Skip to content

The Federal Reserve is going to raise interest rates. Are you prepared?

By Dr. Steve Sjuggerud, editor, True Wealth: 

Interest rates are headed higher in 2015… and most investors see that as a bad thing for the U.S. stock market.

But is it?

I don’t think it is…

I think we still have plenty of upside potential from here.

Let me explain…

For years now, our working script has been that we’re in “the Bernanke Asset Bubble.”

The basic idea of our script has been that the Federal Reserve would keep interest rates lower than anyone could imagine for longer than anyone could imagine. And that would cause asset prices – like real estate and stocks – to soar higher than anyone could imagine.

That’s exactly what has happened. Rates have been near zero since 2008… six long years. But we’re now much closer to the end of near-zero rates than the beginning.

The Federal Reserve has achieved its goals… low unemployment and mild inflation. And higher interest rates are likely starting next year.

So what will happen when the Fed finally raises interest rates?

Most investors think the rate hike will kill the stock market boom.

Their basic thought is: “Stocks are going up because of the Fed’s low interest rates and money printing. Once those end, the fun is over.”

Logic says that higher interest rates should hurt stocks. After all, higher rates raise borrowing costs for companies, and they allow you to earn more money on your cash in the bank (which creates competition for stocks).

But history tells a different story… Rising rates

Article source: http://thecrux.com/steve-sjuggerud-interest-rates-are-headed-higher-heres-what-to-do/

Here’s a “wealth confession” you might not believe

From Bill Bonner, Chairman, Bonner Partners: 

You’ll recall from last time that the first secret to getting rich is that you cannot fear poverty. Otherwise, you can’t take the chances you need to take if you are to accumulate substantial wealth.

You’ll also recall that there are only three important decisions in life: what you do… where you do it… and with whom you do it.

Here, we continue our series with more on… what you do.

Imagine a man who is a great chef. He loves cooking. So he opens a restaurant, and it is an immediate success.

Seeing the possibilities, he takes his recipes, trains other chefs, and opens other restaurants. Pretty soon, he has restaurants all over town… and the money is rolling in.

But now he is no longer doing what he likes to do. Instead of cooking, he’s running a complicated business; he’s become a manager and an administrator. He’s figuring out tax strategies, leverage, and cost control.

“I’ve become a damned accountant,” he says. “I hate accounting.”

The real fun is getting money, not having it. Once you have it, the fun is over.

This is partly because of the nature of wealth. To get it, you have to be expansive, ambitious, and optimistic.

But once you have it, you have to change your personality to cope with it… protect it… and administer it.

Instead of being an entrepreneur… and a builder of wealth… you must become a custodian… and a conservator.

You can

Article source: http://thecrux.com/bill-bonner-this-wealth-confession-will-probably-shock-you/

The Perfect Storm Of Factors To Push Silver Prices Up [SPDR Gold Trust (ETF …

silver demandJim Bach: It’s a combination of the dollar’s tenuous strength and elevated downside speculation that explains why silver prices are down right now.

why silver prices are down right now

Yesterday (Tuesday), the bid price of spot silver dove $0.49 to $16.97 an ounce by market close, the first time it’s been below $17 since early 2010. This rounds out a September where the white metal got pummeled, falling 12.8% for its worst month of 2014. On Sept. 19, it had its worst day on the year, falling $0.79. It’s now down on the year 13.3%.

Silver futures - contracts promising the future delivery of physical silver – dropped 12.5% on the month, falling to $17.06 as of yesterday’s close. That’s a decline of $2.43.

Exchange-traded funds backed by silver were also clobbered in September. Silver ETFs, such as the iShares Silver Trust (NYSEARCA:SLV) closed yesterday at $16.35, a 12.6% descent on the month, and the ETFS Physical Silver Shares (NYSEARCA:SIVR) fell to $16.78, also down 12.6%.

This slump, however, can be explained by a number of easily identifiable factors that are not sustainable in the long-term, and once they clear up, silver will be able to reverse this fall.

Just look at the strength of the dollar. It’s at four-year highs just as silver prices are at their four-year lows.

And the last time the dollar hit its peak in June 2010, when silver was trading at $18.468, the white metal marched forward to $30.91, or 67.4%, by the end of

Article source: http://etfdailynews.com/2014/10/01/the-perfect-storm-of-factors-to-push-silver-prices-up/

A Look At Silver Wheaton’s Streaming Agreement For The Constancia Mine

Silver Wheaton is a precious metals streaming company which signs long term purchase agreements with mining companies producing silver or gold as a by-product. It provides funds for capital expenditure upfront when a project is being developed and obtains the right to buy precious metals produced at low, fixed prices. The silver or gold obtained at a fixed price is sold at market rates. The company does not pay for any ongoing capital or exploration costs at the mines. Such a business model greatly lowers its business risk, as compared to other companies that are directly involved in mining.

In this article, we focus specifically on the company’s precious metal streaming agreement for Hudbay Minerals’ Constancia mine. We will incorporate various dimensions of the streaming agreement such as the reserve base at the mine, expected output, upfront payments made by Silver Wheaton, and the per ounce cash cost paid.

See our complete analysis for Silver Wheaton

The Constancia Mine and Streaming Agreement

The Constancia copper project is located in the Chamaca and Livitaca districts in the province of Chumbivilcas in Southern Peru. Constancia will be an open pit mine, producing molybdenum in addition to copper, along with silver and gold by products. The project is expected to begin commercial production in 2015.

On August 8, 2012, Silver Wheaton entered into an agreement with Hudbay to acquire 100% of the life of mine silver production from the Constancia project. On November 4, 2013, the company amended the agreement to include the acquisition of 50%

Article source: http://www.forbes.com/sites/greatspeculations/2014/10/01/a-look-at-silver-wheatons-streaming-agreement-for-the-constancia-mine/

I just learned a powerful lesson from resource master Rick Rule

By Louis James, Chief Metals Mining Investment Strategist, Casey Research:

At our San Antonio summit, Rick Rule gave a talk that, as always, was well reasoned, packed with facts, and powerfully cogent. His message was simply that bear markets are for buying and bull markets are for selling—and in the future, resource investors with staying power would look back on the current market as “the good old days” when they were able to buy great stocks cheap.

It was a great talk that no one I spoke to had any objection to nor argument against. What I did hear from some people, however, were comments along the lines of:

Yes, but he’s been saying that for years...”

Given the level of understanding of and sophistication regarding natural resource investing among Casey Summit attendees, this downbeat expression might be a sign of a bottom.

Fair enough, though I have to say that while I did get some questions about talking tax losses or reducing exposure to metals and mining stocks until the tide turns, what most people wanted to know was what the best bargains on sale now are. My answers are covered in our metals newsletters and updated in between issues.

Back to Rick’s talk…

When I heard the pushback about Rick having said the same thing for years, my first thought was that he hasn’t; during the first two years of the slump that began in 2011, Rick was saying the market could go lower.

He did

Article source: http://thecrux.com/the-most-important-lesson-i-learned-from-rick-rule/

Controversial chart suggests deflation could be coming

From Chris Kimble at Kimble Charting Solutions:

Click on chart to enlarge

Well, October is here and it’s time for the baseball post-season to start…

Speaking of baseball, is a “New Deflationary Ball Game” starting in a variety of assets?

This 5-pack reflects that a variety of long-term support and resistance line breaks are taking place.

The U.S. dollar (upper left) is pushing above a 9-year resistance line recently. At the same time the TR commodity index, gold, and silver are each breaking a support line that has been in place for over a decade. Crude oil is attempting to break a 5-year support line at this time as well.

Are we seeing the beginning of a whole new price game for these key global assets? It is still early in this process. Should the U.S. dollar keep pushing higher, these other assets could find themselves a good percentage below current prices.

I have shared for the past two years that silver’s downside target that I am interested in comes into play around the $15 zone, which is fast approaching.


Recommended Links


Porter Stansberry: 99% will have no interest in my new project…

“That’s fine with me… I’m equally certain that the 1% of you who will be interested could make a lot of money with what I’m about to show you…” See it here.

The day

Article source: http://thecrux.com/trader-alert-controversial-chart-suggests-deflation-could-be-coming/

Gold Prices Rise as Some Cash in on Recent Downturn

Gold prices turned higher Wednesday as investors locked in gains on bearish bets following the metal’s recent steep downturn, while platinum futures fell to the lowest level in almost five years.

Gold for December delivery, the most actively traded contract, settled up $3.90, or 0.3%, at $1,215.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices fell to $1,205 an ounce earlier in the session.

With…

Article source: http://online.wsj.com/articles/gold-prices-rise-as-some-cash-in-on-recent-downturn-1412173736

How to master any game (including life) and win

By James Altucher:

I swept the chess pieces to the floor and ran out. The pieces were still popping around on the ground like popcorn when I left the room where the match was being played. It was my school versus some other school. I had lost.

I didn’t care at all about the rest of my team. Losers.

The coach of the team, an English teacher, ran out after me but he was sort of laughing. “Stop,” he said. “Wait.”

But I didn’t want to. I had lost. I was worthless. I hated myself. I hated everyone. The rest of my team was laughing. I could hear them. Laughing at me. The other team was in shock.

I am a sore loser. It’s not that I’m so competitive with others. But I’m competitive with myself. I like to do better than I did before. Sometimes that means something very bad: I like to be perfect at the things I’m interested in.

Of course, it’s impossible to be perfect.

I had nightmares that night. My dad opened my door at 3 in the morning and asked if I was ok. “No,” and there was nothing he could do.

I didn’t go to school the next day or the next. I was a loser with acne, and now a bad chess player.

A year later I was t highest ranking under 20-year-old in my state. And then I basically stopped playing, except when my life was in big transition

Article source: http://thecrux.com/james-altucher-how-to-master-any-game-and-beat-everyone/

Ten absurd facts about the war in Afghanistan you will not believe

From Mike “Mish” Shedlock at Global Economic Trend Analysis:

In 2010, vice-president Joe Biden publicly vowed the U.S. would be “totally out” of Afghanistan “come hell or high water, by 2014.”

In a few short months, 2014 will be gone.

Are U.S. troops out of Afghanistan? Nope.

Iraq? Nope.

Instead, we have troops in Syria.

Political Promises

Political promises should never be believed.

Today, the U.S. signed an extension allowing U.S. forces to remain in Afghanistan until “at least” 2024.

At Least Until 2024

The Guardian reports a new Afghanistan pact means America’s Longest War Will Last Until at Least 2024.

The longest war in American history will last at least another decade, according to the terms of a garrisoning deal for U.S. forces signed by the new Afghanistan government on Tuesday.

Long awaited and much desired by an anxious U.S. military, the deal guarantees that U.S. and NATO troops will not have to withdraw by year’s end, and permits their stay “until the end of 2024 and beyond.”

The entry into force of the deal ensures that Barack Obama, elected president in 2008 on a wave of anti-war sentiment, will pass off both the Afghanistan war and his new war in Iraq and Syria to his successor. In 2010, his vice-president, Joe Biden, publicly vowed the U.S. would be “totally out” of Afghanistan “come hell or high water, by 2014.”

Under the Bilateral Security Agreement’s annexes, the U.S. military will have access to nine major land and airbases, to include

Article source: http://thecrux.com/this-jaw-dropping-news-shows-why-you-should-never-ever-believe-political-promises/

Indian government slashes gold, silver tariff


The Indian government today announced a cut in import tariff value for gold and silver. The import tariff value of gold was slashed by over 5% and that of silver by nearly 11%, in tandem with prices of precious metals in the international market.

The Central Board of Excise and Customs (CBEC) issued notification in this regard reducing the gold import tariff value to $396 per 10 grams. The import tariffs are being slashed from the existing $420 per 10 grams. Meanwhile the import tariff value of silver has been lowered from the existing $645 per kilogram to $575 per kilogram.

The government move to lower the import tariff value is in track with the weakening gold prices in the global and domestic markets.

The international gold prices have seen a sharp slide in recent days. London Gold prices fell by 0.24% to $1,205.80 per ounce. Meanwhile, gold in India witnessed a third day of rise, touching Rs. 27,470 per ten grams in the national capital, New Delhi. On the other hand, spot silver prices plunged by Rs 1,050 per kg to Rs 38,650 per kilogram.

Gold prices have dropped 6.3% in September alone, whereas silver prices have plunged over 12% during the month.

Tariff value is the base price on which the

Article source: http://www.resourceinvestor.com/2014/10/01/indian-government-cuts-gold-silver-tariff?ref=hp