July 2019 - Week 4 Edition
Gold and Silver Soar to Long-Term Highs
Last week, gold and silver soared on Thursday and Friday, primarily over Middle East tensions and a “dovish” Federal Reserve governor’s comments. Gold opened at $1,400.80 last Wednesday morning in London and rose to $1,439.70 on Friday’s closing, rising $39 (+2.8%) in 2+ days. So far this year, silver hasn’t usually followed gold up after such moves, but this time silver rose, too. Silver rose from $15.61 on Wednesday’s close to $16.315 on Friday, up 4.5%, rising more rapidly than gold, as we indicated it might do in our recent silver reports. Meanwhile, stocks retreated late last week, upping gold’s advantage:
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The Fed Could Cut Rates Faster Than Anticipated – Sending Gold Soaring
Rates remain super-low in Europe with a 10-year Swiss bond now yielding -0.76%, the lowest long-term sub-zero bond yield yet. The stock and gold markets have already priced-in a 0.25% rate cut at next week’s meeting of the Federal Open Market Committee (FOMC), which convenes eight times a year to set interest rate policies. However, a super “dovish” talk by a key Federal Reserve official last Thursday sent gold to a six-year high ($1,439.30) and silver to a 13-month high ($16.40) late last Thursday.
The New York Federal Reserve Bank is the most influential of the Fed’s 12 districts. It’s President, John Williams, suggested last Thursday afternoon that the Fed should be more aggressive in its monetary policy actions to prevent a slowdown in the U.S. economy. Some market watchers may have over-reacted to his talk by jumping to the conclusion that the Fed might cut rates by 0.50% (a “giant step”) next week, but we don’t think that will happen. This Fed will be more cautious than that, so the rise to $1,439 gold may be premature. In time, the Fed will cut by three or more 0.25% baby steps, but likely no giant steps.
The U.S. dollar dropped on Williams’ remarks, which also helped gold’s prices in dollar terms. At the same time, tensions were rising in the Middle East pushing up gold, while the oil market fell a bit in price on the assumption that the U.S. and Iran could start negotiations again regarding U.S. sanctions on Iran.
Political Correctness is Getting Out of Hand – and Pretty Sad
In January 2013, during his second Inauguration, President Obama hung the Betsy Ross 13-star flag behind him, without offending anyone. In 2015, prominent Democrat and playwright Lin-Manuel Miranda launched the hip-hop musical “Hamilton.” The cast proudly sang a tune celebrating that same flag flying at Yorktown, in a song titled “Guns and Ships,” which appeared late in Act I:
“How does a ragtag volunteer army in need of a shower
Somehow defeat a global Superpower?
How do we emerge victorious from the quagmire?
Leave the battlefield, waving Betsy Ross’ flag higher?
--From the Musical “Hamilton” (Act I)
The multi-racial cast had no problem singing those words over the last few years. I presume they still sing that song, despite Colin Kaepernick’s unfortunate veto of a Nike shoe design due to the presence of what he implied was a “racist” 1777 flag purportedly designed by a Quaker lady (and Quakers were strong opponents of slavery), Betsy Ross. Her home colony of Pennsylvania was the first to abolish slavery in 1780, 7 years before the Constitution.
The Betsy Ross flag stands for America’s miraculous victory over the greatest military power the world had ever seen to that date, after six years of struggling through defeats and retreats. At what point did that flag become a racist symbol? In fact, Lisa Moulder, director of the Betsy Ross Home in Philadelphia, said that she has never heard of the flag being used as a hate symbol, and Dr. Alveda King, niece of Dr. Martin Luther King, Jr., said “I am not sure brother Kaepernick even totally understands who Betsy Ross is.”
I am on the board of Crime Stoppers of Southeast Texas and I teach continuing education classes for law enforcement. I have contacted several police chiefs and retired FBI agents in both Texas and Louisiana. They all emphatically told me that they had not seen the Betsy Ross flag used in an inappropriate manner and never in conjunction with the Confederate flag or seen it for sale in places that sell Confederate flags.
The Anti-Defamation League keeps an exhaustive “Hate Symbols Database,” and there is no mention of any Revolutionary War-era flag in that data base. Mark Pitcavage, a senior research fellow for the ADL’s Center on Extremism, said that extremist groups have occasionally used it, but the flag is most commonly used for patriotic purposes: “We view it as an innocuous historical flag. It’s not a ‘thing’ in the white supremacist movement.” If a few fringe racist groups used that flag, so what? Must Christians stop honoring the cross if KKK groups burn crosses? I prefer not to let haters define our greatest symbols.
When I was in high school and college marching bands in the 1970s, those in attendance at all football games and parades always stood when the flag we carried passed. I have spoken with many veterans who went to West Point and served in overseas wars. They saw men die next to them. They were present when the flag was draped over the casket of their colleagues, then folded carefully and given to the widow or heirs. Disrespect for the flag saddens those veterans who saw their fellow soldiers die in defense of America. My Air Force veteran father had an American flag draped over his coffin. The Betsy Ross flag is also part of the seal of the U.S. Department of Veterans Affairs.
It is sad to see Democratic Presidential candidates like Julian Castro or Beto O’Rourke jump on the anti-American bandwagon of praising Nike and Colin Kaepernick for banning an honorable American symbol of freedom and personal sacrifice. Colin Kaepernick refused to stand during the raising of today’s 50-star flag, so what flag does he want Nike to put on a shoe these days? Is there any U.S. flag that he respects?
Please ask an account representative about the patriotic flag bars and rounds we offer for sale!
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