Gold & Silver Matter More Than Ever: No Hiding the Coming Pension Crisis

The collapse of the pension ponzi isn't something that's years away, but rather, it's happening right now, in real-time, with GE freezing pension benefits for some 20,000 employees (who have yet to retire).

- Source, Silver Doctors

The 3 Phases Of Metals Investing

The 3 phases of metals investing explained, what happens when the public at large invests in gold & silver? 

This week we review the price movements of gold, silver platinum, palladium, the US Dollar Index, DOW, S&P, and more.

- Source, Golden Rule Radio

Lagarde’s ECB To Save The World With “Green Bonds"?

Negative Rates: Buy Swiss bonds for 1087, in 10 years get back only 1000! Backfire: Trump wins if Dems march all the way to Impeachment. Hypocrisy: Record company share buybacks as execs offload their own shares...

- Source, Golden Rule Radio

Gold & Silver Erase Early Week Losses... Has The Danger Passed?

With gold back above $1500 and silver back above $17.50, it seems as if the danger of further price attacks has passed, but the cartel's favorite hit man is lurking in the shadows, and he's likely to strike on Friday. Here's why...

- Source, Silver Doctors

Silver on the Verge of Lift Off, Stocks on Edge of a Cliff

FED Pumps Billions Into Markets, Gold & Silver Reactions?

The Fed pumps another $75 billion into financial markets, continuing capital-injection plan. Impeachment talks begin but do they impact the markets past the initial days? 

We review the price movements of platinum, palladium, and the US Dollar index in relation to gold & silver.

- Source, Golden Rule Radio

Egon von Greyerz: Compared to Gold Assets Will Fall 95%

Financial and precious metals expert Egon von Greyerz (EvG) predicts, “All of these bubble assets that are based on just credit and credit expansion are going to implode measured in real terms, measured in gold. 

I expect the stock market and the property market to lose at least 95% or more in real terms.

The next up cycle for gold (and silver) has started. The next phase of this market has started, and it is going to go on for a long, long time. It is going to go to levels that will be hard to believe today. 

The world cannot have solid growth until this debt has imploded, the transition will be terrible, but I don’t see any other solution to this. 

The debt can only be wiped out by also wiping out all the asset values. You can’t just make the debt disappear and have the assets stand there at the values that they are today.

When this debt is written off or implodes, or whatever they want to call it, that means all these assets are going to go down. 

That’s why I am saying it is going to go down 95% against gold. There is absolutely no other way, in my view.”

- Source, USA Watchdog

Chris Powell: JP Morgan Gold Rigging, is Less than Half the Story

Not only a strong end to the week for the monetary precious metals prices, but also one the week began with one of the biggest bombshell news items and criminal lawsuits filed against the often alleged silver and other precious metals market rigging bank, JP Morgan Chase.

- Source, The Silver Doctors

How the Fed’s funding struggles highlight the fragility of Wall Street confidence

When obscure corners of the financial markets that are typically considered mundane draw outsize attention on Wall Street, it is always cause for investor concern.

That was the case last week when surging overnight borrowing costs laid bare cracks in a key Wall Street funding mechanism, which left many scrambling for cash and the New York Federal Reserve responding by injecting hundreds of billions of dollars into the financial system to restore calm.

In other words, this was no ordinary week in financial markets and more than a few investors were seeing shades of the 2008 financial crisis, reigniting decade-old nightmares of a systemic funding chaos.

“My initial reaction was fear,” said Hugh Nickola, head of fixed income at Gentrust, and a former head of proprietary trading of global rates at JP Morgan. “There’s really nothing more important than the functioning and transparency of financing markets.”

The sudden spotlight on the short-term “repo” market easily overshadowed Wednesday’s highly anticipated Fed decision on monetary policy, where the U.S. central bank cut federal-funds rates by a quarter-of-a-percentage point to a 1.75%-2% range in a divided 7-3 vote.

Rates on short-term funds, that are typically anchored to fed-funds rates, briefly became unhinged, spiking to nearly 10% on Tuesday.

Nickola said his worries only receded after the Fed started to intervene with a series of short-term funding operations that kicked off Tuesday and totaled nearly $300 billion for the week. On Friday, the central bank tightened its grip on rates ahead of the end of the quarter, when liquidity can become scarce, by extending its daily borrowing facilities through at least October 10, and unveiling three, 14-day term operations.

The short-term rate spike also raised concerns about the potential for the funding tumult to shake consumer confidence, at a time when financial markets often are viewed as a barometer of the economy’s vitality.

Bruce Richards, CEO of Marathon Asset Management said the biggest risk to the U.S. economy was a weakening of consumer sentiment, in remarks Thursday at the CNBC Institutional Investor Delivering Alpha conference.

Richards said that while U.S. households are doing well, it would become “very worrisome” if consumer confidence starts to fade, since two-thirds of the U.S. economy is consumer-driven.

“Right now, it is corporate confidence” that is weakening, he said.

Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, also sees reason to fret due to continuing Wall Street liquidity woes that could seep into the real economy.

He pointed to three factors that still leave the money-market plumbing fragile: heavy U.S. Treasury borrowing to fund the widening fiscal deficit, a flat-to-inverted yield curve, and a regulatory environment that limits the ability of banks to absorb government debt.

LeBas thinks overnight funding operations alone won’t be enough to keep credit flowing over the longer run...

- Source, Market Watch

What's the confusion with silver's fundamentals? There is no oversupply

The long-term demand of silver will always outpace supply, owing to strong growth in industrial usage, said Phil Baker, CEO of Hecla Mining. “There’s no oversupply of silver. 

The growing consumption of silver from industrial, but it’s really more consumer products, has really taken off. It’s happened over the course of the last 20 years, and it continues to increase,” Baker told Kitco News on the sidelines of the Denver Gold Forum.

- Source, Kitco News

Negative Interest Rates Are Social Political Poison

The interest rate business model is dead. Negative interest rates killed it, with no replacement in sight.

Anne Kunz and Holger Zschäpitz co-authored an excellent article for Welt (in German) called the Interest Rate Business Model is Dead.
Here are some excerpts via Google translate with many of my own modifications. For example, the title itself is my translation, not Google's.

Google has the title as "Business Model With the Interest is Dead".

I made an educated guess that Google's title isn't quite right.

I picked up the article from this Tweet.

Translation errors below may be Google's or mine. I took a fair amount of liberty, adding some words, deleting others, or changing the word order so the result makes sense to me.

Apologies to the authors for any of my errors.

Interest Rate Business Model is Dead

The cash cow bank lending model is dead, buried by the European Central Bank (ECB).

The coup de grace came at the recent meeting. As ECB President Mario Draghi squeezed the negative interest rate for banks even deeper.

The ECB will restart its bond purchase program in November. This time, without a time limit. Thus, the monetary authorities have permanently chained the long-term interest rate at a low level and cut the profit opportunities of the financial sector to a level that isn't sustainable. For a long time, institutions have made good money from the difference between long-term and short-term interest rates.That time is now over.

In 2016, Commerzbank employed more than 50,000 people. CEO Martin Zielke wants to close one-fifth of the 1,000 branches and even wants to part with an important source of income including his Polish subsidiary MBank. The workforce should be reduced to around 38,000 by the end of 2020.

The sale of Mbank is a desperate attempt at salvation.

In terms of stock market value, Deutsche Bank and Commerzbank are now loosely hanged even by more regionally active institutions from Norway and Sweden. [That is a direct translation that reads wrong but I do not know how to fix it].

Even the once proud Landesbanken is a restructuring case. This is a dangerous development.

"With the allowance, the ECB has relieved the German banks in the short term by around 500 million euros. At the same time, banks will be burdened considerably by the continuation of the low interest rates for an indefinite period, "says Peter Barkow, financial expert at Barkow Consulting. "Especially the German banks are very much dependent on income from the long-term investment of customer deposits at higher interest rates, called maturity transformation. This strategy only works very limited, "warns the expert. [The allowance refers to the ECB not charging banks a portion of the negative interest on excess reserves]

However, the corresponding earnings impact on the banks will only be delayed. "Many German banks have to find new sources of income in the medium term. In the short term, a further reduction in costs will probably be necessary, "says Barkow.

For more than a hundred years, banks lived on long-term lending or investing in securities their clients entrusted to them in the short term .

Historically, banks made money out of time. If time no longer has a price, because there is no more interest, nothing can be earned. Ten-year Bunds yielded around 1.5 percentage points more than two-year issues in historical terms. Currently, the difference is just under 0.2 percentage points.

In the multi-billion loan portfolios, the institutions are losing a lot of money due to ECB policy. Accordingly, the shares of Deutsche Bank and Commerzbank have fallen in sync with the interest rate differential. How dramatic the situation is for the banks, the analysts of JP Morgan have written down.

In a 120-page analysis, JP Morgan analysts calculated what effects the ECB policy will have on the banks. They used Japan as an example. Japan has had negative interest rates for some time now and there institutions have been unable to earn anything for two decades with time. The JP Morgan analysts' conclusion: Interest margins could continue to shrink and continue to weigh on the earnings side.

"The negative interest rate policy of the ECB is ruining the financial system and is a socio-political poison," says Frank Kohler, CEO of Sparda-Bank Berlin. The financial system is absurd if we have to explain to the children that money has a negative value - and thus debt is good, because you may not have to repay everything.

Socio-Political Poison

Bingo.

- Source, Mish Shedlock

Financial Markets At Very High Risk Of Black Swan Event

Last week, the markets had the risk of war with Iran and the Fed to worry about, but to start these final trading days of September, 2019, there are no major uncertainties on the market's radar, but there is a very specific reason why we might just see a black swan come swooping down onto the markets.

- Source, Silver Doctors