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.

Elites Have Destroyed a Possible U.S. – Russia Alliance to Contain China

This post Elites Have Destroyed a Possible U.S. – Russia Alliance to Contain China appeared first on Daily Reckoning.

There’s no need to rehash the sordid politics of the U.S.-Russia relationship since 2014. That relationship became collateral damage to gross corruption in Ukraine.

The U.S. and its allies, especially the UK under globalists like David Cameron, wanted to peel off Ukraine from the Russian orbit and make it part of the EU and eventually NATO.

From Russia’s perspective, this was unacceptable. It may be true that most Americans cannot find Ukraine on a map, but a simple glance at a map reveals that much of Ukraine lies East of Moscow.

Putting Ukraine in a Western alliance such as NATO would create a crescent stretching from Luhansk in the South through Poland in the West and back around to Estonia in the North. There are almost no natural obstacles between that arc and Moscow; it’s mostly open steppe.

Completion of this “NATO Crescent” would leave Moscow open to invasion in ways that Napoleon and Hitler could only dream. Of course, this situation was and is unacceptable to Moscow.

Ukraine itself is culturally divided along geographic lines. The Eastern and Southern provinces (Luhansk, Donetsk, Crimea and Dnipro) are ethnically Russian, follow the Orthodox Church and the Patriarch of Moscow, and welcome commercial relations with Russia.

The Western provinces (Kiev, Lviv) are Slavic, adhere to the Catholic Church and the Pope in Rome, and look to the EU and U.S. for investment and aid.

Prior to 2014, an uneasy truce existed between Washington and Moscow that allowed a pro-Russian President while at the same time permitting increasing contact with the EU. Then the U.S. and UK overreached by allowing the CIA and MI6 to foment a “color revolution” in Kiev called the “Euromaidan Revolution.”

Ukrainian President Viktor Yanukovych resigned and fled to Moscow. Pro-EU protestors took over the government and signed an EU Association Agreement.

In response, Putin annexed Crimea and declared it part of Russia. He also infiltrated Donetsk and Luhansk and helped establish de facto pro-Russian regional governments. The U.S. and EU responded with harsh economic sanctions on Russia.

Ukraine has been in turmoil (with increasing corruption) ever since. U.S.-Russia relations have been ice-cold, exactly as the globalists intended.

The U.S- induced fiasco in Ukraine not only upset U.S.-Russia relations, it derailed a cozy money laundering operation involving Ukrainian oligarchs and Democratic politicians. The Obama administration flooded Ukraine with non-lethal financial assistance.

This aid was amplified by a four-year, $17.5 billion loan program to Ukraine from the IMF, approved in March 2015. Interestingly, this loan program was pushed by Obama at a time when Ukraine did not meet the IMF’s usual borrowing criteria.

Some of this money was used for intended purposes, some was skimmed by the oligarchs, and the rest was recycled to Democratic politicians in the form of consulting contracts, advisory fees, director’s fees, contributions to foundations and NGOs and other channels.

Hunter Biden and the Clinton Foundations were major recipients of this corrupt recycling. Other beneficiaries included George Soros-backed “open society” organizations, which further directed the money to progressive left-wing groups in the U.S.

This cozy wheel-of-fortune was threatened when Donald Trump became president. Trump genuinely desired improved relations with Russia and was not on the receiving end of laundered aid to Ukraine.

Hillary Clinton was supposed to continue the Obama policies, but she failed in the general election. Trump was a threat to everything the globalists, Democrats and pro-NATO elites had constructed in the 2010s.

The globalists wanted China and the U.S. to team up against Russia. Trump understood correctly that China was the main enemy and therefore a closer union between the U.S. and Russia was essential.

The elites’ efforts to derail Trump gave rise to the “Russia collusion” hoax. While no one disputes that Russia sought to sow confusion in the U.S. election in 2016, that’s something the Russians and their Soviet predecessors had been doing since 1917. By itself, little harm was done.

Yet, the elites seized on this to concoct a story of collusion between Russia and the Trump campaign. The real collusion was among Democrats, Ukrainians and Russians to discredit Trump.

It took the Robert Mueller investigation two years finally to conclude there was no collusion between Trump and the Russians. By then, the damage was done. It was politically toxic for Trump to reach out to the Russians. That would be spun by the media as more evidence of “collusion.”

IMG 1

Russian President Vladimir Putin (l.) has recently named a new Prime Minister, Mikhail Mishustin (r.). This is part of a complex government reorganization designed to extend Putin’s rule beyond existing term limits. This is a setback for democracy, but may be a plus for the economy because it adds stability and continuity to Putin’s programs.

This whirl of false charges, cover-ups, and deep state sabotage finally led to Trump’s impeachment on December 18, 2019. Fortunately, the Senate impeachment trial may soon be behind us with Trump’s exoneration in hand (although new impeachment charges and false accusations cannot be ruled out).

Is the stage finally set for improved U.S.-Russia relations, relief from U.S. sanctions, and a significant increase in U.S. direct foreign investment in Russia?

Right now, my models are telling us that Russia is one of the most attractive targets for foreign investment in the world. Just because U.S. policymakers missed the boat does not mean that investors must do the same.

Russia is often denigrated by Wall Street analysts and mainstream economists who know little about the country. Russia is the world’s largest country by area and has the largest arsenal of nuclear weapons of any country in the world.

It has the world’s 11th largest economy at over $1.6 trillion in annual GDP, ahead of South Korea, Spain and Australia and not far behind Canada, Brazil and Italy.

It also is the world’s third largest producer of oil and related liquids, with output of 11.4 million barrels per day, about 11% of the world’s total. The U.S. (17.8 million b/d), Saudi Arabia (12.4 million b/d) and Russia combine to provide 41% of the world’s liquid fuels. The latter two countries effectively control the world’s oil price by agreeing on output quotas.

Russia has almost no external dollar-denominated debt and has a debt-to-GDP ratio of only 13.50% (the comparable ratio for the United States is 106%).

In short, Russia is too big and too powerful to ignore despite the derogatory and uninformed claims of globalists. Importantly, Russia is emerging from the oil price shock of 2014-2016 and is in a solid recovery.

The stage is now set for significant economic expansion as illustrated in the chart below from Moody’s Analytics:

IMG 2

This graphic analysis from Moody’s Analytics divides major economies into categories of Recovery, Expansion, Slowdown and Recession. Economies revolve clockwise through these four phases. The U.S. is in a Slowdown phase with some risk of Recession. Russia is in the Recovery phase heading toward Expansion. The Russian situation is the most attractive for investors because it offers cheap entry points with high returns as the Expansion phase begins.

Russia has also gone to great lengths to insulate itself from U.S. economic sanctions. Their reserves have recovered to the $500 billion level that existed before the 2014 oil price collapse with one important difference. The dollar component of reserves has shrunk substantially while the gold component has increased to over 20%.

With the recent surge in gold prices, Russia’s reserves get a significant boost (when expressed in dollars) because of the higher dollar value of the gold reserves. Gold cannot be hacked, frozen or seized, as is the case with digital dollar assets.

Russia’s fortunes have been improving not only because of low debt and higher gold prices but also because of higher oil prices. The country is poised for a strong expansion, even if U.S. hostility caused by the Democrats continues.

If Trump regains his footing after impeachment and wins a second term (which I expect), investors can expect warmer relations with Russia and an even more powerful Russian economic expansion than the one already underway.

Regards,

Jim Rickards
for The Daily Reckoning

The post Elites Have Destroyed a Possible U.S. – Russia Alliance to Contain China appeared first on Daily Reckoning.

Russia: The Lost Opportunity

This post Russia: The Lost Opportunity appeared first on Daily Reckoning.

The biggest story out of China right now is the coronavirus that I addressed in yesterday’s reckoning.

But while it’s important, the bigger story is the geopolitical dynamic between the U.S., China and Russia.

Today I’m going to address that dynamic and show you how Washington has squandered a major opportunity to turn it in America’s favor.

When future historians look back on the 2010s, they will be baffled by the lost opportunity for the U.S. to mend fences with Russia, develop economic relations and create a win-win relationship between the world’s greatest technology innovator and the world’s greatest natural resources provider.

It will seem a great loss for the world. Here’s the reality:

Russia, China and the U.S. are the only true superpowers and the only three countries that ultimately matter in geopolitics. That’s not a slight against any other power.

But all others are secondary powers (the U.K., France, Germany, Japan, Israel, etc.) or tertiary powers (Iran, Turkey, India, Pakistan, Saudi Arabia, etc.).

This means that the ideal posture for the U.S. is to ally with Russia (to marginalize China) or ally with China (to marginalize Russia), depending on overall geopolitical conditions.

The U.S. conducted this kind of triangulation successfully from the 1970s until the early 2000s.

One of the keys to U.S. foreign policy in the last 50 or 60 years has been to make sure that Russia and China never form an alliance. Keeping them separated was key.

In 1972, Nixon pivoted to China to put pressure on Russia. In 1991, the U.S. pivoted to Russia to put pressure on China after the Tiananmen Square massacre.

Unfortunately, the U.S. has lost sight of this basic rule of international relations. It is now Russia and China that have formed a strong alliance, to the disadvantage of the United States.

China and Russia have forged stronger ties through the Shanghai Cooperation Organization, for example — a military and economic treaty — and the BRICS institutions. Part of it is an anti-dollar campaign.

One leg of the China-Russia relationship is their joint desire to see the U.S. dollar lose its status as the world’s dominant reserve currency. They chafe against the ways in which the U.S. uses the dollar as a financial weapon.

But ultimately, this two-against-one strategic alignment of China and Russia against the U.S. is a strategic blunder by the U.S.

Russia is the nation that the U.S. should have tried to court and should still be courting. That’s because China is the greatest geopolitical threat to the U.S. because of its economic and technological advances and its ambition to push the U.S. out of the Western Pacific sphere of influence.

Russia may be a threat to some of its neighbors, but it is far less of a threat to U.S. strategic interests.

Therefore, a logical balance of power in the world would be for the U.S. and Russia to find common ground in the containment of China and to jointly pursue the reduction of Chinese power.

Of course, that hasn’t happened. And we could be paying the price for years to come.

Regards,

Jim Rickards
for The Daily Reckoning

The post Russia: The Lost Opportunity appeared first on Daily Reckoning.

Now What?

This post Now What? appeared first on Daily Reckoning.

Stocks were up and away this morning, aloft on happy wings. And as stocks went up… records came down.

Both the Dow Jones and S&P established fresh highs today.

Today is — after all — when the United States and China stowed their differences… and came formally to terms.

President Trump and Chinese Vice Premier Liu He signed their names to a “phase one” trade accord late this morning.

What precisely did they pledge? AP draws the overall sketch:

Under the Phase 1 agreement, which the two sides reached in mid-December, the administration dropped plans to impose tariffs on an additional $160 billion in Chinese imports. And it halved, to 7.5%, existing tariffs on $110 billion of goods from China.

For its part, Beijing agreed to significantly increase its purchases of U.S. products. According to the Trump administration, China is to buy $40 billion a year in U.S. farm products — an ambitious goal for a country that has never imported more than $26 billion a year in U.S. agricultural products.

Once the handshakes were over, the president seized a microphone and gushed:

Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade with China. Together we are righting the wrongs of the past.

And so there is more joy in heaven this day. But will there be more joy on Earth the next?

We are not half so convinced. The wrongs of the past — if they be wrongs at all — may well remain wrong.

The warring parties have signed a truce, it is true. But truce is not peace.

Truce may be no more than a mere respite from arms, a temporary cessation of fire, a brief clearing of battlefield smoke.

Consider the terms of this truce…

It cuts in half tariffs on certain Chinese wares from 15% to 7.5%. Yet tariffs on some $360 billion of Chinese exports stand in place.

Perhaps two-thirds of Chinese goods remain under penalty. As do more than half of all United States shipments to China.

Today’s signing scarcely budges them.

Meantime, this phase one armistice leaves unaddressed China’s war aims, its peace terms, its strategic objectives.

Continues the AP wire:

The so-called Phase 1 pact does little to force China to make the major economic reforms — such as reducing unfair subsidies for its own companies — that the Trump administration sought when it started the trade war by imposing tariffs on Chinese imports in July 2018…

Most analysts say any meaningful resolution of the key U.S. allegation — that Beijing uses predatory tactics in its drive to supplant America’s technological supremacy — could require years of contentious talks. And skeptics say a satisfactory resolution may be next to impossible given China’s ambitions to become the global leader in such advanced technologies as driverless cars and artificial intelligence.

Adds The New York Times:

The deal also does not address cybersecurity or China’s tight controls over how companies handle data and cloud computing. China rejected American demands to include promises to refrain from hacking American firms in the text, insisting it was not a trade issue.

Affirms Eswar Prasad, who formerly directed the International Monetary Fund’s China desk:

“[The deal] hardly addresses in any substantive way the fundamental sources of trade and economic tensions between the two sides, which will continue to fester.”

And so the generals remain huddled over their charts… the cannons are still loaded… and the troops are ready to answer the bugle.

They only await orders from the commander in chief.

Ultimate peace — lasting peace — will therefore require a “phase two” treaty…

The president has vowed to tackle China’s multiple trade atrocities in phase two of negotiations.

That is why he has held most existing tariffs in place. These represent the stick end of the “carrot and stick” polarity.

He will wield them as clubs, forcing Chinese concessions in this crucial second phase.

But phase two must wait. The president has suggested — strongly — that negotiations may not proceed until this year’s election is decided.

Assume they do proceed…

Will Mr. Trump club China into submission? Will China throw down its arms… and come marching into camp?

Not if it means losing “face,” argues Jim Rickards:

Culturally, saving face may be more important to the Chinese. The Chinese are all about saving face and gaining face. That means they can walk away from a trade deal even if it damages them economically.

Meantime, the truce, the uneasy truce, enters force.

The Lord only knows if it holds…

Regards,

Brian Maher
Managing editor, The Daily Reckoning

The post Now What? appeared first on Daily Reckoning.

Now What?

This post Now What? appeared first on Daily Reckoning.

Stocks were up and away this morning, aloft on happy wings. And as stocks went up… records came down.

Both the Dow Jones and S&P established fresh highs today.

Today is — after all — when the United States and China stowed their differences… and came formally to terms.

President Trump and Chinese Vice Premier Liu He signed their names to a “phase one” trade accord late this morning.

What precisely did they pledge? AP draws the overall sketch:

Under the Phase 1 agreement, which the two sides reached in mid-December, the administration dropped plans to impose tariffs on an additional $160 billion in Chinese imports. And it halved, to 7.5%, existing tariffs on $110 billion of goods from China.

For its part, Beijing agreed to significantly increase its purchases of U.S. products. According to the Trump administration, China is to buy $40 billion a year in U.S. farm products — an ambitious goal for a country that has never imported more than $26 billion a year in U.S. agricultural products.

Once the handshakes were over, the president seized a microphone and gushed:

Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade with China. Together we are righting the wrongs of the past.

And so there is more joy in heaven this day. But will there be more joy on Earth the next?

We are not half so convinced. The wrongs of the past — if they be wrongs at all — may well remain wrong.

The warring parties have signed a truce, it is true. But truce is not peace.

Truce may be no more than a mere respite from arms, a temporary cessation of fire, a brief clearing of battlefield smoke.

Consider the terms of this truce…

It cuts in half tariffs on certain Chinese wares from 15% to 7.5%. Yet tariffs on some $360 billion of Chinese exports stand in place.

Perhaps two-thirds of Chinese goods remain under penalty. As do more than half of all United States shipments to China.

Today’s signing scarcely budges them.

Meantime, this phase one armistice leaves unaddressed China’s war aims, its peace terms, its strategic objectives.

Continues the AP wire:

The so-called Phase 1 pact does little to force China to make the major economic reforms — such as reducing unfair subsidies for its own companies — that the Trump administration sought when it started the trade war by imposing tariffs on Chinese imports in July 2018…

Most analysts say any meaningful resolution of the key U.S. allegation — that Beijing uses predatory tactics in its drive to supplant America’s technological supremacy — could require years of contentious talks. And skeptics say a satisfactory resolution may be next to impossible given China’s ambitions to become the global leader in such advanced technologies as driverless cars and artificial intelligence.

Adds The New York Times:

The deal also does not address cybersecurity or China’s tight controls over how companies handle data and cloud computing. China rejected American demands to include promises to refrain from hacking American firms in the text, insisting it was not a trade issue.

Affirms Eswar Prasad, who formerly directed the International Monetary Fund’s China desk:

“[The deal] hardly addresses in any substantive way the fundamental sources of trade and economic tensions between the two sides, which will continue to fester.”

And so the generals remain huddled over their charts… the cannons are still loaded… and the troops are ready to answer the bugle.

They only await orders from the commander in chief.

Ultimate peace — lasting peace — will therefore require a “phase two” treaty…

The president has vowed to tackle China’s multiple trade atrocities in phase two of negotiations.

That is why he has held most existing tariffs in place. These represent the stick end of the “carrot and stick” polarity.

He will wield them as clubs, forcing Chinese concessions in this crucial second phase.

But phase two must wait. The president has suggested — strongly — that negotiations may not proceed until this year’s election is decided.

Assume they do proceed…

Will Mr. Trump club China into submission? Will China throw down its arms… and come marching into camp?

Not if it means losing “face,” argues Jim Rickards:

Culturally, saving face may be more important to the Chinese. The Chinese are all about saving face and gaining face. That means they can walk away from a trade deal even if it damages them economically.

Meantime, the truce, the uneasy truce, enters force.

The Lord only knows if it holds…

Regards,

Brian Maher
Managing editor, The Daily Reckoning

The post Now What? appeared first on Daily Reckoning.

GO USA! First New #Copper Mine in USA in 10 Years

For many years Gold Stock Trades has been at the cutting edge of new trends like the electrification of the automobile and a resurgence of mining in the USA for precious and battery metals.

I have searched high and low for the best US mineral assets which can supply gigafactories with the much needed metals needed for electric vehicles and technology.

I have written to some of our top leaders to start developing and incentivizing a return to US mining and manufacturing for the following reasons.

We have become energy independent with regards to oil.  Nevertheless, we import our most important metals like uranium, copper, rare earths and lithium and are totally reliant on foreign countries to supply a whole litany of the periodic table.

This comes at a huge cost.  A major legal case has been launched against the largest tech companies such as Apple, Google, Microsoft and Tesla for using child slave labor.

Families are seeking damages for their relatives that were killed and maimed to provide the materials used in smartphone devices. 

This is the first such case and should bring more support for mining in the USA rather than in other places which take advantage of children.

Demand for copper and cobalt is soaring but a lot originates from areas with extreme poverty and no labor laws.

Washington DC is seeing a push led by President Trump to boost domestic mineral production, development and exploration for the first time in decades.

News came out recently in our sector that a junior copper producer has started mining again in Nevada.  Its the first new copper mine in the USA in over a decade.  

The mine could produce around 27k tonnes of copper annually at a cost below $2 and mine life is at least 13 years but they are also drilling and discovering a lot more copper at surface which is open pit amenable.

This means they could expand significantly and have first mover advantage.  The automakers are all looking to expand their battery and electric vehicle making industry in the Western USA.

This demand growth is going to require a lot more battery metals more specifically copper which has not yet moved like gold and silver but could have its day soon possibly turning the corner to hit new highs.

The stock is forming a cup and handle and has broken out above the 200 DMA which is technically bullish.

Listen to my recent interview with the CEO of this new copper producer in the USA...the first one in 10 years!

Please note for full disclosure Jeb Handwerger is a shareholder and they are a Goldstocktrades.com sponsor that means I have a conflict of interest.

Assume Author (Jeb Handwerger) owns shares and that I want to sell them for a profit. I may have received or intend to receive compensation for digital marketing services from these companies. The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Jeb Handwerger about any company, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. Author is not responsible under any circumstances for investment actions taken by the reader. Author has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. Author is not directly employed by any company, group, organization, party or person. The shares of these companies are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed / registered financial advisors before making investment decisions. Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. Author is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. Author is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. Author is not an expert in any company, industry sector or investment topic.

 

 

Gold Year End Breakout Finally Boosting Junior Miners $GLD $GDXJ

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Several weeks ago when the TSX Venture was on its back due to tax loss selling I warned its planting time not selling time predicting a year end breakout in gold and the junior miners.  Now gold has rallied pretty much everyday for 2 straight weeks making it short term overbought after a powerful breakout move into new 7 year highs.

Don't be surprised for a little profit taking along the way as precious metals bulls who have been beaten down for so long are finally able to take some gains as gold is overbought because of the recent instability in Iraq over the killing of the Iranian General by the USA.

I believe after a little bit of a breather in gold we could be on our way to new record highs in gold in 2020 past $2000 USD.  There are real weaknesses with the economy and there are not many tools left for the bankers to employ.  War is one possible fix to boost inflation but the American Public may be tired after close to 20 years of fighting in the Middle East.

For years the West has been trying to appease and keep a balance in the Middle East between the Shiites and Sunnis all for the sole purpose of a steady supply of oil.  When one side gets too powerful the other is assisted.  Recently Isis and Al Qaeda were devastated leading to the Shiites led by Iran to have control.  The last thing the West wants is Iran to take over Baghdad which could lead to the next step which is war with Saudi Arabia over Mecca.

Trump made an interesting point that the USA doesn't need the Middle East oil anymore as the Country in now energy independent.   Question remains what would happen if USA pulls troops out of region and leaves it for Nato to solve.  Even many oil rich countries are looking for better energy alternatives such as nuclear and solar and the consumers are pushing for electric vehicles as Tesla overtakes the traditional automaker market.

Finally the junior gold miners are breaking out especially the explorers ready to drill.  For years the majors have neglected exploration and they are running out of reserves.  New discoveries are being looked at and some major exploration teams are getting permitted, funded and starting to drill.

For weeks I highlighted this little junior recommended by the top newsletter writers in the industry such as Eric Coffin, Brien Lundin, Bob Moriarity, Jordan Roy Byrne and Gwen Preston among others especially when I saw the Placer Dome Geo who discovered the major mine for Barrick Newmont join the team.

The overall team is amazing with an all star roster but this recent addition along with raising money indicated smart money is following this drilling program.  The project is adjacent to Barrick-Newmont's largest gold mine in Latin America which produces over a million ounces of gold a year at all in sustaining costs under $650. 2020-01-08_13-28-42

This is not just an area play...they have historical drill results already which shows its inline with the large system next door.  They have 8 untested magnetic anomalies that have not been tested at all.  They are fully financed and permitted for drilling which may get started any day now.  The share count is still low around 100 million shares with almost a third of the float in the hands of insiders and strategics. The chart looks amazing.

Listen to my recent interview recorded before the Holidays with the CEO by clicking here...

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Please note for full disclosure Jeb Handwerger is a shareholder and they are a Goldstocktrades.com sponsor that means I have a conflict of interest. Please remember my service is sponsored by junior mining companies and by readers like you. Any help is greatly appreciated! Become a partner by clicking here!  Jeb shares exclusive content with website sponsors and/or partners!

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Follow me on Twitter, Facebook and Linkedin @goldstocktrades Assume Author (Jeb Handwerger) owns shares and that I want to sell them for a profit. I may have received or intend to receive compensation for digital marketing services from these companies. The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Jeb Handwerger about any company, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. Author is not responsible under any circumstances for investment actions taken by the reader. Author has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. Author is not directly employed by any company, group, organization, party or person. The shares of these companies are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed / registered financial advisors before making investment decisions. Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. Author is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. Author is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. Author is not an expert in any company, industry sector or investment topic.

 

 

 

Researchers produce gold, silver, copper foams

Scientists at the US Lawrence Livermore National Laboratory created ultra-low density gold, silver and copper foams to give physicists better X-ray sources to employ in experiments at the National Ignition Facility.

This facility is a large laser-based inertial confinement fusion research device that uses lasers to heat and compress a small amount of hydrogen fuel with the goal of inducing nuclear fusion reactions.

“We are looking primarily at fundamental science questions that govern how to synthesize, assemble and shape metal nanowire-based aerogels,” said the project’s principal investigator, Michael Bagge-Hansen, in a media statement.

Bagge-Hansen explained that although the material is called foam, it is not made by foaming. Rather, it is a spaghetti-like web of randomly connected nanometer-sized wires, formed into the shape of a miniature marshmallow and containing the same or fewer number of atoms as air.

The National Ignition Facility’s mission is to achieve fusion ignition with high energy gain, and to support nuclear weapon maintenance and design

To conduct this experiment, the research group sought different ultra-low density metals that could be used as targets for laser-driven X-ray sources for experiments further probing the properties of various materials placed under the extreme conditions possible when the National Ignition Facility’s 192 high-powered lasers are directed inside the target chamber.

According to Tyler Fears -one of the scientists involved in the project- each element emits a characteristic set of X-rays when heated by lasers into a plasma. “Metal foams can mimic gas even though they are made from materials that are not gas at room temperature,” he said.

To create the foams, the team freezes the nanowire inside a shape-creating mold typically filled with a water-glycerol mix. When it hardens, the nanowire looks like a mesh of frozen spaghetti.

The material is then removed from the mold and the frozen water is extracted by replacing it with the solvent acetone, which is then dissolved in a supercritical drying process using liquid carbon dioxide, leaving only the metal and air. “Supercritical drying ensures the liquid transforms into a gas phase without creating a meniscus that could damage the fragile ultra-low density metal foam structure,” Fears said.

Using this process, the experts have produced copper and silver foam, and silver has performed well at the National Ignition Facility.

When it comes to gold foams, Fears said they still tend to fall off the mounts that hold them in front of the lasers. “That’s the challenge we’re trying to overcome now,” he said.

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Diamond markets under pressure – Rapaport

Rapaport published a report stating that diamond markets are under pressure as profit margins have tightened and the trade war with China has fueled uncertainty.

The international firm revealed that the RapNet Diamond Index, known as RAPI, for 1-carat diamonds fell 0.7% in May and is down 1.7% since the beginning of the year.

RAPI is the average asking price in hundred $/carat of the 10% best-priced diamonds, for each of the top 25 quality round diamonds offered for sale on the Rapaport Diamond Trading Network.

Stones weighing 3 carats saw the most dramatic change, with a 4% drop in May and a 9.8% drop since the beginning of the year.

To try to boost sales, polished suppliers are offering technology and source verification as a value-added service

Diamonds of 0.30 carats sunk by 3.7% in May and 9.4% since the start of the year, while 0.50-carat rocks fell 1.7% last month and 2.9% year to date.

"There is good demand for 0.60- to 1.99-carat, F-J, VS2-I1 diamonds. Buyers are insisting on well-cut stones. Polished below 0.50 carats is slow due to excess supply, weak Chinese demand and tight Indian liquidity," the report reads.

According to Rapaport, this state of affairs has pushed cutters to operate at lower capacity as they try to reduce inflated inventory, while manufacturers are rejecting high-priced rough stones that have made polished production unprofitable.

"De Beers and Alrosa are carefully managing production and price levels amid this year’s slow rough demand," the document states.

In the view of the firm's chairman, Martin Rapaport, if the trade does not change its business practices and adapt to new realities, the diamond industry will suffer "extreme financial and regulatory disruption."

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