Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up Michael Rivero, host of the What Really Happened with Michael Rivero radio show joins me for an incredible interview on a range of topics including the plan to take out President Donald Trump, why we may not seen the last of Hillary Clinton, how globalism is a bad thing when we’re dealing with a pandemic and why we shouldn’t sleep on the Middle East despite the apparent mutual stand down between the U.S. and Iran. All of that and more during my interview with Michael Rivero, coming up after this week’s market update.
Gold and silver markets are advancing strongly this week.
Perhaps they got a bit of a safe-haven boost from the fear generated by Wednesday’s Democrat presidential debate. Mike Bloomberg’s shaky performance made Bernie Sanders and his brand of socialism the de facto winner.
The rising threat of socialism as the dominant ideology of a major political party puts the stock market on shakier ground.
With Joe Biden sinking, Mayor Bloomberg was supposed to be the moderate who could stop Bernie’s socialist insurgence. But he was humiliated by Elizabeth Warren, who went on the warpath against the billionaire while trying to out-flank Bernie on the left with identity group grievance mongering.
Democrats’ hostility to wealth creators and their enthusiasm for higher taxes and massive new redistribution programs has Wall Street concerned. Investors aren’t yet panicking, though – perhaps because they believe a socialist can’t win a general election.
But economic risks and monetary risks loom regardless of who wins in November. The Federal Reserve’s furious efforts to keep the expansion going will likely fail at some point. But our monetary planners are currently defining “success” as achieving higher rates of price inflation in the economy. So, by their own definition, success suggests that hard asset prices will rise.
Well, gold closed Thursday at a fresh multi-year high. As of this Friday recording, it’s on the move again and gold prices currently trade at $1,643 an ounce and are up 3.6% for the week.
Silver, meanwhile, is putting together a weekly gain of 4.1% to bring spot prices to $18.54 per ounce. The white metal has broken out of a near-term consolidation to reach multi-week highs. Prices closed Thursday just a few cents shy of a new high mark for the year. As of this Friday recording it currently sits above that mark and a strong weekly close above $18.50 should clear the way for an upside push toward the $20 level.
Turning to platinum, it’s up 1.1% for the week to trade at $980. And palladium is spiking to new records again – packing on more than $250 and another 10.4% this week. Prices for the chronically under-supplied metal now come in at a whopping $2,703 an ounce.
But everything else pales in comparison to what has been happening in rhodium. Rhodium prices have risen nearly 20-fold over the last three years, with prices holding in the $11,000 to $12,000 range in recent days. Money Metals Exchange has been hearing from a fair number of those fortunate investors who picked up some rhodium bars over the years, and almost all of these folks are now selling rhodium and locking in some truly phenomenal gains.
All in all, interest in precious metals is on the rise – albeit still mostly under of the radar of Wall Street.
Interest in digital alternative currencies also continues to percolate. Although Bitcoin and other cryptocurrencies remain priced well below their December 2017 peaks, it’s clear that they aren’t going away.
Rather than fight them, some large corporations and even central banks are looking to co-opt them. Facebook is attempting to roll out a virtual currency called libra. But it is facing pushback from European Union regulators and many members of the U.S. Congress.
During testimony to Congress last week Federal Reserve Chairman Jerome Powell said that every major central bank is “taking a deep look" at cryptocurrencies – including the possibility of issuing their own. Powell has denied that the Fed is planning to launch a digital dollar that would trade outside the banking system.
However, China’s central bank is actively pursuing the concept. China has invested heavily in cryptocurrency infrastructure and has reportedly filed 84 patents in pursuit of a new electronic currency payments system.
Concerns about the legal and tax status of privately traded crypto coins represent a major impediment to more widespread adoption and use. As of now, it’s difficult to spend cryptocurrencies in ordinary real-world transactions. Security risks and the proliferation of cryptocurrency scams are also scaring some people away from buying into them.
This week, a California man pleaded guilty to bilking nearly $150 million out of thousands of people worldwide through a digital currency scheme.
The scheme centered around a phony digital currency called GemCoin. It was pitched as being backed by precious gemstones. But the so-called GemCoins were ultimately backed by nothing but fraudulent promises.
Some digital coins out there claim to be backed by gold or silver. Some of these coin issuers mean well and actually have the metal in vaults. But these types of vehicles should still be regarded as very risky.
No digital or exchange-traded metals product can serve as a true proxy for owning physical bullion. Gold and silver coins, bars, and rounds you can actually hold in your hand carry no counter-party risk and no risk of being stolen through cyber-attacks.
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 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. How are you?
Michael Rivero: I'm doing fine, and thank you very much for having me on your show.
Mike Gleason: Yeah, it's been quite a while since we last talked, and I'm super excited to have you back on and hear your thoughts on a number of topics here. Now, for starters, this is shaping up to be a tumultuous year, though you would never guess it by looking at financial markets. The coronavirus story is getting more dire by the day – I’ll ask you more about that in a moment. It's also an election year. But despite the massive disruptions to the supply chain in and out of China, stocks are near all-time highs, still overshadowing safe haven assets like gold. What do you make of the apparent lack of concern by equity investors considering the geopolitical backdrop here, Michael?
Michael Rivero: Well, we know that the stock markets and equity markets are being propped up by the Federal Reserve money printing, and a lot of that has to do with the fact that Trump is running his 2020 campaign on the basis of the strong economy, which Obama tried to take credit for the other day, which provoked a bit of a backlash. Looking at the economy more at the grassroots, I'm not sure that we're feeling the impact from the coronavirus just yet, although we're hearing dire warnings about supply chain problems over in Great Britain. Jaguar/Land Rover are saying they're going to run out of parts to build cars with in a matter of a few weeks because those parts are all made in China and regardless of how serious or not serious the actual virus is, people are taking it seriously and it is having an impact on China's economy and sooner or later, that is going to have a negative effect on our economy.
Mike Gleason: How about the coronavirus, Michael? Obviously we're having to take information from the Chinese government when it comes to the severity of all of this. Give us your thoughts on how big of an issue this may really be.
Michael Rivero: Well, the problem is we don't really know because we don't have any sources of information we can trust to be telling us the truth. I mean, there are extreme views on both directions… one side saying it's no big deal and the other side saying this is a slate wiper. And part of the problem is that in the past, we have seen, like SARS was overblown in the media to sell vaccines. MERS was overblown in the media to sell vaccines. Back in 2009, the “When Pigs Fly” Flu was being oversold to push various vaccines and cures. And because we know that past history, a lot of people are looking at COVID-19 and saying, "Well, this is just more of the same thing."
But as I mentioned before, companies are taking this seriously. They're shutting their doors. Apple just announced they're moving their production from China to Taiwan because of fears about the virus. And we are getting a lot of stories where a lot of people are being exposed. So far, interestingly enough, only ethnic Chinese are dying from it. Everybody else is basically the level of a small flu and a lot of people are starting to wonder if in fact this was something that was accidentally released from the Wuhan BSL Biological Lab, which is located very, very close to the fish market where they're claiming the disease originated.
Mike Gleason: Yeah, when a ZeroHedge talked about that idea, I think they got banned from Twitter, so that's obviously not the party line it sounds like. We'll have to continue to follow that story. Very interesting.
Now, the year started out with some serious concerns over World War III breaking out after the U.S. assassinated and Iranian general, which prompted a military response from Iran causing gold to spike on safe haven buying, but that story lost steam quickly as calmer heads prevailed for the time being. Now, it's hard to imagine that things are now hunky dory in the Middle East, but what say you here? Will we be talking about tensions with Iran and the U.S. again anytime soon?
Michael Rivero: Yes, I think that we will. It's been no secret that the U.S. government wants to invade Iran. They want control of Iran's oil, more importantly, what currency that oil is going to be sold for. They want to impose private central banking on Iran, which is one of the last holdouts to refuse western style private central banking, and as far as the calmer heads, you're absolutely correct on that issue. We had Rohani the other day came on out and said that we were dangerously close to outright war because of that assassination and because the United States continues to blame Iran for an attack on a Saudi Arabia facility, even though the people on the ground are saying that it was actually carried out by ISIS.
And so, I think the United States is going to continue to provoke Iran any way that they can until Iran does something that can be basically claimed to be the initiating event, "Oh, look what the Iranians have done," and we're all supposed to forget about all the things the United States has done to Iran going all the way back to 1953 and the overthrow of Mohammad Mossadegh and the imposition of the Shah. And what happened in 1979 of course was the Iranian people basically took their country back and the United States has not forgiven them for that because the attitude is once you're part of the American empire, you stay part of the American empire.
Mike Gleason: Switching gears here a little bit, Michael, I wanted to ask you about deep state operations here in the U.S., because that has been a major theme of the Trump presidency to this point, the Russia-gate investigations and then the impeachment attempt over the Ukrainian situation. Was this all just a coup by the intelligence community, or is Trump overstating that? And if it was a coup, will these people pay the price… I'm talking about the likes of James Comey, Strzok, the so-called whistleblower and others? So, was this a deep state coup, and if it was, should these people go to jail and will they go to jail?
Michael Rivero: Well, it was an attempted coup, basically an attempt to oust Donald Trump, which began even before he took office. As soon as he won the election in 2016, you were hearing all this talk about, "Oh, he must be impeached." We know from the text messages between Lisa Page and Peter Strzok that they were talking about an emergency plan to get rid of Trump. And if you really look at all that they've done since then, this Russia-gate situation, lying to the court, this bogus dossier that was cooked up by Christopher Steele. Yeah, it was an attempted coup d'etat. Should they go to jail? Yes. Will they go to jail? I seriously, seriously doubt it. We're hearing rumblings that William Barr is launching some DOJ investigations, which is why all of a sudden, we're hearing this huge cry that Barr should step down. In fact, the news was even saying he was considering stepping down. The Department of Justice spokesman has said that's absolutely fake news. Barr has no intention of resigning at this time.
Mike Gleason: Now, we're into the primary season. We should get your thoughts on the election. There's plenty of contention in the Democratic party with the establishment there attempting to cheat Bernie Sanders and install a more favored candidate once again, we heard that same kind of story from four years ago, but what are your thoughts as to how the Democrat primary might play out? Do you expect Bernie to get the nomination or will Bloomberg surge here or are we headed for chaos and a brokered convention? Let's get your thoughts there, Michael. How do you assess the field of challengers from the left?
Michael Rivero: Well, we know the Democratic core does not want Bernie Sanders to win the nomination because they don't think the socialist president is going to be able to win against Donald Trump. They were pushing Joe Biden, but he's kind of self-disrupting with all the wacky things that he's saying there. Bloomberg is in third place in the polls right now, but he's being accused of literally using his fortune to buy his way into the presidency and a lot of people aren’t comfortable with that. Buttigieg is facing an uphill battle against the more conservatives because of his being gay. So yes, I think we're headed to a brokered convention, and I am still convinced that Hillary Clinton is trying to find some way she can insert herself back into the race.
Mike Gleason: We've heard some rumors about her maybe being on a ticket with Bloomberg. Do you give any credence to those rumors, and might that be something that actually lifts Bloomberg to the nomination?
Michael Rivero: Well, it certainly would be a very powerful combination. And the Bloomberg campaign will neither confirm or deny the rumors that came out from the judge report. Hillary Clinton issued a statement saying that she's just standing on the sidelines and waving and will support whoever the nominee is, which is neither a confirmation or denial. So I think, yeah, it's definitely something that Hillary is working to do. And if she can't come out of the brokered convention as the nominee, she may agree to be Bloomberg's vice president, at which point my advice to Bloomberg is to hire a professional food taster, wear your Kevlar and stay out of small airplanes.
Mike Gleason: Getting back to the economy here, where do you think you see things going economically? I mean, do you see it rolling over at some point or is it just going to keep chugging along here? Because in our view, a strong economy here in the U.S. is likely to guarantee at a Trump reelection. Do we have that about right? What do you think?
Michael Rivero: Yeah, absolutely. If the economy continues to look good, then Trump is going to be reelected. And so that means you have a lot of Democrats who are out there hoping the economy takes a major upset between now and November because if the economy does go downhill, yes, they'll blame Donald Trump for it. I mean, this situation the other day where Obama came out trying to take credit for the economic boom, I mean, that's nonsense. Even Obama, before he stepped out of the White House, admitted that his laws that he passed here were a failure, that they'd spent all this money and they'd lost four million jobs in the process.
I mean, Obama's not going to run for office ever again. And so I think that this was sort of setting the stage for saying that Trump really isn't to be given credit for the economic situation and that if it does go south, the Democratic talking point is going to be, "Well, we left the economy poised for this recovery and it was going to be really good and Trump went and wrecked it." And I think that's what they're kind of hoping for. How actively they will try and derail the economy remains to be seen, but at this point, nothing is beyond possibility.
Mike Gleason: Sticking with the economic theme here… is this a new era of unending bull markets under a Federal Reserve that will never stop stimulating, or will they lose control at some point? And what are the ramifications of all this stimulus and money printing that keeps these markets propped up seemingly forever?
Michael Rivero: Well, the problem is that ordinary investors are being shut out. They literally can't afford a lot of these key stocks. That's one aspect of it. The other one is that it's increasing the amount of debt that the nation is in because the Federal Reserve isn't giving this money away. They're loaning it out at really low interest rates, yes, but still it's a loan and has to be repaid somewhere down the road, and all this extra cash floating around of course devalues the individual dollar. So those of us who work for a living, we've got money in our pocket that we already traded our labor for and all of this money printing by the Federal Reserve is causing that money in our pocket to lose buying power day by day.
It's almost like Lord Baltimore waved his wand and said, "Your money is now worth less than it was yesterday." We're already seeing signs of a recession about to start here. Japan's slipping a recession. Apple's earnings are way, way off and we're seeing indicators that the iconic companies in the United States are in serious, serious trouble. Macy's has just been downgraded to junk status by the rating agency. Their stock took a major fall today as well.
Mike Gleason: Talking more about inflation, you alluded to that a moment ago. The fed talks about wanting a 2% price inflation, and you have to think at some point, not only are they going to get that, but they're probably going to see it go higher and they may lose control of it, which often happens throughout history. Talk about that if you would. Do you think we're going to see an inflationary environment really take hold?
Michael Rivero: Well, we're already in an inflationary environment. I mean, that's what all this excess money printing is all about. They're inflating the money supply, and of course, prices will rise to absorb the available surplus cash. When you have too much money chasing too few goods and services, yeah, the prices are going to go up. So, I think we're actually on the doorstep of a recession right now, and I really have to question the mindset of the bankers over at the Federal Reserve where they want prices for ordinary Americans to start going up.
Mike Gleason: Yeah, it certainly seems pretty perverse to have the American consumer have less purchasing power with the dollars that they have in their pocket by 2% or whatever their arbitrary number is, every year. It's quite amazing that this is now the prevailing economic and monetary thought of the day that our money is supposed to be worth less and less on an ongoing basis, and really inflation, it's a tax on the wage earner. I mean, we've got obviously the elites just raking it in based on all the cheap money that they're able to borrow and reinvest. But the average American is really getting squeezed, aren't they?
Michael Rivero: They absolutely are. I mean, we're seeing prices go up. Rents are going up. Right now, one in four renters are spending more of their paycheck on rent than on any other cost of living. So, as wages and salaries go down, prices go up, there's going to be a point where it's going to be a crossover and we're finding more and more people are sort of living between the rock and the hard place. And we're seeing a lot of retail vacancies. People don't have money to go out and spend on things, so that's why we're seeing these iconic retailers who are going out of business now.
Mike Gleason: Is one of the reasons that you do see a recession coming also have to do with China? I mean, obviously that's a very big economy at this point. We saw in, I believe it was August of 2015, when the Chinese stock market really showed some serious signs of stress, we nearly had the next global financial crisis. It was averted, but that's a big economy, and if the coronavirus continues to hurt them, eventually the rest of the world going to feel that, right?
Michael Rivero: Absolutely. No question about it. And now we're seeing the downside of globalism because the problem in any one country becomes a problem for the entire world. We saw that back in 2008 with the collapse of the mortgage-backed security fraud, which should have been confined to the United States banking system and instead it almost wrecked several banks over in Europe.
Mike Gleason: How about gold, Michael? We've seen it reach a seven year high recently. As we're talking here on Wednesday afternoon, it's back near where it was back in early January when bombs were flying in the Middle East and we're now above $1,600 again. Any comments on what you've seen from gold, which continues to hold up quite well despite the fact that the dollar has done very well this year, at least up through the end of last week? Give us your thoughts on metals and what kind of year you think we'll see in 2020.
Michael Rivero: Well, I'm not an expert on valuing the metals, but generally, at least have part of your portfolio in silver and in gold because it's a great way of preserving your wealth. It's always going to be there. It's always going to hold its value. There's never been such a thing as silver or gold crashing down to zero or being rated at junk status. It's very stable. I can't recommend enough having silver and gold in your portfolio.
Mike Gleason: Well, Michael, as we begin to wrap up, politics and the coronavirus are dominating the news in the U.S. Are there any other stories that you think people should be watching maybe that we haven't touched on yet? Talk about anything else or other topics as we begin to close?
Michael Rivero: Well, while we're all distracted with impeachment and politics and COVID-19, the fact is the wars in the Mid-East are still going on. People are still being killed. Vast sums of money are being spent dropping bombs on countries that have done absolutely nothing wrong to the United States of America other than be sitting over resources that are coveted by American corporations.
Mike Gleason: Well, we'll leave it there. Always good to have you on, Michael. It's great to have you back. Thanks for the time today and for your enlightening insights. It's going to be quite an interesting year, and I look forward to having you on again before long to dissect it as it unfolds. Now, before we let you go, please tell people more about how they can get your commentary on a regular basis through the website and also your radio show.
Michael Rivero: Well, the website is called WhatReallyHappened.com and the radio show is on the Republic Broadcasting Network Monday through Friday from 3:00 PM to 6:00 PM Central U.S. time. And you can go to RepublicBroadcasting.org and listen to the radio show there or there are various other online places. There's also a podcast on YouTube. Please tune on in and feel free to call into the show and share your comments.
Mike Gleason: I consider Michael to be quite the authority on a range of topics as you just heard, one of the most well-read individuals that I and definitely recommend people check out his program.
Thanks so much. Truly great stuff, Michael. It was great having you back, as I mentioned. All the best to you. I wish you good health, sir, and I hope you have a great weekend as well.
Michael Rivero: Thank you very much. Same to you and I look forward to being on your program again.
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.