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

Sunday, October 22, 2017

Keiser Report: Housing Bubbles

In this episode of the Keiser Report from Denver, Colorado, Max and Stacy discuss housing bubbles and surging economic activity. Despite the doomsayers, is the economy recovering? Stacy interviews Ellen Brown, author of ‘Web of Debt,’ about the state-owned bank proposal for Los Angeles. They also discuss the newly-discovered $14 trillion in debt previously hidden in the global derivatives market, and whether or not that could happen in a blockchain-based financial world.

- Source, Russia Today

Saturday, October 21, 2017

Rick Santelli & Yra Harris: Buy the Dips on Gold

Central Banks and the damage of years of mis-allocated capital
Gold, Dollar, Euro, Bitcoin & Crypto-Currencies
State of the US Economy
Bull Market in Stocks

Friday, October 20, 2017

Russia Stockpiles Gold To Prevent A Currency Attack From the United States

Countries stockpile gold for strategic and defensive reasons — for instance, in case relations between nations are damaged and their currencies lose their value,” Gabriel Rubinstein, a financial consultant and former representative of the Argentine Central Bank.

Russia has been accumulating a significant gold reserve for over a decade, along with China and most, if not all of the BRIC/SCO/Silk Road countries. This is a fact that has been either unnoticed or intentionally ignored by the western mainstream media. Of course, gold is a barbarous relic that just “sits there and does nothing” (Warren Buffet).

The graphic above, courtesy of, shows the monthly gold holdings of the Russian Central Bank. One has to wonder why Russia is willing to make this information public, unlike China or the United States. Having said that, I suspect that – like China – the public information does not show Russia’s true gold holdings, which I would bet is significantly greater. Conversely, it’s commonly accepted by those of us who have studied this issue for many years that the actual amount of physical gold held by the Federal Reserve on behalf of the U.S. is substantially less than the official number.

GATA posted an interesting article from Sputnik, which asserts that part of the motivation for Russia making gold a significant part of this currency reserves is to protect itself from currency and financial system attacks from the U.S.

Gold, this eternal financial resource, has a real value if compared to other financial assets. The Russian government believes that it’s better to have more gold resources than dollars. Hypothetically speaking, if Russia holds tons of US dollars and the US wanted to damage its economy, this would be possible through currency manipulations,” Rubinstein said, adding that gold guarantees against such a scenario (from the Sputnik article linked in the previous paragraph).

Russia has increased the value of its gold reserves by a factor of 10x over the last decade. It has also reduced its euro holdings from 40% of its Central Bank reserves to 26%. Russia has also been aggressively unloading its Treasury holdings.

You’ll note that there’s an inflection point in the graph above (my edit) which shows that the rate of accumulation of gold increased in 2014. As the Sputnik article points out, this point of inflection coincided with the sanctions imposed by the U.S. and the EU on Russia in 2014. Senator McCain is currently imploring Trump to ramp up those sanctions.

It’s been my view that the U.S. tried to attack Russia’s currency in 2014 – in conjunction with the sanctions – in order to affect the the value to Russia of its energy exports, as Russia is the world’s largest oil exporter:

The graph above shows the RUS/$ currency pair (from Gold and silver investors are familiar with the waterfall formation that occurred in early 2014. That plunge in the ruble vs the dollar has the unmistakable footprints of a currency attack and the U.S. is the only country with motive.

This would explain one of the primary reasons that Russia accelerated the conversion of its dollar and euro reserves in yen. I would argue that one of the other primary reasons is that, along with China, the gold accumulation activity precedes an eventual re-introduction of gold into the global monetary system. My fear is that the U.S. is willing to start a global military conflict before it would be willing to let a reserve currency reset occur.

Wednesday, October 18, 2017

Jordan Peterson: Is it Game Over For the West?

In this episode of The Mark Steyn Show, Mark explores what Daffy Duck used to call "pronoun trouble". His guest is Jordan Peterson, a clinical psychologist at the University of Toronto whose entire career has been imperiled by his opposition to the new "non-binary" gender pronouns - such as "zhe". 

Transgender activists and other politically correct enforcers have determined to destroy him. 

In this full-length interview, Steyn and Professor Peterson discuss the Orwellian perversion of language and the totalitarian impulses of social engineering. And Mark asks the big question: Is the jig up for western civilization?

Monday, October 16, 2017

China could shatter petrodollar by compelling Saudi Arabia to trade oil in yuan

Beijing is likely to “compel” Saudi Arabia to sell crude oil in yuan, and others will follow, according to the chief economist and managing director at High Frequency Economics Carl Weinberg. This will hit the US dollar, he says.

In an interview with CNBC Weinberg said China has become a key player in the oil market since overtaking the US to become the world's largest importer.

Saudi Arabia has "to pay attention to this because even as much as one or two years from now, Chinese demand will dwarf US demand,"Weinberg told the media.

"I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them," he added.

A 1974 agreement between US President Richard Nixon and Saudi King Faisal meant Riyadh has been accepting dollars for all its oil exports.

However, recently, countries like China and Russia have been looking to exclude the greenback from bilateral oil trade. Russia and Saudi Arabia are the most significant exporters of oil to China, alternating in top spot.

China has already said it wants to start a crude oil futures contract priced in yuan and convertible into gold.

Veteran investor Jim Rogers told RT last month that countries are getting more concerned about trading in dollars, because “if the US gets angry at you, they just set enormous pressure on you that can even get you out of business.”

“China, Russia, and other countries understand this, and they are trying to move world trade and world finance away from that,” said Rogers.

In July, Russia and China signed a 68 billion yuan ($10 billion) investment fund to ease ruble-yuan settlements.

- Source, Russia Today

Friday, October 13, 2017

John Rubino: The Real Peak Complacency

Stocks are at record highs while volatility is at a record low. Which is another way of saying that investors aren’t as worried as they probably should be about the coming year.

That’s okay. Price corrections (with their attendant volatility spikes) are normal and natural ways for markets to teach overconfident investors a little humility. Think of them as the financial word’s forest fires, clearing out the underbrush of misconception, malinvestment, and hubris.

But there’s another area of Peak Complacency that is neither natural nor benign. And that’s cyberspace. Americans – and Europeans and Japanese – have moved most of their financial lives online just as hackers and other cyber-enemies get the upper hand. Recently:

  • Credit rating agency Equifax – apparently through its own incompetence – allowed hackers to access and presumably copy and sell “sensitive personal information” of 146 million Americans.
  • Online portal Yahoo upped the number of accounts that were hacked in 2013 to – get this — 3 billion.
  • The National Security Agency admitted that its state-of-the-art hacking tools were stolen by hackers and are now available for sale on the dark web.
  • The Federal Deposit Insurance Corporation (FDIC) suffered more than 50 data breaches between January 2015 and December 2016, exposing “personally identifiable information (PII) of U.S. citizens.”

And then there’s bitcoin, where online exchanges are being hacked with apparent impunity and zero recourse for victims:

Cryptocurrencies: How hackers and fraudsters are causing chaos in the world of digital financial transactions(Independent) – There have been at least three dozen heists of cryptocurrency exchanges since 2011 and more than 980,000 bitcoins stolen, worth about $4 billion. Dan Wasyluk discovered the hard way that trading cryptocurrencies such as bitcoin happens in an online Wild West where sheriffs are largely absent.

Mr Wasyluk and his colleagues raised bitcoins for a new tech venture and lodged them in escrow at a company running a cryptocurrency exchange called Moolah. Just months later the exchange collapsed; the man behind it is now awaiting trial in Britain on fraud and money-laundering charges. He has pleaded not guilty.

Mr Wasyluk’s project lost 750 bitcoins, currently worth about $3m, and he believes he stands little chance of recovering any money.

“It really was kind of a kneecapping of the project,” said Mr Wasyluk of the collapse three years ago. “If you are starting an exchange and you lose clients’ money, you or your company should be 100 per cent accountable for that loss. And right now there is nothing like that in place.”

Cryptocurrencies were supposed to offer a secure, digital way to conduct financial transactions but they have been dogged by doubts. Concerns have largely focused on their astronomical gains in value and the likelihood of painful price crashes. Equally perilous, though, are the exchanges where virtual currencies are bought, sold and stored. These exchanges, which match buyers and sellers and sometimes hold traders’ funds, have become magnets for fraud and mires of technological dysfunction, posing an underappreciated risk to anyone who trades digital coins.

The obvious conclusion is that our bank, brokerage and bitcoin accounts aren’t safe from hackers and/or cyber-attacks that shut down settlement systems and power grids.

In the aftermath of Hurricane Maria, for example, much of Puerto Rico is still without power, which means ATM machines aren’t working. See Puerto Rico is now a cash-only economy.

So physical cash – always a good thing to have on hand – is a crucial part of disaster planning. And precious metals in the form of small denomination gold and silver coins are if anything even more important, since who knows what a large-scale cyber event and the subsequent central bank money printing will do to fiat currency values.

- Source, John Rubino via Sprott Money

Thursday, October 12, 2017

Why Greece took the fall for a European banking crisis

The Greek bailouts were a banking crisis in disguise. In an excerpt of her upcoming book, editor-in-chief, Claire Connelly, explores how Greece took the fall for decades of irresponsible lending by French and German banks. If Greece continues to participate in the European Union, democracy is doomed.

It is somewhat fitting that the birthplace of democracy is now the battle ground for its continued existence.

The cliche of opulence and laziness disguises real Greek misfortune at the hands of the European community – and America – resulting in one of the most offensive punchlines of all time: Somehow Greece deserves the economic disaster wrought upon it, a severity not seen since The Great Depression.

In reality, the country’s long financial crisis is one big deliberate illusion created by some of the world’s largest banks and multinational conglomerates that have sidelined governments and made the rule of law and the will of the people all but irrelevant.

It has prioritised multinational profits over the economic needs of Eurozone countries, and even those outside of the union. With no sovereign currency with which to balance the score, Greece has become utterly subject to France, Germany, the International Monetary Fund (IMF) and the European Central Bank, (ECB).

The money from the three bailouts did not go to Greece at all and did not restore prosperity – it was never designed to in the first place – but flowed straight back into the coffers of French and German banks whose bad decisions over the last half century became the burden of the Greek people.

Banks never pay for their own mistakes. The European Union was formed – at least in part – to avoid the wars, destruction and barbarism of the 1920s, ‘30s, and ‘40s – but a monetary union with no federal mechanisms and no recourse for exploitation has led to war by other means. (It is no coincidence that fascism has reared its ugly head in Europe’s economically weaker nations while Germany continues to dominate the Eurozone).

If Greece continues to participate in the European Union, democracy is doomed.

The EU was created as an industrial cartel with the sole purpose of diminishing democracy and made the rule of Parliaments all but irrelevant. These technocrats and finance moguls will not simply hand back back their power to Europe.

Greece and its participating Eurozone partners should take the bold decision to leave the EU to save Europe from itself...

- Source, Renegade Inc, Read More Here

Wednesday, October 11, 2017

Germany's Gold Investment Market Has Boomed in the Past 10 Years

According to a recent report of the World Gold Council, After the financial banking crises of 2007 and 2008 German's have invested heavily into the gold market. Just last year alone they have purchased over $6 billion in gold related investment products.

Please see the rest here; Market Update: German investment market

- Source,

Tuesday, October 10, 2017

Who’s Affected Most by Anti Russian Sanctions?

In this episode of the Keiser Report from Phoenix, Arizona, Max and Stacy take a look at the underreported UN report on Russia sanctions and what the report might teach the individual about maintaining economic sovereignty. 

In the second half, Stacy interviews Erik Voorhees of about the latest crackdowns on Initial Coin Offerings in the cryptocurrency space. 

They also discuss whether or not bitcoin is a store of value or a payment system. Or both.

- Source, Max Keiser

Wednesday, October 4, 2017

Gregory Mannarino: Big Gold & Silver Moves As Trouble Comes To Bond Market

Gregory Mannarino says to watch the debt markets, gold, silver and the US dollar.

He says that the bond market is making huge moves. Greg says the sell-off is accelerating.

Mannarino says that as currency flees from the bond market, big moves are ahead.

The stock market may be gaining somewhat, because stocks are in “la-la land”, but that’s not the only place all of the currency is going.

The bond market funds will not be going into the US dollar, however.

When it comes to gold and silver, that stack is going to pay off nicely considering what Greg says about the precious metals.

Monday, October 2, 2017

Paul Craig Roberts: We Are Witnessing A Collapsing Economy But This Is Really Scary

Economic Trainwreck

Do the Wall Street Journal’s editorial page editors read their own newspaper?

The front page headline story for the Labor Day weekend was “Low Wage Growth Challenges Fed.” Despite an alleged 4.4% unemployment rate, which is full employment, there is no real growth in wages. The front page story pointed out correctly that an economy alleged to be expanding at full employment, but absent any wage growth or inflation, is “a puzzle that complicates Federal Reserve policy decisions.”

On the editorial page itself, under “letters to the editor,” Professor Tony Lima of California State University points out what I have stressed for years: “The labor-force participation rate remains at historic lows. Much of the decrease is in the 18-34 age group, while participation rates have increased for those 55 and older.” Professor Lima points out that more evidence that the American worker is not in good shape comes from the rising number of Americans who can only find part-time work, which leaves them with truncated incomes and no fringe benefits, such as healthcare…

Positioned right next to this factual letter is the lead editorial written by someone who read neither the front page story or the professor’s letter. The lead editorial declares: “The biggest labor story this Labor Day is the trouble that employers are having finding workers across the country.” The Journal’s editorial page editors believe the solution to the alleged labor shortage is Senator Ron Johnson’s (R.Wis.) bill to permit the states to give 500,000 work visas to foreigners.

In my day as a Wall Street Journal editor and columnist, questions would have been asked that would have nixed the editorial. For example, how is there a labor shortage when there is no upward pressure on wages? In tight labor markets wages are bid up as employers compete for workers. For example, how is the labor market tight when the labor force participation rate is at historical lows. When jobs are available, the participation rate rises as people enter the work force to take the jobs.

I have reported on a number of occasions that according to Federal Reserve studies, more Americans in the 24-34 age group live at home with parents than independently, and that it is those 55 and older who are taking the part time jobs. Why is this? The answer is that part time jobs do not pay enough to support an independent existence, and the Federal Reserve’s decade long zero interest rate policy forces retirees to enter the work force as their retirement savings produce no income. It is not only the manufacturing jobs of the middle class blue collar workers that have been given to foreigners in order to cut labor costs and thus maximize payouts to executives and shareholders, but also tradable professional skill jobs such as software engineering, design, accounting, and IT—jobs that Americans expected to get in order to pay off their student loans.

The Wall Street Journal editorial asserts that the young are not in the work force because they are on drugs, or on disability, or because of their poor education. However, all over the country there are college graduates with good educations who cannot find jobs because the jobs have been offshored. To worsen the crisis, a Republican Senator from Wisconsin wants to bring in more foreigners on work permits to drive US wages down lower so that no American can survive on the wage, and the Wall Street Journal editorial page editors endorse this travesty!

The foreigners on work visas are paid one-third less than the going US wage. They live together in groups in cramped quarters. They have no employee rights. They are exploited in order to raise executive bonuses and shareholder capital gains. I have exposed this scheme at length in my book, The Failure of Laissez Faire Capitalism (Clarity Press, 2013).

When Trump said he was going to bring the jobs home, he resonated, but, of course, he will not be permitted to bring them home, any more than he has been permitted to normalize relations with Russia.

In America Government is not in the hands of its people. Government is in the hands of a ruling oligarchy. Oligarchic rule prevails regardless of electoral outcomes. The American people are entering a world of slavery more severe than anything that previously existed. Without jobs, dependent on their masters for trickle-down benefits that are always subject to being cut, and without voice or representation, Americans, except for the One Percent, are becoming the most enslaved people in history.

- Source, Paul Craig Roberts via King World News

Bill Fleckenstein: The Catalyst That Will Send Gold Surging Above $1400

As we get ready to kickoff trading for the month of October, today Bill Fleckenstein spoke with King World News about the catalyst that will send gold surging above $1,400.

Eric King: “Bill, what do you think will be the catalyst that sends the gold price above$1,400?”

Bill Fleckenstein: “A continuation of the current policies, I guess. I don’t know what it’s going to take for the price to go over $1,400, but what I can say is that there is a perception amongst a lot of investors that the central banks know what they are doing.

Anyone who reads your site probably disagrees with that statement. So here in America, and in Japan and in Europe, problems just get kicked down the road and they grow bigger and larger, which makes…

- Source, King World News

Friday, September 29, 2017

Puerto Rico's Future Has Been Irrevocably Altered

The news coming out of Puerto Rico -- limited as it is with power and cell service out on most of the island -- is terrible and demands far more of a media and government response than we've seen so far. Every effort should be made to get the people of Puerto Rico the resources they need to cope with this disaster.

"Cope" will be Step One. The island faced large-scale challenges even before Hurricane Maria hit, with a shrinking population, crumbling infrastructure and a financial mess. We need to be realistic about what the future for Puerto Rico and its people looks like. We're probably looking at hundreds of thousands of Puerto Ricans leaving the island for the mainland U.S. over the next several years, a scenario with significant implications for the island and the rest of the nation.

Puerto Ricans have been leaving for the mainland U.S. for decades. The island's population shrunk by 2.2 percent in the 2000s, and has already fallen by 8.4 percent since 2010. While the northeastern U.S. has historically had the largest concentration of Puerto Ricans, increasingly migration is to the Southeast. A 2014 study from the Pew Research Center showed that about half of all Puerto Ricans moving from the island to the mainland were moving to the South. In 1980, New York had around 10 times as many Puerto Ricans as Florida did. Today, they've roughly achieved parity...

While every effort should be made to rebuild Puerto Rico and to modernize its long-neglected infrastructure, I share my colleague Tyler Cowen's pessimism for the island's long-term prospects. It's over-indebted, its population is shrinking, and its young people have been leaving. Economically, financially and demographically, it would appear to combine the worst aspects of rural America's demographics with the pension, debt and infrastructure woes of places like Chicago.

In theory, some of these problems are fixable. The island's debts could be written down or bailed out. The federal government could invest tens or hundreds of billions of dollars to rebuild the island's infrastructure and economy. The Jones Act, making trade to the island more costly than it needs to be, could be repealed. But this menu of policy prescriptions requires the kind of high-trust society with well-functioning institutions that we sadly lack at present.

While many Puerto Ricans will want to stay, or lack the resources to leave, we should be realistic about what shape the rebuilding process will take over the next several months. Electrical systems need wholesale reconstruction. Water systems were damaged. Agriculture is in ruins. Cell towers and power lines need to be rebuilt. And that's to say nothing of roads, homes and schools. What Puerto Rico needs is a blank check of resources -- political will, labor and money -- in order to rebuild.

There's a sad chance that the resources simply will not be found. The mainland should prepare for an influx of Puerto Ricans over the next several months and years. Hundreds of thousands of Puerto Ricans seeking to move to urban centers in the Southeast, the Mid-Atlantic and Boston are going to put pressure on housing markets already struggling to keep up with current demand. Employers, however, may get some relief as they struggle to find workers.

- Source, Bloomberg, Read More Here

Secret Monetary Policy: Who Manipulates Gold Prices and Why

While major international events, like nuclear tests carried out by North Korea, affect gold prices and result in a situation when investors prefer to invest their money in the noble metal, economic expert Dimitri Speck believes that there are other, more important factors that play a crucial role in influencing the global financial market.

Gold prices have been subject to constant manipulations since 1993, German expert on the gold market Dimitri Speck told Sputnik Germany.

According to him, the manipulation of gold prices has been presented by the media as if it has been initiated by a couple of malicious traders just recently, but this idea is wrong.

"When the gold price manipulation started on August 5, 1993, these were central banks that initiated the process, and namely the then head of the US Central Bank Alan Greenspan. He did not want to let the gold price rise over $400," Speck said, adding that Greenspan feared that a significant increase in gold prices might affect the "inflation thermometer."

The expert noted that the US Fed had arranged an agreement among the central banks to keep the gold price below $400 dollars. This was done for several years by means of sales and loans.

Drivers of Gold Price Manipulation

Central banks, which often belong to the state, do not act alone, but work closely with private banking and financial institutions, Speck continued.

"With the help of price shocks, they [the institutions] shortly knock the prices down to drive other buyers out of the market. The state is the first to get benefit from all this, and this primarily concerns the United States. Well, and the dollar. These are the main beneficiaries of the gold price manipulation. Because the US dollar, as the main world currency, looks good in this case," the analyst noted.

Explaining how the manipulation process actually takes place, Speck noted that this happens "very simply," namely by "damaging other competitors."
In this case, gold is the main rival to currencies based on loans, such as the US dollar and the euro.

"The positive development of the price of gold as such exacerbates the debt and other economic deficits of the United States," he stated.

Benefits for Banking System

In his book "Secret Monetary Policy: Why Central Banks Manipulate Gold Prices," Speck also analyzes the benefits that the banking systems themselves get as a result of financial manipulations.

The expert came to the conclusion that the US banking system is one of the main beneficiaries of the gold price manipulation process.

When the gold prices drop, the US dollar rises and its position looks better than it actually is. Banks are then capable of lowering interest rates in order to reduce inflationary expectations and calm depositors.

"They propose lower interest rates to depositors, and this in turn facilitates obtaining a loan. This is beneficial for the state — and, of course, for the banking system," the expert said, adding however, that this approach was one of the main factors that caused the global financial crisis.

- Source, Sputnik News

Thursday, September 28, 2017

Bitcoin Under Fire: Profit for Gold?

Cryptocurrencies, especially Bitcoin, have flown a little too close to the sun recently, and it has seen them get burned by a few key monetary institutions, as well as governments. This attack on Bitcoin, as well as fear and speculation around other markets, could spell a good time for investment in gold.

Seen as an insurance policy, gold has been a steady and safe investment for hundreds of years. As markets, beyond even the crypto market, get spooked, investors could see a safety net in the precious metal.
Good time for gold

While all the attention over the last few months or so has been solely aimed at digital currencies and their astronomical gains, gold has not been suffering, although many thought it would.

Gold recently hit a new high of $1,350, and part of that was a $100 rise seen over three months for the steady commodity. It seems paltry for those who have been spoiled by swings as big as 25 percent in a day by digital currencies, but in its own right, it is a big jump.

Essentially, that jump, and new high, was reason enough for gold to be no longer considered a bear market - and all this while Bitcoin was making its own massive gains.
Why will gold profit from Bitcoin under fire?

As Bitcoin was rising, so was gold, but when Bitcoin came under fire from China, and JP Morgan recently, gold profited even more.

Gold was always seen as a safe and steady investment; not too much growth, but never really any decline. When sexy cryptocurrencies came along, with their 800 percent gains in less than a year, many put their funds into it.

However, in the bad times, and for those investors who are a little more cautious, gold acts as a good insurance policy, as well as a reliable option to diversify with.

Additionally, it only takes a relatively small number of investors around the world to decide to allocate five to 10 percent of their wealth to gold, to radically improve its valuation.
Real world factors aiding gold’s appeal

It’s not only Bitcoin that has talk of bubbles and uncertainty around it. The stock market has shown many times it has its propensity to pop, and there is a similar bubble feeling at the moment.

The US stock market is already too high, and that has to do with a concentration of speculation into a very limited number of stocks in the NASDAQ. Lesser company stocks have already fallen.

The dollar is also weakening, as it has done since its inception. But, it has its own factors to worry about. None more so than its country’s leader, Donald Trump. Trump, as well as his war of words - so far - for North Korea, is putting a lot of doubt into financial markets, making gold again appear to be the safest and steadiest option.

- Source, Coin Telegraph