When I was asked to write an article about the impact of negative interest rates and negative yielding bonds, I thought this is a chance to look at the topic from a broader perspective. There have been lots of articles speculating about the possible implications and focusing on their impact in the short run, but it’s not very often that an analysis looks a bit further into the future, trying to connect money and its effect on society itself. 

Economists, conservative investors and market observers have been issuing stern warnings for years regarding the severe impact of the current monetary policy direction. In a recent statement, ECB Vice President Luis de Guindos warned of potential side effects and risks to the economy resulting directly from the central bank’s policies.

There are numerous and wide-ranging reasons why someone may choose to invest in physical precious metals. A deep understanding of monetary history provides plenty of solid arguments, and so do the mounting geopolitical risks, the spiking probability of a recession and the long-term goal of many conservative investors to safeguard their financial self-determination.

“Negative interest rates are unsustainable and once investors decide to stop paying for the privilege of holding government debt, a banking crisis could result, says James Grant.” Returning SBTV guest, Claudio Grass, speaks with us about the unsustainable pensions, crumbling fiat currencies and a looming financial crisis in a world of insane central bank monetary policies.

“The essence of the interventionist policy is to take from one group to give to another. It is confiscation and distribution. “ – Ludwig von Mises, Human Action In less than a year, we have witnessed an unprecedented monetary policy rollercoaster by the Federal Reserve, which began with a momentous U-turn in the central bank’s guidance in January, and has continued to escalate ever since.

Few investors and market observers were really surprised when Mario Draghi announced the ECB’s next massive easing package in mid-September. Cutting rates further into negative territory and the revival of QE were largely expected sooner or later, as the “whatever it takes” outgoing ECB President is now faced with a wide economic slowdown in the Eurozone.

After a remarkable run over the past few months, gold and silver now appear to have entered a period of consolidation. Many speculators and short-term focused investors have sold their positions fearing a correction, while mainstream market commentators fuel these fears, with analyses that proclaim “the end of the road” for gold and silver.

We’ve recently seen a lot of coverage and even more “expert analyses” on the state of the bond market, to the extent that the average investor, or the average citizen for that matter, is likely to be overwhelmed and very confused about what it all means. Experts from the institutional side and defenders of the current monetary direction argue that it is all the result of policy choices, that’s it’s all under control and that we really shouldn’t worry about the extreme phenomena and distortions we now see in the debt markets.

Even with seasoned precious metals investors, it is often the case that platinum gets overlooked, while gold and silver dominate the conversation over which metal affords the best long-term protection of one’s wealth. Nevertheless, platinum has proved to be an excellent store of value, while it also offers a number of interesting advantages as a long-term investment that could play an important part in a conservative and proactive strategy.

The past few months have been an exciting time for gold investors, as the precious metal has seen a spike in demand after serious economic concerns and geopolitical tensions unsettled the markets. Many mainstream analysts have pointed to a number of recent events, from the US-China trade war escalations to the inverted yield curve, to explain the recent gold rally.

After the Federal Reserve’s monetary policy U-turn earlier this year and the central bank’s decision to cut interest rates for the first time in a decade, mainstream investors and analysts believe that holding rates lower and for longer will help keep stock markets afloat and the economic expansion alive.

“The intellectual leaders of the peoples have produced and propagated the fallacies which are on the point of destroying liberty and Western civilization.” Ludwig von Mises, Planned Chaos. It took multiple meetings and over 50 hours of official negotiations for EU leaders to reach an agreement on the appointments for the top jobs of the EU and the ECB, but in mid-July the results finally came in.

Our readers probably realize by now, what a proud Swiss fellow I am, and how I take every possible opportunity to argue how Switzerland presents itself as a role model to achieve radical decentralization and respect for civil liberties. It also assures the right of self-determination in an environment where municipalities, cities or smaller states are in competition with each other and, by doing so, limiting the power of politicians.

An interview with Prof. Angelo M. Codevilla. Following decades of the propagation of a false historical narrative regarding Switzerland’s role during WWII, an entire generation, especially in the West, has grown up with a distorted version of events, based on unfounded and unsubstantiated claims.

June has been an interesting month for gold, as geopolitical events, market fluctuations and developments on the monetary policy front fueled an exciting ride for the precious metal. As long-term investors with a strict focus on the big picture, short-term moves and speculative angles are largely irrelevant in and of themselves, but they do provide important signals that, without fail, confirm the strategic superiority of precious metals holdings in this highly overvalued and artificially inflated investing environment.

Every seasoned gold investor and every student of monetary history has likely stumbled upon various theories about institutional manipulation of the gold market. While it is true that rarely is there smoke without fire, it is still important to approach this matter rationally and form opinions based on sound evidence and solid research.

In previous articles, we have outlined in great detail the many faults of the current monetary policy direction of major central banks and the large-scale economic impact of keeping interest rates artificially low. Among the worst offenders is the ECB, that is unapologetically persistent on continuing this exercise in absurdity that are negative interest rates.

Interview with Dimitri Speck. Given the massive intervention and monetary manipulation experiment by central banks over the last decade, the amount of distortions created in the market, as well as the record debt accumulation at all levels of the economy, have given rise to considerable risks for investors. For a more detailed understanding of these issues and for his outlook, I turned to Dimitri Speck, a renowned expert in the development of trading systems and in seasonal analysis, whose experience and successful career spans over two decades.

The value of silver and gold is given by their own nature. Neither gold nor silver has value expressed in other units of account. Their value is expressed directly in their own weights. Everything else that is valuable (other assets, commodities, goods, services, or performed labor) is measured against a certain weight of these metals. In other words, the value of gold and silver is assigned by their own nature, while the value of a transaction is measured by the quantity of the metal that changes hands.

In today’s world, it is obvious that the competition of ideas is under serious threat and with it, the much-needed discussions on how to deal with certain topics or try to understand the world we live in. That is particularly worrying, especially when one considers that the western world went through the process of Enlightenment roughly 200 years ago. In the words of Immanuel Kant:

Late last year, Barrick Gold, the world’s largest gold miner in terms of reserves, made headlines when it announced its acquisition of Randgold Resources, in an $18bn mega-merger that marked a key moment for the mining industry. In January, United States gold giant Newmont and principal rival of Barrick, made public its own plans to buy Canada’s Goldcorp, the world’s third-largest bullion producer by market value, for $10 billion.

Overall, under Mr. Draghi’s watch, the ECB’s balance sheet has ballooned to a previously unimaginable scale and aggressive policies like the extensive QE program and negative rates have encouraged the accumulation of debt and heavily distorted market mechanisms.

At the end of January, only a month after the official end of the QE program of the European Central Bank (ECB), its President Mario Draghi told the European Parliament’s committee that the central bank could resume its bond purchasing, in a questionable effort to assuage concerns over the impact of the policy change.

The latest numbers released by China’s statistics bureau fueled widespread concerns about the outlook of the global economy, as the Asian superpower reported its slowest growth rate since 1990. The figures showed a 6.6% growth for 2018, confirming the view that the growth engine of the world economy is running out of steam.

Numbers from Bizarro-World. The past few months have been really challenging for anyone invested in gold or silver; for me personally as well. Despite serious warning signs in the economy, staggering debt levels and a multitude of significant geopolitical threats at play, the rally in risk assets seemed to continue unabated.

Over the last years, Venezuela has become a modern poster child for the failure of socialism and with good reason. It offers an abundance of lessons and stern warnings for many western nations, but it also provides a very insightful and relevant reminder for individual investors too.

Introductory Remarks: The “Anti-Politician” Godfrey Bloom, by PT
Most of our readers will probably remember former UKIP chief whip and European Parliament representative Godfrey Bloom. As far as we know, he is the only politician who ever raised the issue of the workings of the fractionally reserved central bank-directed monetary system in the EU parliament. This system is of course central to the phenomenon of the recurring boom-bust sequences plaguing the global economy.
 
Godfrey Bloom (left) and interviewer Claudio Grass
 

It is also a major means of redistributing wealth from the poor and the middle classes to those who are already rich and own most of the assets likely to appreciate in price due to monetary inflation (an unavoidable side-effect, irrespective of their wishes).

Todd Horwitz is known as Bubba and is chief market strategist of  Bubba Trading.com. He is a regular contributor on Fox, CNBC, BNN, Kitco, and Bloomberg. He also hosts a daily podcast, ‘The Bubba Show.’ He is a 36-year member of the Chicago exchanges and was one of the original market makers in the SPX.

The 2016 U.S. presidential elections are unprecedented: I don’t believe we have ever witnessed before a campaign year so toxic, so dangerously divisive and full of ad hominem attacks. Both camps have vilified the opposition and their followers, creating a schism in society. There has been no rational dialogue on the issues that truly concern the American public.

In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has intensified further since then.

In recent months, more and more of our clients and friends from overseas are asking us whether it is safe to travel to Europe. These fears are understandable, given the media coverage of the tragic events that occurred this year. The press painted a sinister and truly graphic picture of Europe as a war zone, as a target of global terrorism.

Mounting Resistance Thousands of people recently demonstrated in Brussels against free trade deals negotiated by the EU. This happened just days before a meeting of EU trade ministers in Bratislava last Friday, which was considered the last push to salvage the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the United States.

This summer witnessed a renewed escalation between Russia and Ukraine after Russian President Vladimir Putin accused Ukraine of sending saboteurs to attack Russian troops, targeting “critical infrastructure”. Kiev denied the allegations and claimed Russia’s “fantasy” was nothing but a false pretense to launch a “new invasion”.

It has been almost eight years since former U.S. President George W. Bush warned the world that “without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.” The government’s response to the crisis was a USD700 billion rescue package that was supposed to prevent U.S. banks from collapsing and encourage them to resume lending, which was soon to be followed by a series of Quantitative Easing (QE) packages injecting money into the economy.

The Brexit referendum has revealed the existence of a deep polarization in British politics. Apart from the public faces of the opposing campaigns, there were however also undisclosed parties with a vested interest which few people have heard about. And yet, they have been instrumental in transforming Great Britain into a State based on the principles of democratic socialism.

Crumbling Stability. In the past few months, we have witnessed a series of defining events in modern political history, with Britain’s vote to exit the EU, (several) terror attacks in France and Germany, as well as the recent attempted military coup in Europe’s backyard, Turkey. Uncertainty over Europe’s political stability and the future of the EU keeps growing.

A Fragile System. Claudio Grass, Global Gold: Ronald, it is a pleasure to have the opportunity to speak with you. We’ve known each other for a very long time, both on a personal and professional level. Because of our central banks, we find our economies today operating on artificial stimulus and negative interest rates. How would you summarize the consequences of this policy?

The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. The sooner the better.

Every freedom loving person on the planet has their eyes fixed on this referendum. A clear majority voting for Brexit and therefore for more decentralization, would show that the British realized they can break free from their self-imposed nonage, and reclaim individual liberty.

  Introductory Remarks – About Godfrey Bloom [ed note by PT: Readers may recall our previous presentation of “Godfrey Bloom the Anti-Politician”, which inter alia contains a selection of videos of speeches he gave in the European parliament. Both eru…

Government Intervention is Making Things Worse. Claudio Grass, the CEO of Global Gold, has recently interviewed legendary Swiss fund manager Felix Zulauf.

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