The proposed change to the tax code is meant to dissuade American businesses and funds from supporting the Chinese Communist Party (CCP), which lawmakers and the intelligence community have increasingly warned is a national security risk in recent years.

“For too long, Americans investing in China’s military-industrial complex have been given unfair tax breaks that allow them to profit from funding our adversary,“ Moolenaar stated in the announcement. ”Our nation’s tax code should be incentivizing investment in the United States, not collaboration with the CCP.”

Capital gains tax policy allows for the deferment of paying taxes for profit on an investment. It’s meant to encourage investment, and currently has no location-based restriction. The bill, titled the Patriotic Investment Act, targets investments with ties to the CCP, and specifically notes it doesn’t apply to Taiwan.

Chinese investments would instead be taxed at the highest income rate. If the bill is passed into law, companies would have six months to divest from China before the new rate kicks in, and can pay in three installments.

“The Capital gains tax rate was meant to encourage investment in American innovation, not fund an oppressive communist regime,“ Rubio stated. ”But Wall Street continues to give money to our adversaries and reap rewards from the American tax system. Enough is enough.”

In addition to national security concerns, the lawmakers noted that the CCP pours “hundreds of billions of dollars” into enterprises to maintain its military, which aids its persecution of ethnic and religious minority groups via torture and slave labor, and violates international trade rules in a way that has “dismantled” American industries, businesses, and jobs.

The bill comes a day after Moolenaar previewed the action at a talk at the American Enterprise Institute, calling divestment from the CCP a “No. 1 priority.”

China, the world’s second largest economy, is currently facing an economic crisis, with record levels of foreign investment pulling out.

Still, its economy is deeply intertwined with international supply chains, and Chinese companies, most of which have CCP ties, still supply critical components to American companies, even in competitive industries.

When the White House earlier this week proposed a ban on Chinese software and firmware for connected vehicles, the Commerce Department noted that implementation would need to be delayed until 2027 because American manufacturers have said that they do not know where all of their parts components originate and the new due diligence processes will be complex.

In the chip industry, the United States has taken many steps to block China’s access to advanced semiconductors, but China is still a top exporter of larger chips, and American companies still depend on them.

In early September, shares in real estate, utilities, and consumer staples have emerged as top performers. Gold prices continue to rise, and government bond yields are on track for their most significant monthly decline since December, indicating a flight to safety as bond prices increase.

“It’s really been something to see,” said David Bahnsen, chief investment officer at the Bahnsen Group, commenting on the market’s rotation towards defensive assets.

Concerns surrounding the U.S. economy’s health, the potential scale of forthcoming interest rate cuts, and the upcoming November presidential election have led some investors to exercise caution.

The latest inflation report did little to alleviate these worries. Core inflation, which excludes the often-volatile food and energy sectors, came in slightly above expectations, prompting a sharp decline in stocks and bond yields before a late-day recovery.

Since early August, markets have struggled to maintain stability, particularly as some of Wall Street’s favored trades began to unwind and data indicated a potential cooling in the labor market. Major indexes have experienced significant one-day fluctuations, yet the S&P 500 remains only 2% below its July peak and has gained 16% year-to-date.

The once-dominant Magnificent Seven tech stocks have also seen a decline in momentum. Nvidia, for instance, has dropped 7% since its earnings report on August 28, despite posting quarterly earnings and sales that more than doubled—a growth rate that has slowed from the previous year’s rapid pace.

The recent market reordering has positioned the utilities sector in close competition with technology as the top-performing group in the S&P 500 for 2024, with both sectors up over 20%.

The Fed is widely anticipated to initiate interest rate cuts at its upcoming meeting. Investors believe that the unexpected rise in core inflation strengthens the case for a modest quarter-percentage point cut rather than a more aggressive half-point reduction. According to CME Group, the likelihood of a larger rate cut has decreased to about 15%, down from 34% earlier in the week.

As interest rates are poised to decline, the attractive dividend yields offered by defensive stocks become increasingly appealing. The real estate sector of the S&P 500 currently boasts a yield of 3%, followed closely by utilities at 2.9% and consumer staples at 2.2%.

“If you’re going to buy something that might have upside from an equity perspective, but it’s also going to give you money to sit and wait, it’s not a bad place to do it,” said Mark Hackett, chief of investment research at Nationwide.

Bank of America strategists have advised clients to increase their exposure to utilities and real estate, predicting these sectors will benefit from a lower interest rate environment due to their attractive dividends.

Defensive stocks, such as those in real estate, utilities, and consumer staples, are favored because consumers prioritize essential expenses like rent, utility bills, and household goods, even when they cut back on discretionary spending.

Gold has reached new all-time highs since March, driven by a surge in demand for safe-haven assets. Lower interest rates enhance gold’s appeal, as it does not yield income, making it more attractive compared to dividend-paying stocks and interest-bearing bonds. Gold prices have risen 23% this year, outpacing the S&P 500.

“We haven’t had to make the case for gold nearly as much as we’ve had to make the case for OUR gold,” said Jonathan Rose, CEO of Genesis Gold Group. “Retirees in particular have appreciated our faith-driven approach to rollovers and transfers of their retirement accounts into physical precious metals.”

The benchmark 10-year Treasury yield settled at 3.653% on Wednesday, marking the second-lowest level of 2024. Bond yields typically decline as prices rise, and investors often seek the safety of U.S. Treasurys during turbulent market conditions.

Meanwhile, the S&P Global Investment Manager Index’s risk appetite reading has dropped to its lowest level since May 2023. This monthly survey, which gathers insights from approximately 300 institutional investors, reveals concerns about valuations, political uncertainty, and recession risks.

Despite the current market dynamics, stocks appear historically expensive. The S&P 500 is trading at 21 times its expected earnings over the next 12 months, compared to its 10-year average of 18.

The pressing question for investors is whether the current surge in defensive assets is a temporary trend or the beginning of a new market regime.

“We’ve gone through a few of these headfakes, but we think this one is real because rates are going to start coming down,” said Emerson Ham III, senior partner at Sound View Wealth Advisors. “If you get a rally where you’ve got defensive names doing well but also technology performing on a fundamental basis, that’s kind of the best of both worlds.”

(DCNF)—American technology company Nvidia has shot up in value over the last several years following speculation about the potential economic impact of new computing technology that some investors believe could increase productivity substantially.

Nvidia posted huge year-end quarterly profits Tuesday evening, up 265% from a year prior as the company continues to grow at breakneck speeds, according to the company’s fourth quarter results. The fourth quarter gain beat expectations and led to a $277 billion stock rally on Wednesday, up 16.3% in just the day, making it the largest single-day increase in the New York Stock Exchange’s history, according to Reuters.

Investor hype around Nvidia is due to its stake in the semiconductor market, where it commands a vast majority of market share in artificial intelligence (AI) related technologies, experts told the Daily Caller News Foundation. Many investors predict that AI and greater computing efficiency will be a boon to businesses, which could greatly increase productivity using the technology for a wide array of applications.

“Nvidia has already made strides in increased efficiency, which is a tremendous advantage in this regard due to the sheer volume of calculations that must be performed to make a technology like AI possible,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “With the ability to position data centers virtually anywhere, size is not really a major issue anymore for chips, but efficiency is due to increased energy prices and environmental regulations. Being on the cutting edge of chip technology puts a firm in a position to truly command the market.”

Nvidia was first founded in 1993, introducing products related to 3D graphics, particularly for gaming and multimedia creation, and later invented the graphics processing unit in 1999, taking a big step for computing power, according to the company’s website. The company also claims to have sparked the era of modern AI in 2012, way ahead of trends around the technology, giving it a commanding lead on other technology companies that are now looking to catch up and expand into AI.

“Nvidia controls most (about four-fifths) of the chip market for AI-related technologies,” Antoni told the DCNF. “The explosion of demand around AI has boosted chip demand too, leading to growth forecasts for Nvidia that were completely off the table just a couple years ago. Like all stock prices, no one can say for sure if Nvidia’s current popularity is warranted because stock prices are speculation on future earnings, and the future is by definition uncertain. This is particularly true for AI, where so much of the potential is unknown.”

Nvidia’s stock price has exploded over the past few years, measuring less than $40 a share at the start of 2019, peaking at over $310 a share in November 2021, before sliding to around $127 a share in October 2022, ultimately climbing all the way to around $800 a share in February 2024, according to MarketWatch.

Nvidia breaks stock market record with a $247 billion one-day market cap surge, as reported by Bloomberg.

Renowned for AI & fast computing, #Nvidia hits a major financial milestone with its staggering revenue.

Stock up nearly 280% in the past year!#AI #Crypto #Stocks pic.twitter.com/Qv9aQ3LP14

— Christiaan (@ChristiaanDefi) February 23, 2024

“The fact that the demand for these products is growing indicates to me that our society, these companies, educational organizations, all the different users of AI believe that there is great value here that can improve our lives,” David Inserra, a fellow for free expression and technology at the Cato Institute, told the DCNF. “I can’t predict that it will certainly be that way. But every indicator that we have indicates that the market is saying there’s great value here. I think that we’d be foolish to ignore that important market indicator.”

Generative AI powered by the type of technology Nvidia is leading the way on is already finding several applications in business despite being in its infancy, including in customer service, cybersecurity, personal assistants, inventory management, accounting and more, according to Forbes. The U.S. is also looking to use semiconductor technology and AI in military applications and is trying to prevent China’s access to the equipment to maintain a technological and militaristic edge.

American companies controlled around 48% of the market share in the semiconductor market in 2022, compared to 7% in China, according to Statista. South Korea controlled the second-largest market share with 19%, followed by Japan and the European Union at 9%.

The Biden administration has placed a number of restrictions on the semiconductor industry to ensure continued American supremacy, including putting sanctions on several Chinese chip manufacturers in October 2022 to prevent them from working with American firms. Congress has also approved $39 billion in direct funding for chip manufacturers as part of the August 2022 Chip and Science Act.

The rollout of the funds has so far failed to bring a substantial number of chip manufacturing plants into operation, with several companies pushing back new plant completion dates to 2025 or later due to volatility in chip prices and government funding uncertainty.

The growth of generative AI powered by new chips has also led to concerns that the technology is being given a liberal skew, such as Google’s AI chatbot Gemini taking a nuanced position on the terrorist organization Hamas’ stance on the violent eradication of Israel and whether China is committing genocide against the Uyghur people.

Nvidia is part of what has been dubbed the Magnificent Seven Stocks, which are stocks that have delivered a large portion of stock growth in the past few years, according to Yahoo Finance. Tesla, an electric vehicle (EV) company, has had a similar meteoric rise starting slightly earlier but has since remained relatively stagnant in 2024 as other competitors in the EV field emerge, raising concerns that Nvidia might not live up to expectations.

“This is always the market dynamic, right? If someone comes along and delivers a more desirable product, well then yeah, sure,” Inserra told the DCNF about the potential for Nvidia to lose its current investor hype. “Right now we’re talking a lot about AI, but what if a new kind of AI, a better type or even more advanced, better type of technology emerges and uses different kinds of computing power? We don’t know what the future of innovation could bring. So to that extent, yeah, it’s possible that Nvidia isn’t going to be the golden child of this forever, but from what I’ve read, it seems like they have been forward-leaning and looking for ways to move into new spaces in the use of their processors for AI, and so right now they have that leg up.”

Nvidia declined to comment to the DCNF.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].

A new report from Bloomberg tells the story of Peter Doelger, who by the age of 78 was worth around $50 million. Doelger built his own company, sold it to a conglomerate and successfully bet the proceeds on stocks and oil.

Doelger is doing well financially but not mentally. His family says he started to show signs of dementia around the time he made his fortune, and after signing it all over to JPMorgan Chase & Co. to manage, Doelger’s holdings dwindled in value all the way down to around $1.5 million.

The family’s claim is that Doelger’s fortune was mismanaged by JPMorgan without his knowledge. Financial experts at the banking giant were supposed to keep Doelger’s money and holdings intact and growing, but instead they allegedly whittled it down to just about nothing.

In the end, Doelger and his family had to sell their Boston condominium and move in with relatives since his fortune is now a thing of the past. And apparently this kind of thing is happening more and more as wealthy baby boomers on the verge of dementia get taken advantage of by the corrupt financial system.

“We had 100 percent trust in them that they will manage our assets,” stated Peter’s wife Yoon about Doelger’s relationship with JPMorgan. “We didn’t expect them to make us a fortune but at least make us comfortable.”

(Related: Learn more about how to protect against Alzheimer’s and dementia with these five foods.)

Wall Street, a den of vipers

The Doelgers are now fighting it out legally in Boston federal court to try to hold JPMorgan accountable for letting a wealthy client sliding into dementia to lose almost his entire fortune at the company’s hands. The Doelgers’ hope is that JPMorgan will eventually be forced to pay out at least some of what was lost.

Peter, who is now 86, can barely even remember what happened leading up to this point. In an interview, he attempted to tell the story of how he built his business, but got lost in the conversation trying to explain what happened after that, including his relationship with JPMorgan.

A court-ordered exam declared Peter unable to testify in the litigation, and both sides of the case have agreed not to contest this ruling.

“The couple’s situation spotlights an issue that has always lurked on Wall Street but is surging in scale as the baby boom generation retires with a record stockpile of wealth,” Bloomberg reports.

“Legions of boomers have enough saved to be deemed ‘accredited’ or ‘sophisticated’ investors under U.S. securities laws, qualifying them to buy into riskier, complex asset classes with juicy commissions for intermediaries. Yet many of those clients will inevitably face cognitive decline. The industry lacks a formal system to detect when that happens.”

A Securities and Exchange Commission (SEC) study on financial sophistication found that households of accredited investors who are at least 80 years in age typically score far worse on competency tests than unaccredited investors a few decades younger.

“This case screams out for more attention to how waning cognitive abilities affect older people’s capacity for financial decision-making and independent financial management,” commented Naomi Karp, a consultant on aging, law and policy who worked as an analyst for the Consumer Financial Protection Bureau, about the Doelger case.

“We need to put more responsibility on financial firms since they are well-positioned to detect warning signs.”

More related news coverage can be found at Collapse.news.

Sources for this article include:

• Bloomberg.com
• NaturalNews.com
• SEC.gov

The Fed’s decision not to raise rates keeps the target range between 5.25% and 5.50%, marking the third meeting in a row where the Fed chose to not adjust the rate, according to an announcement from the Federal Reserve following a meeting by the Federal Open Market Committee (FOMC). The Fed also released its future projections of the economy and the federal funds rate, with FOMC members projecting rates will be lowered to a median of 4.6% by the end of 2024, indicating three interest rate cuts if the Fed sticks to its typical 0.25% change pattern.

“Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter,” the FOMC statement reads. “Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated…The Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”

The last rate hike was at the committee’s meeting in July and was the 11th in a series of hikes starting in March 2022 in an effort to combat inflation, which peaked at 9.1% in June 2022.

“The Fed is unlikely to raise their interest rate targets any further in 2024,” Dr. Thomas Hogan, senior fellow at the American Institute for Economic Research, told the Daily Caller New Foundation. “The question is when they will start cutting rates. The median FOMC projection is that inflation (PCE inflation, not CPI) will fall to 2.5% in 2024 and that the fed funds rate will be cut to 5.1% by the end of 2024. If inflation appears to be coming down, then we should expect their economic projections to show lower projections for inflation and the fed funds rate, indicating they will begin cutting rates sooner than previously expected.”

Inflation decelerated slightly in November, with the consumer price index (CPI) rising 3.1% year-over-year compared to 3.2% in October, far above the Fed’s 2% target. Core CPI, which excludes energy and food, remained even more elevated at 4.0%, following significant recent deflation in the price of gasoline.

The economy showed strong growth in the third quarter of 2023, with gross domestic product rising 5.2% compared to just 2.1% in the second quarter. The U.S. job market continues to slow, with the economy adding 199,000 jobs in November, with around 47,000 of those jobs coming from the return of striking workers in the auto and motion picture and sound industries.

Top investment banks and asset managers are mixed in their forecasts for the U.S. economy in 2024, with strong growth but high inflation and slowing job numbers clouding recession predictions and complicating the Fed’s long-term goal to reduce inflation without triggering a recession.

“But even if the Fed does start cutting rates in 2024, it is unlikely to lower them by much,” Hogan told the DCNF. “The FOMC’s most recent projections show the FOMC keeping interest rates above 5% in 2024 and not getting below 4% until 2026.”

Sound off about this article on the Economic Collapse Substack.

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Image by Amanda via Flickr, CC BY 2.0 DEED.

This obsession is more than a shared enthusiasm for environmental conservation. Rather, this obsession places so-called “green energy” policies above profits and has effectively become the business model of the world’s largest corporations.

But how did this happen?

This net-zero business model did not occur in a vacuum. Executives did not just wake up one day and determine that it would be wise to change their practices to paint reliable and affordable fossil fuels as evil and to advance emissions reduction goals by a mutually shared end-date.

This change is the product of years of collaboration between radical left-wing activists, private and public asset managers and woke corporate executives. Indeed, it has become increasingly clear that the corporate world’s efforts to eradicate the use of fossil fuels has been carefully orchestrated by vast “networks” of money managers, environmental and shareholder activists and corporate elitists.

The evidence of such collusion is mounting – and much has been occurring in plain sight.

Consider the tactics of Ceres, a left-wing environmental group that serves as the “collaborator-in-chief” when it comes to getting corporations to adopt net-zero carbon emissions goals. In its own words, Ceres uses “its powerful networks and global collaborations of investors, companies and nonprofits, [to] drive action….”

These “networks” include the largest asset managers and corporations. Its “Investor Network,” which includes more than 220 institutional investors managing more than $60 trillion in assets, touts some of the world’s largest asset managers and shareholders: BlackRock, State Street Global Advisors, CalPERS and both the New York City and New York State Comptrollers. It also includes labor unions like the AFL-CIO and AFSCME, and activists such as the Sierra Club Foundation and As You Sow.

The list of corporations included in Ceres’ “Company Network” is no less remarkable. It includes: Disney, Amazon, Target, Coca-Cola, PepsiCo, Citigroup, and JPMorgan Chase, to name a few.

Participation in these networks apparently comes with a price tag. “Network Member Dues” made up more than $3.6 million – or 11 percent – of Ceres’ operating revenue in FY2021. What this suggests is that the world’s largest asset managers, like BlackRock, give money to Ceres to participate in its “Investor Network” alongside left-wing shareholder groups like As You Sow. As You Sow is responsible for spearheading net-zero emissions proposals at companies like Amazon, who is also a member of Ceres’ “Company Network” and presumably pays member dues, who then receives the As You Sow proposal, that is voted on by other “Investor Network” members like CalPERS, State Street, and yes, BlackRock.

Say what?

Despite then what appears to present massive conflicts of interest between network members, particularly asset managers and executives who have a fiduciary duty to shareholders, and between companies who are competitors, collaboration between “network” members abound, all in the name of eradicating fossil fuels.

Ceres makes no attempt to hide its collusive cheerleading. It touts its effective facilitation of “collective action” to “stabilize the climate.” And it has been so successful at deploying these tactics that it is a founding partner of Climate Action 100+, which it calls, “the world’s largest investor engagement initiative working to get the biggest corporate polluters to become net-zero businesses.” Climate Action 100+ also happens to be a “collaborator” with the “Investor Network,” demonstrating the many layers upon which these networks operate.

This handholding between corporations (who are otherwise competitors) to advance ESG initiatives and an anti-fossil fuel agenda, has caught the eye of lawmakers. That’s because antitrust laws prohibit anticompetitive business practices. And after all, aren’t the vast networks of collaboration between companies the very thing that groups like Ceres and its partners in the ESG lobby like to brag about?

Well, the ESG lobby has apparently done such a good job bragging about its partnerships that federal lawmakers are investigating whether actions by Climate Action 100+ have resulted in antitrust violations. However, Climate Action 100+ is only one of many such collaborations  being investigated, creating a veritable whack-a-mole out of the ESG climate cartel.

As House Republicans continue their efforts to address the radical ESG agenda and the threat its efforts to destroy the oil and gas industry poses to our economy and national security, it may want to consider whether targeted antitrust protections are needed to address the vast “networks” of anti-fossil fuel activists. Until then, it may also find more “collaborators” to investigate, hiding in plain sight.

Sarah Rehberg is Deputy Director of the Free Enterprise Project at the National Center for Public Policy Research.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].

Investing is allocating capital to a productive business to create more wealth. Investing has more risk—and potential reward—than saving. Today, however, what most people think of as saving is actually investing.

That’s because most people take the excess of their production over consumption and put it into the stock or bond market. Most people understand that it’s not optimal to simply hold fiat currency, which the central banks continuously debase. So they put their money into other assets, primarily bonds and stocks.

In other words, fiat currency and inflation have ruined saving for most people. It has forced them further down the risk curve into stocks, bonds, and other investments in a struggle to maintain their purchasing power. However, there is no guarantee those investments will even keep up with inflation. But suppose they do. They will then be subject to a capital gains tax, even if it’s only a nominal gain, not a real one.

That means savers face the daunting task of not only keeping up with inflation but also outpacing the capital gains tax on the nominal gain just to maintain their purchasing power. That’s made saving an impossible task for most. Before the era of easy-to-produce fiat currency, people could simply save in money, which was either gold or a derivation of it.

There was no need for a dentist, construction worker, or taxi driver also to become a hedge fund manager to try to keep their head above water. That’s how the fiat era monetized stocks, bonds, real estate, and other assets that wouldn’t have otherwise been.

For example, 50 years ago, the market cap of all the gold in the world was roughly equal to the market cap of all the stocks in the world. Today, the market cap of gold is about 10% of the world’s equities. It’s an indication of how capital that used to be allocated to saving in gold became allocated to the stock market instead.

That doesn’t mean there isn’t a legitimate place for stocks, bonds, and real estate—there certainly is. It’s just that people would use them for investing—or, in the case of real estate, its utility value—and not as savings vehicles. Bonds in general and Treasuries in particular, became the “go-to” savings vehicles to store wealth in the fiat era.

However, I think that will change soon as bonds will be incapable of storing value in the face of financial repression. With 2022 being the worst year for Treasuries in American history, the shift away from bonds has probably already begun. That means a lot of the capital parked in bonds will be looking for a new home that functions as a better store of value.

Gold: Make Saving Great Again

Gold has been mankind’s most enduring store-of-value asset because of its unique characteristics. Gold is durable, divisible, consistent, convenient, scarce, and most importantly, the “hardest” of all physical commodities.

In other words, gold is the one physical commodity that is the “hardest to produce” (relative to existing stockpiles) and, therefore, the most resistant to debasement.

Gold is indestructible, and its stockpiles have built up over thousands of years. That’s a big reason why the new annual gold supply growth—typically 1-2% per year—is insignificant.

In other words, nobody can arbitrarily inflate the supply. That makes gold an excellent store of value and gives the yellow metal its superior monetary properties.

People in every country of the world value gold. Its worth doesn’t depend on any government or any counterparty at all. Gold has always been an inherently international and politically neutral asset. This is why different civilizations worldwide have used gold to store value for millennia.

From a historical point of view, using government bonds as a savings vehicle is a relatively new concept. As it fades, I expect people will rediscover the world’s premier store-of-value asset: gold.

It’s already starting to happen in a big way… Last year, central banks bought roughly 37 million ounces of gold—a multi-decade record.

It’s no coincidence that the worst year ever for US Treasuries also saw the highest central bank gold buying spree in over 55 years.

As Treasuries’ political and debasement risks rise, nobody should be surprised that demand for gold is skyrocketing. I expect this trend to accelerate.

Instead of parking their savings in Treasuries, people, companies, and countries will increasingly park their savings in gold. We are already seeing that with central banks. So far this year, central banks have bought about 25% of worldwide gold production.

China is one of the biggest gold buyers. China has dumped over 25% of its massive stash of Treasuries since 2021. At the same time, China has bought vast amounts of gold—five million ounces since last November, or nearly $10 billion.

Observation #9: Gold is the top store-of-value alternative to Treasuries. As demand for Treasuries falls, demand for gold will soar.

Central banks and governments are the largest individual holders of gold in the world. Together they own over 1.1 billion troy ounces of gold out of the 6.8 billion ounces humans have mined over thousands of years.

And those are just the official numbers that governments report. The actual gold holdings could be much higher because governments are often opaque about their gold, which they consider a crucial part of their economic security.

Russia and China—the US’ top geopolitical rivals—have been the biggest gold buyers over the last two decades. It’s no secret that China has been stashing away as much gold as possible for many years.

China is the world’s largest producer and buyer of gold. Russia is number two. Most of that gold finds its way into the Chinese and Russian government’s coffers.

As the trend of financial repression unfolds, I expect central banks to accelerate their Treasury sales and gold purchases.

Conclusion

Here is the investment thesis for gold:

• Observation #1: The US government can’t repay its debt. Default is inevitable.
• Observation #2: It will not be an explicit default.
• Observation #3: The debt will continue to grow at an accelerating pace.
• Observation #4: Foreigners are not buying as many Treasuries.
• Observation #5: The US government cannot allow interest rates to rise much further.
• Observation #6: The Federal Reserve is the only big buyer of Treasuries stepping up, which means currency debasement.
• Observation #7: The US government will use financial repression to debase the currency in a controlled fashion, though it could spiral into out-of-control inflation.
• Observation #8: Treasuries will no longer be the “go-to” store-of-value asset as people look for alternatives.
• Observation #9: Gold is the top store-of-value alternative to Treasuries. As demand for Treasuries falls, demand for gold will soar.

In short, we are on the verge of a paradigm shift in international finance as gold replaces Treasuries as the world’s premier store-of-value asset.

Article cross-posted from International Man.

The last time the international monetary system experienced a paradigm shift of this magnitude was in 1971. Then, gold skyrocketed from $35 per ounce to $850 in 1980—a gain of over 2,300% or more than 24x.

I expect the percentage rise in the price of gold to be at least as significant as it was during the last paradigm shift.

That’s because this coming gold bull market could be fundamentally different than other cyclical bull markets. It will be riding the wave of a powerful trend: the re-monetization of gold as the king store-of-value asset. It could lead to the biggest gold bull market ever.

While this megatrend is already well underway, I believe the most significant gains are still ahead. That’s precisely why I just released an urgent report on where this is all headed and what you can do about it… including three strategies everyone needs today. Click here to download the PDF now.

This latest scandal is going to be downplayed by corporate media, the White House, and even most Republicans on Capitol Hill. The reason for the first two is obvious, but Republican lawmakers have a different reason for not pressing to have Granholm removed. She is guilty of the very thing many of them have done as well. With that said, here are the details via Discern News Wire:

Biden’s Energy Secretary, Jennifer Granholm, has admitted to providing false testimony regarding her ownership of individual stocks. In a letter sent to Senate Energy and Natural Resources Committee leadership, Granholm acknowledged that she still held shares in six companies, despite stating under oath on April 20 that she had sold all of her shares. She clarified that while she divested from stocks that could pose a conflict of interest, she retained assets that were deemed non-conflicting by government ethics officials.

Granholm expressed regret for her mistake in the letter, stating, “I mistakenly told the Committee that I did not own any individual stocks, whereas I should have said that I did not own any conflicting stocks.”

To rectify the situation and align her financial holdings with her testimony, she divested her remaining stock holdings on May 18, 2023, even though they were considered non-conflicting. The specific companies in which she held shares were not disclosed in the letter but will be included in her Annual Public Financial Disclosure Report in mid-June.

Furthermore, Granholm revealed that her husband, Daniel Mulhern, owned shares worth $2,457.89 in Ford Motor Company, which were sold on May 15. She acknowledged that these shares were not disclosed in her previous Public Financial Disclosure Reports and that she had mistakenly believed her family’s divestiture of Ford was complete in early 2021. Granholm assured that she and her spouse thoroughly reviewed their financial assets and found no other omissions in her financial disclosure report.

Granholm emphasized her commitment to upholding the highest ethical standards as a public servant and expressed regret for the oversight regarding her spouse’s interest in Ford. She assured that all the transactions mentioned in the letter would be disclosed in a Public Financial Disclosure Periodic Transaction Report in July.

An Energy Department spokesperson reiterated Granholm’s commitment to transparency and ethical standards, stating that she promptly divested non-conflicting assets upon realizing her error. The spokesperson emphasized Granholm’s dedication to leading the Department of Energy in a manner that prioritizes the interests of the American people.

According to Unusual Whales, a trades tracking service, members of Congress moved their investments around at extremely convenient moments. Here’s a brief recap of some of the trades noticed:

BREAKING NEWS: The New York Times has just reported on Congressional members trading during the banking crisis. They showed how members traded during the crisis, while the public worried. Here is the list of members highlighted:

Representative Jared Moskowitz sold shares of Seacoast Banking Corporation worth $65,000 to $150,000 on March 10th. $SBCF fell 20% afterwards.

Representative Jared Moskowitz sold shares of Seacoast Banking Corporation worth $65,000 to $150,000 on March 10th.$SBCF fell 20% afterwards.

— unusual_whales (@unusual_whales) April 20, 2023

Representative Dan Goldman, a Democrat, sold shares of First Republic Bank, $FRC, on March 15. Dan Goldman has been making hundreds of stock trades since he started his congressional duty.

The wife and children of Representative Ro Khanna, sold First Republic, $FRC, on March 15th. Representative John Curtis, Republican, sold shares in First Republic , $FRC, on March 16, the day the “bailout” occurred.

The wife and children of Representative Ro Khanna, sold First Republic, $FRC, on March 15th.

Representative John Curtis, Republican, sold shares in First Republic , $FRC, on March 16, the day the "bailout" occurred.

— unusual_whales (@unusual_whales) April 20, 2023

Representative Nicole Malliotakis, a Republican from New York, bought shares of New York Community Bancorp, $NYCB, after private discussions with NY bank regulators and labeled it as her spouse despite single. The stock rallied 40% two days later after buying Signature assets.

Many members said it was their trust or advisors, not them trading, to the New York Times. Yet once again during crisis, Congressional portfolios benefited while the public panicked. You can find all their trades forever and free at http://unusualwhales.com/politics.

While Congress splits time between pretending to do something about our failing economy and pretending it’s not failing at all, they’re busy making sure their own investments are safe. This is corruption, plain and simple.

When it comes to reading the financial tea leaves, there are three groups that smart investors look to for hints about what to expect. The first is government. Policies not only affect investments directly but also send cues to big players about which way the winds will turn. The second group is made up of central banks such as the Federal Reserve. Contrary to what they tell the public, their primary goal is to protect their own money with a distant secondary goal being to keep the economy stable.

It’s the third group that doesn’t get nearly as much attention that often gives the best clues about what’s coming down the pike. This group of mega-money managers, which is made up of corporations like Blackrock, Vanguard, and State Street, often have the most direct influence over the financial affairs of individual investors. While governments and central banks can make macro moves to affect industries or economy in general, it’s the money managers who have the most influence over companies big and small.

Moreover, they directly impact investments of individuals by making moves in their retirement portfolios.

This is why Friday’s discussion between Fink and Wall Street analysts is raising eyebrows. While many investors are concerned about the banking industry’s instability, BlackRock sees it as a huge opportunity. According to Business Insider:

Upheaval in the banking sector could create openings for growth in parts of BlackRock like cash management, the firm’s Aladdin technology business, its alternatives business, and its advisory arm, Goldman Sachs analysts led by Alex Blostein said in a note to clients on Friday.

The alternatives business, where managers offer products like private credit and private equity, has been a focus of growth. The Financial Times reported last December that BlackRock had “discussed whether to pursue a takeover of private markets manager Carlyle but decided against it,” citing three people with knowledge of those discussions.

But it isn’t what these huge financial corporations say that gets the most interest. It’s what they exclude from their discussions that often point investors toward smart money. It’s noteworthy that as Fink and others at BlackRock talked of inorganic investments in certain areas, they didn’t mention BlackRock Gold, the wing of the company tasked with investing in precious metals companies. Considering they’ve boosted investments into these companies up to 70% this year, one would think portfolios backed by physical precious metals would be worthy of a mention.

Instead, crickets. Their silence says more than any words they may have uttered.

In an interview with FOX Business, Jonathan Rose, CEO of Genesis Precious Metals, said, “Both gold and silver added 15% to 20% over the last six months, while the overall market was in the range of 2% to 4% growth.”

“Things are just starting to heat up,” he added. “In fact, the long-term projections in the precious metals market could get even higher.”

“And regardless of the Fed’s position, few Americans have faith that the U.S. dollar will strengthen, providing a strong case for allocating a portion of funds to a tangible and secure asset,” Rose added.

If BlackRock, central banks, and governments are looking toward precious metals in general and gold in particular to back their own investments, one might conclude the same for individuals with retirement and wealth to protect.