Latest from Brien Lundin

Bye-Bye Fed?

It wasn’t long ago that my prediction for Fed rate hikes was considered crazy and outlandish.

Now some of the world’s most respected experts are saying that I was right all along.

Dear Fellow Investor,

I’m more accustomed to being thought of as a wild-eyed gold bug than one of the more conservative analysts in the market.

But that’s how extreme the market — and investor sentiment — has swung in recent days.

Remember, for over a year now I’ve been proclaiming to anyone who’d listen that the Fed was going to run into a brick wall, and that its rate hike campaign would end far earlier than anyone was then predicting.

Exactly a year ago, for example, I wrote this in Gold Newsletter:

“...then there’s the longer-term story: Massive debt loads in developed economies, unprecedented money creation through quantitative easing policies and 5,000-year lows in interest rates as a result of ZIRP and NIRP have created a situation wherein we will never see ‘normal’ interest rates again.

“Over human history, the natural rate of interest has hovered around 6%. But given today’s crushing debt loads, interest rates of even 3%-4% would crater the Federal budget in the U.S., for example.

“Interestingly, a number of Fed governors/presidents have recently admitted that their target for the Fed Funds rate is only 2.5%. Yet they’re also jonesing for 2%+ inflation. That means their stated goal is an environment of ultra-low (0.5%) or even negative real interest rates. That’s enormously bullish for precious metals.

“Throw in the potential of a stock market correction/crash and/or a recession that would force the Fed back into easing mode, and the future looks bright for gold and silver.”

Well, that’s exactly what’s happened. Stomach-churning sell-offs in the stock market have led the Fed to worry about the health of the “wealth effect” they created...and to indicate that they’re going to reconsider their pace of rate hikes.

In other words, they blinked.

This doesn’t surprise me. Just about everyone called me crazy when I wrote this in February:

“As I’ve reported in these pages, a number of Fed presidents/governors have said that the ‘terminal rate’ for their hiking campaign is merely 2.5% on the fed funds rate. With that rate now at 1.5%, that means the Fed only has four quarter-point hikes left in its program.

“And that’s assuming that the Fed will be able to keep to its plan. As we’ve seen repeatedly, events — and the economy — often derail their well-laid plans. If the FOMC is forced to hold off on rate hikes again this year, it will be tremendously supportive of both stocks and gold.

“And if the Fed is forced to publicly halt its rate-hike program altogether in reaction to a major hiccup in the economy or a serious correction in the stock market, the reaction in gold would be explosive.

“Frankly, I don’t expect the Fed to find the room to raise rates three or more times this year. And I wouldn’t be surprised to see them forced to hold pat.

“Regardless, even if everything goes without a hitch and they follow their plan to a T, their rate-hike program would end this year.

“Few people are even mentioning this fact.”

Now, in recent months the Fed has also evolved their view of a terminal rate, moving it to 3.0%-3.5%. That led me to adjust my prediction from an end of the rate hikes this year to sometime around the middle of 2019.

I should’ve kept to my original, more extreme prediction. But it looks like it’s going to be right on target.

Golden Opportunities continues below...

Crazy Becomes The Consensus

Just over the past 24 hours, it’s amazing how many respected authorities have come around to my way of thinking.

In an interview yesterday on CNBC, famed trader John Tudor Jones said he doesn’t expect that the Fed will hike at all in 2019.

Goldman Sachs dialed back their forecast of four hikes next year to only a 50% chance of a hike next March.

Last night, Former Fed Chair Janet Yellen told an audience that “there are gigantic holes in the system” and “the tools that are available to deal with emerging problems are not great in the United States.” Because of over-leveraged loans, she said she worries “that we could have another financial crisis.”

This morning, Former Dallas Fed President Richard Fisher says U.S. economic growth has slowed down, and he’s worried that the Fed hasn’t “put enough nuts on the tree” with rate hikes. In other words, they won’t be able to cut rates sufficiently to have any real effect.

Of course, that means the Fed would have to resort to QE almost immediately.

And in that event, the gold price would soar.

The bottom line is that, as I wrote last week, the array of fundamental issues that were working against gold have now completely shifted in favor of the yellow metal.

We may still see gold trade sideways to lower over the next few days, going into next week’s Fed meeting and expected rate hike. (The gold price is actually unchanged as I write.)

But after that last rate hike — which could be the last one for months, if not years — we could see another big rally in gold. If that happens in the same fashion as we’ve seen the last three years, selected junior gold stocks will soar.

In a few days I’m releasing my year-end buy list...the stocks I feel are best positioned to leverage gold’s gains...in our December issue of Gold Newsletter.

If you want to get that list, and a full year of Gold Newsletter and my on-going recommendations, just CLICK HERE.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference

P.S. Another reminder: Our faculty of world-renowned experts at the 2018 New Orleans Investment Conference predicted the current stock market volatility, along with other startling predictions for the year ahead.

Better yet, they gave up their top picks in junior resource stocks — not only in gold, but silver, copper, uranium and more.

You can get all the exciting details in our New Orleans 2018 audio and video recordings. To get yours, CLICK HERE.

Latest from Brien Lundin
#Listrak\DateStampLong#

Bye-Bye Fed?

It wasn’t long ago that my prediction for Fed rate hikes was considered crazy and outlandish.

Now some of the world’s most respected experts are saying that I was right all along.

Dear <>,

I’m more accustomed to being thought of as a wild-eyed gold bug than one of the more conservative analysts in the market.

But that’s how extreme the market — and investor sentiment — has swung in recent days.

Remember, for over a year now I’ve been proclaiming to anyone who’d listen that the Fed was going to run into a brick wall, and that its rate hike campaign would end far earlier than anyone was then predicting.

Exactly a year ago, for example, I wrote this in Gold Newsletter:

“...then there’s the longer-term story: Massive debt loads in developed economies, unprecedented money creation through quantitative easing policies and 5,000-year lows in interest rates as a result of ZIRP and NIRP have created a situation wherein we will never see ‘normal’ interest rates again.

“Over human history, the natural rate of interest has hovered around 6%. But given today’s crushing debt loads, interest rates of even 3%-4% would crater the Federal budget in the U.S., for example.

“Interestingly, a number of Fed governors/presidents have recently admitted that their target for the Fed Funds rate is only 2.5%. Yet they’re also jonesing for 2%+ inflation. That means their stated goal is an environment of ultra-low (0.5%) or even negative real interest rates. That’s enormously bullish for precious metals.

“Throw in the potential of a stock market correction/crash and/or a recession that would force the Fed back into easing mode, and the future looks bright for gold and silver.”

Well, that’s exactly what’s happened. Stomach-churning sell-offs in the stock market have led the Fed to worry about the health of the “wealth effect” they created...and to indicate that they’re going to reconsider their pace of rate hikes.

In other words, they blinked.

This doesn’t surprise me. Just about everyone called me crazy when I wrote this in February:

“As I’ve reported in these pages, a number of Fed presidents/governors have said that the ‘terminal rate’ for their hiking campaign is merely 2.5% on the fed funds rate. With that rate now at 1.5%, that means the Fed only has four quarter-point hikes left in its program.

“And that’s assuming that the Fed will be able to keep to its plan. As we’ve seen repeatedly, events — and the economy — often derail their well-laid plans. If the FOMC is forced to hold off on rate hikes again this year, it will be tremendously supportive of both stocks and gold.

“And if the Fed is forced to publicly halt its rate-hike program altogether in reaction to a major hiccup in the economy or a serious correction in the stock market, the reaction in gold would be explosive.

“Frankly, I don’t expect the Fed to find the room to raise rates three or more times this year. And I wouldn’t be surprised to see them forced to hold pat.

“Regardless, even if everything goes without a hitch and they follow their plan to a T, their rate-hike program would end this year.

“Few people are even mentioning this fact.”

Now, in recent months the Fed has also evolved their view of a terminal rate, moving it to 3.0%-3.5%. That led me to adjust my prediction from an end of the rate hikes this year to sometime around the middle of 2019.

I should’ve kept to my original, more extreme prediction. But it looks like it’s going to be right on target.

Golden Opportunities continues below...

Crazy Becomes The Consensus

Just over the past 24 hours, it’s amazing how many respected authorities have come around to my way of thinking.

In an interview yesterday on CNBC, famed trader John Tudor Jones said he doesn’t expect that the Fed will hike at all in 2019.

Goldman Sachs dialed back their forecast of four hikes next year to only a 50% chance of a hike next March.

Last night, Former Fed Chair Janet Yellen told an audience that “there are gigantic holes in the system” and “the tools that are available to deal with emerging problems are not great in the United States.” Because of over-leveraged loans, she said she worries “that we could have another financial crisis.”

This morning, Former Dallas Fed President Richard Fisher says U.S. economic growth has slowed down, and he’s worried that the Fed hasn’t “put enough nuts on the tree” with rate hikes. In other words, they won’t be able to cut rates sufficiently to have any real effect.

Of course, that means the Fed would have to resort to QE almost immediately.

And in that event, the gold price would soar.

The bottom line is that, as I wrote last week, the array of fundamental issues that were working against gold have now completely shifted in favor of the yellow metal.

We may still see gold trade sideways to lower over the next few days, going into next week’s Fed meeting and expected rate hike. (The gold price is actually unchanged as I write.)

But after that last rate hike — which could be the last one for months, if not years — we could see another big rally in gold. If that happens in the same fashion as we’ve seen the last three years, selected junior gold stocks will soar.

In a few days I’m releasing my year-end buy list...the stocks I feel are best positioned to leverage gold’s gains...in our December issue of Gold Newsletter.

If you want to get that list, and a full year of Gold Newsletter and my on-going recommendations, just CLICK HERE.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference

P.S. Another reminder: Our faculty of world-renowned experts at the 2018 New Orleans Investment Conference predicted the current stock market volatility, along with other startling predictions for the year ahead.

Better yet, they gave up their top picks in junior resource stocks — not only in gold, but silver, copper, uranium and more.

You can get all the exciting details in our New Orleans 2018 audio and video recordings. To get yours, CLICK HERE.