Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up we’ll hear from the one and only Gerald Celente, world-renowned trends forecaster and publisher of the Trends Journal. Gerald parses through all of the major new stories these days and tells us which one is the most important storyline that will affect the stock markets, the economy, and gold. Don’t miss our explosive conversation with Gerald Celente, coming up after this week’s market update.
As President Trump announced controversial new tariffs on foreign steel and aluminum, metals traders discounted any potential impact in the futures markets. Neither base metals nor precious metals futures got any real boost from the tariffs this week.
Gold spot prices currently come in at $1,321 per ounce, down a small fraction of a percent since last Friday’s close. Silver, meanwhile, shows a slight weekly gain to trade at $16.60. The other white metals are trading to the downside this week although just slightly, with platinum down 1.0% to $960 an ounce and palladium off 0.7% to $990.
Whether precious metals markets can transition into a spring rally may depend on which way the U.S. Dollar Index breaks. It has been consolidating in a trading range over the past few weeks since plunging to a 3-year low in January.
Metals bulls are obviously gearing up for another leg lower in the dollar. The long-term fundamentals of the dollar are grim. But it can potentially gain against other troubled fiat currencies such as the euro over any given period.
Central bankers have a variety of tricks up their sleeves to manage currency values. And they all have a vested interest in maintaining confidence in the world’s major fiat currencies. The last thing they want is for one to crash precipitously and drive savings and commerce into crypto-currencies or precious metals.
Unfortunately, a lot of the inner workings of the Federal Reserve are secret. The public isn’t allowed to know what tools monetary planners are deploying and why. Nor can we know for sure how or why the Fed may be intervening in precious metals markets. That’s because Fed officials refuse to submit themselves to a full public audit of their books.
The Fed even has a team of lobbyists dedicated to defeating “Audit the Fed” legislation in Congress. Audit the Fed enjoys overwhelming support in the House of Representatives but has so far been unable to get the 60 votes it needs in the Senate to break through Senator Chuck Schumer’s wall of obstruction.
The Senate’s main champion of Audit the Fed is Rand Paul. This week Senator Paul moved to attach Audit the Fed as an amendment to a major financial reform bill. He expressed optimism that President Trump would sign the bill if he could get it to his desk.
Tucker Carlson: Well Kentucky Senator Rand Paul has been trying to audit the Federal Reserve for years now. Under President Obama that was impossible, of course. Under an ordinary Republican administration it would be pretty unlikely, but perhaps he can pull it off under President Trump, who has endorsed the idea. Senator Paul has introduced an Audit the Fed bill into the senate and is campaigning hard for the Republican majority to pass it while they can.
Sen. Rand Paul: It's about transparency. It's about knowing what your government does. The Constitution gives the power to Congress to mint and coin and money. We sort of transferred that power to the Federal Reserve in 1913, but I think we ought to know what they're doing. The dollar's lost 96% of its purchasing power, what does that mean? Your prices have gone up every year. What was once worth a dollar, now takes $24 to buy what was once worth a dollar.
Tucker Carlson: And that's a result of policies made at the Federal Reserve?
Sen. Rand Paul: Absolutely, they print up the money, but it's sort of a codependency, and this is a dirty little secret. You need to have a Federal Reserve if you're going to have a 20 trillion dollar debt. Why? They buy your debt. But they buy your debt by printing up money.
Don’t expect a huge push from the White House or the Treasury Department to get Audit the Fed done. Even though Donald Trump expressed support for the idea on the campaign trail, his appointments of Steven Mnuchin to Treasury and Jerome Powell to head the Federal Reserve suggest that he doesn’t want to shake up the monetary system, at least not while he’s in office.
Powell is about as “establishment” a pick as it gets. In fact, Jay Powell helped lead the Fed’s institutional opposition to Rand Paul’s Audit the Fed bill last time around. During his confirmation hearing, Powell reiterated his opposition to more transparency. Not surprisingly, Rand Paul was one of a handful of Senators to vote against Powell’s confirmation as Fed chairman.
Perhaps Senator Paul can persuade the president to put forward his own position on the issue of Fed transparency. Paul has shown an ability to work with Trump to get things done on healthcare and other issues. And Trump has shown a willingness to take on members of his own administration, most notably Attorney General Jeff Sessions.
Should Fed Chairman Powell go one rate hike too far and trigger some kind of financial crisis, you can bet President Trump will find some way to vent his displeasure at the central bank. But until the Fed screws up in some obvious way that makes incumbent politicians angry, auditing the Fed will likely remain an uphill battle politically.
Well now, without further delay, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world and it's always great to have him on with us.
Mr. Celente, thanks again for the time today and welcome back.
Gerald Celente: Oh, it's always great being on. Thank you.
Mike Gleason: Well, Gerald, it's never a dull moment in Washington, D.C., these days. President Trump always keeps it lively. We have the never-ending Russia controversy, of course, the war of words with North Korea, and the intervention in Syria have both been regulars in the headlines over the past year. Now Trump is talking about tariffs and people are worried about a trade war. Volatility is coming back to the stock markets and some investors are getting nervous about rising interest rates. When it comes to Russia interfering in U.S. elections, it seems more or less like a smoke screen. We have very little doubt there is plenty of collusion and a fair bit of it involved Hillary shepherding the Uranium One deal over the finish line.
So, we're finding it hard to predict which of these stories are worth paying attention to and which are likely to fade away. And there's nobody better who can help us evaluate this than you, so I'm excited to talk today. So, which of the current stories have legs, Gerald? Will there be a trade war, a big correction in stocks, another attempt by Democrats to impeach Trump? What?
Gerald Celente: Well, the attempt by the Democrats to impeach Trump have never stopped. And, again, Mike, I've been at this a lot of years, and anybody awake and alive that hasn't tuned out knows that every time we've had an election in this country, whether you like the person or not, they always used to say, "Well, whether you like it or not, this is the new person. Let's rally behind him and try to push the country forward." That never happened with Trump. And I want to make this really clear. I'm not a Trump supporter. I didn't vote in this last election. And (people say), "Oh, you didn't vote? Did you get what you deserve?", to which I say, "Grow up. If you voted for any of these people, then you got what you deserve and I don't deserve either of them. My standards are different."
And I look what's going on. It doesn't make the news, all the things that you just mentioned. Hey, how about what just happened in Italy with Cinque Stelle, the Five Star Movement, becoming the major party, a party that just started in 2009 because the people are disgusted with the establishment. How could you be disgusted with the establishment? You should love the establishment. How could you dare be anti-establishment? That's the stupidity of the language that they use.
They call it, for example, what Trump is doing, protectionist movements. Oh, a protectionist? Oh, I'm a close combat practitioner, have been for over a quarter of a century. I'll protect myself. I'll protect myself if I'm being attacked. But yet if you're being attacked trade-wise, economically, and you go to protect yourself, well, you're a protectionist. So, listen to the language, it's very important as a trend forecaster.
You mentioned about the Russian elections. The bar has sunk so low that people are listening to Samantha Power, the former UN Ambassador. And I'm tired of hearing this baloney, "Oh, if only women were in charge." It's not about men, women, race, creed or color. Good and bad comes in all of them. Let's call it equal. This is a woman, along with Hillary Clinton, Samantha Power and Susan Rice that started the Libyan War, that overthrew a sovereign nation, whether you liked the guy or not, that did nothing to us and created the refugee problem that nobody talks about and the migrant crisis. Because when Qaddafi was in there in Libya, they weren't going into Europe. He made a deal with them and warned them that when he went, the migrants would come.
Going back to Samantha Power, they quote this warmongering woman who loved every war that she's ever known beginning with Bill Clinton's destruction of Yugoslav War, she's quoted in the Spanish newspaper, El País, regarding the election that just happened in Italy, "Italy joins long list of elections influenced by Russia. Sputnik will do Sputnik does," of course, that's the media station, "The question is what are our democracies going to do about it? Will voters repudiate candidates who seek to benefit from Russian interference?" Only a stupid moron, an ignorant jerk, would say those words and only low life presstitutes that put out, because they get paid to put out, would repeat those words and that's what the media has become. So, if anybody is tuning in to the mainstream media to get their news, you better grow up.
And the same thing's happening with the equity markets. Look what happened. Oh, the markets are down. Yeah, so? Why did they go down? Well, listen to why they went down. Ah, because that guy Gary Cohen's not in there, I tells you, and he was the chief economic advisor and he's against Trump's trade policies and tariffs. Just hours before that, the same blabbermouths on the business media were trumpeting that the market went up 150 points because North Korea is talking peace. North Korea talking peace has nothing to do with anything. It has nothing to do with price-earnings ratios. It has nothing to do with GDP. Oh, yeah, if they're going to blow the joint up, of course, then the whole world has to worry, but that's not going to move a market. So, the markets are moving because of one major issue and that's interest rates. And they’re concerned that they're going to raise interest rates too fast.
And, look what happened, hey, home sales are down. Pending home sales are down. New home sales are down. New car sales are down. Oh, consumer debt, oh, it's over, what, 13.1 trillion dollars? Oh, what's the national debt? Over 20 trillion dollars? And you just added another 1.5 to it? What's the global debt? Eh, almost 50 trillion dollars. What happens when interest rates go up? That's what's driving the markets. They're over-leveraged, they're overvalued and they're fearing interest rates rises. So, if anybody's listening to the major media to get their news, you better grow up because all you're getting is identity news. Whatever station you're turning into, they're selling the propaganda that they love most.
Mike Gleason: I want to key in on something that you just mentioned there. We have such a consumption-based economy and it appears like buying of the big-ticket items like homes and automobiles, as you just mentioned, is slowing, likely based on rising interest rate fears and the fact that all of those Americans in debt are starting to feel these rate hikes. What do you have to say on the consumer front here, Gerald, and what might that mean for the economy?
Gerald Celente: If rates go up too high, the economy goes down, end of story. And, again, the only reason the markets are going to sustain themselves is because of stock buybacks. And Trump's tax plan, again, I call it what it is, why would anybody want to have major deficits the way that you have? If you're in business and you're losing, what, 500 billion dollars a year, are you going to stay in business? So, going back to Trump's plan, I agree with him on redoing these trade agreements.
When Bill Clinton, Slick Willie, "I didn't have sex with that woman Monica Lewinsky. I smoked it and didn't inhale," Clinton brought us NAFTA, he promised 200,000 jobs. We lost almost 900,000. When Bill Clinton got China into the World Trade Organization and Bush signed them in two weeks after 9/11 when no one was watching, we lost 3.5 million jobs to China. So, that's why I'm saying I agree with Trump. And, by the way, Obama's South Korean deal, we lost 75,000 jobs on that. Going back, on the tax thing. No, I don't agree at all.
And don't believe me, look at the Tax Policy Center and others that have done nonpartisan groups, the 1% get 83% of the tax breaks going back to the market. They're allowing corporations to repay to create money overseas and paying very little on taxes and the tax breaks going down from 35 to 21% are allowing them to invest more in: stock buybacks. It's not going into capital improvements. It's not going into wages. Because you look at the facts. What, the last quarter, the S&P 500 earnings, are up 15%. They're looking for a 19% increase in 2018. The money didn't go into capital improvements. It went into stock buybacks. Since Trump passed the tax plan, over 200 billion dollars have gone into stock buybacks. They're estimating, Mike, that there's going to be 1.5 trillion dollars’ worth of stock buybacks this year. That's driving the market.
And then you look at the numbers. It would be, depending on whose numbers you look at, between 85 and 90% of all of the stocks in the United States are owned by 10% of the people. The 1% owns 45% of that. And, on average, that 10% owns about $350,000 of stocks. So, now the rest of the stocks that's owned, the 10% left out there, that we, the little people own, only own about $15,000 worth of shares. So, the market is very different than the real economy. The Trump rally has peaked. It may go a little higher. It's peaked. And so what we're saying is the downside risk is definitely ... it hit a correction and pulled out of it, 10% down in mid-February. We could see another correction and a possible bear market because of the blowback from trade agreements. And we believe that the aluminum and the steel issue that really only affects mostly Canada the most, it doesn't touch China, they're doing this to renegotiate NAFTA. And so they're going to say, "Look, we'll get rid of these tariffs if we renegotiate this lousy deal."
Oh, and going back to Slick Willie Clinton, perfect name for him. Another lying little freak. Line him up with the rest of them, Bush, Clinton, Obama. You name them, they're all there. Anyway, he also promised not only that jobs would be created and that our trade deficit would improve, we went to basically a two billion dollar trade surplus to now 71 billion dollar deficit with Mexico. How could anybody support this stupidity? The only way you support the stupidity, if you're on ABC, NBC, CBS, CNN, Bloomberg, CNBC, and you're getting paid to put out. You're a presstitute. Because anybody with an ounce of brains would say, "This doesn't make any sense. We lost all these good jobs."
Oh, Al Gore, I remember that fat mouth shooting his mouth off with the Ross Perot debate when Ross Perot warned about the sucking sound coming out of this country as the jobs left. And Al Gore, another little boy who never worked a day in his life, born on third base, thought he hit a home run. His old man was a senator… that's why he got where he was… saying that, "Well, we're going to get rid of those lousy, dirty manufacturing jobs and bring you service sector jobs." Yeah, that pay nothing. So, now you hear the stupid people in the media say that, "Well, the prices will go up on things." Oh, yeah, what a half a penny on a can of beer? And you're talking about that? Oh, but how about if manufacturing jobs came back and the Rust Belt got rid of the rust and people are making a living wage? Wouldn't they be happy to pay a little more if they're living a lot better?
So, here's what I say to everybody. Is the world, is your society, is your country better off with globalization and trade agreements and the Euro Zone than it was before any of that? And if you could add to five, if it's only one hand you have to count on, you could count on the fact that median household income in the United States is below 1999 levels. You can see the debt levels of the people. And look at the facts, 78% of the people are living paycheck to paycheck. So, the markets are very disconnected to the real world and that's our forecast on the markets.
Mike Gleason: Expanding the point a bit here, stocks have been on shaky ground recently. What do you make of the reaction in gold over the past couple of months? It got taken down last month when we had a bit of a big correction there over the few days that we did, but now it seems to be hanging in there quite well during the latest couple of stock market down days. So, what do you make of gold as a safe haven here, Gerald?
Gerald Celente: We've been saying this now since 2014. Gold has to smartly break over $1,450 an ounce and then, after that, it does a Bitcoin bounce, meaning it'll skyrocket up over $2,000 an ounce. Gold has not been able to break past our point, which we're calling $1,385 an ounce. It has to do that. But the downside risk of gold, again, we do not give financial advice… we're trend forecasters. Our downside risk of gold is very small. And so we're looking at a downside risk of tops 100 bucks and we don't see that happening. But we're saying to our subscribers to the Trends Journal and our clients, watch the price of gold. If gold starts moving up sharply, watch out for a market crash because the markets are over-leveraged, they're overvalued. Again, the price-earnings ratios now are near historic highs. Everybody knows about the ETFs and the over-leverage, so follow gold. Gold is singing its own song and, right now, it should be going up more than it is if the markets were truly in trouble. That's our forecast for gold. And, again, we still maintain that gold is the ultimate safe haven.
Mike Gleason: Well, now as we begin to close here, is there anything else you're focusing on as we progress through the year? Anything that you're keeping an eye on that we maybe haven't discussed that you think need to be on people's radars, Gerald?
Gerald Celente: Yes, you mentioned Syria briefly, and that's what you have to really watch out for. You have a problem going on over there in Israel where Netanyahu is being brought up on corruption charges. And one of my sayings is "When all else fails, they take you to war." And that's what we're concerned about. The war talk against Iran is heating up in the United States. It's heating up in the Middle East. If the United States, Israel, Saudi Arabia, and their Gulf allies go to war with Iran, kiss the markets goodbye and a lot of life with it. And that, of course, will be really spiking gold prices. And it'll also spike oil prices.
And, right now, again, I'm going through the facts... the United States cannot take higher interest rates. The consumers are already stretched out. You're looking, again, at the facts where banks are reporting that late payments are growing again. So, they cannot take a raise in rates, nor can they take a raise in oil prices. That'll really put a damper on the economy. Watch out what's going on in the Middle East and take your identity out of it. It's not what you like, who you're rooting for or what you believe in, just look at the facts and follow them. If you go to a doctor and you want a diagnosis, all you want are the facts. You don't care what religion, race, creed or color the doctor is or what the doctor believes in. All you want is an honest diagnosis of the facts and that's what people need to do. And, of course, that's what we try to do our best with the Trends Journal.
Mike Gleason: Well, you are doing a fantastic job there. I love following you like I do. It's wonderful stuff and appreciate you coming on and for your time today. Now before we let you go, please tell listeners how they can get their hands on Trends Journal and the other great information there that you put out on a regular basis at the Trends Research Institute through the various mediums so they can get history before it happens, as you like to say.
Gerald Celente: Go to TrendsResearch.com and you'll see our Trends Journal, Trend Alerts. We do Trends Monthly. Trends in the News broadcasts Monday through Thursday and Trend Alerts each week. And we really do our best to keep people ahead of the news and on top of the trends. And it's only $99 a year, money back guarantee. You have nothing to lose.
Mike Gleason: Well, thanks again, Mr. Celente. We always love having you on. Stay warm and dry up there. I know your part of the country is getting some pretty good storms this week, but hope you have a great weekend and I look forward to our next conversation. Take care.
Gerald Celente: Well, thank you. And thank you so much for having me and thank you for all that you do.
Mike Gleason: Well, that will do it for this week. Our sincere thanks, again, to Gerald Celente, publisher of the renowned Trends Journal. For more information, the website is TrendsResearch.com. Be sure to check that out.
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.