Frank Homes Reveals Why Gold Will “Just Explode… in the Blink of an Eye” (Podcast)
Frank Homes Reveals Why Gold Will “Just Explode… in the Blink of an Eye” Podcast by Mike Gleason for Money Metals
Coming up Frank Holmes of U.S. Global Investors joins me to update us on some of the best value propositions he sees in the markets. He also reveals why he’s very bullish on the metals right now and why he expects the next leg higher to happen in the blink of an eye. Don’t miss another wonderful conversation with the man the Mining Journal named America’s Best Fund Manager, Frank Holmes, coming up after this week’s market update.
Precious metals markets are struggling to gain ground as gold prices continue to oscillate around the $1,300 level. For a 7th straight week, gold traded into or out of $1,300 per ounce. Earlier in the week, gold climbed above that key level but got pulled back below it Thursday on heavy selling.
As of this Friday morning, the yellow metal checks in at $1,293 per ounce, essentially unchanged for the second week in a row now.
Despite the weakness in gold, the gold to silver ratio rose to a new multi-decade high of 87 to 1 on Thursday as the white metal got pounded to register its lowest close of the year. Spot silver prices currently trade at $15.11 an ounce and are posting a weekly decline of 0.5%.
Platinum prices are down 0.6% this week to trade at $899. And finally, palladium is off 0.3% on the week to trade at $1,383 the ounce.
Metals bulls are currently feeling disappointed that these markets aren’t getting any boost from the dovishly postured Fed.
Minutes from the Federal Reserve’s March meeting were released on Wednesday. Policymakers telegraphed a pause on rate hikes for the rest of the year. However, they did not give any indication that rate cuts, as advocated by President Donald Trump, will be on the table.
The Fed also telegraphed an end to Quantitative Tightening by September. In the meantime, the central bank continues to unload billions of dollars in assets off its balance sheet every month, effectively trimming back growth in the currency supply. Perhaps that is weighing on precious metals markets and the broader inflation trade.
Last Friday, President Trump called for the Fed to reverse course and re-start Quantitative Easing.
Steve Liesman (CNBC): President Trump’s substantially raising the ante in his comments and criticism of the Fed. Not only does he think the Fed should cut rates, he also today for the first time advocated new Quantitative Easing, that’s the emergency measure from the financial crisis where the Fed buys bonds and increases its balance sheet to push down interest rates.
Donald Trump: I personally think the Fed should drop rates. I think they really slowed us down. There’s no inflation. I would say in terms of Quantitative Tightening, it should actually now be Quantitative Easing.
A new QE deployment probably won’t happen until the economy takes a dramatic turn for the worse. But the odds of some form of Fed easing in the months ahead are growing as economic indicators soften.
This week the International Monetary Fund downgraded its growth forecasts for the global and U.S. economies. The IMF forecasts the American economy will grow 2.3% in 2019, down from a previous projection of 2.5%. Wall Street analysts are also downgrading their outlook for corporate earnings.
Lower profits and lower growth rates will mean lower tax revenues for the government. The already ballooning federal budget deficit would then become a much bigger problem – and could serve as impetus for the Fed to resume purchasing Treasury bonds.
Well, speaking of taxes, the filing deadline is just around the corner. For some, it may not be too late to take advantage of some last-minute tax reduction strategies. For others, it’s not too early to begin making smart tax moves for the current year.
Unfortunately for precious metals investors, tax laws are rigged against them.
Under current IRS rules, capital gains on all forms of bullion are arbitrarily treated as “collectibles.” The IRS taxes collectibles at a rate of 28% instead of the lower rates that apply to stocks and other financial assets.
Fortunately, there are legal ways to shelter your gold and silver gains from taxation. One of the most straightforward and effective ways is through an IRA. You can hold certain types of tangible assets – including IRS-approved gold, silver, platinum, and palladium bullion products – inside a Self-Directed IRA.
Within the IRA, you can sell some or all of your holdings, trade one metal for another, or even switch the account back to conventional financial assets when you think metals markets have peaked. None of your Precious Metals IRA gains are taxable until you actually take withdrawals in the form of cash or the physical metal itself.
An IRA backed by hard assets can be a powerful way to preserve wealth during times of rising inflation. Inflation may not be on most investors’ radar at this point, but there is a danger in the Fed’s recent statements essentially declaring it will do nothing more this year to fight inflation.
Once the inflation genie is let out of the bottle, it becomes hard to control. It can give the illusion of rising prosperity through rising asset prices on the one hand, while on the other acting as an oppressive tax on workers and savers whose wealth is stuck in depreciating dollars.
To learn more about funding a Precious Metals IRA and selecting a reputable account custodian, just click on the IRA section of MoneyMetals.com. Or give one of our knowledgeable, no-pressure Specialists a call at 1-800-800-1865.
Well now, without further delay, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome in Frank Holmes, CEO and chief investment officer at US Global Investors. Mr. Holmes has received various honors over the years, including being named America’s Best Fund Manager by the Mining Journal. He is also the co-author of the book The Gold Watcher: Demystifying Gold Investing, and is a regular guest on CNBC, Bloomberg, Fox Business, and also right here on the Money Metals Podcast.
Frank, welcome back and thanks for joining us again.