Market Recap February 21, 2017

Gold Closed at $1237.50

Silver Closed at $18.00

Economic News

After some early profit taking both gold and silver closed right where they started after the three day weekend.  The metals turned after the flash PMI showed weakness in manufacturing as the early optimism has yet to show any actual results.

Retail Reports

Retail was in the news as Wal-Mart, Macys and Home Depot all reporting earnings.  Only Home Depot posted good numbers and gave strong guidance for 2017.  Macys said earnings where down 13% and Wal-Mart earnings fell 18%.

Other News

Since 2005 companies have used zero interest rates not to create jobs and build factories like the FOMC models said they would, instead they bought back their own stock.  For everyone one job created companies bought back $296,000 of stock back.

How have low rates help you and I – in 2005 a person would need about $225,000 to collect 16,000 a year in interest on a typical bank CD.  Thanks  low rates today that some person would need $10,000,000 to earn $16,000 in interest.

In short big companies used low interest rates to buy back stock and the fed guaranteed nobody put the super rich could live off their life savings.


Recap February 16th, 2017

Gold Closed at $1238.60

Silver Closed at $18.06

Economic Reports

Two more reports today may have the markets thinking differently.  First time jobless claims continued its historic falloff with only 239k claims filed last week.  Levels not seen since the 1970s.  The Federal Reserve is been claiming this as a positive but some are know thinking it may be just the opposite.

These low claims numbers may be more indicative of the type of jobs that have been created in the last 10 years (part time, temporary and contract) that do not allow for people to file for benefits as more and more companies look for ways to cut cost and be able to adjust the size of there workforce quickly.

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Recap February 15th, 2017

Gold Closed at $1231.20

Silver Closed at $17.95

What a Difference a Day Makes

Day two of Janet Yellen’s testimony in front of congress had the chair women talk of “very disappointing” economic growth and said that the Federal Reserve held no blame in the economies performance.  This continues a disturbing trend where the fed only gives themselves credit for “fixing” the economy but somehow they never are responsible for “breaking” the economy.  Just another example of why we need to demand a complete audit of the Federal Reserve and to shine a bright light as to what exactly they have been doing.

Lot of Data

Lots of data points today that continue to draw a picture of stagflation that I am sure the fed does not see and will not take any blame for it when they admit to it happening.

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Recap February 14th, 2017

Gold closed at $1227.80

Silver Closed at $17.92

Before Congress

Both metals where higher today as day 1 of Janet Yellen testifying in Washington about the state of the economy and what the Federal Reserve may be thinking.  Twice a year the Federal Reserve Chief is required to go to congress and update members about the condition of the US economy and the effects of monetary policy on the Unites States economy.

The big question was what clues, if any, would she give as to the future of interest rate hikes for 2017.  The chairwomen did not disappoint and seemingly talked out of both sides of her mouth in what is becoming the new way the federal reserve communicates.

Will They or Wont They?

At first she sounded hawkish saying “it would be a mistake not to raise rates sooner rather than later” and then dovish by saying that the federal reserve need to “go slow” when hiking rates.  The big issue for the fed is that the actual data is not matching the economic models that the fed likes to use.  This is causing the fed confusion which led Janet Yellen to play both sides once again today.

The economic models say that the fed should be hiking rates and that both GDP and inflation should be rising along with wages and full employment.  Unfortunately we cant live off economic models and the reality is something much different.

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Recap February 9th 2017

Gold Closed at $1228 for the day

Silver Closed at $17.61 for the day

Tax Cuts

President Trump said that he thought that details on his tax cut promise would be coming in the next 2 – 3 weeks.  That news helped the Dow reach an all time high while gold and silver which both hit new highs for the year suffered some profit taking.  The tax cut are expected to bring relief to big companies wanting to bring money home are also expected to blow another hole into the already massive $20 trillion debt.


First time jobless claims fell to a 43 year low (234K) and continuing claims rose again showing that the job market seems to be shrinking.  The population of the country 43 years ago was 212 million and today its 318 million, but with 95 million people not in the workforce today the jobs market doesn’t seem to be created enough jobs to support the population.

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Recap February 8th 2017

Gold Closed at $1241.00 for the day

Silver Closed at $17.75 for the day

Gold & The Economy

Gold and silver set another high for the year today as more data seems to be pointing to a continued slowing of the economy despite optimism that followed Donald Trump into the white house.  A major point of concern today has to do with falling gasoline demand from the US consumer which has been a leading indicator of recessions in the past.

Also, Bill Gross a leading wall street pundit came out today saying the US was getting ready to enter another recession.  Legendary investor, and a favorite of mine, Stanley Druckenmiller says he has been buying gold since the Federal Reserve meeting in December and thinks gold has a lot more room to the upside.

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Jobs data – Why do they use “fake” data

The first Friday of every month the government releases its jobs report from the previous month to the world.  The stock channels all cover this data and present it to all of us as factual data albeit with some seasonal adjustments.  They would have you believe that the fate of the stock market, the dollar, GDP and the economy itself are at stake when these numbers come out.  So if that is true then why wouldn’t we want the best  most accurate information possible?

It may come as a shock to you but the government and the Federal Reserve rarely if ever use actual data.  Instead they hide the truth by using what they call “seasonal adjustments” that they claim “smooth’s out the data” so that a more accurate picture emerges.  To make matters even more confusing they are constantly changing these “seasonal adjustments” so that nobody can really tell if the economy or the jobs market are actually getting better.

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Gold & Silver Steady as Fed Conflicted

Gold Closed at $1243.20

Silver Closed at $17.76

Fed Speak

Both metals were steady today as the markets tried to interpret comments from two fed governors. First, Philadelphia Fed Governor Harker said that an interest rate hike should be on the table for the next meeting. A rate hike may be on the table –  its just not at the table the fed will be eating at in 6 weeks.  Second, Minneapolis Fed Governor Neil Kashkari told everyone on his blog that the fed should go slow on rate hikes signaling that no hike would be coming at the next meeting.

This continues the fed pattern over the last several years where multiple governors will come out and contradict each other as they try stall for more time.  The plain truth is the data doesn’t support the raising of rates but with all the manipulation of the numbers giving the illusion of a recovery the fed needs to act like it might.

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Gold and Silver Move Higher

Spot Gold finished at $1235 – highest level of the year

Spot Silver finished at $17.71 – Highest level of the year

Moving The Market

The dollar continued to be under pressure as the great jobs report from last week appeared to be nothing more than a headline number that was over inflated by adjustments and that workers are seeing no wage growth.

The ECB reaffirmed it needs to continue to provide stimulus to the Euro zone for sometime to come while rebuffing claims that the Euro zone is a currency manipulator.

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Recap February 1st 2017

Spot Gold Closed at $12 .709.60 – Down .70 cents for the day

Spot Silver Closed at $17.51 – Down .04 cents for the day

FOMC Meeting

The big news of the day was the FOMC meeting that ended today with the release of the Federal Reserve statement indicating no change in the interest rate along with no clues as to when that might change.  Most economist expect the Fed to raise rates 2 – 3 times in 2017.  However, according to the Fed the economy has shown no noticeable change since the last meeting.

Economic Reports

Several economic reports where out today indicating the same up and down economy that we have seemingly been stuck in for the last several years.  Construction spending, car sales, and mortgage applications where down.  While ADP said job growth was strong and ISM reported higher cost for manufacturing but with continued job contractions.   Inventory of unsold autos are at levels not seen in years with GM saying it has a 4 month supply of unsold cars.

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