Gold solidly down on profit taking rebound in USDX

Gold solidly down on profit taking, rebound in USDX

Gold prices are sharply lower in midday U.S. trading Monday, on some profit-taking pressure from the shorter-term futures traders and as the U.S. dollar index is solidly up today, on a rebound after last week hitting a two-month low. Silver prices are just modestly down. Still, both metals are in firmly bullish technical postures to suggest more upside for prices in the near term. April gold was last down $22.70 at $1,989.20 and May silver is down $0.133 at $24.955.

Global stock markets were mixed overnight. U.S. stock indexes are a bit weaker near midday. It’s a calmer start to the trading week, following a three-day holiday weekend for most traders and investors. The U.S. Labor Department’s March jobs report issued Friday morning came in about as expected, showing a non-farm payrolls rise of 236,000 jobs versus a gain of 311,000 in the February report. Still, Friday’s jobs numbers fall into the camp of the U.S. monetary policy hawks, who want to see further interest rate increases from the Federal Reserve.

The U.S. data point of the week will be Wednesday morning’s consumer price index report for March, which is expected to show an annual rise of 5.1%, compared to a rise of 6.0% in the February report.

  Bank of America is looking for $2,100 gold price by Q2

The key outside markets today see the U.S. dollar index sharply up. Nymex crude oil prices are slightly down and trading around $80.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.4%.

Technically, April gold futures prices hit a 12-month high last week. Bulls still have the solid overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80, scored in March of 2022. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $2,000.00 and then at today’s high of $2,006.60. First support is seen at $1,975.00 and then at $1,965.00. Wyckoff's Market Rating: 8.0

May silver futures prices hit a 12-month high last week. The silver bulls have the solid overall near-term technical advantage. Prices are in a steep uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at last week’s high of $25.295 and then at $25.50. Next support is seen at $24.50 and then at $24.25. Wyckoff's Market Rating: 8.0.

May N.Y. copper closed down 440 points at 397.15 cents today. Prices closed near the session low today. The copper bulls have the slight overall near-term technical advantage but have faded recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the March high of 417.45 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 382.20 cents. First resistance is seen at today’s high of 403.95 cents and then at 407.15 cents. First support is seen at last week’s low of 399.60 cents and then at 392.60 cents. Wyckoff's Market Rating: 5.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

The Battle for Control: Why Governments Fear the Decentralized Nature of Bitcoin

The Battle for Control: Why Governments Fear the Decentralized Nature of Bitcoin

Why is the government wary of Bitcoin? The simple answer to that question is "the loss of control!"

The government's most potent instrument for influencing the economy is controlling the money supply. The government wants total economic control because doing so would be politically advantageous. To make fresh money, the government borrows from banks. As a result, the government is increasing the amount of future debt that must be repaid to produce fiscal stimulus.

Thankfully, the government may depreciate the currency by reducing the debt's value. You get into trouble because you could want to hold onto the money as a store of value. Your savings will eventually lose value even if you have placed your funds in an interest-bearing account.

Governments are willing and ready to fight Bitcoin and other altcoins, not the blockchain technology that powers it. Several governments and banks have praised blockchain technology's workings, and they are keen to incorporate it into the system to move toward improving operational effectiveness. 

Governments worldwide are preparing to implement digital currencies (CBDC) to simplify the electronic transfer procedure. The government intends to use blockchain technology so that digital transactions are traceable and can be taxed because it records every transaction in the ledger. The caveat is the type of blockchain they will implement for their digital currencies. It is permissioned, so only central banks will see the transactions, not the public. 


Image source: 101 Blockchains

People's confidence was shaken by the tremendous financial crisis that the world was experiencing. Once the banking system fell, Bitcoin rose from the ashes, giving consumers a different way to control their money. Anybody with an internet connection may buy Bitcoin and safely save their money. Peer-to-peer technology powers the payment network. It is a decentralized coin that the government, and any third parties, cannot manipulate.

Fiat currencies credibility

Fiat refers to the traditional currency issued by the government. The government has declared that these currencies are valuable. People have understood that this pledge is meaningless because real assets do not back fiat currencies over time. Fiat money typically lacks both intrinsic value and utility value. It only has value because those who use it as an accounting unit or, in the case of currency, a means of exchange believe it has value. They believe businesses and other individuals will accept it for transactional purposes.

You will never be able to trade the money in for a can of beans or a bar of gold with the government. People only believe in fiat currencies because the government has the credit to issue them. To purchase either of those items, you must pay the seller of beans or gold in fiat money. 

Fiat currencies gained credibility through legal tender laws, central bank credibility, government backing, and the network effect. While a physical commodity does not support fiat currencies, it is backed by the government's ability to enforce legal tender laws and collect taxes, creating demand for the money. As long as people believe that the government will continue to back the currency and maintain its value, fiat currencies will continue to be accepted as a means of exchange.

The essence of control

Fiat money is totally under government control. They give central banks the authority to create or destroy money through monetary policy to affect the economy. The government also sets the rules for how these currencies may be moved so they can be traced and taxed. It makes it evident who stands to gain from this movement and aids in investigating illicit activity.

Control is necessary to ensure the safety and security of individuals and institutions. The government can set rules and regulations to prevent fraudulent or illegal activities, such as money laundering, and to protect consumers from financial scams or predatory lending practices. It also helps to prevent excessive speculation or manipulation of financial markets.

The government can regulate the money supply and influence economic activity by controlling the currency. By adjusting interest rates and using other monetary policy tools, central banks can help to stabilize inflation, support economic growth, and mitigate economic downturns. Central Banks like the Fed aim to protect the banks, giving them enormous powers to control the citizens. Money is power, and whoever controls the money controls power. This is exactly what the government wants.

How is Bitcoin valuable?

Long before Satoshi published his white paper on the Cryptography Mailing List in 2008, Bitcoin's history had already begun. Cryptographers first fought the battle for privacy and freedom in the digital era, then the Cypherpunks took up the cause, and now the Bitcoiners are carrying on the struggle.

Without question, Satoshi was brilliant, but he didn't create something from nothing. Instead, Satoshi shrewdly utilized existing technologies to produce the revolutionary new currency, Bitcoin. Note that because Satoshi Nakamoto chose to stay incognito, speculation has it that Satoshi could be a group rather than a single person.

Users of Bitcoin can escape the current financial system. Bitcoins don't actually exist in the physical world. They are produced by "miners" in cyberspace. Bitcoins are created by solving challenging algorithms that operate as a kind of global transaction verification rather than being written on paper or carved on metal.

This digital money (more accurately, cryptocurrency) can only be held digitally and transferred between buyers and sellers without an intermediary and is also awarded to miners when they correctly solve a block. The same idea applies to airline reward points on a more compact scale. The points may be used to pay for travel-related expenses like hotel and aircraft tickets. All of them utilize airline miles as virtual money.

The entire financial system's framework will collapse if Bitcoin is broadly embraced. This was a fantastic solution in light of the instances when the financial sector became corrupt. 

In a research paper from Galaxy Digital, the energy used by the Bitcoin network was quantified and compared to that of other industries, such as the banking industry. It was discovered that while the banking sector uses 263.72 TWh annually, Bitcoin uses just 113.89 TWh.

By analyzing some of Bitcoin's distinctive qualities and how they relate to and affect its energy consumption, the research provided context for Bitcoin's energy usage. Regrettably, such important information won't be permitted to appear in the mainstream media due to the world powers' campaign against Bitcoin.

Why do governments fear Bitcoin?

  • Unbeatable

When Bitcoin first emerged, many who opposed it painted it as a hoax. But Bitcoin is still there and in the news fourteen years later. There is always a long way to go before most people use Bitcoin. More businesses and services are embracing Bitcoin daily, making it a legitimate payment option. Anybody wishing for cryptocurrency to disappear will not get their dream since it is here to stay.

The loss of control presented by Bitcoin is a crucial issue that worries governments and financial institutions. They still need to devise a mechanism to tax Bitcoin or any other cryptocurrency. The government cannot monitor the transactions or the revenue generated by them. You can see why the government discourages the idea, given that taxation is the primary source of governmental income.

The lack of a centralized authority and blockchain technology are the two defining characteristics of Bitcoin that give it power and acceptance. It establishes a secure network where users can remain pseudonymous. Yet when considered from the government's standpoint, this is a field it cannot regulate or meddle in. A lack of regulation for the government entails a lack of control and revenue. 

Additionally, because Bitcoin is a peer-to-peer system, there is no need for a central clearing house or authority to oversee the transfers. What earnings are being produced, who is selling, and who is buying the Bitcoins remain entirely hidden from the sources, which is something the government hates so much.

  • Provides a lifeline

Even the most essential products and services are sometimes unavailable to many in nations like Venezuela, which has suffered hyperinflation. Reports demonstrate how Venezuelans are surviving hyperinflation with the help of Bitcoin. They use this cryptocurrency to order internationally couriered items online. This nation illustrates how the people have been let down by the government and conventional banking institutions. Yet, the government has attempted to crack down on the Bitcoin miners and traders rather than finding a solution to the financial crisis.

  • Community Control and Crime Concerns

The two-headed monster of government hostility to cryptocurrency is because it continues to remain out of their total control. Yet, it also suggests that they sincerely worry about protecting the rights of residents and those looking to invest in risky assets.

Having said that, it is crucial to remember that not all government worries are unwarranted. It was premised on the idea that financial transactions were anonymous, and thus criminal activity was inevitable. Crimes like drug trafficking, terrorism, money laundering, and tax evasion may worsen with such a system. These may harm the rest of society. 

However, we must understand how Bitcoin can address the problems that traditional systems have caused, putting aside the likelihood of a wide variety of illegal acts that have garnered the headlines and painted them negatively. Recessions and unemployment have repeatedly been triggered by the central bank changing the money supply. The welfare of individuals is at risk because the global financial system thrives on avarice and corruption.

It's okay to try your luck with Bitcoin; remember that you're entrusting a very sophisticated system with your money. You may need to be more thoroughly knowledgeable about this industry; because you are interacting with individuals you don't know and entering a situation where you have few legal options.

The fight against Bitcoin requires large-scale coordination among nations 

Bitcoin's growth has been a concern for various governments, including the United States. The US government is projected to run a $1.4 trillion deficit in 2023. Even if the government shuts down the entire military and eliminates the Department of Defense's projected $800 billion budget, the budget would still be projected to operate in the red for 2023.

This indicates that the U.S. government's resources to fight against Bitcoin are limited. Still, it is clear that the government is targeting cryptocurrency to expand the reach of its financial surveillance. Approximately 86% of central banks are actively exploring the development of Central Bank Digital Currencies (CBDCs). This development could threaten the growth of cryptocurrencies, including Bitcoin.

Wall Street's push to open up access to Bitcoin investment is meeting resistance from a bipartisan group of lawmakers and regulators in Washington, which might also hinder the growth of Bitcoin. Some years ago, China, another country that has shown concern about the growth of Bitcoin, attempted to crack down on Bitcoin miners who effectively power the digital coins' accounting system by forcing its own banks to stop facilitating crypto use. If China can’t stop it, what do you think the countries that still practice freedom are going to do?

While the U.S. government's resources might be limited to fight against Bitcoin, the government might expand its arsenal through multilateral relations in targeting cryptocurrency to broaden the reach of its financial surveillance. 

As Bitcoin is internationalized, effective regulation would require the cooperation and approval of practically every nation-state. Still, it might be challenging to see countries focusing on Bitcoin in unison; even though the major world powers such as the United States and China have a bloc-like effect, there has been more coordination, often led by the U.S. government.

Extensive cooperation is needed to shut down the network effectively; otherwise, users will successfully conduct transactions and maintain the Bitcoin network in other countries. A gradual, nation-by-nation prohibition might harm total acceptance. 

At its most extreme, a very improbable state-led ban in the United States could prevent Bitcoin from accessing American-led financial institutions and markets with almost all global reach. However, a "global ban" or "government crackdown" will not be possible as Bitcoin can be used for transactional purposes across international borders.

The libertarian view

The allure of Bitcoin extends beyond its autonomy and financial stability. Digital money appeals to libertarians as well since they favor private property rights and minimal government involvement. Libertarians see Bitcoin as a method to avoid conventional financial institutions, which they believe are governed by governments and susceptible to heavy regulation. Bitcoin provides a decentralized financial system free from governmental control and inflationary monetary policies.

Because Bitcoin transactions are safe and transparent, they are consistent with libertarian values such as individual freedom and privacy. Bitcoin transactions cannot be controlled or changed thanks to permissionless blockchain technology, offering an unmatched level of security compared to conventional banking systems.

Bitcoin stands for control over one's financial future and the shielding of assets from governmental meddling for libertarians and those who share their views. Even if the appeal to libertarians may appear specialized, it is a sign that digital currencies can alter the financial landscape. It's conceivable that cryptocurrencies will become more widely accepted and used for various purposes as more people become aware of their benefits.

The bottom line 

Governments are wary of Bitcoin for several reasons, including its lack of central control, illicit activity use, consumer protection, volatility, and potential threat to national currencies. While some governments have taken steps to regulate Bitcoin and other cryptocurrencies, others have banned them altogether. As Bitcoin continues to gain mainstream acceptance, it will be interesting to see different approaches to how governments respond to this new form of currency.

It's important to note that while governments are wary of Bitcoin, they also recognize the potential benefits of blockchain technology, which underlies Bitcoin and other cryptocurrencies. Blockchain technology can potentially revolutionize various industries, including finance, healthcare, and logistics. The relationship between governments and cryptocurrencies is complex and evolving, and it will be interesting to see how it develops in the coming years.

 

 

 

About: Prince Ibenne. (Nigeria) Rapid and sustainable human growth is my passion, and getting a life-changing opportunity into the hands of people is my calling. Empowering entrepreneurs provides me with enormous gratification. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Tim Moseley

GoldSilver: The critical indicator every silver trader is watching

Gold/Silver: The critical indicator every silver trader is watching

Happy Easter to all of you, and with Good Friday here, the markets enjoy an early close after the release of the monthly Nonfarm payroll report. The number narrowly beat expectations showing an increase of 236,000 jobs, and the initial reaction gave a favorable boost to the U.S. Dollar and Treasury Yields. Unfortunately, the Precious Metals markets are closed today, leaving Sunday night as a possible "volatility event" as the markets try to price what a stronger report will mean for the Fed at their next meeting. Looking back from the lows in March, Gold has rallied $200 and Silver over $5, leaving both markets susceptible to a correction. For those currently long, we will continue to lift protective stop losses and use options to add to positions while concentrating on "undervalued" metals such as Copper and Platinum.

Daily May Silver Chart

The technical backdrop shows Silver extending the "Bull flag pattern" we identified several weeks back while continuing to achieve new swing highs and breaking through the consolidation zone seen from December through February. We remain cautiously optimistic as most technical indicators show the market substantially "overbought," as seen through the slow stochastic indicator. The eight-day exponential moving average (EMA) has worked exceptionally well in helping Silver traders from a risk management standpoint and looking to exit their positions on the first close below. Traders will then wait to see if an extended selloff occurs by analyzing if a crossover occurs with the eight-day EMA crossing below the thirty-four-day EMA. If that event happens, we could be setting up for a multi-week correction.

To further help you develop a trading plan, I went back through 20 years of my trading strategies to create a Free New "5-Step Technical Analysis Guide to Gold that can easily apply to Silver." The guide will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Silver.

Daily June Gold Chart

The technical backdrop in Gold shows a different picture from Silver as the market successfully "broke out" from the "Bull Flag" pattern we identified in last week's article. However, without a continuation above $2050, traders should use any close below $2000 as the first warning sign that a correction could be brewing. A critical level we are watching is the March 21st downward spike low to 1965.9, now the first significant support. A break below 1965.9 will begin signaling a near-term failure. Therefore, we would be only cautiously Bullish and reevaluating upon such a move. For those working closely with us, most of you are working stops below the $1955 level on a "Good till Cancelled" basis.

Having the flexibility to enter and exit the market quickly makes it essential for Precious Metals investors to have a futures trading account alongside their core Physical Precious Metals holdings. If you are interested in speculating on the rise and fall of the price of Precious Metals on a shorter-term basis, such as two weeks or two months, or If you have never traded futures or commodities, I just completed a new educational guide that answers all your questions on transferring your current investing skills into trading "real assets," such as the 1000 oz Silver futures contract. You can request yours here: Trade Metals, Transition your Experience Book.

By

Phillip Streible

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Insider trading is when someone makes a deal utilizing secret information

Insider trading is when someone makes a deal utilizing secret information to get an unfair advantage over other investors.

insider trading

In recent years, the use of cryptocurrency has exploded, with many people investing in digital currencies such as Bitcoin and Ethereum. As with any rapidly developing financial market, there is the potential for illegal activities such as insider trading to take place. Insider trading involves individuals using confidential information to make trades that give them an unfair advantage over other investors. This type of activity is illegal in traditional financial markets, and regulators are now taking steps to crack down on insider trading in the cryptocurrency market.

ecosystem for entrepreneurs

Insider trading in the cryptocurrency market can take many forms. For example, individuals with access to confidential information may use this information to buy or sell cryptocurrency before the information becomes public. Alternatively, insiders may tip off their friends or family members about upcoming news or events that could affect the value of a particular cryptocurrency, allowing them to profit from the information.

One example of insider trading in the cryptocurrency market is the case of Coinbase employee, Rohan Jain. Jain allegedly used confidential information about Coinbase's upcoming support for Bitcoin Cash to purchase the cryptocurrency before the announcement was made public. Jain then sold the Bitcoin Cash after the price surged following the announcement. The Securities and Exchange Commission (SEC) brought a case against Jain, and he was ordered to pay a $300,000 fine and barred from trading securities for a period of six months.

The SEC is responsible for enforcing federal securities laws in the United States, and they have been actively investigating insider trading in the cryptocurrency market. In November 2018, the SEC settled charges against two individuals who were accused of insider trading in the cryptocurrency market. The individuals were alleged to have traded on confidential information about a company's planned initial coin offering (ICO), making profits of over $1.4 million. As part of the settlement, the individuals were required to pay fines and penalties totaling over $1.1 million.

Regulators around the world are also taking steps to crack down on insider trading in the cryptocurrency market. In Japan, the Financial Services Agency (FSA) has been working to tighten regulations around cryptocurrency exchanges, including rules related to insider trading. In December 2018, the FSA issued a warning to six cryptocurrency exchanges regarding their internal controls around insider trading. The FSA has also proposed new rules that would require cryptocurrency exchanges to report any suspicious trades or transactions that could be linked to insider trading.

ecosystem for entrepreneurs

The European Securities and Markets Authority (ESMA) has also highlighted the risks associated with insider trading in the cryptocurrency market. In a statement released in February 2018, the ESMA warned investors about the potential for insider trading in the cryptocurrency market, stating that "there is a risk that the price of cryptocurrencies could be manipulated by traders who have access to confidential information or who are able to influence the market in some other way."

In addition to regulatory action, cryptocurrency exchanges themselves are taking steps to prevent insider trading. Many exchanges have implemented strict rules around the trading of digital assets, including measures to detect and prevent insider trading. For example, some exchanges require employees to sign non-disclosure agreements and prohibit them from trading on the platform. Others use advanced analytics tools to monitor trading activity for suspicious patterns that could indicate insider trading.

Insider trading is a serious crime in traditional financial markets, and regulators and exchanges are now taking steps to prevent it from occurring in the cryptocurrency market. While the cryptocurrency market is still relatively new and unregulated, it is clear that insider trading will not be tolerated. As the market continues to evolve and mature, it is likely that additional measures will be put in place to prevent insider trading and other forms of illegal activity. In the meantime, investors should be aware of the risks associated with cryptocurrency investments and take steps to protect themselves from insider trading and other fraudulent activities.

Tim Moseley

The Fed US dollar may stop gold’s record run next week

The Fed, US dollar may stop gold's record run next week

With so much uncertainty dominating financial markets, most analysts expect it's only a matter of time before gold prices hit new record highs above $2,000 an ounce.

However, with the market looking slightly overstretched, it might be challenging for gold to hit its new target next week. The cautious outlook for gold and silver comes as the precious metals saw significant breakout moves above $2,000 and $25 an ounce, respectively.

The gold market is looking to end the week up nearly 2% as the June contract last traded at $2,023.70 an ounce; meanwhile, silver continues to outperform, with prices ending the shortened trading week up more than 3% as the May contract trades at $25.04 an ounce.

This past week, gold and silver have significantly benefited from a sharp drop in bond yields, which in turn has weighed on the U.S. dollar. The U.S. dollar Index is looking to end Thursday at critical support around 102 points.

According to some analysts, if the U.S. dollar finds some momentum, it could prompt investors to take some profits on their bullish gold bets.

"It again looks like the U.S. dollar is trying to establish a short-term uptrend on its daily chart while June gold looks a bit top-heavy. We've seen this story before, though, and it usually ends with the greenback falling and gold strengthening," said Darin Newsom, senior market analyst at Barchart.com.

The U.S. dollar's and gold's future could be determined by just a handful of reports next week, starting with Friday's March Nonfarm payrolls report. Markets will be closed Friday for the Easter long weekend; however, the U.S. government will be open and will release the report.

Analysts note that investors and traders will have to wait until markets open Sunday before they can react to the data. According to consensus forecasts, economists expect the economy to create 288,000 jobs last month. Analysts note that anything better than expected will be bullish for the U.S. dollar and gold negative.

"As gold fires, long signals on all gauges of momentum, the upcoming jobs report could be of notable importance. On the one hand, a weak number could be a catalyst to see if the macro investors, who have thus far held notable dry-powder during the latest rally, add to their long positions. On the flip side, a strong report could bolster Fed expectations, and could see CTAs modestly reduce their positions if prices don't hold above $2026/oz," said commodity analysts at TD Securities.

   Retail Investors and analysts remain bullish on gold, but the precious metal might need a rest

While the U.S. labor market has been surprisingly resilient since early 2022, economists note that there are signs the tide is starting to shift, highlighting weakness and raising recession fears.

"If tomorrow's NFPs follow on the steps of recent data releases, showing signs of weakness in the US labor market, then I would expect further dollar weakness and the corresponding upside for the precious metal," said Ricardo Evangelista, senior analyst at ActivTrades. "I can see gold breaking through the previous maximum of $2069 touched during the summer of 2020."

Craig Erlam, senior market analyst at OANDA, said that because of current market conditions and sentiment, Friday's employment data would have to significantly surprise to the upside.

"Any disappointing data or even numbers in line with expectations and we will see gold make a run to its record highs," he said.

Aside from the jobs report, analysts note that inflation data next week could also provide some support for the U.S. dollar. Economists have said that a strong jobs market and persistently high inflation could force the Federal Reserve to continue to raise interest rates.

There are growing expectations that the Federal Reserve's tightening cycle has ended. The CME FedWatch Tool shows that markets see a roughly 50/50 chance that the central bank will leave interest rates unchanged between 4.75% and 5.00%.

While another 25 basis point hike in May would create a headwind for gold, many analysts don't see it as a game changer for the precious metal. Many analysts note that in this environment, investors will just have to wait a little longer before record highs are seen again.

Sean Lusk, co-director of commercial hedging at Walsh Trading, said that even if gold is technically overbought at current levels, there is solid support in the market.

"There are solid reasons why we are trading at these levels. We are seeing significant diversification into precious metals because of major uncertainties in the world," he said.

Lusk added that if gold does test support around $2,000, investors might want to buy micro gold futures to test the waters.

Looking beyond U.S. interest rates, Lusk said the ongoing banking crisis would continue supporting gold as a safe-haven asset.

Next week's data

Wednesday: U.S. CPI, Bank of Canada monetary policy decision, FOMC minutes

Thursday: U.S. PPI, U.S. jobless claims

Friday: Retail Sales, preliminary University of Michigan consumer sentiment

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

Beyond Infinity

Beyond Infinity

Beyond Infinity is a one-level affiliate platform where you can earn an unlimited income. However, Beyond Infinity is much more than just a business.

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That is why, when our product is purchased for a one-time out-of-pocket cost of fifty dollars, we give the purchaser an account in our Beyond Infinity Gold Big platform.

We even give them a jump-start deposit of ten dollars that will begin to earn from three percent up to five percent in profit share earnings compounded every week automatically. I know that ten dollars does not sound like much, but just imagine this one-time deposit earning over two hundred thousand dollars in six years with no further effort on the part of the purchaser and no further money out of pocket.

In our effort to help as many people as we can, we have created the Big platform to help everyone earn without dipping into their pockets again for any additional costs ever. Some may say this is too good to be true, but sometimes you find something that is both good and true at the same time, and Beyond Infinity Gold Big is just that.

When you are sharing Beyond Infinity with others, while this will earn you fantastic unlimited income, just think about the financial advantage you have just given someone for a better financial future.

That is the real mission and purpose of Beyond Infinity – to actually help as many people as we can all around the world. And while you're helping others, Beyond Infinity is helping you as well. In fact, in our sharing community, we help one another. We share our time, our resources, and even our money. You will find those members in our community who are willing to even pay for someone's product for them, giving them an even greater advantage.

It used to be, and there probably still is, a stigma around paying it forward for others, as most people have been in situations where they have paid it forward for someone, but the biggest problem with that was expecting something in return and not getting it. However, Beyond Infinity has changed all of that. In fact, you are encouraged to pay it forward for others because with us, it is a win-win situation, and it is not about expecting anything in return.

With the Beyond Infinity Compensation Plan, you will receive much more than you paid to help someone else, and because you have helped someone else, you do not have to expect anything in return as it is given to you automatically. With Beyond Infinity, our Big platform is totally passive and does not require any effort on the part of the purchaser to earn.

However, if you are actively looking to earn even more money, in addition to receiving a forty-dollar commission for each new paid member you refer, we also have two other income-producing platforms. One of our other income-producing platforms is the Infinity Plan, where you can earn unlimited five-dollar coded commissions for each person coded to you as a one-level affiliate plan.

Only one person receives a commission from another member encoded to you, which means that you are the one to receive the five-dollar commission. The Infinity subscription is forty dollars every twenty-eight days, but it is pulled from your reserve account at ten dollars every seven days. Your reserve account is continuously capped at forty dollars from your earnings and not your pocket.

This happens automatically, so you don't have to worry about it. Our other income-producing platform is the Honey Production Line (HPL), where you can receive fifty dollars from HPL1, one hundred dollars from HPL2, and two hundred dollars from HPL3 continuously and simultaneously from all three automatically. If you would like to start earning unlimited income, completely passive or active, by sharing Beyond Infinity with others, please get back to the member who shared this video with you to learn more. There is no better time to get started than today.

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Tim Moseley

The Trust Crisis Of Banks Worsens Ensuing Initial Collapse Of SVB A Plus for Crypto

The Trust Crisis Of Banks Worsens Ensuing Initial Collapse Of SVB. A Plus for Crypto

The US banking sector is facing a crisis of trust following the collapse of Silicon Valley Bank, which has left many Americans, particularly those without insurance for their deposits, anxiously trying to determine if their money is safe. A recent report found that more the 186 banks, or 5% of all banks in the country, are in danger of failing. The article outlines the analysis, identifies the risk factors to watch out for, and explains why investing in cryptocurrency could be a genuine safe-haven option.


Source: SSRN Papers-Full Study

As the above screenshot shows, the study is titled ‘Monetary Tightening and US Bank Fragility in 2023; Mark-to-Market Losses and Uninsured Depositor Runs?’  It was written by four academics from distinguished universities in the United States on March 13th, 2023. 

The report begins with a brief explanation of why so many US banks are at risk of going under and pertains to all the assets banks hold on their balance sheets. These are US bonds (US government debt) and mortgage-backed securities (MBS) (bundles of mortgages). US Bonds and MBSs are the safest assets a bank can hold, at least according to regulators, and why banks tend to invest most of their customers' deposits in US bonds and MBSs.


Images sourced at Investopedia.com

These assets earn interest for the banks and thus make it possible for them to offer services with low or no fees. However, when interest rates rise, the value of US bonds and MBSs decreases. The reasons for this are many, but the main takeaway here is that higher interest rates result in US bonds and MBSs crashing. If the value of these assets falls too much, banks can become temporarily insolvent. 

This insolvency is temporary because when US bonds and MBSs mature, meaning the loan terms end, the bank receives the total value of the underlying asset. Again, the mechanics of this are many, but just know that US bonds and MBSs don't lose money if they are held to maturity, and why banks don't report the losses on US bonds and MBSs when interest rates rise. 

Most information about losses on debt securities held by banks is immersed in the glossaries in their SEC filings. It is not considered a significant problem until that bank has major liquidity issues. It’s because it's not a loss until they sell, and in the case of US bonds and MBSs, they won't lose anything if they hold them to maturity. 

This accounting practice is arguably controversial. These so-called unrealized losses are acceptable if the bank isn't forced to sell any of these assets at a loss, specifically customer withdrawals.  It’s what happened to SVB and why it sank. However, there is one crucial detail to keep in mind. 92.5% of SVB's deposits were uninsured by the Federal Deposit Insurance Corporation (FDIC). 

For context, the FDIC only ensures bank deposits up to $250,000 per account. Any amount above that is considered uninsured. SVB experienced a bank run because its uninsured depositors could see that it had many unrealized losses. This led to speculation that SVB didn't have enough money to honor all withdrawals. 

As such, this bank run may not have happened if most deposits were insured, i.e., under $250K per account. SVB had so many uninsured deposits because the bank provided accounts and banking services primarily to small and medium-sized businesses, startups, and entrepreneurs in Silicon Valley. These clients typically require lots of cash liquidity to pay their employees, make acquisitions, etc. 

Around $9 trillion of bank deposits in the United States are uninsured, roughly 50% of all bank deposits. Banks have been happily investing these uninsured deposits into US bonds and MBSs. The problem is that interest rates have risen, and their unrealized losses have proliferated. At the end of 2022, US banks collectively had unrealized losses totaling more than $600 billion. Interest rates have risen more since then, so these losses are likely even more prominent now.

In short, US Banks have lots of unrealized losses and also lots of uninsured depositors who are concerned that banks can't honor withdrawals because of these unrealized losses. The authors examined over 4,000 banks in the study to see which ones were most at risk and why. 

Unrealized Losses

First, the study highlighted that 42% of all bank deposits had been invested into regular MBSs, with another 24% invested in commercial MBSs, i.e., commercial real estate loans, US bonds, and other asset-backed securities (ABS). The authors then tried to calculate the unrealized losses on these assets. After crunching the numbers, the authors found the following, 

“The median value of banks' unrealized losses is around 9% after marking to market. The 5% of banks with worse unrealized losses experience asset decline of around 20%.” 

Note that ‘marked to market’ means ‘assuming sold today.’ In lay terms, the average American Bank has unrealized losses of around 10%, and 5% of the most vulnerable banks have unrealized losses of 20%. 

So if depositors were to rush and withdraw from these banks, they would get 90% of their money back at the average bank and 80% back at a vulnerable bank. Not surprisingly, these unrealized losses were the smallest for Global Systemically Important Banks (GSIB), including JPMorgan and Bank of America. GSIBs have less than 5% of unrealized losses. The average non-GSIB has 10% unrealized losses, and SVB wasn't even the worst. 

The authors found that more than 11% of US banks had larger unrealized losses than SVB when it collapsed. They estimate that as many as 500 other banks could have failed based purely on unrealized losses. The reason why only SVB went down was because of the high number of uninsured deposits. The authors then provide a series of scenarios to showcase how uninsured depositors could react to rising interest rates.

Uninsured Depositors Waking Up

The first scenario assumes that the uninsured depositors stick around and wait. The other three scenarios surmise they withdraw and invest in other assets, which provides a higher interest rate than a savings account. Understand that insolvency fears related to unrealized losses aren't the only reason why uninsured depositors withdraw money from a bank. 

The primary reason why they would do this is that they want to earn a high-interest rate on their large deposits. This desire for yield increases as interest rates rise. Unfortunately for the banks, it's hard for them to provide competitive interest rates on savings accounts without losing lots of money. This is why many US banks haven't increased their interest rates on savings accounts, despite interest rates increasing. They’re making lots of money off their depositors. However, if they were to raise interest rates on savings accounts, they wouldn't make nearly as much money. 

In the study, the authors assume that most uninsured depositors are sleepy, meaning they aren't rushing to withdraw to earn a higher interest rate elsewhere. However, this is starting to change; besides the banking crisis, the high-interest rates that are still rising in other regions tempt those sleepy uninsured depositors into waking up and moving their money elsewhere. If they do this, banks with large, unrealized losses will start going under as they won't be able to honor all withdrawals. 

How Many Banks At Risk?

Naturally, the authors assess whether banks have enough assets to honor these upcoming withdrawals from uninsured depositors. They assume that the FDIC doesn't close down banks that come under stress, which is significant because the FDIC is likely to do this if banks start getting squeezed. 

The good news is that all bar two American banks have enough assets to honor withdrawals from uninsured depositors. The bad news is that the authors don't specify which two banks are at risk, but they conclude that this little risk means additional bank runs are unlikely for the time being. 

For Good Measure

As an extra, the authors analyzed the possibility of what would happen if uninsured depositors ran. They did a number of simulations of bank runs, from 10% to 100% of uninsured depositors withdrawing their assets. 


Source: SSRN Papers-Full Study

What's concerning is that the ten banks most at risk of experiencing a bank run are large. As the authors cite in the study, 

 “The risk of run does not only apply to smaller banks. Out of the 10 largest insolvent banks, 1 has assets above $1 Trillion, 3 have assets above $200 Billion (but less than $1 Trillion), 3 have assets above $100 Billion (but less than $200 Billion), and the remaining 3 have assets greater than $50 Billion (but less than $100 Billion).” 

Unfortunately, the authors don't specify which banks these are but reveal how sensitive US banks are to bank runs. They concluded that even if just 10% of uninsured depositors withdrew their money from banks, 66 banks would go under. If 30% of uninsured depositors withdrew their money, 106 banks would go under. If half of all uninsured depositors ran, 186 banks would fail. This underscores that at least a few dozen banks are at risk of going under over the coming months. 

This is ultimately due to the fatal combination of significant unrealized losses due to rising interest rates and withdrawals from uninsured depositors seeking higher yields from these rates. The final simulation was if 100% of uninsured deposits withdrew all their assets from US banks. They insisted that this simulation is worth doing to assess the state of the US banking sector. Surprisingly only about half of US banks would go under. 

The authors then conclude by highlighting that the value of assets held by US banks is more than $2 trillion lower than what's being reported, thanks to unrealized losses-based accounting. They reiterate that hundreds of banks are at risk of going under if uninsured depositors withdraw. They warned that even small numbers of withdrawals from uninsured depositors could lead to unrealized losses being realized. This would lead to more bank runs, evolving into an even bigger banking crisis than we've seen. They go as far as to suggest regulations to address this. 

For starters, banks should start changing how they report their unrealized losses so that bank depositors have a better sense of how underwater their banks are. Because of the lack of transparency, the authors manually calculated these unrealized losses using complex maths. The authors acknowledge that this won't solve the insolvency risks many banks face, so they recommend that banks be forced to increase their capital requirements. 

This coincides with what Michael Barr, the Fed’s Vice-chair for Supervision, has been busy doing. Michael had been examining capital requirements for banks before the banking crisis began. Maybe he saw the banking crisis coming or was preparing to take advantage of it to introduce regulations. Michael Bar’s anti-crypto speech indicates the second possibility is the most likely. Michael has been desperate to increase his powers, presumably to consolidate the banking sector to assist in the rollout of a central bank digital currency

Be Vigilant of The Risk Elements

Which risk factors should you be aware of when analyzing banks? I am not a financial adviser. Still, my research into this convoluted accounting system revealed that the two main risk factors are unrealized losses and uninsured deposits. It is at risk if your bank has many unrealized losses and uninsured deposits. The problem is that it takes work to estimate these unrealized losses. Moreover, not all uninsured deposits are prone to flight. Remember that most of them are required to pay employees at small companies. 

Also, as mentioned above, most banks with many uninsured deposits tend to be smaller, i.e., not GSIBs. In theory, this makes them inherently riskier than GSIBs. In practice, though, when a non-GSIB goes under, it gets acquired by a GSIB. This means your assets could be safer at a small bank. If you read the article about bank bail-ins, you'll know that GSIBs can be risky. 

If a non-GSIB goes under, it gets acquired by a big bank, and customer deposits are kept, but if a GSIB goes under, customer deposits are used to bail them out. As recently happened with Credit Suisse and its takeover by UBS. The arguably political deal required capital from somewhere to satisfy UBS. According to WSJ, the Swiss government was desperate to avoid the appearance that this was a taxpayer-funded bailout.

GSIBs are also more likely to comply with investment ideologies, like ESG. As discussed in this article, the Bank of America is one of the big institutions behind the ESG movement. Some of its affiliates are introducing individual ESG scores for their customers. 

Small banks may also have challenges because around 80% of commercial real estate loans come from small banks. In addition to being wrecked by higher interest rates, commercial real estate is struggling because people must return to the office. 50% of office spaces in the US are empty. This means that small banks are at a higher risk of sitting on larger unrealized losses, which is consistent with the findings of the study. 

If that weren't bad enough, these losses would likely increase as time passes, even if interest rates start coming down because work from home is probably here to stay. Even if uninsured depositors are less likely to withdraw from small banks due to the purpose of these deposits, just a small number of withdrawals could therefore cause severe issues for small banks. 

The findings of the study suggest this risk is already there. All it takes is 10% of uninsured deposits to move. In sum, small and big banks come with their own risks, and it's up to you to decide which risks you'd instead take. Diversifying your deposits is an option, but the fact that every bank operates using this fractional reserve model means your money will never be genuinely risk-free in their coffers. 


Image credit: Markethive.com

Cryptocurrency To The Rescue

This is where cryptocurrency comes in. Cryptocurrencies ostensibly have only one risk: their current price volatility. There are, of course, risks associated with things like improperly written code, but the largest and most established cryptocurrencies have been battle tested every day for over a decade. 

Aside from that, cryptocurrencies are one of the best hedges against the banking system. When you hold a cryptocurrency, there is no counterparty risk. That crypto is genuinely yours, and there isn't some greedy banker going and investing your crypto into a basket of risky, commercial real estate loans behind your back. 

This characteristic alone makes cryptocurrency valuable. Also, cryptocurrency lets you send a transaction to whoever you want, whenever you want, and for however much you want. This is the true definition of financial freedom, and its importance was fully displayed when Nasdaq halted the trading of bank stocks during the recent banking crisis. 

Nobody can turn off the decentralized cryptocurrency exchange and prevent people from trading. You will always be able to trade. Take a second to consider; that blocking transactions, halting trading, and freezing assets will only become more common as CBDCs are rolled out. This will make the financial freedom aspect of cryptocurrency ever more critical, along with the decentralization that underlies it. 

Without decentralization, crypto's value proposition quickly disappears. That's why instead of wasting time assessing the unrealized losses and uninsured deposits of banks, you should learn about what makes a cryptocurrency genuinely decentralized. After all, the days of commercial banks are numbered; the thousands of existing banks will inevitably consolidate into a handful of mega banks, and governments will nationalize these mega banks. 

Financial freedom in the traditional financial system will be gone when that happens. At the same time, economic freedom in the crypto ecosystem will only continue to grow. By the grace of God, it will rise to the point that it's capable of accommodating the billions of people who will pull out of the traditional financial system as it becomes ever more centralized and ideological. 

Both monetary mechanisms will take years to play out, but it's already clear that the global financial system is splitting into two structures: free and sovereign and one that is not. You now have the once-in-a-millennium opportunity to choose which system to participate in. It’s critical to make that decision before it's made for you. 

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

 

Also published @ Substack.com

Tim Moseley

Gold sees routine corrective profit-taking pullback

Gold sees routine corrective, profit-taking pullback

Gold prices are modestly down in midday U.S. trading Thursday. Silver prices are slightly up. Both metals are seeing some normal chart consolidation after hitting 12-month highs on Wednesday. Gold and silver bulls still have the strong near-term technical advantage to suggest the path of least resistance for prices remains sideways to higher. April gold was last down $6.30 at $2,014.90 and May silver is up $0.068 at $25.105.

Some upbeat U.S. jobless claims numbers rallied the U.S. dollar index briefly before it backed off later on. But this was enough to prompt a pullback in gold prices and some profit taking.

Global stock markets were mixed overnight. U.S. stock indexes are mixed at midday. Risk appetite this week has down-ticked. Reads a Wall Street Journal headline today: "Bank failures; high inflation; rising rates. Is the resilient jobs market about to crack?" A three-day holiday weekend for many markets likely has sellers in the gold and silver markets tentative, as both markets have seen their prices come up from their daily lows as midday approaches.

In overnight news, reports said that as the price of gold is back above $2,000 an ounce the countries of Brazil, Russia, India, China and South Africa all plan to increase their gold reserves. This is due to "an increasingly bipolar geopolitical world—exacerbated by the war in Ukraine, says an ING analyst. He added such is a "structural positive for gold and structural negative for the U.S. dollar."

 Bank of America is looking for $2,100 gold price by Q2

The U.S. data point of the week is Friday's U.S. employment situation report for March from the Labor Department. The key non-farm payrolls number is seen coming in at up 238,000, compared to a rise of 311,000 in the February report. The U.S. markets will have to wait until Monday to react to the data, as they are closed on Friday for the Easter holiday.

The key outside markets today see the U.S. dollar index slightly down after hitting a two-month low Tuesday. Nymex crude oil prices are slightly down and trading around $80.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.28% and has fallen this week.

Technically, April gold futures prices hit a 12-month high Wednesday. Bulls still have the strong overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80, scored in March of 2022. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's low of $1,950.00. First resistance is seen at today's high of $2,033.30 and then at this week's high of $2,033.80. First support is seen at $2,000.00 and then at Tuesday's low of $1,979.00. Wyckoff's Market Rating: 8.0

May silver futures prices hit a 12-month high Wednesday. The silver bulls have the strong overall near-term technical advantage. Prices are in a steep uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at this week's high of $25.295 and then at $25.50. Next support is seen at today's low of $24.695 and then at $24.50. Wyckoff's Market Rating: 8.0.

May N.Y. copper closed up 220 points at 400.85 cents today. Prices closed near mid-range today. The copper bulls have the slight overall near-term technical advantage but have faded recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the March high of 417.45 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 382.20 cents. First resistance is seen at today's high of 403.15 cents and then at Tuesday's high of 407.15 cents. First support is seen at today's low of 397.10 cents and then at this week's low of 392.60 cents. Wyckoff's Market Rating: 5.5.

By

Jim Wyckoff

For Kitco New

Time to Buy Gold and Silver

Tim Moseley

Gold futures consolidate forming a base at recent highs above 2030

Gold futures consolidate forming a base at recent highs above $2030

The solid breakout that moved gold futures above $2000 to a high of $2043 yesterday, and $2049.20 today indicates a new level of support well above $2000 per ounce.

Currently, the most active June 2023 futures contract is fixed at $2037.10 a net decline of $1.1 or 0.05%. The fact that gold did not immediately sell off as it has in the past after hitting the highest price since gold hit $2077 last year indicates strong bullish market sentiment that continues to drive gold higher and more importantly hold those recent high prices.

Today’s fractional decline occurs with dollar strength which indicates that there are still traders bidding the precious metal higher although not enough to take gold futures higher on the day.

The same cannot be said for spot gold which is currently fixed at $2020 which is a net gain of $0.30. According to the Kitco Gold Index (KGX), today’s spot prices are a combination of investors bidding spot gold higher by $6.60 coupled with dollar strength taking gold lower by $6.30, thereby creating a fractional gain of $0.30. The dollar is currently up 0.30% and the index is fixed at 101.57.

The force that propelled gold well above $2000 yesterday was weaker U.S. economic data. The data suggested that the Federal Reserve could certainly consider slower rate hikes and a pause of rate hikes sooner. According to the CME’s FedWatch tool, there is a 55.9% probability that the Federal Reserve will not raise rates at the May FOMC meeting and begin to pause raising rates as they assess whether their former rate hikes indicate that their actions have put inflation on a firm trajectory towards their target of 2%.

The next key event that will shape the Federal Reserve’s decision will be Friday’s jobs report. This is because the Federal Reserve is laser-focused on the extremely robust labor market as a strong higher inflationary component.

On a technical basis, there is no resistance until $2069 the highest closing price for gold futures on record. With a short-term bias, you can use today’s low of $2026 as a potential solid support level.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

Breakout in gold takes futures to a high of 204340 in striking range of record high

Breakout in gold takes futures to a high of $2043.40 in striking range of record high

A solid breakout in gold moved futures pricing well above $2000 in trading today. Currently, the most active June 2023 contract is trading up $39.10 or 1.94% and fixed at $2039.40. That puts gold within striking range of the all-time high of $2088 as well as the record closing price for gold futures at $2069.40.

Dollar weakness contributed roughly 25% of the gains in gold today but it was market participants actively bidding the precious yellow metal higher that caused this current rally to accelerate. The dollar is currently down 0.53% and the dollar index is fixed at 101.25.

The primary fundamental event that propelled gold well above $2000 was weaker U.S. economic data. This data suggests that the Federal Reserve could certainly consider slower rate hikes and a pause of rate hikes sooner.

For the first time since May 2021, available new job positions have dropped below 10 million. Today CNBC reported that "Job openings fell below 10 million in February for the first time in nearly two years, in a sign that the Federal Reserve's efforts to slow the labor market may be having some impact. Available positions totaled 9.93 million, a drop of 632,000 from January's downwardly revised number, the Labor Department reported Tuesday in its monthly Job Openings and Labor Turnover Survey."

Because the Federal Reserve has been laser-focused on the extremely robust labor market as it uses its tools to reduce inflation today's report confirms that recent action by the Federal Reserve is beginning to have an impact as seen in the contraction of job openings.

The probability that the Federal Reserve will not raise rates at the May FOMC meeting has increased dramatically. According to the CME's FedWatch tool, there is a 58.7% probability that the Federal Reserve will leave its terminal rates of 4.75% to 5% and beginning a period of pausing rate hikes. However, there remains a 41.3% probability that the Fed will raise rates by ¼% in May.

There is no technical resistance in gold futures until $2069 the highest closing price for gold futures on record. There is solid support for gold at $2013 which is the 38.2% Fibonacci retracement of the most recent leg of the rally. In other words, there is a high probability that gold futures will not only hold above $2000 but challenge the all-time record close.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter