Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up Gerald Celente of the Trends Journal joins me for another explosive conversation you will not want to miss. Gerald covers a range of topics including why he believes the Fed will continue to keep the cheap money game going as long as it can, how the success on Wall Street is not showing up on Main Street and why he believes negative interest rates are coming to America – possibly as soon as this time next year. Gerald gives his take on the presidential election and the key prices levels to be watching for in gold in the months ahead. So, don’t miss another sensational interview with trends forecaster Gerald Celente, coming up after this week’s market update.
Well, as impeachment circus lows and stock market highs dominate the news cycle this week, precious metals are quietly attempting a recovery.
On Thursday, silver prices closed back above the $17 level. As of this Friday recording, silver trades at $17.02 an ounce, up 0.8% on the week. Gold, meanwhile, comes in at $1,469 and is currently posting a weekly gain of 0.5%.
Bulls still have some work to do to repair the technical damage inflicted on both metals during last week’s selling. Gold and silver still face some overhead resistance and the potential for concentrated short selling by financial institutions in the futures markets.
Significant price bottoms are usually reached after the commercial sellers force the speculative longs to capitulate. We certainly saw some of that last week. Whether there is one final washout ahead remains to be seen.
Futures market manipulation of precious metals prices remains an obstacle to free and fair price discovery. Despite some recent prosecutions involving price rigging by banks, the Gold Anti-Trust Action Committee believes the rabbit hole goes much deeper.
GATA reported this week that U.S. Representative Alex Mooney of West Virginia is pushing Attorney General Bill Barr to pursue additional investigations of price rigging in the futures markets. Mooney raises concern in particular about a mechanism for settling metals contracts called "exchange for physicals." He notes this may pose "some danger of a systemic issue."
Both Mooney and GATA have repeatedly raised questions with the Commodity Futures Trading Commission that have gone unanswered. Perhaps Attorney General Barr’s office will be more responsive to credible allegations of criminal manipulation in the precious metals markets.
In the meantime, metals investors will have to be prepared for more artificially induced price volatility in their holdings. The best way to beat the paper manipulators long term is to avoid playing in their rigged casino and keep accumulating precious metals in physical form. The supply and demand fundamentals of the physical market will ultimately win out and force their hand.
Futures contracts, exchange-traded funds, and other derivative products tied to gold and silver prices are no substitute for the real thing. Only the actual metal is a time-tested store of value and hedge against financial turmoil including the risk of an inflation outbreak.
Speaking of inflation, on Wednesday the Labor Department reported that U.S. consumer prices rose more than expected in October. The consumer price index increased 0.4% last month as households faced higher costs for food, energy, healthcare, and a range of other goods. It was the largest monthly CPI gain since March.
Many economists believe the CPI actually understates real-world inflation. The Federal Reserve has other preferred gauges for estimating inflation, but they all have their flaws as well.
Fed Chairman Jerome Powell talks over and over again about pursuing a “symmetrical” 2% inflation target. But this number is completely arbitrary and is found nowhere in the central bank’s original “stable prices” mandate.
Prospective Federal Reserve Board nominee Judy Shelton is skeptical of the prevailing thinking at the Fed on inflation. Shelton was floated by President Donald Trump as a Fed member several months ago and is still waiting for an opportunity to be confirmed by the Senate.
She will have a difficult time given her unorthodox but very common-sense views on things like true price stability. She appeared on CNBC this week and offered these thoughts:
Judy Shelton: There are so many indices for evaluating inflation that right away, it's confusing. Of course, for me, a dependable dollar wouldn't lose value at all. Instead, we have this regimented built in 2% obsolescence and I would rather, and I think Paul Volcker has expressed this as well, not have 2% because that very easily can become 4%. I've seen some economists saying, well that would make life a lot easier for central bankers. They would have more room to maneuver, but it makes life infinitely more complicated for the people who have to use money.
I'm leery that the Fed now talks about symmetrical inflation. If they ever do hit their target, it now sounds like they're willing to go above that amount for a non-determined period of time so that somehow they balance out and say, well, over the long run we hit 2%. At least, people are not listing inflation as their primary concern these days, but still it's a very interesting intellectual challenge to discuss what is the right rate of inflation. I guess I prefer zero.
Sound money advocates would certainly welcome Shelton’s perspective having a seat at the Fed’s policy making table. She has previously expressed support for reintroducing gold into the monetary system as a way of tethering the value of the dollar to something solid.
But for now, the monetary system isn’t tethered to anything except the unlimited demand by bankers and politicians for new dollars to be created out of thin air.
Well now, without further delay, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome back the one and the only Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is a frequent guest on the Money Metals Podcast and is perhaps the most well-known trends forecaster in the world. And it's always great to have him on with us.
Gerald, thanks for the time again today, and welcome back.
Gerald Celente: Oh, my pleasure. Thanks for having me on.
Mike Gleason: Well, Gerald, since we spoke last in August, the Federal Reserve has begun propping up the repo markets, and they resumed buying government debt. They tell us the program on bond purchases should in no way be confused with prior bond purchasing programs, also known as Quantitative Easing. They don't want us to worry about it. Just a little extra boost for an economy struggling with some fears over trade and a minor temporary problem in the repo markets is what they're saying. The only trouble is that hundreds of billions of dollars are involved so far, and it could wind up being trillions. So once again, the Fed is shoveling freshly-printed cash at banks and the Treasury Department. What is your guess as to why the Fed has engaged in this stealth bailout, and why aren't more people talking about it?
Gerald Celente: Well, because most people don't know what a repo market is, and who cares, really, in the sense that ... but I disagree with you that they're printing cash. It's digital money backed by nothing and printed on nothing. And as I say that facetiously, when you say cash, it's just this is just a scam. It's make-believe money. And they're dumping in, according to the numbers, and you said it's going to go to the trillions, and that's correct, over 120 billion a day. A day.
And you got these little slimer, low-life central banksters. I mean, remember these are private banks. Let's get the word Federal Reserve off it. There's nothing Federal about it. And we just heard from the top bankster there, Jerome Powell, saying that interest rates are unlikely to change as long as growth continues. What growth is he talking about? The only growth that they're talking about are the equity markets, and the equity markets have nothing to do with the growth of the nation or the growth of the average person. So, all this is is one big sham to keep what morons, imbeciles, and jerks call “investors” into the market so they could keep making more billions. They're not investors, they're gamblers, and they're addicted.
And go back to January 4th of this year when low-life Powell did a 180 from 2018 when they were going to raise interest rates. They were expecting two to three interest rate increases in 2019, and on January 4th, despite very high job numbers on that Friday, said that they were going to be, “patient in raising interest rates” because they're concerned about the markets, because they just had the worst December 2018 since the Great Depression. So, all they're doing here is dumping money into the marketplace to keep the gamblers happy, and the banksters are nothing more than the money junkies. They're giving them the fix.
And you heard President Trump say that the S&P is up more than 45%, the Dow Jones Industrial Average is up over 50%, NASDAQ Composite is up 60%. And those numbers could be higher, Trump said, if it weren't for reluctance of the Fed to even lower rates more. So, he's saying that there would be another 25% added to each of those numbers I just read. What do those numbers have to do with the average person? What does the S&P, NASDAQ, and Dow have to do with anybody? This money is only going to pump up the markets. And it's all fake money. Digital money backed by nothing and printed on nothing.
Mike Gleason: For a while we wondered if the Fed would play ball with Trump. There was a question about whether or not Wall Street would support the President or try to get him unelected. It looks like maybe that question has been answered. The Fed is cutting rates and throwing money in the bond markets. Has that changed your outlook? Because until recently, signs were that the U.S. was sliding towards recession and an economic slowdown was the one thing that could derail Trump's chances of reelection. Do you still think we are likely to get a recession and a selloff in stocks before this time next year, or will they be able to keep it going, keep this party going a little bit longer with all the new stimulus?
Gerald Celente: Well, we've been forecasting that we're going to see by this time next year, earlier than ... like maybe a year from October, you're going to see negative or zero interest rate policy. And that's going to keep boosting the market up artificially. And he's going to do everything he can. Wall Street doesn't ... yeah, they don't like him, but they don't want the markets to go down. So they're in a catch-22 — either stay with Trump and keep getting low interest rates because of the pressure that he's putting on the Fed.
I mean, he just came out again this week and said that the Fed should continue to cut interest rates to make the U.S. more competitive. He's talking about negative interest rates, and he goes, "Give me some of that money." He said, "Give me some of that money. I want some of that money." I mean, these are his words, "I want some of that money." So they're going to just continue to do this to keep the markets going, and Wall Street wants only for the market to keep going. Yeah, I mean, they'd rather have Trump than Elizabeth Warren and Bernie Sanders.
Mike Gleason: Speaking of that, let's talk a bit about the election since that will be the major story in the year ahead. To us, it looks like the Democrats are doing whatever they can to lose. They spun everyone's wheels for three years with the Russia Gate investigation, which bore no fruit. Now they're trying to impeach based on an alleged attempt by Trump to extort the Ukrainian government into investigating the Bidens. That's an issue that looks more likely to hurt Democrats than to hurt Trump, to the extent Americans are still paying attention at all. Unless we're missing something, the impeachment will die in the Republican Senate if it even gets through the House. And on top of all of that, the Democrat front runners look almost unelectable. We don't think America is quite ready to vote for Elizabeth Warren or Bernie Sanders, a couple of socialists. But give us your thoughts, if you would, on the Democrat candidates and Trump's prospects for reelection here, Gerald.
Gerald Celente: Well, again, we're forecasting Trump the winner as it stands now. And there are always the wild cards. That's why people say, that I predict the future. Nobody can predict the future. There are too many wild cards. And I wouldn't call Bernie Sanders or Trump or Warren "socialists." I call them "stupid people." And they're doing nothing to talk about improving the economy. All they're talking about is how to get more money to give away and make things less expensive in healthcare and other areas. They're doing nothing about how are we going to create more jobs, build the economy, and build the middle class. So they're not going to win the swing states.
And it's funny you mentioned Sanders and you mentioned Warren, but you left out Biden. And that's the mentality and the feeling that Biden won't be there. But even if Biden wins, Trump is going to win the swing states. They're not going to vote for a Sanders or a Warren. It'll be like a McGovern running against a Nixon.
And as for impeachment, you're 100% right. It's going nowhere, and it's a total waste of people's time. And anybody listening to the mainstream media is just wasting their precious time in life. This is the headline on, as we're speaking, on the Cartoon News Network (aka CNN), the whole front page. We learned about a new Ukraine call, why it matters. How about shove it? Who you talking to, junior? I'll tell you who they're talking to, they're talking to all stupid people. Only imbeciles and morons tune into ABC, CBS, Fox, the Cartoon News Network, and any of the other ones.
If you're going to follow the impeachment sideshow I should say, going on ... Forget about what's going on in Bolivia. Why do you need to know what's going on in Chile? Hey, how about Lebanon? Who? And what about Algeria? Hey, Hong Kong, Spain. I mean, look what's going on around the world. Americans are totally oblivious to what's going on, what's going to happen, and the implications. So, this is the stupidity of what's going on, and it's in front of everybody's eyes.
Mike Gleason: Switching gears here a little bit, we're heading into the end of the year. Metals have performed well, though a good portion of those gains have been given back the past week or two. Stocks are up. The ominous yield curve inversion has disappeared in the bond markets. The dollar is strong. You have to hand it to the Fed and the banks, these markets are well managed to say the least. We aren't sure if surprises are still allowed to happen. But what are your thoughts for the months ahead? Are you expecting any surprises?
Gerald Celente: Well, again, I never thought that they would dump this money, $120 billion into the repo market. My forecasts are based on things that are going on, and now I hear something like this that's unprecedented. And if you remember when it happened in September, it was only going to go to October 10th, and then from October 10th it went to November 4th, and then from November 4th it went to infinity. So, you can't forecast this stuff.
And so what's happening with all this monetary methadone being shot back into the bull, now you're seeing people running back into the markets because they know they're going to keep getting more cheap money for free so they could gamble and keep their addiction going. And that's going to put downward pressure on gold, as it has. And my forecast is the same. It has not changed one bit. And that is that I said when gold broke over $1,450 an ounce, it would head towards $2,000, and it was. But then it's been sidetracked by, again, all this cheap money that's going into the equities markets that's now being taken out of the safe haven assets.
And on the downside, I said if gold goes below $1,450, which it got very close to doing, the bottom would be $1,390. So, I maintain the gold forecast, and what they're doing to the markets is only going to temporarily inflate them. Again though, but they'll come up with another scheme. They're sick people. They're addicts. Addicts do anything, anything to get their fix. And the money junkies are the banksters, and they give them their fix.
Mike Gleason: Certainly, negative interest rates are starting to get a little bit more play here in the United States. We're seeing that in other parts of the world. You got to think that's a good environment if we do get a true negative interest rate here in the U.S. Is that kind of what you're looking at long term as we maybe move in that direction?
Gerald Celente: Well, that's what I'm saying. We're forecasting by next October, late October, you're going to see interest rates at negative or zero in the United States. This is Trump's quote: "We are actively competing with nations who openly cut interest rates so that now many are actually getting paid when they pay off their loans, known as negative interest." Whoever heard of such a thing? Nobody's ever heard of such a thing. And then he goes on to say, "Give me some of that. Give me some of that money. I want some of that money." And that's all it's about, some of that money and negative interest rates, and it's going to just keep artificially propping this up.
But again, it's going to end at some point. The debt bubble is gigantic, and it's around the world. And China is in deep trouble as well. They don't know what to do. They don't want to devalue their currency by pumping more cheap money in despite what Trump is saying, because there's some $16 trillion worth of business debt that's dollar based in China, and they have to pay it back in dollars and around the world. So, the stronger the dollar gets, the weaker these currencies go, and the bigger their debt burden is. So this is really a crisis that's going on that's merely been temporarily stopped.
Mike Gleason: Yeah. Well put. Well, finally, Gerald, as we begin to wrap up, give us any final thoughts on anything we may not have touched on either on the financial front or on the geopolitical front. Give us a sense of the stories and trends you're going to be following most closely as we close out 2019 and look towards 2020.
Gerald Celente: Well, what we're looking at is really the geopolitical instability going on. Again, name the country, Hong Kong, Iraq, the people are protesting. All over the world. Bolivia, Chile. And then wars are heating up more in Mali. With the problems in Syria, with Iran. So, people should be very, very careful. Now, we don't give financial advice, but we're saying prepare for the worst. And if you prepare for the worst and the worst doesn't happen, you haven't lost anything. If the worst happens and you haven't prepared, you could lose everything. And I still maintain the position as gold being the most valuable safe haven asset, and it will prove that because this lust for oil, lust for money, and lust for power is the way of the world now, and it's ready to explode as we see it.
Mike Gleason: Well, excellent stuff. Once again, Gerald, we always appreciate the time. Before we let you go, please tell listeners how they can get their hands on the tremendous Trends Journal information that you put out there through the various mediums, or anything else they ought to know about how they can follow the Trends Journal more closely, especially given the tenuous state of things during the 2020 election year that is about to commence.
Gerald Celente: Well, you nailed it. It's tenuous times, and that's why we've gone, it used to be a quarterly, to a monthly. Now it's a weekly because events are happening so fast, and the implications are so strong in so many different directions. And it's the only magazine in the world that'll give you history before it happens. We tell you what's happening, what it means, where it's going, and how it's going to affect you. There's no other magazine like it, and it's a weekly, and again, a money back guarantee. It's only $129 a year. The only magazine where you'll get history before it happens so you could help prepare for what's coming ahead.
And in 2021, we're forecasting the greatest recession. And as we look around the world, the global slowdown is underway. I mean, you name the countries. Germany nearing recession levels. We'll see very shortly whether they fell in again. And when a country like that is going down, you know how bad it is.
Mike Gleason: Yeah, certainly a big linchpin over there in the eurozone for sure. That'll be interesting to watch. And we've got the holidays coming up. Anybody that's maybe thinking of a unique gift, Trends Journal would make a fantastic one for a loved one or a friend. It's fantastic information. You hear the great stuff that Gerald gives us here on the podcast on a regular basis, and I urge everyone to check that out because it is truly great stuff. History before it happens, like they like to say.
Well, Gerald, thanks so much for the time. Again, enjoy your weekend. We'll look forward to catching up with you again probably after the first of the year and can't wait for our next conversation. Take care.
Gerald Celente: Well, thank you, and thank you for all that you do.
Mike Gleason: Well, that will do it for this week. Thanks, again to Gerald Celente, publisher of the renowned Trends Journal. For more information, the website again is TrendsJournal.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.