At the same time, of course, as you pointed out, precious metals have not been exactly in huge demand in that sort of environment. That is because, hey, future cash flows are safe. Now if volatility goes up, then suddenly you’ve got headwinds to those future cash flows. An advantage to having gold that has no cash flow is that we’re merely discounting that change. So, relatively speaking, when volatility goes up, gold is more in favor. That’s one of the reasons why when there’s a so-called crisis in the world, gold tends to do well.
Years later, after recalling my Dad’s grumbling about inflation in the late 1970s, I had a second question: if the Dow did end up taking a protracted time to get back to even, wouldn’t inflation erode my real rate of return? If it took a portfolio-killing ten years, for example, I might have earned back that $20,000 I lost, but now the car I’d planned to buy with that money cost not $20,000 but $30,000. Or $40,000. Show me all the long-term charts you want but I still can’t afford to buy that car.
Yes, a senior Fed official, and one who has a direct line to Fed Chair Janet Yellen, stated that the stock market is running on “fumes.” This degree of bearishness from ANY Fed official is incredible. But for Williams to make a statement like this on the very same day that the Fed Vice-Chair pointed out that stocks are overvalued is like a six sigma event.
This is a CLEAR signal that the Fed is ready to let stocks fall from their lofty levels. But before anyone panicked, Fed Chair Janet Yellen appeared to assure us that the Fed stands ready to halt any financial crisis from occurring when the drop comes.
Historically, September and October have marked difficult trading periods for the stock market, with indexes frequently suffering sharp losses during those months. There are numerous market pundits and talking heads who are saying that stocks are overvalued and have run too far. They are all searching for that black swan that will topple everything.
Are earnings going to be the death knell for this rally?
The specter of hate incidents and crimes — some of them fueled by the nastiness of the 2016 presidential campaign — felt white hot months ago. The issue remained high-profile as several horrific murders — a South Asian immigrant slain in Kansas City, a homeless black man butchered near Times Square in New York — generated outrage and national news coverage.
Speaking at a news conference, B.C. Minister of Energy, Mines and Petroleum Resources Michelle Mungall said the project was “uneconomical to move forward. We respect the company’s decision.”
Mungall denied that the decision was related to B.C.’s new NDP government’s position on LNG projects.
The Steel Manufacturers Association (SMA)—whose members represent 75 percent of U.S. steelmaking capacity – strongly supports the intent of the American-steel-first policy, arguing that it would boost the economy, increase capital investments, and create American jobs.
“With capacity utilization rates hovering around 70 percent, the domestic steel industry has ample existing capacity to supply materials for pipeline projects,” SMA President Philip K. Bell says. “This plan is also a critical component in the achievement of U.S. energy self-sufficiency,” Bell notes.
The drought is so bad, in fact, that an estimated seven out of ten farmers in these areas have chosen not to even attempt to bring their wheat to full harvest, instead baling it early to create hay. That strategy drastically reduces the amount of wheat to be made into flour on the open market, and also reduces the income of those farmers.
That hay will be used to feed animals that are unable to graze in the parched pastures of the west, but at a much lower price; hay, even with a spike to about $100 per ton thanks to the drought, fetches typically about 60 percent the price of wheat.
Gold & Silver
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