Trump!!!

This post Trump!!! appeared first on Daily Reckoning.

The president appeared before the American people last evening… and assessed the state of the American Union.

In his telling the union is in a swell and exalted state, marvelous beyond compare.

And he is eager to accept credit…

A grand fellow, by all the gods, the president has fanned a mighty cyclone of American prosperity.

The result is record-low unemployment for Americans of every model and make…

For African-Americans. For Hispanic-Americans. For Asian-Americans. For women. For veterans, the disabled, the undegreed, the young.

And Mr. Trump let us know that America’s record stock market is the world’s envy.

We can only look on in awe, eyes apop and jaw adrop. As we have written before…

We confess a sincere admiration for any man so certain of his stars, so certain of whom the angels are for… and whom they are against.

No modesty hangs about him. No self-doubt gnaws at him. No scruple enchains him.

In Trump we have the popinjay pure and perfect, the supreme chest-thumper, the peacock of peacocks.

The fellow is simply… sui generis.

We concede he may be no deeper than the skin that encases him. But intellectual depth is vastly overrated in a president.

Overrated? It is often a menace…

It is the “deep thinkers” who think the republic into its deepest fixes.

They are drunk on their thoughts… as other men are drunk on alcohol.

The “Sage of Baltimore,” H.L. Mencken, certainly hooked onto something when he wrote:

“We suffer most when the White House bursts with ideas.”

Woodrow Wilson — for example — was the only doctor of philosophy to ever seize the White House.

He presided over Princeton University before he presided over the United States.

And the nation is still afflicted with his lovely ideas…

Who signed the Federal Reserve Act into law?

The answer is Mr. Wilson.

Who signed the federal income tax into law?

The answer is Mr. Wilson.

The same Mr. Wilson ordered the doughboys “over there.” 116,000 of them will remain forever over there.

And the Versailles Treaty that closed the “war to end all wars” spawned the “peace to end all peace.”

WWI was “the Great War” until an even greater war imposed a Roman numeration upon it.

In contrast to the intellectual president, we find Wilson’s successor once removed — Calvin Coolidge.

In Mencken’s telling, Coolidge…

Slept more than any other president, whether by day or by night… There were no thrills while he reigned, but neither were there any headaches. He had no ideas, and he was not a nuisance.

Take due note of the phrasing — it was not “He had no ideas, but he was not a nuisance.” It was rather:

“He had no ideas, and he was not a nuisance.”

Loftier praise for any president is scarcely imaginable: He had no ideas and he was not a nuisance.

Being a nuisance, alas, is how presidents nudge their way onto the history pages.

Whom do historians slobber and swoon over — a Calvin Coolidge or a Franklin Roosevelt?

A Grover Cleveland — or a Theodore Roosevelt?

Both Roosevelts were colossal nuisances.

Our central criticism of Trump is not that he is a nuisance… but that he has not been nuisance enough.

Trump was elected, in fact, to be a nuisance.

Not a statesman, that is — but a demolition man.

Mr. Trump pledged to “drain the swamp.”

He would end the forever wars… and disentangle the United States from entangling alliances.

And did he not pledge to retire the debt?

Yet the United States remains entangled as ever… and more indebted than ever.

The swamp, meantime, remains as deep, as thick, as gaseous as ever.

But it is not our purpose to bring the president into contempt or ridicule. We have no heat against the fellow whatsoever.

His presidency vastly entertains us, in fact — as a circus entertains us, as a professional wrestling bout entertains us, as the sight of a man with his shirt on backward entertains us.

And his campaign rallies are the highest comedy. Nothing comes within 100 miles of it.

Besides, we never believed that Mr. Trump stood the slightest chance of emptying the swamp.

Nearly the entire governmental apparatus is against him — including much of his party.

He is simply a man out of his depth.

But a George Washington would be out of his depth today.

Even “Old Hickory” Andy Jackson would be under the presidential desk the first day on the job, sinking a bottle of Tennessee’s hardest whiskey and sobbing for his mother.

No, the national rot is too deeply advanced for any one man to turn back.

The termites have eaten too deeply into the floorboards beneath… and the rafters above.

And they are after whatever solid timber that remains…

Regards,

Brian Maher
Managing editor The Daily Reckoning

The post Trump!!! appeared first on Daily Reckoning.

Trump!!!

This post Trump!!! appeared first on Daily Reckoning.

The president appeared before the American people last evening… and assessed the state of the American Union.

In his telling the union is in a swell and exalted state, marvelous beyond compare.

And he is eager to accept credit…

A grand fellow, by all the gods, the president has fanned a mighty cyclone of American prosperity.

The result is record-low unemployment for Americans of every model and make…

For African-Americans. For Hispanic-Americans. For Asian-Americans. For women. For veterans, the disabled, the undegreed, the young.

And Mr. Trump let us know that America’s record stock market is the world’s envy.

We can only look on in awe, eyes apop and jaw adrop. As we have written before…

We confess a sincere admiration for any man so certain of his stars, so certain of whom the angels are for… and whom they are against.

No modesty hangs about him. No self-doubt gnaws at him. No scruple enchains him.

In Trump we have the popinjay pure and perfect, the supreme chest-thumper, the peacock of peacocks.

The fellow is simply… sui generis.

We concede he may be no deeper than the skin that encases him. But intellectual depth is vastly overrated in a president.

Overrated? It is often a menace…

It is the “deep thinkers” who think the republic into its deepest fixes.

They are drunk on their thoughts… as other men are drunk on alcohol.

The “Sage of Baltimore,” H.L. Mencken, certainly hooked onto something when he wrote:

“We suffer most when the White House bursts with ideas.”

Woodrow Wilson — for example — was the only doctor of philosophy to ever seize the White House.

He presided over Princeton University before he presided over the United States.

And the nation is still afflicted with his lovely ideas…

Who signed the Federal Reserve Act into law?

The answer is Mr. Wilson.

Who signed the federal income tax into law?

The answer is Mr. Wilson.

The same Mr. Wilson ordered the doughboys “over there.” 116,000 of them will remain forever over there.

And the Versailles Treaty that closed the “war to end all wars” spawned the “peace to end all peace.”

WWI was “the Great War” until an even greater war imposed a Roman numeration upon it.

In contrast to the intellectual president, we find Wilson’s successor once removed — Calvin Coolidge.

In Mencken’s telling, Coolidge…

Slept more than any other president, whether by day or by night… There were no thrills while he reigned, but neither were there any headaches. He had no ideas, and he was not a nuisance.

Take due note of the phrasing — it was not “He had no ideas, but he was not a nuisance.” It was rather:

“He had no ideas, and he was not a nuisance.”

Loftier praise for any president is scarcely imaginable: He had no ideas and he was not a nuisance.

Being a nuisance, alas, is how presidents nudge their way onto the history pages.

Whom do historians slobber and swoon over — a Calvin Coolidge or a Franklin Roosevelt?

A Grover Cleveland — or a Theodore Roosevelt?

Both Roosevelts were colossal nuisances.

Our central criticism of Trump is not that he is a nuisance… but that he has not been nuisance enough.

Trump was elected, in fact, to be a nuisance.

Not a statesman, that is — but a demolition man.

Mr. Trump pledged to “drain the swamp.”

He would end the forever wars… and disentangle the United States from entangling alliances.

And did he not pledge to retire the debt?

Yet the United States remains entangled as ever… and more indebted than ever.

The swamp, meantime, remains as deep, as thick, as gaseous as ever.

But it is not our purpose to bring the president into contempt or ridicule. We have no heat against the fellow whatsoever.

His presidency vastly entertains us, in fact — as a circus entertains us, as a professional wrestling bout entertains us, as the sight of a man with his shirt on backward entertains us.

And his campaign rallies are the highest comedy. Nothing comes within 100 miles of it.

Besides, we never believed that Mr. Trump stood the slightest chance of emptying the swamp.

Nearly the entire governmental apparatus is against him — including much of his party.

He is simply a man out of his depth.

But a George Washington would be out of his depth today.

Even “Old Hickory” Andy Jackson would be under the presidential desk the first day on the job, sinking a bottle of Tennessee’s hardest whiskey and sobbing for his mother.

No, the national rot is too deeply advanced for any one man to turn back.

The termites have eaten too deeply into the floorboards beneath… and the rafters above.

And they are after whatever solid timber that remains…

Regards,

Brian Maher
Managing editor The Daily Reckoning

The post Trump!!! appeared first on Daily Reckoning.

The Latest Government Myth

This post The Latest Government Myth appeared first on Daily Reckoning.

“Deep down, he’s shallow,” said critic Peter DeVries of one author, famously revered.

Today we submit the case that Friday’s GDP report — grand, gaudy and garish — is deeply shallow beneath the scintillated surface.

That is, the deeper numbers tell a tale 180 degrees out of joint with appearance.

And private-sector growth may actually peg along at the crawlingest rate in six years.

Let us now peek within and beneath official data…

Friday’s official 3.2% trounced all reasonable estimate, all respected opinion.

Even the Federal Reserve’s chronically cheerful Atlanta squad pegged Q1 GDP at 2.8%.

But scratch the surface and what do we find? What accounts for the screaming headline number?

Inventories.

Companies will often amass inventories to jump out ahead of expected tariffs.

Inventories have been mounting for the past year and then some… rising some 8%.

And data reveal American business piled up $32 billion of inventoried goods the first quarter — a $46.3 billion swelling over the previous quarter.

Government bean counters heap inventories into the column of business investment. Thus in the official telling, they add to the gross domestic product.

Says the Bureau of Economic Analysis, Q1 rising inventory contributed 0.65 percentage points to real GDP.

Rinse them out and we have Q1 growth of 2.55%… not 3.2%.

2.55% is still handsome. Most original Q1 estimates came in under 2%.

But Daily Reckoning affiliate Wolf Richter takes the longer view:

Rising inventories, which are considered an investment and add to GDP, are eventually followed by a decline in inventories when companies whittle them down again, and there is a price to pay for it…

Companies that sit on that inventory and have trouble selling it will at some point cut their orders to reduce their inventories. When this happens, sales drop all the way up the supply chain… when businesses whittle down their inventories by ordering less, it ripples through the economy, lowers GDP growth…

Affirms a swarm of Morgan Stanley economists:

“The buildup in inventories over the past several quarters points to a large reversal in the second quarter.”

How about the third… and the fourth?

Meantime, we are informed the false fireworks of government spending account for another portion of the final 3.2%.

But according to the ladies and gentlemen of Oxford Economics, one metric tells tell a far truer tale of GDP:

Final sales to domestic purchasers.

What if we run the blue pencil through Q1 inventory and government GDP contributions… and cleave to final sales alone?

Q1 GDP increased not 3.2% or even 2.6% after subtracting government’s “addition” — but a wilting 1.3%.

1.3% is miles and miles and miles behind the official 3.2%.

Let us peek even deeper beneath the shimmering surface…

Q1 consumer durable goods spending sank 5.3%… the steepest plunge in 10 years.

Private-sector consumption and investment — the pounding pulse of a healthful economy — trickled to a semi-comatose 1.3%.

That is the faintest increase in nearly six years.

Consumer spending overall increased a mere 1.2%… off from 2.5% the quarter previous.

And from last quarter’s 5.4%, business investment halved — to 2.7%.

MarketWatch informs us that investments in factories, offices, stores and oil wells sank for the third-straight quarter.

It further informs us that investments in equipment such as computers, aircraft and machinery overall scratched out a piddling 0.2% increase.

Is this the eight-cylinder roar of a throbbing economic engine?

“On the outside, it looks like a shiny muscle car,” writes Bernard Baumohl of the Economic Outlook Group…

“Lift the hood, however, and you see a fragile one-cylinder engine.”

Former Obama economic adviser and present Harvard grandee Jason Furman takes his own disappointing glance under the hood:

“First-quarter GDP is 3.2%, but the underlying data is much weaker and is consistent with a slowing economy.”

The aforesaid Oxford Economics affirms the economy is “undeniably cooling.”

Meantime, the Federal Reserve huddles at Washington this week.

What does Friday’s GDP report implicate for interest rates?

Despite the dazzling headline number, the Federal Reserve’s “Open Market” Committee will hold rates steady. They will certainly not raise rates.

Why are we so certain?

Official inflation data.

The Federal Reserve’s preferred inflation gauge — which excludes more fluid food and energy prices — increased not a jot last month.

And it has increased only 1.6% year over year.

So the Federal Reserve remains hopelessly asea, as far as ever from its infinitely elusive 2% target.

And it will cut rates before raising rates — depend on it.

But last week we explained why we expect inflation to menace within the foreseeable future.

Regards,

Brian Maher
Managing editor, The Daily Reckoning

The post The Latest Government Myth appeared first on Daily Reckoning.

Japan on a Larger Scale

This post Japan on a Larger Scale appeared first on Daily Reckoning.

In my 2014 book, The Death of Money, I wrote, “The United States is Japan on a larger scale.” That was five years ago.

Last week, prominent economist Mohamed A. El-Erian, formerly CEO of PIMCO and now with Allianz, wrote, “With the return of Europe’s economic doldrums and signs of a coming growth slowdown in the United States, advanced economies could be at risk of falling into the same kind of long-term rut that has captured Japan.”

Better late than never! Welcome to the club, Mohamed.

Japan started its “lost decade” in the 1990s. Now their lost decade has dragged into three lost decades. The U.S. began its first lost decade in 2009 and is now entering its second lost decade with no end in sight.

What I referred to in 2014 and what El-Erian refers to today is that central bank policy in both countries has been completely ineffective at restoring long-term trend growth or solving the steady accumulation of unsustainable debt.

In Japan this problem began in the 1990s, and in the U.S. the problem began in 2009, but it’s the same problem with no clear solution.

The irony is that in the early 2000s, former Fed Chair Ben Bernanke routinely criticized the Japanese for their inability to escape from recession, deflation and slow growth.

When the U.S. recession began during the global financial crisis of 2008, Bernanke promised that he would not make the same mistakes the Japanese made in the 1990s. Instead, he made every mistake the Japanese made, and the U.S. is stuck in the same place and will remain there until the Fed wakes up to its problems.

Bernanke thought that low interest rates and massive money printing would lead to lending and spending that would restore trend growth to 3.2% or higher.

But he ignored the role of velocity (speed of money turnover) and the unwillingness of banks to lend or individuals to borrow. When that happens, the Fed is pushing on a string — printing money with no result except asset bubbles.

The bottom line is that this extravaganza of zero rates and money printing worked to ease the panic and prop up the financial system. But it did nothing to restore growth to its long-term trend or to improve personal income at a pace that usually occurs in an economic expansion.

Now, after a 10-year expansion, policymakers are considering the implications of a new recession. There’s only one problem: Central banks have not removed the supports they put in place during the last recession.

Interest rates are up to 2.5%, but that’s far lower than the 5% rates that will be needed so the Fed can cut enough to cure the next recession. The Fed has reduced its balance sheet from $4.5 trillion to $3.8 trillion, but that’s still well above the $800 billion level that existed before QE1.

In short, the Fed (and other central banks) have only partly normalized and are far from being able to cure a new recession or panic if one arises tomorrow. It will takes years for the Fed to get interest rates and its balance sheet back to “normal.”

Until they do, the next recession may be impossible to get out of. The odds of avoiding a recession until the Fed normalizes are low.

In the meantime, get ready for more disinflation (or deflation) and slow growth. The central banks are stuck and there’s no way out.

They cannot escape the corner they have painted themselves into.

Regards,

Jim Rickards
for The Daily Reckoning

The post Japan on a Larger Scale appeared first on Daily Reckoning.

Spending Your Golden Years in a Foreign Country

This post Spending Your Golden Years in a Foreign Country appeared first on Daily Reckoning.

I just got back from a week driving around Baja, Mexico with my wife and daughter, and we had a terrific time.

You might think it’s a little crazy to spend spring break taking a Jeep an hour off the nearest paved road just to find a secluded surf spot but it’s par for the course in our family. Heck last year we were in El Salvador – a country that has one of the highest murder rates in the world – doing pretty much the same thing.

I admit, it’s easy to let the headlines scare you off.

But for me, it is precisely that kind of sensationalism that creates opportunities for savvy travelers.

Spring Break in Baja

In Baja, we stayed in a luxurious house with a clear view of the best surf break in the area for less than I’ve paid at a budget hotel in Florida.

Tacos at the local stand ran $11 for our whole family of three.

In the Valle de Guadalupe wine area, we drank very good local Bordeaux blends for a third of what their French or California equivalents go for.

And a quick look at the local Farmacia would show you ridiculously low prices for some of the same medicines U.S. residents pay a fortune for.

I never felt threatened. It was very easy to get around and communicate with a limited amount of Spanish. The people are super friendly and helpful.

There are plenty of U.S. retirees living in Baja for precisely these reasons. You can literally move one hour across the border from San Diego and get the same basic life for a fraction of the price.

Obviously, that’s not for everyone and you do give up plenty of things in the process.

Travel Opportunities

But I’m telling you all of this because it highlights some of the opportunities that are available outside of the United States … opportunities that can be reached in less than six hours from most major U.S. cities.

So let me ask: Would you ever consider retiring to a foreign country?

I’ve been all around the world – from South Africa to India … many countries in Europe … and throughout much of Latin America. And quite frankly, I could have stayed in just about any of the places I visited for months on end.

More importantly, just about everywhere I’ve been I’ve met fellow Americans who are doing just that – living out their dreams in picturesque towns that most people only see on postcards.

Indeed, more and more U.S. citizens are choosing to live abroad – even if it’s just through VERY extended vacations – so they can stretch their retirement dollars further, gain access to affordable medical care, have new adventures, even hire personal assistants for less than a daily meal at McDonald’s.

Consider Panama, a country I visited back in 2001 …

Panama

There are spectacular and affordable beachfront condos that you can rent for a few hundred bucks a month.

And on the kind of budget that wouldn’t even cover rent here in the U.S., an expat can retire in impressive comfort in Panama, thanks in part to the country’s special Pensionado program.

You’ve probably heard of it – a special program that allows income-earning foreign retirees to obtain indefinite residence in the country plus get a whole host of other benefits including big discounts on movies, concerts, bus fares, medical services, and a whole array of other things.

Or what about Thailand, which I traveled toten years ago …

Thailand

I personally know a number of U.S. citizens who now live there at a fraction of what they spent here.

I’m talking about personal chefs, nightly massages, high-speed Internet connections, and beachfront accommodations for less than renting an apartment in Philadelphia or Kansas City.

Other Places to Consider…

And although it’s still on my “to visit” list, Ecuador also provides an attractive package for American retirees – including discounts on many services plus the ability to participate in the country’s national retirement system for about $60 a month.

I could keep going all day … Nicaragua, Costa Rica, Malaysia, and countless other places that provide bountiful benefits worth exploring.

Heck, I have one friend near retirement who plans on buying a sailboat and spending the first part of his golden years going wherever he wants!

At the end of the day, the point I’m trying to drive home is that increasing income is certainly one way to better your situation no matter what your age. But changing your perspective, cutting costs, and considering less-traveled paths is certainly another – and complementary – way to get the things you want out of life.

So get out there and do some research. You’ll be amazed at what you find. And if you’re already living your dream, don’t hesitate to write in and tell me about it!

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post Spending Your Golden Years in a Foreign Country appeared first on Daily Reckoning.

McEwen says Gold Bar will make first pour this month

Construction of the Gold Bar mine near Eureka, Nevada is on time and on budget. Owner McEwen Mining of Toronto says the first gold pour will happen this month, and the $81.4 million budget has not increased. Commercial production is expected by the end of Q1 2019.

McEwen has placed about 136,000 tonnes of ore on the leach pad, and anticipates producing 55,000 oz. of gold this year at an all-in cost of $975 per ounce. Output will average 62,800 oz. per year over a 7.4-year life.

Heavy snow and cold temperatures made December and January challenging for work at the site. Electrical work, instrumentation installation, and commissioning of the gold refinery circuit remain to be completed at the process plant.

Exploration drilling continues, and the company plans to add the resources at Gold Bar South, giving the project an extra year of life. The 2019 exploration budget is $4.4 million.

This story first appeared in Canadian Mining Journal.

 

The post McEwen says Gold Bar will make first pour this month appeared first on MINING.com.

OceanaGold reports 2019 guidance and exploration budget

OceanaGold Corp. (TSX: OGC; ASX: OGC) says its mines in the Philippines, New Zealand and the U.S. will produce a total of between 500,000 and 550,000 ounces of gold and 14,000 to 15,000 tonnes of copper this year at all-in sustaining costs ranging from US$850 and US$900 per oz. gold sold.

In 2018 the company produced 533,300 ounces of gold and 15,000 tonnes of copper at AISCs of US$767 per oz. At Haile in the U.S., the exploration program will concentrate mainly on drill targets within and around the existing deposits.

This year the company plans to increase mining and milling tonnes to more than 200,000 ounces of gold a year at its Haile mine in South Carolina. The mine is an open-pit operation with additional underground resources.

In New Zealand it plans to advance permitting and continue resource drilling and engineering studies for its Martha underground project at its Waihi gold mine on the North Island. Martha could add another ten years to Waihi’s life of mine, the company says. OceanaGold bought Waihi in October 2015 from Newmont Mining (NYSE: NEM).

The company has budgeted US$40 million to US$50 million on global exploration this year to increase reserves across all of its operations. About US$8 million to US$10 million of the funds will be spent on drilling Wharekirauponga (WKP), a prospect on the North Island of New Zealand.

At its Macraes mine on New Zealand’s South Island, the company plans to spend between US$7 million and US$10 million on exploration associated with potential mine life extensions along the 32-km Hyde-Macraes Shear Zone including Golden Point. OceanaGold believes Golden Point could become the basis for a potential standalone underground operation. Macraes is an open-pit and underground operation, which has been operating for more than 29 years and is the country’s largest gold producing operation.

In the Philippines, the exploration focus will be primarily on infill and extension drilling at the lower levels of the Didipio underground. Didipio is a high-grade, gold-copper mine on the island of Luzon, about 270 km north of the Manila.

At Haile in the U.S., the exploration program will concentrate mainly on drill targets within and around the existing deposits.

The company has also set aside US$6 million to US$8 million on exploration joint-ventures in the Americas.

At presstime in Toronto OceanaGold was trading at $4.41 per share within a 52-week trading range of $2.97 and $5.01.

Brian Quast of BMO Capital Markets has a market perform rating and a price target of $5.00 per share.

This story first appeared in The Northern Miner.

The post OceanaGold reports 2019 guidance and exploration budget appeared first on MINING.com.

Excelsior updates progress at Gunnison in situ project

Excelsior Mining Corp. of Vancouver is developing the Gunnison in situ copper project in Cochise County for production beginning in Q4 2019. Work is progressing on all fronts.

The Gunnison project has always been easily accessible. Thanks to the new road south of highway I10, the production wellfield is as well. The property has direct access to road, rail, power and water.

Excelsior has five rigs on site working on collar drilling and installation of the cement casings of the initial wells. The entire wellfield – 41 production wells and 22 compliance wells – should be complete by July this year.

A 3.2-km pipeline is being constructed to connect the processing facilities to the wellfield. The launch and receiving pits are done, and horizontal boring scheduled to begin in March. The pipeline is to be complete by May 2019.

Excelsior is ramping up the staff hiring process, including Brent Berg as environmental, health and safety manager. He is a former president of Cameco Resources.

Additional information about the Gunnison copper project can be found in the technical report at www.ExcelsiorMining.com.

This story first appeared at Canadian Mining Journal.

The post Excelsior updates progress at Gunnison in situ project appeared first on MINING.com.