Bloomberg, Bank of America/Merrill Lynch, and other prominent financial institution analysts are sounding the alarm that risk indicators continue to increase, suggesting an end to the current bull market, which could be more sudden and more dramatic than seen in recent decades. Like a dieseling engine, the stock market continues chugging along, refusing to die, coughing, belching smoke, and running on a drizzle of Fed “hope,” low unemployment, and ever so slightly improving Gross Domestic Product.
Some technical analysts however are saying that the stock market could have another 5% – 7%
increase left in it before the “end” is reached, but the list of negative pressures continues to
mount. Contrary to Yellen’s “banks are safer than ever” statement at Jackson Hole, the reality is
that Wells Fargo alone now has more depositor funds at risk in derivatives than the total amount
of derivatives held by all American banks back during the 2008 banking collapse. Derivatives
are a two sided-coin, 50% of all “swaps” lose. If Wells Fargo’s gamble doesn’t pay off, then
their depositors will lose, thanks to the increasing use of the bail-in technique. And if you’re
counting on the FDIC to come to their rescue, forget it. A long history of court cases confirm that
putting money into a savings account, CD, or other banking product is no different than checking
account funds. When you put that money into the bank, you become an “unsecured creditor” and
you’re placed at the bottom of the financial food chain.
Meanwhile, North Korea continues to generate geo-political turmoil and uncertainty. A potential
government shutdown is looming before the end of September. Tropical Storm Harvey has
become a huge federal financial liability. A long list of missed targets has rendered the Fed
incapable of implementing further interest rate increases or initiating proposed balance sheet
reductions. September is historically the stock market’s worst month for growth and the $1.9
trillion in “cheap money” borrowed from the Fed has been eclipsed by the $2.1 trillion they’ve
spent on company stock buyback programs, leaving most public companies without the money to
fortify infrastructure or support any type of sustained growth.
Most viewed Mnuchin’s Fort Knox visit as a long overdue reality check, but the reality is that the
government’s looking for a way to water down the coming wrangling event for a debt ceiling
increase, in order to avoid a government shutdown. On the Treasury books, the U.S. gold cache
is valued at $42.22 per troy ounce. Now that it’s been counted, it can be revalued on Treasury
books at today’s spot value. Under the Gold Reserve Act of 1934, the Fed printing press can go
back to work without Congressional interference, because the activity doesn’t increase the
national debt, nor does it require debt ceiling legislation. It’s like magic! The government says
they’re not a fan of gold. Don’t do what the government says, do what they do! Today’s precious
metal prices and availability present a very limited opportunity. Don’t miss it!
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.