Sound economic policies and perhaps the lack thereof in the U.S.

May 3, 2014

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We welcome a new guest this week who joins  our regular distinguished group of experts. Help us welcome Michael Belkin, a well know adviser to some of the largest funds  in the world.

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    May 03, 2014 03:27 AM

    I would like to remind everyone the words of Morgan Stanley last week:

    ” we will never again see $1300 gold.”

    Now, there’s a company whose information you can trust! Not!

      May 03, 2014 03:04 AM

      Ha ha,I didn’t know about that. Thanks.

        May 03, 2014 03:26 PM

        Did they say that? You guys have a link?

        May 04, 2014 04:02 AM

        Here is a link I found from on Morgans comments.

        Morgan Stanley: gold price won’t see $1,300 again.

        So you have to wonder then if they are really predicting a major deflationary period to evolve that would flatten asset bubbles across the developed world and lead to a collapse in commodity prices as we entered a global slowdown.

        That is a legitimate worry. Some of us however do believe that inflation will be unleashed one way or another and that such forces will extend our current credit bubble while substantially reducing the long term impact of real debt. I think the jury is out on whether that will be a success or not.

        So we cannot be certain of that assessment. There is little question though that the forces of deflation are alive and well even in countries that have engineered substantial Quantitative Easing programs. Japan is a good example. China is another where GDP has actually been in decline for more than five years even as they opened the spiggots to the largest credit bubble known in all history. Europe meanwhile needs no introduction on the topic of deflation although their own home brewed QE program is still pending.

        So even as I side with the idea that our current regime will keep the balls in the air for some years to come while holding rates flat I also have to acknowledge there is substantial risk that the globe could slip into a period of negative aggregate growth, increasingly high unemployment, financial instability, sovereign defaults and asset price declines that will no longer respond to intervention by reflating on demand. This is particularly so with the risk that China itself will suffer a hard landing as its extraordinary experiment in credit creation comes home to haunt all of us.

        It remains highly doubtful that the worlds second largest economy can fall to low single digit growth rates without have a deleterious effect on pretty much everyone else nor that we will not suffer as they export deflation in the form of reduced product pricing across the known world.

        Rick Ackerman addressed the expansion of debt with regard to poor collateral backing fairly concisely in his interview with Gary today. It is the absolute size of the debt relative to what a society can service that seems to have become the inhibitor.

        China is no exception. In their case we witness the troubles emerging at the corporate level where highly inflated real estate and property values are the essence of what underpins the largest part of the industrial economy and therefore places its financial sector at risk. The collateral is suspect simply because it is so inflated.

        In most regards and by all known metrics, the Chinese are undergoing the latter stages of a property bubble. Unless we can conclude that this time is different for the Chinese and that such bubbles can persist indefinitely then we should probably conclude their credit expansion is at serious (and inevitable) risk of deflation.

        Furthermore, the demographic juggernaut we face in the developed economies will force headwinds on virtually all the emerging market economies for more than the next two decades and this simply cannot be adequately discounted nor accounted for by interventionist policies. QE will never be enough to create more than a tiny percentage of growth hopes and in fact we now know that the effects are diminishing with each new program.

        So maybe Morgan is correct. Maybe all commodities will suffer serious declines.

        Surely most of us will agree that debt piled upon debt does not make any of us wealthier and Gary’s contention that governments can simply turn on the printing presses does not give me confidence that solution will satisfactorily solve our problems.

        At the end of the day we still face a time we must repay the pipers and whether that be in much smaller currency units or not is hardly offering more comfort as by definition a severely devalued currency only means our buying power has been stripped in proportion to the growth of the money supply.

        But I am not trying to argue for Gary’s case here as that is not the topic of Morgans gold call. Deflation is indeed a serious threat and we must accept that unless the worlds leaders can create a solution to driving fresh growth off the peak of an asset bubble that already encompasses much of the globe, that we will indeed see a deflation and more likely than not a depression.

        In any case I don’t see how any of this will lead to lower gold and silver prices in the future unless labour and energy costs fall substantially thus reducing mine costs. A deflation so severe that it reduces mine inputs 20 to 40% will be one slowdown that we can only call it an outright depression.

        The problem that I have with the Morgan comments is that they have failed to address how money itself becomes increasingly valuable in a deflation setting (this is on the assumption that the reason gold prices will not exceed 1300 dollars is because absolute declines in mining costs will fall due to inputs such as oil, labour, regulatory burdens, taxation, employee benefit costs and land tenures or rents are to also fall over time).

        None of that makes sense to me. As gold is the essence of money itself then it begs to reason it will rise in value during a period of deflation on the one hand whereas it will protect buying power on the other in a period of inflation (in relative terms to a falling dollar).

        And as gold is already close to the costs of mining on average it seems improbable it will fall too much further even in the face of flat increases in the production costs. Alternatively though, gold prices should rise if costs inflate in order to offset those new costs on the assumption it is already priced near the cost of extraction. That is the minimum expectation as compensation to producers meets the real world demands of production.

        Perhaps Morgan has weighted the speculative demand too heavily and not given enough credence to the business case for gold mining. They may have also weighted Chinese demand too heavily in their assumptions of what sustains price. While I would agree demand has fallen it is also worth noting those declines are not really significant and that Central Bank acquisitions are still ongoing.

        My own beliefs are that gold must begin to rise again to telegraph that inflation has arrived and that this idea will be accommodated in the models developed by most Central Banks. Gold price increases now support their agenda of promoting inflation within target ranges. It is therefore a tool that can now be put to good use.

        This is convenient too as the investment community gradually becomes better apprised of those intentions which need to more closely match the models with the real prices of metals on the boards. There is not in fact a faster way to indicate the arrival of inflation than through gold price changes and this can be accomplished even as the dollar strengthens if that is the desired outcome.

        Just my opinion of course. I don’t think the Morgan call makes a lot of sense right now.

          May 04, 2014 04:21 AM

          I am not into long posts unless they are well written and contain both sides of an argument. Good job Bird.

          I think the ace in the hole for the manipulators is energy costs. Open up the shale gas and everything changes. No inflation? Change the rules or say that the depletion is larger than first thought.

          Man, if the markets are efficiently manipulated the people doing so must wake up every morning with their minds swimming between calm truth and the rip tides of lies. No wonder Bernanke’s voice was always shaking.

          May 04, 2014 04:51 AM

          Birdman you’ve highlighted a lot of the very key issues that are ALL in play….China is my #1 concern, hot spot. Yes the Ukraine issue will pop or unwind gold with its news but overall China is the elephant in the trading room no doubt.

          Many of your points are spot on and I don’t like to use the term fundamentals but yes many of your issues support a fundamental view as to what outcome they “should” produce.

          I always look to who can create the pricing on the charts of gold and silver that being the hedge funds, pension funds and the large speculators “if” they are forced to unwind positions due to so many events that could start a stampede like the insane margin levels so many of these players hold then its the liquidation of these positions that can and would produce much lower prices across the commodity complex.

          Nothing moves faster out the Exit door than a leveraged hedge fund on the wrong side of a trade who needs to unwind their winners along with the positions the margin clerks all calling on…..fundamentals get tossed aside!

          A waterfall event like 2008 sent all positions around the world to “Cash” and as we know that’s how Deflation begins, hoarding cash with the mind set that what you own today will be cheaper next month. The majority of these positions are held in US$’s so cashing out sends the $ a lot higher

          Even if demand from China for gold continued along with that of various central banks, they are bid buyers not payers from the offer side, its those that sell their leveraged positions that determine price and if the short sellers back off from their bouts of covering we’ve seen since Jan 1st of this year the net buyers will be happy to continue buying but at lower levels.

          You and I and everyone here at Al’s site may understand the value of a physical gold position vs paper currency, but the majority put no value on that approach and we don’t create the price on the charts, they do….Price is everything!

          Going to be yet another interesting week!

          May 04, 2014 04:25 AM

          Appreciate your comments jj and Dan. You guys want to know what I worry about most? It is that I might be deluding myself in thinking there is any real hope that our economy can stage a recovery before the chickens come home to roost. Maybe we cannot inflate our way back to the good old days.

          After listening to this weekend show I was struck by how a mood of genuine worry has permeated the thinking of all the guests. Like they are just waiting for a funeral to start and there is nothing that can be done because we finally know nobody can resuscitate the patient anymore.

          Kind of depressed me. Both the case for and against deflation with Rick and Gary just made me realize that whatever happens it is not going to be good and nobody is going to feel any investment profit was a success if the rest of the economy is in shambles.

          Probably it is quite enough to just survive financially intact.

          So we wait. Some here will try to prepare. Others will leave their fate to God even though they actually knew the warning signs. Most ordinary people will do nothing at all though and a lot of lives are going to get wrecked in the process.

          Maybe what bothered me was that all the guests express opinions I respect. They are highly intelligent and well informed. None of them are from the crazy camp that get so much airtime on other sites. They are all professional and for the most part thoughtful guys who express worries that I can relate too so it bothered me that what we are discussing really is that serious.

          It is not just a bunch of talk anymore. The writing is on the wall. But what the hell is it saying!

            May 04, 2014 04:47 AM

            Birdman imo when we look back over the next 5 years surviving financially will be a fantastic result…..if my familes net worth is intact I will be very pleased!!

            May 04, 2014 04:34 PM

            Could be a rough patch. Not sure why but it has been bothering me quite a bit lately. Actually losing sleep some nights. Maybe I have to stop reading all the gloom sites and get a little positive energy going again.

            On that note, the other day I mention that John Kerry was in town to strengthen ties and reaffirm US commitments and the past relationship with Ethiopia. He is still here tonight I believe and South Sudan was high on the agenda. And then out of the blue (I really must start paying closer attention!) the Premier of China has arrived!

            Yup, Li Keqiang himself is on the scene on the 50th anniversary of a past Chinese Premiers Ethiopian visit. And he came with money and lots of it if I got the story right. There are promises to finance the new railroad to Djibouti, chip in on new highways and related infrastructure, share technology, build industrial parks, expand bilateral trade relationships and so much more. And he came with a large group of investors in tow.

            If I said that John just got upstaged that would be an understatement because the Chinese delegation made a big splash and the news conference that I just saw was quite a bit more upbeat and well attended than the US group. Lots of media, Lots of promises. Lots of money and assurances that human rights would be promoted etc along with efforts directed at poverty alleviation.

            Not sure if that was deliberate or not but this is big politics I suppose. The Premier affirmed the China-Africa strategic trade partnership and emphasized efforts to promote further development of trade relations and cooperation. So things are really moving over here. But you all knew that because I keep telling you. It is all about demographics and the energy of youth. The whole globe could sink into a pit of despair and I really doubt it would make a dent what is happening here now.

            These parts of Africa have the highest growth rates in the world right now and that boom looks to have received a big boost with both US and Chinese delegations appearing on the scene at the same time.

            It is good to see they are paying close attention. This is where the action is.

            May 04, 2014 04:48 PM

            The story for the curious…..

            Chinese premier starts Africa tour with visits to Ethiopia, AU headquarters

            May 04, 2014 04:15 PM

            What is odd to me is that this story is not getting any coverage over on your shores. Reuters picked it up but otherwise it did not really register. China has been investing hundreds of billions in Africa over the past few years with plans to do much more in the future. You might think that would make the news in places other than at Stratfor where they do in depth investor intelligence. Hmmmm……but then you guys have Ukraine 24/7 and flight 370 to dull your minds and keep you all distracted from everything else going on in the world that will make a difference in a few years time.

    May 03, 2014 03:30 AM

    The PMs are up, of course, because of Ukraine.

    Expect Russia to take over control of the port of Odessa. That port is actually more important to Russian exports than Sebastapol.

      May 03, 2014 03:44 AM

      Yes cfs, Odessa’s the lynchpin.

      May 03, 2014 03:07 AM

      Segs 3 and 4: Banks close on Monday = Global currency reset Tuesday = Inflation Wednesday? Yes/No? Make allowances for my naivety!

      Rick/Gary 15 All, thanks guys.

      May 03, 2014 03:12 PM

      I wish that I understood my chemistry professor at the U Dub as well as I understand you!

    May 03, 2014 03:32 AM

    GOFO rates:

    May 2:2014

    1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate

    -.08800% -.064% -.0420% -.004% + .0600%

    May 1.2014:

    1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate

    -.0800% -.05400% -.03400% +002% +.05600%

    May 03, 2014 03:35 AM

    Gold inventory at the GLD:

    May 2.2014: tonnage 782.85/ we lost another 2.7 tonnes of gold heading straight to Shanghai

    May 1.2014: tonnnage/ 785.55. we lost another 2.39 tonnes of gold.

    April 30.2014: tonnage 787.94 we lost 4.2 tonnes of gold which followed on the heels of a massive 3.4 million oz withdrawal from silver yesterday. As Koos Jansen reports.

    May 03, 2014 03:38 AM

    We finally get to see where Italy has its sovereign gold kept. A little over 1,100 tonnes is kept in Rome and no doubt it is still there.

    The rest of their gold is gone!! (Italy’s gold is gone in the same fashion as the German gold)

    (Info from Mark O’Byrne)

    May 03, 2014 03:42 AM

    ‘In a time of deceit, telling the truth becomes a revolutionary act’ – Orwell.
    Living in an age of misinformation, the mis-informers have to play out their lies until such time as they have nothing left to play with.
    The nearest definition to hell that I can think of.

      May 03, 2014 03:46 AM

      hmmmm, I always thought of it as an eternal pit of fire. Wow, where is my theology going!

        May 03, 2014 03:18 AM

        Bobby, all metaphors for NOTHINGNESS – OBLIVION, or however else you wish to understand it. Some people speak of hell as eternal flames, others that it is unendurable cold or some bottomless pit. But surely Hell is best understood as that ‘place’ where God and His love and all laughter are completely absent.

          May 03, 2014 03:39 AM

          I think the only one’s who speak of hell as being cold…….are people in ALASKA AND SIBERA………

          May 03, 2014 03:04 AM

          Rev, without god some people think whatever it is, cant exist.
          Anyone interested in a hell, maybe look at Zoraster, from Pursia, under Darius.
          There was the demonization of the god Pan by the Christians.
          Also the influence from Greece and Hades.
          Possible explanations as to why the Christian devil has horns and hooves.

            May 03, 2014 03:55 PM

            bb I go back to my original understanding of Satan – that he is a tempter and not some horned creation: The devil bit was more a mediaeval invention created by folks who couldn’t hack their dark side, leaving the ‘devil’ to became the proverbial scapegoat.

            May 03, 2014 03:39 PM

            Andrew, we are at least similar in this, if not the same.
            I think you could call Zoraster about medival times. Id have to check the dates.
            He was attempting to help people to deal with both sides as I recall.

            May 04, 2014 04:33 AM

            bb I’m a Gnostic Christian in many respects….makes me a heretic to some but I’m past caring!!

          May 03, 2014 03:07 AM

          God is in Hell (Psalm 139:8, also, God is everywhere). That is what makes it Hell, dwelling with His just and holy wrath forever.

            May 03, 2014 03:16 PM

            Wayne, I will never understand a belief in a loving god that torteurs.
            Seems to me that is an example of misinterpreting what Jesus was talking about.
            Just my opinion of course.

            May 03, 2014 03:19 PM

            The Wrath of GOD……………and the LOVE of Jesus……….

            May 03, 2014 03:02 PM

            get the time periods correct and you have some of the answers………

            May 03, 2014 03:30 PM

            BB, those who are healthy don’t need a physician. If you want to understand, read An Alarm to the Unconverted by Joseph Alleine:

          May 03, 2014 03:07 PM

          Man, that would be a terrible environment!

        May 03, 2014 03:10 PM

        I would think that “an eternal pit of fire” could take a lot of forms!

        How is the wine?

      May 03, 2014 03:11 PM

      His intellect is why 1984 is such a frightening novel!

    May 03, 2014 03:48 AM

    In your first segment at the 6:12 mark you state that on this program “we really stress diversification,” and you also criticize the “people who are pumping gold and silver.” I’ve been listening to your show for at least five years and you and your guests spend at least 95% of your time talking about gold and silver.

    And I couldn’t even begin to count the number of times we have all heard you say “I just can’t understand why the prices of gold and silver are not much higher than they are now.” You have also, too many times to count, stated that you can’t understand why anyone would be investing in the conventional markets.
    Tell us all Al, of all of the companies you recommend to your listeners and that are sponsors on this site, how many of them are NOT involved in the gold or silver markets? And you believe in diversification?
    Making such a comment on this show is ridiculous. You’re a precious metals nut and you don’t even realize it!

      May 03, 2014 03:22 AM

      C,MON, Dale;
      This is a HARD ASSET site..plain and simple..Al has money in the RE market, Stock market (nuts…:)) AND PM’s…he has said that countless time – AD NAUSEUM…C’MON MAN…pay attention! If Big Al – was a charlatan I would be the first to call him on it…and I wouldnt spend my time discussing this at all…..plain and simple!

        May 03, 2014 03:00 PM

        Thanks Marc! I really appreciate you support. You are a good person. (Kathy finally convinced me of that! Joke)

    May 03, 2014 03:56 AM

    As I listen to your show further Al, I’ve realized what a hypocrite you are. As I’ve said in my previous post, you have stated many, many times that you can’t believe why anyone would be invested in the conventional markets. Yet, at the 11.00 minutes mark of the 2nd segment you state the you get into the conventional markets and that you’ve done really well in those markets over the past 5 or 6 years.
    Please explain how stating “I can’t believe why anyone would be investing in the conventional markets,” which all of us have heard you state many times on this very show, and the comment you’ve made in segment 2 are not a contradiction.

      May 03, 2014 03:37 AM

      Al has been very clear that he thinks it’s too late in the cycle to be buying the general stock market now. It is 5 years into a cyclical bull market after all. That doesn’t mean that he couldn’t have ridden this up from the 2009 low.

        May 03, 2014 03:55 AM

        Thanks Gary, listen to my Saturday Daily Editorial.

        Talk with you on Monday.

    May 03, 2014 03:44 AM

    If we do not continue to pound the gold bull story……who will we be able to sell our hoard to? VRH

    May 03, 2014 03:33 AM

    The inflation/deflation debate masks an essential reality: People with different household incomes experience inflation differently. Forgetting for a minute the discretionary baubles that well-to-do people may indulge in, the fact is that all households have certain essentials they must pay for in order to survive. Food, shelter costs, insurance, transportation, labor for services, tolls and taxes command a far greater percentage of total income for the poor and middle class than they do for the well-heeled. And these essentials are not rising at the government’s lie of 1-2% a year. Food on a unit cost basis is rising easily at 6-8% per year, tuition at 4-6%, health insurance premiums for the same level of coverage perhaps (& I think this conservative) at 10%, auto repairs (In my region of the country I have seen hourly rates rise from $45 an hour to as high as $85 an hour over the last 10 years), tolls, bus and subway fares, property taxes, declining quality of workmanship in clothing (cotton goods lasting half as long as ones made 10 or 20 years ago is no different to a household budget than shrinking a half gallon of ice cream to 48 ounces), non-cosmetic medical & dental procedures. . .it goes on and on. Worse yet (and this is key) is that a affluent person may incur higher costs for his lifestyle than a person of modest means, but the affluent person still has a level of discretionary income left over after taking into account his rising costs than does the person of modest means. So the effect of inflationary increases in essential goods and services is more devastating to lower income households (the overall rate of inflation is thus higher for the poorer household). Hearing Rick and Gary talking about inflation in terms of asset classes is a red herring. The majority of people do not have substantial investments in real estate or the investment markets. Besides, these markets by virtue of their leverage (properties with little equity and stocks/commodities bought on margin) would be vulnerable to deflation. So what? Indeed, if we have a property price collapse and a crashing stock market, it would change little the struggle lower income families have each day with paying for essential goods and services. It might devastate the equity stake they have in their most significant asset, giving them less of a source to meet obligations. As far as I am concerned, you can have simultaneous inflation and deflation wherein what you MUST have is going up faster in cost than your income’s ability to meet it while what you may have but not necessarily need could be going down. And it doesn’t take a Bob Moriarity to realize that resources essential to our survival will not get any cheaper to find or produce.

    May 03, 2014 03:50 AM

    This is my first comment ever and i have followed Rick for years, and Big Al for a couple.
    Rick and Gary are both right, the problem is the policy. When you cut unemployment benefits and food stamps (money directly given to the public) along with tapering, less money means deflation. ( rick is correct). However Gary is right you cannot trust the goverment to do the right thing, they will open the gates back up once they (the fed) gets they downturn there looking for. Going back and forth with flooding the markets with money, then stopping makes then both winners. Who looks right at the moment depends on the current policy. We will have hyperinflation down the road when the Fed has no other choice but to turn the spigot on, and once the currency is worthless, deflation will grip the land because nobody will have any real money.

      May 03, 2014 03:39 AM

      Fred, the problem that I see with turning the money spigot on is governments will never be able to get the money to where it is needed most in a crisis, it always ends in a bubble in some asset class which may or may not be in the country from where it originated. Having said that I only see deflation as the final outcome. Governments are notorious for the mishandling of all economies and are responsible for the problems we are in today.

        May 03, 2014 03:57 AM

        Gary seems to think that the crisis of 2008 was solved by Bernanke turning on the money spigot but this was no solution because the crisis has gotten much worse and the potential for a much bigger disaster now looms. A problem is only solved when the condition for it’s return have been alleviated.

          May 03, 2014 03:20 AM

          The biggest government disaster of all time was when the bankers under JP Morgan duped Woodrow Wilson the idealist into allowing the creation of The Federal Reserve. Before the economy was managed by free market forces and although there would be depressions at intervals they generally only lasted a few years and the economy returned to normal after it had been cleansed through bankruptcy’s and defaults. Like Rick Ackerman points out Lehman brothers was let go by Bernanke in 2008 but that left all the other too big to fail institutions still standing and where are we today.

          Gary seems to think that the economy will turn around when we have the next revolution in manufacturing but we are now in a world economy and if the financial institutions aren’t sound the future will flow only to the countries that have responsible banking systems and very little debt.

          May 03, 2014 03:43 AM

          You haven’t been listening to what I’ve been saying for years. They are making the problem bigger and bigger and it will eventually reach the end game in the currency markets. Bernanke just delayed the inevitable but he didn’t cure the problem.

      May 03, 2014 03:09 PM

      Thank you sir. (Farmer Fred)

    May 03, 2014 03:14 AM

    Don’t worry guys those that like to lie, rob, defraud, kill the innocent, worship the devil and support or practice politically correct perversions will get to hell sooner or later. Except they repent it is unavoidable.

    May 03, 2014 03:28 AM

    Silver cultists? Nut cases?
    Bob I am surprised you would notice such a small church let alone condemn it.
    In all seriousness silver gets wacked because it is both a monetary metal and a industrial metal. Industry needs a cheap resource and the banksters don’t want too many people if any buying real gold or silver. They might tolerate a few people doing it in the west but for it to be a mass movement that is deemed to be unacceptable heresy in the eyes of the church of paper and electronic fiat currency.

    May 03, 2014 03:47 AM

    I can see it now. Bob Moriarty dies and is at his Judgement. Jesus says welcome in my good and faithful servant. You have done a good job helping people throughout you life on Earth.

    Bob in reply says “i am going to have to disagree with you”

    Does he ever agree with anyone? If you pic B he picks A. if you pick Ahe picks B.
    i have a crazy uncle who does the same thing.

      May 03, 2014 03:13 AM

      Dave he finds it really hard to accept a compliment. But that doesn’t mean he not very often right!

    May 03, 2014 03:35 AM

    The deflationary argument carries some elements of truth as does the inflationary argument. But overall the deflationary element is carrying the day.
    Interest rates on deposits = negative = 400 billion lost in the general economy on a yearly basis.
    Pensioners are receiving less than what was projected and in many states are receiving less than before. ie monthly receipts decreased over 5 to 6 years. Again economic velocity is lost.
    Money printing is causing a loss of purchasing power which means less goods are sold because the money buys less. Even the commodities of those goods have increased in price which reduces the quantity of goods or components that can be bought.
    Decreased employment = decreased overall economic activity. Less goods purchased = decresed goods sold = deflation

    This is just some of the argument besides, debt deficits and trade deficits


      May 03, 2014 03:22 AM

      The deflationary argument is nothing but valid. It’s the reason all the central banks have been inflating (the money supply).

    May 03, 2014 03:16 AM

    Segment one was great. Got to give Bob credit, he sticks to character and is always outspoken. About the crazy camp of gold and silver cultists….well fortunately there are very few left coming to this site. But we all remember them for their undying loyalty to the creed and their obvious extremism. Bob’s correct though, the silver fanatics were even worse. They just got a lot less attention. Lots of good laughs in that segment. Bob boils my blood some days but you got to love the guy. He never disappoints.

    May 03, 2014 03:53 AM

    Trader Dan Norcini has been dropped from King World News as of 2014…perhaps he can return to the KE Report?

      May 03, 2014 03:12 AM

      Was he dropped or did he quit? Maybe he and Bill Haynes needed a break.

    May 03, 2014 03:07 AM

    Al, one point that you should have made regarding Dan and KWN is that yes Dan was providing a weekly commentary at the site BUT that was during the bull run and after gold and silver had topped Dan continued but provided many facts regarding the bearish trend that was unfolding…..imo as I have no idea but I believe Dan left KWN because the always buy side pump was 99% of KWN (and still is) and Dan’s (correct) outlook towards gold and silvers trend was completely the opposite based on Dan being a professional trader, not ever being a pro pumper.

    Excellent point Cory, there is so much misinformation in our world today regarding Everything!!

    I certainly didn’t want to highlight Dan’s Cult article to suggest everyone who owns any form of gold and silver is a nutjob…..again imo there are two types that invest in the sector those that can trade the obvious trends within the sector by buying and selling and sitting at times in 100% cash as a trade at times.

    Its those that live by idea that you must never ever sell your positions because overnight the US$ will be revalued 50% lower or the Crimex will close as the shelves are bare of physical metals……or Hyperinflation will appear overnight.

    IF gold is going many, many % points higher does it really matter that one sells at times their entire positions?

    Professional traders will build positions in % adding 25% at a time as the Market Confirms your Correct and will sell into strength as the price moves to overbought levels… Cory pointed out.

    There are just too many investors that are well under water with their pm’s sector that look to the same pumpers that had them hold their positions vs seeking those that have called the last few years correctly, and that’s not how one protects their wealth.

    I had already sold 2/3 of my silver position in early April 2011 and sold the last 1/3 after reading Bob’s site at 321gold regarding just how insane the move in silver had got in late April….he confirmed what I saw on the chart, thanks Bob!

      May 03, 2014 03:06 PM

      Bob called a bottom for silver on our show when he said he bought silver last week. Let’s see if he is correct.

    May 03, 2014 03:26 AM

    I sure like Bob Moriarity
    Concerning diversification, I find Rickards advice applicable to most people.

    Al, ANYBODY would like to be diversified.

    One of the best deversifiers I know of is Rogers, thing is he has the billions to do it.

    Rickards, takes the time to explain, if you have 10 thousand buy 1 gold coin.
    He speaks to everyone. Which I feel is the kind of thinking that is beneficial to most people.

    Some people here have millions, great, diversify, obviously the more you diversify the better off you are, but simply to tout diversify?
    To me that’s saying “just have a lot of money”

    I guess Im saying that should this site want to help people financialy you need to talk to MOST people. A lot of millionares already have the where with all to understand how to handle money and investment.
    So, I really like Rickards thinking in that regard.

    Interesting Bob is the most popular guest, I think he showed why yet again.

    Al, your not wrong about diversification, obviously, but you limit the number you speak with.

    On the other hand, you could do as Maloney says, 50% gold, 50% silver = 100% diversified.

      May 03, 2014 03:04 PM

      That is a bit of a ridiculous statement from Mike.

      How do I limit the number that I speak with?

        May 03, 2014 03:27 PM

        Not ridiculas, he might be right. not that I think that way.

        When you speak of diversification, you speak to people that have the money to do that.
        And maybe that’s the only people on this site anyway, I just think that people that only have, say,.$100 a month to invest should understand they too can act to protect themselves.
        If they believe they must diversify to have hope, geez, that would be dissheartning.

    May 03, 2014 03:40 AM

    Armstrong highlights the key levels for Gold to hold and overtake next week.

    May 03, 2014 03:05 AM

    Cory mentions selling half of an investment and letting the other half ride.
    A strategy. Everyone should have one, and as Bob says, “2 kinds of people”
    Don’t sell a winner you walk away a loser.

    I just wanted to say to anyone that might just be starting out.
    Read, MICKEY FULP, Everything, his due diligence is 2ND TO NONE.

    Had I of just followed Mickey from 08 on, I would be much farther ahead than I am today, and I have had many multiple baggers.

    The reason I only followed Mickey in a limited way, is his time frame is 1 year.
    Not enough action for me, but that’s my nature.
    Mickey reduces risk better than anyone Ive read, while giving himself the opportunity for BIG gains.
    Everything he does is absolutely free. He really is a person that does what he can to help people with investing in the commodity secter.

    Not that others are not good, on this site there are some great thinkers, but Mickey,
    awesome. You will find his work and information exceedingly advantageous.

    OK OK, enough Mickey pumping, I just wanted anyone new to see an option they have they may of otherwise not known about.

    May 03, 2014 03:06 AM

    THE MARKET says that SILVER is $19.50 TODAY.
    ILL SEE YOU GUYS IN between 2 to 5 years at the coin shop selling my silver to the MAJORITY OF the RETAIL MARKET at 90 to 150 an ounce…….SEE YOU there!! Friends…CULT COMMON MAN..A silver cultist…buys silver with ALL HIS/HER ASSETS, risks his family ability to feed his family, becomes so irrational they bury their silver in a remote location and hunkers down for the END TIMES!! COMMON Bob….silver ISNT A is what you do with it that might provide clues to a “cultish” mentality….WOW I have to MARK this date down in history…I actually DISAGREED WITH MR. Moriarity—-shame on me….:)

      May 03, 2014 03:18 AM

      “The lady doth protest too much, methinks”

      -comes to mind

        May 03, 2014 03:47 PM

        Sorry Irwin. I don’t get you lately. What lady? And what was with the snot song yesterday?

      May 03, 2014 03:30 AM

      THE MARKET says that SILVER is $19.50 TODAY.
      Above statement is a statement loaded with hubris and arrogance. What about the opinion and rights of owners and producers? What about the exchange rate between silver money and total currency?

        May 03, 2014 03:28 AM

        You COMPLETELY missed my point. I am simply acknowledging that the price of the COMEX says $19.50 spot price as of 05/03/2014….that is a fact! In other words, BEFORE making my point – I gave a NOD to what the market says I can sell it for. As they say: All that matters is the score! The score is: The market = $19.50. OK? BUT that doesnt mean we have come even remotely close to “real value” in nominal terms with the state of affairs in global-economics. REAL, tangible asset vs. paper derivative skewed-virtual price. Things will come back to ‘order”. Then I will look at the scoreboard and sell when its “over-valued”.

    May 03, 2014 03:12 AM

    Michael Levy (of Border Gold) in a discussion with Campbell this morning:
    – canadian dollar to 0.80 is not out of the question

    $CDW is now 0.91$CDW

      May 03, 2014 03:23 AM

      Better hope his 80 call is incorrect as place a silver chart beside that of the CDN$….80 suggests much lower Silver

        May 03, 2014 03:48 PM

        Agree with that, jj. Michael Levy is often wrong though (thank God).

      May 03, 2014 03:49 AM

      This is the price I watch:$SILVER:$CDW&p=W&b=5&g=0&id=p75198250691

      If silver priced in USD goes no where while $CDW goes to 0.80 – silver/$cdw would be over $24

        May 03, 2014 03:28 AM

        Looking at spate Weekly charts of Silver and the CDW$ the last 5 years shows the breakout both had in Aug 2010 on the way to Silvers high of $49+ and CDW$ 105 then a hard reversal into the fall of 2011 for both $26.00 and 94.00

        Both chop traded highs and lows across 2012 putting in Sept highs before both starting the down trend in place these last 22 months

        An 80 CDW$ could/should place silver est @ $15.00

        Last 11 cent drop in the CDW$ saw Silver fall from $29 to $19.00 fwiw

        Was there a timeframe mentioned Irwin for the 80 level?

        May 03, 2014 03:11 AM

        No time frame mentioned that I heard. The program should be posted at sometime this weekend.

        The two Mike’s interpretation is that Bank of Canada governor Stephen Poloz would prefer a weaker Canadian dollar; if that’s the case, their call for 0.80 isn’t just opinion, but a reading of the road map.

          May 03, 2014 03:17 AM

          Got it thanks as I wondered where the rest of the interview was?…..will see if the second half is up on Sun.

          You’ve got the premier of Ontario increasing taxes and the debt level of Ontario will need an 80 cent $ to help its economy…BOC to the rescue!…..Marty is on it!

            May 03, 2014 03:54 AM

            Don’t understand, but Sarah is looking into it.

            May 03, 2014 03:52 PM

            Just guys pushing an industry agenda in Canada, Al. They don’t know what will happen with the dollar any better than anyone else. They are only saying what they want to happen but it is shortsighted in my view. Canada will not be hurt by a dollar that shows a little more strength. Especially as it has already sold off so heavily these past few years. Energy and precious metals will give it a lift though. Those guys better get used to that or they will be on the wrong side of the trade.

    May 03, 2014 03:14 AM

    BUMPER AND DUMPERS……………Bob M., Says,” Aren’t they….”
    Art Cashin, Craig Paul Roberts,Yamada?

      May 03, 2014 03:03 AM

      Gold and silver………..are most likely the most corrupt of all the investments.
      and one should play them as that………
      Real estate investments…….number one, is shelter, paid for and no mortgage, and should only be half as much as you can afford. The market is screwed up and is not coming back, in this generation.
      AS far as stocks and bonds………….good luck.

    May 03, 2014 03:25 AM

    Chris Kimble highlights 3 bullish H&S possibilities with his GDX, GDXY and XAU Weekly charts:

    May 03, 2014 03:40 AM

    “There are a class of people who like to have a calamity to worry about.” – Munger

    May 03, 2014 03:06 AM

    Excellent show.

      May 03, 2014 03:57 AM

      Thanks bb!

    May 03, 2014 03:08 AM

    Really good show. Thanks Cory and Al. The lineup was terrific and the discussion wide ranging. Really appreciated some of the final comments from Michael Belkin and Glen Downs in the last two segments.

      May 03, 2014 03:57 AM

      Thanks Bird, hope all is well with you.

      What do you think of my audio reply to Dale? I hope that I made myself clear.

        May 04, 2014 04:19 AM

        Clear as a bell, Al. We really like you here. Don’t sweat the critics. Most of your listeners are big fans.

    May 03, 2014 03:00 AM

    Irwin, I gave the 80 cent CDN$ call a listen.

    Here is the key, with the Bank of Canada looking for a target level of 80 with the same reasons why no country wants a strong $ with exports being such an important part of the Canadian business model the FX traders know full well every comment looking forward from the BOC will be CDN$ bearish…..along with government data.

    CDN$ at 80 could have us looking across at the silver chart price at $15.00

      May 03, 2014 03:13 PM

      You got it jj. What they want is improbable. CAN$ still trades as a commodity currency. Strength there will move it up. If and when we see a rotation to resources and hard assets which I happen to think is inevitable once stocks fall then the CAN dollar will rise and show stength again. If you noted, as I did, it has been in retreat since gold peaked. What else would we expect? This fall will see a sharp rise in both crude and nat-gas if the Ukraine situation does not settle. Just in time for winter. We will get some inflation all right and the Loonie will start surprising more than a few who wish it would stay flat.

    May 03, 2014 03:22 AM

    Inflation or Deflation, I’ll take the likes of Armstrong’s view over the panels opinions….no comparison imo

    Increased taxation around the world is very deflationary….will golds next major run be between Nov 2015…2020

    Large corporations, Banks are hoarding cash….that’s Deflationary

      May 03, 2014 03:52 AM

      At least you do listen to everyone, “Original”

      By the way, off mike Doc had some very complimentary things to say about you.

        May 03, 2014 03:28 PM

        Big and small Al, I listen to them all but trade based on the chart action.

        Doc is a rare breed of chartist Al as many will draw projection lines promoting their views which again imo is useless, Doc is alot like Norcini as they call what they see on the chart without emotion and that imo is so key. Obviously Dan’s shout was directed at the constant hate mail he receives because he calls it as it unfolds….as Doc does.

        Well I take it Richard and I along with so many are viewing the key levels those that create the charts are setting up and as much as I’d like to be well long the sector once again I’ll wait for confirmation to do so….and I’ll check in with Doc’s opinion to confirm what I think I’m seeing on my charts.

        I know many traders Al who have been surviving the markets at the professional level for 30-40 years, they have never seen anything like it and ALL agree there is no way this ends well for the average family on the planet….the #1 footprint in the markets that is creating these insane cross currents are the Central Bank actions.

        I know your a huge fan of diversification, those that have the background experience and the luxury of watching every tic-by-tic action can carry heavily weighted positions vs those that are trying to invest and carry on a day to day career, that is a BIG task in these markets.

        Good Luck to us all!

    May 03, 2014 03:02 PM

    WEll, for what its worth, I’ve stopped going to King World News completely.

    IT just doesnt correspond with reality. Maybe that means its a real bottom soon in PM’s, but I need a serious break from the market.

    I just build up cash and despair for now.

    Which probably means the stock market will run for years.

      May 03, 2014 03:15 PM

      OK….that’s the top!……… Thanks Waterloo!

    May 03, 2014 03:13 PM

    Can not believe Al thinks the market would go up on a good job report. In the last 4 years when the job number beats estimates the stock market ended down on the Friday and up on Monday. I bought SPX calls at 3:30pm Friday. Will sell around lunch on Monday. Like shooting fish in a barrel.

      May 03, 2014 03:16 PM

      Good luck with that. Lets see what Monday brings.

        May 03, 2014 03:24 PM

        Nothing happened in the Ukraine relief rally – I will sell my calls into that. Got to travel to freaking LA on Tuesday for the rest of the week. Bahrain to the west coast is all ways a butt kicker.

    May 03, 2014 03:41 PM

    Inflation vs deflation, what I learned was that money printing distorts the markets. Perhaps this is why people are getting mixed signals. According to the dow to gold ratio I have learned that we are in the middle of a 20 yr secular gold market. The dow to gold ratio started rising back towards the dow side in approx 2011..when the money printing began. But I believe the longer term trend will sooner or later prevail. I am new at investing, any thoughts on my comment?

    May 03, 2014 03:29 PM
    May 03, 2014 03:47 PM

    Our tax code is set up to capture inflation.
    The tax collector has a hard time collecting tax on deflation.
    As long as Central Bankers remain in control inflation is the scenario to expect.
    When the central bankers find themselves drowning deflation is certain.

    May 03, 2014 03:24 PM

    Big Al and Cory, another outstanding show.



    May 04, 2014 04:54 AM

    I am getting depressed reading Martin Armstrong lately. It all sounds like repetitive propaganda to me. Brainwashing if you are a fan and I don’t appreciate it. I reject more and more of what he says lately. The essays strike me as self aggrandizement and self promotion rather than genuine commentary. Those who he claims write in to his blog with questions virtually always write just like him and in the same voice. In other words…fake. He has good ideas all right but is pushing an agenda that is too obvious. Anybody else noticing problems there?

      May 04, 2014 04:04 AM

      Agree sometimes I feel like he’s talking to himself, I should ask myself this question to make my point.

      My main reason of having a daily dose of his blog is he did correctly just as Norcini did get his readers on the right side of the gold trade these past couple years, at a min he had the goldbugs understanding the Why gold will continue to pause vs to da moon always buy side opinions….that and the chart action had me continuing % gains from using shorts ETF’s

      The real reason is Armstrong isn’t selling anything and he has a huge following of those who have the means to move any chart and he has been asked by the only Central bank of the world who every director on the board is a former bond, equity or currency trader, the Central Bank of China to sit with them and explain Global Capital Flows.

      That for me is huge!…..understanding where the Real money flows will position themselves with the events around the world unfolding tells me where momentum will be and its why his #1 call these past few years has been long US equities as Big money looks to invest in US companies…..getting cash away from higher tax’s out of Europe especially.

        May 04, 2014 04:35 AM

        No question he has genius. Not many say what he says and also turn out to be correct. Maybe I am just losing interest in the Ukraine angle and conspiracy side of his argument that is going nowhere. I am not sure if anyone cares either. Markets have barely budged. Anyway, I am not really a follower as I was only introduced to his site some months back by one of the posters here. Never heard of him before that. Guess I live in my own bubble. This is one of the only sites I read anymore.

    May 04, 2014 04:15 AM

    Gary has a better understanding of inflation that Doc.
    Why not just read Rothbard.
    Inflation is any excess growth of money supply over and above the natural growth of monetary metals (i.e., gold and silver)

    Google: What has the Govt. Done to our money pdf

    May 04, 2014 04:17 AM

    In fact, why can’t you have inflation with fiat money printing in excess of gold and silver production AND prices of goods and services DECLINING because of PRODUCTIVITY increases.

    A problem of definition. The key is being aware of monetary distortions.

    May 04, 2014 04:20 AM

    Doc, I’m sure your having a look at your US$ chart this weekend.

    The channel chop trade zone the $ has been in since Oct between 81.50 and 79.+ looks to be tested once again on the support side, we start next week below 79.38 would suggest 79 being tested….closing next Fri below 79 would certainly add some fuel to the precious metals sector, of course we could also continue to hold that support and head back towards 80.50 and continue the chop trade….Boring!!!!!

      May 04, 2014 04:02 AM

      I believe the dollar is key right now to the movement of a lot of markets. We’ll know by summer what direction the dollar decides to take.

    May 04, 2014 04:44 AM

    Birdman, another currency that will effect Gold’s trend just as the Silver chart and the CDN$ movements are very similar Gold and $Yen are a must comparison.

    This is what Armstrong is highlighting, Japanese investors will be bidding up their equity index as well as moving capital into Us equities.

    The first mistake goldbugs make imo is when a currency like the Yen is clearly going to be devalued by the BOJ they think the Japanese will run to gold and although fundamentally it makes perfect sense as we look around the globe how many currencies have seen major devaluations in purchasing power where as if one held physical gold they would have been protected….yet gold is still sub $1300

    A much lower Yen is NOT gold positive as Abe announced his aggressive approach Nov 2013 a look at the Gold and Yen charts since Nov 2013 clearly shows they follow each other.

    Worth reading, by John Mauldin: What do you think Japanese investors will do when they realize what is happening? Buy equities, of course, but also diversify internationally. This move is going to play havoc with cross-border capital flows into all sorts of markets.

      May 04, 2014 04:07 AM

      Sorry comparing Gold and $Yen should be from Nov 2012….not 13

    May 04, 2014 04:13 AM

    This is THE $25Trillion debt position in the room looking at the Exit

    May 04, 2014 04:16 AM

    Deutsche Banks holding a Derivative position of $75 Trillion… China the pin looking for a bubble or vice-versa?

    May 04, 2014 04:33 AM


    May 04, 2014 04:07 PM

    The segments with Gary and Rick (3 and 4) are excellent. The deflation/inflation argument has been raging for years and the long term outcome remains unclear.

    I am slightly surprised that the effects of the aging population of the developed world with its attendant trend for deflation was only mentioned in passing by Gary (and not Rick). At present 25% of the Japanese population is in the geriatric age group. Adult diapers outsell baby diapers in Japan. China will follow this path (in great part due to their 1 child policy). The US and EU are also on this path. The US has about 12-13% in the geriatrics age group. This proportion will increase over time. Overall, persons in the geriatrics age group do not spend money, rather they husband their resources to meet the costs of their increasing dependence. They take on little debt (they cannot borrow from their future….they have little future left!). Countries with aging populations will thus have less economic growth and thus tend to have deflation over inflation.

    Yes…the world is awash in ‘money’, but as it is hoarded by aging societies…..with uncertain futures…with low money velocity…..deflation will win out. Only when the “echo boomers” enter their home-making/family raising years will a trend to inflation begin to come forward.

    May 04, 2014 04:43 PM

    When the US loses it’s world reserve currency status this will be hugely deflationary for them because they will learn what the rest of the world has been paying for imported goods and it is 20-50% higher then what US citizens are typically charged at retail outlets.

    May 04, 2014 04:51 PM

    Is this all thats left…a wealth effect?….I don’t want an effect…I want the real thing!

      May 05, 2014 05:07 AM

      Gotta agree with you Tom.

    May 04, 2014 04:53 PM

    I thought inflation was simply the expansion of the money supply….KISS…Keep It Simple Stupid

      May 05, 2014 05:08 AM

      More dollars chasing fewer goods!

    May 04, 2014 04:01 PM

    They say 1oz of gold will always buy you a nice suit… much for an Armani?

      May 05, 2014 05:00 AM

      by that accounting method……….gold should be $3500

      May 05, 2014 05:10 AM

      I am assuming that you don’t consider an Armani to be a nice suit!