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Safe Havens – The Major Push and Pull Factors

Cory
September 27, 2017

Chris Temple and I look at the pullback in safe haven assets recently. Eliminating day to day noise and focusing on what is the most significant driver of these assets is real interest rates. The recent comment by the Fed point to rising real interest rates in the near term. We also consider how impactful tax reform and infrastructure spending will be if they get implemented.

Click here to visit Chris’s site for more great commentary and stock recommendations.

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Discussion
39 Comments
    CFS
    Sep 27, 2017 27:08 AM

    off topic:
    (Has Macron been studying Germany?)
    PARIS (AP) — As part of its budget plan for next year, French President Emmanuel Macron’s government is seeking to balance tax cuts with spending cuts to reduce the country’s deficit.
    France’s budget, presented Wednesday in a Cabinet meeting, is based on an estimated growth of 1.7 percent next year — the same as this year.
    The government plans to cut taxes by 10 billion euros ($11.7 billion) next year in hopes of boosting growth and job hiring. At the same time, the French budget includes 15 billion euros ($17.6 billion) worth of budget cuts. Macron was elected in May on a promise to make French economy more competitive in a globalized world.

    CFS
    Sep 27, 2017 27:13 AM

    The US desperately needs a major corporate tax cut, and a general decrease in personal taxation, if it wants the US economy to grow faster.

    By any rational measure the US stock market is over-valued. Liquidity is keeping it up, but if the Fed removes liquidity, watch out below.

    Sep 27, 2017 27:26 AM

    Politicians depend on the Money Changers for career protection.
    https://www.bloomberg.com/view/articles/2017-09-27/how-congress-governs-the-federal-reserve

    Sep 27, 2017 27:31 AM

    I’ll concede that silver is poised for a bounce, maybe a large one (based on 2 hour chart divergence with RSI, as well as the how far below the 50 day EMA it is on the daily chart). EXK and AG are coiled for a bounce too. So maybe IPT.V will be spared making another lower low here.

    Sep 27, 2017 27:47 AM

    Silver stinks until it breaks $22

    b
    Sep 27, 2017 27:11 AM

    These “to the moon” guys have been full of poop for years, same as the manipulation crowd.
    I do figure everything is manipulated tho.

    One thing I think is true, fundamentals should overcome all of it.
    Should, maybe not.

    Sep 27 My Views Regarding Prospects for Gold Hugo Salinas Price plata

    Hugo writes about a fundamental that should matter big time.
    Sure, this story has been around a few weeks.

    Remember too, Mexico is discussing making silver legal tender again.
    It could happen.

    These things should take PMs to their natural free market level.
    Well, should.

      Sep 27, 2017 27:45 AM

      Good comment b. It can be very dangerous listening only to the :to the moon” guys. They can be entertaining but very bad for your portfolio.

      Sep 27, 2017 27:28 PM

      Guys, just remember that the same can be said of those who are overly cautious during a bull market – they will cost you. The strongest trends, bull or bear, are driven by the fact that most people are on the wrong side. So the best thing for this bull would be for everyone to doubt it. Which means i should be quiet. 😐

        Sep 28, 2017 28:21 AM

        Matt,
        Matt, I agree. I believe the next major move in the PMs will be missed by 40-50% of the gold bulls who aren’t employing substantial portion of their gold/silver portfolio to “a turkey strategy”. Gold is HATED now by both the bears and a fair % of the bulls…..this next move in the dollar could prove one more painful washout of the bulls. As long as this market is perceived as a “BEARish-bull” the next major move will be substantial and missed by a lot of technicians too. Gold is too sophisticated for most investors to fully price and understand.

        Sep 28, 2017 28:37 AM

        Good point Matthew. Either way a lot of people miss out on the upside by being to cautious and a lot of people get hurt by buying into the feeling of needing to be all in. It’s when everyone is trying to get in is the time to get out in my eyes.

    b
    Sep 27, 2017 27:12 AM

    Doesnt look like the link worked.

    Its at 321gold or plata

    Sep 27, 2017 27:19 AM

    Jose Altuve just got his 200th hit for the 4th year in a row and is hitting .349

      Sep 27, 2017 27:48 AM

      He’s having another great year! I love baseball and this time of the year coming into playoffs gets really exciting!

      So many good teams that are looking strong into October.
      Who’s your team Bonzo?

        Sep 27, 2017 27:11 PM

        Hi Cory, when I was a boy I loved the Yankees with Mantle, Yogi Berra, Moose Skowron, Roger Maris, Hank Bauer, Gil McDougal, Tony Kubek, Cletis Boyer, Bobby Richardson, Elston Howard, Don Larsen, Bob Turley, and Whitey Ford. When Houston got a team in 1961 I started rooting for them. I went to the 1st game ever played in the Astrodome in April ’65 and say my idol Mickey Mantle hit the 1st indoor HR, but the Astros won 2-1. Go Astros!

          Sep 27, 2017 27:25 PM

          I watched Don Drysdale throw 100mph against the Astros in the temporary stadium while they were building the Astrodome. I saw Hank Aaron snap his wrists for several home runs against the Astros when the Astrodome was finished. I also saw some great Astros (and Colt 45s) traded to other teams and become all stars. Mayor Hofheinz and crowd who liked money more than baseball. My mother died at 100 and her favorite thing was watching the Astros…and now they arevwinning.

          Sep 28, 2017 28:44 AM

          That’s amazing! I grew up watching the Yankee’s team with Jeter, Williams, Pettitte, Rivera, etc… I know it’s contradictory but I cheer for them but also like it when the Blue Jays do well (it makes it way more fun to watch the games in bar when they are good).
          Either way this time of the year is great for sports fans!

    Sep 27, 2017 27:22 AM

    Texas has no income, estate, or stamp tax, but I paid 21K in property and school tax on my hacienda.

      Sep 27, 2017 27:27 AM

      Your hacienda must actually be a “el rancho cost a plenty”, since property taxes are based normally on market value.

        Sep 27, 2017 27:59 AM

        My parents paid just $26,500 for it, back in 1946. And now the annual tax is 21,000.

          Sep 27, 2017 27:39 PM

          $26,500 in 1946 puts easily over $1,000,000 today, thanks to the Fed’s massive counterfeiting.

            Sep 27, 2017 27:50 PM

            Yep, 1.1 mil, but since it did not flood during Harvey I hear it may be worth 20% more.

            Sep 27, 2017 27:25 PM

            In 1946 where I live you could have bought a nice property for $8000 CDN. Now you would pony up about 3,000 times that much.

            Sep 27, 2017 27:53 PM

            Yeh, Dick Tracy but were you alive in 1946?

      Sep 27, 2017 27:27 PM

      They kill you in Texas with property taxes. Best state for overall taxes may be Alabama for retired folk and golfers.

    Sep 27, 2017 27:23 AM

    Off topic: Just noticed this article about trump possibly firing HHS Secretary: http://www.msn.com/en-us/news/politics/trump-looking-very-closely-at-firing-health-secretary/ar-AAsxpOA?li=BBmkt5R&ocid=ientp
    JMO but I think if he does, his popularity will climb out of the hole and up by several points!

      Sep 27, 2017 27:54 AM

      Pay for Play……….clean up the colleges…….what a freaking scam….

    Sep 27, 2017 27:30 PM

    Republicans Push For 2nd Special Counsel To Investigate Hillary, Comey, & Lynch

    As Robert Mueller’s investigation into Trump-Russia collusion turns into a witch-hunt in search of anything, or anyone that can be scapegoated to justify the year long circus originating from a Hillary Clinton-John Podesta concocted story to explain away their failed $2 billion election disaster, documented crimes were committed by Hillary Clinton, James Comey, and Loretta Lynch.

    Perjury, obstruction of justice, secret airport tarmac meetings, leaking of government documents, and the destruction of 33,000 government emails… perhaps the GOP has finally mustered up the balls to bring in the real criminals to justice.

    http://www.zerohedge.com/news/2017-09-27/republicans-push-2nd-special-counsel-investigate-hillary-comey-lynch

    Sep 27, 2017 27:42 PM

    8
    JPMorgan Ordered To Pay Over $4 Billion To Widow And Family

    “Surviving stage 4 lymphoma cancer was easier than dealing with this bank and its estate administration.”

    http://www.zerohedge.com/news/2017-09-27/jpmorgan-ordered-pay-over-4-billion-widow-and-family

    Sep 27, 2017 27:16 PM

    Illegal immigration costing U.S. record $135 billion a year

    The swelling population of illegal immigrants and their kids is costing American taxpayers $135 billion a year, the highest ever, driven by free medical care, education and a huge law enforcement bill, according to the the most authoritative report on the issue yet.

    And despite claims from pro-illegal immigration advocates that the aliens pay significant off-setting taxes back to federal, state and local treasuries, the Federation for American Immigration Reform report tallied just $19 billion, making the final hit to taxpayers about $116 billion.

    State and local governments are getting ravaged by the costs, at over $88 billion. The federal government, by comparison, is getting off easy at $45 billion in costs for illegals.

    President Trump, Attorney General Jeff Sessions and conservatives in Congress are moving aggressively to deal with illegals, especially those with long criminal records. But their effort is being fought by courts and some 300 so-called “sanctuary communities” that refuse to work with federal law enforcement.

    http://www.foxnews.com/politics/2017/09/27/illegal-immigration-costing-record-135-billion-year-study-shows.html

    Sep 27, 2017 27:50 PM

    Xop and energy stocks have had a big move up the charts looking extremely overbought. I sold off my xop for another big gain today and will wait for a correction. Oil appears to have stalled at 52 and it could correct to 50 to 50.50 before it moves higher.