Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up we’ll hear from Michael Rivero of WhatReallyHappened.com as he shares his unfiltered insights on the home stretch of the upcoming election. He’ll also give us his thoughts on what could happen in the financial markets in the wake of the election results. Don’t miss a highly entertaining and informative conversation with Michael Rivero, coming up after this week’s market update.
Precious metals markets are showing some signs of perking up as weaker-than-expected economic data continues to come in. On Thursday, durable goods data showed that demand for machinery and equipment softened in September. That could be indicative of broader economic weakness that reduces the odds of a December rate hike.
Gold prices advanced slightly through Thursday’s close. As of this Friday recording, the yellow metal trades at $1,272 per ounce, up 0.3% for the week.
Platinum finally picked up some positive price movement, gaining 5.1% so far this week and currently comes in at $984.
Turning to silver, prices now trade at $17.79 an ounce, up 1.1% this week. The silver market has traded in a tight range over the past three weeks since falling sharply at the beginning of the month.
The upshot is that the relative softness in silver futures prices has attracted renewed buying of the physical metal. After experiencing light demand in the summer months, sales of U.S. Silver Eagles surged in October. The more than 3.5 million Silver Eagles sold so far this month is already the highest monthly total since May.
For the year, demand for Silver Eagles is down a bit from 2015’s record setting 47 million coins. But if November and December prove to be strong months for silver bullion buying, then 2016 could end up being the second or third best year ever for Silver Eagle sales.
Looking ahead to November and December in the spot markets, we can expect to see volatility pick up.
A potential catalyst next week is the Federal Open Market Committee, which meets on Tuesday and Wednesday. Although no policy changes are expected to be announced, markets can just as easily be jolted by the words accompanying a non-hike as by an actual rate hike.
The following Tuesday, November the 8th, is Election Day. The highly contentious election could have more of an impact on markets than normal, especially if voters deliver any major surprises. In June, the surprise “yes” vote on Brexit roiled global financial markets for several days. Markets seem to be banking on a Hillary Clinton victory. But Donald Trump thinks he will prove the pollsters wrong just like the pro-Brexit campaign did.
If the winner’s margins are razor thin in one or more key swing states, there is a chance the loser could refuse to concede. Both campaigns have seeded the idea to their supporters that the election could be rigged. Democrats and the mainstream media have repeatedly cried foul over Trump’s use of the term “rigged.” But the Clinton campaign has repeatedly pushed the conspiracy theory that Russia might somehow hack the election results to put Trump over the top.
As relations between the U.S. and Russia have deteriorated in recent years, the Russians have embarked on a long-term strategy to increase their gold reserves. Over the past seven years, the Central Bank of Russia has acquired more gold than any other central bank. It has added 900 tonnes to its reserves. By comparison, the People’s Bank of China reports 770 tonnes in official gold purchases over that same period. Russia, despite having only one-tenth the population of China, is exhibiting a bigger appetite for gold – at least with regard to official reserves.
In September, Russia grew its gold reserves by the equivalent of another 500,000 troy ounces although there have been reports that the nations’ funding shortfalls have caused a pause in gold buying this month. But buying month in and month out regardless of price is a prudent accumulation strategy if you’re a central bank or an individual investor. Whether the market prices of gold and silver go up next week, or next month, or next year, is far less important than whether the number of ounces you hold is going up.
Continued central bank buying by Russia, China, and other major powers should provide some fundamental support for gold prices going forward. Another bullish fundamental is diminishing mine output. Gold production fell more than 2% in the third quarter. However, jewelry demand from India and China declined by even more. That has contributed to the price weakness seen since July, as has a strengthening U.S. dollar.
We could see some big moves in the dollar and other markets in November – possibly in the opposite directions they went in October. So hang on tight!
Well now for more on the election, the fallout that’s likely to occur and the teetering state of the financial and political establishments, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome back Michael Rivero, founder and editor of WhatReallyHappened.com. Michael hosts a daily radio show and covers geopolitics, financial markets, and many other topics like few others can and it's always great to have him on with us. Michael, thanks for joining us again and good morning to you there in Hawaii.
Michael Rivero: Thank you very much. I'm glad to be back.
Mike Gleason: Well, Michael the U.S. presidential election is now in the homestretch as we're less than two weeks away from November 8. Now it looks like one of the more likely outcomes in the election will involve Hillary winning and Trump immediately contesting her victory. Do you think this will be the election outcome and also do you think there will be evidence of widespread voter fraud?
Michael Rivero: Well, we already have widespread evidence of election fraud going through out the primaries and we have all these electronic voting machines where people are pushing the button for a straight Republican ticket or for Donald Trump and it switches to Hillary for President. And of course, the election officials are all saying, "Well, these are just people who are too stupid to use touch screens." Or "It's a calibration issue." In one of the counties in Texas they actually had to shut down the electronic machines because everybody was complaining and they were saying, "It's just a calibration issue. It's just a calibration issue." But when was the last time you had to re calibrate your laptop, your tablet, or your cell phone? Why are all of these so called calibration errors favoring Hillary Clinton?
So to me, and to a lot of other people, it's obvious that Hillary knows the only way she could ever possibly get to the White House is to steal the election. Donald Trump is right to be taking the stance that he's not going to accept the results of the election just blindly. And it's rather amazing to see the corporate media out there saying, "You should just accept the results we give you without any question." Or, "You're attacking democracy." And this idea of saying that Donald Trump is attacking democracy by questioning whether the elections are honest is like you're challenging or damaging home safety by asking if the doors are locked. Nobody is under any obligation to accept an election where fraud has been involved here. Al Gore certainly didn't do it back in 2000. Donald Trump shouldn't do it now.
I certainly won't, and this idea that for the good of the nation we have to accept election fraud is nonsense, and yet it actually appeared in a New York Times editorial the other day… where they went back to where John F. Kennedy stole the election from Richard Nixon back in 1960, and they're saying because Nixon put country ahead of person, he stayed silent even though he knew he'd been robbed. Well, we don't know why Nixon stayed silent. He may have been very much afraid of the Kennedy family's connection to organized crime going back to prohibition days. He may have been afraid of his life. A lot of people working with these politicians are afraid of their lives. Apparently the former CEO of the Clinton Foundation is now trying to get asylum in Russia. So everybody's afraid of the network that's out there. We don't know why Nixon didn't challenge that election. He certainly had grounds to. Al Gore certainly challenged in 2000 and Donald Trump should challenge this election because this is clearly the crookedest election in the nation's history.
Mike Gleason: Now, Trump does certainly represent a huge number of Americans who are angry and mistrustful. Where do you think all that energy will go after the election assuming Hillary does win?
Michael Rivero: Well, I think there's going to be a lot of upset because I think elections are used to generate the consent of the governed by maintaining the illusion that somehow or other we voted for all this abuse we've been suffering. And with the majority of Americans no longer trusting the election system to be honest and accurate, I think what you're going to see if Hillary wins the White House, you're going to see Americans simply turning their backs and walking away and saying, "I don't want to listen to you anymore. I'm not going to fill out the paperwork. I'm not going to put the stickers on things. I'm not going to pay your bills and certainly you may not have our children for more wars of conquest." And Hillary could win, rather steal the White House and lose the nation in the process. There's a lot of anger out there that I'm hearing from a lot of people and it's getting harder and harder to try and keep people calm and patient.
Mike Gleason: No matter who wins the election, the loser here is going to be the establishment itself. The public's confidence in the Federal government continues to erode. The two major political parties have been embarrassed. We've got evidence of corruption everywhere, as you just talked about. Perhaps most notably in the Department of Justice and the FBI, but Wikileaks and others just keep pulling back the curtain and what they're revealing about Washington DC isn't pretty. Talk for a minute if you would about this growing distrust and do you think it can ever be restored?
Michael Rivero: At this point I would say definitely no. Now, obviously if Donald Trump is able to overcome the election fraud, and we have to remember what happened with the Brexit vote in Great Britain, where there was intense election fraud going on on the part of the remain agenda, but they couldn't reverse a landslide. So we need to keep that in mind. Donald Trump could still win this thing despite the election fraud because the overwhelming support by ordinary Americans is with Donald Trump. And they see the corporate media lining up with Hillary Clinton. Only 6% of American's still trust what the corporate media has to say. So there's going to be a change. The threat to the establishment is clearly much more with Donald Trump in the White House than with Hillary. With Hillary stealing the White House, the establishment would continue. Although, it would certainly have suffered some damage in terms of its carefully crafted propaganda image.
With Donald Trump, especially with his plan to put Trey Gowdy in as attorney general, you're going to see a lot of people leaving this country. I'm not talking about Whoopi Goldberg and all those other ladies on The View who are saying they're going to move to Canada if Donald Trump wins the election. I'm talking about high ranking U.S. politicians are going to head for the border for any country without an extradition treaty. It's all going to start unraveling. The corruption at The Clinton Foundation, the possible espionage, the pay for play, the bribes, and all of it. Crimes have been committed. The head of the FBI actually said “Hillary Clinton committed felony violation from Title 18, we just choose not to bring charges.” But contrary to what Hillary supporters are saying, this does not represent an exoneration. It doesn't declare her innocent of wrong doing. It simply says charges have not yet been filed. If Donald Trump wins the White House and Trey Gowdy is his attorney general, those charges are going to be filed. Day 2 of the Trump Administration is going to be very busy for the clerk of the court.
Mike Gleason: Now, switching gears here a little bit. I want to talk about monetary policy. Now let's suppose that Trump defies the odds here and goes on to win. Will he really get rid of Janet Yellen at the Fed and put for tighter monetary policy? After all, he loves debt and has advocated for low interest rates in private business as a real estate mogul.
Michael Rivero: Well, I think with Trump his downside, and obviously I'm a Trump supported, but I think in many ways going into the job of President he is as naïve as Jimmy Carter was. Too much of Trump's world view is based on what he's been seeing on corporate media over the years. He's gotten some good advisors, and he's starting to really make oblique references to things that have really been going on. The problem is that Donald Trump by himself is not going to be able to effect much change other than criminal prosecution of his predecessors. We could very easily see Barack Obama, if Trump wins the election, we could see Barack Obama on his last day in office just issue a blanket pardon for all crimes past, present, future the way Gerald Ford did to shut down the Watergate investigation.
But Donald Trump is going to be facing a Congress that's openly hostile to him, a corporate media that's openly hostile to him, and we the American people can't just sit back and say that Trump is going to fix it. We're going to have to be working with him. 200 million strong standing at the offices of Senators and Representatives and glaring through that glass to send a message that you are no longer working for Israel, you are no longer working for Wall Street, you are working for We The People, or you are going to be out of a job.
Our work load is actually going to go up with a Trump victory, not down. Anybody who thinks otherwise is definitely going to be part of the problem. But Donald Trump, I don't think he's willing to challenge the nature of private central banking itself, but there's absolutely no question that he is going to be very hostile to all of the outright criminal fraud that we have been seeing on Wall Street for the last decade. What Donald Trump is going to have to deal with is the fact that fraud is the only thing holding Wall Street up right now. I would advise that his focus needs to be on reviving manufacturing and non-GMO agriculture as quickly as possible so that we've got something to trade other nations are going to want to buy.
Because Donald Trump wants to drop all this war agenda against Russia and China. He wants to go back to peace through commerce and trade, but right now after the last 30 years of mismanagement, the United States doesn't make anything anybody wants to buy. That's why they're out there with all these trade agreements, arm twisting foreign nations to buy our products even if they don't want them.
Mike Gleason: It's now being reported that Obamacare is going to see big increases in costs next year as participants are going to see big jumps in their premiums. Based on the trajectory of things, is it possible that healthcare costs could singlehandedly sink the U.S. economy or is that overstating it?
Michael Rivero: No, it's not overstating it. The problem is, we've already reached a point where government solution to every problem is to take more people away from the American people. And they're doing it to a number of devices… Obamacare is one, human-caused global warming and carbon tax is another. But we've reached a point where every time one part of the government demands some money from the American people, they have to make do without something else. If they're being charged more for healthcare premiums then they're going to be buying fewer clothes for their kids. If they're being hit with a carbon tax, they may decide that they can't afford to send their kids to school without student loans. And so the net increase in economic activity remains a constant and the net tax revenues remain constant no matter what they do.
That is the real problem. Getting back to this idea of all the massive fraud we've been seeing on Wall Street with companies, name iconic companies like Wells Fargo. What it signals to me is the real economy of the nation, the economy that makes the whole nation work high paying jobs for the people... the people take that money, they buy homes, they buy cars, they go to the shopping malls and buy TVs and stuff… that economy as already ground to a halt. And that's why they're being forced to rely on fraud to try and make Wall Street look like it's still functioning. At least as far as the election is concerned.
But we need to restart that economy. And one of the things that Trump is going to have to deal with is the basic nature of private central banking, which is, it creates more debt than money with which to pay that debt until the system is drowning in debt and start to lock up. That's the situation where we are right now. That's what's driving this world to a new world war.
Mike Gleason: Internationally this week we've seen tensions flare up in Russia where the Brits have sent tanks and troops to the Russian boarder. What's going on there, Michael, and why are they doing this?
Michael Rivero: Well, partly it's chest thumping. It's the U.S. trying to act tough against Russia to try and get Russia to pull out of Syria so the U.S. can get get rid of Bashar al-Assad and impose a puppet ruler. But everybody knows this is what the U.S. has been doing…. in Afghanistan, in Iraq, in Libya, in Yemen. Now they're trying to do it in Syria. Eventually they want to do Iran. Back in 2005 General Wesley Clark blew the whistle on what the plan really is… and that is for the U.S. to go on out and take control of all the resource rich nations on earth to force those nations to trade those resources only for the U.S. dollar so that the rest of the world would have to come to the United States and borrow those dollars at interest, or bring us manufactured goods and agricultural produce in exchange for this ink and paper so that they could buy the oil for their own economic activity. It's called the petrodollar arrangement and it's been in place since the 1970s when Richard Nixon ended gold convertibility which brought Bretton Woods to an end.
And because our economic system has gotten lazy with all of this wealth just pouring in automatically, that's why our manufacturing has been allowed to decline in both quantity and quality. It's why our jobs continue to be off-shored to other countries and nobody wants our GMO agriculture. So right now, if the world stops using the U.S. dollar for cross border trade and banking there's nothing left to prop up the U.S. economy. And that's why they're pushing so hard and that's why we're on the edge of a new world war.
Mike Gleason: In terms of the financial markets here in the States, if not globally, it seems that we're seeing them incredibly managed right now leading up to the election with very little movement happening. Perhaps a lot of folks are sitting on the sidelines as they wait for the election results and what's going to happen with the fallout there. Maybe it's a combination of both of those things. What do you think the post-election landscape will look like in the financial world?
Michael Rivero: I think if Hillary steals the White House, I think they're just going to continue to do things as they've been doing them because it guarantees the flow of wealth from ordinary people into the pockets of Hillary's backers. And that's why Wall Street has been such a strong supporter of Hillary Clinton. And Hillary Clinton will turn a blind eye to the illegal behavior of the bankers. If Donald Trump is able to overcome the election fraud and win the White House, we will see a panic on Wall Street. Not necessarily of the markets themselves, but we may start seeing a lot of the CEOs decide to step down, retire, and head off to countries without extradition. Because more and more people around the world are just pointing out the obvious disparity between the way the United States government treats crooked financial operatives and the rest of the world. Iceland is still throwing their crooked bankers from 2008 into jail. Other countries actually have death penalty for bankers who violate the public trust.
Here in the United States every time one of these crooked bankers causes a disaster they simply go on out and rob the American people to pay for it all over and keep the system going. I think one of the reasons that the establishment is so opposed to Donald Trump… yes he's a billionaire… but he did it playing by the rules. He made things. He built hotels and resorts and he wasn't always successful. But he knows how to make money the old fashion way as opposed to our permanent ruling class of money junkies where all they know how to do is figure out ways to take money from other people and give it to their friends and give it to each other. It’s rather amazing to see Hillary Clinton out there chastising Donald Trump because one year he lost a billion dollars in a business venture, and we still don't know where the six billion dollars went that went missing when she was Secretary of State, but we're not supposed to talk about that.
We have all these people in Washington DC who are criticizing Donald Trump for being the business man who's decided late in life to get into politics. But that description also fits people like Thomas Jefferson and George Washington and Ben Franklin… the founding fathers who were not career politicians. They were businessman, plantation owners, farmers, growers, publishers, inventors. They knew how to actually make a business work, which made them the ideal people to make the young nation work. And we need to get back to that simple wisdom. We were never supposed to have a permanent, hereditary ruling class of parasites lording over us.
Mike Gleason: How about gold and silver. Do you see more safe haven buying of the metals and could they be the benefactor of some economic and financial market turmoil post-election?
Michael Rivero: Well, we know that gold and silver prices are being artificially held down because they're trying to keep the American people to have their savings accounts at the banks to maintain the bank's cash reserves and keep the money where the banks can grab it in an emergency and the laws will now allow them to do that. Most people don't understand that about a year ago, Congress passed a law that redefined a savings account holder as an unsecured investor in the bank and moved the priority for the repayment of a failing bank, the savers used to be at the top of the list now they're at the very bottom. The derivatives are now at the top. Same thing with the stock market. They don't want people liquidating their stock portfolio and getting into metals, so they have to prop up the stock market and make it look good and they have to suppress gold and silver prices to make them look less attractive. But more and more people are picking up on what's been going on and we are seeing a movement into metals. We're hearing of shortages of certain investment grade coins that are out there right now.
Countries like China and Russia are buying gold and silver. I know Russia has had to sell some of theirs lately because they are still suffering the ill effects of that oil price war that was started by the United States. But that actually backfired and it cost a lot more economic harm to Europe, South America, the fracking industry, the Canadian oil industry. It caused a lot more damage to us than it did to Russia. Russia of course, is being forced to put more and more money into their military to match the saber rattling that they're seeing from NATO and the United States.
Mike Gleason: Well, it's excellent and enlightening stuff as always, Michael. It's going to be quite interesting to see how this plays out over the final 10 days or so before the election. I look forward to having you on after it's all over and get more of your thoughts on what's next. Now before we let you go, please tell people how they can get more of your commentary on a regular basis through the website and also your radio show.
Michael Rivero: Okay, well the website is WhatReallyHappened.com. We've been running it for a little over 22 years now. And I do a Monday through Friday talk show from 3pm to 6pm central U.S. time at RepublicBroadcasting.org.
Mike Gleason: Well it's truly great stuff. Thanks again, Michael, and I always enjoy talking with you and appreciate your time. Look forward to speaking with you again before long and I hope you enjoy your weekend. Thanks very much.
Michael Rivero: Thank you very much.
Mike Gleason: Well that will do it for this week. Thanks again to Michael Rivero, founder and editor of WhatReallyHappened.com.
About the Author:
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.