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golden rising interest rates the biggest hoax in American politics gold can unify us across the great political divide President Trump has completely flip-flopped the way he looks at economic data when he was on the campaign trail he called the stock market a big fat ugly bubble now that he's sitting in the Oval Office he takes credit for the same bubble he's done the same kind of 180 when it comes to employment data on the campaign trail he called 5% unemployment the biggest hoax in American history but when the jobs report came out last week Trump eagerly tweeted the unemployment rate remains at a 17-year low of 4.1% the unemployment rate and manufacturing dropped to 2.6 percent the lowest ever recorded the unemployment rate among Hispanics dropped to 4.7 percent the lowest ever recorded Peter Schiff called Trump out on his flip-flop in his most recent podcast well if 5% was the biggest hoax in American history what's four point one percent it's an even bigger hoax so this is the biggest hoax in American history except the differences now Trump is the purveyor of that hoax he is no longer calling it out he is now participating in the same hoax that he criticized in order to get elected the official jobs numbers came and better than projected according to the Labor Department the US economy added 228 thousand jobs in November earnings rose 3.1% over the last twelve months but much of that was due to people working longer hours average hourly pay increased 2.5 percent a number most considered disappointing as Peter pointed out looking at the earnings numbers over the last couple of months was even more disappointing the projection was a 0.3% increase after a zero increase in October instead that we got to zero point two increase in November and the October number was revised down to minus 0.1 it's also notable that the labor force participation rate held steady at sixty two point seven near the lowest it's been in this cycle it's one thing to talk about Iran number of new jobs but it's important to look at where those jobs are coming from the economy did add 31,000 manufacturing jobs that's certainly a plus but the majority of the jobs were created in education and healthcare as Peter put it too bloated sectors of the economy that are being propped up by government overall Peter wasn't impressed by the types of jobs created and he said it looks a lot like the jobs report we got when Obama was in the White House again a lot of low wage jobs a lot of part-time jobs has changed it's the same phony jobs that President Trump was calling Obama out on it's what helped him become elected because it resonated with the people who had those lousy jobs but of course now that there has lousy jobs it's a different story everything is great there is one thing Republicans and Democrats should agree about buy gold but like everything else the yellow metal has become politicized if you believe the stereotype only people on the red buy gold a recent article by martin tiller at nasdaq calm highlighted the phenomenon during the obama presidency gold somehow became politicized glenn beck for one seemed to suggest to viewers that obama's election foreshadowed the end of the world as we know it then popped up in the commercial breaks urging viewers to buy gold as these things tend to go the fact that gold was therefore appealing to many on the red made it despised by those on the left this is understandable in these hyper politicized overly polarized times but it really doesn't make sense the reasons to own gold or economic not political sure politics has an impact on the economy but recessions geopolitical shocks stock market crashes national debt these things all happen no matter which party is in control the latest political brouhaha revolves around the Republican tax plan it's looking increasingly likely the GOP may actually get something done that has the stock market all just up as we've pointed out the optimism may be unwarranted Peter Schiff called the plan governments on a credit card and it's true while the plan will certainly reduce the tax burden at least on some people temporarily it does nothing to actually shrink the size and scope of government as long as the federal behemoth is growing and spending money we're going to have to pay for it if not today tomorrow nevertheless those Republicans who have traditionally bought gold are sinking their money into stocks because they are optimistic about the Trump economy peter has said this is a mistake the people who typically buy gold in America voted for Trump and they're no longer worried about the economy so they're not buying gold they're buying stocks instead and I think they're making a big mistake they should be selling their stocks and buying even more gold but again it really doesn't matter whether you're a Republican or a Democrat the economic impact of a policy doesn't care about the politics of those who implement it of course your politics will probably influence how you perceive the impact of a given policy but according to tiller passage of the tax plan is a good reason to buy a gold no matter how you view the politics there are two schools of thought about the tax cuts in that bill they can be regarded as either pro-growth or deficit busting depending largely on one's political affiliations if either of those proves to be true however a case can be made that an investment in gold will pay off the Republicans claim their tax cuts will spur investment grow the economy and create lots of jobs conventional wisdom holds that this would be bad for gold but consider this unemployment is already at a low level some interesting ramifications as tiller explains with an unemployment rate around 4% in science of some upward pressure on wages in the second half of this year it will certainly add to fears of inflation taking hold gold is used by traders as a hedge against inflation so if Republicans are right and we get a big boost to growth Gold Buyers win on the other side of the political aisle Democrats are embracing the doom and gloom Republicans wallet and for the eighth Obama years they believe the rich will simply hoard their tax cut money in offshore accounts and the promised economic growth will never materialize that will add to an already out-of-control national debt yes it is weird hearing people on the Left fret over deficits but it is what it is that scenario is also good for gold the yellow metal is in addition to a hedge against inflation a safe haven play used by traders when they fear disruption and there is nothing I can think of that would be more disruptive to the global economy that even a hint of a bankrupt America so if Democrats are right Gold Buyers win so you see gold really can unify us across the great political divide the two sides may have completely different expectations from the tax cuts and therefore different reasons for doing so but whoever turns out to be right the effects on the economy will probably be such that both will end up in profit making money it seems is one of the few things left that has no partisan slant the Federal Reserve is widely expected to nudge interest rates up again this week most analysts agree that inspector very Hayek is one of the primary reasons gold has slumped over the last several weeks but our rising interest rates really bad for gold the short answer is no at least not historically conventional wisdom holds that Tedder monetary policy tends to increase bond yields and boost earnings that makes in bonds more appealing to investors theoretically lowering the appeal of gold and silver so when the Fed starts talking rate hikes the air generally comes out of the precious metals markets but consider this the Fed started raising interest rates two years ago with the rate of full 100 basis points higher than it was in December 2015 gold is trading at nearly $200 per ounce higher than it was then that's more than a 15 percent increase as a recent Bloomberg article pointed out when it comes to rate hikes and gold the reality tends to be celled a rumor by the fact chart gold against the US 10-year Treasury yields and it looks distinctly like the metal tempts to sell the rumor of rate rises and by the fact every time yields have peaked north of 2.5 percent over the past five years gold has promptly rallied economists predict that yield barrier should be broken sometime in the first quarter of 2018 last summer Peter Schiff explained why the current rising rate environment is good for gold despite the conventional wisdom central banks gives two primary rationales to justify rate hikes strong economic growth and a healthy inflation rate as Peter explained inflation is key when it comes to gold rising interest rates are not negative for gold I mean the main reason that interest rates are arising around the world is because inflation is picking up around the world higher inflation is positive for gold I mean it is the most bullish thing for gold and in fact when inflation rates are rising that means money is buying less right the purchasing power of money is going down and that's when you want to own gold and while higher rates do boost bond yields inflation is not a friend of the bond market bonds lose value as inflation increases that is bullish for gold because gold is something you would own as an alternative to bonds a bear market and bonds is bullish for gold but for some reason everybody just thinks well if interest rates are going up that just makes gold less attractive because you're giving up the opportunity cost it makes bonds less attractive because bonds are falling in value it makes currency less attractive because interest rates are rising because currency is losing value but gold won't be losing value gold is going to be storing value right now most investors are ignoring the yellow medal but this might actually be an opportune time to buy gold as we said last week with the price relatively low right now gold may well be giving you an early Christmas present what's ever recorded the unemployment rate among Hispanics dropped to 4.7 percent the lowest ever recorded Peter Schiff called Trump out on his flip-flop in his most recent podcast well if 5% was the biggest hoax in American history what's four point one percent it's an even bigger honks so this is the biggest hoax in American history except the difference is now Trump is the purveyor of that hoax he is no longer calling it out he is now participating in the same hoax that he criticized in order to get elected the official jobs numbers came and better than projected according to the Labor Department the US economy added two hundred and twenty eight thousand jobs in November earnings rose 3.1% over the last twelve months but much of that was due to people in health care as Peter put it too bloated sectors of the economy that are being propped up by government overall Peter wasn't impressed by the types of jobs created and he said it looks a lot like the jobs report we got when Obama was in the White House again a lot of low-wage jobs a lot of part-time jobs has changed it's the same phony jobs that President Trump was calling Obama out on it's what helped him become elected because it resonated with the people who had those lousy jobs but of course now that there has lousy jobs it's a different story everything is great there is one thing Republicans and Democrats should agree about buy gold but like everything else the yellow metal has become politicized if you believe the stereotype golden rising interest rates the biggest hoax in American politics gold can unify us across the great political divide President Trump has completely flip-flopped the way he looks at economic data when he was on the campaign trail he called the stock market a big fat ugly bubble now that he's sitting in the Oval Office he takes credit for the same bubble he's done the same kind of 180 when it comes to employment data on the campaign trail he called 5% unemployment the biggest hoax in American history but when the jobs report came out last week Trump eagerly tweeted the unemployment rate remains at a 17-year low of 4.1% the unemployment rate and manufacturing dropped to 2.6 percent below working longer hours average hourly pay increased 2.5 percent a number most considered disappointing as Peter pointed out looking at the earnings numbers over the last couple of months was even more disappointing the projection was a 0.3% increase after a 0 increase in October instead that we got to zero point two increase in November and the October number was revised down to minus 0.1 it's also notable that the labor force participation rate held steady at 62 point 7 near the lowest it's been in this cycle it's one thing to talk about Iran number of new jobs but it's important to look at where those jobs are coming from the economy did add 31 thousand manufacturing jobs that's certainly a plus but the majority of the jobs were created in education only people on the red by gold a recent article by Martyn tiller at NASDAQ calm highlighted the phenomenon during the Obama presidency gold somehow became politicized glenn beck for one seemed to suggest to viewers that obama's election foreshadowed the end of the world as we know it then popped up in the commercial breaks urging viewers to buy gold as these things tend to go the fact that gold was therefore appealing to many on the read made it despised by those on the left this is understandable in these hyper politicized overly polarized times but it really doesn't make sense the reasons to own gold ur economic not political sure politics has an impact on the economy but recessions geopolitical shocks stock market crashes nash
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