Follow the Money to a “Historic Success"

Posted On Sep 1, 2016 By Dave Gonigam

  • “Cables are past” and other English-as-a-second-language clues to a tech hoax
  • The newest sign we’re onto something with this Apple wireless-charging thing
  • Six months of manufacturing growth goes kerflooey
  • Dollar weakens today, and Rickards says this is just the beginning
  • Amazon rethinks student-debt bondage… 35 prepaid cellphones and a sweet part-time job… the upside to the latest War on Cash scheme… and more!

As Apple rumors go, this one is exceedingly lame. 

Check out this phony mockup of a new Apple ad, or maybe a website splash page — complete with fractured English like, “The new headphones comes [sic] with your iPhone right in the box.”

Airpods

Two days ago, we told you how Apple is likely to ditch the headphone jack on the newest iPhone, due for release next Wednesday. You’ll need either Bluetooth headphones or a clunky adapter to plug into the Lightning port.

Today the interwebz are buzzing about how each new iPhone will come with wireless earbuds like those pictured above… and this is supposed to be the salvation of flagging iPhone sales.

One website that shall remain nameless says these “Airpods” will be how you’ll signal to all your friends that you have the latest and greatest model… much the same way the original white iPod headphones signaled you’d stepped up from a Walkman. Your friends won’t want to be left behind, and they’ll have no choice but to upgrade too.

That would make sense if the new iPhone were as cutting-edge as the original iPod 15 years ago. But a pair of crappy wireless headphones as standard equipment? That’s evolutionary, not revolutionary.

No, if Apple wants to start moving the needle on iPhone sales again, it needs to do something revolutionary.

As we’ve been saying for a while now, Ray Blanco of our science-and-wealth team believes that will be wireless charging. And not some silly thing where you have to plop the handset down on a charging surface… but the freedom to keep using your phone as long as you’re within 15 feet or so of the charger. You could be in the next room with your phone and still charge up.

What’s more, Ray’s onto the story of a tiny company working on this wireless charging technology, a company with an unnamed “key strategic partner.”

The evidence is circumstantial… but nonetheless compelling… that Apple is said partner. Something worth keeping in mind in advance of the big iPhone announcement next Wednesday.

The newest piece of evidence comes back to one of Wall Street’s most famous truisms.

It’s attributed to Peter Lynch — the man who became a legend with Fidelity’s Magellan Fund in the late 1970s and ’80s.

“Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise.”

That is, executives and directors might unload shares to finance a kid’s college education or buy a midlife-crisis Maserati or fork over a huge divorce settlement (after splurging on the midlife-crisis Maserati). It doesn’t necessarily reflect on the company’s prospects.

But it does reflect on the company’s prospects — and very well — if they’re accumulating shares.

Last Friday, five insiders of this tiny company disclosed, as the law requires, that they’re buying shares.

What’s more, these are brand-new shares. Usually when a company floats new shares, it’s a sign of desperation for a new source of cash to come through the door, and the share price sinks like a stone.

But when insiders soak up the bulk of new share issuance? Says Ray: “I consider this multimillion-dollar investment by those most intimately knowledgeable about the company, its technology, its development plan and its partners both actual and potential to be an important vote of confidence in the company’s potential to grow into a historic success.”

And instead of falling, the share price is now rising — enough that Ray is raising the buy-up-to price on this tiny firm, thanks to this most bullish of catalysts.

If Apple takes the veil off wireless charging next Wednesday using technology developed by this company, that would be far more bullish still.

If you passed up the chance to look into this opportunity before, now you have another chance. Check out Ray’s up-to-the-minute research at this link.

So much for the modest revival of U.S. manufacturing in 2016.

It being the first of the month, the ISM manufacturing index is out. Numbers above 50 indicate a growing factory sector; numbers below 50, a shrinking one.

Among dozens of economists polled by Bloomberg, the average guess for today’s number was 52.2. The lowest was 51.3.

The actual number was 49.2. Oops!

Factories Back in a Funk

Not only is it the first sub-50 reading in six months, the internals of the report stink. New orders, backlog orders, production, employment — all those registered sub-50 readings too.

Between the ISM number and another tumble in oil prices, the major U.S. stock indexes are slumping again today. As we write, the Dow has shed more than 75 points, to 18,322. Crude has taken a nearly 3% spill to $43.39.

Hot money flowing out of stocks is flowing into Treasuries and gold. The 10-year Treasury yield rests at 1.56%. Gold has rallied a bit to $1,314, largely because of dollar weakness. The dollar index has slipped to 95.6, perhaps because the ISM number makes a Fed rate increase this month a bit less likely.

Jim Rickards is on record as saying there’s no way the Fed raises this month… but if there’s a “good” jobs number tomorrow, we’re sure the rate-hike chatter will resume in earnest. Oy…

More dollar weakness is in the cards beyond today, Jim adds.

“On Sunday, the G-20 will gather in China for the most important G-20 meeting since the original ‘Shanghai Accord’ was hammered out on Feb. 26. This is a chance for the G-20 to review progress since February and update their foreign exchange battle plan.”

As a refresher, the Shanghai Accord was a secret deal brokered by the International Monetary Fund aimed at pulling China back from the economic abyss. Under this deal, the euro and yen were to strengthen and the dollar was to weaken. Because of the Chinese yuan’s loose peg to the dollar, the yuan would weaken without the Chinese formally devaluing — which freaked out global markets at this time a year ago.

So now it’s time for a six-month checkup. The yuan and the dollar remain roughly at parity. The yen has strengthened considerably against the dollar. The only part that’s not working according to plan is that stronger euro. “This is mostly due to pre- and post-Brexit anxieties about Europe and a resulting flight to dollars,” Jim explains. “European banks are also facing a dollar shortage and are swapping euros for dollars to meet their dollar-denominated liabilities.

“When you know what central banks are trying to accomplish and see that they have failed to accomplish it, forecasting is simple,” Jim goes on. “You can be sure that central banks will just try harder.

“A stronger euro and weaker dollar are still the objects of central bank policy. This will be a big topic of discussion at the G-20 on Sunday.

“The same countries that created the Shanghai Accord will be looking for ways to strengthen the euro to help out China. The fact that the meeting is being held in China and that Chinese President Xi is also president of the G-20 this year will add to the pressure.”

As Jim’s been saying for several weeks, the G-20 meeting is the prelude to much bigger events tanking the dollar at the end of this month. If you haven’t given his warning your attention yet, time’s running out.

For the record: Amazon and Wells Fargo have called off their student loan partnership, only weeks after making a huge deal about it.

The way it was supposed to work, subscribers to Amazon’s “Prime Student” service — basically Amazon Prime at half the yearly fee — would be eligible for a 0.5 percentage-point discount on student loans from Wells Fargo.

No one’s saying why the deal’s off. We don’t really care; we mention it only because the subject came up during one of our periodic rants about the student loan bubble in July. Heh…

Suing telemarketers — nice living if you can get it?

The site Legal News Line tells us of a woman in Pennsylvania named Melody Stoops who sued companies that dialed her with robocalls — mostly banned under the federal Telephone Consumer Protection Act.

Thing is, she kept at least 35 prepaid cellphones sitting around in a shoebox, basically waiting for them to ring, for the express purpose of filing these suits. The penalties run roughly $500-1,000 per violation.

“It’s my business. It’s what I do,” she told a federal district court. Unfortunately for her, a judge has denied her standing in one of the cases — on the grounds that she acquired the phones with the goal of suffering legal injury.

Who says the courts have lost their way?

“You know, I might enjoy watching the unintended side effects of that ‘two kinds of money’ scheme you described yesterday,” a reader writes.

“The consequence of that policy that you did not mention is simple. Individuals and (especially) businesses don’t deposit cash they receive. They spend it to buy the supplies and equipment they need, pay their workers, pay their owners, etc.

“In other words, as long as everyone pays each other cash, nobody suffers any bankster losses and everyone deprives the predators-that-be of that much information about what they buy and sell. Would I love to see cash businesses become the norm? Absolutely! Wouldn’t you? Wouldn’t Jim? I think so.”

“I appreciate that the war on cash is very real,” writes another.

“Some of the players come from the world of positive intentions such as reducing crime and tax fraud. Some of the players strongly resemble those who wish to control the national or world economy. Some want to preserve a world where they can live out their lives in a manner not resembling a pawn in a computer program.

“I find myself in that last category. While not denying your hypothesis, my question is one of likelihood that nations can prevail against a large fraction of the population that will turn all of their creativity into assuring the failure of said plans.

“When cash systems fail, barter seems to emerge. When fiat currencies become problematic, precious commodities assume a dominant role in exchange transactions. If cash that one holds has a lower valuation than digital cash, how does one value the gold or silver one physically possesses? The commodity cannot ever assume the discount of the physical currency, because the commodity will simply be valued so as to take that discount into the calculation.

“If governments are so silly as to go in that direction, they will actually be encouraging the growth of goods and barter as units of exchange, something that has always been anathema to the tax man. Wouldn’t be the most stupid thing government has ever done, but still reasonably high in the Darwin Award continuum.”

The 5: Well, that’s the glass-half-full interpretation, to be sure. But don’t discount the prospect of draconian enforcement methods.

Or maybe it wouldn’t even come to that. Remember, we said this scheme could likely be implemented only under cover of a crisis. It’s not hard to imagine people transacting in physical cash and barter being demonized by our government as unpatriotic ingrates refusing to do their part for the recovery.

President Trump might say they’re enabling illegal immigrants, who rely so much on the cash economy. President Clinton might say they’re in league with Putin; judging by her recent speeches, anyone who objects to her policies must be in league with Putin.

Don’t get us wrong; we’d love to see a widespread withdrawal of people’s consent from such a scheme. But if it’s not widespread enough, expect the backlash to be fierce.

Best regards,

Dave Gonigam
The 5 Min. Forecast

P.S. Now that the calendar has turned to September, we wish to pass along a warning Jim Rickards first shared a month ago. Jim, take it away…

I’ve got an urgent warning today for anyone who will listen…

In short, the dollar’s days are numbered, and I finally have a date in mind.

Mark this date on your calendar now: Friday, Sept. 30.

On this date, one single event could spell disaster for the U.S. dollar, effectively gutting the U.S. stock market and cannibalizing your retirement savings.

If you’re not prepared, this event could ultimately END what we’ve come to know as the American way of life…

Now, I’ve preached the downfall of the U.S. dollar before… but this is different…

There is an exact date and time for when I expect the dollar to take a massive hit. (Click here to see the specifics.)

And when it does, you’ve got no idea how radically this may impact your financial safety… yet.

Click here now to get ready.


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