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Tuesday, July 21, 2015

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Without PHYSICAL Gold & Silver, You Will Be Greeced!

Posted: 21 Jul 2015 01:00 PM PDT

Pay attention.  We have said this before: the elites and their bankers take no prisoners.   Submitted by ETP: Step back for a moment and absorb what just transpired in the ongoing Greek tragedy that refuses to go away. Greece, with no possibility of ever repaying its fictitious debts to the EU, and the EU, […]

The post Without PHYSICAL Gold & Silver, You Will Be Greeced! appeared first on Silver Doctors.

Does A Commodities Crash Mean Global Depression, Mass-Devaluation Or Both?

Posted: 21 Jul 2015 12:53 PM PDT

First, precious metals peaked and began drifting lower. Then copper fell, oil plunged and it became obvious that these weren’t isolated events. The entire commodities complex — that is, all the physical inputs a modern economy uses to power, transport and build stuff — was in sustained decline. Here’s the Bloomberg Commodities Index over the past five years:

Bloomberg commodiites July 2015

Now, after the past week’s free-fall, commodities are front-page news:

Commodities crash to 11-year low as deflation fears grow: Latest price slump complicates backdrop for interest rate hikes

Global commodity prices have slumped amid a glut of supply and low demand – and now experts are foreseeing the prospect of deflation in the West.

A basket of commodities measured by the Bloomberg commodities index has fallen to an 11-year low, and the index is down 42 per cent since its peak in 2008.

The "commodity supercycle" was the term to describe the boom in commodity prices pre-crisis, when global growth was steaming ahead and supported demand. Although commodities have had a hard time post-crisis, falls in the price of everything from from gold and oil, to copper and nickel have accelerated. Tin has fallen 25 per cent so far this year, Nickel is down 54 per cent from its February 2011 high, and natural gas has slumped 40 per cent over the same period.

There is a glut of industrial commodities on the world market and with growth flagging, demand is simply not strong enough.

Slightly different dynamics are at play in the oil market, as Saudi Arabia has vowed to keep Opec's production high despite weak demand. Already-low oil prices have fallen 10 per cent in the last month, ahead of the lifting of US sanctions against Iran. There is known to be a significant amount of supply stacked up in Iran and waiting to hit the world market. Brent crude for September was down to $56.75 a barrel yesterday morning.

46% – fall in copper prices since 2011

25% – fall in tin prices so far this year

ASK DOCTOR COPPER
Perhaps most telling is the price of copper, which is trading around its lowest level since the financial crisis.

Known as Dr Copper due to its use as a barometer of global economic health, the industrial metal fell to $5,240 a metric tonne last week, heading towards weakness last seen in the summer of 2008.

The slump in copper is a "direct consequence of the actions we are seeing in China, the increasingly flustered and desperate government [measures]", says Alastair McCaig at IG Index.

The nation accounts for 50 per cent of global copper demand, and despite official GDP data released last week stating that growth has confounded expectations to hit seven per cent in the second quarter, the figures have been widely ridiculed.

A range of other indicators show China is struggling. Not only is the debt-laden country going through a difficult transition from infrastructure-led growth to a consumption-led economy, but a stock market bubble has recently burst and $3 trillion (£1.9 trillion) has been wiped off the value of local shares. Authorities have taken a heavy-handed approach, banning the sale of some stocks for six months and going after short sellers.

"All of those [measures] independently might not be seen as too much of an issue but bundle them all together and we are seeing increasingly nervous oversight of the Chinese economy," McCaig says.

DEFLATION
Looking ahead, the ongoing weakness in oil is likely to spell deflation for Western economies. Black gold plays a large part in dictating inflation levels in the West. The last round of inflation data — showing the UK had zero consumer price inflation — was correlated before the latest squeeze on oil prices kicked in.

"The latest fall in oil prices will push many economies including the UK into deflation in the next month or two," says Michael Pearce at Capital Economics.

DELAYING RATE HIKES
Now experts suggest planned interest rate hikes could be delayed. "The UK is already skirting with deflation in the next couple of months and that is going to keep the Bank of England sitting on its hands," says Neil Williams at Hermes Investment Management.

Consensus in the market is for the first US rate hikes to appear in December, with the UK set to follow suit early next year. But dozens of central banks have been forced to ease policy so far this year, painting a weak global picture. "The US and UK are talking of raising rates but with 30 banks having cut rates, the way things are going those numbers are likely to increase," says McCaig.

A few questions:

Q: Why did it take so long for the commodities crash to penetrate the conventional wisdom?

Because it conflicted with the general theme of global economic recovery. The US was reporting lower unemployment (though a lot of analysts continued to point out the bogus nature of that stat) and Europe and Japan had begun aggressive QE programs (which always leads to more borrowing and spending, right?). So despite the occasional hiccup, 3%+ growth was a lock going forward. Consider the opening paragraphs of this July USA Today article:

The International Monetary Fund cut Thursday its projection of global economic growth in 2015 to 3.3% from 3.5% issued in April, citing sluggish conditions in the U.S. in the first quarter.

Setbacks in the U.S. – like harsh winter weather, port strikes, and downsizing in the energy sector – have contributed to slower growth worldwide, it said in its latest “World Economic Outlook” update.

While the rest of the world should pick up pace by next year, advanced economies like Germany could make headway faster than developing nations, it said.

Growth of 3.3% is not bad at all, and it remains the consensus forecast for 2016. This implies fairly robust demand for commodities, so the fact that their prices are declining was easy to dismiss as an aberration soon to be rectified by rising sales.

Q: Can there be growth, inflation and all the other good things that governments have been promising while raw materials prices are tanking?

The answer is probably no, which means the other numbers — GDP, deficits, interest rates — will have to be adjusted to conform with the commodities complex rather than the other way around.

Which in turn means that the world’s governments are about to panic. Expect some Hail Marys in 2016, including sharply negative interest rates, a serious war on cash to facilitate those negative rates, and a return to QE in the US, where the idea of raising interest rates will be quickly abandoned.

Since these policies are just more aggressive versions of what has already failed, they’re unlikely to stop the carnage, leaving the developed world with one final weapon against global deflation: a coordinated devaluation of all major currencies, probably against gold. Though it’s taking a really long time, the currency war continues to play out according to Jim Rickards’ script.

Here's the latest on 'Dr. Copper'...

Posted: 21 Jul 2015 12:02 PM PDT

From JT Long, Executive Editor, The Gold Report:

Experienced investors know that commodities and equities move in cycles, and understanding where copper, iron ore, nickel and zinc are in the cycle can result in much smarter decisions than blindly following the pack. In this interview with The Gold Report, Salman Partners Vice President of Commodity Economics Raymond Goldie brings some perspective to the charts and names the junior mining companies that could ride the inevitable waves up.

The Gold Report: You recently wrote a paper called “Stagnation: The New Paradigm?” where you put current commodity prices in perspective by showing charts going back to 1999. What happened over the last five years in iron ore and copper and what can we expect going forward?

Raymond Goldie: The price of iron ore from 2011 to 2015 dropped more than 70%. If you look at the other great indicator of the mining industry — the price of copper — you find a similar, but smaller, decline over the same time period.

[Copper chart located above. Data: London Metal Exchange.]

TGR: What were the fundamentals both behind iron ore and copper’s astronomical moves up going back to 2004 and the subsequent falls?

RG: Iron ore prices really started to rise in 2008 because of increasing demand for infrastructure needs globally. Copper received added attention in China as it became seen as money right alongside gold. Chinese bankers started using copper, especially for foreign trade financing, which helped push copper prices up to levels that may not have been sustainable.

In both cases, the main reason for the following shift down was that supply had increased faster than demand.

Both iron ore prices and copper prices are, even at their relatively depressed levels today, higher than any price that they’d ever seen before 2006.

TGR: The continuing trend lines that you have on both iron ore and copper in these charts show slow, steady growth going forward. What prices are you expecting in 2016 and beyond?

RG: One of the things I’ve learned is that I’m not particularly good at forecasting prices. The forward strip markets, the futures prices on the London Metal Exchange, incorporate the aggregate of expectations and are better at forecasting prices. That seems to be calling for a steady increase in copper prices over the next 10 years.

In the case of iron ore, there is no forward strip market, so I relied on the Australian government forecast. We’re at a pretty flat bottom now and the best estimate is a steady increase in iron ore prices.

TGR: What would steadily increasing commodity prices mean for the commodity equities market?

RG: That’s a very good question—how strong is the relationship between commodity prices and commodity equities? One of the answers is that stocks of companies that produce copper, like Freeport-McMoRan Copper & Gold Inc. (FCX), the biggest one, and some of the smaller producers — the biggest one in Canada is First Quantum Minerals Ltd. (FM:TSX) — follow the larger equity market closer than the commodity prices.

One of the charts that I’ve put together shows the relative performance of the Toronto Stock Exchange diversified mining index against the overall Toronto composite index. It shows seven clear economic cycles since 1960. In every one of those cycles, equities have experienced two peaks and two troughs. One of the peaks happens as you recover from the end of the recession. Then in the middle of each cycle, those equities tend to languish and decline and form a second trough, finally running up to the cycle end peak. I believe we are at the middle of one of these mid-cycle peaks right now.

Source: TSX data, analysis by Salman Partners Inc. The index is of non-precious metals equities’ performance relative to that of the TSX Composite, recalculated to 100 being the low point in each cycle immediately after the end of the recession that began each cycle.

TGR: Is there anything different about this cycle than the previous cycles? Is it acting as predicted?

RG: Many have said we are experiencing uncommon demand, but if we look at the Western world’s demand for base metals in this cycle compared with some of the previous cycles, we find that the trend of the line for demand has been pretty much in the middle of previous cyclical trends. Even China’s export data is, on average, sideways. There may, indeed, be strong growth in China in demand for copper, but there’s also been strong growth in production of copper in China. The net result is that China’s impact on the rest of the world copper market is pretty flat. So it’s not a demand story.

I think it’s a supply side story that is resulting in copper prices that are stronger than at any time before 2006.

TGR: What is causing the lack of supply and will that continue?

RG: At the beginning of every year, copper mining companies publish their production goals, and typically up to 2005, they achieved that. One of the ways they did that is by tucking away some high-grade ore so they could kick up the pounds if needed at the end of the year. But since 2005, the world’s copper industry has consistently produced 7% less copper than planned. One of the reasons we’ve had these shortfalls is that those areas of high-grade ore don’t exist anymore. They’ve been mined out.

That is why we have a supply side issue at existing mines. When it comes to building new mines, not only are we not finding sparkling new copper deposits at the rate we used to, but also it takes longer to get mines into production—12, 15, 20 years—because of new environmental compliance regulations.

That is why this isn’t a typical cycle. This is a cycle constrained by government compliance and governmental regulations.

TGR: Can the junior companies fill that demand in the coming cycle?

RG: Many juniors have superb projects, but they’re lacking financing. Banks generally want to lend to big companies. So the juniors are sitting, waiting to be taken over or engage in a joint venture with a big company. But big company shareholders often do not want to see their companies underwriting big new expansion projects. They’d rather see that cash returned to them.

TGR: What are the companies that have some money to move projects ahead?

RG: First Quantum has become a big company by growing internally and through the recent takeover of Inmet Mining Corp. That big company interest will allow Cobre Panama to come on stream roughly as planned.

NovaCopper Inc. (NCQ) has an equally good project. In fact, it’s smaller and higher grade. It’s in Alaska, which many people would consider to be a more stable jurisdiction than Panama, but it can’t yet get full financing. The project continues to be studied and permitted, but we don’t have the financing to bring it all the way through to production yet. The company has managed to get enough interest from investors that it’s staying alive, but it doesn’t have financing all the way through to production.

Nautilus Minerals Inc. (NUS:TSX) is a small company, but it was able to find financing, largely through partnering. One of those partners is the government of Papua New Guinea, which is in for 30% of that project at the bottom of the ocean off the country’s coast. That has provided enough financing to move the project all the way through to production.

TGR: Has Nautilus answered the risk question associated with underwater mining and proved it can be economical?

RG: Nautilus is merging mining technology and deep ocean oil and gas drilling technology. I have confidence that the engineers have figured out a way to make it work.

TGR: Are you following other copper companies?

RG: Reservoir Minerals Inc. (RMC:TSX.V) has a joint venture with Freeport-McMoRan, which has named Reservoir’s Timok Project in Serbia as one of its top priorities. This is a country that has been wracked with war; only recently has there been calm. The political instability resulted in a lack of new technology used to explore ore deposits in a seasoned mining area. The Timok project combines a known occurrence of large, high-grade ore deposits with modern exploration methods to find some humdinger resources. The company is working on permitting and engineering in preparation for raising final financing.

TGR: Is nickel following the same pinch-point curve™* as copper?

Source: London Metal Exchange

RG: Nickel is also in a mid-cycle low, something that occurs well before the end of an economic cycle. As long as economic growth continues, we will see a recovery in the price of commodities that relate to that recovery. Nickel is one of them. In fact, I’m more optimistic about nickel than most other commodities because it is a supply side story. The demand is growing fairly consistently at about 4% or so a year.

The supply side issue is that in January of 2014, the government of Indonesia, the Saudi Arabia of nickel, banned exports of raw nickel as part of a move to producing finished nickel. China had been making lots of cheap nickel from this high-grade Indonesian ore and stocked up before the door shut. We’re not quite sure when the Chinese will run out of that ore, but it’s almost certainly before the end of this year. Once that happens, a shortfall of 200,000 or 300,000 tons a year could push the price up from the current $5 a pound ($5/lb) range to something more like $11, 12 or 13/lb. Remember, the price of nickel got into the $20/lb neighborhood in 2007.

TGR: What junior companies do you follow in the nickel space?

RG: Royal Nickel Corp. (RNX:TSX) and Sherritt International Corp. (S:TSX) are covered by my colleague, Nik Rasskazovskiy. What’s driving the price of both companies is the nickel price. Royal Nickel has a project in Quebec and is looking for a big brother to help develop it. Sherritt is North America’s go-to play on nickel. It has operations in Cuba, Canada and Madagascar and is one of the world’s lowest-cost producers of nickel. Once we see confirmation that the Chinese have run out of Indonesian nickel ore, nickel prices will turn up, and then we could start to see joy in the share prices of Sherritt and Royal Nickel.

TGR: Looming supply challenges have been reported in the zinc space. What is your outlook in that market?

RG: A few months ago a lot of investors noticed that many of the big world zinc mines are closing down. Some speculated we were running out of zinc and that the price might go from the current $0.91/lb to as high as $2/lb in a couple of years. The problem is that because of that prediction, a lot of production—particularly in China, Peru and at Vedanta Resources Plc’s (VED:LSE) projects in Africa and Asia—ramped up fast. The net result is the price of zinc isn’t $2/lb. It’s about $0.91/lb and likely to stay in that range for the next few years.

TGR: Are there junior companies that can still be successful?

RG: Trevali Mining Corp. (TV:TSX) is one of the best zinc plays. It has a joint venture with Glencore International Plc (GLEN:LSE), the world’s biggest zinc producer and trader. Also, it has mines in Peru and Canada, so it’s already in production. Better yet, that production is low cost.

Zazu Metals Corp. (ZAZ:TSX) is an Alaskan play on a zinc deposit that, fortunately, can make money at $0.94–0.95/lb. But it needs a big brother.

TGR: Do you have any words of wisdom that can help investors re-engaging with the market as the summer comes to a close?

RG: We have seen the bottom in copper. We are still waiting for the bottom in nickel, and zinc could be a couple of years out. I would focus on copper equities. Start with the big, liquid copper producers. That used to mean Freeport McMoRan, but it also now has huge interests in oil and gas. I have really no idea what’s going to happen to oil and gas prices in the foreseeable future. So I turn to First Quantum, which is Canada’s go-to copper play. This is probably the best performer among base metals equities between now and the end of this year. Looking out further will be the time for other junior copper plays and then later, nickel, and even later, zinc.

TGR: Thank you for your time.

*Pinch-point curve™ is a term trademarked by Raymond Goldie.

Raymond Goldie, vice-president of commodity economics and senior mining analyst at Salman Partners, has extensive experience in the investment business, including more than 20 years as a mining analyst covering non-precious-non-ferrous and precious minerals (gold, silver, PGEs, diamonds) and fertilizer companies. In geology, Goldie holds a Bachelor of Science from Victoria University in Wellington, New Zealand; a Master of Science from McGill University; a Ph.D. from Queens University; and a Diploma in Business Administration from the University of Toronto.

To Pass TPP, U.S. State Dept. Upgrades Malaysia’s Human Trafficking Ranking Despite Discovery of Mass Graves

Posted: 21 Jul 2015 12:00 PM PDT

When it comes to a choice between human rights, freedom and national sovereignty versus multi-national corporate giveaways, we know which decision the U.S. government makes every time. In the latest slap in the face to anyone stupid enough to still think the American status quo cares about anything other than money and imperial power, I bring you the following:   […]

The post To Pass TPP, U.S. State Dept. Upgrades Malaysia's Human Trafficking Ranking Despite Discovery of Mass Graves appeared first on Silver Doctors.

CREDIT SUISSE : Gold In A Medium-Term Bear Trend; Go Short Targeting $956

Posted: 21 Jul 2015 11:10 AM PDT

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The Creator of This Amazing Internet Privacy Device Has Been Silenced: “Effective Immediately We Are Halting Further Development”

Posted: 21 Jul 2015 11:00 AM PDT

They want to know everything. They want to monitor everyone. And they will stop at nothing to accomplish their goals.   Submitted by Mac Slavo, SHTFPlan: Data collection and invasive monitoring of American citizens has been at the forefront of government activities for decades. After revelations by Edward Snowden in recent years, the fringe conspiracy […]

The post The Creator of This Amazing Internet Privacy Device Has Been Silenced: "Effective Immediately We Are Halting Further Development" appeared first on Silver Doctors.

No matter what's in the news, these stocks just keep going higher

Posted: 21 Jul 2015 10:58 AM PDT

From Brian Hunt and Ben Morris, DailyWealth Trader:

While Chinese stocks were crashing…

While natural resource stocks were hitting fresh multiyear lows…

While major stock indexes were selling off hard…

One of the world’s strongest uptrends didn’t miss a beat… And DailyWealth Trader readers are making money.

If you understand the powerful financial secret behind this trend, you can cash in, too. Below, we cover all of the details…

Selling insurance is one of the world’s greatest businesses… And understanding it is one of the world’s great investment secrets.

Insurance companies collect premiums from their customers. And if they’re good at what they do, those premiums exceed what they’ll end up paying out in claims. In the meantime, they get to invest all that money. As Porter Stansberry has explained in his Investment Advisory, insurance companies get paid to use capital. “That’s a fantastic way to become very wealthy,” he wrote.

Insurance stocks are also a great way to play inflation defense. Insurance companies take in current dollars… and agree to pay out claims in “future dollars.” Should inflation gradually erode the value of the U.S. dollar as some analysts expect, well-managed insurance companies will prosper.

And even after more than six years, these stocks still haven’t recovered from the financial crisis. Back in 2008, investors couldn’t sell insurance stocks fast enough. Big names like AIG made promises they couldn’t keep. From its May 2007 peak to its March 2009 low, the iShares Dow Jones U.S. Insurance Fund (IAK) lost 78% of its value.

The government stepped in with billions of dollars in bailouts… And insurance stocks soared. Since bottoming in 2009, these stocks are up over 300%… outpacing the S&P 500 Index by nearly 50%.

Despite this big run, insurance stocks haven’t gotten even close to recovering.

They’re still cheap… And there’s still a lot of upside ahead.

IAK holds big-name insurance companies, like MetLife, AIG, and Aflac… It’s a diversified way to invest in insurance stocks… and it’s enjoying a long, steady uptrend.

As you can see in the chart below, IAK is up 312% since its March 2009 low. It has far outpaced the S&P 500. IAK has also been impressive in the past few weeks. While the stock market was dropping, IAK was hitting new highs. That’s a major display of strength.

But even after this huge rally, insurance stocks are cheap. Over the past 20 years, the S&P 500 Insurance Index has had an average price-to-book-value (P/B) ratio of 1.65. Today, it has a P/B ratio of 1.12. IAK’s holdings are even cheaper, with an average P/B of just 1.06. (Book value is a rough measure of the liquidation value of a company’s assets. And the P/B ratio is a simple, useful measure of value for financial stocks.)

These ratios are exactly where they were five years ago… But shares have doubled. This means that the values of these companies have doubled right along with share prices.

So insurance stocks are cheap and they’re in a big uptrend. And shares of IAK would have to increase 56% just to get back to average valuations. If you don’t own insurance stocks yet, it’s a great time to open a position. We recommend using a 15% trailing stop to protect your capital if the trend turns.

In sum, insurance is a fantastic business… And insurance stocks are historically cheap. These cheap valuations mean there’s great potential for more upside. So as long as the trend is up, ride it for profits.

Regards,

Brian Hunt and Ben Morris

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Former U.S. General Calls For Rounding Up and Interning “Radicalized” and “Disloyal” Americans

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Goldman Sachs says dump US stocks and buy Europe, what nonsense!

Posted: 20 Jul 2015 08:43 PM PDT

It’s time to dump US equities and go for Europe in the wake of the progress now being made sorting out Greece, argues Goldman Sachs in a research note published yesterday. But does Europe not catch a cold if Wall Street sneezes?

The bank upgraded its three-month view on European equities to ‘overweight’ on Monday, while downgrading US stocks to ‘underweight’. It warns that they have historically underperformed in the 12 months after the Federal Reserve’s first rate hike, now expected in September.

Greek risks fade

‘European equities have been one of the key asset classes to benefit from a fading of Greek risks following their drawdown,’ the bank said.

‘While performance potential might be limited in the near-term after the strong rebound, several supportive fundamental factors should help outperformance of European vs. US equities until year-end,’ claims the bank, including a weaker euro, comparatively easy monetary policy and a pickup in Europe’s economic growth that will help drive stronger earnings and a recovery in margins.

By contrast US stocks look dismal by contrast. Goldman sees the S&P 500 falling by 0.7 per cent, 0.2 per cent respectively on a three-month and six-month view, and up just 3.2 per cent over 12 months.

‘We are underweight US equities, as return potential is constrained by high valuations and margins,’ the bank said. ‘Historically, non-US equity markets have outperformed US equities in the 12 months after the first Fed rate hike’.

The Federal Reserve is widely expected to raise rates as soon as September – its first hike in nine years. Quite how the record high US stock markets – with record margin trading and record stock buybacks now fading – will fare is a matter of some conjecture on Wall Street.

Could this be like Shanghai over the past month? You don’t need to be a genius to see that is not only possible but highly probable. The problem is that a predicted healthy correction could so easily be a Chinese-style crash.

Is Goldman right that investors should therefore switch to European equities? Why should they fare any better in a big stock market crash? Does Wall Street not set the direction for European equities to follow?

Poor advice

Forgive us at ArabianMoney for pointing this out. But since when did US and European stocks ever move in opposite directions?

If Wall Street is coming down then you want your money out of European stocks too. The dollar is doing very nicely at the moment, or if you want a really bombed out asset there is always gold that is now due for a rebound.

Buying European stocks instead of US equities is jumping out of the fire and into the frying pan!

Gold long term charts tell the story of major channel breaks

Posted: 20 Jul 2015 08:18 PM PDT

Commodity Trader

HSBC’s James Steel reckons gold price has now bottomed out

Posted: 20 Jul 2015 08:12 PM PDT

Gold has just seen a classic price bottom with its ‘flash crash’ and looks to have stabilized around $1,100 an ounce argues HSBC’s top precious metals analyst James Steel on ‘Bloomberg Surveillance’.

For those record short positions stacked against the precious metal this is very bad news. For gold longs it’s the way back up to higher prices as those shorts will have to cover very soon, and that has an automatically positive and leveraged impact on the price…

4 Things That Are Happening Today That Indicate That A Deflationary Financial Collapse Is Imminent

Posted: 20 Jul 2015 03:29 PM PDT

four asphalt - public domain
When financial markets crash, they do not do so in a vacuum.  There are always patterns, signs and indicators that tell us that something is about to happen.  In this article, I am going to share with you four patterns that are happening right now that also happened just prior to the great financial crisis of 2008.  These four signs are very strong evidence that a deflationary financial collapse is right around the corner.  Instead of the hyperinflationary crisis that so many have warned about, what we are about to experience is a collapse in asset prices, a massive credit crunch and a brief period of absolutely crippling deflation.  The response by national governments and global central banks to this horrific financial crisis will cause tremendous inflation down the road, but that comes later.  What comes first is a crisis that will initially look a lot like 2008, but will ultimately prove to be much worse.  The following are 4 things that are happening right now that indicate that a deflationary financial collapse is imminent…

#1 Commodities Are Crashing

In mid-2008, just before the U.S. stock market crashed in the fall, commodities started crashing hard.  Well, now it is happening again.  In fact, the Bloomberg Commodity Index just hit a 13 year low, which means that it is already lower than it was at any point during the last financial crisis…

#2 Oil Is Crashing

On Monday, the price of oil dipped back below $50 a barrel.  This has surprised many analysts, because a lot of them thought that the price of oil would start to rebound by now.

In early 2014, the price of a barrel of oil was sitting above $100 a barrel and the future of the industry looked very bright.  Since that time, the price of oil has fallen by more than 50 percent.

There is only one other time in all of history when the price of oil has fallen by more than $50 a barrel in such a short period of time.  That was in 2008, just before the great financial crisis that erupted later that year.  In the chart posted below, you can see how similar that last oil crash was to what we are experiencing right now…

Oil Price 2015

#3 Gold Is Crashing

Most people don’t remember that the price of gold took a very serious tumble in the run up to the financial crisis of 2008.  In early 2008, the price of gold almost reached $1000 an ounce, but by October it had fallen to nearly $700 an ounce.  Of course once the stock market finally crashed it ultimately propelled gold to unprecedented heights, but what we are concerned about for this article is what happens before a crisis arrives.

Just like in 2008, the price of gold has been hit hard in recent months.  And on Monday, the price of gold absolutely got slammed.  The following comes from USA Today…

The yellow metal has tumbled to a five-year low amid a combination of diminishing investor fears related to foreign headwinds in Greece and China, and stronger growth in the U.S. which is leading to a stronger dollar and coming interest rate hikes from the Federal Reserve. Investors have been dumping shares of gold-related investments as other bearish signs, such as less demand from China and the breaking of key price support levels, add up.

Earlier today, an ounce of gold fell below $1,100 an ounce to $1,080, its lowest level since February 2010. Gold peaked around $1,900 an ounce back in 2011.

For years, I have been telling people that we were going to see wild swings in the prices of gold and silver.

And to be honest, the party is just getting started.  Personally, I particularly love silver for the long-term.  But you have got to be able to handle the roller coaster ride if you are going to get into precious metals.  It is not for the faint of heart.

#4 The U.S. Dollar Index Is Surging

Before the U.S. stock market crashed in the fall of 2008, the U.S. dollar went on a very impressive run.  This is something that you can see in the chart posted below.  Now, the U.S. dollar is experiencing a similar rise.  For a while there it looked like the rally might fizzle out, but in recent days the dollar has started to skyrocket once again.  That may sound like good news to most Americans, but the truth is that a strong dollar is highly deflationary for the global financial system as a whole for a variety of reasons.  So just like in 2008, this is not the kind of chart that we should want to see…

Dollar Index 2015

If a 2008-style financial crisis was imminent, these are the kinds of things that we would expect to see happen.  And of course these are not the only signs that are pointing to big problems in our immediate future.  For example, the last time there was a major stock market crash in China, it came just before the great U.S. stock market crash in the fall of 2008.  This is something that I covered in my previous article entitled “Guess What Happened The Last Time The Chinese Stock Market Crashed Like This?”

As an attorney, I was trained to follow the evidence and to only come to conclusions that were warranted by the facts.  And right now, it seems abundantly clear that things are lining up in textbook fashion for another major financial crisis.

But even though what is happening right in front of our eyes is so similar to what happened back in 2008, most people do not see it.

And the reason why they do not see it is because they do not want to see it.

Just like with most things in life, most people end up believing exactly what they want to believe.

Yes, there is a segment of the population that are actually honest truth seekers.  If you have felt drawn to this website, you are probably one of them.  But overall, most people in our society are far more concerned with making themselves happy than they are about pursuing the truth.

So even though the signs are obvious, most people will never see what is coming in advance.

I hope that does not happen to you.

The post 4 Things That Are Happening Today That Indicate That A Deflationary Financial Collapse Is Imminent appeared first on The Economic Collapse.

Resources are getting crushed… more pain ahead?

Posted: 20 Jul 2015 12:35 PM PDT

From Bloomberg:

The rout in commodities deepened with prices touching the lowest since 2002 as the prospect of higher U.S. interest rates sent gold tumbling.

Raw materials are losing favor with investors as the dollar gains amid signals from Federal Reserve Chair Janet Yellen that the central bank may raise rates this year on the back of an improving U.S. economy. Higher borrowing costs curb the attractiveness of commodities such as gold, which doesn’t pay interest or give returns like assets including bonds and equities.

READ MORE: Why America is NOT Normal – Dr. Ron Paul's 8 facts prove how bad things really are

The Bloomberg Commodity Index dropped as much as 1.4 percent, falling for a fifth day in the longest stretch of declines since March. Gold futures sank to the weakest in more than five years while industrial metals, grains, Brent crude and U.S. natural gas also slid as a measure of the dollar climbed to the highest since April 13.

“Any increase in U.S. interest rates should further strengthen the dollar, prompting more fund outflows from commodities, metals and emerging-market assets,” Vattana Vongseenin, the chief executive officer of Phillip Asset Management Co. in Bangkok, said by phone.

The Bloomberg Commodity Index slid 1.3 percent to 96.2949 at 10:10 a.m. New York time, after touching 96.1913, the lowest since June 2002.

With raw materials fetching lower prices, shares of commodity producers are tumbling. The 15-member Bloomberg Intelligence Global Senior Gold Valuation Peers Index, which includes AngloGold Ashanti Ltd. and Newcrest Mining Ltd., dropped as much as 8.4 percent.

Dissection of a gold price smash

Posted: 20 Jul 2015 02:16 AM PDT

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