The Dept. of Justice and the FBI have lost credibility by not prosecuting HRC and many others. Former Mayor Giuliani said about The Clinton Foundation, “If I was attorney general, I would indict the Clinton Foundation as a racketeering enterprise.”

The credibility of central bankers will decrease further. Central bankers have held interest rates near zero for about eight years and have pushed over $13 Trillion in sovereign debt “yields” to a negative interest rate. Crazy!

…and about the Markets

…also, are you sitting with a large cash position and wondering what to do? Dealing with Lump Sums

It was an event-filled and turbulent evening last night as the results for the 45^th US presidential election rolled in, signalling that the majority of the American electorate had voted for Republican candidate Donald Trump. Trump received over 270 of the 538 electoral college votes needed to secure a majority. Trump will now be inaugurated as US President on Friday January 20, 2017.

Media and Polls eat Humble Pie

This, the 58th US presidential election, will no doubt go down in history as one of the most unusual, divisive and wrongly predicted US presidential elections of all time. The official surveys of the expected outcome were proven to be way off the mark, and in fact the entire US polling industry may have to reassess its methodologies and enter a period of self-reflection. The mainstream media machine, particularly but not exclusively in the US, was also shown up throughout this election campaign to be glaringly slanted and in favor of the Democratic candidate Hillary Clinton at the expense of Trump, and a large amount of shock, back-peddling and embarrassment seems to have hit that section of the media today, in a 2017 version of ‘Dewey defeats Truman’.

The media and survey driven, but shockingly wrong, consensus of an assured Clinton victory, which was relentlessly pitched over the last few months, also seems to have been priced into the financial markets, which is arguably why the actual outcome of a Trump victory caused acute volatility and large moves across the markets last night and into today.

Market Volatility

US stock market index futures all fell sharply during trading in US evening hours last night as the prospects of a trump victory began to crystallize. S&P 500 futures and Nasdaq 100 futures both went limit down in trading, each losing about 5%, and Dow equity index futures at one stage was 800 points lower. Asian market equities were also weaker, and the US Dollar weakening against most major currencies, and the Mexican Peso also plummeting.

The markets had a very Brexit feel to them, in a similar fashion to how the markets had reacted overnight between late Thursday June 23rd, the day the Brexit EU referendum was held in the UK, and early morning Friday June 24th, when it became clear that the referendum results pointed to a majority of voters wanted the UK to leave the European Union. In both these events, Brexit and a Trump win, financial market uncertainty has been a big factor.

Florida and Ohio

Results from the battleground states of Florida, Ohio, and to a lesser extent North Carolina were decisive to Trump’s election and to the market’s moves. Florida, with 29 electoral votes, and the 3^rd highest population by state at just over 20 million people, was called to Trump late on Tuesday night before 11pm. Ohio, with 18 electoral seats and 7^th largest state population of 11.6 million people went to Trump at about 10:20pm. North Carolina, with 15 electoral seats and a 10 million population, was called for Trump just after 11pm NYT. Within the space of an hour, Trump had won the 3 key states of Florida, Ohio and North Carolina, which between then have 62 electoral college seats. By just after 1:30am, Pennsylvania was called to Trump, and following that Wisconsin. A trump majority in Iowa also helped. The rapidity of these results coming in also had a resonance with the Brexit results back in June.

Previously, the states of Florida, Ohio, Iowa, Pennsylvania, Wisconsin, and Michigan, had all majority voted for Obama on both occasions when he had been elected. This is why these particular state results going to Trump were a) critical for Trump and b) caused the volatile market reactions due to the markets’ perceptions that a Trump presidency will create more unknowns and greater uncertainty.

Precious metals prices, as would be expected, moved higher on the back of the market uncertainty and the Trump gains. Gold’s low in US Dollars was about $1270 at 8pm New York time (NYT), then it made a $50 ascent to a high of $1336 just after midnight NYT, an up move of 5.2%. See BullionStar gold chart for one day move. Silver in US Dollars moved up from $18.40 at about 8pm NYT to $19.02, an up-move of up 3.37%. Platinum also had a sizable up move, at one stage rising $20 from $1000 to $1020. These moves in precious metals prices were also reminiscent of similar moves on the morning of the Brexit results.

Trump and a Gold Standard

Beyond these short-term benefits to the gold price and the prices of other precious metals from a Trump victory, there are some other longer-term benefits to gold that a Donald trump presidency might create.

These longer term potential benefits to gold stem from Trump’s affinity for the use of a gold standard as part of the US monetary system. A gold standard, to define the term generally, is a monetary system that employs gold as a monetary unit, and links the economy’s currency to that monetary unit of gold. When used by a number of countries, each country’s currency can then be expressed in terms of gold, i.e. the exchange rates between the currencies are defined in terms of gold.

Donald Trump is known to be sympathetic to the concept of a gold standard, and even attracted to the prospect of implementing a gold standard as a way of maintaining the stability and value of the US Dollar. The first of Trump’s recent references to a gold standard came in a 2015 interview with WMUR-TV, New Hampshire, in a segment called ‘Conversation with the Candidate’, published on March 31, 2015, in which Trump commented on the gold standard in response to an audience question:

Question: “Can you envision a scenario that this country ever goes back to a gold standard?”

Trump: “In some ways, I like the gold standard and there is something very nice about it but you have to go back at the right time… We used to have a very solid country because it was based on a gold standard for it. We do not have that anymore. There is something very nice about the concept of that. It would be very hard to do at this point and one of the problems is we do not have the gold. Other places have the gold.”

The transcript of this interview can be read in an archived page of the WTAE-TV Pittsburgh website. See ‘web extra’ section. WTAE is a sister channel of WMUR.

It’s slightly odd that Trump thinks the US doesn’t have the gold, or maybe he knows something about Fort Knox and the US Treasury gold reserves that has not been made public.

Following his March 2015 comments, Trump again addressed the gold standard in November 2015 in a short video interview with GQ magazine when he said:

“Bringing back the gold standard would be very hard to do, but boy would it be wonderful. We’d have a standard on which to base our money.”

You can see the short GQ video interview with Trump on visiting this page.

Some of Trump’s economic advisers also have notable views on gold, and the possible utilization of gold within the US currency system. In an interview with Forbes magazine in August this year, Dr. Judy Shelton, part of Trump’s economic advisory team, was asked on her view of a gold backed monetary system:

Forbes Question: “You’ve written before about going back to some sort of gold-based monetary system. Is that something the U.S. could do unilaterally, or would we need to convene other nations and get them on board?”

Shelton: “In terms of gold being involved [in the system], some people may think of that as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it’s universal. 

It’s a well-accepted monetary surrogate that transcends borders and time. If you look at the foreign reserves of the most important countries, they keep them mostly in gold. I don’t want to read too much into it, but it proves that gold is not some barbarous relic.”

Shelton also referenced a Bretton Woods style conference:

“I’m not opposed to a new Bretton Woods conference, and if it takes place at Mar-a-Lago, I’m fine with that.”

Bretton Woods being the 1944 conference in New Hampshire at which the attendee countries planned the introduction of a gold backed system of fixed exchange rates, where the value of  the US Dollar was linked to gold and other participating currencies were linked to the Dollar. Mar-a-Lago is a hotel and club in palm Beach, Florida, owned by Trump.

John Paulson, the founder and head of the well-known and successful hedge fund company Paulson & Co Inc, is also an economic advisor to Trump. Paulson is known, among other things, for his fund’s investments in gold, and for example, Paulson & Co is currently the 5th largest institutional investor the SPDR Gold Trust (GLD). The appointment of Paulson to a position on Trump’s team could also arguably bolster Trump’s position on gold in the monetary system.

As an aside, in the WMUR-TV interview in March 2015, Donald Trump also expressed a view on auditing the Federal Reserve, a view that it will be interesting to see if he still holds during his Presidency. In another answer to a question from the audience, Trump agreed that the Fed should be audited:

Question: Let’s go back to our audience now coming from Bob. What is your question? …[Bob]:”My question is about Federal Reserve. What if any changes would you make to Federal Reserve and do you think they should be audited on a regular basis?”

Trump: “Audited, absolutely. I really think you can have it or not have it. A lot of people like it and a lot of conservative people like it. They think there is an adjustment with interest rates and other things. I’m not a fan. I’m not a big fan. Audit, 100%.”

Keynes, Greenspan and Bernanke

Any time the gold standard is mentioned, such as when Trump mentioned it on the occasions back in 2015, there are invariably sections of the financial media which wheel out the old misquote by the economist John Maynard Keynes, and state that Keynes said that gold is a barbarous relic. Even Shelton seems to have used the old misquote.

However, Keynes never said that gold was a barbarous relic. Keynes actually wrote the words “the gold standard is already a barbarous relic”, in chapter 4 of his 1924 book “A tract on Monetary Reform”, when specifically discussing whether Britain should return to a gold standard. Britain returned to a gold standard in 1925, against the advice of Keynes. The quote is at the bottom of page 172 of Keynes book “A tract on Monetary Reform”, (1923, this edition Published 1924), chapter 4, “Alternative aims in Monetary Policy”.

Arguably, Keynes was referring to the move after World War I by some countries to return to a gold standard (the inter-war gold standard), and even if he was talking about the classic gold standard (which ran from 1821 to 1914), Keynes just had a personal view that the gold standard was too constraining for what he saw as a “modern” economic system. But what Keynes was essentially advocating at that time, in other language, was a debasement of currency. Fast forward nearly 100 years and its obvious now that fiat currencies’ purchasing power has been heavily debased vis-a-vis the gold standard period.

Contemporary endorsements and appreciations for a gold standard are not actually the far out radical ideas that some might claim them to be and are not exclusive to Trump and his advisors. The concept of a gold standard is actually discussed by serious and mainstream monetary economists and even to an extent endorsed by them. In June this year, in an interview with Bloomberg in the aftermath of the UK’s Brexit results, Alan Greenspan, former Fed chairman had this to say about the gold standard:

“Now if we went back on the gold standard and we adhered to the actual structure of the gold standard as it exists let’s say, prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the U.S., and that was a golden period of the gold standard.”

And in March 2004 in a speech ‘Money, Gold, and the Great Depression‘, even ex Federal Reserve chairman, Ben Bernanke, who always seemed to give a somewhat grudging partial endorsement to gold, had this to say:

“The gold standard appeared to be highly successful from about 1870 to the beginning of World War I in 1914. During the so-called “classical” gold standard period, international trade and capital flows expanded markedly, and central banks experienced relatively few problems ensuring that their currencies retained their legal value. The gold standard was suspended during World War I, however, because of disruptions to trade and international capital flows and because countries needed more financial flexibility to finance their war efforts.

With Trump soon at the helm and in the White House, it’s not beyond the bounds of possibility that Trump and his advisors may explore the utilization of gold within the US monetary system over the next 4 years. And who knows, they might even bring Greenspan and Bernanke in as consultants, but perhaps only if Trump does not audit the Fed!

BullionStar
E-mail BullionStar on: support@bullionstar.com

Dear MoneyTalks Listener:

Last month, you got an invite from me to the recent Subscribers Investment Summit.  I know some of you attended.  I hope you found the event to be both enjoyable and informative.  SIS is one of two specialized conferenced that I co-founded. The other, more “hard rock” focused event, is the Metals Investor Forum.   It shares many characteristics with the Subscriber Summit.  That’s no accident.  I had very firm ideas about what events like this should look like and how they should be operated.  Those ideas are reflected in the way the Metals Investor Forum is organized.  I chose a wider list of newsletter editors to give you a broader analysis of different aspects of the resource and metals market.  All the editors share one important characteristic, however.  All of them, myself included, have subscriber supported newsletters.  They are not advertorials They are paid by their subscribers, not the companies they talk about in their publications. 

All the editors have the right to invite companies to present their stories at the Forum.  Obviously, they want the companies chosen to reflect well on their publication and offer attendees some of their best ideas. The agenda at the Metals Investor Forum severely limits the number of companies that can attend. Those companies would not be a “first come, first served” list as you see at most events like this.  It is a curated list, selected by the editors of the paid subscription newsletters who would also present at the conference.  A company can’t present at the Subscriber Investment Summit unless it’s under active coverage by one of the paid subscription newsletters that host the event and the company must be invited by the editor.  That’s the only way they get in.

What’s the attraction for the companies that present and sponsor?  Simple.  The companies presenting know that the audience is invite only too.    The primary audience is paid subscribers to the newsletters, plus analysts, brokers and other invited parties.  Companies know that the audience is there to learn and interact with them and that they are interested and active investors in the space. Companies find themselves interacting with current shareholders and attracting new ones.  Management groups that have attended one of my events before already know this.  We turn away companies at every event because the demand exceeds available space.

The attendee list fills up too.  We had to close the RSVP list before the last Metal Investors Forum in May.  I think we’ll have to do that again.  You can’t wander in off the street. You can’t get in unless you have an RSVP for the event.  And you can’t RSVP without an invite. 

Here’s yours.

As you probably know, I’m a regular contributor to the Inside Edge premium service of Money Talks.  I’ll be speaking at Mike Campbell’s World Outlook conference in February.  As Michael  kind enough to invite me I’m returning the favor by inviting you, as “a friend of Mike’s”, to the next Metals Investor Forum.

Meet face-to-face with Eric Coffin (HRA Advisories), Joe Mazumdar (Exploration Insights), Gwen Preston (Resource Maven), John Kaiser (Kaiserresearch.com), Jay Taylor (Jay Taylor’s Gold, Energy and Tech Stocks) and Jordan Roy-Byrne (TheDailyGold.com) as they present you with their market outlooks and strategies and introduce you to some of their favorite companies for the current market environment.  It’s all at the Metal Investors Forum on November 12^th and 13^th at the Rosewood Hotel Georgia in Vancouver.  

Commodity markets SOARED from January to August 2016.  The resource sector has been going through a mild correction since early September.  That looks like its bottoming now.  Many successful explorers and developers are trading at a discount just as they begin delivering news from a busy exploration year.  This is a real opportunity for savvy investors that know that timing can be everything in the market.  The editors presenting at the Metals Investor Forum have selected companies they feel have the best chance to reward traders over the next few months.  Traders that were wise enough to take the time to come and meet the management teams face to face and hear their stories.

Meet the CEO’s of hand-picked junior gold and base metals explorers and developers hand-picked by our editors. The conference takes place in a four star venue that was intentionally chosen to limit the audience size.  This event always sells out. Our audience consists of well-informed retail investors, along with select brokers and fund managers.

That makes it a valuable networking day for our entire audience.

We want you to hear from companies that are carrying out some of the most exciting and potentially rewarding exploration in the sector. Companies with some of the best assets and potential out there across the resource space. This new bull market has already produced some spectacular gains – and Metals Investor Forum attendees heard about many of them early.

As we head into the winter in a strengthening bull market – the opportunities and profits that you potentially could be exposed to are phenomenal. DON’T MISS OUT!

This year’s Vancouver conference is Saturday November 12^th and Sunday November 13^th  in the Spanish Ballroom and Ballroom Promenade at the Rosewood Hotel  Georgia.  The May Metals Investor Forum was many attendees first introduction to the entirely rebuilt Hotel Georgia and this beautiful venue.  The feedback from attendees of the May show was fantastic.  Many thought it was the best conference of its type in years, some said “ever”.   Attendees got to listen to great (but short!) presentations in comfortable surroundings, interspersed with long breaks with catered coffee, lunch and dessert that allowed them to spend one-on-one time with management teams and other attendees.  The November event should be even better.

Please join us for this exclusive event. Similar events cost hundreds of dollars for privileged access and networking—but this event is FREE. There are only a limited number of seats available–so don’t delay as we “sell out” every event.

Join us at this exclusive event:

When:  Saturday, November 12^th and Sunday November 13^th 2016 from 9am – 5pm, with a cocktail reception to follow.

Where: Rosewood Hotel Georgia, downtown Vancouver

Tickets are very limited.  Most of the seats are spoken for already but, as a Money Talks listener you still have a chance to get yours.  If you act quickly.  It’s free to attend but you MUST pre-register.  Register today to reserve your FREE seat. ( And, please, only register if you do intend on showing up – this event sells out and we want to keep seats open for attendees)

Simply click on the link below to go directly to the registration page.   You can also get more information on the event at www.metalsinvestorforum.com

RSVP Link:   CLICK HERE or paste this url in your browser – https://metalsinvestorforum-nov2016.eventbrite.com/?aff=MoneyTalks

Eric Coffin

Editor. HRA Advisories

It now looks like gold’s correction is done and its intermediate base pattern is completing, and if so then we are at an excellent entry point for many better PM stocks, which have been savagely beaten down over the past several months – a necessary correction following their outsized runup earlier in the year.

On its 1-year chart we can see that gold’s corrective action from early July has brought it all the way back to its steadily rising 200-day moving average, a classic buy spot, where a potential intermediate base has formed.…continue reading HERE or click on chart for entire article with 7 large charts

…related, more gold & silver analysis:

Gold and Silver: Connecting The Dots