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ARE YOU GOING FOR THE GOLD?

Wednesday, April 22, 2020

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‘The Fed can’t print gold’

The economic response to the coronavirus has been unprecedented.

From record drops in consumer spending, to expectations of a record decline in GDP growth, and a never-before-seen explosion in support from fiscal and monetary authorities, we are in a truly unparalleled environment for investors.

And amid these newfound challenges, strategists at Bank of America Global Research think the case has strengthened for the oldest safe haven in the book: gold.

“As the ultimate store of value, gold prices have performed well during the past 15 months, posting a rally of over 10% since the Federal Reserve did a monetary policy U-turn in January 2019,” write strategists led by Michael Widmer.

“The size of major central bank balance sheets has been stable at around 25% of GDP for the last decade or so, just like the gold price,” the firm adds.

“As economic output contracts sharply, fiscal outlays surge, and central bank balance sheets double, fiat currencies could come under pressure. And investors will aim for gold. Hence, we mark-to-market our forecasts and now project an average gold price of $1,695/oz in 2020 and $2,063/oz in 2021… we have also decided to up our [18 month] gold target from $2,000 to $3,000/oz.” (Emphasis added.)

The case for the yellow metal from BofA is straightforward — investors seeking protection from an economic downturn and a targeted reflation of the economy via fiscal and monetary stimulus will turn to gold for safety.

Or as BofA writes: “The Fed can’t print gold.”

Now, the gold trade has had its ups and downs over the years, but proved resilient during a strong stock market run in 2019 and has weathered the coronavirus chaos quite well. Indeed, only long-dated U.S. Treasuries have kept up with gold as successful safe haven trades this year.

After a few flat years, gold surged in 2019 and has performed well during the current crisis, keeping pace with other safe haven assets like long-dated Treasuries. (Source: Bank of America Global Research)
After a few flat years, gold surged in 2019 and has performed well during the current crisis, keeping pace with other safe haven assets like long-dated Treasuries. (Source: Bank of America Global Research)

BofA notes that factors such as a strong US dollar, continued market volatility, and decreasing demand from emerging market buyers could also weigh on gold. A poll from Reuters published Monday indicates traders see gold trading lower on these concerns this year and next.

BofA also notes that a spread between the paper and physical contract widened in early April on concerns over global gold production and the inability for some buyers to take delivery. And while these spreads have narrowed in recent days, the blowout in oil seen this week is a reminder that physical settlement of commodities can in extremely rare instances cause chaos in the market.

DoubleLine CEO Jeffrey Gundlach tweeted Monday that he foresees a similar, but opposite, dynamic potentially playing out in gold — demands for physical delivery corresponding with no bullion available to deliver.Jeffrey Gundlach@TruthGundlach

I spoke about how physical gold is far better that “paper gold” for the opposite but related reason that tanked May WTI today. What if the “paper gold” vehicles wanted to take delivery of their futures and the counter party couldn’t deliver?2,847Twitter Ads info and privacy856 people are talking about this

In late 2019, we highlighted work from Goldman Sachs that indicated a preference for physical gold among investors seeking to stable stores of value for their wealth. In that note, Goldman strategists forecasted the gold price would rise to $1,600 by 2020. Of course, in December no strategists were baking a global recession into their forecasts for this year.

As of Tuesday, an ounce of gold was trading just below $1,700.

And in an environment where fiscal and monetary authorities around the world appear ready to do whatever it takes to get businesses and consumers back on their feet after a forced stoppage of economic activity, BofA writes that “a lot of risks could effectively be socialized, boosting the appeal of gold.”

So far, so good.

By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdlandStory continues

Inflation: merely a monetary phenomenon?
On 22 January 2015, Mario Draghi announced a considerable enlargement of the ECB’s public and private bond purchase
programme (QE) with the goal of anchoring inflation expectations in the medium term and reviving the economy, something that
was unimaginable a year ago. With this announcement, the ECB joined the rest of the central banks such as the Federal Reserve,
the Bank of Japan and the Bank of England that have been increasing their balance sheets by buying up assets for some time now.
A large amount of liquidity has been injected into each country’s economy through these expansionary monetary policies.
However, inflation has continued to fall steadily and is now starting to jeopardise the anchoring of inflation expectations in the
medium and long term. Given this unusual situation, some have even questioned one of the few laws in economics that had
seemed resilient, known internationally thanks to a famous phrase by the economist Milton Friedman:
Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced
only by a more rapid increase in the quantity of money than in output.
This claim that inflation is a monetary phenomenon is based on the quantity theory of money, according to which prices vary in
proportion to the money supply. This relationship is based on a mathematical identity,1
according to which the value of transactions
carried out in an economy (understood as nominal GDP) is equivalent to the amount of money circulating in that economy
(understood as the amount of money in an economy multiplied by the number of times this changes hands; i.e. the velocity of
money). If we assume that the velocity of money is constant, in an economy without economic growth the inflation rate equals the
rate of growth in money. Therefore, if money supply increases, there will be more money chasing the same goods, so prices will go
up. Similarly, if the rate of growth for economic activity and the quantity of money is the same, prices should remain constant.
Friedman’s statement has been backed by empirical evidence,
also showing a positive relationship between inflation and
growth in excess money supply (growth in money supply
above the real growth in GDP) for a large number of countries.
This relationship is strong and robust in the long term but, the
relationship between both variables may weaken temporarily
in the short term due to factors such as price rigidity and the
velocity of money not being constant. For example, a reduction
in the velocity of money in circulation would be compatible
with an increase in the money supply without putting pressure
on prices.
Based on the above, both the theory and empirical evidence
suggest that, if growth in the money supply is greater than the
actual growth in GDP, this should push up inflation in the
medium term. However, since the start of 2012, the relationship
between both variables seems to have weakened to the point
of almost disappearing. On the one hand, growth in money
supply has accelerated more than GDP growth while, on the
other, core inflation2
has continued to fall. Below we look at the main factors that lie behind this decoupling between monetary
aggregates and prices in the last few years.
In this respect, an analysis of the effectiveness of monetary policy and specifically how it affects monetary aggregates is essential.
In general terms, when a central bank offers liquidity to the banking system, either by offering long-term credit or by directly
purchasing some of its assets, the monetary base increases.3 There isno automatic rise in the money supply,4
however. Traditionally
banks would use the liquidity provided by central banks to increase the supply of credit 5
and movements in money supply were
therefore in line with those in the monetary base, ultimately leading to an increase in consumption and investment and thereby
pushing up prices.
However, the considerable increase in the monetary base occurring over the last few years has not led to a similar increase in the
money supply (see the table). The factors limiting the growth capacity for credit can be found both in its demand and supply.
0
5
10
15
20
25
30
0 5 10 15 20 25 30
M2/GDP **
CPI
Notes: * Each dot represents the average inflation and growth in money supply above GDP
growth for advanced economies. ** M2 is a measurement of the money supply.
Source: ”la Caixa” Research, based on data from the IFS.
Long-term relationship between prices and money
supply by country *
Year-on-year change (%) (average 1984-2013)

  1. M x V = P x Y or dM + dV = dP + dY. Where M is money supply (dM are the variations in this variable), V is the velocity of money circulation, P are prices and Y is GDP
    in real terms.
  2. We have focused on core inflation to isolate the effect of falling oil prices over the last few months.
  3. Monetary base is understood as the amount of liquidity provided by central banks, either in the form of currency in circulation or bank reserves deposited with the
    central bank.
  4. The relationship between the monetary base and money supply is known as the money multiplier.
  5. Money supply is understood as the currency in circulation plus currency in its most liquid form; i.e. bank deposits.
    39
    www.lacaixaresearch.com febrUARY 2015 www.lacaixaresearch.com
    DOSSIER: INFLATION EXPECTATIONS 02
    Specifically, a significant part of demand was imm

“LET THEM EAT ICE CREAM” “TO HELL WITH THE COMMONERS”

Pelosi is hunkered down in a multi million dollar estate overlooking the ocean in San Francisco. She is living the high life, the dolce vita while the population at large is starving for their next meal. To her, less for them is more for her. Click here to get a taste of her small thinking brain.

https://www.dailywire.com/news/brutal-ad-devastates-pelosi-over-elitist-attitude-while-americans-suffer

https://www.washingtonexaminer.com/news/you-should-be-ashamed-critics-unleash-on-pelosi-for-showing-off-freezer-loaded-with-ice-cream

WE WILL SEE YOU IN COURT – XI JINPING WANTED DEAD OR ALIVE FOR MASS MURDER

The Butchers of Beijing must be held accountable for murder. Countries, States and citizens have brought or will be bringing legal action individually and through class action against the Communist Regime. Most of these suits will be futile; they will fall on deaf ears due to the fact that suing a foreign government is all but impossible. However, we have the solution to the problem. Simply put, all nations that owe a debt to China, have assets belonging to China or in the case of third world countries that have signed infrastructure projects with China, DECLARE THEM NULL AND VOID. “FORCE MAJEURE

For instance, China is believe to hold approximately THREE TRILLION DOLLARS ($3,000,000,000,000) IN TREASURY BILLS, DECLARING THEM “NULL AND VOID” IS THE RIGHT THING TO DO. China will never pay otherwise, therefore to ZERO out the amount owed to China would effectively exact the debt they owe the world. But that is not all, the world must also take SIX other actions.

Demand that all Chinese enterprises leave their countries, demand all Chinese citizens leave their countries, demand that all Chinese education entities cease their operations and track down any other Chinese assets, such as building ownership, corporations or entities and nationalize them. Halt all Chinese owned companies on the stock exchanges. And do not allow any Chinese imports into their respective countries. THESE ARE NOT THREATS, THIS IS FRONTIER JUSTICE.

We must say that killing one person does not even come close to what we recommend, but it is a start. These actions may stimulate a revolution in China that will eventually overthrow the worlds MASS MURDERER.

WE ASK BEIJING, “WHAT ARE YOU GOING TO DO ABOUT IT?”

PELOSI SPREADING COVID-19 LIES

Nancy Pelosi Spins Ludicrous Defense for Her Promotion of Chinatown Tourism in Late February

Posted at 1:30 pm on April 19, 2020 by BonchieShare On FacebookShare On Twitter

Nancy Pelosi Spins Ludicrous Defense for Her Promotion of Chinatown Tourism in Late February

Speaker of the House Nancy Pelosi, D-Calif., makes a statement about a coronavirus aid package, on Capitol Hill in Washington, Friday, March 13, 2020. (AP Photo/J. Scott Applewhite)

Nancy Pelosi, after nearly two months of the media ignoring it, was finally asked this morning about her promotion of tourism in late February, even as the Wuhan virus had clearly escalated into a serious situation for the country. This came during a trip to Chinatown in which she told people everything was safe and that they should come visit.

The reason this is so relevant is because Pelosi has relentlessly attacked Trump as not taking the virus seriously enough in January, even accusing him of having killed people as a result. Given that, the fact that she’s on video telling people to go to Chinatown and enjoy the food a month later makes her a massive hypocrite.

Anyway, here’s her insufferable answer as to why she did it.Matt Batzel@MattBatzel

Pelosi defends encouraging tourism to Chinatown on February 24 because she felt she was exposing bigotry

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TRENDING

Here’s How Worried About COVID-19 the 2020 Democratic Primary Candidates Were

Elizabeth Vaughn 

You see, she was just trying to fight discrimination or something. That makes sense because discrimination is defeated by encouraging people to gather in densely packed areas to spread a deadly disease. Wait, what?

One of the more ridiculous things Democratic politicians have learned to do in the last decade is to spin every flub into a topic on racism. They apparently see that as a shield whereby they can’t be criticized as long as they are flexing their social justice muscles. The reality is that Pelosi told people to come to Chinatown in late February because she didn’t know any better. And because she didn’t know any better, she has no business going after others for their response to the virus.

She wants to have it both ways though. Her words must be hand waved away, but she can basically accuse Trump of murder for actions he took before anyone believed this disease would be much of an issue in the United States.

These recriminations have become absolutely ludicrous at this point. There was no world where Trump could have taken tougher actions in January, nor even into late February. It wasn’t until early March that the magnitude of the situation was apparent enough that the public was willing to buy-in. Pelosi has disingenuously attempted to act as if she were ahead of the curve long before the administration was. That’s simply false and her past statements show it to be false. No amount of hiding behind ridiculous charges of racism will change that.Front-page contributor for RedState. Visit my archives for more of my latest articles and help out by following me on Twitter @bonchieredstate.Read more by Bonchie

PELOSI LICKS ICE CREAM WHILE AVERAGE AMERICANS ARE STARVING

Nunes claims media double standard over Pelosi ice-cream incident: McConnell would be ‘thrown out’ as leader

By Yael Halon | Fox News

Rep. Devin Nunes on Congress making business relief deal amid coronavirus crisis

California Congressman Devin Nunes joins ‘Fox and Friends.’

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

California Republican Rep. Devin Nunes slammed House Speaker Nancy Pelosi, D-Calif., Sunday for showcasing her gourmet ice cream while stalling the replenishment of the Small Business Administration’s (SBA) emptied fund allocated to help businesses shuttered by the coronavirus pandemic.

“If any Republican leader, if [Senate Majority Leader] Mitch McConnell or [House Minority Leader] Kevin McCarthy or any of our speakers in the past would have done something like Pelosi did, where she’s sitting at home in front of her refrigerator with a $24,000 freezer that I don’t think too many of us have… it would be a fatal flaw,” Nunez told “Fox & Friends Weekend.”

“We would boot McConnell or McCarthy out of leadership just like that,” he added. “They would have been out four days ago, the minute that popped up.”

He also said the media gave Pelosi a free pass.

“If you have Mitch McConnell with a bunch of gourmet ice cream, he’d be thrown out of leadership immediately.”— Rep. Devin Nunes, ‘Fox & Friends Weekend’

Nunes was referencing Pelosi’s appearance via livestream on CBS’ “Late Late Show” last Monday, during which she showed host James Corden her elaborate ice-cream collection while standing in front of a high-end, pricey refrigerator. Pelosi later posted the controversial clip on Twitter, with the caption: “We all have found our ways to keep our spirits up during these trying times. Mine just happens to fill up my freezer.”

“What the hell is going on?” Nunes shot back.Nancy Pelosi@SpeakerPelosi

We all have found our ways to keep our spirits up during these trying times. Mine just happens to fill up my freezer. #LateLateShow

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Nunes was the latest Republican lawmaker to criticize the leader for showing off her wares amid nationwide layoffs and furloughs. Meanwhile, Senate Democrats earlier this month rejected a request by McConnell, R-Ky., to provide unanimous consent to legislation that would have added $250 billion to the SBA’s Paycheck Protection Program (PPP).

“When you have… 20 million people unemployed and you have people that can’t get paychecks… she’s sitting in San Francisco eating gourmet ice cream? It doesn’t fly, out in the real world,” Nunes said.

THE CORONAVIRUS OUTBREAK, STATE-BY-STATE

Democrats said any legislation to fund the small business program also needed to provide aid to hospitals, Nunes explained, adding that lawmakers have been in contact and have proposed a “logical plan” that would gain bipartisan support.

“We had a conference call yesterday. We have another one scheduled for tonight. The idea is she [Pelosi] would ‘plus up’ the money for the paycheck protection so that we can keep people employed and also give money for hospitals. That seems like a logical great plan, has huge bipartisan support. I think it’s one the American people would understand,” he said.

CLICK HERE FOR COMPLETE CORONAVIRUS COVERAGE

Nunes also said the mainstream media were “covering up” Pelosi’s tone-deaf late-night appearance, accusing Democrats of a double standard in their coverage of the party leader.

“Like I said at the beginning, when you have a leader that makes such a fatal flaw, what would be a fatal flaw for a Republican, for a Democrat the media is covering up… if you have Mitch McConnell with a bunch of gourmet ice cream, he’d be thrown out of leadership immediately.”

Fox News’ Charles Creitz contributed to this article

GETTING THE IRE OF THE GERMANS IS VERY DANGEROUS

Jerusalem PostWORLD NEWS

Germany’s largest paper to China’s president: You’re endangering the world

“You [Jinping], your government and your scientists had to know long ago that coronavirus is highly infectious, but you left the world in the dark about it.”

By BENJAMIN WEINTHAL   APRIL 20, 2020 13:21

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A poster with a portrait of Chinese President Xi Jinping is displayed along a street in Shanghai, China, October 24, 2017 (photo credit: ALY SONG/REUTERS)

A poster with a portrait of Chinese President Xi Jinping is displayed along a street in Shanghai, China, October 24, 2017(photo credit: ALY SONG/REUTERS)

BERLIN – The editor-in-chief of Germany’s largest paper Bild on Thursday launched a full frontal attack on China’s communist President Xi Jinping for his regime’s failure to come clean about the coronavirus outbreak and the massive human rights violations carried out by the Communist Party.Julian Reichelt, the prominent editor-in-chief of the Bild, wrote to Jinping that  “Your embassy in Berlin has addressed me in an open letter because we asked in our newspaper Bild whether China should pay for the massive economic damage the coronavirus is inflicting worldwide.”Read More Related Articles

He wrote that, “You [Jinping], your government and your scientists had to know long ago that coronavirus is highly infectious, but you left the world in the dark about it. Your top experts didn’t respond when Western researchers asked to know what was going on in Wuhan. You were too proud and too nationalistic to tell the truth, which you felt was a national disgrace.”Reichelt said that, “You rule by surveillance. You wouldn’t be president without surveillance. You monitor everything, every citizen, but you refuse to monitor the diseased wet markets in your country. You shut down every newspaper and website that is critical of your rule, but not the stalls where bat soup is sold. You are not only monitoring your people, you are endangering them – and with them, the rest of the world.”He continued with his bill of particulars, noting that “surveillance is a denial of freedom. And a nation that is not free, is not creative. A nation that is not innovative, does not invent anything. This is why you have made your country the world champion in intellectual property theft.“China enriches itself with the inventions of others, instead of inventing on its own,” Reichelt wrote. “The reason China does not innovate and invent is that you don’t let the young people in your country think freely. China’s greatest export hit (that nobody wanted to have, but which has nevertheless gone around the world) is coronavirus.”The spokeswoman for China’s embassy, Tao Lil, published an open letter to Bild in German on the embassy’s website on Wednesday, stating that, “I followed your reporting on the corona pandemic in general and China’s alleged guilt in particular today. Apart from the fact that we consider it a pretty bad style to blame a country for a pandemic that is affecting the whole world and then to present an explicit account of alleged Chinese debts to Germany, the article ignores some essential facts.”

She added that “We note that many countries now struggling with COVID-19 have had time to prepare for the cross-border spread of the pathogen after China reported its outbreak under IHR [World Health Organization] guidelines.” 


The best-selling paper Bild calculated prior to Reichelt’s editorial that China owed Germany €149 billion for coronavirus damages, triggering the angry response from the Chinese embassy in Berlin.Bild said the compensation amounts to  €1,784  per person if Germany’s GDP drops by 4.2 percent. The Bild article was titled: “What China owes us.”China’s embassy spokeswoman said the article “stirs up xenophobia and nationalism.” 
 The Bild editor-in-chief cited a Washington Post article reporting that, “your laboratories in Wuhan have been researching coronaviruses in bats, but without maintaining the highest safety standards. Why are your toxic laboratories not as secure as your prisons for political prisoners? Would you like to explain this to the grieving widows, daughters, sons, husbands, parents of corona victims all over the world?”He concluded that, “In your country, your people are whispering about you. Your power is crumbling. You have created an inscrutable, non-transparent China. Before Corona, China was known as a surveillance state. Now, China is known as a surveillance state that infected the world with a deadly disease.That is your political legacy.”

TWO PLAGUES UNLEASHED ON AMERICA

The Wuhan Coronavirus has decimated the economic well being of the United States. We know that. President Trump has handled it deftly. Soon, maybe by June 1, 2020, we will see the economy rocking and rolling. However, America suffers another plague, one more serious, but easily defeated. That plague is home grown, it has eyes, hands, legs, but no heart, that plague is the DEMOCRAT PARTY. Any reasonable person worth his or her salt will recognize it in an instant.

Media outlets, such as CNN, MSNBC , Washington Post and NY Times give it shelter. Trump has called them out since day one. They provide safe harbor. A read of their daily diatribe is enough to make one puke. Not a word of their lengthy invective is true. Joseph Goebbels, the German Minister of Propaganda would be proud of their sagacity. A Nazi politician and Reich Minister of Propaganda of Nazi Germany from 1933 to 1945. He was one of Adolf Hitler’s closest and most devoted associates, and was known for his skills in public speaking and his deeply virulent antisemitism, which was evident in his publicly voiced views. Sounds like most Democrats, doesn’t it?

You know who they are; from Pelosi to Schumer and all of those in between. From Ginzberg to Kagan, to Brier to Sotomayor. They condone MS-13, they give tribute to gangs, to drug lords and to illegal aliens. They don’t know right from wrong, but they do know that our enemy is their friend. A party with Tlaib and Rashid, filthy people not fit to be in America.

Come November 3, and it can’t come soon enough, this home grown plague will be euthanized by the American voter. We will find them sleeping with the fishes.

POSTED ON JANUARY 26, 2020 – BLACK SWAN EVENT

THE BLACK DEATH – YEAR OF THE RAT – BLACK SWAN EVENT

During the Black Death pandemic in the middle of the fourteenth century upwards of two hundred million people may have succumbed to the virus.

From Wikipedia, the free encyclopedia

The Black Death is thought to have originated in the dry plains of Central Asia or East Asia, where it traveled along the Silk Road, reaching Crimea by 1343. From there, it was most likely carried by fleas living on the black rats that traveled on all merchant ships, spreading throughout the Mediterranean Basin and Europe.

The Black Death is estimated to have killed 30% to 60% of Europe’s population. In total, the plague may have reduced the world population from an estimated 475 million to 350–375 million in the 14th century. It took 200 years for the world population to recover to its previous level. The plague recurred as outbreaks in Europe until the 19th century.

The plague originated in Wuhan China, a city of 11 million people. Effectively the city has been on lock down. Those confirmed cases around the world, mostly resulted in a visit to Wuhan. It remains to be seen what effect this will have on the world economies. As it is, China’s economy is in a precarious situation. A one or two percent decrease in GDP would have a grave effect on those who are put out of work.

So far over 2000 cases have been reported with over 100 deaths. Statistics say that more than 11,000 have been affected

Source: The Centre for Health Protection of the Department of Health of Hong KongCenters for Disease Control and Prevention
Credit: Map by Daniel Wood/NPR. Research by Susie Cummings and Ayda Pourasad/NPR.

GET THIS

https://www.foxnews.com/politics/coronavirus-researcher-pandemic-genocide-blacks-nih

Lead NIH coronavirus researcher suggested pandemic could be ‘genocide’, said doctors would let blacks die

White men out to destroy Blacks. Excuse us, but aren’t Democrats sanction abortion which affects minorities, but Republicans are anti abortion. Dr. Corbett believes that behavior by Blacks – excess drinking, overweight and smoking have nothing to do with their succumbing to the Wuhan Coronavirus at rates higher than Whites.

A MUST READ BY THE RED MENACE

https://www.theatlantic.com/magazine/archive/2020/05/mcmaster-china-strategy/609088/?fbclid=IwAR1d0rVx54dM-2zEUfoINVEpv1l4pqpD9is-dGPQ7cQoO2FMWa72ILjKjCY

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I. The Forbidden City

On November 8, 2017, Air Force One touched down in Beijing, marking the start of a state visit hosted by China’s president and Communist Party chairman, Xi Jinping. From my first day on the job as President Donald Trump’s national security adviser, China had been a top priority. The country figured prominently in what President Barack Obama had identified for his successor as the biggest immediate problem the new administration would face—what to do about North Korea’s nuclear and missile programs. But many other questions about the nature and future of the relationship between China and the United States had also emerged, reflecting China’s fundamentally different perception of the world.

Since the heady days of Deng Xiaoping, in the late 1970s, the assumptions that had governed the American approach to our relationship with China were these: After being welcomed into the international political and economic order, China would play by the rules, open its markets, and privatize its economy. As the country became more prosperous, the Chinese government would respect the rights of its people and liberalize politically. But those assumptions were proving to be wrong.