Tuesday, September 20, 2016

Gold World News Flash

Gold World News Flash


An Unorthodox Solution To The World's Economic Problems

Posted: 20 Sep 2016 12:30 AM PDT

Submitted by Frank Hollenbeck via Mises.ca,

We currently face a monumental dilemma. How do we extract ourselves from all this excessive debt without crashing the world economy? There is a solution which is totally counterintuitive: print even more money. In other words, to get out of the deep, deep hole we are in, dig even deeper.

It is called the Chicago plan. With a stroke of a pen, money would be substituted for debt, without the negative consequences of printing money. Banking would be restructured so that it never again leads to boom and bust cycles, and most debt, public and private, could be cancelled.  It’s basically a “one time” get out of jail card for the world economy.

The plan, and there are different versions, was first developed in the 1920s and 193os by the leading economists of the time. A version of this plan was actually put on Roosevelt’s desk, and was presented to Congress for implementation in 1934.

Back then, economists realized that it was the rapid expansion and contraction of credit, not driven by fundamentals of the real economy, which created most booms and busts. This is because banks can make a loan and then finance it out of thin air, through the fractional reserve banking system- something no other business can do. Of course, central banks adding unnecessary liquidity aggravated the problem and made the boom and bust cycles worse.

An essential feature of all the different Chicago plans is that it would require banks to hold 100% reserves against deposits.

Currently, banks in the U.S. normally are required to hold between 0 and 10 percent reserves against deposits. According to the Chicago plan, banks would be required to exchange their assets for enough money to bring their reserves up to 100%. It is basically an asset swap, with the government exchanging cash for almost all the banks private and public debt. This new money in the banking system just sits there since banks have a new 100% reserve requirement, so there are no inflationary consequences of all this new printing.  An IMF paper on the Chicago plan estimates that government could cancel the entire government debt held by banks and over $15 trillion of private debt!

Irvin Fisher, a Yale economist whom Milton Friedman called America’s greatest economist, said that the plan would greatly reduce the severity of business cycles, probably eliminating booms and busts. Bank runs would be impossible, making deposit insurance unnecessary, and it would greatly reduce the amount of public and private debt.

The IMF paper using state of the art economic modeling concluded that Dr. Fisher was right, and that the plan would be even more beneficial. Real GDP growth would initially surge by 10% resulting from the elimination of many distortions.

Many Austrians would normally cringe at such a plan since it implies massive government intervention and the strengthening, although temporarily, of government influence on the economy. This, however, can be viewed as one of the few legitimate roles for governments: enforcing property rights. Fractional reserve banking is fraud (see here and here) since it generates multiple claims to the same real resources or goods and services. The Chicago plan would simply be taking ill-gotten gains away from the counterfeiters.

The plan, if structured correctly, would achieve most of what Austrian economists have been proposing for many years, and would finally set the world economy on a stable path.

First, it is important to put a wall between the deposit function and the loan function. Historically, the incentive to engage in the FRB Ponzi scheme, committing fraud, is simply too great. These functions should not coexist in the same entity. We should have deposit banks and investment trusts, which should be 100% equity financed. These investment trusts or loan banks would then be like any other business and would not need any more regulation than that of the makers of potato chips.

A very interesting feature of the crypto-currency  bitcoin is the “bitcoin wallet.” To a large degree, this would eliminate the need for deposit banks. We could have a worldwide crypto-currency, call it the Dypre (first letters of major currencies), or multiple cryto-currencies linked to gold.  Banks would then finally act as true financial intermediaries instead of the fraudsters they are today. Some of the assets in the asset swap could be bank ATMs, to be converted to cryto-currency distribution points and then sold off to the private sector.

Governments should not be allowed to finance banks – a feature of the IMF plan. Investing in a loan bank or, more accurately, a 100% equity financed investment trust, should be like investing in the stock market. You know you could lose everything. However, money in a deposit bank is there, for sure, to pay your rent and electricity bills.

Second, central banks should be abolished. Every dollar that the central bank prints is a tax on cash balances: a tax which no one has voted for. Deflation should be the norm, as during much of the 19th century. A real gold standard should be seriously considered, since governments simply cannot be trusted. There is simply too much temptation to print money to fund spending, or to use the printing press to reach unattainable macroeconomic goals. This will finally stop governments from fiddling with the economy’s most important price: the interest rate.

Finally, private debt instruments should cease to exist if they are fraudulent in nature. This is a very important since past attempts to separate deposit banking from loan banking failed because banks were able to create near money-a demand deposit in a different dress (e.g., a money market mutual fund).

Many free market economist fear that such a plan would simply allow government and the private sector to ramp up borrowing all over again. The difference this time is that governments and households would have to compete with the demand for plants and equipment (investment) for a limited amount of funds coming from slow-moving savings. Higher interest rates would quickly create pressures for less borrowing.

The ideal solution would be to link a balance budget to the plan. Governments would then depend solely on direct taxation to fund spending. The government would have to explain to the taxpayer why he must forgo his flat screen television at Christmas to pay for soldiers in Afghanistan or planes over Lybia. The average citizen would finally realize there is no free lunch, and that government services require real sacrifices.

The Chicago plan failed in the 30s because the banking cartel killed it. Today the situation is different. People blame banks for the current monumental mess we are in. If academic economists can get together behind some version of this plan, as they did in the 30s, it is possible, with public support, to bring the banking cartel, obviously screaming and kicking, to the alter of 100% reserve banking.

Inaction is not an option. Today, we are between a rock and a hard place with no good choices. We are left with the increasing likelihood of severe depressions and hyperinflations eventually leading to dictatorships. If history is a guide, Napoleon and Hitler, both responsible for millions of deaths, rode to power on a wave of discontent that followed periods of excessive monetary printing. For Napoleon it was the hyperinflation of 1790-1797, and for Hitler the hyperinflation of 1921-1923. In that situation, no one really wins.

Europe is a runaway train with a certain crash in its future. European governments would be wise to discuss a rapid implementation of this plan for their economies, before extremism takes hold again, and Europe repeats its catastrophic past.

It is essential that we start a banking revolution before it is too late. The Chicago plan would restructure the banking system leaving a world for our children that is stable without the booms and busts that have created so much hardship for so many.

REVISED & UPDATED: The ESTABLISHMENT and its AGENDA

Posted: 19 Sep 2016 11:30 PM PDT

by TC, SGT Report:

Enclosed is a summary of the OUTSTANDING 2+ Hour documentary   SEE – People Who Control America  which fully exposes the ESTABLISHMENT and its Globalist Agenda. 

Once voters understand the truth – regardless of whether they like TRUMP or not – they will HATE the ESTABLISHMENT and understand that TRUMP is our only hope!

This election is NOT about Democrats vs. Republicans.

This election is NOT about Hillary vs. TRUMP.

This election is about the ESTABLISHMENT vs. Non-ESTABLISHMENT!

The ESTABLISHMENT – (Oligarchy) a relatively small group of people who have control over the US government (including law enforcement ex.- James Comey and Loretta Lynch) irrespective of the wishes of the people.  The Big BANKS, Military Industrial Complex, Big MED, Big PHARMA, Mainstream Media (MSM), and Multinational companies are all integral parts of The ESTABLISHMENT and control our government.

The ESTABLISHMENT is a "REVERSE ROBIN HOOD"- stealing from the poor and giving to the rich! They are responsible for bankrupting the USA ($19T Debt and $103T Unfunded Liabilities) – the US Dollar has lost approximately 98% of its purchasing power vs. Gold since the origination of the FED in 1913 and approximately 97% of its purchasing power vs. Gold since Nixon closed the Gold window in 1971.

The ESTABLISHMENT is also responsible for the murders of hundreds of thousands of US soldiers and millions of civilians worldwide. Since the Spanish American War (1898) – the USA has NOT been involved in any legitimate war where we were attacked UNPROVOKED! (Ex.- Spanish-American War – sinking of the Maine was a false flag event, WW1- sinking of the Lusitania was an instigated false flag event, WW2 – Pearl Harbor was instigated false flag event, Vietnam War –  Gulf of Tonkin was a fake false flag event, War on Terror 9/11 – false flag event, and WW3 (forthcoming) – we are currently instigating Russia & China.)

Wars = Debt = Death

Winners – ESTABLISHMENT BANKS, Military Industrial Complex, and Globalists.

Losers – The People.

Democratic and Republican Parties – The ESTABLISHMENT controls both parties so it does not care which party wins – as long as it is one of their chosen puppets. Their puppet election campaign promises may differ – but once in office they will promote the same Establishment Globalist Agenda.  

Mainstream Media (MSM) – Is controlled by the ESTABLISHMENT via 6 major corporations. This includes FOX News which is owned by News Corp / Rupert Murdoch.  See Proof!

MSM has evolved from unbiased news organizations into propaganda promoting arms for the Establishment Globalist Agenda.  The ESTABLISHMENT also controls most of the POLLS! Their current agenda is to make it appear that Hillary is way ahead to discourage Trump voters from voting and to encourage more Hillary/Democratic political donations. (I believe the most relevant data point is that more supporters get turned away at TRUMP rallies than actually show up to see Hillary)

What is the ESTABLISHMENT GLOBALIST Agenda? –  The formation of a “one world” government with the ESTABLISHMENT in charge.  The Council on Foreign Relations (CFR), Group of 30, Trilateral Commission, The Pilgrims Society, and Bilderberg Group are the primary ESTABLISHMENT organizations that create Globalist policy and promote their Globalist Agenda via Politicians, Central Bankers, MSM, Academia, and Hollywood.

What has the ESTABLISHMENT been doing to achieve its GLOBALIST AGENDA? Attempting to make life so bad that countries and people worldwide will seek the ESTABLISHMENT as their solution. This is being achieved by destroying nationalism, economies, and currencies worldwide – along with creating and instigating Racial Tension, Poverty, Chaos, Fear, and War.

  1. Herding – Start by “herding” some of the 196 countries into small groups. ex. European Union, North American Union, United Nations.
  2. Destroy Nationalism – Allowing unrestricted illegal immigration and by removing borders.  (Throwing a Turd into the punchbowl).
  3. Destroy Currencies and Economies – Massive currency debasement (inflation) and exponential debt that is mathematically impossible to repay – ultimately leading to DEFAULT.
  4. Enslave Citizens – Government housing, food stamps, Obamacare, and entitlements to control and capture votes. (Urban Plantations)
  5. Destroy the Rule of Law – separate laws for the ESTABLISHMENT vs. Citizens.
  6. Instigate WW3 – Surround Russia and China with military installations and weapons systems. Create and weaponize ISIS to do the "dirty work" of the Zionists while concurrently supporting the BIG BANKS and Military Industrial Complex.
  7. Population Reduction – Unnecessary Wars, required toxic Vaccinations & Immunizations, and restrict health care (Obamacare). The ESTABLISHMENT goal is to reduce the world population from 7.4b to 500m people.

CONNECTING THE DOTS

How is it possible for a relatively unknown Community Organizer or a documented liar to become POTUS?   Because Obama and the Clinton(s) were the "chosen" ESTABLISHMENT puppets!

Why is Hillary NOT in jail?    As their "chosen" puppet she is protected by the ESTABLISHMENT!

Why is MSM so biased in favor of Hillary and why does it continually perpetuate lies against TRUMP?  MSM is the propaganda arm of the ESTABLISHMENT. In the 2016 Presidential race – Hillary is the “chosen” ESTABLISHMENT puppet . Trump’s Nationalist Agenda is a direct threat to the ESTABLISHMENT and it’s Globalist Agenda!

Why do you think the Big Banks were bailed out in 2008 by BUSH after they created the financial meltdown?  BIG BANKS are the foundation of the ESTABLISHMENT and were protected via their chosen puppet Bush(s)!

Why were no bankers jailed under OBAMA?  The BIG BANKS are the foundation of the ESTABLISHMENT and their executives were protected via their chosen puppet Obama!

Why do think CNBC, FOX Business, and Bloomberg NEVER mention that the FED is a Private Corporation owned by the BIG BANKS? Viewers might realize that the 2008 financial meltdown was orchestrated by the ESTABLISHMENT –  a “big steal” to enrich themselves at the expense of the USA citizens!

Is the #1 purpose of the FED, a Private Corporation, is to enrich its shareholders?  The creators of the 2008 financial meltdown were the only ones that benefited from the meltdown – at the expense of the US Citizens! Their stated employment and inflation objectives simply deflections from the truth!

Why do you think the USA is continually engaging in Wars worldwide? To benefit Big BANKS (Wars = Debt = Interest Income) and the Military Industrial Complex that makes a fortune selling weapons, planes, machinery, equipment, etc. Also, world destruction will expedite the ESTABLISHMENT in achieving its globalization agenda!

Why is the Obama/Clinton administration provoking War with nuclear powers Russia and CHINA? Instigating WW3 will expedite the ESTABLISHMENT in achieving its GLOBALIST agenda.

Why don't we win wars? The ESTABLISHMENT GLOBALIST agenda is to perpetuate Wars to benefit the BIG BANKS and Military Industrial Complex – ultimately leading to society destruction and an ESTABLISHMENT Globalist controlled world.

Many believe that the USA indirectly created ISIS by weaponizing the Taliban via Benghazi to overthrow (murder)  SEE – the great leader of Libya Muammar Gaddafi and to do the “dirty work” of the Zionists in the Mideast.   SEE – PUTIN’s tells the truth about ISIS that you will NOT hear from MSM 

Was the purpose of Hillary's personal email server to hide the fact that Benghazi was a weaponizing operation to overthrow governments or to hide the criminality of the Clinton Foundation?

Were Obama and Hillary hoping to destroy their Benghazi weaponizing operation evidence by hanging Christopher Stevens, his staff, and protectors out to dry?

Why are some prominent Republicans either not or begrudgingly committing to TRUMP – ex. Cruz, Kasich, Gingrich, McCain, Bush(s), Ryan, Romney, Rove, etc.?  They are signifying that their loyalty is to the ESTABLISHMENT instead of the USA, Republican Party, and their Constituents!

Why are many Billionaires and Corporate Titans ex. Bloomberg, Buffet, Koch(s), Gates, Whitman, Cuban, Cook, etc. not supporting TRUMP?  They are signifying their committed to the ESTABLISHMENT and its Globalist Agenda and have also taught me that   Wealth  Courage + Character!

Does the ESTABLISHMENT have regard for human life? – A Psychopath has no conscious.  How many millions of people died in unnecessary wars over the last 120 years to enrich the ESTABLISHMENT?  Only Psychopaths could instigate the murders 3000 military/Hawaiian citizens at Pearl Harbor and 3000 office/rescue workers on 9/11. If you are interested in learning more about the 9/11 LIES and its similarities to Pearl Harbor   SEE – The BEST 9/11 Documentary Series Ever!   (I suggesting starting at 57:15 in DVD 1)

Why does the Libertarian Party have an anti-gun VP candidate who was a former Chairman of the CFR? In addition to the Democratic and Republican Parties – the Libertarian Party is also controlled by the Establishment.   SEE – The Libertarian Party has “sold out” to the ESTABLISHMENT! and Gary Johnson is not a Libertarian!

Why does the USA make such lousy trade deals? The ESTABLISHMENT GLOBALIST agenda is the destruction of economies- ultimately leading to an ESTABLISHMENT controlled world. Why would the USA citizens ever want to be part of an ESTABLISHMENAT Globalist world if everything was wonderful?

Why has the Autism rate gone from 1:10,000 to 1:45 children over the last 50 years? Because children are required to have knowingly toxic MMR vaccinations!

Why aren’t people allowed to file lawsuits against the CDC and Pharmaceutical companies that have knowingly supplied toxic MMR vaccinations?  The US Congress is owned by the ESTABLSIHMENT (BIG PHARMA). In 1986, The National Childhood Vaccine Injury Act was passed, shielding the Pharmaceutical Companies from lawsuits brought by injuries and deaths caused by vaccinations!   There is a CDC Scientist Whistleblower, William Thompson who has evidence that the CDC and BIG Pharma committed fraud by knowingly requiring children to be vaccinated with toxic MMR vaccinations resulting in our exponential Autism rate. Due to William Thompson’s non-disclosure agreement with the CDC – he NOT allowed share this information UNLESS subpoenaed by Congress.

Why hasn’t Congress subpoenaed Whistleblower William Thompson? Our political leadership (Democrats & Republicans) is owned by the ESTABLISHMENT (BIG Pharma)!

SEE – Interview with VAXXED Producer Del Bigtree. 

Why have the FDA and Texas Medical Board been doing everything in their power to shut down the Burzynski Clinic, since 1976, when it has one of the highest Cancer Treatment success rates in the USA? Our political leadership (Democrats & Republicans) is owned by the ESTABLISHMENT (BIG MED) which does not want a Cancer Cure to destroy a $200B annual industry!

SEE – Burzynski – Cancer is Big Business

You can NOT rely on MSM to tell the truth.

Please share this information with everyone you know! 

Grand Ascension or Great Collapse?

Posted: 19 Sep 2016 11:01 PM PDT

It depends upon your perspective and the markets you follow … Perspective: The global economy is drowning in debt – $230 Trillion and counting – that will not be repaid at current value....

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2008 Redux? What it Means for Precious Metals

Posted: 19 Sep 2016 10:30 PM PDT

by Andy Hoffman, Miles Franklin:

I cannot overemphasize the importance of the topics discussed in Friday's "Emergency Podcast" with Bix Weir – including Thursday's Federal Reserve and Bank of Japan policy statements; Obama's "damned if he does, damned if he doesn't" signature or veto of the JASTA, or Justice Against Sponsors of Terrorism Act, also on Thursday; the first Presidential debate, a week from today; the much-ballyhooed, but likely all-bark-but-no-bite Algiers oil producers meeting a day later; and oh yeah, the accelerating Deutsche Bank stock collapse. Not to mention, upcoming referendums and/or elections across Europe; the looming GrExit crisis and Catalonian secession; and the unquestionably intertwined ramifications of all of the above; particularly as relates to Precious Metals, which equally unquestionably, will experience a dramatic demand surge if the "powers that be" lose control of any or all of the above. Or, for that matter, countless "black swan" events that cannot possibly be predicted, despite logic suggesting anything that can go wrong under such circumstances, likely will.

Above all, "it's the debt, stupid." To which, I feel compelled to highlight Bix's quote that "no country in the history of countries has ever paid off its debt…as they either devalue their currency, or default." This is the gist of the problem affecting all the world's fiat currencies; each of which, is amidst its final, catastrophic stage of collapse – although clearly, some are further along than others. No matter, all will eventually get there – including those at the top of the "monetary totem pole" – once Central banks realize there is no alternative to all-out hyperinflation, rate suppression, and asset monetization. In other words, the definition of how a Ponzi scheme, which is exactly what fiat currency is, implodes.

The principal catalyst for Friday's podcast was the incomprehensible act of financial sabotage – and frankly, political warfare – that was the Department of Justice's decision to charge Deutsche Bank $14 billion for committing the same crimes as all other banks have received ZERO penalties for. An amount, I might add, identical to what Apple is being penalized by the European Union for "tax evasion." Not to mention, this amount is roughly two-thirds of Deutsche Bank's remaining market capitalization. To that end, I'll leave it to you to decide why such an incredibly destructive decision was made, just six weeks before the most important election in U.S. history. But irrespective, no one can deny that "whoever" made such a decision, knew full well the potentially devastating political; economic; and above all, financial market ramifications.

To that end, the weekend's news was wrought with chaos. Again, making one wonder if such events are connected – or alternatively, the rapidly progressing symptoms of a world at the edge of dramatic political, economic, and social changes. Such as, random bomb attacks in New York and New Jersey; an ISIS-claimed stabbing spree in Minnesota; the U.S. military "accidentally" killing 62 Syrian troops, who were theoretically fighting against ISIS; Angela Merkel's Christian Democratic Party (what happened to the separation of church and state?) suffering a stunning defeat in Berlin's elections, at the hands of the resurgent, anti-EU "Alternative for Deutschland" party; 300,000 Germans protesting the globalist TTIP and CETA trade proposals; a report showing that Central banks, led by China, sold a whopping $343 billion of U.S. Treasury bonds in the last 12 months; Russia cutting interest rates, marking the 673rd Central bank easing since the 2008 crisis; and Donald Trump's continuing polls surge, despite "betting lines" stating otherwise. Just as they did hours before the Brexit, when equally rigged "betting lines" suggested a strong "Bremain" victory. Last but not least, the "Land of the Setting Sun" continues to lead all "first world" nations in its cumulative plunge down the rabbit hole to mediocrity – as it's government hit a new low of lunacy, in lambasting its shrinking population's "sexual apathy." Apparently, the equivalent of "sexual stimulus" – i.e., offering financial incentives, with printed money – isn't causing Japanese citizens to have more children. Perhaps it's because the Bank of Japan's hyperinflationary policies, including negative interest rates, have made the cost of raising children too expensive?

Financial market damage control, at least early on, is in full swing; as despite Deutsche Bank falling further, and interest rates creeping higher, the PPT is pushing stocks up anew. The pathetically comical "reason" scrolling across CNBC is "Venezuela confident in an energy agreement" at Algiers next week, despite the fact that oil's "bounce" is tepid at best. Let alone, that such a statement, like the other hundred "oil PPT" circulated rumors, is based on absolutely nothing. Let alone, from Venezuela – which isn't even a major OPEC producer anymore, and can barely survive its horrifying hyperinflation on a daily basis. As for Precious Metals, we didn't see a "Sunday Night Sentiment" attack for the first time in five months; or for that matter, a "2:15 am" raid for only the 106th time I the past 807 trading days. But don't worry, even though silver prices surged to $19.20/oz – where it still trades, as I write – the Cartel "recovered its senses," via prototypical "Cartel Herald" algorithm, in time for New York "pre-market" trading.

2016-09-19_chart12016-09-19_chart22016-09-19_chart3

At this point, I've said all I can say about Thursday's Fed and BOJ meetings – in a nutshell, that in both cases, I expect the results to be, putting it mildly, extraordinarily dovish. And since the powers that be are likely to throw the kitchen sink at market support before said decisions are made – that is, unless the Deutsche Bank news represented a new, market-destroying "strategy" – I thought it a good time to reprise the question of "what will happen" if financial markets spiral out of control (FYI, as I edit, Deutsche Bank stock is plunging anew).

The answer, of course, is that no one really knows – particularly if there are indeed "agendas" in motion, such as those that Bix Weir theorizes. However, the one thing I am sure of – and always have been – is that physical Precious Metal demand, which is already at a global all-time high, will rise more than any other asset class.

In 2008, the powers that be did everything in their power to make it appear that Treasury bonds, not Precious Metals, were the "ultimate safe haven" during times of crisis. Heck, they've utilized that same tactic every time financial markets have fallen in my memory, even as markets' tell-tale "initial instinct" is always to take Precious Metals higher. Unfortunately, this strategy backfired in a major way in 2008 – as by November, not only had paper PM prices bottomed, but physical inventory sold out. Even paper gold ended the year higher, if only by the slightest of margins, outperforming absolutely everything except government-supported Treasury bonds. Which this time around, are going to need a lot more government support, now that interest rates are at all-time lows, whilst government debt and deficits all-time highs. And per above, Central banks are selling them en masse, to fund their own exploding deficits, and protect their imploding currencies.

That said, physical gold was up perhaps 20% in 2008, given the exploding premiums the sold out bullion industry experienced; whilst silver, despite paper prices falling roughly 50%, was essentially unchanged, given the roughly 100% premiums experienced in sold out physical markets. And what do you know, a mere three years later, paper gold had rocketed from $770/oz to $1,920/oz, and paper silver $10 to $50.

But that was 2008, an environment when global debt was barely half of what it is today; whilst currencies were dramatically higher; political unity and social stability non-issues; and Central banks had both credibility and balance sheet "dry powder." As for Precious Metals, physical demand was dramatically less than it is today (2008 U.S. Mint Silver Eagles sales were 19 million ounces, compared to 47 million in 2015); mine production was still rising, and above-ground, available-for-sale inventory significantly higher. In other words, eight years of comprehensive financial market and economic intervention have created a "perfect storm" of potential Precious Metals tightness; compared to the polar opposite condition – i.e., massive oversupply – of essentially everything else, from stocks; to bonds, commodities, currencies – and most damning of all, DEBT.

In other words, if anything even remotely close to 2008 unfolds, the results will be as "leveraged" as Deutsche Bank's derivative book – politically, economically, socially, and monetarily. Few asset classes even have a chance to avoid all-out destruction, as anything related to "risk" will be destroyed. Which leaves just money, i.e., physical gold and silver. Which, in a world where the very definition of money will be in question, will likely be at the receiving end of the greatest demand surge in monetary history. In my humble opinion, of course.

Read More @ MilesFranklin.com

"The Big Short's" Steve Eisman Reveals What The Next Big Short Is

Posted: 19 Sep 2016 10:08 PM PDT

"That Wall Street has gone down because of this is justice... They fucked people. They built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience."

      - Steve Eisman

 

One decade before he became famous for the being the inspiration behind Mark Baum's character, played by Steve Carell in the movie the "The Big Short", Steve Eisman was making hundreds of millions predicting the next big short, namely the collapse of the subprime mortgage industry. Which is why every appearance of the otherwise reclusive financial guru sees broad popular interest, and this past Sunday, when Eisman appeared at the beachfront Fontainebleau Hotel in Miami, where several thousand Wall Street securitization professionals are convening this week for their 22nd annual ABS East Conference, was no different.

Incidentally, it's the same gathering where, in one scene of the film "The Big Short," the character based on Eisman bursts into outrage at a mortgage executive giving a talk.


Steve Eisman Photographer: Daniel Acker/Bloomberg

Eisman hadn't attended a securitization conference since 2007. But Information Management Network, the organizer of an annual confab in Miami, decided to changed that when it invited him to give the keynote speech Sunday.

So what did did Eisman have to say to the industry that he helped bring down? "You fuckers blew up planet earth. Shut up and move on." adding that "it feels like Daniel in the lion's den."

Cited by the Asset Securitization Report, he then apologized in advance for offending his audience, and launched into an explanation of the mortgage crisis and an assessment of the current state of the economy and financial system, or "why things still suck." The bottom line, in his view, we don't have the three prerequisites for a full-blow crisis: too much leverage, a big asset class that blows up, and a lot of banks holding this asset class.

By that measure, neither subprime auto loans nor student loans are going to be the next mortgage crisis. Eisman seems more concerned about Europe, where banks are still much more highly leveraged than in the U.S., and where regulators in peripheral countries like Italy, Spain and Portugal have been slow to force them to recognize losses.

But while the big picture may not be so bad right now, Eisman said he is not a big believer in marketplace lending. "Silicon Valley is clueless," he says.

"If you buy a book on Amazon, that's the end of the relationship."  Whereas, if you make a mortgage, "that's the beginning of the transaction." And there are only two business models. "The first is to originate the loan and hold it, which means you're a bank. That's a low margin business. The second is to originate a loan and sell it, and who are they going to sell it to? You [Wall Street]. And you are fickle."

As Bloomberg adds, Eisman said that the central problem is that lending startups, their founders and backers in particular, don't have a lot of experience making loans to consumers, and some of them approach loan-making as they would retail sales, Eisman said.

As Bloomberg notes, more than 160 startup firms of this kind have emerged since 2009. The biggest include LendingClub Corp., Prosper Marketplace Inc. and Social Finance Inc. Together these companies arranged more than $36 billion of financing in 2015, mainly for consumers, up from $11 billion the year before, according to a report from KPMG. A spokeswoman for SoFi declined to comment about Eisman's remarks; representatives for LendingClub and Prosper didn't return messages seeking comment.

"We have seen loans underperform from their expected loss estimate at the time of underwriting," Stephanie Yeh, a director at Credit Suisse Group AG, said on a Monday morning panel discussion. "There still isn't a lot of data."

Earlier this year, a spike in delinquencies and defaults from some lenders rippled through the community of investors who buy these securitizations. Investors demanded that lenders raise their rates to protect the high returns that they've come to expect from the debt. In an audience poll on the same panel, more than 50 percent of the crowd said in a live electronic survey that there is not sufficient data for investors to assess risk tied to unsecured consumer loan securitizations.

To be sure, proponents of peer 2 peer lending cite the benefits of this technology, which include faster approval times, cheaper transaction costs, and more availability of credit to borrowers who may otherwise not qualify for traditional consumer loans, typically of several thousand dollars and with higher interest rates. Big banks, money managers, hedge funds, insurers, trustees, law firms and credit ratings firms are all competing for the online lenders' business. But these lenders and their wares are new, and they haven't been tested in an economic downturn yet. This has drawn concern from skeptics like Eisman, who say there's no telling how the loans will perform long-term. He said Sunday night the business will never scale to the proportions that its proponents claim.

That said, if the recent woes of former lending giant LendingClub are any indication, one won't even need to wait for a downturn before the industry faces its own subprime moment.

Then there is the "risk" of heightened regulation, to which Eisman had an emphatic answer: "Tough," Eisman told an audience member who raised a question about whether regulations from the Dodd-Frank Act should be forced upon companies that specialize in other kinds of consumer debt aside from mortgages. "You live in a bad neighborhood, you blew up planet Earth, so shut up, and move on."

* * *

But while the focus of Eisman's address was his bearish outlook for the marketplace lending model, he had some other just as notable remarks:

On Quantitative Easing.

"QE is no more than monetary policy for rich people," the money manager quipped. He said that central banks "use QE to go out the risk curve, so people invest in the stock market, but it does not impact the economy.  Most people do not invest in the stock market, they invest in banks [they are saving more] and banks don't pay interest on their money."

From a corporate perspective, GDP is lower than pre-crisis, if you buy back stock you get a return on your investment that's fairly certain, or build a new factory, where the return is uncertain. In a zero interest rate environment, you'll choose the more certain reward. Very low interest rates have a negative signaling effect. A lot of people think something has to be wrong.

On GSE Market Share

"I'm about as left-wing as they come. Obamacare does not bother me. GSE dominance [of the mortgage market] does." "The reason that Fannie Mae and Freddie Mac continue to dominate the mortgage market is the federal government decided not to put people in jail. Instead it fined banks. Banks don't want to get fined, so they don't make [nonconforming] mortgages."

* * *

Finally, and most importantly, he explained what he believes the next "big short" will be.

 "In 2007, I'm so happy I can't stand it. But in 2008, it was planet earth [in trouble]. I told someone I felt like Noah … do you think Noah was happy?"

Asked to name the next big short, Eisman initially declined. "I'm not in such a rush to do it again," he said. "It took years off my life." Then he relented, saying, "The only big short out there is when the world loses confidence in QE."

Predictably, Eisman did not offer any ideas on how to profit when his prediction is - again - proven to be right, since the collapse of the central bank model will mean all fiat-denominated conventional finance as we know it will come to an end, and force the world to revert to "traditional" hard assets, such as gold.

Chinese Loan Demand Drops To All Time Low

Posted: 19 Sep 2016 07:33 PM PDT

With China's latest housing bubble once again in full swing, when as reported overnight the average new-home price in China's 70 cities rose 1.2% in August, the biggest monthly increase in six years...

 

... the euphoria for home purchases can be easily explained: an epic burst of mortgage loan issuance, serving as the false foundation for China's latest home buying spree.

However, step away from the residential housing market, and things turn decidedly sour. As Caixin reported overnight, loan demand in China, as opposed to record supply, 

... has plunged to all time lows. Specifically, the willingness of Chinese companies to borrow reached dropped to the lowest print in the series' 12 year history, according to a survey published by the country's central bank on Sunday.

Amid China's accelerating economic slowdown, the country's overall index of loan demand was at 55.7 in the third quarter, the lowest since the People's Bank of China started to compile the data in 2004. The index of loan demand from medium-sized enterprises fell to 52 and for small business to 55.8, both historic lows. However, the figure for large corporations slightly rebounded at 51.4, up 0.1 points from a quarter earlier.

Faced with a slower economy, small and medium-sized enterprises (SMEs) now find it difficult to expand their businesses, said an SME loan manager at one of China's midtier commercial banks who did not want to be named, citing bank policy against speaking to the media. He said his bank has been losing borrowers since the first half of 2015.

Additionally, banks have imposed tougher rules on approving loans to SMEs amid rising non-performing loans. Tighter restrictions, in turn, have cooled companies' enthusiasm to seek new funds from banks, the SME loan manager said.

And here is a stunning statistic you will likely not hear anywhere else as it may shake the very foundations of China's house of cards: "20% to 30% of his business customers haven't repaid their debt, he said."

As we have reported for years, in the latest period, 12 out of China's 16 publicly listed banks saw a rising level of non-performing loans in the first half of 2016 compared with the same period a year before.

At the same time, and explaining the rise in NPLs, the demand by manufacturers for loans declined in the third quarter, falling to 46.8 from the second quarter's 48.

Chinese manufacturers' growth stagnated in August, with the Caixin China Purchasing Managers' Index coming in at 50, down from 50.6 the previous month. The PBOC's index of loan demand from the non-manufacturing sector remained unchanged at 55.1.

Some more Chinese fiction peddling: more than half of the bankers from the 3,100 institutions surveyed by the central bank said the national economy in the third quarter was "cooling down," while 44.6 percent of them thought the overall trend looked "normal." That's more than half who said China's economy was set for more economic deterioration.

Finally, of the 20,000 residents surveyed, 53.7% said the housing prices are "high and unacceptable," 0.3 percentage points more than in the second quarter. Only 3.4 percent described prices as "satisfactory," and the remaining 42.9% considered them "acceptable." Then again, if loan demands continues to collapse at this record pace, the clearest indication yet that China is indeed headed for a hard landing despite the trillions in new loans created (which go who knows where if they are not actually demanded), all those house prices will soon become far more affordable.

Why Is There So Much Confusion In Macroeconomics?

Posted: 19 Sep 2016 06:45 PM PDT

Submitted by Frank Hollenbeck via Mises.ca,

Should we print, not print? Stimulate, not stimulate? Is austerity the right or wrong policy? Is government spending or printing effective? If we ask two economists these questions, we will likely get three opinions for each question. Economists seem confused, yet these questions are more important today than ever. Where does this confusion come from? Doesn’t economic theory give us clear-cut answers? It does, but poor terminology and a lack of focus have muddied the waters. Many macroeconomic disagreements can be elucidated with a better understanding of the role played by holding cash, or hoarding, in economics.

To a large degree, Keynes is to blame for much of this confusion by using a double entendre. In his “General Theory, he did not clearly distinguish between savings (correctly defined) and hoarding. The paradox of thrift is a misnomer. Thrift is both savings and hoarding. It should correctly be called the “paradox of hoarding”. Economists should not be this careless with terminology.

Even today, confusion persists. When Paul Krugman discusses thrift he is alluding to the impact of hoarding. When Austrians talk of thrift they are referring to savings. Keynesians and Austrians seem to be on different planets and some of the blame can be attributed to poor terminology.

In a circular flow economy, the value of output must be equal to income. Income represents claims on goods and services, and can be divided into three categories. It can be consumed, saved or hoarded. Consumption is using claims on goods and services for personal satisfaction. The correct narrow definition of savings is a transfer of claims from one group to another. This is the definition found in the classical loanable funds theory of interest rates. The saver is giving up his claims to be able to consume more goods and services in the future. He makes this transfer to investors who use these claims to purchase plants and equipment to produce goods and services in the future. The last category is hoarding, or holding cash, which is the equivalent of stuffing money in your mattress. From income, it is the only claim that is not used to purchase currently produced goods and servicesKeynes, and his followers, constantly uses the word “savings” to imply two very different and distinct acts: the activity of transferring claims and the activity of holding claims. Classical economists were never this careless.

Since these claims are unused, Keynesians fear, in a circular flow economy, the value of output would be higher than the amount of claims used to purchase that output. Since some output would remain unsold, inventories would rise, output would be curtailed, and a downward spiral in output would ensue. Any future shift in hoarding will create another spiral in output. In this scenario, prices do not fall to bring the value of output in line with the value of claims. In a Keynesian framework, prices are sticky downward.

Let me explain this point with a very uncomplicated example. Suppose you have 10 pencils and $10. What is the price of a pencil? It can’t be $2 since we would have pencils that remain unsold, so the price would tend to fall. It can’t be 50 cents since people would have money and nothing to buy. Prices would be bid up. This would lead to equilibrium where pencils would be sold for $1 each.

Since the government does not create pencils, the only way it can obtain pencils is by taking claims from others by borrowing, taxing or printing. If it prints $10 and used it to buy pencils, the price of pencils will increase to $2 (inflation) since we now have $20 chasing 10 pencils. The government will obtain 5 pencils by lowering the purchasing power of money. It has taxed cash balances the equivalent of 5 pencils. The same logic applies to taxes or borrowing. Every dollar printed, borrowed or taxed to finance government spending displaces an equivalent purchasing power from private consumption or investment spending. Government spending is robbing Peter to pay Paul. It rearranges the deck chairs, but does not add deck chairs.

Most economists would agree with this “crowding out” example. Why then do some economists advocate more government spending if government spending displaces an equivalent amount of private spending? The answer lies in the role played by hoarding.

From our initial example, suppose we hoard $5. The price of output will fall to $0.50, a period of deflation, since we now have a money supply of $5 chasing 10 pencils. If input prices also fall proportionately from $0.80 to $0.40, we are still making the same profit rate and the economy has simply adjusted input and output prices to a new level of hoarding. Hence, the level of hoarding is immaterial and the economy is operating as though we had started out with a money supply of $5 and 10 pencils.

The Keynesian fear is twofold.

If output prices are sticky, the price of a pencil will remain stuck at $1, or will only drop with a long lag. In this situation, with $5 chasing 10 pencils at a price of $1, we will be left with 5 unsold pencils. This excess output will lead businesses to curtail output, fire workers, until we are left with a new equilibrium of maybe only 5 pencils. The entire adjustment process has been in output and not in price.

 

The second fear is even if output prices adjust, input prices do not adjust quickly enough. If input prices remain at $0.80 while output prices are at $0.50 we are producing at a loss, which leads to less output, more hoarding, and a downward deflation-depression spiral in the economy.

The Keynesian prescription to avoid this depression in output is to have the government substitute its own claims for those being hoarded. The government’s claims are substituting for claims not being used. The price of pencils would remain at $1, with $5 of private demand and $5 of government demand. The government would have to print and use $5. It can neither borrow nor tax to finance this government

Bitcoin is money, U.S. judge says in case tied to JPMorgan hack

Posted: 19 Sep 2016 06:10 PM PDT

Sounds like this logic would recognize gold as money too.

* * *

By Jonathan Stempel
Reuters
Monday, September 18, 2016

NEW YORK -- Bitcoin qualifies as money, a federal judge ruled on today in a decision linked to a criminal case over hacking attacks against JPMorgan Chase & Co. and other companies.

U.S. District Judge Alison Nathan in Manhattan rejected a bid by Anthony Murgio to dismiss two charges related to his alleged operation of Coin.mx, which prosecutors have called an unlicensed bitcoin exchange.

Murgio had argued that bitcoin did not qualify as "funds" under the federal law prohibiting the operation of unlicensed money transmitting businesses.

But the judge, like her colleague Jed Rakoff in an unrelated 2014 case, said the virtual currency met that definition.

"Bitcoins are funds within the plain meaning of that term," Nathan wrote. "Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment." ...

... For the remainder of the report:

http://www.reuters.com/article/us-jpmorgan-cyber-bitcoin-idUSKCN11P2DE



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K92 Mining Shows What 'Fast Track' Really Means

Company Announcement
By Kevin Silva
Market One Media, Vancouver, British Columbia, Canada
via Business News Network, Toronto
September 18, 2016

"Fast-tracking" is an overused phrase in the mining sector. But K92 Mining Inc. (TSX.V: KNT) has demonstrated exactly what that concept means.

Less than four months after going public on May 25, the company has completed additional financings totaling $18.5 million. It also refurbished the mill and mine facilities with enhanced processing capacity and has two drills turning onsite. With all this accomplished, production looks to be just days away.

"The technical team on site has done an excellent job with the production restart, and we are on schedule and on budget," says Director and Chief Operating Officer John Lewins. "With that focus on track, and with the enhanced financial flexibility resulting from our recent financings, we are now looking to target a resource expansion that we believe exists."

K92 has under-promised and over-delivered. ...

... For the remainder of the announcement:

http://www.bnn.ca/k92-shows-what-fast-track-really-means-1.568196



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Arch That Was A Gateway To The Temple Of Baal Is Going Up In New York’s City Hall Park On Monday

Posted: 19 Sep 2016 06:05 PM PDT

by Michael Snyder, The Economic Collapse Blog:

If you tried to put up a large cross in a public park in New York City there would be lawsuits flying all over the place, but apparently an ancient pagan arch that served as a gateway to the Temple of Baal is no problem at all. On Monday, September 19th, a reconstructed version of Palmyra's Arch Of Triumph (also known as the Monumental Arch) will be erected in New York City. Specifically, it will be located in City Hall Park in Manhattan. The organization behind this project is known as the Institute for Digital Archaeology, and they have confirmed the location and the date on their official website

This arch was originally constructed in Palmyra, Syria by the Roman Emperor Septimius Severus in the 3rd century A.D., and it stood there until it was destroyed by ISIS in 2015. The following comes from the Wikipedia article about this arch…

The Monumental Arch, also called the Arch of Triumph (Arabic: قوس النصر‎‎) or the Arch of Septimius Severus, was a Roman ornamental archway in Palmyra, Syria. It was built in the 3rd century during the reign of emperor Septimius Severus. Its ruins later became one of the main attractions of Palmyra, until it was destroyed by the Islamic State of Iraq and the Levant in October 2015. Most of its stonework still survives and there are plans to rebuild it using anastylosis.

On this map you can see how Palmyra was laid out. The Arch of Triumph (identified on the map as the "monumental arch") connected the main street of the Colonnade with the Temple of Bel. If you wanted to go to the Temple of Bel, there was essentially one way in and one way out, and everyone coming and going would pass through this arch.

Those that are familiar with ancient Middle Eastern deities already know that "Bel" and the "Baal" that we find in the Bible were one and the same. Here is more from Wikipedia

Bel (/ˈbeɪl/; from Akkadian bēlu), signifying "lord" or "master", is a title rather than a genuine name, applied to various gods in the Mesopotamian religion of Akkad, Assyria and Babylonia. The feminine form is Belit 'Lady, Mistress'. Bel is represented in Greek as Belos and in Latin as Belus. Linguistically Bel is an East Semitic form cognate with Northwest Semitic Baal with the same meaning.

Back in April, the arch that stood directly in front of the Temple of Baal was supposed to be put up in Times Square, but fortunately that project was ultimately canceled. A reproduction of the Arch of Triumph (the arch discussed in this article) was put up in Trafalgar Square in London at that time, and there were rumblings that a reproduction of the Arch of Triumph would also come to New York at a later date.

Unfortunately, that has now become a reality.

So why are people getting so upset about some ancient arch that may be connected to an ancient god that nobody seems to worship anymore?

Read More @ TheEconomicCollapseBlog.com

Gold Price Closed at $1313.50 up $7.70 or 0.59%

Posted: 19 Sep 2016 05:59 PM PDT


19-Sep-16PriceChange% Change
Gold Price, $/oz1,313.507.700.59%
Silver Price, $/oz19.210.432.26%
Gold/Silver Ratio68.390-1.138-1.64%
Silver/Gold Ratio0.01460.00021.66%
Platinum Price1,022.106.100.60%
Palladium Price683.3538.505.97%
S&P 5002,139.12-0.04-0.00%
Dow18,120.17-3.63-0.02%
Dow in GOLD $s285.17-1.74-0.61%
Dow in GOLD oz13.80-0.08-0.61%
Dow in SILVER oz943.46-21.54-2.23%
US Dollar Index96.06-0.29-0.30%
FREE!: Get Franklin Sanders Daily Gold Price Reports and Market Commentaries:


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GATA Chairman Murphy discusses silver's threat to gold price suppression

Posted: 19 Sep 2016 04:55 PM PDT

7:54p ET Monday, September 19, 2016

Dear Friend of GATA and Gold:

Ken Ameduri of Crush The Street today interviews GATA Chairman Bill Murphy about silver's threat to the central bank gold price suppression scheme. The interview is 15 minutes long and can be heard at Crush the Street here:

https://www.crushthestreet.com/videos/live-interviews/inevitable-physica...

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



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NewCastle Gold's New CEO, Gerald Panneton, Hits the Ground Running

By Tommy Humphreys
CEO.ca
Tuesday, September 6, 2016

Mining entrepreneur Gerald Panneton took a few years off after building one of Canada's largest gold miners, Detour Gold. He raced performance cars in his down time, and conducted due diligence on various mining assets to potentially back.

This summer, the geologist set his sights on NewCastle Gold (TSXV:NCA), owner of a past-producing gold mine in California with similarities to Detour Gold in its early days. ...

... For the remainder of the report:

https://ceo.ca/@tommy/new-newcastle-gold-ceo-gerald-panneton-hits-the-gr...



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The Central Banks Have Prepared The Economy For A 50% Market Collapse

Posted: 19 Sep 2016 04:50 PM PDT

 Ken Rogoff pushing for negative interest rates and a cashless society. The Fed has prepared the economy for a 50% market crash. US Congress says the enormous debt is now a national security issue. The central bankers are preparing to transition the US dollar into the SDR. Which means the...

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Turk asks: What will be the Fed's excuse this time for not raising rates?

Posted: 19 Sep 2016 04:03 PM PDT

7p ET Monday, September 19, 2016

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk tells King World News today that this week's meeting of the Federal Open Market Committee will be interesting not for any increase in interest rates but for the committee's explanation for again declining to raise rates. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/james-turk-the-world-is-headed-for-a-crisis-far...

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...



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Prophecy Update End Time Headlines 9/19/16

Posted: 19 Sep 2016 03:28 PM PDT

 A fast paced highlight and review of the major news stories and headlines that relate to Bible Prophecy and the End Times… The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers ,...

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South Africa's top gold miner isn't afraid to say President Zuma 'has to go'

Posted: 19 Sep 2016 02:27 PM PDT

By Danielle Bochove, Kevin Crowley, and Millie Munshi
Bloomberg News
Monday, September 19, 2016

South Africa's President Jacob Zuma "has to go," with poor governance deterring prospective investors, according to the head of Sibanye Gold Ltd., the biggest producer of South African bullion.

"Any solid investor, any solid company is founded on good governance and what we have in South Africa at the moment is very poor governance, from a government point of view," Sibanye Chief Executive Officer Neal Froneman said in an interview from the Denver Gold Forum in Colorado Springs.

He joins a growing chorus of South African business leaders criticizing the president's stewardship of the economy. Sipho Pityana, chairman of AngloGold Ashanti Ltd. and a prominent African National Congress member, last week said Zuma had "no integrity" and his actions are putting South Africa at risk of a credit-rating downgrade to junk. ...

... For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-09-19/sibanye-south-africa-s...



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Gold Standard Continues to Expand North Dark Star High-Grade Deposit

Company Announcement
Wednesday, September 14, 2016

VANCOUVER, British Columbia, Canada -- Gold Standard Ventures Corp. (TSXV: GSV; NYSE MKT:GSV) today announced assay results from two holes, DS16-21 and DS16-04, at the recently discovered North Dark Star oxide gold deposit on its fully-owned and controlled Railroad-Pinion Project in Nevada's Carlin Trend. Results from DS16-21 have increased the width of the deposit and, more importantly, have confirmed that higher-grade oxide mineralization projects up-dip to more shallow depths to the east of DS16-08.

The primary objective of this year's drill program at North Dark Star was to expand the high-grade zone discovered in core hole DS15-13 (15.4 meters of 1.85 gold grams per tonne and 97 meters of 1.61 gold grams per tonne) at the end of last year's drill program. ...

...For the remainder of the announcement:

https://goldstandardv.com/news/2016/expansion-gold-standards-north-dark-...



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Hillary Blames Trump For NYC Terrorist Bombing

Posted: 19 Sep 2016 10:23 AM PDT

 What will Clinton lie about next? 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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World Money and Hyperinflation

Posted: 19 Sep 2016 10:00 AM PDT

This post World Money and Hyperinflation appeared first on Daily Reckoning.

This world money has existed for some time, but it's about to become a lot more important.

In 1944, John Maynard Keynes proposed a form of world money, which he called the "bancor," at the Bretton Woods international monetary conference.

In 1961, Nobel Prize winner Robert Mundell said, "the optimum currency area is the world," laying the theoretical foundation for world money in his classic article "A Theory of Optimum Currency Areas."

In March of 2009, U.S. Treasury Secretary Timothy Geithner supported greater issuance of Special Drawing Rights (SDR's) at the depths of the financial crisis.

And as recently as October 2015, the former undersecretary general for economic and social affairs (ECOSOC) of the United Nations, José Antonio Ocampo, wrote an Op-Ed calling for new issues of SDRs with a disproportionate share going to emerging markets.

The list of prominent international monetary elites calling for greater use of SDRs as world money keeps growing. It's critical you to understand this new trend.

The SDR has the power to reduce the dollar to the status of a local currency no different than the Mexican peso. Understanding SDRs will also help you avoid losses from inflation and benefit from new opportunities that will be created by their use.

Hyperinflation on the Horizon

Much has been written about the collapse of the dollar.

We define collapse as a spontaneous loss of confidence in the dollar as a store of value resulting in sudden hyperinflation.

The source of such hyperinflation is not money printing (that happened already) but the rapid turnover of money. Those who lack confidence in dollars as a store of value will quickly dump dollars for other assets.

In this scenario, the alternative to the dollar can be as familiar as gold or land. It could be one of the new digital assets such as Bitcoin. The dollar alternative could even consist of natural resources such as oil or water.

When it comes to hyperinflation, the alternative doesn't matter that much…

What matters is that investors will dump dollars as fast as they get them. The resulting turnover (what economists call velocity) will feed on itself and lead to skyrocketing dollar prices. It is important not to think of hyperinflation as prices "going up" (although that is literally true).

A better understanding is that assets, goods and services have a constant real value, while the dollar itself is collapsing.

That dollar devaluation is the real source of "higher prices."

After all, gold is gold, land is land and water is water.

When you see hyperinflation, you are really seeing the collapse of the dollar relative to everything that dollars can buy.

Regards,

Jim Rickards
for The Daily Reckoning

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New World Order One World Government United Nations Global Takeover Breaking News September 19 2016

Posted: 19 Sep 2016 09:11 AM PDT

 New World Order One World Government Islamic United Nations Global Takeover Breaking News September 19 2016 The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers ,...

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The World’s Greatest Investors Are Starting to Panic

Posted: 19 Sep 2016 09:00 AM PDT

This post The World's Greatest Investors Are Starting to Panic appeared first on Daily Reckoning.

Last week, three of the world's best investors sent a clear warning signal: There's danger ahead…

At the "Delivering Alpha" conference in New York, billionaire investor Carl Icahn gave his opinion on our precarious markets:

"You look at the environment, and I think it’s very dangerous. You’re walking on a ledge and you might make it to the end, but you fall of that ledge and you’re really going to see trouble."

Icahn believes the Fed's in a trap. It needs to raise interest rates but risks causing a market meltdown by doing so.

And Icahn's not the only one who sees trouble ahead…

Ray Dalio of Bridgewater Associates runs the world’s largest hedge fund. He used the same "D-word" at the conference as he identified a "dangerous situation" due to central banks still screwing around with loose monetary policy.

And Paul Singer of Elliott Management spoke about the massive risk created by these same low interest rates:

“I think it’s a very dangerous time in the global economy and global financial markets."

None of these guys has the ability to accurately predict what's going to happen in the future. But with so much smart money sending out such clear warning signals, it's a good idea to take stock of your investment strategy—now.

As trend followers, we're prepared for any "danger" that comes our way. We always have a plan for the unexpected.

Trend following has delivered strong positive returns each decade for more than a century — all because there is always a plan of attack in advance of market movement.

That includes remarkably consistent performance over such an extensive time horizon that includes life-changing events such as the Great Depression, multiple recessions and expansions, multiple wars, the Global Financial Crisis, and periods of rising and falling interest rates.

The bottom line is trend following works extremely well when crisis hits because it seeks to capture the majority of a market trend, up or down, across all major asset classes.

It's this diversified strategy of investing in anything that's working that has consistently delivered substantial abnormal returns for trend followers for more than 100 years.

And portfolio diversification doesn't only work in trend following. It's also been a core philosophy of investing titans like Icahn, Dalio, Singer and many others.

In fact, as Chris Mayer, Chief Investment Strategist at Bonner & Partners, explains below, it's one of two critical factors that the world's most successful investors regularly use to get superior returns.

Regards,

Michael Covel
for The Daily Reckoning


Two Critical Factors for Successful Investing

By Chris Mayer

Warren Buffett's Berkshire Hathaway (BRK) has been one of the best performing stocks of the past half-century.

A $1,000 investment in 1964 would be worth $11.6 million today.

Berkshire, as you probably know, owns a diversified collection of businesses acquired over its 50-year existence.

Two key factors helped make Berkshire great: It had permanent capital and it could invest in anything.

While there is only one Warren Buffett, there are plenty of talented investors at the helm of similar vehicles. Below, I'll talk about one of them.

Before I get to that, let's look at those two key factors:

Permanent capital. Investors are a skittish lot. They tend to pull money out of funds after the market has fallen. If you're running a fund, it means you have cash going out the door when the opportunity set is richest.

If you have permanent capital, as Berkshire does, then when investors sell the stock, the amount of cash Buffett has to invest doesn't change.

The ability to invest in anything. Buffett can and does buy anything. He owns railroads, insurance, jewelers, and a long list of other investments. He doesn't have to invest unless he thinks it's a good bet.

So, there are a number of companies somewhat similar to Berkshire that you've probably heard of: Markel, Fairfax Financial Holdings, Loews Corp, Icahn Enterprises, and Leucadia National are some of the most frequently mentioned.

Sometimes people will mention Greenlight Re (Reinsurance), Third Point Re, and Pershing Square Holdings. These allow you to ride the coattails of three celebrated investors: David Einhorn, Dan Loeb, and Bill Ackman, respectively. But they are not quite so similar to Berkshire as the ones above.

There is another smaller one you may not have heard of: HC2 Holdings (HCHC). This is an investment vehicle run by Phil Falcone, who owns 11% of the stock.

Falcone is a talented investor who ran a publicly traded vehicle called Harbinger, which more than doubled under his four-year reign. But you may know him best for his past legal troubles with the SEC and communications company Light Squared (now rebranded as Ligado Networks).

With that behind him, Falcone has been on a redemption tour. HC2 owns a variety of businesses: Schuff (a steel fabricator) and Global Marine (undersea cables), as well as investments in insurance and biotech.

Most recently, Falcone made a bid to acquire Andersons, a publicly traded agricultural firm. This is quite a find by Falcone and shows his ability to find attractive deals. Anderson's is under-managed with key assets – such as grain elevators and fertilizers – worth significantly more than Falcone's offer. (We'll see if he gets it done.)

All together, it's not hard to value HC2 at $8 to $10 per share – a big jump over the sub-$5 share price today.

For the past three years, I've been developing a blueprint for finding early-stage companies that share the key traits of Berkshire: permanent capital, the ability to invest anywhere, and a talented investor at the helm.

I'm hosting a free investment masterclass to show you how it works – and how it can vastly improve your investment returns. For details, see below…

Sincerely,

Chris Mayer

The post The World's Greatest Investors Are Starting to Panic appeared first on Daily Reckoning.

Multiweek Correction in Gold and Silver Markets Continues

Posted: 19 Sep 2016 08:10 AM PDT

Technical analyst Jack Chan charts gold and silver as the multiweek correction continues.

Monetary forum's 'Seven Ages of Gold' report sees metal regaining status

Posted: 19 Sep 2016 08:10 AM PDT

Seven Ages of Gold

From the Official Monetary and Financial Institutions Forum, London
Monday, September 19, 2016

http://www.omfif.org/analysis/press-releases/seven-ages-of-gold/

Central banks are turning back to gold purchases in line with a century of practice between 1870 and 1970. This has restored the yellow metal as a central element of monetary management after four decades of attempted demonetization, according to a new report from the Official Monetary and Financial Institutions Forum.

Annual net gold purchases of 350 tonnes a year by world central banks over the past eight years have returned to the 100-year average up to 1970 -- reflecting the metal's renewed attractiveness as a safe haven asset in an environment of uncertainty and low or negative interest rates.

... Dispatch continues below



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K92 Mining Shows What 'Fast Track' Really Means

Company Announcement
By Kevin Silva
Market One Media, Vancouver, British Columbia, Canada
via Business News Network, Toronto
September 18, 2016

"Fast-tracking" is an overused phrase in the mining sector. But K92 Mining Inc. (TSX.V: KNT) has demonstrated exactly what that concept means.

Less than four months after going public on May 25, the company has completed additional financings totaling $18.5 million. It also refurbished the mill and mine facilities with enhanced processing capacity and has two drills turning onsite. With all this accomplished, production looks to be just days away.

"The technical team on site has done an excellent job with the production restart, and we are on schedule and on budget," says Director and Chief Operating Officer John Lewins. "With that focus on track, and with the enhanced financial flexibility resulting from our recent financings, we are now looking to target a resource expansion that we believe exists."

K92 has under-promised and over-delivered. ...

... For the remainder of the announcement:

http://www.bnn.ca/k92-shows-what-fast-track-really-means-1.568196



The OMFIF research document -- the "Seven Ages of Gold" -- contains detailed statistics plotting long-run changes in central banks' policies on buying and selling gold over seven distinct periods during the past two centuries, each lasting an average of around 30 years.

The latest "rebuilding," Period VII, has been underway since the financial crisis in 2008. In these eight years central banks in both developed and developing countries have shown a new fondness for the yellow metal, rebuilding gold's importance as a bedrock of most countries' foreign reserves.

Central banks have been net bullion buyers every year since 2008, adding more than 2,800 tonnes or 9.4 percent to reserves. Developed countries (accounting for the most official holdings) have been conserving stocks, while developing countries led by China and Russia have been building them up.

This is the longest protracted spell of gold accruals since 1950-65, when central banks and treasuries acquired a net total of more than 7,000 tonnes during the economic recovery after the Second World War.

Developments since 2008 mark a powerful change from the "sales," Period VI, in 1998-2008, when central banks, particularly in developed countries including the United Kingdom, the Netherlands, and Switzerland, were unloading bullion holdings. This is also in sharp contrast to the "demonetisation," Period V, in 1973-98, when gold's role was in limbo after it was officially phased out of the monetary system in 1971-73.

Central bank gold transactions have often been somewhat disassociated from the gold price. Central banks were net sellers over Periods V and VI, four decades of fluctuating but generally rising bullion prices. The latest period since 2008 has been a time of sharp price swings in the $1,000-$1,600-per-ounce range, but the eight-year switch to central bank purchases appears to have been a factor behind the price recovery since 2015.

To request a PDF of this report, please email editorial@omfif.org stating your name and institution.

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Help 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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Economic Collapse Confirmed! Most Credible Video Ever!

Posted: 19 Sep 2016 07:19 AM PDT

 This is a tough topic, because people either don't won't to believe it or are not capable because they lack the knowledge to comprehend what is being said. When you understand that our country can only operate based on debt/credit, not physical dollars, you finally see that the USA is a huge...

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

Wall Street Takes Fed To Court, What That Means For You

Posted: 19 Sep 2016 06:59 AM PDT

This post Wall Street Takes Fed To Court, What That Means For You appeared first on Daily Reckoning.

According to a recent Wall Street Journal post, "Bank trade groups and industry advisers are debating the possibility of legally challenging the Federal Reserve in an attempt to force changes to annual "stress tests" of the biggest U.S. lenders…"

In other words, Wall Street is examining the possibility of taking the Federal Reserve to court.  The Fed, arguably the most influential central bank in the world, has been the leading force on Wall Street since its modern existence.  A legal suit against the central bank could have a rippling impact on monetary policy and even trigger investor confidence in already weakening markets.  

The specific case that the banks are building focuses on is The Administrative Procedure Act (APA) that was passed under President Truman in 1946.  The Act was established in order to be a checks-and-balances maneuver to prevent the federal government from overextending its power.  At the time, it was established as a balance to powers enacted from The New Deal.  Under the most recent legal dispute, it would take into focus financial reforms brought about in The Dodd Frank Act which passed following our most recent global financial crisis.

What Are Stress Tests?

Pure and simple, the stress test examines what would happen if a big bank were to get into significant trouble.  Each bank has to hand over to the Fed a formalized "capital plan" that illustrates how the bank would manage if a shock was to hit (significant unemployment, drop in commodity prices, etc.).  

In the wake of 2008, banks hit a point where they were too big to fail and were causing major government backed financial bailouts to occur.  These stress tests were to be applied as a "stop gap" to prevent this from occurring again.

Source: Financial Times – Fed Stress Tests Explained

Wall Street Leading the Charge

The organization that is pushing forward in legal efforts is the Committee on Capital Markets Regulation.  The Committee has members making up executives from Citigroup, Goldman Sachs, JPMorgan Chase and Wells Fargo.  The organization states that the Fed "has likely not complied with the APA's procedural requirements…" and pointedly outlines that "the Fed's stress tests act as a de facto binding capital constraint on banks."

A majority of the major banks that have executives featured within the "organization" were also significant benefactors of federal TARP and bailout money in the wake of the financial crisis.  It should also be noted that the top five banks on Wall Street went from holding 35% in industry wide assets in 2007 to 44% today.  

They have only gotten bigger.

Why Does this Matter?

These tests are vitally important to investors in U.S based banks because if the institution is unable to pass its "test" it is then prevented by the Federal Reserve from increasing returns to shareholders (in the form of dividends or buybacks).  The tests are seen as an opportunity to publicly instill confidence that the financial system is not a global threat and risking another collapse as seen in 2008.

So far this year 31 out of 33 U.S banks required for examination have passed the Fed stress tests.

These circumstances of big banks and their affiliate trade groups going after the Fed in court are extremely rare. The fact that a group representing such a vast and distinguished list of Wall Street executives signals that the case could be a landmark legal precedent against the Federal Reserve, its policy and the legal parameters of Congress.

For your money, it means that if you hold investments with (or even affiliated) any major U.S bank, your returns could be at a greater threat risk or be at a heightened possibility of lower return.  

Beyond the capital repercussions of such an extraordinary legal venture, it could mean that the Fed has finally met its match.  Monetary policy, interest rates and even bailouts could all be under the crosshairs of the legal system.

Regards,

Craig Wilson, @craig_wilson7
for the Daily Reckoning

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The post Wall Street Takes Fed To Court, What That Means For You appeared first on Daily Reckoning.

Stakeholder Gold, New Technology for a Yukon Deposit

Posted: 19 Sep 2016 01:00 AM PDT

Bob Moriarty of 321 Gold discusses Stakeholder Gold and the cutting-edge exploration technology it is employing in the Yukon.

Multiweek Correction in Gold and Silver Markets Continues

Posted: 17 Sep 2016 01:00 AM PDT

Technical analyst Jack Chan charts gold and silver as the multiweek correction continues.

A Technical Summary of the Past Week in Gold and Silver

Posted: 17 Sep 2016 01:00 AM PDT

Technical analyst Jack Chan charts the past week's movements in the gold and silver markets.

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