Tuesday, August 23, 2016

Gold World News Flash

Gold World News Flash


Jim Grant: "This Will Turn Out To Be Very Bad For Many People"

Posted: 23 Aug 2016 12:24 AM PDT

Submitted by Christoph Gisiger via Finanz und Wirtschaft,

James Grant, Wall Street expert and editor of the investment newsletter «Grant’s Interest Rate Observer», warns of a crash in sovereign debt, is puzzled over the actions of the Swiss National Bank and bets on gold.

 

From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy. This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» is one of the most ardent critics when it comes to super easy monetary policy. Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market.

Jim, for more than three decades Grant’s has been observing interest rates. Is there anything left to be observed with rates this low?

Interest rates may be almost invisible but there is still plenty to observe. I observe that they are shrinking and that the shrinkage is causing a lot of turmoil because people in need of income are in full hot pursuit of what little of yields remains.

What are the consequences of that?

It reminds me of the great Victorian English journalist Walter Bagehot. He once said that John Law can stand anything but he can’t stand 2%, meaning that very low interest rates induced speculation and reckless investing and misallocation of capital. So I think Bagehot’s epigraph is very timely today.

John Law was mainly responsible for the great Mississippi bubble which caused a chaotic economic collapse in France in the early 18th century. How is the story going to end this time?

It will turn out to be very bad for many people. If Swiss insurance and reinsurance executives are reading this right now they might be rolling their eyes and they might be frustrated to hear an American scolding from a distance of 3000 miles about the risk of chasing yield. After all, if you’re in the business of matching long term liabilities with long term assets you have little choice but to wish for a better, more sensible world. But you have to take the world as it is and today’s world is barren of interest income. The fact is, that these are very risk fraught times.

Where do you see the biggest risks?

Sovereign debt is my nomination for the number one overvalued market around the world. You are earning nothing or less than nothing for the privilege of lending your money to a government that has pledged to depreciate the currency that you’re investing in. The central banks of the world are striving to achieve a rate of inflation of 2% or more and you are lending certainly at much less than 2% and in many  cases at less than nominal 0%. The experience of losing money is common in investing. But where is the certitude of loss even before your check clears? That’s the situation with sovereign debt right now.

On a worldwide basis, more than a third of sovereign debt is already yielding less than zero percent.

There is not quite a bestseller, but a very substantial book called «The History of Interest Rates». It was written by Sidney Homer and Richard Sylla. Sidney Homer is no longer with us, but Richard Sylla is alive and well at New York University. So I called him and said: « Richard, I’ve read many pages but not every single page in your book which traces the history of interest rates from 3000 BC to the present. Have you ever come across negative bond yields?» He said no and I thought that would be kind of a major news scoop: For the first time in at least 5000 years we have driven interest rates below the zero marker. I thought that was an exceptional piece of intelligence. But I notice however that nobody seems to have picked up on it.

It’s now already two years ago since the ECB was the first major central bank to introduce negative rates.

There are some other historical settings: In Europe, ??Monte dei Paschi di Siena, this 500 and plus year old bank in Italy, is struggling and as broke as you can be without being legally broke. Monte dei Paschi has survived for half a millennium and now it is on the ropes. Meanwhile, the Bank of England is doing things today that it has never done in its history which is 300 plus years. So I suggest that these are at least interesting times and in many respects unprecedented ones.

So what’s the true meaning of all this?

In finance, mostly nothing is ever new. Human behavior doesn’t change and money is a very old institution and so are our markets. Of course, techniques evolve, but mostly nothing is really new. However, with respect to interest rates and monetary policy we are truly breaking new ground.

Now central bankers are even talking openly about helicopter money. Will they really go for it?

I already hear the telltale of beating rotor blades in the sky. I also hear the tom-toms of fiscal policy being pounded. There seems to be some kind of a growing consensus that monetary policy has done what it can do and that what me must do now – so say the «wise ones» – is to tax and spend and spend and spend. That seems to be the new big idea in policy. In any case, it is not good for bondholders.

Interestingly, nobody seems to be talking about the growing government debt anymore. Also, budget politics are just a side note in the ongoing presidential elections.

The trouble with this election is that somebody has to win it. I have no use for Donald Trump but I have equally no use for Hillary Clinton. The point is that one of those two is going to win. That is the tragedy! So we at Grant’s regret that one of them is going to win.

The financial crisis and the weak economic recovery likely have spurred the rise of Donald Trump. Why isn’t the US economy in better shape after all those monetary programs?

I wonder how it would have been if markets had been allowed to clear and if prices had been allowed to find their own level in real estate in 2008. Central banks have intervened to quell financial panics for at least 200 years. For instance, in 1825 the bank of England lent without stint and was not – as they said – overnice about the kind of collateral. That was a very dramatic intervention. So it’s not as if we have never before seen the lender of last resort at work. But what is new is the medication of markets through this opiate of quantitative easing year after year after year following the financial crisis. I think that this kind of intervention has not only not worked but it has been very harmful. Around the world, the economies are not responding despite radical monetary measures. To some degree, I believe,  they are not recovering because of radical monetary measures.

What’s exactly the problem with the US economy?

There is another side of what we are seeing now: In America certainly the Federal Reserve and bank regulators generally are very heavy handed in their interventions. I’m sure they have every good intention. But with their regulatory charges they are suppressing the recovery in credit that takes place  in a normal economic recovery and in this particular case after a depression or after a liquidation.

Then again, a revisit of the financial crisis would be catastrophic.

The new rules with respect to financial reform have absorbed not only forests worth of paper but also the time and attention of legions of lawyers. If you talk to a banking executive what you hear is that the banks have been overwhelmed by the need to hire compliance and regulatory people. This is especially bearing on the smaller banks. I think that’s part of the story of the lackluster recovery: Monetary policy has been radically open in the creation of new credit. But it has been radically restrictive with regard to risk taking in the private world.

So what should be done to get the economy back on track?

There are guides in history on how to do this. For more than a hundred years in Britain, in the United States and probably as well in Switzerland, the owners of the equity of a bank themselves were responsible for the solvency of the bank. If the bank became impaired or insolvent they had to stump up more capital to pay off the liability holders, including the depositors. But over the past hundred years collective responsibility in banking has gradually replaced individual responsibility. The government, with the introduction of deposit insurance, new regulations and interventions has superseded the old doctrine of the responsibility of the owners of a property. That’s why I think we need to go away from government intervention and go more towards market oriented solutions such as the old doctrine of responsibility of the bank owners.

At least in the US, the Fed is trying to go back to a more normal monetary policy. Do you think Fed chief Janet Yellen will make the case for another rate hike at the Jackson Hole meeting next week?

Janet Yellen is by no means an impulsive person. According to the « Wall Street Journal», she arrives for a flight at the airport hours early – and that’s plural! So this is a most deliberative and risk averse person. Also, as a labor economist, she’s a most empathetic person. She believes what most interventionist minded economists believe: They have very little faith in the institution of markets and they don’t believe that the price mechanism is anything special. They want to normalize rates and yet they can always find an excuse for not doing so. We have been hearing for years now that the next time, the next quarter, the next fiscal year they will act. So I believe what I’m seeing: None of these days the Federal Funds Rate will go higher than 0.5%. I can’t see that happening.

Wall Street seems to think along the same lines. So far, many investors don’t take the renewed chatter of a rate hike too seriously.

The Fed is now hostage to Wall Street. If the stock market pulls back a few percent the Fed becomes frightened. In a way I suppose, the Fed is justified in that belief because it is responsible to a great degree for the elevation of financial asset values. Real estate cap rates are very low, price-earnings-ratios of stocks  are very high and interest rates are extremely low. One can’t be certain about cause and effect. But it seems to me that the central banks of the world are responsible for a great deal of this levitation in values. So perhaps they feel some responsibility for letting the world down easy in a bear market. It has come to a point where the Fed is virtually a hostage of the financial markets. When they sputter, let alone fall, the Fed frets and steps in.

Obviously, the financial markets like this cautious mindset of the Fed. Earlier this week, US stocks climbed to another record high.

Isn’t that a funny thing? The stock market is at record highs and the bond market is acting as if this were the Great Depression. Meanwhile, the Swiss National Bank is buying a great deal of American equity.

Indeed, according to the latest SEC filings the SNB’s portfolio of US stocks has grown to more than $60 billion.

Yes, they own a lot of everything. Let us consider how they get the money for that: They create Swiss francs from the thin alpine air where the Swiss money grows. Then they buy Euros and translate them into Dollars. So far nobody’s raised a sweat. All this is done with a tab of a computer key. And then the SNB calls its friendly broker – I guess UBS – and buys the ears off of the US stock exchange. All of it with money that didn’t exist. That too, is something a little bit new.

Other central banks, too, have become big buyers in the global securities markets. Basically, it all started with the QE-programs of the Federal Reserve.

It is a truism that central banks do this. They’ve done this of course for generations. But there is something especially vivid about the Swiss National Bank’s purchases of billions of Dollars of American equity. These are actual profit making, substantial corporations in the S&P 500. So the SNB is piling up big positions in them with money that really comes from nothing. That’s a little bit of an existential head scratcher, isn’t?

So what are investors supposed to do in these bizarre financial markets?

I’m very bullish on gold and I’m very bullish on gold mining shares. That’s because I think that the world will lose faith in the PhD standard in monetary management. Gold is by no means the best investment. Gold is money and money is sterile, as Aristotle would remind us. It does not pay dividends or earn income. So keep in mind that gold is not a conventional investment. That’s why I don’t want to suggest that it is the one and only thing that people should have their money in. But to me, gold is a very timely way to invest in monetary disorder.

Dispelling The Norwegian Housing Myth

Posted: 22 Aug 2016 10:55 PM PDT

Submitted by Alexander Grover in Oslo, Norway

Recently, Dagens Næringsliv published an article where an economist from DnB (Norway’s largest bank) stated that Norway is not in a housing bubble although conditions resemble one and prices can still fall.  The article bases the current prices on the following assumptions:

  • High population growth
  • High development in household incomes and expectations
  • Good conditions on the labor market
  • Low-interest rates and high credit supply

The article continues, differentiating the Norwegian housing market from the American one, basically stating that a socialist country with lots of benefits can handle higher debt levels than a capitalist one. It fails to acknowledge the impact of the eroding oil foundation on the long term economy.

My previous article discusses and questions the above in detail. To further emphasize that housing’s best days are behind us, let’s take a look at prices in dollar and commodity terms:  

Oslo Apartment Prices in Dollar Terms

Regarding universal currency, this bubble already popped in 2013, now trying to stage a recovery. However, the long-term USDNOK rate will depend on oil prices, trade balances and interest rates.

Housing Prices in Gold Terms          

Gold is considered both the universal commodity and currency since it does not perish, easy to assay and disconnected from the Central bank’s hysterics.  In gold terms, the bubble burst back in 2007.

Real Interest Rates

As long as real rates are negative (and becoming more so), the economy is out of balance (since mid-2012), eroding the currency value and creating asset bubbles.  When people stop losing from saving at a bank and Norway finds an alternative to the oil industry, the economy can be considered stable.  Since my last article, the gap between inflation and benchmark rates have widened (from ca. -3.3 to -3.9), putting more pressure on the NOK and bringing us closer to a day of reckoning: uncontrollable inflation or an asset price correction via sudden and decisive rate hikes. 

Source: Norges Bank and SSB

Conclusion        

Nevertheless, even though recent inflation figures make Norway reluctant to cut rates, they may do so, maintaining the illusion. House prices may increase in NOK terms, but they won’t buy much when sellers realize a profit. Remember, there are other investments than housing: dividend yielding stocks in companies with high equity ratios, precious metals, education and your own business.

Marc Faber Rings the Alarm Bell, Predicts a 50% Near Term Correction in Stocks

Posted: 22 Aug 2016 08:45 PM PDT

 

 


Marc Faber Rings the Alarm Bell, Predicts a 50% Near Term Correction in Stocks

Written by Nathan McDonald (CLICK FOR ORIGINAL)


Volatility is the name of the game. Stocks are acting up, but standing strong. Oil is propelling higher and the US dollar is falling. Turmoil around the world has never been higher and an ominous shadow is lurking in the background, ready to strike.

 

The situation that we now face is ultimately going to end in a collapse of epic proportion. The financial world is now a ticking bomb that is just waiting to explode - I know this, you know this and even if the masses don't, they can feel it in their bones.

 

The only ones that don't seem to be aware of this dangerous situation are the elites who are currently profiting off of this heightened turmoil and their mainstream media mouthpieces who couldn't be more happy to assist in the destruction of the Western financial world. After all, it would make for a good story, right?

 

Unfortunately, I am not alone in this assessment of the current global situation. Marc Faber, a prominent voice in the financial community and the editor of the Gloom, Boom and Doom report has taken an ultra bearish view of the current economy.

 

A recent CNBC article, highlights a recent interview they had with Marc Faber this past week, and states the following:

 

The notoriously bearish Marc Faber is doubling down on his dire market view.


The editor and publisher of the Gloom, Boom & Doom Report said Monday on CNBC's "Trading Nation" that stocks are likely to endure a gut-wrenching drop that would rival the greatest crashes in stock market history.

"I think we can easily give back five years of capital gains, which would take the market down to around 1,100," Faber said, referring to a level 50 percent below Monday's closing on the S&P 500.


The S&P 500 is sitting at 2,184.29 at the time of writing! This would be a truly stunning collapse of the markets. One that would send the financial world plummeting out of control. Contagion would spread and the credit markets would utterly and completely seize up.

 

What is equally as shocking as this claim of monumental collapse is the fact that Marc Faber believes this will happen in the near term future! This isn't some far fetched 5-10 year prediction that no one will remember he made down the road. No, this is a bold statement from a man who accurately predicted the 2008 crisis and many of the drastic events that have unfolded in modern times.

 

Marc Faber is just one more expert that is ringing the alarm bells. Sadly, the mainstream media continue to dismiss the experts who are trying to warn the masses, stating that we are conspiracy theorist and nothing more. Even though we have been proven right in our predictions time and time again, causing the trash can to nearly overflow with tin foil hats.

 

I don't know if the collapse is in the near term such as Marc Faber believes, but I know that it could occur at anytime. Whether it be a week, a month, or years from now, wouldn't you rather be prepared? The risk is simply too great to not be.

 

Please email with any questions about this article or precious metals HERE

 

 

 

Marc Faber Rings the Alarm Bell, Predicts a 50% Near Term Correction in Stocks

Written by Nathan McDonald (CLICK FOR ORIGINAL)

THE DOLLAR IS DOOMED: Fed Admits Another $4 TRILLION In QE Will Be Needed To Offset An “Economic Shock”

Posted: 22 Aug 2016 08:05 PM PDT

[Ed. Note: Um, if you don’t have PHYSICAL precious metal by now, what on earth are you waiting for? Click HERE. ~SGT]

from Zero Hedge:

“Large-scale asset purchases and forward guidance about the future path of the federal funds rate have almost no ability to offset a shock in current circumstances, but down the road may be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in some, but not all and maybe even not most, circumstances.”

In a Fed Staff working paper released over the weekend titled “Gauging the Ability of the FOMC to Respond to Future Recessions” and penned by deputy director of the division of research and statistics at the Fed, the author concludes that “simulations of the FRB/US model of a severe recession suggest that large-scale asset purchases and forward guidance about the future path of the federal funds rate should be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in most, but probably not all, circumstances.”

So far so good, however, there are some notable problems with the paper’s assumptions, as Citi head of G10 FX, Steven Englander, observes.

He writes that the paper's basic framework is to take the standard US economic model used by the Fed, give it a negative shock big enough to push the unemployment rate up by 5 percentage points (big but not unprecedented over the last 50 years) and deploying the Fed's policy rate, QE and forward guidance tools to see if they are adequate to get the economy back on track. Negative rates and helicopter money are not used.

The two simulations assume:

  1. the economy is in equilibrium initially with inflation at 2%, r* at 1%, so equilibrium nominal fed funds is 3%
  2. the economy is in equilibrium initially with inflation at 2%, r* at zero (secular stagnation) and equilibrium nominal fed funds at 2%

He compares three policy approaches. The first assumes a linear world where fed funds can go into negative territory but there is no breakdown in the structure of economic relationships. It is probably not a realistic view of policy ineffectiveness at negative rates, but it is mean to be a baseline. The second just takes fed funds down to zero and keeps it there long enough for unemployment to return to baseline.

 The third takes fed funds down to zero and augments it with additional USD2trn of QE and forward guidance. A variation on the third policy response function doubles the amount of QE in the second simulation.

In other words, the Fed is already factoring in a scenario in which a shock to the economy leads to additional QE of either $2 trillion, or in a worst case scenario, $4 trillion, effectively doubling the current size of the Fed’s balance sheet.

He continues his critique of the Fed’s argument as follows:

In the simulations. QE and forward guidance take 10yr yields down 225-300 bps depending on the starting point for fed funds and whether you do $2 trillion or $4 trillion for QE. But that is not going to work very well if by design fed funds and 10yr yields can't go below zero. And if expected rates are already low then forward guidance does not have much room. Fed official will gave to keep a straight face while saying they we will keep rates at zero … forever.

 

What makes it work is that QE and committing to low rates for longer gets the long rate down quickly and this compensates for the inability to take short rates down as far as you would want. In the unconstrained model, the maximum drop in short rates is almost 9 percentage points, almost twice as much as in the constrained model, but the QE/forward guidance  lower takes (and keeps) long rates 75bps lower than when the Fed takes rates to zero and stops. When the Fed is starting from 3% fed funds, the combo can almost entirely offset the zero constraint, but only if the full $4 trillion QE is brought to bear. Starting from 2%, QE of $2 trillion is not enough to get long rates down far or fast enough to offset the shock.

All of which brings Englander to the following stunning conclusion:

I would have rewritten the conclusion as: “large-scale asset purchases and forward guidance about the future path of the federal funds rate have almost no ability to offset a shock in current circumstances, but down the road may be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in some, but not all and maybe even not most,circumstances.” The italics and colors show my changes.

Just as troubling, Englander admits that the nuanced read of the Fed paper admits it is effectively powerless to withstand a sharp recession: “The key policy issues and what drives the paper's conclusions and my variant is the starting point.Were we to have a recession today or a year (or even two years) from now, it is very unlikely that the Fed weapons have anywhere near the potency that the paper describes. The FOMC had an end-2018 median fed funds rate of 2.4% at the June meeting and my guess is that it is lower now. Markets don't price in even 100bps in fed funds till the end of 2019 (taking Eurodollar rates and subtracting 40bs or so.) That said, a 5% shock to the unemployment rate is pretty extreme, if the Fed is not stepping on the brakes hard or world not falling apart for other reasons.”

Read More @ ZeroHedge.com

“A Date Which Will Live in Infamy:” President Nixon’s Decision to Abandon the Gold Standard

Posted: 22 Aug 2016 07:40 PM PDT

from Antonius Aquinas:

Franklin Delano Roosevelt called the Japanese "surprise" attack on the U.S. occupied territory of Hawaii and its naval base Pearl Harbor, "A Date Which Will Live in Infamy." Similar words should be used for President Nixon's draconian decision 45 years ago this month that removed America from the last vestiges of the gold standard.

On August 15, 1971 in a televised address to the nation outlining a new economic policy entitled, "The Challenge of Peace," Nixon instructed the Treasury Department "to take the action necessary to defend the dollar against the speculators."*

Nixon continued:

I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interests of monetary stability and in the best interests of the United States.**

Of course, any objective student of history knows that this was a lie and that it was not "speculators" which were causing monetary instability, but the U.S.'s own crazed inflationary policy which attempted to fund its imperialistic endeavor in Vietnam while expanding the welfare state at home.  This resulted in the Treasury losing an alarmingly amount of gold reserves to other central banks who rightly sought real value in exchange for depreciated American greenbacks.

In essence, Nixon's decision ended gold redemption and placed the U.S. and the rest of the world on a purely fiat paper standard for the first time in recorded time.  By doing so, the U.S., in effect, became a deadbeat nation which no longer honored its obligations and was set on the road to its current banana republic status.

Instead of impeachment proceedings and his ultimate resignation for the juvenile break in at the headquarters of the nation's other ruling crime syndicate, Nixon should have been imprisoned for this deliberate and destructive act which has led, in large measure, to the nation's crushing and insurmountable debt burden, reoccurring booms and busts, and now economic stagnation.

Nixon's disastrous decision had precedent.  FDR had his own day of monetary infamy in 1933 when, by Executive Order 6102, he outlawed the private ownership of the precious metal while eliminating  gold redemption by banks for dollars.  Ostensibly, the order was instituted as an emergency measure to combat the Depression, but in reality, it was done to allow the Federal Reserve greater "flexibility" in inflating the money supply.

While Roosevelt and Nixon's decisions would backfire economically, their actions highlighted the totalitarian direction that the federal government and its executive branch were heading throughout the 20th century.  Moreover, the lack of opposition or protest to blatant executive dictatorial decrees by either the legislative or judicial wings of the federal government demonstrates again the flawed and frankly naive argument put forth by Constitutionalists of every ideological persuasion on how the celebrated "separation of powers" theory checks tyranny.

Nixon's final abandonment of the gold standard had far greater ramifications than simply bad economics.  Without the discipline of hard money, central banks could, and did, create massive quantities of paper money and credit, which enriched the politically connected financial elites and the governments which they were aligned.  Such power was used, in time, to control, spy on, and regulate the subject populations to a degree never seen before.  The power of the state has swelled mostly through bank credit expansion without worry of gold redemption.

Read More @ AntoniusAquinas.com

Competitive Devaluation and Rising Precious Metals Prices

Posted: 22 Aug 2016 07:20 PM PDT

by Jeff Nielson, Bullion Bulls:

Words have meaning. Actions have consequences. It is very easy for people to forget these tautologies inthe Wonderland Matrix. Most of the time, the words we hear are lies. In other words, what is said is not what is actually meant (or thought). Alternately, the words we hear are vacuous euphemisms, like "the New Normal", i.e. words without any meaning at all.

Actions have consequences. But inside the Wonderland Matrix, the mainstream media pretends there are no consequences, or (even more perversely) asserts that the "consequences" of a particular action are the precise opposite of the actual consequences. An obvious example of this perversity came when the ECB loaned much more money to Greece (a bankrupt economy), and then called that loan "a bail-out". In the real world; you cannot "bail out" a bankrupt debtor by increasing its debts, you can only worsen the insolvency.

In the real world, actions have real consequences, hence the title to this piece. Competitive devaluation is the official economic/monetary policy of the Corrupt West. What is the consequence of competitive devaluation? To answer that question, as always, we must begin with definition of terms. What is "competitive devaluation"? This was fully explained in a recent commentary.

The plain meaning of this term could not be simpler. What is devaluation itself? It is when a nation (or economic bloc) reduces the exchange rate of its currency. What is competitive devaluation? It is when nations race to devalue their currencies, as rapidly as possible.

What happens when a nation devalues its currency/reduces its exchange rate? This is an important question, since (apparently) none of the talking heads of the mainstream media and none of the charlatan economists know the answer to it. When a nation reduces its exchange rate, the price of everythingrises.

Devaluation = reducing the exchange rate = creating (price) inflation.

These terms are precisely, mathematically synonymous. Thus competitive devaluation = competitive (price) inflation. This brings us back to the insanity of the Wonderland Matrix. Inside this asylum, the inmates are "competitively devaluing" their currencies as rapidly as possible. At the same time, we have these corrupt regimes and central banks insisting there is "no inflation" (no price inflation).

These governments are racing to create inflation, but (supposedly) failing to create any, at all. If this absurdity was actually true, it would be grounds for all of these incompetent regimes to resign in disgrace – or be impeached for failing to do so. The reality, however, is precisely opposite.

If there is one thing we know with absolute certainty about the monetary fraud-factories called "central banks", it is that they know how to create inflation. The criminal kingpin of these fraud-factories is the Federal Reserve. In its first century of crime, the value of the U.S. dollar has fallen by 99%. It hasdevalued the U.S. dollar by 99%, i.e. 99% of its value has been devoured by Federal Reserve-created "inflation".

Now this same entity is claiming that it is impossible to devalue the dollar any further – no matter how much new funny-money it cranks out from its crooked printing press. What does it mean when an entity devalues and devalues and devalues its currency, and then tells us it can't devalue the currency any further? It means that this currency is already worthless. You can't "devalue" a currency below zero.

In fact, the Federal Reserve has been competitively devaluing the U.S. dollar since the day it was born. It's finished. Mission accomplished. The U.S. dollar is fundamentally worthless, based upon several different metrics.

The U.S. dollar has been hyperinflated to worthlessness, with the Bernanke Helicopter Drop simply being the proverbial "last straw". With other Western currencies now being little more than fraudulent derivatives of the U.S. dollar, their own status is little different. However, let's pretend otherwise. Let'spretend that these paper currencies are not already worthless, i.e. it is still possible for our traitorous governments to "competitively devalue" them even further.

As already explained; competitive devaluation = competitively reducing the exchange rate = racing to create price inflation. A price spiral. Competitive devaluation logically and mathematically implies a price spiral. You cannot have one without the other, they are two sides of the same coin. However, in a world of markets, such a price spiral will not be uniform. Some asset classes will spiral higher at a different rate than other asset classes.

We see this, even within the opaque fog of the Wonderland Matrix. Food and housing costs spiral higher, in what is clearly the beginning of a hyperinflation Death Spiral. Prices for other asset classes (notably manufactured goods) have risen much more slowly. A large part of the reason for this discrepancy was explained in a previous commentary.

The situation is different with respect to precious metals. Gold and silver are "monetary metals". The true meaning of this phrase was also fully explained recently. As monetary metals, gold and silver mustfully reflect changes in our monetary system.

Read More @ BullionBullsCanada.com

Gold Price Closed at $1337.70 Down $2.70 or -0.20%

Posted: 22 Aug 2016 06:29 PM PDT


22-Aug-16PriceChange% Change
Gold, $/oz1,337.70-2.70-0.20%
Silver, $/oz18.84-0.46-2.37%
Gold/Silver Ratio70.9921.5452.22%
Silver/Gold Ratio0.0141-0.0003-2.18%
Platinum1,106.50-9.70-0.87%
Palladium691.25-17.20-2.43%
S&P 5002,182.64-1.23-0.06%
Dow18,466.86-23.15-0.13%
Dow in GOLD $s285.370.220.08%
Dow in GOLD oz13.800.010.08%
Dow in SILVER oz980.0422.062.30%
US Dollar Index94.500.020.02%

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ARE NEW YORKERS ARE FREE-RANGE SLAVES? GERALD CELENTE

Posted: 22 Aug 2016 05:01 PM PDT

 The Cato Institute reports New York is again the least free state in the country. Why are liberal states like New York the least free? Legendary trends forecaster Gerald Celente joins Gary Franchi to explain. The Financial Armageddon Economic Collapse Blog tracks trends and...

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

Gold Daily and Silver Weekly Charts - Comex Silver Option Expiration On Thursday

Posted: 22 Aug 2016 01:41 PM PDT

Tomorrow’s Ten-Baggers, Part 1: Jay Taylor’s Favorite Juniors

Posted: 22 Aug 2016 12:32 PM PDT

Precious metals investors are a conflicted bunch right now. Most are happy with the action so far this year, and still expect rising gold and silver to send high-quality mining stocks to the moon. But most were also caught a bit off-guard by the miners’ recent spike. For every investor who loaded up on, say, […]

The post Tomorrow’s Ten-Baggers, Part 1: Jay Taylor's Favorite Juniors appeared first on DollarCollapse.com.

Last chance to buy GATA conference DVDs and posters of Wall St. Journal ad

Posted: 22 Aug 2016 10:55 AM PDT

2:10p ET Monday, August 22, 2016

Dear Friend of GATA and Gold:

GATA soon will be closing its merchandise business, so please consider helping us by purchasing a set of DVD recordings of our Gold Rush 2011 conference in London and our 2005 conference in Dawson City, Yukon Territory, Canada.

Or you can purchase a poster of our 2008 full-page color advertisement in The Wall Street Journal warning of the financial disaster impending from the suppression of the gold price by central banks.

DVDs of the proceedings of the two conferences can be purchased here:

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

Posters of the Wall Street Journal ad can be purchased here:

http://tinyurl.com/zr4tjuc

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org



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Sandspring Resources Commences 2016 Exploration Campaign

Company Announcement
August 17, 2016

Sandspring Resources Ltd. (TSX VENTURE:SSP, US OTC: SSPXF) is pleased to announce commencement of the 2016 exploration campaign at its Toroparu Gold Project in Guyana, South America.

In 2015 the company completed a 3,700-meter diamond drilling program on the promising Sona Hill Prospect, located 5 kilometers southeast of the main Toroparu deposit. Sona Hill is the easternmost gold anomaly in a cluster of 10 gold features located within a 20-by-7-kilometer hydrothermal alteration halo around Toroparu. Drilling at Sona Hill in 2012 and in 2015 intercepted high-grade mineralization in both saprolite and bedrock, and confirmed the continuity and grade potential of the Sona Hill mineralization.

For the remainder of the announcement and highlights of the 2015 drill program:

https://finance.yahoo.com/news/sandspring-resources-commences-2016-explo...



Join GATA here:

New Orleans Investment Conference
Wednesday-Saturday, October 26-29, 2016
Hilton New Orleans Riverside
New Orleans, Louisiana
http://neworleansconference.com/wp-content/uploads/2016/08/2016_Powell.h...

Support GATA by purchasing DVD recordings of the proceedings of our London conference in August 2011 or our Dawson City, Yukon Territory, conference in August 2006:

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

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

http://www.cartserver.com/sc/cart.cgi

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

Harry Dent WARNING Global Economic Collapse is Near 2016 2017

Posted: 22 Aug 2016 10:31 AM PDT

In his book The Great Boom Ahead, published in 1992, Mr. Dent stood virtually alone in accurately forecasting the unanticipated "Boom" of the 1990s. Today he continues to educate audiences about his predictions for the next and possibly last great bull market, from late 2005 into early to mid...

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

Biggest bond traders are on a negative-yield binge, and can make it pay

Posted: 22 Aug 2016 09:03 AM PDT

By Brian Chappatta and Andrew Wong
Bloomberg News
Sunday, August 21, 2016

It might be considered absurd, if not for the unprecedented contortions in global financial markets.

Pacific Investment Management Co.'s largest international bond fund and China are piling into negative-yielding Japanese debt, buying securities that pay out less than the purchase price. And there's a way to turn a tidy profit off the trade.

At the heart of the strategy is the world's insatiable appetite for dollar assets, which is presenting an opportunity for investors with greenbacks to spare: the chance to pick up extra yield, a luxury in an era of record-low interest rates. For dollar lenders, even three-month Japanese bills, trading at a rate of negative 0.24 percent, offer juicy returns through a swap transaction that locks in exchange rates. ...

... For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-08-21/pimco-china-show-no-fe...



ADVERTISEMENT

Sandspring Resources Commences 2016 Exploration Campaign

Company Announcement
August 17, 2016

Sandspring Resources Ltd. (TSX VENTURE:SSP, US OTC: SSPXF) is pleased to announce commencement of the 2016 exploration campaign at its Toroparu Gold Project in Guyana, South America.

In 2015 the company completed a 3,700-meter diamond drilling program on the promising Sona Hill Prospect, located 5 kilometers southeast of the main Toroparu deposit. Sona Hill is the easternmost gold anomaly in a cluster of 10 gold features located within a 20-by-7-kilometer hydrothermal alteration halo around Toroparu. Drilling at Sona Hill in 2012 and in 2015 intercepted high-grade mineralization in both saprolite and bedrock, and confirmed the continuity and grade potential of the Sona Hill mineralization.

For the remainder of the announcement and highlights of the 2015 drill program:

https://finance.yahoo.com/news/sandspring-resources-commences-2016-explo...



Join GATA here:

New Orleans Investment Conference
Wednesday-Saturday, October 26-29, 2016
Hilton New Orleans Riverside
New Orleans, Louisiana
http://neworleansconference.com/wp-content/uploads/2016/08/2016_Powell.h...

Support GATA by purchasing DVD recordings of the proceedings of our London conference in August 2011 or our Dawson City, Yukon Territory, conference in August 2006:

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

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

The Only Thing That Can Save Your Retirement…

Posted: 22 Aug 2016 09:01 AM PDT

This post The Only Thing That Can Save Your Retirement… appeared first on Daily Reckoning.

Let's be honest, if you're planning to retire in the near future, you're royally screwed…

The Fed has eliminated interest income through zero interest rates. The days of getting 5% interest on your hard-earned savings are a dead-end dream.

Artificially inflated stocks are at all-time highs by way of this insane interest-rate policy. And with stocks at these elevated levels, it's hard to imagine much more than 2%–3% returns over the next decade.

Social Security? Come on. With a funding gap estimated at $13.4 trillion?  Like it or not, your Social Security benefits will be cut big time… or you'll be working well into your 80s. Or both.

No doubt you're getting squeezed on all sides. And that's just the tip of the iceberg.

There's another punch to the gut coming. I hate to be the bearer of bad news, but the retirement crisis is about to get a whole lot worse.

Broken Promises

The government has a nasty secret it's keeping from you: It owes its retirees a ton of money it can't possibly pay them. And you're on the hook for it.

Credit-rating agency Moody’s recently reported that federal, state and local governments are $7 trillion short in pension payment funding. That's 40% of the entire U.S. gross national product. Uh-oh.

And that's just public sector pensions…

Moody's also found that private multiemployer pension plans are massively underfunded by another $337 billion.

And the situation isn't going to improve. That's because we're getting hit with a demographic time bomb…

As baby boomers retire in record numbers, we're seeing fewer U.S. workers for each retiree.

Right now, we have three workers for each retiree. Within a decade it will be down to two. More retired dependents with fewer supporting workers means slower economic growth and higher debt obligations.

In other words, we're not growing our way out of this problem. It's only going to get dicier. And taxpayers like you are going to get the bill rammed down your throat.

When these pension plans go bust, promised benefits will be cut to the bone. But there will still be a shortfall of epic proportions. And it will be made up by tax increases and bailouts… paid for by you.

Make no mistake: This government "screw up" didn't happen by accident. Reaching into your pockets for more cash is the redistributionist's objective.

You are just a pawn in game. And the whole thing is about to go off the rails.

The Only Way for You to Win

So with no interest income, miniscule future stock returns, stagnant economic growth, higher taxes, bailouts by the bushel and guaranteed Social Security cuts, how can you possibly enjoy a comfortable retirement?

If you're counting on those options, you're toast and you might as well tune me out.

But for those that are ready to take control of their future, let's get open-heart-surgery serious about your immediate steps…

The first and most important thing you need to do is protect your capital. That means avoiding the traditional "buy and hold" investing strategy.

With "buy and hope," when the market crashes (and it will), well… tough luck, you are "stock-market dead."

That means losing half of your retirement account in a matter of months, like what happened in 2008, is fait accompli. It could take you a decade to just get back to breakeven — if you ever do. That's the retirement killer you must avoid at all costs.

The second thing you need to do is outperform "buy and hold." With stocks at record highs, most estimates have equities returning 2%­–3% over the next decade.

While nobody can predict the future, it's hard to imagine stocks averaging the expected 8% or more returns per year from these bubblicious heights.

And you'll need returns far in excess of that to make up for all of the known and unknown challenges we all face.

That's easier said than done.

But thankfully, outsized returns are exactly what trend following delivers.

Analysts at AQR Capital Management crunched data back more than 110 years and found that annualized gross returns for trend following were 14.9%. That's compared to the roughly 9% return from equities during the same period.

And trend following was also far superior in protecting investors' capital. The bright minds at AQR found that during the worst ten market crashes of the past 110 years, trend following experienced positive returns in nine out of ten of those events.

Look, there's no way in hell you're going to live the retirement you want through a risky "buy and hold" strategy with stocks at historic highs, with bonds paying nothing and with Social Security gearing up for drastic cuts.

What you need is a lower-risk, higher-return alternative to overcome America's daunting retirement crisis. And based on historic data, trend following is the one strategy that gives investors like you the power to win out.

Unfortunately, most investors will continue to trust the rigged system.

They will ignore my warning.

But they're just like lemmings jumping off the cliff into the ocean.

Even though they see the obvious danger, they follow each other – one by one – into the abyss.

Don't be a lemming.

Please send me your comments to coveluncensored@agorafinancial.com. Let me know how you're prepared for the coming crisis.

Regards,

Michael Covel
for The Daily Reckoning

The post The Only Thing That Can Save Your Retirement… appeared first on Daily Reckoning.

Is Russia Getting Sucked Into A Multi Arab War? - Morris

Posted: 22 Aug 2016 03:30 AM PDT

 We will activate all previous Yemen-USSR treaties, so Russia can use our military bases, airports & ports to fight terrorism." - Saleh The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists ,...

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

Breaking News And Best Of The Web

Posted: 21 Aug 2016 05:37 PM PDT

Stocks, oil and gold down, dollar up in early trading. European banks deteriorating. Negative interest rates getting a lot of attention. More scary predictions from George Soros. Citi loads up on derivatives. Fed officials predicting Sept rate hike. Corporations buy back fewer shares, insiders sell more. Money pours into emerging markets. Silver miners gain fans. […]

The post Breaking News And Best Of The Web appeared first on DollarCollapse.com.

Felix Zulauf Sees Final Leg of the Bull Market

Posted: 21 Aug 2016 05:00 PM PDT

It's no secret that Felix Zulauf has made timely calls on our show in the past. Just last December on FS Insider, Zulauf called the bottom in gold, which has since risen about 30 percent. This time on Financial Sense, Zulauf discusses his current outlook and how problems developing...

Novo Resources Aims for High-Grade Gold Trifecta

Posted: 21 Aug 2016 01:00 AM PDT

Bob Moriarty of 321 Gold, who has been following Novo Resources for four years, discusses the company's three programs that are likely to gain investor attention.

Gold Ready to Correct

Posted: 20 Aug 2016 01:00 AM PDT

No bull market is sustainable on a nonstop price spike, says technical analyst Jack Chan, and he predicts the current gold bull market will soon correct, providing an good entry point.

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