News that the US and China agreed to drop their tariff threats while they work on a larger trade agreement rallied equity markets last night.

The NIKKEI was up 0.3%, the SCI gained 0.6%, Eurozone shares were unch to +0.7%, and S&P futures were +0.6%, with firmer oil aiding the move (WTI from $71.38 - $71.85 supply concerns from Iran and Venezuela).

The dollar rose sharply, with the DX climbing to yet another 5-month high at 94.06. Weakness in the safe haven yen (110.80 – 111.39 – 4-month low), a plunge in the euro ($1.1765 - $1.1716 – 6-month low, continuing concerns over Italian political situation), and a dip in the pound ($1.3480 - $1.3390, 5-month low, concerns over tomorrow’s inflation reading,

Carney’s speech, and lack of optimism ahead of the next round of Brexit negotiations), helped lift the greenback. Gold came off sharply, falling from its $1292.15 high through support at $1285-87 ($1287 – double bottom - 12/28 and 5/16 lows, $1286 – 5/18 1ow, $1285 – 5/17 low, $1285 - up trendline from 12/15/16 $1123 low), to reach $1282 – where support in front of the $1281 (12/27 low) held. Later during European hours, the DX pulled back to 93.78, and gold bounced back to the old support at $1285.

After the NY open, the DX continued to pare more of its overnight gains – despite a stronger than expected reading on the Chicago Fed National Activity Index (0.34 vs. exp. 0.14).

A strong bounce in the euro ($1.1770) knocked the DX back to 93.65, and tripped some bargain hunting buying and short covering in gold. The yellow metal punched back through $1285 to reach $1289.50 by mid-morning.

During the late morning, US equities cut some of their gains (S&P...

I was flying back from giving a presentation in Vancouver last week and browsed through the financial publications at an airport newsstand, scanning to see what passes as mainstream advice these days. I spotted Money Magazine’s May issue and saw an article titled “5 Ways to Invest if You’re Worried About a Crash.” My curiosity was piqued—surely they’ll mention gold… right?

I wasn’t holding my breath. This publication has been a wonderful contrary indicator for gold—an issue in December 2015 actually claimed Lego sets were a better investment than gold, for example, and it marked, almost to the day, the very bottom of the gold bear market and the perfect time to buy. I’m convinced this magazine will also give us a clear sell signal (“Buy Gold Now!” or some such headline) AFTER the price has already skyrocketed. I guess I should thank them ahead of time.

Anyway, I turned to the article and read the subtitle:

“Worried about how shaky stocks have become lately? These five investments can act like shock absorbers in a diversified portfolio.”

Okay, surely this has got to include something about gold. I know from past issues that they don’t like precious metals, but they can’t possibly ignore what history has shown.

I was wrong. Gold is not mentioned once. The closest they get is suggesting “commodities.” And their recommended pick in that category was for a natural resource fund, whose top 10 holdings include exactly zero exposure to precious metals.

As bad as that was, it’s what I read next that stunned me. All four of their other recommendations were to—I’m not kidding—buy more stocks!

I actually laughed out loud; my seat mate glanced over at me, concerned...

The heart of the debt problem is this: You can’t get elected unless you promise people things you can’t possible deliver without massive debt spending.

Nobody wants to admit the simple mathematical truth: Someone has to pay for the debt incurred by past administrations. In the future, people will have to pay more to get less. It’s not a negotiation. It’s math.

But no politician can get elected on this platform. So sooner or later, the math is going to force the hand of whichever president is unlucky enough to be in office when the debt music stops and the whole charade comes crashing down.

There is a huge debate over “Austerity” versus “Spending.” While conservatives in government talk a “good game” about cutting spending, budgeting and debt reduction, the exact opposite has been the case over the past several Administrations both “conservative” and “liberal” alike.

The irony is that increases in debt lead to further increases in debt as economic growth must be funded with further debt. As this money is used for servicing debt, entitlements, and welfare, instead of productive endeavors, there is no question that high debt-to-GDP ratios reduce economic prosperity over time. In turn, the Government tries to fix the “economic problem” by adding on more “debt.” The Lowest Common Denominator^[1] provides more information on the accumulation of debt and its consequences.

The U.S. has the labor, resources, and capital for a resurgence of a “Marshall Plan.” The development of infrastructure has high rates of return on each dollar spent. Instead, the government has spent, and continues to spend, trillions bailing out banks, boosting welfare support, supporting Wall Street and...

The government needs an “economics heavyweight” with budget credibility, said Peter Chatwell, head of rates strategy at Mizuho International Plc. “Italian bonds are not the right long for those with market-to-market issues right now,” said Chatwell. “Instead, being long core bonds, and increasing duration, is the better risk-reward.”...