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Rickards: Gold Is Ready To Rumble

Rickards: Gold Is Ready To Rumble
Tyler Durden
Sun, 12/13/2020 – 13:55

Authored by James Rickards via The Daily Reckoning,

Gold had a nice run last week. It traded up from $1,769 per ounce on Monday, November 30, to $1,842 per ounce by the..

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Rickards: Gold Is Ready To Rumble Tyler Durden Sun, 12/13/2020 - 13:55

Authored by James Rickards via The Daily Reckoning,

Gold had a nice run last week. It traded up from $1,769 per ounce on Monday, November 30, to $1,842 per ounce by the close on Friday, December 4. That’s a 4.1% gain, not a bad week’s work. Gold’s trading at about the same level today. Still, this mini-rally has to be put in the context of the steep tumble that preceded it.

From an interim peak of $1,951 per ounce on November 6, gold fell to $1,769 per ounce on November 30, a 9.3% decline in just three weeks. This quick decline was the latest leg down in an intermediate-term fall from $2,063 per ounce on August 26, 2020. From that all-time high, gold fell 14.3% in three months.

The decline since August and the recent November downdraft have gold investors on edge. Is the bull market over? Is gold on its way down to the $1,200 to $1,400 per ounce range it held from early 2016 to mid-2019?

Here is your correspondent, about 700 feet underground in a gold mine in Utah. Before descending, we were kitted out with helmets, headlamps, reflecting vests and miner’s belts with an emergency oxygen supply attached to the belt. This mine is still in the development phase, not yet in the production phase. This means that different safety standards apply, including the fact that there was only one elevator shaft. If the elevator malfunctioned for any reason, the only alternative exit was to climb a 700-foot fixed ladder. Fortunately, events went smoothly. This kind of hands-on experience in the mine is critical to understanding the entire gold supply-chain from mine to refinery to bullion vault.

More to the point, investors want to know if last week’s turnaround is a sign of things to come or just a blip in a longer-term downtrend.

The short answers are: The bull market is not over. Gold is not on its way back to $1,400. And, gold is now poised to break out to the upside and to resume its push to $2,000 per ounce and higher.

Gold investors understand what just happened. They may not understand why it happened. An explanation of the reasons behind the recent fall in gold prices will also explain why last week’s rally was real and why new all-time highs are in the cards. There were four factors that contributed to the decline since August.

The first and most powerful factor is the rise in interest rates. It’s no secret that gold has no yield and competes with cash and Treasury notes for allocations from investor portfolios. The yield to maturity on the ten-year Treasury note bottomed at 0.508% on August 4, 2020, about three weeks before gold peaked. Rates have risen steadily from there.

As late as September 29, the 10-year note rate was only 0.654%. It then surged, hitting 0.970% on December 4. The rate increase produced capital losses for noteholders but attracted a flood of capital from new buyers. Some of the capital moving to Treasury notes came at the expense of gold.

The second factor is the election. The consensus was that Biden would be president and Republicans would control the Senate. This meant that big new spending bills were on the way, but the worst excesses of the progressive wing of the Democratic Party would be sidelined. That scenario is nirvana for the stock market. With big spending coming and policy gridlock on extremism, gold’s attraction as a safe haven was diminished.

The third factor is the approval of several COVID vaccines and new therapeutics. These developments supported the view that the pandemic would soon be behind us. A combination of business reopenings and pent-up demand would quickly restore strong growth and lower unemployment. A strong economy presages higher interest rates, which is a negative for gold prices. It also suggests higher stock prices, another competitor for investor dollars. Economic happy talk is one more reason to turn away from gold.

The fourth factor involves technicals and market dynamics. The “price” of gold is not really the price of physical gold after taking into account scarcity and high commissions involved with sourcing gold today. Instead, the price you hear about is actually the COMEX futures price. That’s a highly leveraged paper gold proxy for real gold.

Futures trading is automated and relies on algorithms that mimic other algorithms. The result is that when prices decline, more sell orders are triggered, momentum builds, stop-loss levels are hit, leveraged players cover their losses with more sales and so on in a recursive dynamic that overshoots fundamental valuation based on money supply or economic predictive analytics. That’s just how leveraged, automated markets work today.

These gold market dynamics suggest continued headwinds for the price of gold. What’s the counter-thesis for an increase in the dollar price of gold?

Right now, my models are telling me that the dollar price of gold is heading significantly higher.

Last week’s price action was not an anomaly in a downtrend. It was the definitive start of a major new uptrend.

Interest rates, politics, economic forecasts and automated trading converged to start a decline in the dollar price of gold and then to accelerate that decline to the level we saw recently. Here’s the good news: None of those factors are sustainable. All of them will soon reverse, sending gold prices back towards the $2,000 per ounce level. Here’s why:

Interest rates on ten-year Treasury notes have fluctuated over the past ten years with an overall downward trend. Rates hit 3.6% in February 2011 then plunged to 1.38% in May 2012. Rates spiked again to 2.87% in December 2013, then plunged again to 1.28% in July 2016. Another spike sent rates to 3.10% in October 2018, then another plunge took them down to 0.50% in August 2020.

What jumps out from the data is that every spike in rates was followed by a collapse. And each collapse took rates lower than the prior dip (1.38%, 1.28%, 0.50%). The reason is clear. Every time the market sends rates up based on some narrative about inflation, growth or the “end of the bond bubble” reality intrudes, a weak economy grows weaker and rates plunge again.

The market gets the narrative wrong every time (but it keeps trying). The bond bears confuse nominal rates (which are low) with real rates (which are still relatively high). Those high real rates impede growth.

Gold’s resilience in the face of these periodic rises in rates is revealed in Chart 1 below. This chart shows the dollar price of gold both as a daily closing price and as a simple moving average on a year-to-date basis.

Price of Spot Gold

What appears is that despite volatility in the daily closing price, the simple moving average is on a steady uptrend. The daily price dipped below the moving average briefly on only two occasions.

The first was the stock market bottom on March 23, when demand for liquidity (due to stock losses) led to gold sales (to raise cash for margin calls to cover stock losses). The second time was at the market open on November 30, when higher interest rates and talk of a huge COVID-relief spending package fueled expectations of a stock market rally, which diminished the attraction of gold.

In both cases, the gold price quickly bounced back, bringing the moving average along with it. The uptrend was not interrupted.

The reality today is that coronavirus cases and fatalities are spiking, new lockdowns are coming and we’re heading into another recession following the first recession from February to July 2020. Rates will fall again, this time to around 0.35% or lower. This will provide an enormous boost to gold prices.

Markets are likewise too complacent about the election outcome. Today, markets are priced for a Biden presidency, Republican control of the Senate, and some combination of big spending and gridlock on the progressive agenda. Yet, there is a real prospect that the Democrats will win both Senate seats in Georgia on January 5, 2021.

A Biden victory with Senate control pulls the rug out from under the gridlock scenario and opens the door to the Green New Deal and more. As that political possibility comes into focus in the next few weeks, stocks will retreat, and gold will be the winner.

The rosy scenario of ample vaccines and the return of a growing economy is also a mirage. Vaccines are coming, but it will take six months to a year before enough people have received them to leave the pandemic behind. While the pandemic may fade, the economic damage will not.

We are in a new great depression. The adverse effects will be inter-generational. Most of the small businesses that closed will never reopen. Bankruptcies are skyrocketing. Job losses will be permanent. The disease is still raging. New lockdowns will produce a new recession.

Again, the stock market has priced a recovery based on cap-weighted indices that favor tech companies that produce relatively few jobs. The real economy of small-and-medium-sized enterprises (about 45% of GDP and 50% of all jobs) is flat on its back. This will reveal itself in terms of higher savings rates, reduced consumption and reduced labor force participation.

Finally, momentum is a two-way street. The same forces that caused the gold market to overshoot on the downside will cause the next rally in gold to overshoot on the upside. Buying begets buying, leveraged shorts will rush to cover and robots will buy for fear of being left behind.

Since August, gold has faced headwinds in the form of higher rates, political trends, rosy economic scenarios and leveraged momentum. Those headwinds are about to turn into tailwinds as the economy slows, rates fall, political uncertainty grows and momentum swings to the upside.

Savvy investors will buy gold in its current trough. They can enjoy the ride back to $2,000 from there, then much higher.

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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