GOLD 00.00 1.20 0.00%
SILVER 00.00 1.20 0.00%

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Metal Market Report July 2018 - Week 4 Edition

July 2018 - Week 4

Gold closed at $1,232 Friday after dipping to $1,211 on Thursday, July 19, mostly based on a dip in the U.S. dollar after President Trump criticized the Fed for raising rates and said that a strong dollar is hurting U.S. trade policy. Meanwhile, the Chinese have been rapidly devaluing the exchange rate of their yuan in order to erase the penalties inherent in the tariffs President Trump raised on Chinese exports to the U.S.  However, the dollar recovered somewhat on Monday and so gold retreated back to $1,224.

Buy the Bargains Now, So You May Double Your Money Later

Back in 2006, I bought a house in my hometown of Lake Charles, Louisiana. It was on the lake with a dock in a gated community. It was a year after hurricane Rita and the home still needed some work. Real estate prices were down for a variety of reasons, including the aftermath of the hurricane, but I figured that lakefront property was scarce, and more casinos and industry were rumored to be coming to the area, so it seemed like a good investment. Now, 12 years later, billions of dollars in industrial construction are underway, a new large casino has expanded, and hotels are popping up all over. I recently turned down an offer of about double what I paid for my home, and quality lakefront property is rarely offered for sale.

Similarly, gold looks to be depressed now. The dollar has been up and gold has been down but I, like J. P. Morgan and Commerzbank, see what’s coming, just like I saw quality lakefront property before the boom.  In past reports, we’ve shown how the national debt is rising to over a trillion a year again, how gold is becoming harder to find and to excavate and how the fall and winter are the best times for gold.

Likewise, I have reported on four billionaires who are actively buying high-end rare coins priced at $2,500 and up for their complete sets, much like buying a lake house when the prices are low.  Now I have learned of a fifth billionaire aggressively buying, along with other multimillionaires.

Just like buying a lake house in my hometown after a devastating hurricane, it is time to buy quality rare coins as I see gold and silver rising over the next year and new customers flocking to the coin market. Don’t wait and have to pay twice as much for the same rare coin, if you can even find it in the future!  Call us today!

The Press is Obsessed with Russia, While China Poses the Major Threat

After Present Trump met with Vladimir Putin in Helsinki last week, the press and various pundits have seemingly gone out of their minds in leap-frogging over each other with excessive commentaries about the President’s “treason” (according to biased former CIA Director John Brennan), an impeachable offense subject to the death penalty under federal law! The Washington Post on Friday published an editorial saying the “Entire Republican Party is Becoming a Russian Asset.”  Every time I think some in the press and some Democrats are going “over the top” in their rhetoric, I see them going farther over the top the next week.

All this reminds me of a magician’s trick. The magician keeps your eye on one hand while the other hand is doing the magic. The world’s eyes are on Putin – a dangerous man, to be sure – but the major culprit we should fear right now is mainland China, which is far more adept at “hacking” than Russia ever was. China is a far more powerful economy – it’s #2 in the world, vs. #12 for Russia, behind Canada or South Korea.  China is the main culprit in our trade deficit, accounting for nearly two-thirds of our trade deficit.

President Trump has threatened tariffs on the majority of China’s exports to the U.S., but most of those tariffs will not take effect until September 1, giving China time to negotiate trade treaties, which would include a lowering of their tariffs and an end to their product piracy of copyrighted U.S. technological trade secrets and counterfeiting of U.S. products – including bullion coins and rare coins. Chinese counterfeiting was extensively covered in my previous reports.  Some Chinese officials favor negotiation, but their supreme leader, who has just made himself “leader for life” (unheard of since Mao’s day), has dragged his feet, wanting to “save face” by standing up to the American giant.

What the Chinese have done over the last three months – and you hardly see this anywhere in the U.S. press these days – is to devalue the Chinese currency, the yuan, to offset the costs of the proposed tariffs.  Three months ago, the exchange rate was 6.25 yuan per U.S. dollar ($0.16), but now it’s 6.8 ($0.147), an 8% devaluation, which is a huge trading advantage for the Chinese, offsetting the higher cost of their exports sent to the United States.  If a new tariff is 10%, the 8% devaluation makes the “real” tariff 2%.

I will continue to watch the China threat, even though much of the country is consumed with the Russian threat.


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