The pound is rallying today on news of a more hawkish Bank of England and comments from the European Union President that there won’t be a hard Brexit for England. Young Research turned bullish on the pound in the spring. The pound is up a few percentage points since then, but with a supportive technical backdrop and strength in the euro upside potential remains. … [Read more...]

In less than a year, Italy could have a government that is committed to either dropping out of the euro altogether, or to some other scheme such as creating a so-called 'parallel currency.' Either of these are obviously bad for the euro-zone as a whole. Italy is one of Europe's largest economies, and unhinging it from the euro would be a catastrophe for the currency bloc. But political momentum points toward a more euro-skeptic party winning in Italy's coming elections. The FT's Tony Barber explains how that could happen: Neither the left, nor the right nor Five Star has much hope of outright … [Read more...]

For all the talk of the FAANG-led stock market rally, one asset class that isn’t getting enough respect is gold. The S&P 500 may be up 20% since year-end 2015, but gold prices are up 21%. If inflation is subdued as many proclaim, and the outlook for stocks remains bullish, why are gold prices so strong?   … [Read more...]

Who doesn’t like ice cream? On a recent trip to Paris we spent the early part of an afternoon on the Left Bank, walking along the eclectic Rue de Seine. If you want to get a feel for how Paris used to be, then Rue de Seine is for you. Standing at the corner where Rue de Buci meets Rue de Seine, outside Bar du Marche, a nice looking gentleman asked in a very friendly tone if he could help me find something (was it that obvious?). In response I asked if he could recommend an ice cream shop and he pointed us to Grom, a perfect place to get a crème glacee between lunch and a late … [Read more...]

One of the lines in the chart below is the purchasing power of the USD, and the other is the purchasing power of an ounce of gold. Both series are rebased to one in 1913, the year the esteemed Federal Reserve was created. Since the Fed was created, the U.S. dollar has lost 96% of its purchasing power while gold has gained purchasing power. That’s no coincidence. Gold is a store of value. A wealth preservation vehicle. Gold won’t make you rich, but it won’t make you poor either. Gold is a currency. It can’t go bankrupt, lose its value because of poor management, accounting fraud, … [Read more...]

After President Trump's comments yesterday about the country struggling to compete with the dollar as strong as it is, and separate positive statements he made about regularly dovish Fed Chairwoman Yellen, gold and silver prices jumped. Will a "weak dollar" Trump administration be a boon to gold investors? Carla Mozee writes at MarketWatch: Gold, silver and prices for other metals leapt Thursday, bolstered as the U.S. dollar was shoved lower after U.S. President Donald Trump said the currency has been trading at “too strong” of a level. June gold GCM7, +0.83%  advanced $12.10, or 0.9%, to … [Read more...]

In a survey of 21,000 people from around the world conducted by the Wharton School, Switzerland has emerged as "The Best Country." This is the second year of the survey, and the first time Switzerland was included. Last year's winner, Germany, was pushed to fourth place, with Canada and the UK taking slots 2 and 3, and Japan taking 5th. The U.S. came in seventh of the 65 countries polled. The Local writes: “Switzerland debuts as the world’s 'top' country, in part because of its progressive social systems, protection of human rights and business-friendly environment,” said the ranking … [Read more...]

During the Presidential campaign Trump promised to get tough on trade. Mexico was the focus of much of his rhetoric, but that isn't the only trading relationship the new administration is looking to renegotiate. The FT reports that the Trump administration wants to have a sit-down with Germany on the country's massive trade surplus. Germany's membership in the euro-area keeps its currency undervalued and provides it with a meaningful trading advantage. If the Germans brought back the Deutsche mark, most economists estimate it would appreciate significantly vis-à-vis the euro thereby … [Read more...]

After selling-off as interest rates spiked following the election, gold has made something of a comeback in 2017. Gold is up over 9% YTD compared to about a 6% gain in the S&P 500. The rally in gold seems at odds with the prevailing sentiment in the stock market. Stock market investors are bullish. The Dow has been up for ten consecutive days. Gold and stocks don't often rise in tandem like they have over the last two months. Is gold trying to tell us something? Is calamity on the horizon? Are rising gold prices a signal that goods inflation is about the rear its ugly head? Is the … [Read more...]