Gerald Celente: “Monetary Methadone” Is Running Out, Crash Looms (Podcast)

Gerald Celente: “Monetary Methadone” Is Running Out, Crash Looms Podcast by Mike Gleason for Money Metals

Coming up Gerald Celente, top trends forecaster and publisher of the Trends Journal joins me for an explosive conversation on the state of the markets, gold, the upcoming presidential election, and why he believes the next recession will be one for the ages.  Gerald also reveals what you should be doing right now to prepare for it. So, don’t miss my conversation with Gerald Celente, coming up after this week’s market update.

As markets close out the month of August, precious metals investors are scoring some big summer gains.  The standout performer has been silver, surging over 15% during the month.

On Thursday, the white metal spiked to nearly $18.70 an ounce before pulling back in afternoon trading.  As of this Friday recording, silver prices come in $18.43, up 5.4% for the week.

Silver has vastly outperformed gold since early July.  That’s a healthy sign for the broader precious metals bull market.  The gold to silver ratio is coming down from a quarter century high and likely has much further to fall as the bull market progresses.

For the week, gold is essentially unchanged to bring spot prices to $1,530 an ounce.

And speaking of ratios, the gold-to-platinum ratio is also coming down from extreme heights as the automotive metal finally kicks into gear.  This week, the platinum market broke out to a new high for the year.  It is up a whopping 8.8% since last Friday’s close to trade at $937 per ounce.

And finally, palladium is surging here today and is up 5.3% now for the week to trade at $1,543.

Looking ahead to next month, metals investors will await a near-certain rate cut from the Federal Reserve.  There is an outside chance the Fed could cut by 50 basis points instead of the usual 25.

Everybody knows that President Donald Trump favors larger scale reductions in interest rates.  He wants to stimulate the economy and stock market ahead of next year’s election.

Fed policymakers are supposed to stay out of politics and make their decisions based solely on the economic data before them. But it would be naïve to believe they don’t harbor political biases.

They have been under relentless attack by President Trump.  They see his attacks as posing a threat to the so-called “independence” of the Federal Reserve.  They may even fear that if he is re-elected he will threaten the existence of the Fed as an institution.

Could the Federal Reserve be deliberately withholding stimulus to try to get Trump defeated?  It may sound like just another baseless conspiracy theory.  But, in fact, there is some basis for believing Fed officials have the motive and opportunity to sabotage the Trump economy.

Don’t take it from me.  Take it from former New York Fed President Bill Dudley.  On Wednesday, he penned an article for Bloomberg titled “The Fed Shouldn’t Enable Donald Trump.” Dudley argued that the central bank should refuse to support the economy while the Trump administration is waging trade wars.  Instead, he claimed, the Fed should force President Trump to “bear the risks – including the risk of losing the next election.”  Dudley went so far as to suggest that “the election itself falls within the Fed’s purview.”

Those are things anyone who has held a senior position at the Fed simply doesn’t say – at least not publicly.  Former U.S. Treasury Secretary Larry Summers, a Democrat, was aghast.

CNBC Anchor: Former New York Fed president, Bill Dudley, is arguing that the Fed should not cut interest rates further in response to president Trump’s trade war with China. Strong’s sharp criticism from foreign Treasury Secretary Larry Summers, who called it quote, “The worst case of Trump derangement syndrome in the financial world.”

Larry Summers: For a trusted former official of the Fed, whose thinking is inevitably going to be tied to the Fed, to recommend that they raise interest rates so as to subvert the economy and influence a presidential election is grossly irresponsible, and is an abuse of the privilege of being a former Fed official. So, it was the taking of the economic dialogue out of the realm of economics, and the putting it in a realm of politics and suggesting that the Fed was there, and was acting politically, or might act politically, that was empowering the Fed’s critics, and I thought, was profoundly disloyal.

Pay no attention to that disloyal man behind the curtain, Summers tells us.  The powers that be don’t want the public to believe there’s an anti-Trump resistance movement operating inside the Federal Reserve.

But if there were, and the people leading it were smart, they too would denounce Dudley.  They would swear up and down in their public pronouncements that they aren’t motivated by politics.

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