Gold Kept Afloat By ETF Inflows

The Market Gage - Dillon Gage's Precious Metals Newsletter

Gold ETF inflows continue to dominate the Gold arena as over 100,000 ounces were added to the funds. That’s five out of the last six days that have seen an increase in holdings.

I guess you can say the ETF interest in the yellow metal is keeping the price of Gold afloat. Meanwhile, a stronger dollar this morning is keeping the price of Gold in negative territory and there doesn’t seem to be any news today that will change that.

Wall Street Gold traders have no interest in getting involved at these levels and would prefer to concentrate on the currency markets at this time,

Today’s Spotlight: Socialism

Venezuela’s failed Socialist Policies

Venezuela has 3.5 billion in bond payments coming due in October and November, so as their reserves dwindle, a near-term default is not out of the question.

In a surprise move, Venezuela’s President Nicolas Maduro announced that he will be listing its price of oil in Chinese Yuan terms, shunning the U.S. dollar would, as he put it, rid the economy of the “U.S. Imperialist system.”

Washington’s tough new sanctions on Caracas bars U.S. banks from trading in new bonds issued by the government or the state run oil company, PDVSA. The goal is to restrict Venezuela’s access to vital bond and equity markets.

Maduro said these sanctions amounted to a financial and economic blockade, as the ratings agency Fitch downgraded Venezuela and warned default was now likelier.

Despite being an oil rich nation, over 60 percent of all children in Venezuela are facing severe malnutrition. Worse, child mortality has jumped over 30 percent this year.

Inflation in Venezuela could reach 700 percent this year and food outside the major cities continues to be in short supply. Currently, a basic basket of grocery items costs 16 times the monthly wage benefit of 45 dollars. Protests continue, but the question remains how will this crisis end?

Turning to America – Is Bernie Sanders still a force to reckoned with?

College campuses seem to have a love affair with the socialist movement and Bernie Sanders speaks their language. More than fifty-three percent of Millennials view socialism as a viable option for this country in the years ahead. And more than 70 percent of millennials say they would be willing to vote for a socialist candidate.

The question is, will the Democratic party embrace this policy and run with it at the next Presidential election? And even more serious, can our nation fall into the same terrible situation facing Venezuela today?

Basic Universal Income in America?

Monday, former Vice President Joe Biden seemed to move himself to the middle and stated he would not support the popular concept called “Universal Income.” However, there are still those who worry that the advancement in technology will eventually put many folks on the unemployment line.

For instance, Facebook CEO Mark Zuckerberg and Telsa CEO Elon Musk favor Universal Income as they believe automation in the years ahead will eliminate hundreds of thousands of jobs.

I still can’t get my head around this concept, nor do I understand how this country can afford it.

Universal Income is a form of Social Security in which all citizens in the country receive a regular, unconditional amount of money from the government. Some estimate that this kind of free money will cost our government 3 to 4 trillion dollars per year. Just what we need, more debt. When you look at the amount of money that would be given to an individual, you see that it isn’t an amount that a person can live on. So what’s the point?

So Where Do We Go?

“FREE” seems to be the definition of Socialism. Free college tuition, free healthcare, free money, etc. Whatever happened to the hard work theory. Has the need for achievement gone out the window? There are many still out there that are dedicated to their jobs and careers. Who strive hard to succeed. Should they feel obligated to pay for the ones who have no desire to get off their derrieres? Seems like the Socialist movement thinks so.

While Joe Biden’s actions indicate he might be interested in becoming the next Democratic Presidential candidate, the Bernie Sanders of the world still think they have a better chance, because it seems popular to just hang out, protest and look for a handout from Uncle Sam.

Have a wonderful Monday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.