Gold World News Flash |
- Q anon 9/30/18 Hunt for Red October
- THE SEPTEMBER STING: Did the GOP just outmaneuver the Deep State Democrats?
- Breaking News/Best Of The Web
- X ANON .. HOLLYWEIRD EXPOSED
- Ronan Manly: LBMA clearing and vaulting data reveal the absurdity of London 'gold' market
- President Donald Trump HEATED Press Conference on New Trade with Mexico and Canada
- Venezuela's Socialism...And Ours
- Gold and Silver: Bottoming is a Process
- A Three-Way Train Wreck Is About to Derail the Markets
- Jim’s Mailbox
- How intimately are major gold-mining companies connected with governments and central banks?
- You're not invited as World Gold Council teaches central banks about gold
- Gold: New Bull Or Same Old Bear?
- Gold And Silver – Still Weak, Qrtly, Mthly, Wkly Charts
- Ratcheting Up the Gold-Friendly COT Tension
- Power Investing: 4 Problems and 4 Solutions
- The Great Paradox of Today’s Market
- Avoid the Lemming Factor: 7 Ways to Find Great Investments
| Q anon 9/30/18 Hunt for Red October Posted: 01 Oct 2018 10:00 PM PDT Was it part of the plan to have RR tell Flake to stall the nomination of Kavanaugh? In any event the FBI is now looping into it, what will they find? Hopefully they will find dirt on Feinstein and Blasey? The Financial Armageddon Economic Collapse Blog tracks trends and forecasts... [[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://lindseywilliams101.blogspot.com http://www.figanews.com for full links, other content, and more! ]]  |
| THE SEPTEMBER STING: Did the GOP just outmaneuver the Deep State Democrats? Posted: 01 Oct 2018 09:00 PM PDT Dems never thought that Trump would approve an FBI investigation... but the president did and now Dems are in panic The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers ,... [[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://lindseywilliams101.blogspot.com http://www.figanews.com for full links, other content, and more! ]]  |
| Posted: 01 Oct 2018 07:20 PM PDT Jim Rickards: “A three-way train wreck is about to derail the markets” … Emerging markets “slammed” by soaring oil prices … Charles Hugh Smith: “The labor shortage is real” … Skyrocketing deficit? So what, says new Washington consensus … Gold and silver at long-term bottom. “Is it finally time to buy?” Best Of The […] The post Breaking News/Best Of The Web appeared first on DollarCollapse.com. |
| Posted: 01 Oct 2018 07:00 PM PDT It's Hollywood and politicians Fame. Fortune. Power. The more of this they have the wierder. sicker and more dangerous they can become. Well most of them anyway. The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative... [[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://lindseywilliams101.blogspot.com http://www.figanews.com for full links, other content, and more! ]]  |
| Ronan Manly: LBMA clearing and vaulting data reveal the absurdity of London 'gold' market Posted: 01 Oct 2018 06:14 PM PDT 9:12p ET Monday, October 1, 2018 Dear Friend of GATA and Gold: Bullion Star gold researcher Ronan Manly today returns to the monthly gold trading and vaulting data published by the London Bullion Market Association and calculates that 130 times more gold is traded in the LBMA system every month than exists as real metal. Manly writes: "So next time you see the LBMA release clearing data and vault holdings data, as it does at the beginning of every month, it's worth picturing these two sets of data, not as two distinct datasets, but as two interrelated sets of data where a tiny amount of physical gold in London vaults 'underpins' vast amounts of trading in fictional 'gold,' and where mainstream financial journalists fear to tread or ask questions as to how this Ponzi scheme came into existence and has been allowed to go on for so long." ... Dispatch continues below ... ADVERTISEMENT Fisher Precious Metals is preparing and equipping Fisher Precious Metals, voted North America's bullion dealer of the year for 2018 and known for personal service and great pricing, has been helping Americans and Canadians protect their wealth with precious metals for more than a decade. Enjoying a five-star client rating across the internet with no complaints at the Better Business Bureau, the team at Fisher Precious Metals works hard to serve you. We have helped thousands of clients in buying and selling bullion, arranging segregated and offshore storage, establishing precious metals IRAs, and obtaining certified precious metals appraisals. We provide security to our clients with our Bullion Authenticity Guarantee. We recommend that you read our article "How to Avoid Bullion Counterfeits": https://fisherpreciousmetals.com/precious-metals/bullion-authentication/ As a family-owned business, we strive to help you assess your wealth-protection goals and overall investment objectives. From the new precious metals buyer to the seasoned bullion investor, we are here to help you with a no-pressure, confidential consultation. Rest assured that everyone in our firm owns physical precious metals and no one is compensated via commission -- period. Fisher Precious Metals is your full-service precious metals investment partner for life. Please call us at 1-800-390-8576 or visit us here: https://fisherpreciousmetals.com Manly's analysis is headlined "LBMA Clearing and Vaulting Data Reveal the Absurdity of the London 'Gold' Market" and it's posted at Bullion Star here: https://www.bullionstar.com/blogs/ronan-manly/lbma-clearing-vaulting-dat... CHRIS POWELL, Secretary/Treasurer Join GATA here: New Orleans Investment Conference * * * 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: To contribute to GATA, please visit: |
| President Donald Trump HEATED Press Conference on New Trade with Mexico and Canada Posted: 01 Oct 2018 05:00 PM PDT MUST WATCH: President Donald Trump HEATED Press Conference on New Trade with Mexico and Canada The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more [[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://lindseywilliams101.blogspot.com http://www.figanews.com for full links, other content, and more! ]]  |
| Venezuela's Socialism...And Ours Posted: 01 Oct 2018 04:28 PM PDT Nikki Haley joins in a protest demanding the violent overthrow of the Venezuelan government. Isn't that "meddling"? The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers ,... [[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://lindseywilliams101.blogspot.com http://www.figanews.com for full links, other content, and more! ]]  |
| Gold and Silver: Bottoming is a Process Posted: 01 Oct 2018 09:29 AM PDT Article posted at The Market Oracle http://www.marketoracle.co.uk/Article63240.html |
| A Three-Way Train Wreck Is About to Derail the Markets Posted: 01 Oct 2018 09:12 AM PDT This post A Three-Way Train Wreck Is About to Derail the Markets appeared first on Daily Reckoning. The U.S. trade war with China and China's daunting debt problems are well understood by most investors. Coming U.S. sanctions on Iran and Iran's internal economic problems are also well understood. What is not understood is how these two bilateral confrontations are intimately linked in a three-way tangle that could throw the global economy into complete turmoil and possibly escalate into war. Untangling and understanding these connections is one of the most important tasks for investors today. Let's begin with the China debt bomb. As is apparent from the chart below, China has the largest volume of dollar-denominated debt coming due in the next 15 months.
The chart shows China with almost $100 billion of external dollar-denominated liabilities maturing before the end of 2019. But this debt wall is just the tip of the iceberg. This chart does not include amounts owed by financial institutions nor does it include intercompany payables and receivables. China's total dollar debt burden is over $200 billion and towers over other emerging-market economy debt burdens. This wall of maturing debt might not matter if China had easy access to new finance with which to pay the debt and if its economy were growing at a healthy clip. Neither condition is true. China has entered a trade war with the U.S., which will reduce the prospects of many Chinese companies and hurt their ability to refinance dollar debt. At the same time, China is trying to get its debt problems under control by restricting credit and tightening lending standards. But this monetary tightening also hurts growth. Selective defaults have already emerged among some large Chinese companies and certain regional governments. The overall effect is tighter monetary conditions, reduced access to foreign markets and slower growth all coming at the worst possible time. The situation in Iran is even more fraught. The U.S. waged a financial war on Iran from 2011–13. The first step was to impose sanctions on Iranian individuals and entities. Then Iran was banned from using the U.S.-controlled Fedwire system to send or receive U.S. dollars. Iran responded by switching its oil shipments to payment in euros cleared through the SWIFT system, based in Belgium. Next the U.S. leaned on its SWIFT partners to ban Iran from using that system, a process known as "de-SWIFTing." This move effectively cut Iran off from receiving hard currency for its oil. Iranians smuggled dollars into Iran from Iraq and ran a black market to get dollars to pay Dubai-based smugglers to bring in consumer goods. There was a run on the Iranian banks, interest rates were moved to 20% to stop the run and the Iranian rial collapsed. Inflation soared and anti-government demonstrations emerged. Iran was halfway to regime change without a shot being fired. Obama declared a truce in the financial war at the end of 2013 in exchange for negotiations on the Iranian nuclear program. This resulted in the 2015 Joint Comprehensive Plan of Action, JCPOA, a multilateral agreement on Iran's pledge to stop uranium enrichment. Obama paid billions of dollars in cash and gold to Iran as a bribe to secure this agreement. After the agreement, Obama ended many economic sanctions on Iran. Direct foreign investment, mostly from Europe, started up again. Last May, Trump tore up the JCPOA and resumed sanctions under a doctrine of "maximum pressure." The difference now is that Iran wasted the Obama bribe money on foreign adventures and terrorism in Iraq, Yemen, Syria, Lebanon, Gaza and Sinai. The situation in Iran today is even worse that it was in 2013. A new round of severe sanctions is set to go into place on Nov. 4, 2018. These new sanctions will result in a near complete shutdown of Iranian oil sales and an end of direct investment in Iran. Trump is on the path to regime change in Iran unless a new agreement is reached that is much stronger from the U.S. perspective than the JCPOA. Here's where the China and Iran stories converge. Iran has one and only one lifeline to keep its economy going — oil sales to China. And China desperately needs the Iranian oil to keep its own economy growing so it can pay or roll over its debts. The chart below tells the story:
Iran's oil sales to South Korea, Italy, Japan, the UAE, Spain, France and Greece are likely to be shut down or greatly curtailed by the new Trump sanctions. That leaves China, India and Turkey as Iran's only large customers. Turkey and India are facing financial crises of their own and may not have the hard currency to pay Iran. That leaves China as Iran's only source of hard currency going forward. China will not stop buying Iranian oil; they need the oil desperately. Iran will not stop selling oil to China; they need the hard currency desperately. Still, Trump's sanctions will force China and Iran into financial and logistical gymnastics to avoid interdiction by Trump. Iran will use its own tanker fleet to ship the oil because third-party countries won't allow their tankers to violate the sanctions. China will have to cheat on SWIFT message traffic notices to avoid appearing to credit Iran with hard currency. Even with these workaround methods in place, the two-way flow of oil and currency will become more difficult. The impact on China and Iran will be to slow both economies even if the oil and currency keep flowing. China is between a rock and a hard place because it's trying to control the increase in debt while trying to borrow more and pay its debts at the same time. Iran is in even worse condition because its foreign investment currency lifelines are being cut one by one even as the government struggles with hyperinflation, bank runs and social unrest. Both of these situations could be alleviated if China would give Trump the trade deal he wants and if Iran would give Trump the nuclear deal he wants. Both outcomes are unlikely in the near term because of the confrontational geopolitics standing in the way. Markets have been notably docile lately despite crises in Argentina, Turkey, Indonesia, Iran, China, Venezuela and elsewhere. Political crises related to Brexit and U.S. political dysfunction have not roiled global markets so far. The calm and low volatility are about to end. The China-Iran nexus in confrontation with the U.S. is the last straw. Regards, Jim Rickards The post A Three-Way Train Wreck Is About to Derail the Markets appeared first on Daily Reckoning. |
| Posted: 01 Oct 2018 08:44 AM PDT Jim/Bill, This is what Saturday’s talk was all about, back to basics. Dave Look At How Well Gold Has Retained Its Value From 1,000 Years Ago September 27, 2018 By Simon Black . . . Day-to-day, month-to-month, and year-to-year, the price of gold can fluctuate inexplicably. But over the long term, whether you're comparing loaves... Read more » The post Jim’s Mailbox appeared first on Jim Sinclair's Mineset. |
| How intimately are major gold-mining companies connected with governments and central banks? Posted: 01 Oct 2018 08:32 AM PDT 11:36a ET Monday, October 1, 2018 Dear Friend of GATA and Gold: Noting today's dispatch about the World Gold Council's latest confidential seminar for central bank and government officials -- -- our friend R.G. wonders just how intimately major gold-mining companies are involved with governments and central banks and indeed whether major miners are secretly cooperating with governments and central banks in controlling the price of the monetary metal. R.G. asks whether major gold miners are diverting some of their production to government buyers, short of the ordinary markets, in exchange for favors of some sort. After all, mining companies are completely vulnerable to governments for their mining rights, royalty requirements, and observance of environmental regulations. ... Dispatch continues below ... ADVERTISEMENT Storage and Withdrawal of Gold with Bullion Star in Singapore Bullion Star is a Singapore-registered company with a one-stop bullion shop, showroom, and vault at 45 New Bridge Road in Singapore. Bullion Star's solution for storing bullion in Singapore is called My Vault Storage. With My Vault Storage you can store bullion in Bullion Star's bullion vault, which is integrated with Bullion Star's shop and showroom, making it a convenient one-stop shop for precious metals in Singapore. Customers can buy, store, sell, or request physical withdrawal of their bullion through My Vault Storage® online around the clock. Storage rates are competitive. For more information, please visit Bullion Star here: Of course it's unlikely that any major gold miner would acknowledge relationships that secret and sensitive. But GATA long has suspected them and has documented such a relationship involving what is now the world's biggest gold-mining company, Barrick Gold, which a few days ago acquired Randgold Resources. In 2003, trying to win dismissal of the market-rigging lawsuit filed against it by gold dealer Blanchard & Co. in U.S. District Court in New Orleans, Barrick claimed that in borrowing and selling central bank gold the miner had become the agent of central banks in regulating the gold price and should share their sovereign immunity from lawsuit in the United States: The court rejected the argument and Barrick settled the lawsuit, soon after which it announced that it would close its gold hedges. Now Barrick has formally become the business partner of a major gold-mining company owned by the government of China, Shandong Gold. Shandong Gold and Barrick have even exchanged big chunks of each company, so the government of China is now a major shareholder in Barrick. Barrick Executive Chairman John Thornton has even said the company wants a "distinctive and preferred relationship with China": Intimate but not fully understood relationships between major gold mining companies, on one hand, and governments and central banks on the other might explain the indifference of the World Gold Council to the longstanding policy of gold price suppression by major governments and central banks. That is, what if the gold council is really representing not gold investors but certain governments in their objective of minimizing gold's traditional monetary functions? As creators of infinite money, governments and central banks certainly have had the capacity of buying up the gold-mining industry, or gaining control of it through intermediary brokers, and neutering the industry, as the industry has been neutered, might be awfully helpful to the cause of maintaining government's control over money. This is at least something investors in the monetary metals might want to keep in mind. CHRIS POWELL, Secretary/Treasurer Join GATA here: New Orleans Investment Conference * * * 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: To contribute to GATA, please visit: |
| You're not invited as World Gold Council teaches central banks about gold Posted: 01 Oct 2018 06:30 AM PDT 9:30a ET Monday, October 1, 2018 Dear Friend of GATA and Gold: While bigwigs from Franco-Nevada's Pierre Lassonde to crypto-anarchist Doug Casey insist that central banks don't care about gold, the World Gold Council still is planning to invite central bankers and finance ministry and sovereign wealth fund officials to another "executive program in gold reserve management" The program will be held from November 26 to 28 in Singapore, and unless you're connected to a government, you're not invited. ... Dispatch continues below ... ADVERTISEMENT Goldco Is America's No. 1 Gold IRA Provider Goldco Precious Metals was founded by Trevor Gerszt in 2006 with a mission to help Americans protect their retirement accounts from market volatility and inflation by adding precious metals like gold and silver. Experts predict that we are headed toward another economic crash like the one in 2008. If you aren't prepared, your retirement savings could vanish. At Goldco we take the time to understand our customers' investment goals and objectives and give them the resources to feel confident that their money will be there for them when they need it. To learn more about adding gold and silver precious metals to your retirement accounts, please visit Goldco here: According to the World Gold Council's announcement -- https://www.gold.org/news-and-events/events/executive-programme-in-gold-... -- The program will cover: -- Fundamentals of gold demand and supply. -- The role of gold as a reserve asset. -- Case studies on gold reserve management in practice. -- And gold market operations and accounting for gold. That last topic might be especially interesting, since governments and central banks are so secretive about their gold market operations and gold reserve accounting. Omitting anything about mere vaulting of gold, the program's agenda at least suggests that the involvement of governments and central banks in the gold market is far more comprehensive than they and the gold council would like the world to believe. While he scoffs at the idea that central banks might be interested in gold, Lassonde is a former chairman of the World Gold Council, which seems to continue to insist that central banks are or should be interested. "Our purpose," the Worldl Gold Council says, "is to stimulate and sustain demand for gold, provide industry leadership, and be the global authority on the gold market." There's nothing there about letting ordinary gold investors in on central banking's secrets. CHRIS POWELL, Secretary/Treasurer Join GATA here: New Orleans Investment Conference * * * 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: To contribute to GATA, please visit: |
| Gold: New Bull Or Same Old Bear? Posted: 01 Oct 2018 04:10 AM PDT Article posted at The Market Oracle http://www.marketoracle.co.uk/Article63237.html |
| Gold And Silver – Still Weak, Qrtly, Mthly, Wkly Charts Posted: 30 Sep 2018 05:52 AM PDT Article posted at The Market Oracle http://www.marketoracle.co.uk/Article63232.html |
| Ratcheting Up the Gold-Friendly COT Tension Posted: 30 Sep 2018 01:00 AM PDT Precious metals expert Michael Ballanger discusses the most recent gold COT report and movements in the market. |
| Power Investing: 4 Problems and 4 Solutions Posted: 29 Sep 2018 11:27 AM PDT This post Power Investing: 4 Problems and 4 Solutions appeared first on Daily Reckoning. Dear Reader, You must have that little version of yourself sitting on your shoulder giving unsolicited advice. I know I do. He usually chimes in at the most inconvenient time. You want to lose weight, but he says, "Let's stay home and watch tv." You want to try a new hobby, but he says, "You don’t have any talent." You want fiscal freedom, but he says, "You're going to be poor forever." He makes you feel like you aren't good enough and can't succeed. This self-doubt can creep up on even the most successful people. But there is something you can do about him. Words have the power to make you rich or keep you poor. I'm not just talking about understanding investing lingo like knowing the difference between an "asset" and a "liability." That is important. But what I mean are the words you tell yourself every day… Learning how to overcome your self-doubt is one of the best things you can do to ensure you move ahead and achieve your dreams. #1 The Power of Can'tHenry Ford said it best: "If you think you can, you can. If you think you can't, you can't. Either way you're right." When I was growing up, as you know, I had two contrasting points of view to learn from. When my poor dad wanted something that "wasn't in the budget," he would tell himself, "We can't afford that." When we kids wanted an expensive toy or to go on a trip, my poor dad would say, "We can't afford that." My poor dad had a scarcity mindset. Both of my dads believed in the power of words. But my rich dad took a different approach with this knowledge. My rich dad believed that our words had the power to shape our reality because they revealed what we thought and believed about the world. Those with an abundance mindset would not state they cannot afford something. And my rich dad wouldn't allow me to. Instead, he made me think, made me use the power of the words. When I wanted something, he made me ask myself "How can I for that?" to motivate me to put my money to work. One of the reasons so many investors cannot find great investments that make them a lot of money is that they often say, "You can't do that here," or "I can't afford it," or "Prices are too high," or whatever people say to justify their inability to do what others are doing. #2 The Power of Easy"The key to becoming rich is to make things easy," rich dad said one day while he was giving his son and me a lesson on business. "One of the reasons school teachers make less money than businesspeople is because the school system is designed to take the simple and make it complex." Not understanding what he meant, I asked for further clarification. Rich dad promptly replied, "The school system takes 1 + 1, simple math, and turns it into calculus. Taking the simple and making it more complex." The financial world behaves the same way. They make simple ideas or philosophies and make them more complicated. By doing so, they prey on those who have little-to-no financial education. If you don't already know calculus it's impossible to understand. They want you to understand only what they want you to understand because they can charge high fees to do the work in-between without you realizing it's so much simpler than you think. Here's a classic example: In Tony Robbins' book, Unshakeable, Jack Bogle, the founder of the fund Vanguard wrote:
In plain English, that's a bad deal. #3 The Rich Make It Easy to Be PoorHave you ever noticed how easy it is to get a credit card? Have you ever noticed how easy it is to get into bad debt? As I wrote in a recent issue, Gary Cohn blamed investors for the 2007-2009 crash as much as he blamed lenders. He asked, "Was the waitress in Las Vegas who had six houses leveraged at 100 percent with no income, was she reckless and stupid? Or was the banker reckless and stupid?" As revealed later, banks were preying on the lack of financial education by pushing high interest rate loans. The borrowers were just doing what the lenders said they could do. When Kim and I were building our fortune, we ran into trouble with bankers because we had too many investment properties. Even though they were all positive-cash-flow investments, the bank wanted to call some of our loans because we had too much good debt. At the same time the bank was concerned about our multimillion-dollar investment portfolio, they were eager to give us a new credit card as well as give us a loan for a new car. In other words, our banker was concerned that we had too much good debt, but they wanted us to load up with more bad debt. Why is that? #4 Investing without GuaranteesWhy are millions of investors willing to pay a little money each month without any guarantees that the money will be there in the future? Why are millions of investors so willing to lose money each month rather than make money each month? While many average investors are willing to gamble on making money in the future, a power investor wants guarantees on their returns today. Because many investors have been brainwashed to believe that their money is safe in a savings account, 401(k) or a mutual fund. In my opinion, "safe" investments might be the riskiest of them all. Warren Buffett says, "Risk is not knowing what you are doing." The key word is you, not the investment. In the world of investing, there are no investments that are 100 percent guaranteed. There is no investment that is absolutely safe (safe meaning "free from losses"). There is no risk-free investment. When you invest your money, you will win, and you will lose. That is a guarantee. There are things you can do to reduce the risk and increase the safety:
As always, if it looks too good to be true, it probably is. Play it smart, Robert Kiyosaki The post Power Investing: 4 Problems and 4 Solutions appeared first on Daily Reckoning. |
| The Great Paradox of Today’s Market Posted: 28 Sep 2018 09:06 AM PDT This post The Great Paradox of Today's Market appeared first on Daily Reckoning. Today we sit down before facts… challenge bedrock assumptions… and pursue truth down strange roads… Just this Wednesday the Federal Reserve announced its eighth rate hike since the business began in December 2015. Since October last, it has also been pumping liquidity from its balance sheet — at least $220 billion to date — with more on tap. That is, the central bank has been "tightening" on two fronts. Yet we are reliably informed that overall financial conditions are easing. Not only are financial conditions easing… by one metric they are the easiest in 25 years. And so we arrive at a thumping paradox: If money is becoming tighter… why are financial conditions so easy? The Chicago outpost of the Federal Reserve operates a gadget called the National Financial Conditions Index. About which:
Specifically, the index features three components that track U.S. financial conditions on a weekly basis:
Any reading of zero or above is a warning of coming financial weather. Bear markets commenced in 1973, 2000 and 2007 when the index crossed above zero. Economic recessions are also in prospect when the index exceeds zero. Substantially positive readings accompanied the deep recession of the early 1980s, for example. When the National Financial Conditions Index is below zero — on the other hand — it indicates easy waters all around. What is the index's latest reading? Negative 0.88. It is the lowest reading since September 1993… long before quantitative easing twinkled in Ben Bernanke's beady eye. This despite rising interest rates and the Fed's assaults upon its balance sheet. Yet you demand evidence — and evidence you shall have:
What are we to conclude from today's improbable reading? U.K. investment platform AJ Bell:
That is not all:
We remind you that today's fed funds rate ranges between 2% and 2.25%… and 5% is nowhere in sight. Reassuring if true — we have warned that the next rate hike could tip markets into bear market territory within a year. But not every index tracking financial conditions works from the same tool kit. Perhaps, therefore, this NFCI gives a false reading of financial ease. Let us instead look to Bloomberg's own financial conditions index — perhaps it draws a darker sketch. Here, Bloomberg's own index of financial conditions (unlike the NFCI, the greater the financial ease, the higher the reading):
Bloomberg's index likewise indicates easing financial conditions. "For some context of just how easy financial conditions are," says Zero Hedge, "the Bloomberg U.S. Financial Conditions Index… is approaching the highest levels since 2007." But perhaps we should turn to a more… authoritative source than Zero Hedge, like the Bank for International Settlements (BIS). From which:
"If anything, they eased further" over the past quarter, adds Claudio Borio, head of the BIS' monetary and economics department. Tighter money… easier financial conditions. What does our central bank make of the paradox? Mona Mahajan, strategist with Allianz, has said previously that the paradox is "puzzling to the Fed." Doubtless it is. But what, may we ask, is not puzzling to the Fed nowadays? We begin to suspect one plus one might overmatch it… the square root of four might stump it… the number of angles in a triangle might send it to the textbook. Nine baffled years and trillions of confused dollars after the financial crisis, the Federal Reserve still cannot work a consistent 2% inflation rate. Its beloved Phillips curve — the supposed trade-off between unemployment and inflation — is shipwrecked beyond hope. And when was the last time anyone called the Federal Reserve chairman "Maestro"? But to the topic under discussion… Despite Fed tightening, trade war panics, raw geopolitical nerves and all of hell's angels… financial conditions remain as easy as a strumpet's virtue. But why so loose? Perhaps Northern Trust's economic research department lays its finger on it:
We might add that U.S. markets are presently a magnet for global capital fleeing emerging markets. We must therefore consider the possibility that collapse is not on tap so long as conditions remain so relaxed. Of course we cannot exclude the possibility of collapse tomorrow, financial conditions be damned — the fear of it haunts our nights. Thus we waver, indecisively… like the donkey that died of both thirst and starvation standing between a pail of water and a bucket of oats. As our co-founder Bill Bonner is fond of saying, "Sometimes right, sometimes wrong and always in doubt." But doubt, said Descartes, is the origin of wisdom… Regards, Brian Maher The post The Great Paradox of Today's Market appeared first on Daily Reckoning. |
| Avoid the Lemming Factor: 7 Ways to Find Great Investments Posted: 27 Sep 2018 11:42 AM PDT This post Avoid the Lemming Factor: 7 Ways to Find Great Investments appeared first on Daily Reckoning. Average investors are often lemmings. The metaphor dates back to the 19th century illustrating the behavior of people who go along unquestioningly with popular opinion, unconscious of potentially dangerous or fatal consequences. But instead of losing their lives, many lose their life savings. There are many reasons why this happens, but one reason is because average investors blindly follow the pack. Doing what is popular rather than what is smart. Upon seeing their friends get rich, their fear of missing out kicks in and they follow the herd. Warren Buffett said, "Be fearful when others are greedy. Be greedy when others are fearful." The Worst Time to InvestRich dad said, "When taxi drivers and shoeshine boys are investing, it is time to get out of the market. The worst time to invest is when the market is good." He didn't teach us what a lot of financial gurus teach—"chase the next hot investment!" Instead, he taught my best friend and I to sell our bad investments when the market was high and buy value investments when the market was low. He said, "The best time to get rid of the non performing assets in your portfolio is when the market is good, and amateurs are in the market buying." When interest rates dropped, and the real estate market climbed between 2000 and 2003, Kim and I began selling off our marginal real estate investments to investors desperate to get out of the stock market and into the real estate market. Finding an InvestmentOne of the main reasons why so many investors fail to find a great investment is due to what I call the lemming factor. The lemming factor occurs when investors buy because other investors are buying. In most financial publications, you will see ads that claim, "Voted the Year's #1 Mutual Fund," or, "A 36% Return for the Past 5 Years," or, "5 Star Rating." It is ads like these that draw the lemmings in. Generally, if it's true that a mutual fund is number one or has delivered a 35 percent return for five years, then that usually means the end is near. In real estate, the lemmings are drawn in when they know of a friend or office worker who bought a property for $125,000 and sold it three months later for $165,000. The rise of house-flipping televisions shows and the increase in available properties made was incredibly enticing—to lemmings. Sure, the remodeling or improvement is fun—they do it in under an hour, too! But these shows are in the entertainment business. They don't show you the heartache, the pain the time and they don't teach you to analyze an investment. An analysis RealtyTrac ran for MONEY showed "that 12% of flips sold at break even or at a loss before expenses. In 28% of flips, the gross profit was less than 20% of the purchase price. As rich dad often said, "Tales of success bring suckers to the market." 7 Ways to Find a Great InvestmentRich dad said, "If you are going to be a successful investor, you need to be able to find great investments others miss." He taught us to read and analyze financial statements, understand trends and how history can tell you important information, and not to invest in what is popular. The following are seven ways to find great investments in good markets and in bad ones. #1 Remember that people are lemmings Average investors always get into the market late, usually at the top of the market. Because they are late, they come in droves, create a frenzy which drives the prices up. When the market crashes the average investor loses all his money, and the real investors go back in to find the best investments at the best price. This is true for any asset class: business, paper assets, real estate and commodities. #2 Personal Tragedy This strategy might sound heartless and I don't enjoy finding investments this way, but I have. Many years ago, there was a property for sale by a man who had just lost his job. He was weeks away from foreclosure by the bank. I was hesitant. In fact, I declined as soon as I found out. But he insisted that buying the house for what was owed to the bank would help his family, avoid his credit from being damaged, and allow him to buy another house. The point is, when personal tragedy hits, many people are desperate to sell. While this is a good time to invest, I suggest you let your conscience be your guide. #3 A Recession We only have to look back ten years ago. During the recession many businesses were selling the business and its equipment for pennies on the dollar. Homes fell in value, and doodads like cars, lake houses and boats also sold for pennies on the dollar. Again, I do not like trading on personal tragedy, yet sometimes you can actually help someone out, even if you are giving them only pennies on the dollar. Let your conscience be your guide. It's you that looks back at you in the mirror in the morning. #4 A Technical, Political, or Cultural Change In 1986, the government changed the tax law in America. The 1986 Tax Reform Act made it difficult for highly paid individuals (such as professionals like doctors, lawyers, accountants, architects, and others in the S quadrant) to have the same tax advantages that non-licensed business people had. That change contributed to the stock-market crash of 1987 and also the real estate crash that followed a few years later. You might remember the Tuesday night before Trump was eventually named the 45th President of the United States, investors sent S&P 500 Futures plunging more than 4%. #5 The 20-10-5 Cycle Rich dad said, "The stock market dominates the investment market for a period of 20 years. As the twentieth year approaches, the possibility of a market crash increases. After the crash, the stock market tends to stay down for ten years. During the ten years the stock market is down, commodities such as gold, silver, oil, and property dominate the investment world. And every five years, there is some kind of major disaster." #6 Have a friend in the business One of the best ways to find great investments is to have business partners who are in the market every day. Kim and I find great investments because we pay our brokers more than other investors do. For example, while many investors are trying to ask their broker to lower their commissions, we give some of our brokers their full commission as well as 10 percent of the profits from the investment. For some reason, because we are generous, we tend to get the first shot at the best investments. We have purchased several properties before they hit the market by having friends in the business and making them partners in the investment. #7 Pay more money Everything I own has a price. And that's why when a real estate broker approached Kim and I with an offer to buy one of our properties, we listened. He asked how much we would sell it for, after thinking about it, we said $2.5 million. He countered with $1.9 million. We discontinued our talks with that broker. You might ask why, here's the math: The property cost us $700,000. We converted it to an apartment complex with plans of leveling the building after five years and building high-end condominiums. Our plans show that we can build 12 three-bedroom, two-bath condominiums with garages, and sell them for at least $350,000 each, a gross value of $4.2 million. You can see why we turned down $1.9 million. Regards, Robert Kiyosaki The post Avoid the Lemming Factor: 7 Ways to Find Great Investments appeared first on Daily Reckoning. |
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