saveyourassetsfirst3 |
- Gold Stocks an Extraordinary Contrarian Buying Opportunity
- Gold Daily and Silver Weekly Charts - Pop Go the Weasels - Thank You To Zerohedge et al.
- The Screaming Fundamentals For Owning Gold
- The screaming fundamentals for gold
- Venezuela Enforces Fingerprint Registry to Buy Groceries: What to Do Before Rationing Starts in America
- 9 Exciting Gold And Money Charts
- Gold Investors Weekly Review – April 4th
- 2,250 tonnes or 40% of the world’s physical gold trade passed through Dubai last year
- Sprott's John Embry: Gold And Silver Making A Bottom?
- Jim Willie: Gold Standard Will Return- It is Coming. It Will Shake the World
- Power Of Elites Influences Gold And Silver Price More Than China’s Gold
- A Well-Rounded Model
- The Gold Turning
- Bill Black: The Kamikaze Economics of Forcing Austerity on the Ukraine
- [KR584] Keiser Report: Institutionalized Stealing
- Frequently Asked Questions on Silver
- TECHNICAL - Gold NFP Rally Likely to be Short Lived- $1327 Key Resistance
- Gold Rallies Sharply Post NFP, Currently Testing a Key Resistance Level
- Stratigraphy and host rock controls of gold deposits of the northern Carlin Trend
| Gold Stocks an Extraordinary Contrarian Buying Opportunity Posted: 06 Apr 2014 12:00 PM PDT
 The bottom line is the hated gold stocks remain an extraordinary contrarian buying opportunity today. They've almost never been cheaper relative to gold, which drives their profits and hence ultimately stock prices. After the last episode of similar extreme undervaluation during the stock panic, the leading gold-stock index more than quadrupled over the subsequent years. [...] The post Gold Stocks an Extraordinary Contrarian Buying Opportunity appeared first on Silver Doctors. |
| Gold Daily and Silver Weekly Charts - Pop Go the Weasels - Thank You To Zerohedge et al. Posted: 06 Apr 2014 09:30 AM PDT Le Cafe Américain |
| The Screaming Fundamentals For Owning Gold Posted: 06 Apr 2014 09:12 AM PDT
The plethora of systemic risks that make gold a wise investment continue to expand, as does the shocking imbalance between increasing demand and tightening supply. We are approaching a moment in the great transfer of wealth where the dividing line between safety and ruin may quite simply come down to this one question: Got gold? |
| The screaming fundamentals for gold Posted: 06 Apr 2014 09:03 AM PDT "The forces that are going to drive gold higher in current dollar terms are the very same trends that are going to leave most people, and the planet, much worse off than they are now." |
| Posted: 06 Apr 2014 08:00 AM PDT
 What if you were forced to "register" in order to buy groceries? And what if, through that registration, the food you bought could be tracked and quantities could be limited? That's exactly the plan in Venezuela right now. Last year in Venezuela, it became a crime to "hoard" food, and the country's Attorney General called upon [...] The post Venezuela Enforces Fingerprint Registry to Buy Groceries: What to Do Before Rationing Starts in America appeared first on Silver Doctors. |
| 9 Exciting Gold And Money Charts Posted: 06 Apr 2014 07:52 AM PDT In his latest monthly editorial, writer and researcher Peter de Graaf has pulled several charts together which show the status of the gold market. Apart from a positive seasonal influence, the fundamentals still point to strength in gold. The “fundamenals” in this context are basically the relative strength of precious metals compared to other finanical assets, in particular money (as reflected in the monetary base on the US Fed balance sheet) and stocks. The author adds some basic technical analysis to his article. Both short and long term, gold seems well positioned (the mid long term, though, is not explicitly elaborated). Historically the month of March is not very 'gold-friendly'. April and May are more conducive to providing a rally. The first chart is courtesy Seasonalcharts.com. The March pullback came on schedule and appears ready to turn into a rally.
The next chart shows the number of US dollars that are currently circulating (courtesy Mark J. Lundeen). The number is over 1 trillion dollars, and rising exponentially. This is in addition to the trillions of dollars in digital form, which make up the money supply.
This next chart shows the US Monetary Base, which continues to rise exponentially. The two tiny 'blips' in 2000 and 2001 represent the large amounts of money shoveled into the system by Mr. Greenspan to keep the system afloat. The amount of money that is added at this time is mind boggling. During the last 30 day period the base increased by 80 billion dollars. No 'tapering' here. While not all of this money will find its way into gold and silver, some of it will, and as the rally that began on December 31st picks up steam, more and more of this liquidity is expected to move into the precious metals sector.
The following chart compares gold to the US monetary base. The interpretation is that gold is cheaper than at any time during the past 100 years! The current reading is 0.4! When it climbs back to the 4.0 zone; that would imply a gold price 10 times higher than today. Chart courtesy: Macrotrends.net.
The chart below confirms the fact that gold is very cheap at this moment. Mr. Lundeen compares the current gold price to the purchasing power of a dollar in 1920. He calculates that gold needs to rise to $8750 in today's dollars to return to what it was worth in 1920. This sets the stage for a continuation of the current gold bull market.
The following chart shows the energy that is being provided by the US FED (by way of money printing), benefiting both the S&P (red line), and gold (black line). The gold price was pushed out of this relationship when huge numbers of contracts for paper gold were executed at the COMEX in mid-April 2013. On Friday April 12th 2013 at the opening of trading at the COMEX, 3.4 million ounces of gold contracts were dumped in the June contract. On Monday April 15th, another 10 million ounces hit the tape. The amount of gold (in the form of contracts) that was dumped over the two-day period represented 15% of total world gold production. Meanwhile, to fill demand from China, hundreds of tonnes of physical gold were released by the Bank of England, while a large amount of gold was pried away from GLD the gold ETF, in response to rising demand from Asian countries. Chinese and Indian people love bargains! That gold is now gone! It cannot be sold again! This has created a situation where, like a rubber band, the gold price is expected to snap back into the previous alignment.
Featured below is the daily gold chart. Price broke out at the 200DMA (red line) in February and since meeting with resistance at $1400, a test of the breakout has been underway. The supporting indicators (green lines), are providing hints that support is available here. A breakout at the black arrow will tell us that a bottom may well have been carved out. The green arrow points to a 'golden cross', with the 50DMA moving into positive alignment with the 200DMA.
Featured below is the index that compares gold to the S&P 500 index. In late 2011 this index became temporarily tilted in favor of gold. The reversal of direction that came about as gold dropped in price while the S&P 500 rose to new highs, appears to be ready to change direction again. Confirmation will come about when price breaks out at the blue arrow. The three supporting indicators (green lines) are ready to turn up.
This last chart compares the price of gold to the US long bond. The blue line is the 400 week moving average. Up until 2003 it made sense to own bonds and not gold. The green arrow points to the moment when gold took charge. Since then gold has outperformed bonds. In 2011 gold had moved up a bit 'too far too fast' and a pullback in the relationship caused this index to return to the 400WMA, where it is finding support. A breakout at the blue arrow will cause many people to become interested in gold, and bond money is expected to flow into the gold sector, as the eleven year old trend picks up steam.
About the author: Peter Degraaf is an online stock trader with over 50 years of investing experience. He publishes a daily market letter. For a sample copy please visit www.pdegraaf.com. Courtesy of the excellent website Nowandfutures.com for the Greenspan quotes used in this article. |
| Gold Investors Weekly Review – April 4th Posted: 06 Apr 2014 06:36 AM PDT In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week's strengths, weaknesses, opportunities and threats in the gold market. Gold closed the week at $1,303.64, up $8.37 per ounce (0.65%). The NYSE Arca Gold Miners Index rose 0.52% on the week. This was the gold investors review of past week. Gold Market StrengthsGold rose $8.37 per ounce for the week, as the futures contract posted its best one-day performance since March 12 on Friday. U.S. payrolls rose 192,000 in March, missing analysts' expectations for a 200,000 gain. The weekly price action was also supported by positive import estimates from India and expectations of further stimulus in China, where Shanghai physical premiums turned positive.
Gold sales by Japan's biggest bullion retailer increased five-fold in March as investors accelerated purchases ahead of the nation's sales tax increase on April 1. The demand was in response to Prime Minister Abe's tax hike as the government seeks to address the nation's swelling public debt and to stoke inflation. Similarly, India's gold imports are set to more than double in March from February's 33 tonnes, according to a government official with direct knowledge of the matter. Gold Market WeaknessesData from the U.S. Mint shows that sales of gold coins dropped 32 percent in March from February, despite strong sales for silver coins which rose 43 percent. Similarly, the Perth Mint reported sales of 30,177 ounces in March, down from 47,000 ounces in February. Gold Market OpportunitiesBoth the buy-side and the sell-side are warming up to gold. This week, Pecora Capital, a Florida-based asset manager, said gold will return to a record within five years as weaker equities spur demand for a safe haven. On the sell-side, Deutsche Bank raised its 2014 and 2015 gold price estimates, while Australia and New Zealand (ANZ) Bank raised its views to neutral after being bearish on the metal. ANZ analysts say their physical gold indicator increased toward the end of March, even in the face of a weaker Chinese currency. South Africa's platinum sector strikes have reached the 10-week mark as auto sales growth in the U.S. reached 10 percent this March, increasing the potential for a price spike amid supply constraints. The strikes, in which the unions have appeared intransigent, may put thousands of platinum workers out of work permanently, as mining companies seek to mechanize mines to halt cost escalation. A recent proposal criticizes the Black Empowerment status quo and calls for profit-sharing programs with employees that align their interests with those of the company and ensure all related parties receive economic benefit, not just the Black Empowerment groups. Gold Market ThreatsNatixis analysts argue downside pressures for silver are much higher than those of gold given the average mining costs for silver are around $7 per ounce (Natixis estimate). The bank has a base case for silver at $18.60 an ounce for 2014, and $15 per ounce in 2015, noting that prices could go as low as $10 per ounce. In their view, the liquidation of a portion of the nearly 20,000 tonnes of silver held in exchange traded products (ETPs) is a latent threat to the silver market. Executives from Caterpillar are expected to testify next week before a U.S. Senate subcommittee on allegations that the heavy equipment manufacturer used a foreign subsidiary to avoid paying $2.4 billion in U.S. taxes. This type of pressure on corporations to repatriate funds at a massive cost to investors is not new, and we may see more in the mining sector where companies pay taxes in the countries where they operate, not necessarily in the country where their head offices are located. |
| 2,250 tonnes or 40% of the world’s physical gold trade passed through Dubai last year Posted: 06 Apr 2014 06:33 AM PDT Dubai became the biggest transit city for gold in the world last year with around 40 per cent of the global physical gold trade passing through the city at 2,250 tonnes, according to the executive chairman of the Dubai Multi Commodities Centre Ahmed bin Sulayem speaking at the opening of the annual Dubai Precious Metals Conference today. ‘The Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum set us a target of 50 per cent when the DMCC started in 2002 and we are still a little short,’ he said. ‘Gold worth a total of $75 billion was moved through Dubai in 2013.’ African summit The theme of the conference this year is African engagement. Mr. Bin Sulayem commented that out of the 8,300 companies employing 89,000 staff in the DMCC there are 633 from Africa. Both gold and diamonds from Africa are processed in Dubai. The key address this afternoon came from gold industry veteran John Hathaway from Toqueville Asset Management in New York who has $2 billion under his management. He expressed ‘confidence in the gold price resuming its upward path because of the ‘architecture of the gold sector and monetary policies around the world.’ However, he warned of third party risk even in allocated gold accounts where the bank’s assets were likely to be seized, and suggested non-banking institutions were better places to hold gold. In his view the ‘architecture of the gold sector’ is liable to breakdown at some point due to ‘complex and arcane leasing processes’ and the ‘leverage of paper against physical gold’. No forecast That said he would not give a gold price forecast, let alone try to time one. Maybe he is just tired of being wrong as are many gold commentators. The last bull throwing in the towel is usually a very positive indicator. Next up was the president of the American Business Council of Dubai & the Northern Emirates, Ramsey B. Jurdi with a stern lesson of how US sanctions on Iran were also designed to impact local businesses if they traded in precious metals with Iranians. Basically they would have the same sanctions imposed on them, preventing US dollar transfers, for example and business with US entities. Maybe the atmosphere of the DPMC was a little subdued this year after the gold price falls of 2013 but the audience was up from 350 to over 500, a better reflection perhaps of the strength of the bullion trade in Dubai. |
| Sprott's John Embry: Gold And Silver Making A Bottom? Posted: 06 Apr 2014 06:02 AM PDT We have the great pleasure and honor to have with us today John Embry. John joined Sprott Asset Management LP as Chief Investment Strategist in March 2003 with more than $7 billion under management. He plays an instrumental role in developing the corporate and investment policy of the firm. John, an industry expert in precious metals, has studied the gold sector for over thirty years and has accumulated industry experience as a portfolio management specialist since 1963. In a recent interview, I had the opportunity to chat with John over the phone about the U.S. Economy, the Fed, gold and silver. The following is a transcript of this interview exclusive to Seeking Alpha. JP: What are your comments on the new Fed's new chairwoman Janet Yellen's monetary policies and tapering moving forward from here? JE: I think I've said before that I view Janet Yellen as "Ben Bernanke lite," |
| Jim Willie: Gold Standard Will Return- It is Coming. It Will Shake the World Posted: 06 Apr 2014 06:00 AM PDT
 An important backlash is coming to the perverse USFed monetary policy. An urgent call for global action has been seen in the G-20 and BRICS nations. The Iran sanction workarounds are to serve as the prototype for gold trade settlement. Shanghai will set the oil price in Yuan terms. China will insist on making [...] The post Jim Willie: Gold Standard Will Return- It is Coming. It Will Shake the World appeared first on Silver Doctors. |
| Power Of Elites Influences Gold And Silver Price More Than China’s Gold Posted: 06 Apr 2014 05:25 AM PDT Being successful in trading has a lot to do with finding the developing "story" behind the price structure of a market. We had good results in February because we keyed into some very important pieces of market information that would lead to a likely result for the direction of price, or what we call "the story of the market." We had less success in March because the focus was more on trying to catch up to the story, where being just a step or so behind is not as rewarding, even resulting in loss. For the past several weeks, we have shifted focus on what we see as the truer "story" of the PMs market, [Precious Metals]. Some may think we have gone off on an unrelated tangent talking about the elites and fiat currency. The PM community has maintained a relentless focus on how much gold is being imported by China, the diminishing supply of physical gold at COMEX and LBMA, and a host of other popular statistics that support what seems to be important for gold and silver adherents in their beliefs that should ultimately lead to higher prices. The Law of Supply and Demand is what determines price. Not enough are looking at how the elites are able to distort that Natural Law and bend it to their will. It is the power they can exert, and distort, on any aspect of human life, at least in the Western world, that keeps gold and silver at unnaturally low prices. The more cogent issue is, for how much longer can elites keep their unnatural control over the natural forces of Supply/Demand? Longer than most expect, which is what we have been saying for some time. It is quite possible the disappointing expectations for 2013 may repeat in 2014. Here is how we see the developing "story" that explains why gold and silver have not changed trend. "Give me control of a nation's money, and I care not who makes the laws." Mayer Amschel Bauer, aka Rothschild We cannot think of any sentence that has had, and continues to have a more pervasive, as well as perverse, influence over mankind than this one, the key to the Rothschild dynasty in its quest for world dominance. Nor is there any more corrupt and criminal enterprise than that led by the elites with their absolute control over the Western financial world and the entire Western political landscape. The subtext to the Rothschild formula of control is, "If you do not comply with our rules, you will be destroyed." That destruction can be brought about financially or literally. The United States, formed as a Constitutional Republic, has been replaced by a mirror, de facto corporate federal government that has substituted [destroyed] the organic Constitution and the Republic itself, and replaced it with a deceptive federal constitution. The switch in constitutions is just as we addressed the deception in switching U S currency with fiat Federal Reserve Notes, aka the "dollar." [See Gold And Silver - They Are Money] Almost all Americans live under the delusion that they still enjoy freedoms guaranteed by the organic Constitution, not recognizing the bait-and-switch federal constitution that only grants privileges, not inherent rights. The Common Law, recognizing God-given natural rights, has been replaced by pagan Roman law, which is statutory. Law by statute should be a huge clue for the uninformed that something is wrong, but few ever think to question anything promoted by the bankrupt corporate government. What does this have to do with the price of gold and silver? Everything! Another huge clue over this is the fact that several indicators of unprecedented demand for both gold and silver have had zero impact on the market. For the past few years, the only focus by the gold and silver crowd has been how many tonnes of gold China has been importing, marveling at the record amount moving from West to East, trying to calibrate as closely as possible how many tonnes it is. It should be enough to know that it is a record amount and that it continues to this day. Instead of expending so much time, energy, and effort determining numbers, just accept it as a given. It has been priced into the market. The more pertinent question is why has this widely known and accepted factual circumstance not had any impact on the price of gold? Does everyone really need to know how many gold and silver coins are being bought by the public from issuing mints around the world? Is it really important to know how much gold is being smuggled into India? Is there anyone who keeps tabs on PMs that is unaware that Switzerland has been running shifts around the clock recasting gold to meet Chinese preferences for smaller bars that are .9999 fine? More information already priced into the market. Yet, all this has been the heart of reporting by the PM crowd, plus coverage by the most respected minds in gold and silver, all end up concluding that gold should be $10,000 the ounce, silver $150 – $250 the ounce, or even higher for both. What are the current prices for gold and silver? Gold is about 13% and silver about 10% of projected prices. What is wrong with this picture? Almost everyone is looking at the same information and maintaining the same expectations, and all are missing the less obvious but more relevant reasons why gold and silver struggle. Their "story," while valid, is wrong. It is the power of the elites! "Give me control of a nation's money, and I care not who makes the rules." Again, the subtext is, "Play by our rules or you will be destroyed." A common trait shared by Lincoln and Kennedy is that both decided to issue a U S currency that was not central bank-created. Both presidents were "destroyed." Reagan decided to shrink the federal government, ignoring the "rules of the game." After a botched assassination attempt, Reagan went on a huge federal government expansion. He got the message, "Play by our rules, or else." He also got lucky. These are the more famous people who displeased the elites. Less is known about the recent dozen or so bankers who were "suicided." The fact that one chose "suicide" by a nail gun, firing several into his body before determining he was not succeeding and needed to give himself one in the head, should remove any question from any doubter that these were not self-directed choices, in every instance. The point is to convey the degree of power exercised by the elites, and there is no doubt about the fact that they control every aspect of your life, how you live, what you read and watch, what you eat, and of late, what little you can say or do about it without being branded as a terrorist. We have been saying that those in power will not give it up easily, more likely never, and they will destroy currencies and countries in the process of protecting their parasitic power, but it is this power of the elite that determines where gold and silver are. [A not to be forgotten part of the elite's agenda in protecting their fiat v gold is war.] No disrespect to the well-deserved respect for the precious metals pundits and the legion writers with expertise in the precious metals arena, but none are addressing the failure of the natural order of supply and demand as the supposed source for determining price. There is a power struggle going on between West v East, and until it plays itself out, the West has a vested interest in suppressing the price of gold and silver in order to preserve the worthless fiat "dollar" as the elite's chosen world reserve currency. Look at the lot of Cyprus, Greece, Ireland, whose populations have been forced to pay to keep their failed banks alive. It would have made more sense to let the insolvent banks fail, but the elites will not tolerate such fate for their corrupt system, for it would then have a domino effect on the rest of every other insolvent Western bank, propped up by the dictates of unelected officials: all central banks, BIS, IMF, the EU, etc. "Give me control of a nation's money, and I care not who makes the laws." Once one begins to understand the profound impact that sentence has had since the Rothschild dynasty took over the Western world, unnoticed, unseen, but very much present in ways most people cannot fathom. Unless and until people start to question why things are the way they are, nothing will change. Well, that was until China decided they did not like having their gold stolen from them by the Western central banking cartel. It is payback time. China does not stand alone. The formation of the BRICS nations has been in response to the reckless abandon with which the US has been exporting it inflationary Treasury Bonds, backed by the petro-dollar as the world's reserve currency. The ever-growing Eastern bloc of nations is in the process of putting an end to Western world financial dominance via fiat: fiat "dollar," fiat Pound, fiat Yen, fiat Euro, fiat Franc, etc, etc. China has been accumulating as much of the world's supply of gold as it can, [the focus of the PM community], and the accumulation has been at bargain-basement prices. China has no interest in seeing the price of gold rally, certainly not during the phase of accumulation that will then lead to mark-up. That country is willing to accommodate the West in suppressing gold during the last phase of their waning power. History tells us every fiat currency fails. It is just a matter of time. China is well aware of the fate that faces the West, and China is willing to let that demise take its natural course. Here are some clues China has given that most PM analysts are not addressing. China's time frame is much longer than the "do it now" time frame in the West. The reason China will not interfere with the West's misguided intent to suppress gold: for one, China gets it at low prices. For now, China wants to keep the Renminbi stable, [even a little suppression going on there]. It does not want to tie its currency to gold because it would immediately cause it to rally sharply. Staying pegged to the US "dollar," instead, its currency resembles the other international currencies. Unable to match the "creditworthiness" of the "dollar," China's currency officially remains somewhat subordinated to the US fiat. Were the Renminbi allowed to be gold-backed, China's currency would then become too strong, relative to the rest of the world and put China at a competitive disadvantage. For as long as China wants to remain low-key, it prefers a lower gold price. If the world's largest holder of and greatest demand for gold does not want to see it rise in value, and the West does not want gold to rally, that may be enough to keep the paper game alive. Consequently, do not expect China to be a catalyst for establishing a gold-backed currency. It serves China best to allow the West to maintain its duplicitous control over gold and silver. With no country in a hurry to have a gold-backed currency, one of the biggest factors for seeing the price of gold sky-rocket is off the table. This factor is far more significant than all the demand statistics paraded each week by PM writers. We keep saying to pay attention to the charts. They show no signs that would lead to any panic by the West. For as long as the elites remain in control in the West, gold and silver are just a few more [manipulated] commodities. The power of the elites denies the PM of their true status as money. The East is in progress of making a change. One sign of the West's determination to hold onto power is Obama's pimping for the elites, telling Russia sanctions will be imposed over the Crimea situation. Russia is entering into a barter with Iran, exchanging oil for Russian goods and using the Ruble for any contract, eliminating the US petro-dollar. Obama issues yet more threats of sanctions, all because Russia chooses to buy oil from Iran and use its own currency in a trade in which the U S has zero involvement, other demanding Russia use US currency. Obama to Putin: "We are imposing sanctions on Russia, [but we still want you to use our "dollar" in all your trade agreements]. Russia has lots of natural gas resources. The US has lots of debt. Putin to Obama: "What's in YOUR wallet?" Somehow, we feel Obama will end up singing, "Crimea River." No one knows when things will change but change they will, and only then will the price of gold and silver find their natural level. It is always worth making the distinction between buying and owning physical gold and silver v futures. We encourage buying and personally holding the physical to the extent of one's ability to buy both on a consistent basis, regardless of price. The endless printing of digital currency ensures the financial picture for the U S will end badly. Those without gold and silver will suffer considerably. Those with physical gold and silver will also suffer, but they will be better positioned to survive the financial chaos sure to follow. |
| Posted: 06 Apr 2014 05:18 AM PDT Market Compass is built around a set of models that bring together macroeconomic, valuation and trend-following inputs to give a perspective on the attractiveness of different asset classes around the world, from the perspective of a Canadian or U.S. dollar investor. The core models are updated weekly to reflect market action and economic data, although some inputs are only available monthly (sometimes with a lag) and some (such as earnings and other valuation measures) are only available quarterly. We have published the model outputs weekly, and as might be expected, there has been a lot of minor fluctuation week-to-week, as trend-following, momentum and volatility measures react to fluctuations in market prices. This raises a question about how to interpret the model outputs - should an investor who updates their models weekly respond to these variations? What is the threshold of significance for changes? There are many reasonable ways to approach |
| Posted: 06 Apr 2014 04:40 AM PDT Precious Metals Stock Review |
| Bill Black: The Kamikaze Economics of Forcing Austerity on the Ukraine Posted: 05 Apr 2014 10:28 PM PDT By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives We all understand why Russia is waging economic war on the Ukraine, but why is Obama doing so? The New York Times' web site has posted a remarkable Reuters story (dated April 5, 2014) entitled "Ukraine PM Says Will Stick to Austerity Despite Moscow Pressure."
"Unpopular austerity measures" are, of course, among the best things Ukraine can do to aid Russia's effort to "destabilize" the Ukraine. Indeed, Yatseniuk admits this point later in the article.
So, our strategy is to play into Putin's hands by inflicting austerity and turning the Ukraine into "a Western hell." Not to worry says our man in Kiev, because he's sure that ten million ethnically-Russian citizens of Ukraine will gladly "pay the price of independence" to live in "a Western hell." That strategy seems suicidal. Indeed, Yatseiuk emphasizes that he knows the strategy he is following is suicidal.
Six Crazy Degrees of AusterityThe Reuters article presents a stream of incoherent odes to the supposed benefits of financial and political suicide (kamikaze economics and politics). It was at this juncture in reading the article that I began to have a sick suspicion about Yatseiuk's ideological dogmas and likely background. Sure enough, the article soon confirmed my worst fears: "Yatseniuk [is] a former economy minister, lawyer, and economist by education." Another theoclassical economics acolyte is eager to sacrifice his economy and his fellow-citizens on the altar of austerity. The rush to austerity is not a product primarily of Yatseiuk's ideology, but of the EU's worship of austerity. The IMF serves as the EU's "leg breaker" for the Ukraine. The EU is making clear that it will only provide aid if the IMF is in place to extort the Ukraine to inflict austerity on an economy that is already in recession. This is crazy on multiple dimensions. First, the Ukraine defines the concept of "political instability." Playing into Putin's hands by inflicting austerity on the Ukraine and producing "hell" is ludicrous. Second, the Ukraine is in a severe recession. Austerity makes recessions worse. The Ukraine should be spending material amounts of money (from its perspective; tiny amounts from our perspective – or compared to the cost of a military conflict) dealing with Ukraine's acute problems. Third, the Ukraine has an inflation problem not because of excessive demand (demand is grossly inadequate) but because Russia has dramatically increased the cost of energy. Austerity is not the answer to this variant of cost-push inflation. Fourth, the Ukraine has a tiny economy and small debts (relative to the West). The EU and the U.S. can easily pay off Ukraine's debts (or if they prefer any debt owed to non-Russian entities) and replace it with very low interest rate debt in the Ukraine's own currency with interest payments deferred for a decade. Ukraine has made the double mistake of trying to peg its currency to the dollar and to borrow in foreign currencies. The U.S. and EU could solve these problems, going forward, by giving the Ukraine a fresh start. This would speed the Ukraine's economic recovery and remove one of the potential sources of an economic shock that could harm the EU and U.S. economic recoveries. Fifth, the Obama administration purports to oppose the eurozone's austerity policies. The case against inflicting austerity on the Ukraine is even stronger. Obama is under enormous criticism from Republicans for failing to take more decisive actions to support the Ukraine. The Ukraine offers the administration the perfect opportunity to do the right thing economically and politically, to demonstrate his leadership, and to force the Republicans to admit that austerity is a destructive policy that the U.S. needs to prevent by forceful action. Sixth, instead, austerity dogma trumps – simultaneously – good economics, good domestic politics in the U.S. and the Ukraine, and U.S. national security. That's how insanely powerful the failed dogma of austerity has become. The CEOs who run the banks that loan money to the Ukraine are more powerful than the Pentagon and our State Department. ConclusionThe Ukraine faces severe problems beyond Russia and its energy dependence on Russia. It has an enormous informal business sector because it is so difficult to start a legitimate business. Ecuador recently adopted a law, and new technology, to make it radically faster to start a legitimate small business. This is great for entrepreneurs, growth, reduced corruption, and collecting taxes. It is a radical reform that people of all political stripes can support. Similarly, ant-fraud and corruption efforts can save the Ukraine billions of dollars and spur growth. President Obama could develop an aid, stimulus, debt relief, and reform package for the Ukraine based on ideas like this that would that have broad appeal and help the working class and entrepreneurs. It would also be good for peace and security without being hostile to anyone. Instead, we are committing kamikaze capitalism that is so crazy that it should be criminal. |
| [KR584] Keiser Report: Institutionalized Stealing Posted: 05 Apr 2014 05:19 PM PDT We discuss high frequency fraud, picking prices and then filling in the trades to get to that price. In the second half, is the second half of Max’s interview with Jim Rickards about his new book, The Death of Money. In this second half, they talk more about mutually assured financial destruction, the US dollar and the danger of insolvency. |
| Frequently Asked Questions on Silver Posted: 05 Apr 2014 05:05 PM PDT Silverstockreport |
| TECHNICAL - Gold NFP Rally Likely to be Short Lived- $1327 Key Resistance Posted: 05 Apr 2014 04:40 PM PDT dailyfx |
| Gold Rallies Sharply Post NFP, Currently Testing a Key Resistance Level Posted: 05 Apr 2014 04:35 PM PDT actionforex |
| Stratigraphy and host rock controls of gold deposits of the northern Carlin Trend Posted: 05 Apr 2014 02:32 PM PDT nbmg |
| You are subscribed to email updates from Gold World News Flash 2 To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment