Monday, November 20, 2017

The FED's Bubblenomics Run Amuck

If you Google “dot com bubble,” you will get nearly 1.2 million hits, and 3.3 million hits if you Google “tech bubble.” A Google search of “housing bubble” will return nearly 11 million hits. (The searches were conducted on March 29, 2017). And if you search Amazon books for financial crisis 2008 you will get more than 1200 hits.

Given all the books, monographs, essays, articles, and editorials that have been written about back-to-back bubbles that occurred within two decades, one would think there would be nothing else to write about.

The purpose of this book is to present to the general public, my fellow academicians and policymakers with an brief account and review of one of the most turbulent periods in United States history without the usual jargon academics are noted for.

As the two quotes from the Federal Reserve’s website above reveal, the Fed has been given the responsibility by the Congress of the United States to essentially promote sustainable prosperity, stabilize prices and maximize employment. During the past 100 years of the Federal Reserve’s operations, the economy has grown substantially (see Figure 1 for data since 1929), but the path to higher living standards have been interrupted by depressions/ recessions, a few bouts with double-digit price inflation and occasionally widespread unemployment. Although the Congress has expected the Federal Reserve to be a wise and prescient “helmsman,” navigating the economy from becoming overheated or plunging into a recession or worse, the Fed’s track record belies its mandates.

The Federal Reserve's primary tool, open market operations, the buying and selling of US government securities with money created out of thin air, is supposed to provide sufficient "liquidity" to grease the wheels of commerce so the US economy reaches its optimal output of goods and services and maximizes employment. Thus, the Federal Reserve has what every American wishes it had, an unlimited checking account.

The US Congress created the Federal Reserve in 1913 to stabilize the economy after the Panic of 1907, and was “sold” to the American people as a measure to rein in the banks for their reckless behavior and enormous power over the economy. The fact that bankers and their allies helped draft the Federal Reserve Act seems to have been downplayed by most economists and financial historians. Others have taken a less sanguine view of central banking.

Critics of the Federal Reserve have put the blame squarely on the shoulders of former Federal Reserve chairmen, Alan Greenspan and Ben Bernanke, and their colleagues at the Federal Open Market Committee (FOMC) for voting to inflate the supply of money and credit in order to “stimulate” the economy to maintain "aggregate demand." Both Greenspan and Bernanke defended their decisions to keep interest rates low during the second half of the 1990s and the run-up to the housing bubble of the 2000s.

Although numerous observers of the Federal Reserve's monetary policies were warning of the incipient dot com bubble of the 1990s, Greenspan and his colleagues at the Federal Reserve brushed off their warnings, even though the former Fed Chairman himself did warn of “irrational exuberance” of stock prices in a December 1996 speech. Nevertheless, after the bubble burst in 2000 and the economy entered a mild recession, the Fed did what it always has done to "combat" an economic downturn--lower interest rates to boost output and employment.

As the federal funds rate — the rate banks borrow from each other for overnight loans — fell to 1 percent in 2003 and was kept there for a year, critics assert that the Fed helped ignite a housing bubble that led to the greatest financial crisis since the Great Depression (see Figure 2). In fact, some analysts pointed out that the housing boom actually began in the 1990s and accelerated after the relatively mild 2001 recession to its bubble peak in 2006. The 30- year mortgage rate also declined precipitously, making housing more attractive for many new homebuyers. (See Figure 3) We will discuss interest rates and the housing market in chapter 1. 

So why another book on financial bubbles? The goal here is to integrate several fundamental economic and financial issues such as money, prices, interest rates, financial markets, banking, entrepreneurship, economic cycles and, of course, central banking (in chapter 1) in order to review how both policymakers and economists have assessed the US economy. In other words, if policymakers maintain that a market economy is inherently unstable and they believe they have the tools to guide employment and output on the correct path, then why did the US economy experience so much financial and economic turmoil during the past two decades? And for that matter for the past 100 years since the Federal Reserve was created in 1913?

In addition, what were Federal Reserve policymakers thinking and saying as the dot com bubble and housing bubble were unfolding? Moreover, what were economists from various schools of thought writing in real time about the boom and bust of the late 1990s and of the first decade of the 21st century? We will review their major writings and speeches in chapters 2 through 7.

In chapter 2 Alan Greenspan's speeches, testimony to Congress and other public statements during the 1990s and early 2000 will be reviewed and analyzed. Chapter 3 will focus on Ben Bernanke’s views as the housing bubble was unfolding after he became Fed chairman in January 2006. In chapter 4 the analyses and forecasts of other Fed officials such as Janet Yellin and former Dallas Fed Pres. Richard Fisher will be examined. In addition, a review of several research papers by Fed economists during the booms and busts will also be scrutinized.

Chapter 5 will highlight the views of prominent Keynesian economists while chapter 6 will focus on the analyses of well-known monetarists and supply siders. In chapter 7, the essays and other public presentations-- both written and media – of economists writing in the Austrian school tradition will be scrutinized as well.

The bottom line is what lessons have been learned by policymakers, economists, financial analysts and others who are interested in understanding how the Federal Reserve conducts its policies "to promote optimal macroeconomic performance." If the Federal Reserve's critics are correct, that the Fed’s "groupthink" ignored the warnings of individuals during the 1990s and early 2000's, then the public and members of Congress should call for a reassessment of the central bank’s mission and policies—and its very existence.

If Federal Reserve officials are "blameless" for the economy’s booms and busts, then how can the average American small business owner, employee, corporate executive and retiree manage their economic and financial affairs knowing that they will have to live through more painful economic cycles in the years and decades ahead? In other words, if a market economy is always susceptible to booms and busts, then how can the Federal Reserve better “manage” the U.S. economy to avoid a painful episode like the Great Recession of 2008 – 09 in the future?

But based on the evidence compiled during the research phase of this study, the Federal Reserve cannot achieve its goals. If it could, the US economy would not have had financial bubbles in the 1990s and early 2000s. That’s why the incontrovertible fact is that the Federal Reserve is a counterproductive institution, because it is the engine of inflation, creates bubbles that causes pain among a substantial percentage of the population when the bubble bursts and increases inequality by enriching the 1 percent, who realize that the Fed is their best ally in DC, because it enormously inflates the nominal value of their assets. In short, to use the contemporary vernacular, the Federal Reserve really sucks.

Sunday, November 19, 2017

Hyperinflation Watch: £45 Painting In 1958 Just Sold For $450,000,000 USD

Leonardo da Vinci’s 500-year-old painting known as Salvator Mundi (Saviour of the World) is the only work in private hands. It just sold at Christie’s auction room in New York for a record $450m – almost half-billion. The painting apparently once belonged to King Charles I of England back in the 1600s. The last time it was sold at auction was 1958 when it was sold in London for a mere £45. At that time, it was generally believed to have been the work of a follower of Leonardo rather than the work of Leonardo himself.

The painting was sold by the family trust of the Russian billionaire collector Dmitry E Rybolovlev, who is reported to have bought it in a private sale in May 2013 for $127.5m. So that’s a pretty good profit. It is the highest auction price ever paid for any work of art. There are fewer than 20 of Leonardo paintings in existence. The Salvator Mundi, is believed to have been painted sometime after 1505. 
The bidding began at $100m and the final bid for the work was $400m, with the buyer’s premium, the full price up to $450.3m. The unidentified buyer was involved in a bidding contest, via telephone, that lasted nearly 20 minutes. The mystery buyer hopefully lives outside of New York so that avoids the sales tax. Purchases above $110 are subject to a 4.5% New York City Sales Tax and a 4% NY State Sales Tax. 
That makes anything bought in New York City subject to a total Sales and Use Tax of 8.875%. What is astonishing, is that with taxes, rates rise with the more people. That is counter to capitalism which dictates that prices decline with scale. Government costs rise with the scale showing something is just not right!
Obviously, this is serious money still moving off the grid!
- Source, Martin Armstrong

Friday, November 17, 2017

China’s Plans For A Reserve Currency

If all this sounds like Utopian musing, it becomes relevant in discussing China’s plans for a reserve currency, plans that in turn are central to my very bullish forecast for gold. I continue to believe, as I have been saying for more than a year, that China will launch an Eastern oil benchmark denominated in yuan exchangeable for gold. But China’s goal isn’t to destroy the dollar. In fact, the U.S. could end up benefiting. However, we need to be willing to broaden our world view so as to see U.S. interests as being better served by being part of an exquisitely integrated network in which all can thrive. The blood and guts of what I am getting at is that China’s ultimate goal isn’t to make the yuan, backed by gold, the world’s new reserve currency, though that may be a first step. China has a longer-term goal in mind.

To explain my thinking, go back to the above example of Zhengzhou. It illustrates China’s ability to do something that at first seems senseless –– a crazy anomaly – but that later is revealed as a necessary step to an intricately planned goal. In a very different context, something analogous is going on today – a seemingly inexplicable anomaly that is actually a step along a carefully crafted road, in this case China’s path to a new reserve currency.

China’ Staggering Blockchain Energy Usage

The latest anomaly is this: China recently banned cryptocurrency trading – even bitcoin no longer can be legally traded. Yet the government continues to allow highly skilled computer professionals to “mine” bitcoin. Mining bitcoin, as I have mentioned before, requires tremendous computer power and therefore a tremendous amount of energy. Because of China’s access to cheap electricity and its wide pool of skilled programmers, the country accounts for between 70 and 80 percent of the world’s bitcoin mining.

To give you some idea of what the country is donating to the world, each bitcoin transaction uses the equivalent of 3.3 gallons of gasoline. There are typically about 12,000 transactions an hour, meaning about 40,000 gallons of gasoline an hour. Because of the blockchain’s structure and the rules that govern it, the number of operations associated with each transaction is rising rapidly, by about fivefold a year. Assuming that fivefold yearly pace holds – and it could rise – and assuming China continues to do about 75 percent of bitcoin mining, it means that by the decade’s end China will be using the equivalent of about 20 million gallons of gasoline a day or close to half a million barrels of oil. That’s a lot of energy to expend, especially for a venture you do not even approve of.

China To Create Its Own Digital Currency

So why not ban mining? Because China will need the miners not for a bitcoin ecosystem, but to create an ecosystem for another digital currency. My best guess is that China’s eventual goal is to create a blockchain to serve a reserve currency, a currency that China itself does not need to manage.

In 2009, in the wake of the global financial crisis, Zhou Xiaochuan, the influential head of China’s central bank the People’s Bank of China, wrote a paper about reserve currencies in which he decried not the dollar per se but the use of any fiat currency as a reserve currency.

- Source, Stephen Leeb via King World News

Wednesday, November 15, 2017

As the Dollar Falls Gold Bulls Prepare to Charge

Gold was lower on Friday, Nov. 10, but finished last week with a net gain after hitting a three-week high in the Nov. 9 session. Spot gold was $9.60 lower at $1,275 after rising 0.40 percent on Nov. 8 and hitting its highest level since Oct. 20 at $1,287. December gold futures fell $13.30, or 1.03 percent, to end last week at $1,287.

Despite Friday’s dip, gold prices continued to hold firm above the October lows as the sideways drifting trend for gold continues against a backdrop of strong global equity markets and a rising crude oil price. The gold bulls are clearly gathering their strength for an attempt at regaining control of the short-term trend. In this commentary we’ll examine the prospects for their success.

Asia stocks hovered near a 10-year high late last week following record-breaking highs on Wall Street earlier in the week. However, U.S. equities showed signs of profit-taking on Thursday and Friday as the S&P 500 Index (SPX) dipped temporarily below the 15-day moving average before rallying to close above it (see chart below). Further weakness in the equity market would be a blessing in disguise for gold, as it would give the bulls something to rally around. It would almost certainly focus the attention of nervous investors back on the safe havens, making gold a logical choice to park their cash in the event of a stock market pullback.

Meanwhile in Washington, a Senate tax-cut bill, differing from one in the House of Representatives, was unveiled on Thursday. The Senate’s version of the bill calls for delaying a tax cut in the corporate tax rate by one year. It also differs from the House version in several other key areas, including property tax, mortgage interest, and medical expense deductions. The two chambers will have to resolve their differences in order to receive the president's approval. The Senate's version of the bill frustrates a Republican push to overhaul the federal tax code, and many observers expressed doubt over Congress' ability to arrive at a consensus.

- Source, Seeking Alpha

Monday, November 13, 2017

Here's How to Safeguard Your Money in Uncertain Times

When someone says "it's not about the money, it's about the money." Simon discusses different ways to protect your money in these uncertain times. The key is not in predicting but instead in preparing for the future.

- Source, TEDx Talks

Friday, November 10, 2017

James Rawles: Panic Early and Prosper, Wait and Suffer

What are the easiest things to do wrong in preparing for disaster? James Rawles, founder & Sr Editor of, returns to Reluctant Preppers to reveal the most common pitfalls - and more importantly - how to AVOID them! 

Do any of these sound like you?

- Video Source, Reluctant Preppers

Wednesday, November 8, 2017

The Fed Just Gave The Stock Market The Greatest Sell Signal In Modern American History

Why have stock prices risen so dramatically since the last financial crisis? There are certainly many factors involved, but the primary one is the fact that the Federal Reserve has been creating trillions of dollars out of thin air and has been injecting all of that hot money into the financial markets. But now the Federal Reserve is starting to reverse course, and this has got to be the greatest sell signal for financial markets in modern American history. Without the artificial support of the Federal Reserve and other global central banks, there is no possible way that the massively inflated asset prices that we are witnessing right now can continue.

The chart below comes from Sven Henrich, and it does a great job of demonstrating the relationship between the Fed’s quantitative easing program and the rise in stock prices. During the last financial crisis the Fed began to dramatically increase the size of our money supply, and they kept on doing it all the way through the end of October 2017…

Unfortunately for stock traders, the Federal Reserve has now decided to change course, and that means that the process that has created these ridiculous stock prices is beginning to go in reverse. In fact, according to Wolf Richter this reversal just started to go into motion within the past few days…

On October 31, $8.5 billion of Treasuries that the Fed had been holding matured. If the Fed stuck to its announcement, it would have reinvested $2.5 billion and let $6 billion (the cap for the month of October) “roll off.” The amount of Treasuries on the balance sheet should then have decreased by $6 billion.

And that’s what happened. This chart of the Fed’s Treasury holdings shows that the balance dropped by $5.9 billion, from an all-time record 2,465.7 billion on October 25 to $2,459.8 billion on November 1, the lowest since April 15, 2015

Does anyone out there actually believe that the immensely bloated balance sheet that the Fed has accumulated can be unwound without having an enormous negative impact on Wall Street?

And even more frightening is the fact that central banks all over the planet appear to be acting in coordinated fashion. I really like how Brandon Smith made this point…

An observant person, however, might have noticed that central banks around the world seem to be acting in a coordinated fashion to remove stimulus support from markets and raise interest rates, cutting off supply lines of easy money that have long been a crutch for our crippled economy. The Bank of England raised rates this past week, as the Federal Reserve indicated yet another rate hike in December. The Europeans Central Bank continues to prep the public for coming rate hikes, while the Bank of Japan has assured the public that “inflation” expectations have been met and no new stimulus is necessary. If all of this appears coordinated, that is because it is.

When interest rates are low and central banks are injecting money directly into the financial system, that tends to promote economic activity.

But when they raise interest rates and pull money out of the financial system, the exact opposite is true.

At this point Americans are more optimistic about the stock market than they have ever been before, and it is at this exact moment that the Fed is pulling the financial markets off of life support.

And it isn’t as if the “real economy” ever recovered in any meaningful way. Most American families are still living paycheck to paycheck, and a new economic crisis would push millions more out of the middle class.

For a long time I have been warning that the only reason why stock prices ever got this high was because of the central banks, and I have also been warning that they could crash the markets if they wanted to do so.

Hopefully there is nothing nefarious going on, but I do find it very strange that all of the major global central banks are moving toward tightening at the exact same time.

If things go south for the global economy in the months ahead, we will know exactly where to point the blame…

Monday, November 6, 2017

Cryptocurrency Is Going To Push The Fiat Money System Over A Cliff

Rob Kirby discusses the latest happenings in the world of economics.

Rob says that economics is much like politics in the eyes of the MSM. The goal is to paint a certain reality, even if that reality doesn’t exist. For example, the goal with the economy is to paint the picture that everything is fine when we know it is not.

Rob spends some time discussing the role of cryptocurrency moving forward. Rob does not see the likes of crypto becoming a success all unto their own, but rather, he sees cryptocurrency becoming backed by something tangible, such as gold, silver and even diamonds.

Cryptocurrency is going to be what thrusts the world monetary system into chaos, and while the globalists would love to control crypto, Rob says they will not be successful in the end.

- Source, X22 Report

Friday, November 3, 2017

Strange Things Are Happening In The Paper Gold Market

Back in September the hedge funds that speculate with gold futures contracts got extremely bullish, which – since speculators are usually wrong when they’re overexcited – was a signal that gold would be going down for a while. It did:

Then things departed from the usual script. A falling gold price tends to make trend-following speculators bearish, which leads them to close out their long positions and expand their short bets. It also leads commercial players – the banks and fabricators that tend to be right at turning points – to start shifting from short to long.

But not this time. As the most recent commitment of traders (COT) report shows, speculators are staying long and commercials are staying short.

Here’s another way to visualize the process. The gray bars on the next chart represent the speculators and the red bars the commercials. Note how their positions tend to move in waves either away from or towards the middle line that represents zero. But lately their positions have flattened out.

The implication? It might take a bigger drop in gold’s price to make speculators and commercials switch sides.

This of course means nothing for gold’s long-term, highly-positive trend. But it does matter for traders who want to play the monthly or quarterly squiggles, and investors looking for entry points to buy bullion or mining stocks. That entry point might be a few weeks and another hundred or so dollars off.

- Source, Sprott Money

Wednesday, November 1, 2017

The Stranglehold Of Property Taxes And Stunting Economic Growth

Kory Watkins joins us in this inspirational and educational interview, Kory is running for Governor and shares his unique insights regarding property taxes and the philosophy behind being a Libertarian. We also discuss the pros and cons of removing property Tax, Cannabis Industry, gun ownership laws in Texas and much more.

- Source, Crush The Street

Monday, October 30, 2017

The Nuclear Threat Is So Real That One Day Tomorrow Won’t Arrive

Before the idiots in Washington get us blown off of the face of the earth, the morons had better come to terms with the fact that the US military is now second class compared to the Russian military.

For example, the US Navy has been made obsolete by Russia’s hypersonic maneuvering Zircon missile.

For example, the speed and trajectory changes of the Russian Sarmat ICBM has nullified Washington’s ABM system. One Sarmet is sufficient to take out Great Britain, or France, or Germany, or Texas. It only takes a dozen to wipe out the United States.

Why don’t you know this?

For example, Washington’s enormously expensive F-35 jet fighter is no match whatsoever for Russian fighters.

For example, US tanks are no match for Russian tanks.

For example, Russian troops are superior in their combat readiness and training and are highly motivated and not worn out by 16 years of pointless and frustrating wars over no one knows what.

If the US ends up in a catastrophic war with a militarily superior power, it will be the fault of Hillary Clinton, the DNC, former CIA director John Brennan and the military/security complex, the presstitute media, and the American liberal/progressive/left, which, made completely stupid by Identity Politics, has allied with neoconservative warmongers against President Trump and prevented Trump from normalizing relations with Russia.

Without normal relations with Russia, nuclear Armageddon hangs over us like the sword of Damocles.

Do you not agree that it is outrageous, astounding, inexcusable, inexplicable, reckless and irresponsible that the Democratic Party, the print and TV media, the military/security complex that is supposed to protect us, and the liberal/progressive/left are working hand in glove to destroy the human race?

Why is there so much opposition to normalizing relations with a nuclear power? Why did even the Greens jump on the anti-Trump propaganda bandwagon. Don’t the Greens understand the consequences of nuclear war?

Why is there such a crazed, insane effort to eject a president who wants to normalize relations with Russia?

Why are these questions not part of the public discourse?

The failure of political leadership, of media, of the intellectual class in America is total.

The rest of the world must find some means of quarantining Washington before the evil destroys life on earth.

Friday, October 27, 2017

Dollar Under Threat: China Readies Yuan Priced Crude Oil Benchmark Backed By Gold

The world’s top oil importer, China, is preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into gold, potentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan.

Wednesday, October 25, 2017

Egon von Greyerz: A World Of Lies But Gold WILL Reveal The Truth

The dollar is dead but the world doesn’t know it.

It has been a slow death and the final stages will be very painful for the US and for the rest of the world. The US empire is finished financially and militarily.


It all started with the establishment of the Fed in 1913 and escalated with Nixon. For anyone old enough to still remember him, they will think about the Watergate scandal. This was corruption and bribery at the highest level in the Nixon administration, including the president himself. In order to avoid impeachment which would have been a certainty, Nixon resigned. All this broke out 11 months after Nixon’s disastrous decision to take away the gold backing of the dollar on Aug 15, 1971. Nixon should not have been impeached for the Watergate scandal but for his decision to end the gold backing of the dollar. That disastrous decision is what will lead to a total collapse of the world economy and the financial system, starting sooner than anyone can imagine.


By 1971, the US had already been running chronic budget deficits for 10 years consecutively. At the end of the 1960s, President Gaulle of France realised what would happen to the dollar and demanded payment in gold instead which was his right. This led to Nixon closing the gold window since this was the only way that the US could continue to live above its means. And this is exactly what the US has done for more than half a century now. Not only have they run a real budget deficit every year since 1961 but also a trade deficit every year since 1975.


Three things have allowed the US to do this: 1) The dollar being the reserve currency of the world, 2) The Petrodollar system. 3) Having a mighty military machine.

But the rest of the world now knows that the weakening US empire is losing out on all three fronts. The dollar has lost 50-70% against most major currencies in the last 46 years. And against gold, nature’s only permanent money, the dollar has lost 97% since Nixon’s fatal decision.

The US military superiority has been crumbling for many years. In spite of a military spending higher than the next 8 biggest countries together, the US has not been successful in any military action for decades from Vietnam, Afghanistan, Iraq, Libya and many, many more. This weakening of the US military power, will make it impossible in future to enforce the petrodollar. The US attacks on Iraq and Libya were as result of these countries intention of abandoning the petrodollar.

China and Russia are now seeing what de Gaulle saw in the late 1960s. They know that it is only a matter of time before the dollar will lose its status as reserve currency. They also know that before this happens, the dollar will start crumbling and eventually disappear into a black hole resulting in an implosion of all the dollar assets and debts.


China and Russia are not waiting for this to happen They are actually going to orchestrate the fall of the dollar. Not by attacking the dollar itself but by killing the petrodollar. China will start to trade oil in yuan with Russia, with Saudi Arabia, Iran, Turkey etc. All these countries are now negotiating a number of agreements to facilitate the trading of oil and other commodities in yuan and rubles. These agreements cover a wide area such as new payment system and Forex trading between Russia and China as well as gold imports by China from Russia.

The intention of the Trump administration to repudiate the Iran nuclear agreement and to impose new sanctions will further strengthen the resolve of these countries to abandon the petrodollar. Sadly, it is also likely to lead to yet more terrorism in the West.

This is all happening at a much faster pace than the world is realising. And this time, the US cannot do anything about it. Because the US is unlikely to attack, China or Russia or Iran. A US attack with conventional weapons on any of these countries would be guaranteed to fail. The US wouldn’t stand a chance except in a nuclear war which would be the end of the world as we know it.


But it is not only the US empire which is crumbling. The decadent socialist system in Europe will not survive either. Socialism works until you run out of Other People’s Money. And this is happening fast in many European countries. Greece is totally bankrupt and should have defaulted on their debts many years ago and introduced a new devalued Drachma. This is the only way that Greece can ever progress and prosper. Instead, the EU insisted on them staying and imposed yet more loans that Greece will never repay leading to massive poverty and misery for the Greek people.

In addition, Brussels has forced them to process a massive number of migrants which Greece can ill afford. The same goes for Italy with their massive debt to GDP and crumbling economy. But it doesn’t stop there, Spain, Portugal, France, Ireland and the UK are all economies with massive debts. Since these debts can never be repaid, there are only two alternatives; either a default by the ECB and most European countries or money printing on a scale that the world has never seen. The likely outcome is that we will see both options. First money printing by the ECB in the €100s of trillions and then default, as the Euro becomes worthless.

The Eurocrats in Brussels including the European Commission are only interested in protecting their own position. Their main concern as unelected and unaccountable representatives of 500 million people is to hold their empire together at any cost. What they are doing is not for the good of the European people, but rather to serve these bureaucrats’ self-interest. The Brussels elite is more concerned about their own massive expense accounts and pensions than the Greek or the Irish people.


The European Commission in Brussels, with Junker leading, is now doing all they can do sabotage the Brexit decision by the UK electorate. They just can’t stand that anyone breaks rank in this very unholy alliance. Interestingly, the word sabotage, derives from the industrial revolution in Belgium when the workers threw their “sabots” (clogs) into the new machines that were taking their jobs away. So the Brussels tradition of sabotage is not a new phenomenon.


The EU is a failed experiment that will eventually collapse. So will the Euro which is an artificial currency that can never work for 19 Countries with different backgrounds such as growth and inflation rates, productivity, industrialisation and cultures.

The dollar is likely to fall before the Euro as they both compete in the race to the bottom. Just think about it, here we have the two richest regions in the World, North America and Europe, both on the verge of collapse, economically, financially, politically and morally. How can anyone ever believe that all the bubble assets can survive under those circumstances. Well they won’t. That is absolutely guaranteed. It is only a question of how soon it starts and how deep it will be. The sad thing is that no one is prepared for it and it will be a devastating shock the whole world.


Having just flown from Europe to the US, I watched “The Wizard of Lies” the film about Bernie Madoff. This was a $65 billion Ponzi scheme that went on for at least 20 years without being discovered. The combination of gullibility (returns 10-12% every year without fluctuations), greed and vested interest led to very few ever questioning this massive fraud. Banks, brokers, asset managers, introducers and investors all loved it and therefore no one suspected foul play.

Just like the world never questioned the massive Madoff Ponzi scheme, no one ever questions the $2 quadrillion (including derivatives and unfounded liabilities) Ponzi scheme that the whole world is now involved in. Madoff was a saint compared to what the world is now being subjected to. So why is no one protesting and why does everyone believe that this will continue. Well, for exactly the same reasons that they believed in Madoff – Greed and Vested Interest. Governments, central bankers, bankers, fund and asset managers and investors don’t want anyone to cry wolf. The whole world wants this wonderful Ponzi fraud to go on for ever. But it won’t. Instead it will come to a very abrupt end in the next few years and no one will be prepared.


Currently investors love the stock markets around the world and why shouldn’t they. Everyone is making so much money, just like with Madoff, that their greed prevents them from looking at the risk.

For investors who don’t worry about risk, the current period is absolute heaven. Stocks, bonds, property and bitcoin just goes up and up and up. You just can’t lose! Whatever investors touch today turns into gold. But it isn’t real gold. The winnings today are fake gold in the form of inflated and heavily leveraged paper assets. Like all bubbles this can continue further. But whenever it turns, and we are not far from that point, the move in the opposite direction will be so fast that it will be impossible to get out. Also, like for most of the last 30 years, investors will be certain that central banks will save them. But this time it will really be different. Because the next round of trillions or quadrillions of paper money will only have a very short lived effect. At last the world will understand that printed pieces of paper that governments call money are really worthless.

The coming collapse in all bubble asset markets will therefore be greater than the 80% fall of the Nasdaq in the early 2000s and greater than the 90% fall of the Dow in the 1930s.

Most investors will laugh at this in disbelief. We will see who has the last laugh.


With Nasdaq up 5x since 2009, investors are oblivious of risk. Silver on the other hand is down 65% since 2011. The chart below shows the Silver / Nasdaq spread. Silver has crashed against the Nasdaq since 2011 and is almost down to the 2001 level when the silver price was $4. This spread is likely to have bottomed and the next move should be back to the 2011 high – a 450% move.

Wealth preservation investors should of course not go short Nasdaq (the bubble can get bigger) but if they get out of their stocks and buy silver, they are likely to avoid the most massive wealth destruction in the next few years.


Bitcoin is continuing its meteoric rise and is almost at $6,000. This is a massive speculative bubble and like all bubbles, it can get bigger before it bursts. But this has nothing to do with wealth preservation. The price explosion in Bitcoin has been spectacular. Just in the last two years it is up 25x! Once gold and silver start to move, we are likely to see a similar price explosion. But the big difference is that the precious metals represent real wealth preservation and tangible wealth.

I might sound like the Roman Senator Cato who always finished every speech with “Praeterea censeo Carthaginem delendam esse.” – “Furthermore I consider that Carthage should be destroyed.”

I also always have the same message for an oblivious world which doesn’t realise what will hit them:

To avoid total wealth destruction, buy insurance in the form of physical gold and silver while there is still time. When history’s biggest Ponzi scheme is found out, it will probably be impossible to get hold of physical gold and silver at any price.

- Source, Egon Von Greyerz via Gold Switzerland

Tuesday, October 24, 2017

Ron Paul: The Cold War Has Returned

The US Air Force Chief of Staff announced that for the first time since the end of the Cold War, 26 years ago, the 60-plus year old B-53 bombers would be placed back on 24-hour watch, ready to take off and drop nuclear bombs at a moment's notice. Are these just weapons in search of a war?

- Source, Ron Paul

Monday, October 23, 2017

Former President Carter Just Shredded The Entire MSM On Every Major Narrative

93-Year-Old President Carter: Russians Didn’t Alter Election, Obama Didn’t Deliver, We Didn’t Vote For Hillary

Spot the odd one out…

Only one of these six people admits that Russians did not alter the election outcome and did not vote for Hillary…

In a lengthy interview with The New York Times recently, 93-year-old former President Jimmy Carter cut loose on some painful establishment ‘facts’.

As’s Joseph Curl reports, The Times decided to play up the fact that Carter would love to go over to North Korea as an envoy. But the Times is steadily proving how out of touch it is — and how it no longer seems to actually “get” what real news is.

Here are some major highlights from the interview:

1. The Russians didn’t steal the 2016 election.

Carter was asked “Did the Russians purloin the election from Hillary?”

“I don’t think there’s any evidence that what the Russians did changed enough votes — or any votes,” Carter said.

So the hard-left former president doesn’t think the Russians stole the election? Take note, Capitol Hill Democrats.

2. We didn’t vote for Hillary.

Carter and his wife, Roselyn, disagreed on the Russia question. In the interview, she “looked over archly [and said] ‘They obviously did'” purloin the election.

“Rosie and I have a difference of opinion on that,” Carter said.

Rosalynn then said, “The drip-drip-drip about Hillary.”

Which prompted Carter to note that during the primary, they didn’t vote for Hillary Clinton. “We voted for Sanders.”

3. Obama fell far short of his promises.

Barack Obama whooshed into office on pledges of delivering “hope and change” to the country, spilt by partisan politics.

He didn’t. In fact, he made it worse.

“He made some very wonderful statements, in my opinion, when he first got in office, and then he reneged on that,” he said about Obama’s action on the Middle East.

4. Media “harder on Trump than any president.”

A recent Harvard study showed that 93% of new coverage about President Trump is negative.

But here’s another shocker: Carter defended Trump.

“I think the media have been harder on Trump than any other president certainly that I’ve known about,” Carter said. “I think they feel free to claim that Trump is mentally deranged and everything else without hesitation.”

5. NFL players should “stand during the American anthem.”

Carter, who joined the other four living ex-presidents on Saturday for a hurricane fundraiser, put his hand on his heart when the national anthem played — and he has a strong opinion about what NFL players should do, too.

“I think they ought to find a different way to object, to demonstrate,” he said. ” I would rather see all the players stand during the American anthem.”

Not exactly the narrative The Times was painting…

- Source, Zero Hedge