Sunday, August 14, 2016

Gold World News Flash

Gold World News Flash


Discovery of Bulgarian Old Gold Supports the Evolution of Private Money

Posted: 14 Aug 2016 01:00 AM PDT

from The Daily Bell:

World's Oldest Gold Object May Have Just Been Unearthed in Bulgaria … A small gold bead shows that Copper Age people in the Balkans were processing gold 6,500 years ago… -Smithsonian

This gold bead further confirms the maturity of  private monetary  history in our view.

Reference.com tells us, HERE: "The existence of gold has been known for over 5,500 years; therefore, the exact location of its discovery is unknown."

Now Smithsonian, above, has reported that humans were manipulating gold 6500 years ago.

But we've often argued that gold (and silver) were seen as "precious metals" many more thousands of years ago than that. Maybe older gold items don't survive today because when people discovered them, they were recycled.

Murray Rothbard was surely right. He maintained HERE that money was the outcome of competition between different kinds of objects and over time and gold triumphed (along with silver).

There are various reasons why money metals became popular as money. Among them: durability, divisibility, portability, acceptability, limited supply and uniformity. Money therefore developed via competition. Anything could become "money" if it were sufficiently accepted and fulfilled aspects of the monetary recipe.

A further, important point: If gold and silver were seen as valuable then one way or another people were likely utilizing them for trading purposes.

Now the larger question. Do such metals have to be shaped into coins in order to perform monetary functions?

Read More @ TheDailyBell.com

How To Invest In A World Of ZIRP And Stupidly Cheap Capital

Posted: 14 Aug 2016 12:30 AM PDT

By Chris at www.CapitalistExploits.at

Questions require answers and lots of questions require lots of answers.

You'd be wrong in thinking that you'll get either since the missing ingredient to both is lots of time. Someone invent me a time machine and I'll answer more questions. Until then I have a select few to share.

I do read all emails and questions sent but obviously can't answer them all. Sorry about that...

It's been a while since I did a Q&A on the blog so here goes the first one:

Quick note to let you know I really enjoy the podcast. I discovered it through a republication on the Zerohedge blog.

 

I greatly appreciate the focused, intelligent, macro-economic discussions without the spin and sensationalism. I work for a hedge fund, and have (like many others) been struggling to make sense of these QE fueled, Central Bank driven markets. Retail investors (friends & family, not clients) ask me all the time where to put their money, which is a tough one because where do you go if both stocks & bonds are at historic highs?

 

There is also not a ton of value for real estate buyers & investors, and nothing to be had for money in the bank (except for fees). Not a good sign when guys I play pickup basketball with are talking about buying vacation properties as an investment since rates are cheap. I suppose I should tell them to lever up to the hilt, and wait for the next bailout?

 

Keep up the good work!

Thanks for the kind words! I don't know where you're based as we've readers from all over the world but I'll assume you're US based. The US is almost certainly heading into a recession so even if you're prepared to play the momentum game you're not really being paid to take the risk.

Buying real estate at the tail end of the long term debt super cycle takes cojones I don't have. What's your compensation?

What does make sense - if you can find it - is cashflow real estate, based on a 30-year fixed rate mortgage. Even at breakeven on cashflow this can make sense (location dependent) since you're synthetically short the bond market with other people's money. I'd be OK doing that.

To more specifically answer your question: standard portfolio theory works in a world where every single asset price on the planet is not manipulated. That's not a world we enjoy to any degree at all.

Kyle Bass Gold

And yet, these asset allocation models persist because they're taught at most business schools by men with moustaches and pointy shoes who don't have to deal with the real world.

Going to cash, cash equivalents, and liquidity with the majority of your capital, while placing bets on convexity, makes a lot of sense to us. Look for where convexity lies because your cost of entry is so stupidly low and your return potential so high that even when you get it wrong you're not penalised much for it. This makes even more sense in a world where you're now penalised for holding cash in a bank.

Thanks for an excellent site. I've been a reader since 2012 but this is the first time I've reached out. I can't tell you how many times your sound reasoning has saved my butt. Thank you.

With all the advances in technology I'm curious as to why you are not investing in Venture deals which you were doing previously? Also I read your article on Tesla and wondered if you had any thoughts on Amazon as a tech play since I've been buying them over the last year, as I see so much going online and they are the 100lb gorilla in this market. Any thoughts on them?

 

Sincerely appreciative F.E

As you may already know, I ran an early stage VC business from 2012 through early 2016 so I know a thing or two about it.

To answer your question, I'll tell you about a previous life. In the early 2000's I built a real estate investment holding business. Super simple business model which a trained monkey could execute. Buy middle to lower middle class homes at double digit yields (they were available then), leverage them up, and buy more.

It was simple interest rate arbitrage with leverage, where you could constantly examine and understand risk by managing your spread.

Fast forward 2006, and I was struggling to find anything worth adding to the portfolio. Credit was still available but yields had collapsed to 4% or less. Great for asset values (I'd made 60x on my capital) but nothing to buy without going further down the risk curve. I sold up and got out.

Increasingly, I found the same set of problems in VC. It's hard to compete with excited 30-year olds, flush with cash who will blindly throw money at deals. It's eerily similar to the situation I found myself in when I liquidated real estate in late 2006. Also equally importantly, the risk to being illiquid ahead of what I am looking at now is just too great for me to ignore.

My friend Raoul Pal mentions private equity is in a "terrifying situation". I'm no expert on the subject and Raoul certainly knows more about it than I do but early stage VC has increasingly become a lottery ticket investing market right at the point where global liquidity is drying up. It's a function of easy money distorting asset prices globally.

There are a couple of really interesting private deals that I'm working on with partners but as a whole I'm not spending time on the sector.

Regarding Amazon: remember that Elon Musk, Jeff Bezos, etc. are using available capital to build their dreams. But if you look at the cap tables they are certainly not "all in" backing these companies with their own personal balance sheets. Not even close. But hey - you and I'd do the same thing if we could get away with it...

In an environment of zero interest rates and cheap capital, companies with great stories, accompanied by media buzz, benefit from herding and crowd behaviour. This is where both Tesla and Amazon shine.

Now, I'm not suggesting Amazon is a fraud which I think Tesla probably is. As far as I can tell it's just another overvalued company which has grown on the back of very accommodative monetary policy and bullish equity markets. Part of the reason is that it's valued like a tech company, but if you look at their operations, aside from cloud, it's a retailer.

They have a market capitalization of $360 billion dollars and their listed P/E (TTM) is 191. EPS is a paltry buck and change and operating margins are 2.7%. For this to somehow work out, Amazon has to take over virtually all online commerce and run IT for most corporations in the US and maybe even the rest of the world. That's just for it to live up to its current market cap.

All I'd say is to make sure you make the distinction between fascinating exciting ideas and what you're prepared to pay for them. Full disclosure: I'm not interested in Amazon, either long or short.

The 'dollar' is the single most interesting and important issue for the global financial system right now -- at least, that is my instinct (and Raoul has banged this drum for quite a while) but I still haven't come across anyone who can articulate (in layman's terms) why this structural short exists. Jeff Snider at Alhambra Capital Partners is all over this -- he knows his stuff but he is difficult to follow. And Raoul had a go on this podcast but his description is still fairly vague. We know that the Eurodollar system is unwinding (via the mountain of derivatives the banks created in the decade leading up to the GFC) but who exactly is left 'short' after these derivatives are unwound? The unwind itself doesn't involve a cancellation of one leg -- both parties to the transactions are matched off. I assume it has to do with foreign banks' ability to lend dollars to their customers who themselves have $ liabilities. Any explanation from anyone would be gratefully received :)

 

Ignoring, for now, the challenge of explaining precisely why this dollar short exists, the dollar short is key IMHO to the endgame, as this short will pressure the dollar much higher at some point (when the next crisis erupts) and that will create all manner of problems across the globe -- other than $ longs and the American public, the effects would be hugely negative for most. That says to me that the Fed will have no choice but to step in to counteract $ strength (via the printing press, swaps etc) and they will need to do so in a massive way as the gap left by the collapsing Eurodollar system is colossal ..... and this intervention will inevitably lead to the destruction of the dollar (and the global currency system as a whole).

The core thing is that dollars were borrowed globally due in part to QE which followed the GFC. QE created a wonderful carry as investors could borrow dollars and invest them into higher yielding foreign currency investments (I discussed the anatomy of a carry trade here if you're interested). On a macro scale foreign countries actually receive less dollars because assets are priced in dollars. Take oil as a prime example: oil priced in dollars goes down when the dollar goes up.

DXY vs oil

I grabbed the above chart from my trading platform. Oil in blue and dollar index in red and green. You can see how correlated they are.

So when oil countries receive dollars they're earning far less. So now there is an additional shortage of dollars. This affects world trade since profits are lower for anyone selling anything priced in dollars, which is a lot since world trade is still done mostly in dollars. As a result, world trade shrinks and this is without getting into dollar funding liabilities.

Your question is about the eurodollar market which provides us with a window into the risk in the European banking system (or at least in theory it should do so). There are no signs of stress right now, though there are mitigating reasons why I think this is the case (backstopping by ECB is being priced into the market).

There is no way eurodollar futures should be trading at current levels given the market risks. This is more a function of the market pricing in central bank intervention. Very dangerous!

Remember, foreign banks' ability and confidence to lend dollars will likely show up in Euribor rates moving. Those are still ridiculously low. I think if there are any problems, the Fed wouldn't hesitate to open swap lines.

The second part of your question is around how the strength of the dollar impacts global capital flows. As I mentioned, a strong dollar is bad for global growth. The Fed know this and have indicated it in their minutes.

Right now there is an interest rate differential the other way: US rates are still positive, while European and Japanese are negative, and the UK is at zero so this attracts capital to the US.

It's why - as insane as it may seem - when looking at it in isolation, the US bond market is likely to go higher (i.e rates lower). Ultimately there is a reset coming and we don't know when or even how it will play out. We can only look for clues and position accordingly.

Your article on 7 steps to shorting the Euro was fu**ing exceptional. I sent it to everyone I know and have printed it and stuck it on our conference room whiteboard as a talking point. I am a partner at a fixed income fund in London and both internally, and with colleagues we talk a lot about this. Until today I'd not come across such a cogent explanation of how the social interacts with the financial. If I am correct your thesis is largely on rising intolerance towards migrants. You don't need to convince me of this. I'm seeing it in trips to the continent. I've not seen much of it in the mainstream media though. Have you seen any indication in the mainstream media yet?

 

Thanks for the excellent work. P.T

It's been fascinating to watch.

Remember, when we first heard about these people from Middle Eastern and North African trouble spots they were referred to as displaced people. Remember that?

Then a few years later they where called refugees, and now increasingly they're referred to as migrants. The language itself is informative.

If we pay careful attention to the language used, we can pick up the underlying tone. Let's use you as an example. So you're a fund manager. I can refer to you as a "fund manager", or as "one of the 1%". Both statements are strictly speaking true but the underlying tone is quite different.

My researcher just sent me an article about a study that was conducted on the topic of refugees and sentiment towards them. It's profoundly negative and will only keep rising.

The lid can come off the kettle when the media feel at ease with stating things currently politically incorrect. This lifting of the veil can come with election of leaders who are already using this language.

This is why Trump's snake story and pig's blood story resonates. It is tapping into this underlying tone. By the way, I'm not for or against any of these crooks - just pointing out the consequences.

I'm interested in the knock on effects and how to position accordingly.

Have a great weekend, wherever you are.

- Chris

"The essence of the independent mind lies not in what it thinks, but in how it thinks." — Christopher Hitchens

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Nightmare at the Mall: Brick-and-Mortar Retail Totally Loses it

Posted: 13 Aug 2016 08:30 PM PDT

by Wolf Richter, Wolf Street:

Stunning acceleration of a trend.

On the surface, it was the same lackadaisical data we've become inured to in this wondrous economy. But beneath the surface, there lurked a nightmare for the already struggling brick-and-mortar retailers.

Total retail sales in July, at $457.7 billion, remained stubbornly flat from June, and ticked up a measly 2.3% from a year ago, adjusted for seasonal variation and holiday and trading day differences, but not inflation, according to the Commerce Department.

As crummy as it was, it was propped up by sales of motor vehicles and parts, the largest category at 21% of total retail sales. They rose 1.1% for the month and 2.4% year-over-year to $93.2 billion. Auto sales have been booming. In terms of unit sales, they set an all-time record last year, funded by cheap debt and loosy-goosy underwriting standards; so comparisons this year are on top of a year that may be hard or impossible to beat for a while, with the industry already talking about a "car recession."

And here's what else propped up retail sales: Sales by "non-store retailers," which includes e-commerce, soared 14.1% from July last year to $47.7 billion, now accounting for 10.4% of total retail sales. Their share has doubled since 2002.

So retail sales without autos and without non-store retailers – an approximation for brick-and-mortar retailers other than car dealers – came in at $321 billion in July not seasonally adjusted. A year ago, they were also at $321 billion. They have not moved one iota over the past year. And they're up only 2% from two years ago.

That's not counting the impact of inflation. CPI rose about 1% over the two-year period despite the collapse of energy prices. Adjusted for CPI, these retails sales might have gone up only 1% over a two-year period.

The US population grows at a rate of about 0.8% per year currently, according to the Census Bureau. So on a per-capita basis, and adjusted for inflation, these brick-and-mortar retail sales might have actually declined over a two-year period! A grisly thought for brick-and-mortar retailers: on average, each individual consumer might already be buying less there than they used to.

That non-store retailers have been kicking butt at the expense of brick-and-mortar retailers is by now well established. The entire brick-and-mortar industry is fretting about it. Big retail chains specialized in clothing and accessories are struggling with stagnating or now declining revenues. There has been a tsunami of bankruptcies by chain retailers. Mall owners are starting to worry about incessant store closings, including the 141 Macy's stores; they're beginning to bite. Eventually, the brick-and-mortar retail debacle will hit mall REITs and commercial mortgage-backed securities.

This has been a slow-motion development that had been denied for its first decade or so, as malls were considered something American consumers could not possibly live without.

Read More @ WolfStreet.com

Rethinking The Cold War.. And The New One

Posted: 13 Aug 2016 07:20 PM PDT

Authored by Paul Craig Roberts,

The Cold War began during the Truman administration and lasted through the Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter administrations and was ended in Reagan’s second term when Reagan and Gorbachev came to an agreement that the conflict was dangerous, expensive, and pointless.

The Cold War did not cease for long - only from the last of Reagan’s second term and the four years of George H. W. Bush’s term. In the 1990s President Clinton restarted the Cold War by breaking America’s promise not to expend NATO into Eastern Europe. George W. Bush heated up the renewed Cold War by pulling the US out of the Anti-ABM Treaty, and Obama has made the war hotter with irresponsible rhetoric and by placing US missiles on Russia’s border and overthrowing the Ukrainian government.

The Cold War was a Washington creation. It was the work of the Dulles brothers. Allen was the head of the CIA, and John Foster was the Secretary of State, positions that they held for a long time. The brothers had a vested interest in the Cold War. They used the Cold War to protect the interests of their law firm’s clients, and they used it to enhance the power and budgets associated with their high positions in government. It is much more exciting to be in charge of foreign policy and covert activity in dangerous times.

Whenever a reformist democratic government appeared in Latin America the Dulles brothers saw it as a threat to the holdings that their law firm’s clients had in that country. These holdings, sometimes acquired with bribes to nondemocratic governments, diverted the country’s resources and wealth into American hands, and that is the way the Dulles brothers intended to keep it. The reformist government would be declared Marxist or Communist, and the CIA and State Department would work together to overthrow it and place back in power a dictator in bed with Washington.

The Cold War was pointless except for the Dulles brothers’ interests and those of the military/security complex. The Soviet government, unlike the US government today, had no world hegemonic asperations. Stalin had declared “Socialism in one country” and purged the Trotskyists, the advocates of world revolution. Communism in China and Eastern Europe were not products of Soviet international communism. Mao was his own man, and the Soviet Union kept Eastern Europe from which the Red Army drove out the Nazis as a buffer against a hostile West.

In those days the “Red scare” was used like the “Muslim terrorist scare” today—to force the public to go along with an agenda without debate or understanding. Consider the costly Vietnam war, for example. Ho Chi Minh was an anticolonist leading a nationalist movement. He was not an agent of international communism, but John Foster Dulles made him one and said that Ho must be stopped or the “domino theory” would result in the fall of all of Southeast Asia to communism. Vietnam won the war and did not launch the aggression that Dulles predicted against Southeast Asia.

Ho had pleaded with the US government for support against the French colonial power that ruled Indo-China. Rebuffed, Ho turned to Russia. If Washington had simply told the French government that the colonialist era was over and that France needed to vacate Indo-China, the disaster of the Vietnam war would have been avoided. But invented threats to serve interest groups had become hobgoblins then as now, and Washington, along with many others, became a victim of its imaginary monsters.

NATO was unnecessary as there was no danger of the Red Army sweeping into Western Europe. The Soviet government had enough trouble occupying Eastern Europe with its rebellous populations. The Soviet Union was faced with an uprising in East Germany in 1953, from Poland and Hungary in 1956, and from the Communist Party itself in Czechoslavia in 1968. The Soviet Union suffered enormous population loss in World War II and required its remaining manpower for post-war reconstruction. It was beyond Soviet ability to occupy Western Europe in addition to Eastern Europe. The French and Italian communist parties were strong in the post-war period, and Stalin had grounds for hope that a communist government in France or Italy would result in the breakup of Washington’s European empire. These hopes were dashed by Operation Gladio.

We had the Cold War because it served the Dulles brothers and the power and profits of the military/security complex. There were no other reasons for the Cold War.

The new Cold War is even more pointless than the first. Russia was cooperating with the West, and the Russian economy was integrated into the West as a supplier of raw materials. The neoliberal economic policy that Washington convinced the Russian government to implement was designed to keep the Russian economy in the role of supplier of raw materials to the West. Russia expressed no territorial ambitions and spent very little on its military.

The new Cold War is the work of a handful of neoconservative fanatics who believe that History has chosen the US to wield hegemonic power over the world. Some of the neocons are sons of former Trotskyists and have the same romantic notion of world revolution, only this time it is “democratic-capitalist” and not communist.

The new Cold War is far more dangerous than the old, because the respective war doctrines of the nuclear powers have changed. The function of nuclear weapons is no longer retaliatory. Mutually Assured Destruction was a guarantee that the weapons would not be used. In the new war doctrine nuclear weapons have been elevated to first-use in a preemptive nuclear attack. Washington first took this step, forcing Russia and China to follow.

The new Cold War is more dangerous for a second reason. During the first Cold War American presidents focused on reducing tensions between nuclear powers. But the Clinton, George W. Bush, and Obama regimes have raised tensions dramatically. William Perry, Secretary of Defense in the Clinton regime, recently spoke of the danger of nuclear war being launched by false alarms resulting from such things as faulty computer chips. Fortunately, when such instances occurred in the past, the absence of tension in the relationship between the nuclear powers caused authorities on both sides to disbelieve the false alarms. Today, however, with constant allegations of pending Russian invasions, Putin demonized as “the new Hitler,” and the buildup of US and NATO military forces on Russia’s borders, a false alarm becomes believable.

NATO lost its purpose when the Soviet Union collapsed. However, too many careers, budgets, and armaments profits depended on NATO. The neoconservatives seized on NATO as political cover and an auxillary military force for their hegemonic ambitions. The purpose of NATO today is to implicate all of Europe in Washington’s war crimes. Since all are guilty, European governments cannot turn on Washington and accuse the Americans of war crimes. Other voices are too weak to be of consequence. Despite its vast crimes against humanity, the West still retains the position of “a light unto the world,” a defender of truth, justice, human rights, democracy, and individual liberty. This reputation persists despite the destruction of the Bill of Rights and police state repression.

The West does not represent the values that the world has been brainwashed to believe are associated with the West. For example, there was no need to attack Japanese civilian cities with atomic weapons. Japan was trying to surrender and was holding out against the US demand for unconditional surrender only in order to spare the emperor from execution for war crimes over which he had no control. Like the British sovereign today, the emperor had no political power and was a symbol of national unity. Japan’s war leaders were fearful that Japanese unity would dissolve if the emperor, the symbol of unity, was removed. Of course, the Americans were too ignorant to understand the situation, and so, little Truman, bullied all his life as a nonentity, glorified in his power and dropped the bombs.

The atomic bombs dropped on Japan were powerful. However, the hydrogen bombs that have replaced them are far more powerful. The use of such weapons is inconsistent with life on Earth.

Donald Trump has said the only hopeful thing in the presidential campaign. He called into question NATO and the orchesrated conflict with Russia. We don’t know if we can believe him or whether his government would follow his direction. But we do know that Hitlery is a warmonger, an agent of the neoconservatives, the military-security complex, the Israel Lobby, the banks too big to fail, Wall Street, and every foreign interest that will make a mega-million dollar donation to the Clinton Foundation or a quarter million dollar fee for a speech.

Hitlery declared the President of Russia to be the Ultimate Threat—“the new Hitler.”

Could it be any more clear? A vote for Hitlery is a vote for war. Despite this most obvious of all facts, the US media, united as one, are doing everything in their power to drive Trump into the ground and to elect Hitlery.

What does this tell us about the intelligence of the “Unipower,” “the world’s only superpower,” the” indispensible people,” the “exceptional nation”? It tells us that they are as dumb as shit. Creatures of The Matrix created by their own propagandists, Americans see imaginary threats, not real ones.

What the Russians and Chinese see are a people too brainwashed and ignorant to be of any support for peace. They see war coming and are preparing for it.

A Stunning Admission From Deutsche Bank Why A Shock Is Needed To Collapse The Market, And Force A Real Panic

Posted: 13 Aug 2016 06:59 PM PDT

In what may be some of the best, and most lucid, writing on everyone's favorite topic, namely "what happens next" in the evolution of the financial system, Deutsche Bank's Dominic Konstam, takes a look at the current dead-end monetary situation, and concludes that in order for the system to transition from the current state of financial repression, which has made a mockery of all asset values due to central bank intervention, to a semi-credible system driven by fiscal stimulus, there will have to be a crash, one which jolts policymakers out of their stupor that all is well simply because stocks are at all time highs.

And since a legitimate fiscal stimulus is what is needed to re-ignite the economy, US and global GDP will continue declining, even as stocks keep rising to new all time highs, not on fundamentals (which are all pointing in the opposite direction), but due to even more central bank intervention and financial repression, thus a Catch 22, which ultimately - according to DB - ends in the only possible way: with a major crash. 

As Konstam puts it, "the status quo could continue for several years yet – if nothing "breaks" in the system" but "without an external economic shock it is hard to see policymakers being prepared to take dramatic, fiscal action to jumpstart the global economy and bounce it out of a financial repression defined by low and falling real yields to one that at least initially is defined by rising nominal yields through higher inflation expectations."

As for the conclusion, or why a financial shock is long overdue, KOnstam says that "ironically the shock that is needed would require a collapse in risk assets for policymakers to then really panic and attempt dramatic fiscal stimulus. "

This is critical - and inevitable - as only a shock can lead to an "unwind of the falling yield/rising equity market where all financial assets trade badly."

In other words the end of financial repression will see price levels fall so that yields once again look attractive, or said otherwise, there will be a demand for Treasuries, even without the perpetual implicit backstop of central bank purchases.

For such a move to be sustainable itself requires the economic fundamentals to shift – inflation needs to be more secure against an underlying backdrop of robust real growth. Most people now understand that this is not a job for monetary policy alone. Yet the current reach for yield simply prolongs the status quo for policy disappointment.

Which brings us full circle: recall that over the past few months virtually every prominent investment bank, from JPMorgan to Goldman Sachs have warned clients that a selloff is coming. Now, Deutsche Bank has taken it to a whole new level, explaining why a financial crash has to happen to purge the system from the toxic aftereffects of 7 years of financial repression, and to kickstart a fiscal stimulus that will not happen unless markets tumble in the first place.

And while Konstam's line of reasoning is absolutely correct, we doubt just how his employer would look upon a market plunge that wipes out 30%, 40%, or even 50% of global equity values: would Deutsche Bank even survive such a crash? As such we doubt that the strategist's analysis and forecast, correct as it may be, will be endorsed by his employer, even if by now it is clear to all that only a major crash, i.e. a global reset, can kick start the world out of its zombie-like, centrally-planned existence, into the long overdue phase of whatever it is that comes next.

* * *

Below is Konstam's full must read analysis:

Stocks must fall for yields to rise – but unlikely to happen anytime soon

It is pretty much understood that we are in full on financial repression mode, as witnessed by super benign core yields lead by lower real yields with more recently the further downward drift in euro peripheral yields, including the UK. The new high in equities is consistent with our view of financial repression that necessarily has yield returns on all assets being incrementally replaced by price returns – stretched relative valuations follow already increasingly stretched absolute valuations. The last round of economic data does little to suggest any change in this dynamic. As we highlighted last week the conundrum for the US is how an overly strong labor market without meaningful wage inflation resolves itself against markedly weak productivity data with a GDP cake that if anything seems to be stagnating.

With the current status quo, it is clear to us that US yields if anything are still too high – we think they are near the upper bound of a range that pivots closer to 1.25 percent with real yields in particular too high. This probably still reflects a reluctance of investors to get meaningfully long the market although much of the short base has been covered and this in turn reflects a still fairly strong consensus on the economics front that the labor market strength can still resolve itself through higher wages and a virtuous circle of rising demand and productivity – a scenario we would not rule out but not our central view.

More importantly however are what prospects there may be to jolt us out of this financial repression and to what extent regardless of proactive policy, is there a natural end to financial repression – at some point does something have to break in the system. On the former the most likely candidate is obviously some form of global fiscal stimulus. Despite optimism around this in early July we have not exactly had the green light on either helicopter money in Japan or Italian bank bailout. It is still too early to call the US election and stimulus prospects here but the general sense is that it is still difficult to sense the urgency when equities make new highs. Policymakers aren't used to dealing with financial repression and that unfortunately is one of the defining characteristics of stagnation.

We suspect the fall will be defined by markets looking for dramatic policy news that somehow "responds" to super low bond yields and underwrites rising risk asset prices but only to be disappointed precisely because policymakers don't bide the urgency. The result is that yields can fall still further even with risk assets still trading well – hanging onto their relative valuation rationale.

The failure of a policy response allows for more financial repression. We are anyway already beyond the point of preemptive policy since preemption is supposed to recognize and avoid looming problems beforehand. It is clear that the nature of those problems are already material including squeezed interest margins for banks, insurance solvency issues etc. But to be fair, the lack of a fiscal response itself bears witness to the perceived fiscal stress during the 2008 crisis and the need to insulate taxpayers. Additional fiscal burdens can be thought of as a variant of financial repression where future inflation and negative real rates do the redistribution as opposed to the structure of the fiscal regime. Helicopter money fuses financial repression from the money side with the fiscal response in a potentially dramatic way whereby the would be spenders get to spend a lot more directly at the expense of the ongoing savers. And while it may have its own political hurdles that ultimately are insurmountable, it offers a perfectly reasonable alternative equilibrium option where the goal is to raise the price level as well as improve the real growth outlook by overcoming excess savings. The fusion of fiscal with monetary policy can also be appreciated in the context of the fiscal theory of price where monetary policy can offer infinite paths for money growth and potential nominal growth but fiscal policy effectively selects which path is realized based on an equilibrium condition that the NPV of all future budget deficits needs to sum to zero.

* * *

The status quo could continue for several years yet – if nothing "breaks" in the system. There are ways of course for either avoiding breaks or at least patching them – mitigating the impact of negative rates on banks is now in vogue with subsidized bank loans for on lending. And we may yet see soft forms of bank bailout still being allowed. This is similar to the use of alternative yield curves for discounting insurance liabilities.

The conclusion is that without an external economic shock it is hard to see policymakers being prepared to take dramatic, fiscal action to jumpstart the global economy and bounce it out of a financial repression defined by low and falling real yields to one that at least initially is defined by rising nominal yields through higher inflation expectations. Ironically the shock that is needed would require a collapse in risk assets for policymakers to then really panic and attempt dramatic fiscal stimulus.

The logic would also fit with the same correlation structure for financial assets - an unwind of the falling yield/rising equity market where all financial assets trade badly. In other words the end of financial repression will see price levels fall so that yields once again look attractive. For such a move to be sustainable itself requires the economic fundamentals to shift – inflation needs to be more secure against an underlying backdrop of robust real growth. Most people now understand that this is not a job for monetary policy alone. Yet the current reach for yield simply prolongs the status quo for policy disappointment.

"Politically Correct" Rio Olympics Amid Anti-Russia Cold War Hysteria

Posted: 13 Aug 2016 06:20 PM PDT

Submitted by Finian Cunningham via Strategic-Culture.org,

In absurd reality-disconnect, Brazilian authorities are trying to maintain a «politically correct» image during the Rio Olympics, while the entire games are imbued with nasty Cold War politics.

By «politically correct» we mean the apparent absence of politics. But that absence is partial, unilateral and false, and the forced measure is itself a very political act.

The Brazilian Olympics organizers are claiming that it is against the charter of the International Olympics Committee to allow any form of political expression within the sporting venues. And so, they claim, in the interest of public decorum and decency, the Olympics venues must be kept «politics free» in order to not discommode other spectators or global television audiences.

Hence, sports fans have been reportedly bounced out of stadiums by burly police squads at the slightest hint of disturbance. Several Brazilian spectators have been ordered to leave venues for daring to shout out «fora Temer» – a Portuguese reference to interim president Michel Temer, demanding that he quit office.

Fans have even been expelled for silently holding up written posters bearing the same words. Or, ingeniously, sitting in a row with T-shirts spelling out the individual letters of the protest slogan.

But hold on a minute. The entire 2016 games in Rio are being held amid a spectacular backdrop of sinister politics.

Brazil’s elected president Dilma Rousseff was suspended from office back in May after rightwing parliamentary opponents accused her of illegal accounting practices. She denies the allegations, saying that the budgetary measures she took were legal, and that she is being forced from office illegally, which in turn disenfranchises more than 54 million voters. In the opening week of the games, the Brazilian Senate voted to press ahead with Rousseff’s impeachment.

Rousseff’s leftwing Workers Party supporters claim that she has been ousted by a parliamentary coup. Michel Temer, the rightwing coalition vice president, has since assumed her office as the country’s acting president. Temer is accused of orchestrating the de facto putsch. He is also closely aligned with Washington’s anti-leftist agenda in Latin America targeting Venezuela, Bolivia, Chile, Nicaragua and Cuba, among others.

During the opening Olympic ceremony, Temer was roundly booed by Brazilians and appeared to cut his speech short.

Ahead of the opening, the Olympic torch parade was disrupted by angry street protests, with crowds complaining about the high cost of holding the games amid economic hardship for millions of Brazilians. The Rio games are estimated to cost $13 billion. Riot police fired rubber bullets and teargas to disperse protesters and get the Olympic torch into the stadium.

Low ticket sales indicate that for most Brazilians, the Rio games are off-limits, with the price of individual tickets ($100-350) being equivalent to half a month’s salary for many Brazilian workers.

Given the absurd disconnect of sporting extravagance and growing economic hardship for the population combined with the wide perception that Temer and his rightwing supporters have usurped an elected president, it is little wonder that Brazilians have much to protest about. And it is especially galling that the alleged usurpers of state power are now invoking political correctness and the «spirit of the games» to suppress any form of dissent – in the name of «keeping politics out of sport».

Supporters of Rousseff are saying, with good reason, that the democratic right to peacefully protest is simply being crushed under the cover of supposed Olympian ethics.

The absurdity is underscored by the bigger political backdrop of the games being held hostage by a renewed and contrived Cold War agenda against Russia.

The banning of some 100 Russian athletes from participating in the games over allegations of doping has the suspicion of politics being very much injected into the world’s biggest sporting event.

Russia was allowed at the last minute to send a national team after the International Olympic Committee ruled that allegations against individual athletes did not justify a collective ban. But the allegations themselves were controversial, being based on Western media reports and the Western-dominated World Anti-Doping Agency. The latter parlayed much of its claims on those of Russian so-called whistleblowers, who may or may not have been seeking personal rewards.

The tendentious contention leveled by WADA, and taken up by Western media with gusto, is that alleged Russian doping is «state-sponsored». However, Russian authorities were not consulted nor given a fair hearing to rebut the claims. The claims were merely made into an article of faith and driven by a Western political agenda of isolating Russia, as in several other areas of international relations over the past two years, including the downing of a Malaysian civilian airliner over eastern Ukraine in July 2014. No-one knows the cause of that tragedy, but Western media have sought to blame it on Russia without any evidence, as they have with regard to «state-sponsored doping» in sports.

The 2016 Olympics are thus being conducted in a toxic atmosphere of geopolitics redolent of the old Cold War between the West and the Soviet Union.

Vladimir Salnikov, a former Russian Olympic swimming star, in an interview with the Reuters news agency said that the Rio games are reminiscent of the Cold War years in the 1980s when the US and Soviet Union boycotted each other’s events.

«I think the atmosphere is very strange,» said Salnikov, who is in Rio as president of the Russian Swimming Federation.

Salnikov, who won four golds during the 1980s, said it was regrettable that Russian athletes are receiving such a hostile attitude from some spectators and fellow competitors on the basis of the doping allegations.

In particular, he referred to nasty public comments made by the American swimmer, Lilly King, who won the gold this week in the women’s 100-meter breaststroke. King said that her Russian rival, Yulia Efimova, who came second to win silver, should not have been even allowed to participate because she had been previously banned for taking performance enhancing drugs. Efimova was since cleared and reinstated by the international Court of Arbitration for Sports to take part in Rio.

Salnikov said: «Efimova has been through a very severe ordeal, and in an atmosphere of distrust and uncertainty I think she showed very strong character – resilience and focus – and so I think she deserved her medal. She has come through very tough times and I’m sure she will cope».

Apparently, the Russian female swimmer was not able to sleep for two weeks before the Olympics due to the stress caused by the doping scandal.

Presumably, the entire Russian delegation of 270 other athletes – 70 per cent of the full team, the smallest in decades – have likewise been affected by the political cloud that has been imposed over their performance at Rio – in what should be the pinnacle of their sporting careers.

The point is that Russia has been unfairly demonized through doping allegations that have been whipped up on dubious grounds by Western media serving a geopolitical agenda – the same tawdry agenda that has been deployed over Ukraine, Syria, European security, trade sanctions, and so on.

The Rio Olympics have thus been turned into an anti-Russian morality play whose purpose is a base politicized objective.

The heavy-handed suppression of legitimate Brazilian protests against an unconstitutional would-be imposter-president – in the name of «keeping politics out of sports» – is absurdly conducted amidst an international spectacle of subverting the very same Olympic games into a Russia-bashing event.

Like bread and circuses of ancient Rome, we are expected to believe that the «great and good» are nobly entertaining the masses with sporting fun – with an event that has been thoroughly contaminated by toxic politics.

Hillary Clinton Wikileaks October Surprise - Hillary, Toxic and Dangerous

Posted: 13 Aug 2016 05:12 PM PDT

Clinton is the most toxic and dangerous candidate in US history. The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more

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Decline of Empire: Parallels Between the U.S. and Rome, Part IV

Posted: 13 Aug 2016 04:00 PM PDT

by Doug Casey, International Man:

Now to gratify the Druids among you.

Soil exhaustion, deforestation, and pollution—which abetted plagues—were problems for Rome. As was lead poisoning, in that the metal was widely used for eating and drinking utensils and for cookware. None of these things could bring down the house, but neither did they improve the situation. They might be equated today with fast food, antibiotics in the food chain, and industrial pollutants. Is the U.S. agricultural base unstable because it relies on gigantic monocultures of bioengineered grains that in turn rely on heavy inputs of chemicals, pesticides, and mined fertilizers? It's true that production per acre has gone up steeply because of these things, but that's despite the general decrease in depth of topsoil, destruction of native worms and bacteria, and growing pesticide resistance of weeds.

Perhaps even more important, the aquifers needed for irrigation are being depleted. But these things have all been necessary to maintain the U.S. balance of trade, keep food prices down, and feed the expanding world population. It may turn out, however, to have been a bad trade-off.

I'm a technophile, but there are some reasons to believe we may have serious problems ahead. Global warming, incidentally, isn't one of them. One of the reasons for the rise of Rome—and the contemporaneous Han in China—may be that the climate cyclically warmed considerably up to the 3rd century, then got much cooler. Which also correlates with the invasions by northern barbarians.

Economy
Economic issues were a major factor in the collapse of Rome, one that Gibbon hardly considered. It's certainly a factor greatly underrated by historians generally, who usually have no understanding of economics at all. Inflation, taxation, and regulation made production increasingly difficult as the empire grew, just as in the U.S. Romans wanted to leave the country, much as many Americans do today.

I earlier gave you a quote from Priscus. Next is Salvian, circa 440:

But what else can these wretched people wish for, they who suffer the incessant and continuous destruction of public tax levies. To them there is always imminent a heavy and relentless proscription. They desert their homes, lest they be tortured in their very homes. They seek exile, lest they suffer torture. The enemy is more lenient to them than the tax collectors. This is proved by this very fact, that they flee to the enemy in order to avoid the full force of the heavy tax levy.

Therefore, in the districts taken over by the barbarians, there is one desire among all the Romans, that they should never again find it necessary to pass under Roman jurisdiction. In those regions, it is the one and general prayer of the Roman people that they be allowed to carry on the life they lead with the barbarians.

One of the most disturbing things about this statement is that it shows the tax collectors were most rapacious at a time when the Empire had almost ceased to exist. My belief is that economic factors were paramount in the decline of Rome, just as they are with the U.S. The state made production harder and more expensive, it limited economic mobility, and the state-engineered inflation made saving pointless.

This brings us to another obvious parallel: the currency. The similarities between the inflation in Rome versus the U.S. are striking and well known. In the U.S., the currency was basically quite stable from the country's founding until 1913, with the creation of the Federal Reserve. Since then, the currency has lost over 95% of its value, and the trend is accelerating. In the case of Rome, the denarius was stable until the Principate. Thereafter it lost value at an accelerating rate until reaching essentially zero by the middle of the 3rd century, coincidental with the Empire's near collapse.

What's actually more interesting is to compare the images on the coinage of Rome and the U.S. Until the victory of Julius Caesar in 46 BCE (a turning point in Rome's history), the likeness of a politician never appeared on the coinage. All earlier coins were graced with a representation of an honored concept, a god, an athletic image, or the like. After Caesar, a coin's obverse always showed the head of the emperor.

It's been the same in the U.S. The first coin with the image of a president was the Lincoln penny in 1909, which replaced the Indian Head penny; the Jefferson nickel replaced the Buffalo nickel in 1938; the Roosevelt dime replaced the Mercury dime in 1946; the Washington quarter replaced the Liberty quarter in 1932; and the Franklin half-dollar replaced the Liberty half in 1948, which was in turn replaced by the Kennedy half in 1964. The deification of political figures is a disturbing trend the Romans would have recognized.

When Constantine installed Christianity as the state religion, conditions worsened for the economy, and not just because a class of priests now had to be supported from taxes. With its attitude of waiting for heaven and belief that this world is just a test, it encouraged Romans to hold material things in low regard and essentially despise money.

Today's Christianity no longer does that, of course. But it's being replaced by new secular religions that do.

Read More @ InternationalMan.com

VENEZUELA ECONOMIC COLLAPSE - Coffins Being Made From Cardboard. Crazy Inflation & Lack of Materials

Posted: 13 Aug 2016 08:24 AM PDT

VENEZUELA ECONOMIC COLLAPSE - Coffins Being Made From Cardboard. Crazy Inflation & Lack of Materials With food and medicine short, life is hard in Venezuela - and death is hard, too. The country's situation is so acute that families are burying their loved ones in cardboard coffins. A lack of...

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The Most Successful Investments Have Two Things in Common

Posted: 13 Aug 2016 08:00 AM PDT

This post The Most Successful Investments Have Two Things in Common appeared first on Daily Reckoning.

I'm going to tell you a remarkable story…

It illustrates the two key factors that go into a successful investment. Together, they're the surest way I know to score life-changing wins. And they apply to just about any asset, regardless of what the economy is doing.

I was in New York City recently having breakfast with Ken, a longtime reader and friend. Ken is a sharp-tongued New Yorker who tells you exactly what he thinks, good and bad. He runs a small hedge fund in Connecticut. And made a lot of money in the 1980s and 90s riding stocks like Home Depot and Wal-Mart.

But his best investment ever wasn't in stocks…

In 1999, Ken bought an acrylic painting by Ed Ruscha (Sunset to Pico) for $150,000. His wife thought he was nuts. She pointed out that they could have bought a few nice cars with that money. Nonetheless, Ken was fond of the painting.

Sunset to Pico shows nine parallel lines running diagonally across the canvas, as if seen from a bird's-eye view. Below each line is an upside down street name – the nine most recognizable east-west thoroughfares in Los Angeles.

Source: www.sothebys.com

Ken hung it in his home and mostly forgot about it. He simply enjoyed having the piece.

Fast forward to 2015. He's older now. He's thinking he might sell some art and pay off his mortgage.

He knows the value of the Ruscha painting has gone up over time, but he has no idea how much. He gets Sotheby's to appraise it. They say they can sell it for $1 million to $1.5 million.

At the high end of that range, it's a ten-bagger… Remember, he paid $150,000.

So Ken decides to put it up for auction. He puts a reserve on it of $850,000. Meaning, he won't sell it for less than that. Bidding starts at $500,000.

On the day of the auction, Ken arrives with his wife and daughter. It's a big event with high expectations… like having a horse in the Kentucky Derby. They settle in and the bidding starts.

It doesn't take long for the bidding to hit $850,000.

Ken breathes a sigh of relief. He's sold the painting. Bidding climbs higher. It hits $1 million. Ken's ecstatic. He takes a picture of the million-dollar bid. He thinks to himself: "Wow, I've sold a painting for a million dollars."

But the bidding keeps climbing higher… and higher.

It hits $1.5 million. Then the bidding stalls. The auctioneer is working the room and ready to hit the gavel, but another bid comes… $1.6 million… and they keep coming. $1.7 million… $1.8 million…

When the gavel finally falls, Ken sells his Ruscha for $2.3 million.

Even if you never buy a painting in your life, there's a lot to learn from this story…

I'm not advocating that you buy art. I'm always amused when I hear some financial "guru" warn about stocks, and tell you to buy art instead.

What they don't seem to get is that art prices are highly correlated to stocks. When we are in bubbly stock markets, we also tend to see bubbly prices for art and collectibles. Conversely, the bids for both stocks and art disappear in times of despair – like 2008. Don't believe that owning art makes you diversified.

But I do recommend buying a great asset and forgetting about it.

One of the first things I said to Ken after he finished his story was: "You'd never ride a stock that long."

Do you think Ken would've been able to hold on to that art piece if he had the price of the painting blinking on his computer screen every day for 16 years?

There would've been times when it soared. There would've been times when the price dived. There would've been long stretches where it did nothing, or maybe drifted lower. He might've sold it out of boredom to get something that seemed to be moving.

If it were a stock, he might've sold it after it doubled. Those blinking prices on your computer screen are like little siren calls to action.

This is why I tell people not to watch stock prices. Otherwise, you'll surely get scared out of even the best stocks.

I did a study of all the stocks that returned 100-to-1 from 1962 to 2014. The ups and downs of these stocks are incredible.

From the time it went public in 1980 through 2012, Apple was a 225-bagger. A $10,000 investment in turned into $2.25 million. But you had to suffer through two 80% declines and several 40%-plus drops. Netflix was a 60-bagger from 2002 to 2014. Yet it lost 25% of its value in a single day on four different occasions. There was also a four-month stretch where it fell 80%.

Sometimes it's not the decline that will cause you to sell, but the sheer boredom of nothing happening…

Warren Buffett's Berkshire Hathaway has earned a compounded annual return of 20.8% over the past 42 years. But if you bought it in 1997, for example, you had to sit with it for five years before you saw any positive return on the stock. Odds are — if you're watching stock prices and not paying attention to the business — you'll probably dump it for something more exciting.

To enjoy really big, life-altering gains in the stock market, you have to learn to sit on your hands. You have to learn that stock prices can diverge wildly from underlying business values.

And you have to learn to screen out the junk…

Ken has a filter he uses before he buys any art for investment. First, he only buys when there is already a market for the artist's work. Second, he only buys artists who've had their work on display at the Museum of Modern Art in New York City. And finally, he only buys art that has been sold at Sotheby's.

These are quality filters. They help screen out stuff that could go to zero or lose huge chunks of value. Still, there are no guarantees in art… or stocks.

In the stock market, there are a number of quality filters you can use. I recently finished a book called Quality Investing: Owning the Best Companies for the Long Term (2016) by Lawrence Cunningham, Torkell Eide, and Patrick Hargreaves. The latter two are portfolio managers at AKO Capital, a London-based investment partnership. It has delivered double the market's return since its inception in 2005.

The focus of AKO is to own quality assets, defined by these three characteristics:

  • Predictable cash flow generation: You want to own a business that generates a lot of cash. Companies like Apple and Berkshire Hathaway generate a lot of cash. Mining companies generally don't.
  • Sustainably high returns on capital: You want a business that earns a high return on the money invested in it. If you put $100 in a business and it generates a profit of $15, that's a great 15% return on capital.
  • Attractive growth opportunities: This is what propels value over the long term. Imagine owning McDonald's when it had only 300 stores. Or imagine owning a cellphone company when cellphones were only 5% of the market. You want to see that the business can be a lot bigger in the years ahead.

The book goes into quality in much more detail. But the key takeaway is this: You can't hold junk for the long term and expect great results. Buy the best assets.

The two things that drive long-term success as an investor — in stocks or art or probably anything — are time and quality. You need to give your ideas time to work. And you need to own high-quality assets.

If you do that, there's no need to worry about the crazy ups and downs of the markets… or what the Fed is doing… or the state of the economy.

You'll be like Ken, holding on to his painting all those years. And one day, with a little luck, you'll discover you have a fortune.

Regards,

Chris Mayer
for The Daily Reckoning

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The post The Most Successful Investments Have Two Things in Common appeared first on Daily Reckoning.

Blessed by Misfortune

Posted: 13 Aug 2016 08:00 AM PDT

This post Blessed by Misfortune appeared first on Daily Reckoning.

It's still way too early to know if the bull market trend of the last seven years has run its course. Mr. Market may be exhausted from all this running uphill. Or he may be just toying with us. We will wait to see.

When prices go in your direction, you're asking for trouble. No need to think; you know it all already. No need to worry, either; just sit back and let the money come to you. Until it doesn't.

You are much better off when the financial news goes against you. Then you have to wonder about your premises, your emotions — and your sanity.

Hardly a day goes by that we don't thank our lucky stars. We were blessed, you see, by misfortune.

As a child, we had no money. We couldn't lose the family fortune; we didn't have one to lose! Which turned out to be a good thing. For if we had had any money, we would have lost it in the Great Bear Market in Gold of 1980–1998.

President Nixon finally severed the dollar's connection to gold on Aug. 15, 1971. We'd read enough history to know what that meant. Soon, we would be pushing wheelbarrows full of $100 bills to the liquor store to buy a six-pack.

How to protect yourself from the inevitable hyperinflation?

Simple: Buy gold.

That is how we became a "gold bug." Then the worst possible thing happened: Gold went up. From $41 an ounce in 1971, the yellow metal soared to over $800 an ounce by 1980.

We were right! We were smart! We went "all in" on gold… and waited to be rich.

Fortunately, our luck changed before we got far. Misfortune smiled on us… setting us at odds with an 18-year secular bear market in gold.

Do you know what that is like, dear reader?

Every day… every month… every year… losing money… mocked by the market gods… dissed by family and neighbors.

Every day proved even more emphatically than the day before that we didn't know what the hell we were doing. Every day, at the sound of the closing bell, Mr. Market pronounced his solemn judgment: We were idiots.

For 18 years, we endured this punishment. And thank God we did. Because now we know how easy it is to be wrong.

You try to make out what is going on. But you see only shadows and hear only echoes. Like having a ghost haunting an old house, you will feel a chill breeze brush your face…. you will see things appear in strange places and wonder how they got there. But you will never know how this spectral world works, not as long as you cling onto your mortal coil…

As we clung to our losing positions in gold, the smart money went into stocks. Perhaps it understood that we were in a huge credit expansion that would take stocks up to 20 times their value in 1971.

From 874 in 1971 to 18,574 yesterday. Wow! But wait. What if you had just stuck with gold?

Let's see… from $41 to $1,340 an ounce. Holy smokes. That's over 30 times your money!

Maybe our "crackpot" insight was right all along. And maybe gold will turn out to be a stellar investment after all.

Regards,

Bill Bonner
for The Daily Reckoning

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The post Blessed by Misfortune appeared first on Daily Reckoning.

Gerald Celente Get Prepped for Global Systemic Collapse 2016

Posted: 13 Aug 2016 07:23 AM PDT

About Gerald Celente : Founder of The Trends Research Institute in 1980, Gerald Celente is a pioneer trend strategist. He is author of the national bestseller Trends 2000: How to Prepare for and Profit from the Changes of the 21st Century and Trend Tracking: The System to Profit from Today's...

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Gold And Silver – Panic Precious Metals Selling By Elite Overt

Posted: 13 Aug 2016 06:56 AM PDT

The Military Industrial Complex [MIC], economic war, and massive amounts of newly created debt, year after year after year, have the common purpose of protecting the Federal Reserve fiat Ponzi scheme to preserve the failing “dollar” as the world’s reserve currency. Except for phony accounting, all banks are failing, massively underfunded and totally insolvent. Everything possible is being done to prop up these banks to keep the illusion of financial stability alive, even resorting to stealing from depositors. Why anyone maintains fiat money in a bank is a mystery defying fiscal self-responsibility. All retirement accounts, at least in the United States, will be subject to government confiscation replacing everyone’s investments with worthless government bonds. After all, who more than the federal government can better manage your own funds?!

Gold Against Foreign Currencies Update

Posted: 13 Aug 2016 06:51 AM PDT

It is the dog days of summer. The metals are trading below their recent highs while the miners continue to be on the cusp of their next leg higher. In any event we remain bullish as we expect the next big move to be higher not lower. One reason, among many is Gold remains strong against foreign currencies and that often is a leading indicator for the sector at large. This is something we track often and we wanted to provide an update during the slowest period of the year.

We Will Not Escape 2016 Without A Catastrophic Financial Event :Andy Hoffman

Posted: 13 Aug 2016 05:46 AM PDT

Today's Guest: Andrew Hoffman Miles Franklin Precious Metals And Global Investment Strategies The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more

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Value of negative-yielding bonds rises to $13.4 trillion

Posted: 13 Aug 2016 05:42 AM PDT

By Robin Wigglesworth and Eric Platt
Financial Times, London
Saturday, August 13, 2016

The value of negative-yielding bonds swelled to $13.4 trillion this week, as negative interest rates and central bank bond buying ripple through the debt market.

The universe of sub-zero-yielding debt -- primarily government bonds in Europe and Japan but also a mounting number of highly-rated corporate bonds -- has grown from $13.1 trillion last week, according to figures compiled by Tradeweb for the Financial Times.

"It's surreal," said Gregory Peters, senior investment officer at Prudential Fixed Income. "It's clear that central banks are dominating markets. There's a race to the bottom. Central banks are the main drivers of this. It's not fundamental." ...

... For the remainder of the report:

http://www.ft.com/cms/s/0/973b6060-60ce-11e6-ae3f-77baadeb1c93.html



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Join GATA here:

New Orleans Investment Conference
Wednesday-Saturday, October 26-29, 2016
Hilton New Orleans Riverside
New Orleans, Louisiana
http://neworleansconference.com/

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

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

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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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Gold Bull Correction: Not an If, but When

Posted: 13 Aug 2016 01:00 AM PDT

Technical analyst Jack Chan charts indicators that confirm both the gold bull market and an impending correction.

Breaking News And Best Of The Web

Posted: 12 Aug 2016 06:44 PM PDT

Retail sales weaker than expected. Gold and oil pop. US government debt now has negative yield for foreign investors. More good earnings reports from precious metals miners. A major bitcoin hack throws crypto-currency world into turmoil. China, Japan and Russia rattle their sabers. Trump attempts to salvage his campaign, is failing.   Best Of The […]

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