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Sunday, July 12, 2015

Gold World News Flash

Gold World News Flash

The Great FreedomFest Debate Was Like Watching Tom and Jerry

Posted: 11 Jul 2015 11:18 PM PDT

by Keith Weiner

 

With apologies to his fans, Jerry is an evil little mouse who constantly pesters Tom the Cat. Tom tries and tries, but cannot seem to overpower someone who is a fraction of his size and strength.

Watching Stephen Moore attempt to debate Paul Krugman was like that.

The "economics" of Krugman is Keynesian economics. It consists of central planning your life by force, because market failure. And Krugman repeated this phrase "market failure" several times. Of course the solution was always government intervention.

Here is an interesting endorsement about one of Keynes' books.

"Fascism entirely agrees with Mr. Maynard Keynes, despite the latter's prominent position as a Liberal. In fact, Mr. Keynes' excellent little book, The End of Laissez-Faire (l926) might,
so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud."

This was said by someone who knows all about fascism, Benito Mussolini. Fascism is a corporatist system. Although it has private ownership in name, it's all under government control. Krugman is a real economic lightweight who proposed fascism for nearly everything that came up. His debate tactics consisted of context-dropping, asserting simple fallacies, and cherry-picking data.

In the TV cartoon, Jerry would steal something and run into his mouse hole. Tom would be left whacking at the hole with a broom, in vain. At FredomFest, Krugman would say that the government must spend more to get the economy out of recession. Moore disagreed, and Krugman displayed a chart showing government spending and GDP growth rates for many countries around the world. Government spending and growth correlated very well.

Instead of flailing away with a blunt instrument, I would have said "Seriously, Paul? What a simple fallacy. The definition of GDP includes government spending. You haven't proven anything. It's a tautology that if government spending goes up, GDP goes up. This is the flaw in GDP. Sometimes, rising GDP means the people are being impoverished."

Next, Krugman moved on to one of the central fallacies of Keynesianism. In Krugman's words, "You just gave the logic for government deficit spending. Your spending is my income. Where is the income supposed to come from, if everyone cuts spending? Government has to make up the difference."

I would have said, "Seriously Paul. Again?! This is like the Broken Window fallacy [which Krugman said in 2011 "ceased to be a fallacy"]. Not all spending is consumer spending. Investment spending is important. When people slow consumption, it doesn't mean they hoard dollar bills. They increase their bank deposits. Banks lend to promising companies. You know, that next new product or lifesaving technology? Except you don't know it, because government spending has crowded them out."

In an economic downturn, people go on fewer gambling and drinking binges to Las Vegas. Krugman is basically saying that the government has to take up the slack, and go on gambling binges. Because demand shortfall.

Shortly after telling Moore that one cannot cherry-pick one's data, Krugman showed a graph comparing Jerry Brown's California to Sam Brownback's Kansas. For one year. I felt embarrassed for him, as there were sounds of amused laughter from the audience.

Why did it come to Kansas vs. California for the year 2014 (I didn't write the year in my notes)? It's because Moore was defending free markets by appeal to aggregate statistics. Moore used red states as examples of freer markets, and blue for less free markets. He showed a few charts in which red states fared better than blue.

Krugman's cherry-picking got him safely back to his mouse hole, with Moore stuck outside, banging with a floor cleaning tool.

You cannot defend freedom using statistics, as you cannot get a mouse out of the wallboards with a broom.

Both Krugman and Moore were nervous speakers. Krugman was hunched a bit in on himself (though to be fair, he was in hostile territory and he knew it). Both spoke too rapidly and with a jittery character to their voices. Each has a nervous tell, with Moore incessantly taking little sips from his iced tea and Krugman playing with his fingers.

Krugman took the lead on each issue. Moore often respond with a long caveat, which conceded the point to Krugman. For example, Krugman said that some kids are born disadvantaged, so we need to give them each $8,000 to $10,000 (per year, I assume) in free money. He actually said they "choose the wrong parents."

Someone please tell him that this is only possible by robbing the taxpayers. Maybe add that it will just accelerate America's collapse into bankruptcy. Trillions in welfare spending do not fix anyone's problems, and are actually the cause of the disadvantage Krugman discusses.

Moore said he supports a social safety net, because America is rich, we can afford it, and it's morally right. When the broom failed to defeat the mouse, not even Tom tried singing to Jerry.

The topic moved to healthcare. Moore noted that government involvement has caused costs to spiral. Krugman offered another whopper. It's because innovation.

This is absurd, and even Krugman knows it. In computers, there's been decades of both rapid innovation and falling prices.

Krugman moved on to his shining moment, in the Ellsworth Toohey sense of shine. He unshrunk from his hunch, and his voice rang with moral clarity. "Obamacare is a life saver!"

The audience booed.

"I know someone whose life was saved by Obamacare. If you don't know anyone like that, then I'm sorry for your narrow little world."

This is a faux-apology and a presumption. Who the heck is this guy to apologize to me for my life not conforming to his ideology? Not to mention, Krugman glosses over the people harmed by it. There ain't no such thing as a free lunch, even if handout beneficiaries think there is.

Worse yet Krugman implies that, to be moral, you must sacrifice yourself. He is cashing in on the guilt many people feel, at their own success. He's learned that all he has to do is raise the specter that someone else is suffering, and they will concede him anything he demands.

This being FreedomFest, and not the People's Workers' Party, a large majority of the audience supported Moore. However, moderator Mark Skousen asked a very clever question, "If you did not enter this room in agreement with Paul Krugman, did you change your mind as a result of what he said today?" I estimate about 50 people clapped or cheered.

Krugman won because he appealed to people's sense of right and wrong. Morality trumps economics any day of the week. Moore didn't even respond to Krugman's economic errors, much less smack down his phony judgmentalism.

Current Economic Collapse News Brief – Episode 714

Posted: 11 Jul 2015 09:30 PM PDT

from X22 Report:

Episode 714

"There Is Going To Be A Taper Tantrum In Latin America... It Is Inescapable"

Posted: 11 Jul 2015 05:25 PM PDT

Authored by Patrick Gillespie via CNNMoney.com,

Greece needs a bailout and China's stock market is in meltdown mode. But the global economy has another rising red flag: Latin America.

Every major Latin American economy is slowing down or shrinking. The World Bank predicts this will be Latin America's worst year of growth since the financial crisis. As if that's not dire enough, the world's two worst performing stock markets are in the region as well.

And things could get even uglier later this year for Latin America, a region which is double the economic size of India.

"The weakness in Latin America is reflecting the weaker global outlook," says Win Thin, senior economist at Brown Brothers Harriman.

The 'most vulnerable': After years of checkered progress, Latin America is the "most vulnerable" region to China's sputtering economy and market meltdown, experts say. It's become a trade battleground area between the United States and China.

China is the biggest trade partner to many Latin countries, but the U.S. has tried to reassert its presence in recent months. Still, China's sluggish growth is pulling Latin America down with it.

"We're expecting very, very weak growth," says Eugenio Aleman, senior economist at Wells Fargo Securities. "Brazil is in bad shape. Argentina isn't much better. Chile has slowed down to a trickle...Peru is slowing down considerably."

That's just the beginning. Venezuela is arguably the world's worst economy with sky-high inflation. Next door, Colombia has the world's worst stock market this year. Its index is down 13% so far this year. The second worst is Peru, down 12.5%. By comparison, America's S&P 500 is flat this year. (Argentina has the world's best stock market, but that's more a reflection of politics than economics).

While many are focused on Greece right now, "a deeper downturn in China remains the key external risk for Latin America," says Neil Shearing, chief emerging market economist at Capital Economics.

 

The big problem: The three "C's" are weighing down Latin America: China, commodities, and currency.

The region boomed last decade when its commodities, like iron, copper and food, were in high demand.

But China drove that demand. Now Chinese construction companies are pumping the brakes while the government tries to stop its bleeding stock market. That means less Chinese cash is coming to Latin American countries. Oil's tanking prices have hurt the region too.

And then comes currency. The U.S. dollar's strong rise this year has helped it gain a lot of ground on Latin American currencies. That makes it more expensive for Latin Americans to buy imports and, for some companies, more expensive to pay debt that's in U.S. dollars.

Colombia's currency has lost 13% of its value this year against the dollar. Brazil's real has lost 21% and Mexico's peso continues to slide too.

There's likely one more punch to Latin America from the U.S. this year: the Federal Reserve's long-awaited rate hike.

Taper Tantrum deja vu?: Two years ago, Latin American stocks tanked when then Fed Chair Ben Bernanke announced that the Fed would end its stimulus program. After the financial crisis, the Fed put interest rates at zero, and investors went overseas to get better returns on bonds than U.S. bonds, which still give back little. A Fed rate hike could change that scenario.

Latin America is better positioned now to weather a Fed rate hike than past ones. But there could still be an exodus of cash, experts say.

"There is going to be a taper tantrum in Latin America," says Aleman. "It is inescapable."

The FDIC's Plan to Raid Bank Accounts During the Next Crisis

Posted: 11 Jul 2015 05:06 PM PDT

 As we've noted previously, one of the biggest problems for the Central Banks is actual physical cash.

 

The financial system is predominantly comprised of digital money. Actual physical Dollars bills and coins only amount to $1.36 trillion. This is only a little over 10% of the $10 trillion sitting in bank accounts. And it’s a tiny fraction of the $20 trillion in stocks, $38 trillion in bonds and $58 trillion in credit instruments floating around the system.

 

Suffice to say, if a significant percentage of people ever actually moved their money into physical cash, it could very quickly become a systemic problem.

 

Indeed, this is precisely what caused the 2008 meltdown, when nearly 24% of the assets in Money Market funds were liquidated in the course of four weeks. The ensuing liquidity crush nearly imploded the system.

 

Because of this, Central Banks and the regulators have declared a War on Cash in an effort to stop people trying to get their money out of the system.

 

One policy they are considering is to put a carry tax on physical cash meaning that your Dollar bills would gradually depreciate once they were taken out of the bank. Another idea is to do away with actual physical cash completely.

 

Perhaps the most concerning is the fact that should a “systemically important” financial entity go bust, any deposits above $250,000 located therein could be converted to equity… at which point if the company’s shares, your wealth evaporates.

 

Indeed, the FDIC published a paper proposing precisely this back in December 2012. Below are some excerpts worth your attention:

 

This paper focuses on the application of “top-down” resolution strategies that involve a single resolution authority applying its powers to the top of a financial group, that is, at the parent company level. The paper discusses how such a top-down strategy could be implemented for a U.S. or a U.K. financial group in a cross-border context…

 

These strategies have been designed to enable large and complex cross- border firms to be resolved without threatening financial stability and without putting public funds at risk…

 

 

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company into equity. In the U.S., the new equity would become capital in one or more newly formed operating entities. …

 

…Insured depositors themselves would remain unaffected. Uninsured deposits would be treated in line with other similarly ranked liabilities in the resolution process, with the expectation that they might be written down.

 

http://www.fdic.gov/about/srac/2012/gsifi.pdf

 

 

In other words… any liability at the bank is in danger of being written-down should the bank fail. And guess what? Deposits are considered liabilities according to US Banking Law. In this legal framework, depositors are creditors.

 

So… if a large bank fails in the US, your deposits at this bank would either be “written-down” (read: disappear) or converted into equity or stock shares in the company. And once they are converted to equity you are a shareholder not a depositor… so you are no longer insured by the FDIC.

 

So if the bank then fails (meaning its shares fall)… so does your deposit.

 

Let’s run through this.

 

Let’s say ABC bank fails in the US. ABC bank is too big for the FDIC to make hold. So…

 

1)   The FDIC takes over the bank.

2)   The bank’s managers are forced out.

3)   The bank’s debts and liabilities are converted into equity or the bank’s stock. And yes, your deposits are considered a “liability” for the bank.

4)   Whatever happens to the bank’s stock, affects your wealth. If the bank’s stock falls at this point because everyone has figured out the bank is in major trouble… your wealth falls too.

 

This is precisely what has happened in Spain during the 2012 banking crisis over there. And it is perfectly legal in the US courtesy of a clause in the Dodd-Frank bill.

 

This is just the start of a much larger strategy of declaring War on Cash.  The goal is to stop people from being able to move their money into physical cash and to keep their wealth in the financial system at all costs.

 

Indeed, we've uncovered a secret document outlining how the Fed plans to incinerate savings to force investors away from cash and into riskier assets.

 

We detail this paper and outline three investment strategies you can implement right now to protect your capital from the Fed's sinister plan in our Special Report Survive the Fed's War on Cash.

 

We are making 1,000 copies available for FREE the general public.

 

To pick up yours, swing by….

http://www.phoenixcapitalmarketing.com/cash.html

 

Best Regards

Phoenix Capital Research

 

 

 

The European Debt Crisis Visualized

Posted: 11 Jul 2015 05:00 PM PDT

  At the heart of the European debt crisis is the euro, the currency that tied together 18 countries in an intimate manner. So when one country teeters on the brink of financial collapse, the entire continent is at risk. How did such a flawed system come to be? Bloomberg Television and...

[[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

Why central banking persists

Posted: 11 Jul 2015 04:17 PM PDT

Only a few people care whether central banking persists, and they're the ones who profit from it.  In some cases they profit enormously.  The average Joe or Jill doesn't know about central banks and doesn't care to know.  To the ones at the top of the political - economic heap, this is how they want it.

A central bank comes about through political favors -- favors to big bankers and to politicians intent on buying votes and making war.  Where you find a country with a central bank, you have laws establishing it.  It requires political force to make them work.  A central bank is not an agreement among bankers.  It is an agreement backed by the monopoly force of government between bankers and politicians.  They are not free market entities, though they usually posture as one.

Central banks are often described as inflation fighters.  As monopoly producers of money, they are instead the sole source of inflation.

Central banks are said to be responsible for making capitalism work.  By making honest price discovery impossible and raging war against savers, they are in fact anti-capitalistic.  If you want to kill capitalism and replace it with cronyism and instability turn the market over to central bankers.

Almost every textbook that discusses the history of the U.S. central bank, the Federal Reserve, will say it came about as a solution to the various Panics of the 19th century and the Panic of 1907.  What the textbooks don't discuss is why the Panics came about: the common practice of fractional reserve banking.  In simplest terms fractional reserve banking consists of a bank giving two people equal claim to the same monetary unit at the same time.  This is standard operating procedure for banks.  Except among Austrian economists, it is noncontroversial.

As central banks were called on to play a major role in funding World War I, European belligerents suspended payment in gold -- in other words, they outlawed inflation-resistant money.   Doing so prolonged the war and resulted in casualty figures never before seen in mankind's history.  In the U.S. the public was strongly discouraged from attempting to redeem paper money for the gold it represented.  As historian Ralph Raico writes in Great Wars and Great Leaders: A Libertarian Rebuttal,
Had the war not occurred, the Prussian Hohenzollerns would most probably have remained heads of Germany, with their panoply of subordinate kings and nobility in charge of the lesser German states. Whatever gains Hitler might have scored in the Reichstag elections, could he have erected his totalitarian, exterminationist dictatorship in the midst of this powerful aristocratic superstructure? Highly unlikely. In Russia, Lenin's few thousand Communist revolutionaries confronted the immense Imperial Russian Army, the largest in the world. For Lenin to have any chance to succeed, that great army had first to be pulverized, which is what the Germans did. So, a twentieth century without the Great War might well have meant a century without Nazis or Communists. Imagine that. [pp. 1-2]
No Great War, no Nazis or Communists.  No central banks, no Great War.

Central bank funding inflates the wars -- makes them bloodier and longer -- as it produces money for the belligerent governments to spend.  Central banking is very profitable for people on the receiving end of the new money.  They see to it that central banks stick around.

Central bank money today is not restricted by anything tangible.  Individuals can purchase gold or silver coins but the coins are not money proper.  Only central bank digits and paper are money in the sense of serving as a widely-accepted medium of exchange.  This was established by government fiat, not the free market.  Where you find fiat money -- whether it's gold, silver, paper, or digits -- you don't have a free market.

People don't care about monetary issues as long as their money buys things.  When it doesn't then they care, but they rarely understand it.  They know they're being cheated, but exactly how is a mystery.  They don't know about fractional reserve banking, and if they did most economists would tell them it's perfectly okay.  Even the gold-loving maestro inferred it was a legitimate practice, as he describes credit expansion under the government-controlled gold standard:
Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves.  This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits).
Do you see anything wrong with this picture?

Central banking will persist as long as fractional reserve banking remains unchallenged.

Weekend Update July 10

Posted: 11 Jul 2015 02:17 PM PDT

By Everett Millman, head content writer at Gainesville Coins, a leading gold and silver distributor.   ABSTRACT: The global markets had nowhere to go but up this week following a rout that...

{This is a content summary only. Click on the blog title to continue reading this post, share your comments, browse the website, and more!}

GoldSeek plans live interview Tuesday with Sprott, Rule, Fronk, and Casey

Posted: 11 Jul 2015 01:14 PM PDT

4:10p ET Saturday, July 11, 2015

Dear Friend of GATA and Gold:

GoldSeek.com will hold a live Internet panel discussion with audience questions at 11 a.m. ET Tuesday, July 14, featuring four prominent participants in the monetary metals markets: Eric Sprott, chairman of Sprott Inc.; Rick Rule, president and CEO of Sprott U.S. Holdings; Seabridge Gold CEO Rudi Fronk; and Casey Research Chairman Doug Casey.

Vanessa Collette of GoldSeek TV and Cambridge House Live will moderate the discussion.

To register for access to the discussion and learn how to submit questions for the panelists, please visit GoldSeek here:

http://news.goldseek.com/GoldSeek/1436558400.php

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Monday-Tuesday, November 23-24, 2015

http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2...

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

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Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

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Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

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Ben Davies: Acropolis now, again

Posted: 11 Jul 2015 12:41 PM PDT

3:40p ET Saturday, July 11, 2015

Dear Friend of GATA and Gold:

Hinde Capital CEO Ben Davies writes this week that whatever happens in the current negotiations, Greece eventually will default on its debt and the euro generally will fail simply because Europe is not a country but a collection of countries with profoundly contradictory interests.

Turning to gold, Davies notes that it has performed well for those whose national currencies are under the greatest stress. As for gold's price in other currencies, Davies adds that central banks can't want the monetary metal acting as the proverbial canary in the coal mine. "God forbid the canary sings and gold reacts violently higher," Davies writes. "Then the state monopoly on debt and money really would be up."

Davies' analysis is headlined "Acropolis Now, Again" and it's posted at Hinde Capital's Internet site here:

https://hindesightletters.com/blog/acropolis-now-again-ben-davies/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Join GATA here:

New Orleans Investment Conference
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The Silver Summit and Resource Expo 2015
Hyatt Regency Hotel, San Francisco
Monday-Tuesday, November 23-24, 2015

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Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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To contribute to GATA, please visit:

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The Fortune Cookie Knows

Posted: 11 Jul 2015 12:37 PM PDT

This post The Fortune Cookie Knows appeared first on Daily Reckoning.

I was feeling particularly low, having sunk into a sloppy, self-pitying, tequila-fueled, drunken introspection after (again) failing to achieve blissful Nirvana, this time per my wonderful new ("Why didn't I think of it before?") theory, which is to finally attain true transcendence through sheer, strict gluttony.

Gloomily, as I sat, slumped, I burped, and, in a moment of blinding enlightenment, clearly saw that I was such a shocking, colossal failure at so, so many things.

Including (paradoxically) any discernable skills on how to handle failure, for crying out loud, despite having had so, so much of it, which makes me think I am even MORE stupid than everyone thinks, which makes me feel even worse.

Then, just as I was ready to hit bottom, having dimly decided to give the glories of gluttony one more try (but this time with less bacon and more pornography), was absolutely delighted to read that Ben Bernanke was paid $250,000 to give a speech. A speech!

I was reborn! The reason for my new-found zest for living is because Ben Bernanke is BOTH a total, monumental failure as a former chairman of the Federal Reserve (I mean, look around you!), and an arrogant Keynesian dorkface chump if there ever was one. Yet, look at the loot!

One speech! A quarter mill! I mean, this guy is absolutely, completely delusional by actually thinking, and believing, that laughable Keynesian econometric gibberish (to replace falling consumer spending with more government spending) can prevent the horrific economic collapse that always comes after radical expansions of the money supply that distorts the whole price structure of everything into a bloated, inflationary insanity.

And what did we get, in terms of the aforementioned bloated, inflationary insanity? Well, buckle your seatbelt, because I'm going to tell you!

Peak bond prices so high that interest rates are almost literally zero! The S&P 500 peaking at a P/E ratio so high that it is in the "historically high" range! Housing prices that cost an incredible four times the average income! An $18 trillion national debt, more than 100% of GDP! Total (government, business and personal) debt of an astonishing $60 trillion, against an entire GDP of only $17 trillion!

Government spending (federal, state and local), school systems and myriad taxing authorities together spend about 40% of GDP!

And a huge, unfathomable derivatives market that, combined with accrued government obligations, totals in the multi-quadrillions of dollars! This is thousands of trillions of dollars! Quadrillions! Truly incomprehensible sums!

And taxes, taxes, taxes upon taxes everywhere!

And a vast ocean of laws upon laws! Regulations upon regulations! Bubbles, bubbles, bubbles upon bubbles! Excessive repetition upon excessive repetition, which gets complaint upon complaint.

In the late 18th century, of course, you could write stupid sentence constructions like that last one, and nobody would say anything. But at the same time, France sentenced John Law to death for essentially doing this same damned thing: Creating paper money to excess, disastrously expanding the money supply, which ruined France with price inflation and economic misery.

It got so bad that Marie Antoinette (as I understand it) had to advise the French people to eat cake instead of bread.

Perhaps (the historical records are very sketchy here) she suggested a nice, chocolate layer cake with a thick, creamy icing, yum, yum. The perfect breakfast!

Nevertheless, maybe because of consuming all that sugar in all those cakes they ate, the French peasants got all huffy at the hyperinflationary prices, starvation and economic ruination that comes from such insane expansions of the money supply, leading to the French Revolution, the rise of Napoleon, and yadda yadda yadda, and yet — and yet! — here are again! Creating waaAAAaaay too much money upon waaAAAaaay too much money!

Anyway, Dan Cofall, of the eponymous Dan Cofall radio show, was musing about how Christine Lagarde, whom I will graciously introduce as the delusional Keynesian low-life socialist French honcho of the infamous International Monetary Fund, said that it was better to just pay the interest on debt, rather than paying it off.

As outrageous as it sounds to me, or Mr. Cofall, or any right-thinking people, for a slimy banker to suggest that you, and by extension, governments, perpetually stay in crushing debt instead of paying it off, she is, alas, correct, from the point of view of the banks, governments and the gigantic, vampiric financial services industry. Why?

Because the banks have created the oceans of money in order to lend it, and the money went out into the economy. Year after year, decade after decade! The money supply went up, bank interest income went up, businesses went up, tax collections went up, consumer spending went up, government spending went up. Everybody's a winner, it seemed!

Now, if a debtor decides to pay off a debt, the money has to be accumulated by the debtor, thus taking the money out of the money supply, and use it to pay back the bank. The salient point is that the money supply shrinks, the bank is not earning any more interest income, and things go from bad to worse. Much worse.

As an aside, to those who like to hyperventilate over the velocity of money (which is merely GDP divided by the money supply) as an indicator of economic health, remember that GDP can actually shrink and collapse, but the velocity of money still can go up (seemingly indicating economic health) if the money supply was shrinking by more than the GDP collapse!

And collapsing it is! R. Davis ConsumerMetricsInstiture.com reported that "the Bureau of Economic Analysis (BEA) reported that the economy was contracting at a -0.17% annualized rate," which is bad enough, but that these BEA buttheads came to that conclusion only after they "assumed a very mild dis-inflationary annualized deflator of -0.06%." What? A negative inflation rate? Outrageous!

As I remember, ShadowStats.com calculates that price inflation is definitely somewhere north of 6%! 6%! 6%!

I deliberately used repetition to produce the handy and infamous-yet-ominously meaningless "666," to indicate that things are getting outrageous.

I was just about to angrily climb onto my soapbox to, again, denounce the lying rat-faced lowlife bastards that infest government who produce such lies, when Mr. Davis does it with much more elegance and class than I when he notes that " Interestingly, during the same quarter the far more responsive Billion Prices Project (BPP) recorded positive annualized inflation of +1.56%. If the BPP inflation metric was used to deflate the nominal BEA data the economy could be shown to be contracting at more than -1.79% annualized rate."

And if the inflation rate of 6% was used to accurately reflect real GDP growth, then yikes! We're Freaking Doomed (WFD)!

Now, I don't claim to be an expert historian about the world, or boast that I can remember famous dates or people, or even dimly recall that last week I said I would finally clean out the damned garage after all those other times I said I would clean it out, but always forgot for some perfectly understandable and forgivable reason or another, but about which hardly a day goes by without hearing some yammer yammer yammering about it. Damned memory! Damned garage!

But, as it happens, I actually DO know that, in The Whole Freaking History Of The World (TWFHOTW), a shrinking money supply is Never A Good Thing (NAGT), and, in general, is Always A Bad Thing (AABT), because now there is, literally, not enough money to keep the status quo going; some (most) things are going to have to come down in price, and some (most) people are going to lose money as the whole price structure of everything, everywhere, adjusts to the changes.

And with everything now jiggered into the bubble stock market, the bubble bond market, the bubble student loan market, the bubble housing market, and the bubble banks, you can see why the Federal Reserve, the financial services industry, and the government are so desperately, frantically, terrifyingly intent on forcibly manipulating/rigging everything, and why they lie about everything.

And so what to do in a world of make-believe and financial bubbles? Gold and silver, of course! Gold and silver are bargains, bargains, bargains like no other bargains in history. To pointlessly return to bizarre sentence construction, they are bargains upon bargains, and I mean Right Freaking Now (RFN), too!

I hear you scoffing, saying "Such a rude and arrogant fellow, this Mogambo! However, I remain unconvinced, haughtily rejecting gold and silver, ignoring both 2,500 years of compelling world economic history and this repellent little man whom the rabble call Mogambo The Fabulous (MTF)."

Now it is MY turn to scoff, as your snide remarks affect me not. I get worse at home. Like how you didn't even touch on how I eat like a pig, but with less manners. Amateurs!

Perhaps if this was TV, and if this was a Chinese dinner in the Twilight Zone, the episode would end with your fortune cookie ominously reading "You will soon learn a valuable lesson, but only after it is too late."

It would be better, I think you will agree, for you to heed the lesson of history: Buy gold and silver. And then maybe the Twilight Zone episode would end happily, with your fortune reading "You will soon find true love, vast riches, and live happily ever after," which is like a dream come true!

Unless, of course, you are married at the time. Rats!

So, however it works out with your new love and all that money, it's just two more of the many, many benefits of owning gold and silver. At the risk of repeating myself, whee!

Regards,

Mogambo Guru
for The Daily Reckoning

Ed. Note:

The post The Fortune Cookie Knows appeared first on Daily Reckoning.

The Financial Collapse of 2008 Happening All Over Again -- Chris Duane

Posted: 11 Jul 2015 12:21 PM PDT

We Are Now Seeing The Same Economic Disaster In 2008 Happening Now "Greece has no natural resources but beaches": Dirk Müller says they have undeveloped natural gas reserves worth 500-800 Billions. And big forces try to bankrupt Greece to get this resources for pennies on the dollar....

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Gold and Silver Calm Before the Storm

Posted: 11 Jul 2015 10:57 AM PDT

Gold and silver were in the usual capping mode today, although silver managed to finish the week on a slight gain. I am liking silver more and more here, and am not adverse to some small buys at regular intervals with a longer term time horizon. Nibbles, if you will.

ROAD TO WW3 -- How Dangerous Is Israel?

Posted: 11 Jul 2015 10:30 AM PDT

 An EU poll named Israel as the country that possess the biggest threat to world peace. With an arsenal of undeclared nuclear weapons, a reputation for assassinating political enemies and rising tension with Iran, how dangerous is Israel? The Financial Armageddon Economic Collapse Blog...

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Forget Greece! What About U.S.?!

Posted: 11 Jul 2015 09:30 AM PDT

At least the Greeks had to wait for Tsipras to double-cross them AFTER a referendum; in the US, BSoetoro was a traitor from the very first day! The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists ,...

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The Psychological Impact Of Celectial Evets On The Human Psyche - Micheal Armsrtong 2015

Posted: 11 Jul 2015 09:00 AM PDT

 I'd like to give special thanks to the folks that work so hard to bring us this information, and another thank you for the people that learn it and selflessly share it to others. The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries ,...

[[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

Greece's Future has been tossed Down The Toilet

Posted: 11 Jul 2015 08:39 AM PDT

Greece 3rd Bailout Implements Austerity, Pension Cuts, and Increased Taxes! The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more

[[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

Central banks' comprehensive rigging holds gold down, Celente tells Goldbroker's Popescu

Posted: 11 Jul 2015 07:45 AM PDT

10:45a ET Saturday, July 11, 2015

Dear Friend of GATA and Gold:

Trends Journal publisher Gerald Celente, interviewed by Goldbroker.com's Dan Popescu, says the gold price is not responding to the vast increase of money and credit because of comprehensive manipulation of markets by central banks and their investment bank agents -- and he gets suitably indignant about it. The interview is 20 minutes long, gets into the gold issue right away, and is posted at You Tube here:

https://www.youtube.com/watch?v=EZu44rPpLFw&feature=youtu.be&t=6m40s

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Wednesday-Saturday, October 28-31, 2015

http://noic2015.eventbrite.com/?aff=gata

The Silver Summit and Resource Expo 2015
Hyatt Regency Hotel, San Francisco
Monday-Tuesday, November 23-24, 2015

http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2...

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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To contribute to GATA, please visit:

http://www.gata.org/node/16

Bron Suchecki: Silver coin shortages, again

Posted: 11 Jul 2015 07:19 AM PDT

10:20a ET Saturday, July 11, 2015

Dear Friend of GATA and Gold:

Perth Mint research director Bron Suchecki today notes sharply rising premiums for silver coins but cautions today that a shortage of government-minted coins does not necessarily reflect a shortage of raw silver. Suchecki's commentary is headlined "Silver Coin Shortages, Again" and it's posted at the Perth Mint's Internet site here:

http://research.perthmint.com.au/2015/07/10/silver-coin-shortages-again/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Wednesday-Saturday, October 28-31, 2015

http://noic2015.eventbrite.com/?aff=gata

The Silver Summit and Resource Expo 2015
Hyatt Regency Hotel, San Francisco
Monday-Tuesday, November 23-24, 2015

http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2...

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Gold And Silver – Greece Needs Money? Money DOES NOT EXIST!

Posted: 11 Jul 2015 04:21 AM PDT

All the world is indeed a stage, and what is unfolding is a worsening tragicomedy, and it is under the direction of the elites through their debt enslavement [un]known by the world as fiat currency. The unelected “officials” in the EU are the equivalent of Keystone Kops. In fact, that is also true even of elected officials. They are all a bunch of clowns in charge of the circus called government. There is a very high probability that what has been unfolding in Greece will eventually be in your own government, so pay close attention to the outcome of how the bankers are choking the economic life out of the Greek people, and as events have unfolded, it appears that Tsipras has caved into the moneychanger’s demands in exchange for a bailout. This is totally contrary to the outcome of the referendum wherein Greeks voted OXI for accepting the unacceptable financial impositions on Greek citizens.

The Shanghai Stock Market Crash and China Gold Demand

Posted: 11 Jul 2015 04:01 AM PDT

What it means for the future of the gold market "At present, up to 12 trillion yuan stays in domestic residents' saving accounts. The launch of individual gold investment, therefore, will allow residents to change currency assets into gold assets. At the macro level, it will expand channels for changing savings into investment, thus adjusting the money supply; in the micro aspect, allowing citizens to trade and keep gold can improve social welfare, benefiting both the country and the population. Moreover, with the dual attributes of common commodity and currency commodity, gold is a desirable instrument for hedging. Therefore, developing gold trade for individuals is practical." – Zhou Xiaochuan, Governor, the People's Bank of China
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