When Nancy Pelosi isn't making millions in exchange for ambassadorships or trying to dismantle the 2nd amendment from the safety of her ivory tower, the Congresswoman from California enjoys parading minorities around to shill for various causes.

In response to President Trump's Executive Order on immigration, Pelosi trotskied out Indiana Congressman Andre Carson to give an impassioned speech about diversity. After she introduced Carson as a "Muslim member of congress,"  ol 'Nancy wanted to make extra sure that his religious credentials were prominently displayed - which Carson promptly parroted. Oh, and he used to be a police officer! 

Andre Carson (D-IN)...fuels the perception that he is a former cop from a tough Indianapolis neighborhood. As it turns out, Carson was raised by his politician grandmother.  As a “cop,” Carson enforced sales tax collection from local retailers, or what is known as an “excise officer.” Not exactly patrolling the “mean streets” of Indiana. -theBlackSphere

What a tool...

First published here: http://j.mp/2jB7pDU

Dow 20,000 was ushered in with great fanfare. Traders on the New York Stock Exchange sported “Dow 20,000” hats. Even President Donald Trump joined the celebration.

Trump told ABC News he was “very honored” that the stock market gave his presidency a symbolic vote of confidence. “Now we have to go up, up, up. We don’t want it to stay there,” he said.

Everyone loves a bull market. Expecting stocks to go up forever, however, is a dangerous mindset to have as an investor. Recent history suggests that major milestones for the Dow should be viewed less as cause for celebration and more as warning signs.

What 1999 Can Teach Us About 2017

A case in point: Dow 10,000. On March 29, 1999, the Dow Jones Industrials closed above 10,000 for the first time ever.

The financial media, of course, cheered the milestone, feeding the public Wall Street propaganda rather than healthy skepticism.

Sure, the perma-bulls will always concede, there might be a pullback at some point. But books like Dow 36,000, released in 1999, bolstered the conventional wisdom that stocks were destined march higher over the next decade.

In fact, stocks went nowhere for 11 long years. The Dow suffered two crashes – one in 2002 and a bigger one in 2008.

In mid 2010, the blue chip average was right back where it was on March 29, 1999. The Dow crossed back above 10,000, as it had dozens of times before, to little fanfare.

It turned out to be the 10,000 cross that mattered. Finally, more than 11 years after the Dow first hit 10,000, stocks were in a new bull market. The Dow was on its way to 20,000.

Anyone thinking of buying stocks at today’s lofty valuations would be well advised to take heed of what happened to investors who bought at Dow 10,000 in 1999 and held on through today.

Yes, they did double their money (before dividends) in nominal terms.

But in real terms, the Dow hasn’t made any progress.

Investors would have been better off selling stocks when the Dow hit 10,000 and using the proceeds to purchase gold bullion.

Back in March 1999, silver sold for $5.20/oz and gold prices traded at a mere $285/oz. Gold values got as high as $1,900/oz in mid 2011 and today come in at $1,200/oz – still more than four times their 1999 levels.

That puts the Dow’s nominal rise from 10,000 to 20,000 in perspective. The index has merely flat-lined, at best, in real terms since 1999. Going forward, it may not even manage to do that.

Trump Knows He Inherited a Bubble

The price/earnings ratio on the Dow is now arguably in bubble territory. Valuations have been artificially inflated in no small part by the Federal Reserve. Last September, candidate Donald Trump called the Fed-fueled market “a big, fat, ugly bubble.”

President Donald Trump no longer sees it that way. Dow 36,000 here we come!

It will come eventually – even if only because of currency debasement. That doesn’t necessarily mean the next 5,000 point move in the Dow will be to the upside.

History suggests that investors will have better odds of making real gains in stocks by waiting to buy at lower valuations. A bear market in equities could commence at any time, and a final bottom could be years away. In the meantime, stocking up on alternative assets including precious metals will give you other opportunities to make real gains regardless of where the Dow heads over the next few years.

Will Trumpflation Be to Metals What Stagflation Was in the 1970s?

Gold and silver markets have posted some of their biggest up moves when the stock market has been down or flat. The stagflationary late 1970s weren’t kind to stocks, but they gave rise to a spectacular bull market in precious metals. It culminated in January 1980 with the price of an ounce of gold briefly equaling the quote on the Dow Jones Industrials.

From 1980 – 2000, Dow to gold ratio moved from as low as 1:1 to as high as 43:1. From 2000 – 2011, it fell to as low 6:1. The Dow to gold ratio now stands at around 17:1. Should it ultimately revisit the 1:1 ratio, we’d be looking at a massive stock market crash, an explosive move higher in precious metals prices, or some combination of both.

Could gold prices one day meet the Dow at 20,000 or some other number? A return to the 1:1 ratio is an extreme scenario, to be sure. But it’s not far-fetched at all to suppose that history might repeat itself.

Even if Dow to gold only got back to a 4:1 ratio, moving out of stocks and into precious metals at current levels would be the trade of a lifetime. It would imply a potential $5,000 gold price to a 20,000 Dow – a 317% return on gold versus a 0% return on stocks in this hypothetical scenario.

In any major bull market for precious metals, the more volatile metal – silver – can be expected to post the bigger returns. Silver, being both a precious metal and an industrial metal, may also be well suited to benefit from Donald Trump’s pro-industrial policies. Silver is essential in many areas of manufacturing, especially electronic and high-tech products.

Silver is also one of the world’s most enduring forms of money. Along with gold, silver stands as a “hard” alternative to depreciating fiat currencies and bubbly financial assets.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

The post Stock Market Highs Make Strong Case for Precious Metal Buys appeared first on Gold Silver Worlds.

First published here: http://j.mp/2kSS6Yf

By Chris at http://j.mp/22bDW4a

Ok, this is getting a bit ridiculous.

Ever since Americans picked the bully over the crook, and the Mexican Peso began acting like a penny stock just after the promoters begin dumping stock, I've been literally inundated with questions about Mexico. It seems I've got a lot of American readers super keen to look for value where others fear to tread. A good thing!

I did point out back in early December what I thought about the long Mexico trade and in particular the long MXN trade idea.

I showed this chart of the iShares MSCI Mexico Capped ETF (EWW) which is a decent enough proxy for the Mexican stock market. Today it's pretty much unchanged from when I first showed it to you over a month ago.

Here's what I said then:

The reason I chose to show you this chart, one going all the way back to the GFC, is because I want you to see the forest and not get caught up in the gnarly branches and roots of the trees, and as such realise that despite all the brouhaha crossing your news feeds. Trump’s election is IRRELEVANT to this market. The trend was in place well before Trump began lashing out at the Mexicans and Chinese for stealing America’s rice bowls KFC.

So that was, and still is, my macro thesis and how Mexico plays into it.

Sure, the Peso is cheap and by many accounts the greenback is not, but this is knee jerk, first level thinking to simply buy something when it's cheap. When digging down into the bowels of the market to try figure out what's driving capital flows and liquidity, I come to a different view.

This is the nexus of the articles I wrote about the eurodollar market. I urge you to drink lots of coffee and read it as well as the subsequent two articles: "The Eurodollar Market: It's Not Working" and "Collateral Damage", in which I explained my thesis as to why we've been experiencing deflation during ridiculous monetary expansion. A lot of my investment thesis stems from those articles and the knock on effects.

I'd planned to get some thoughts on Mexico when speaking with Mark Yusko today as he's recently back from a trip there, however the conversation went long on other topics and so that'll have to wait for another day. Maybe I'll hit record and publish it as a podcast, which could be fun.

Instead, today I thought to bring you my buddy Kuppy's (Harris Kupperman) take on Mexico because it's a topic we've discussed quite a bit. And since Kuppy is a great stock picker (and I'm more of a macro guy), I thought I'd share with you his thoughts on how best to play the Mexico on sale story.

Enjoy!

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I am writing to you from Santiago de Queretaro, Mexico, where the whole country is having a yuuuuge Donald Trump victory sale. Mexico is one of my favorite countries to visit. It combines a laid back attitude, friendly people and an outstanding culinary tradition.

It also helps that it’s currently one of the cheapest places on the planet—one of many reasons that I’ve spent 5 weeks here recently (Yucatan and Central Mexico thus far).

Mexico has always been known as an affordable place with cheap beer and tacos, but the last two years have taken that dynamic to an extreme.

Where else is the brand new AC Marriott $42 per night? In touristy San Miguel de Allende, we booked a 2,500 foot, 2 bedroom suite on the main square for $75 a night. Food for two with a bottle of mezcal is about $30 at the most posh of restaurants.

It’s verging on silly.

Between the two thirds decline in the Mexican Peso over the past two years and an over-dramatized fear of violence, the tourist economy is basically running on free. They’re just happy to see you and thankfully, my Mexican fiancé can translate my pathetic gringo Spanish as we travel around.  

5-year peso chart: 2/3 of the value is gone in just the last 2 years

If you don’t have a trip planned to Mexico, get working on it. I don’t think it will stay this cheap for long.

Let’s start with the obvious question—is it dangerous?

I tend to like statistics as opposed to jaundiced media reporting. The USA has a 4.5 per 100,000 homicide rate. Mexico is pushing 20, or about four times as bad. Given that I’m not terribly scared in America, four times worse doesn’t seem that bad.

When you dig into the numbers, you realize that much of this crime is drug related. In fact, if you aren’t involved in narco-trafficking, the homicide rate isn’t much worse than that of the USA.

Furthermore, most of the violence seems clustered in a few cities and states. I wouldn’t go to Baltimore or East St. Louis on vacation, why go to the Mexican version? Strip that all out and Mexico is on par with most of America.

Unfortunately, a few dramatic incidents have cost Mexico millions of visitors a year. Eventually, perceptions will adjust to reality and the tourists will flock back—especially given how affordable it is.

I have now taken two trips to Mexico during the past 10 weeks. The whole time, I’ve kept asking myself, “How do you play this?” It’s so cheap.

Despite threats of change from Trump, I know this is an overreaction. Mexico is sure to bounce back and keep growing--though, the economy may shift slightly from manufacturing towards tourism due to how cheap it is to visit.

The thing is, just because something is cheap, that doesn’t mean there’s always a “play.”

There’s an old adage in finance that you don’t buy the currency of Spanish speaking countries. Pull up a 10-year chart of any of these countries and it will be obvious why that adage has weight—pull up a 50-year chart and you won’t even be able to zoom in to where we are today. The peso has overshot recently, but it’s not an asset I want to own.

What about assets benefitting from a weakening currency?

In property, if you can borrow at a reasonable rate in a depreciating currency and get paid rent in US dollars, you’re going to make a fortune. Unfortunately, for most foreign property companies, rents are long-term and struck in depreciating local currencies.

However, the hotel sector is largely immune to this. They can adjust their room rates daily.

Fibra Hotel (FIHO12: Mexico) and Fibra Inn (FINN13: Mexico) have both borrowed in Mexican pesos. Right now, the rates they’re receiving are silly. Look up some of their hotels on the internet: $20 here, $30 there.

This is because there is a lag in how fast they can re-price room rates to take advantage of the decline in the peso—especially as many of their customers are business travelers with budgets in pesos.

However, their costs are mostly fixed, the assets were built with pre-depreciated currency—they’re now worth much more in current pesos than it cost to build them. The supply of new hotels will slow as it costs much more in current pesos to build new ones—all the old ones have a massive competitive advantage until room rates fully reset.

Meanwhile, due to Trump’s victory and the decline in the peso, Mexican hotel REITs are being priced like something awful is about to happen—instead, a weaker peso is a huge boon to them.

In terms of valuations, I don’t think annualizing current quarter cash flow is the correct measure to look at—as room rates in Mexican pesos will likely rise in future quarters.

That said, they trade at about ten times pro-forma AFFO and pay pro-forma Q4 dividends around 9% adjusted for stabilization of new assets. That’s very cheap for a property company with minimal leverage. With mostly fixed costs, I can model these companies to be trading for more like 6 to 8 times AFFO looking forward a year—due to a normalization of hotel rates on a fixed cost structure.

A more typical measure of valuation in the hotel industry is price per room. Adjusting debt for rooms still under construction, these companies trade at enterprise values of around $30,000 to $35,000 a room, while comparable rooms cost at least twice that to construct in Mexico. This would imply that they trade for less than half of replacement cost.

Interestingly, the Mexican hotel market is much more fractured than the US market. As the market consolidates, there are lots of hotels that can be purchased for 10 cap rates—even before economies of scale at a larger REIT increase the returns.

Given the low leverage at both of these companies and how cheap debt is, there is likely to be continued growth as these companies take advantage of distressed players and make highly accretive acquisitions.

Fibra Inn priced in US dollars since the IPO

Fibra Hotel priced in US dollars since the IPO

In summary, I have started small positions in each—I’m looking for further declines before I really add size.

Deep down, I don’t think they’ve bottomed yet. However, they’re very cheap based on almost any metric you can use. They have growth pathways and the re-adjustment of room rates over the next few quarters should flow through the cash flow statements.

Meanwhile, due to dividends, you’re paid well to wait. No one ever gets the exact bottom and Mexico is stunningly cheap, incredibly close for Americans and I expect that travel will increase as a result.

Over the next few quarters, one of two things will happen—either Trump and Mexico will reach an acceptable solution on trade where the currency recovers and average daily room rates reflect something closer to historical rental rates in Mexico when priced in US dollars or the cheapness of the country drives more tourists and occupancy increases, while room rates are re-priced closer to previous dollar rates.

Either way, I see RevPAR in US dollar equivalents increasing dramatically over the next few quarters.

In any case, I’m celebrating Trump’s victory with cheap cerveza, a cheap hotel room and two very undervalued REITs. I continue to seek out other opportunities in Mexico (stay tuned).

Disclosure: Long FINN13 and FIHO12

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That's it for today folks. Have a great week!

- Chris

"Mexico's making a fortune off the United States." — Donald Trump

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First published here: http://j.mp/2jtfLlG

First published here: http://j.mp/2kPhdz0

Where would you have to jump on a plane to in order to be able to see the most egalitarian country in the world? Where exactly would you need to go and could you take it living surrounded half the year with snow, or with a volcano ready to erupt? But, you might just put up with all of that just so long as the people had a greater and more even distribution of wealth between them.

It’s time that the rich stopped getting richer and the poor stopped having to slave away, isn’t it? If you did want that, then you would have to go to Iceland.

The last time Iceland was in the news it was in 2008 when the Icelandic Financial Crisis started. It was the largest banking collapse experienced by any country in the world, relative to its economy. Perhaps though there are great lessons to be learnt from what happened to them. At least the Icelandic people came out of it with a greater spread of wealth in the country. What did the USA get out of the financial crisis? Just richer banks and wealthier 1%-ers. Perhaps now is the time to start learning from others rather than believing that we, the Americans, have done it, been there, seen it and heard it all before.

The Gini Index is a measurement of equality of wealth in a country and it has a base rate of zero, at which everybody has perfectly the same amount of wealth in society. A score of one (100%) means that there is extreme inequality in a country. Maximum inequality of 1 means that only one person possesses all income and means of consumption in a country. The Gini Index or the Gini Ratio was developed by an Italian statistician called Corrado Gini in 1912. The Index can be used to valuate also the before and tax distribution of wealth in a country. The USA comes out looking pretty dismally in the Index as it does very little to reduce inequality in the country between people.

In 2010, the then Managing Director of the International Monetary Fund, Dominique Strauss-Kahn stated in a speech: “But globalization also had a dark side. Lurking behind it was a large and growing chasm between rich and poor—especially within countries. An inequitable distribution of wealth can wear down the social fabric. More unequal countries have worse social indicators, a poorer human development record, and higher degrees of economic insecurity and anxiety. In too many countries, inequality increased and real wages stagnated—failing to keep up with productivity—over the past few decades. Ominously, inequality in the United States was back at its pre-Great Depression levels on the eve of the crisis.”

Inequality stops economic growth. Inequality prevents poor people from accessing the social fabric and it also diverts those people into other activities that are unproductive or illegal. Without sharing of economic growth within and without of a country, there will be a backlash one day from those that are not able to participate actively in the accumulation of the wealth.

So, where are the countries that are doing little to redistribute anything amongst the majority of people? Not as far from home as you may think! The following figures are taken from the study carried out on Organisation for Economic Co-operation and Development (OECD) countries.

10. Japan

Japan has a Gini Index (after tax and transfer) that stands at 0.336. It is therefore the 10^th country with the largest unequal distribution of wealth in society. But, it’s way ahead of the USA, in 4^thposition as one of the worst countries in the world.

9. Greece

The Gini Index for this ailing economic country stands at 0.337 (post tax and transfers). Without taking taxes and transfers into account Greece would have had the 4^thhighest inequality of wealth in the OECD world. Many are prone to criticize the bad economics and finances of the country, but few are willing to look at their own country’s plight.

8. Spain

The Gini Index for Spain amounts to 0.338 (post tax and transfers) and so it is the 8^th worst unequal country in the OECD world. Is the unequal distribution of wealth due to the relatively low rates of education (54% of Spaniards only aged 25 to 64 years old possess upper secondary education)? Spain has an unemployment rate that is still at 23.78% today.

7. United Kingdom

The distribution of wealth in the UK is the 7^th worst in OECD countries, with a Gini Index (post tax and transfers) standing at 0.341. However, if we take into account pre-tax and transfers, then it has the 3^rd worst unequal distribution of wealth. Will the UK’s position see a drastic change when the newly elected government of David Cameron decides to implement further cuts in allowances and family financial support that was announced during the election campaign? David Cameron was elected on making £12 billion in savings on the Welfare State. So far, they have only been able to account for where £2 billion is going to come from.

6. Portugal

This country has the 6^thposition and has a Gini (post tax and transfers) Index of 0.344 just ahead of the UK. Portugal has the lowest number of residents in an OECD country that has a tertiary degree (17.3%) and unemployment still stands at 13.7% in May 2015.

5. Israel

The Gini index (post tax and transfers) stands at 0.376 just behind the USA. It has the 4^thlowest percentage of social spending to GDP ratio (15.8%). Unemployment in Israel, however, only stands at 5.3% today.

4. United States

The USA’s Gini (post tax and transfers) index stands at 0.38 and is one of the worst in the world (OECD). It has the 11^th lowest social sending as a percentage of GDP (20%). It has the 3^rd highest GDP per capita in the OECD. 42% of people aged between 25 and 64 have a tertiary degree . But, despite this, there is still great inequality in the country between the rich and the poor.

3. Turkey

The Gini (post tax and transfers) Index here stands at 0.411 and it is the 3^rdworst country in the world. Only 14% of the population have a tertiary degree (ages 25 to 64). This is the lowest level of tertiary education in the OECD world.

2. Mexico

This country has a Gini (post tax and transfers) Index of 0.466 and it is the 2^nd worst country for inequality in the world. It only spends 7.4% of GDP on social areas to try to reduce that inequality.

1. Chile

This country is the worst in the world for inequality amongst OECD countries. It has a Gini (post tax and transfers) Index that stands at 0.501 and its social spending as a percentage of GDP stands at 10.2% (the 3^rd lowest in the world).  It currently has a GDP growth rate of 1.04% and yet it has great inequality in the country. The greatest.

It’s not surprising perhaps that Iceland is the country with the lowest gap between the rich and the poor. This is, after all, the country where the people in the wake of the financial crisis and the meltdown marched on their Parliament and demanded the resignation of the government. The protest came to be known as the Kitchenware Revolution or the Kitchen Implement Revolution because the people marched on the seat of the Icelandic government in Reykjavik on January 20^th 2009 and banged on pots, pans and kitchenware until the government resigned. Then, a new government formed following an election and for the first time in the history of the country and in fact in the world 25 people with nothing to do with the political world whatsoever were elected from the people directly and formed a Constitutional Assembly that would see the writing of a new Constitution, this time one that came from the real people.

Who’s for marching on the Capitol with their baking tins?

Are you prepared to allow the USA still to have the 4^th most uneven distribution of wealth between the rich and the poor? Wasn’t this the land of opportunity at one time, many eons ago? 

 

First published here: http://j.mp/2jSMm2V

By EconMatters

In this video we discuss Donald Trump`s interesting take on Financial Markets, pre-election results, and now that he is President. Everyone knows we are in a Stock Market Bubble!

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle   

First published here: http://j.mp/2jSKh7a

Remember Fed Watchers?  It was like a market fetish - watching Sir Alan Greenspan's every move, as a possible 'hint' of interest rate policy.  Was his briefcase heavy?  Did his shoulder sag more than usual - indicating many papers in the briefcase, which means the Fed has a lot to decide?  Those were the days.. although Ben didn't seem to have the intellectual charisma of Sir Alan, Ben Bernanke seemed to work as a robot, with no indications from his personality whatsoever, not even a twitch of his beard.  No comment about the current Fed Chair.

Trump however, seems to have changed the game - look just from today:

http://j.mp/2jzA0ZY

If anyone was wondering what Trump would tell Pharma CEOs in an ad hoc meeting scheduled for 9 am today, here is the answer:

• TRUMP TO DRUG CEOS: YOU HAVE TO GET PRICES DOWN
• TRUMP ON MEDICARE, MEDICAID WE NEED PRICES WAY DOWN.  PRICING HAS BEEN ASTRONOMICAL
• TRUMP SAYS NEED TO MAKE DRUG PRODUCTS IN THE US
• TRUMP WILL OPPOSE REGS FOR SMALLER COMPANIES

Some companies are even developing strategies to monitor "The Trump Call" tweet effect:

Just in time for his inauguration, London-based fintech firm Trading.co.uk is launching an app that will generate trading alerts for shares based on comments made on social media by Donald Trump.

Keeping one eye on the U.S. President-elect’s personal Twitter feed has become a regular pastime for the fund managers and traders who invest billions of dollars daily on world stock, currency and commodity markets.

This is all well and good but what implications for the broader markets?  Such a market force has frankly, never existed.  When someone like Bill Ackman tweets, people notice.  But it won't drop the USD Index by 1%, nor will it tank the Biotech Index, or tech.  For better or worse, the Trump tweet effect is a new force that's changing the market dynamic - let's say for the better, because at least it's disruptive.  Fundamentally, short term spikes shouldn't change anything, it's just perception and knee jerk reaction.  Algos should be adaptable, and if you're trading for the long term fundamental play - short term moves shouldn't matter too.  

But this is a 'visible hand' that's never been seen in the markets before.  It's a new risk, a new risk to hedge.  It's possible to hedge any risk, using options, futures, insurance, and other instruments.  

On the other hand, entire strategies could be developed, just trading the Trump tweet momentum - but you'll have to be quick!  

To learn about FX Hedging, such as Emerging Market hedging which is going to be an increasing issue in 2017 - Checkout Fortress Capital Hedging.

If you want to get started learning how markets really work, checkout some titles from the bookstore here at pleaseorderit.com

First published here: http://j.mp/2jzEuQs

Donald Trump’s trade policy is likely to spark higher consumer price inflation, and that has ramifications for gold and silver prices. Regardless of where investors stand regarding the president’s plan to make Mexico “pay” for the border wall, if he is successful in getting Congress to impose a hefty tax on imports it will mean higher prices for things. A tax on goods from China could be even more inflationary.

Saying that higher import taxes are inflationary may be a statement of the obvious, but it is worth making given Trump’s recent promotion of a tax on Mexican goods.

He implies Mexican exporters will “pay” for the wall by absorbing the 20% tax. They won’t. No competitive enterprise has that sort of excess margin.

Trump can punish Mexican exporters by making them less competitive, but he cannot make them pay. Because of Trump’s approach, the U.S. consumer will pony up, one way or another.

The true merits of taxing imports from Mexico and China are currently hotly debated, but no one should be fooled about who will bear the cost. The real question for Americans is whether it makes sense to pay significantly higher prices for goods in order to finance the wall and stimulate U.S. employment and manufacturing.

While on the subject, it is also worth noting that price inflation in the U.S. does not necessarily mean the dollar will weaken relative to other world currencies. In other words, the DXY index and the Consumer Price Index can move higher in unison.

Consider the proposed 20% tariff on Mexican imports. The dollar will weaken relative to Mexican tequila, but it may well strengthen relative to the peso.

Trump’s threats to renegotiate NAFTA and implement taxes on imports crushed the peso in the weeks following the election. Traders saw bad news ahead for the Mexican economy and dumped the currency.

This dynamic may explain why gold and silver prices aren’t yet responding strongly to the inflationary prospect of higher tariffs. Sometimes precious metals rally in advance of higher inflation rates, and sometimes they follow.

So far this year, the U.S. dollar has fallen versus most foreign currencies. Should we start to see a rise in the DXY index, it could exert modest disinflationary pressures in some areas of the economy. But regardless of where the dollar heads against other currencies, the inflation genie will be let out of the bottle if Trump successfully implements his trade policy and CPI numbers shoot higher.

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

The post Trump’s Trade Policy to Drive Price Inflation and Gold Buying appeared first on Gold Silver Worlds.

First published here: http://j.mp/2kasO8R

By EconMatters

If Elections were held tomorrow, The Democrats would win the Presidential election and the Senate for sure, and maybe even the House of Representatives; it is going to be brutal for Republicans come Midterm Elections. Donald Trump is even hurting the business community with his policy initiatives.

Donald Trump will be slowly isolated in Washington and be a lame duck President in two years, most of the stuff Donald Trump blusters about will never see the light of day. The Global Economy will be in recession, and although he will not have caused it directly, he sure will not have helped the situation with his extreme policy approach, and ultimately he will serve as the easy scapegoat for laying the blame.

At this rate, even the business community will be tired of his dictatorial act, and multiple groups will band together and take him down. He will probably be the most impotent President serving out the last couple years of his term, that`s if he isn`t outright impeached before then. Things are going to get rather ugly given his incompetent cabinet makeup these four years; things are not shaping up good for financial markets and the Global Economy under Donald Trump. Financial Market Participants could not have gotten this more wrong after the election.

They are so completely off sides and unprepared for what is to follow over the next four years. I cannot think of a worse Price and Time Relationship to be this Long as a Market Participant. Given valuations what they are, Central Banks at the end of the Road, and a Global Trade War, with Geopolitical Event Risks off the Charts. And I didn`t even get to the unsustainable debt burdens of governments around the world, the end of the stock buybacks and dividends era, and baby boomers about to take out retirement funds from financial markets to live on for the next decade.

I would have thought that the 2008 Financial Crisis cleaned out a lot of the dead wood, i.e., incompetent money managers from the system in a purge effect, but it appears as if the dead wood was replaced with even stupider investors and more incompetent Dead Wood. The Decision Making, Critical Thinking Skills necessary for making intelligent investment decisions is sure a rare commodity these days in Financial Markets.

 

 

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle    

First published here: http://j.mp/2kIfuIo

Hold your real assets outside of the banking system in one of many private international facilities  -->    http://j.mp/2dmUweZ

 

 

 

 

Sometimes It’s Better To Be Lucky Than Good

Posted with permission and written by John Rubino (CLICK HERE FOR ORIGINAL)

 

 

 

In 2015 there was no way the UK would vote to leave the European Union, so Prime Minister David Cameron promised to call a “Brexit” referendum as a cost-free sop to his party’s right wing in the upcoming election. The Conservatives won big, and Cameron kept his promise to run the meaningless referendum. But against all odds and contrary to nearly every election-day poll, Brexit won, flushing Cameron out of politics, pulling the UK out of the EU, and handing a huge victory to a populist coalition led by the UK Independence Pary’s Nigel Farage.

 

In 2016 comedians and mainstream Democrats encouraged Donald Trump to run for president, convinced he would generate lots of good jokes and possibly damage the field of “legitimate” Republican presidential candidates. He did both, but to a far greater extent than his early boosters anticipated, placing the world’s most important government in the hands of a brand-new populist movement.

 

Also in 2016, Italian Prime Minister Matteo Renzi convinced the legislature to shift some of its powers to the executive branch. But because he wanted a popular mandate for what might otherwise be perceived as executive overreach, Renzi called a referendum to ratify the changes and promised to quit if it failed. The referendum went down in flames, Renzi did indeed quit, and the populist Five Star Movement now has a real shot at taking power within the year.

 

These three events all have one thing in common: Catastrophically-overconfident establishments making (in retrospect) suicidal mistakes which opened the door for populist movements that would not otherwise have taken over their respective countries – at least not yet. Their self-inflicted wounds have changed the world.

 

Now we come to France’s Marine Le Pen, the anti-euro, anti-EU leader of the far-right National Front party. She’s popular, polling first among all presidential candidates heading into upcoming elections. But she’s been given no chance of actually winning the run-off that pits the top two candidates against each other in May. The expectation was that the entire rest of the right-left spectrum would cooperate to elect a mainstream candidate.

 

That candidate was expected to be François Fillon, a “Thatcherite” conservative who would impose a little free market vigor on the sclerotic French economy without otherwise upsetting the mainstream internationalist applecart.

 

Then this happened:

 

François Fillon faces fresh allegations over misuse of public funds

(Guardian) – The rightwing French presidential candidate François Fillon is facing fresh questions over alleged misuse of public funds, in the wake of claims that his wife was paid €500,000 over eight years for a fake job as a parliamentary assistant.

The French investigative website Mediapart and the Journal du Dimanche claimed that between 2005 and 2007 Fillon had pocketed money from a kitty of funds earmarked for paying assistants in the French senate.

Mediapart claimed he had “siphoned off” about €25,000 (£21,000) from funds earmarked for assistants in the French upper house.

Last week, state financial prosecutors opened a preliminary investigation into possible misuse of public funds to determine whether Fillon’s wife, Penelope, was paid a very generous salary from public funds for a job she allegedly didn’t carry out. Prosecutors are also investigating whether a high salary paid to her from a magazine owned by a billionaire friend of Fillon amounted to “misuse of company assets”.

The issue is potentially so damaging because Fillon’s austerity plan for France hangs on his own carefully crafted reputation for righteousness. It will be much harder for Fillon to convince a cash-strapped electorate of his controversial plans to slash 500,000 public-sector jobs and make state workers put in more hours for less pay if questions persist about his family’s privileged access to jobs paid for by their taxes.

 

Now the French election is up for grabs, with the real possibility of a runoff between Le Pen and a leftist who, well, here you go:

 

Meet the robot-taxing, marijuana-legalizing, Jeremy Corbyn of the French left

(Politico) – French left-wingers are fed up with being in power.

That appeared to be the message that 600,000 of them were sending Sunday when they made a little known former education minister the favorite to win the left’s presidential nomination.

Benoît Hamon, who spent the past two years as a Socialist backbencher fighting his own government, has little to no chance of winning the presidency in May. Then again, neither does the runner-up in Sunday’s vote, former Prime Minister Manuel Valls, according to the latest Ipsos poll.

Valls campaigned on a scrupulously realistic, some would say boring, platform of incremental change, always touting the possibility of a left-wing victory in May. By contrast, Hamon never suggested victory and drew accusations that he was deliberately campaigning not to win by pitching far-out ideas like taxing robots, legalizing marijuana and paying all French people a €750 living wage.

 

The upshot: Le Pen suddenly has a serious chance of running France in 2017 and beyond. The prospect of a Trump/Putin/Le Pen/Farage axis remaking the world is, um, intriguing. And it couldn’t have happened without the Establishment’s wholehearted if unwitting cooperation.

 

 

 

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Sometimes It’s Better To Be Lucky Than Good

Posted with permission and written by John Rubino (CLICK HERE FOR ORIGINAL)

First published here: http://j.mp/2kLwYaf