David Smith: Silver Has Already Gone from Weak to Strong Hands (Podcast)

Saturday, July 13, 2019
By Paul Martin

JULY 13, 2019

David Smith: Silver Has Already Gone from Weak to Strong Hands Podcast by Mike Gleason for Money Metals

Coming up our good friend David Smith of The Morgan Report and MoneyMetals.com columnist joins me for a wonderful discussion on the state of the precious metals, an exciting new silver backed cryptocurrency and when he believes silver will finally play catch up to gold’s rally. So be sure you stick around for my conversation with David Smith, coming up after this week’s market update.

As Federal Reserve chairman Jerome Powell testified before Congress this week, investors became more confident that they will soon see interest rate cuts. The Dow Jones Industrials traded up to a new record high while commodities and precious metals also gained strength on Powell’s dovish comments.

Gold prices currently trade at $1,408 an ounce, up 0.6% since last Friday’s close. Silver is up 0.7% this week and currently settles at $15.18. Platinum is putting in a weekly gain of 1.7% to check in at $827. And finally, palladium is off slightly from record highs put in earlier in the week. It trades at $1,547 per ounce, down 1.5% now for the week as of this Friday morning recording.

Well, Chairman Powell’s testimony was closely scrutinized not just for its economic implications but also for its political overtones. Powell cited “trade tensions” as cause for concern about the strength of the global economy. He clearly seemed to be blaming President Trump’s tariffs.

But if the tariffs are what ultimately move the Fed to cut rates, Trump will have finally gotten what he wants out of Powell. In recent weeks, Trump has stepped up his attacks on the central bank, calling it the biggest problem facing the economy, floating the idea of firing Powell, and suggesting his administration would match China’s and Europe’s “currency manipulation game.”

Although many presidents before have pursued currency interventions and quibbled with Fed chairmen over interest rate policy, none have ever done it as openly and directly as the current one. Fed apologists in the media and in Congress view the central bank’s “independence” as being under assault.

The notion that the Fed ever was or could be independent of politics is a fanciful one. When a small group of people – appointed and confirmed by politicians – are empowered to make decisions that can make or break markets, economies, and elections, politics will inevitably intrude.

Fed chairman Jerome Powell may sincerely want to make monetary policy without regard to politics. But when political forces exert themselves on the Fed, he finds himself in an impossible catch-22. If he fails to cut rates, then the central bank risks becoming seen as the enemy of half the country as President Trump makes it his foil at campaign rallies. If Powell does what the President wants, then Democrats will accuse him of succumbing to political pressure from the White House.

Democrats used Powell’s Congressional testimony as an opportunity to get him on record in opposition to a gold standard.

Although Trump himself is not calling for a gold-pegged dollar, one of his nominees to the Fed Board of Governors is – or at least has in the past. Potential Fed policymaker Judy Shelton has written and spoken extensively about the gold standard.

Apparently seeking to discredit Shelton’s views, Democrat Jennifer Wexton prodded Fed Chairman Powell into weighing in on the gold standard.

The Rest…HERE

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