Thursday, 31 August 2017

Never Ending Trump Surge in The Markets


Max and Stacy discuss Democrats not looking forward to Hillary’s ‘blame everyone but herself’ book tour. In the second half Max interviews Wolf Richter of WolfStreet.com about the never ending Trump surge in the markets.
- Source, Max Keiser

Tuesday, 29 August 2017

Hugo Salinas Price: 'There Is No Cure for this Disease...'

In 1934, through the Gold Reserve Act, President Roosevelt devalued the dollar from $20.67 dollars per ounce, to $35 dollars per ounce.

The devaluation was excessive, meaning that at $35 dollars per ounce, the world considered that it would rather own American dollars - as undervalued - rather than gold; for this reason, and because of fears regarding another World War, the world shipped enormous quantities of gold to the US, in exchange for US dollars.

The consequence was that the stash of American gold, at the end of WW II, was about 22,000 tons of gold.

The huge error which the American administration committed at the Bretton Woods, N.H., international monetary conference in 1944, where the monetary order of the post-war world was determined, was to force upon the world a defective monetary system: gold was to be the foundation of the post-war world economy, supported by the US dollar, which was to be considered - like it or not - as good as gold.

This huge mistake has brought the US and the world to an enormous economic distortion: all production in all countries of the world, today, and all economic relations, both internally within nations and with regard to their international relations, are disconnected from reality.

After the war, the US continued the policy to which it was and is addicted: credit expansion. Consequently, the undervaluation of the dollar in 1934, turned into an overvaluation of the dollar, and US gold began to be purchased by the rest of the world at what was regarded as an increasingly attractive price of $35 dollars per ounce. Accordingly, the US stock of gold began to contract as gold left the country.

In 1955, when I was 23 years old, and returning from a trip to Europe with my bride on the Italian passenger liner, the "Andrea Doria", I recall after-dinner conversations with elderly gentlemen in the lounge, and the subject of the conversations was the persistent loss of gold on the part of the US.

In the post-war period, as a result of the Bretton Woods Agreements of 1944, the rest of the world accumulated dollar reserves - "as good as gold" - and this helped mask the consequences of the constant US credit expansion. However, there was a fly in the ointment: the perceptive Jacques Rueff, Economics Minister of General Charles de Gaulle, President of France, alerted de Gaulle to the fact that the US was both expanding internal US credit, and external credit by sending US dollars to France in payment for French imports to the US: French acceptance of dollars as payment, was actually credit extended to the US, and according to Rueff, this was unwise.

General de Gaulle thereupon insisted on returning the dollars held by the Bank of France to the US, and demanding in return, the gold to which it had a right. In May of 1968, Paris was shaken by very severe Leftist rioting and President de Gaulle was very nearly deposed. Obviously, the US had not been pleased with General de Gaulle's attitude.

Nevertheless, the outflow of gold from Fort Knox to the rest of the world continued unabated. The cheap dollar purchased a lot of gold, at $35 dollars an ounce.

As we all know, Fort Knox continued to bleed gold until August 15, 1971 when the gold stock having reached some 8,000 tons, President Nixon "temporarily" closed the gold window. The "as good as gold" part of the Bretton Woods Agreements of 1944 had ended. The irredeemable US dollar - a figment of the imagination - was now the basis of the world's economy.

World trade did not stop in its tracks. The world continued to revolve around its own axis in 24 hours a day, and the nations of the world went on using the irredeemable dollar as the foundation of their national economies and their banking systems.

Gold reserves ceased to have any importance for finance ministers around the world. Gold became the "barbarous relic" of J. M. Keynes. Having dollars now became the paramount objective of finance ministers and Central Bank chiefs.

The question for the rest of the world was no longer "We cannot allow excessive credit expansion, because we have to protect our gold reserves." After August 15, 1971, the new question was: "We must export more than we import, in order to have growing reserves of US dollars; because if we have more dollars, we can also expand credit - like the US - and grow our economies." If the rest of the world wanted more dollars in order to "grow their economies", there was, in the last resort, only one country that provided the necessary dollars: the US.

Consequently, the rest of the world went to work to sell whatever it could, to the US, and receive dollars in payment. National prosperity for the rest of the world required a flourishing export market in the US. Those who had nothing to sell to the US were out of luck. Those selling lots of stuff to the US, enjoyed prosperity.

What was the key to selling to the US, for the all-important dollars received in return?

The key, for all countries, was to undersell the local US producers of whatever the rest of the world had for sale. There was no other way to obtain dollars.

It is fitting to remember, how pleased Americans were, back in the 70's, to see their smoky, polluting industries close down, to be replaced with green malls and pleasant cafés, with areas for exercising, sunning and shopping. The time was hailed as the "The greening of America".

What happened to America was a Greek tragedy writ large. By its own hand, the US has destroyed itself. Its huge advantage - the right to issue the world's fundamental money, the dollar - turned into the sword which disemboweled its own guts.

There will be no "make America great again". President Trump will fail utterly, in re-industrializing the US: that cannot possibly happen unless the dollar ceases being the world's reserve currency. Huge fissures in the social make-up of the US are surfacing. The rest of the world looks on in shock, as it contemplates what is going on in the US.

The US is afflicted with a "terminal disease". To introduce a bit of levity into this dismal essay, herewith:

HENRY KING, who chewed bits of string, and was early cut off, in dreadful agonies, by Hilaire Belloc:

THE Chief Defect of Henry King
Was chewing little bits of String.
At last he swallowed some which tied
Itself in ugly Knots inside.
Physicians of the Utmost Fame
Were called at once; but when they came
They answered, as they took their Fees,
'There is no Cure for this Disease.
Henry will very soon be dead.'
His parents stood about his Bed
Lamenting his Untimely Death,
When Henry, with his Latest Breath,
Cried 'Oh, my Friends, be warned by me,
That Breakfast, Dinner, Lunch, and Tea
Are all the Human Frame requires...'
With that, the Wretched Child expires.

A return to gold on the part of the US is unthinkable. It is much too late. Such a move would produce unimaginable social chaos in the US and put an end to the all-powerful "Military-Industrial-Congressional Complex". Total chaos lies ahead, unavoidably, and will present itself as disease intensifies; no politician can be willing to advance its arrival with a monetary reform.


Monday, 28 August 2017

Paul Craig Roberts Destroys “Presstitute Lavish Devotion to Their Masters”

In the United States “conspiracy theory” is the name given to explanations that differ from those that serve the ruling oligarchy, the establishment or whatever we want to call those who set and control the agendas and the explanations that support the agendas.
The explanations imposed on us by the ruling class are themselves conspiracy theories. Moreover, they are conspiracy theories designed to hide the real conspiracy that our rulers are operating.
For example, the official explanation of 9/11 is a conspiracy theory. Some Muslims, mainly Saudi Arabians, delivered the greatest humiliation to a superpower since David slew Goliath. They outsmarted all 17 US intelligence agencies and those of NATO and Israel, the National Security Council, the Transportation Safety Administration, Air Traffic Control, and Dick Cheney, hijacked four US airliners on one morning, brought down three World Trade Center skyscrapers, destroyed that part of the Pentagon where research was underway into the missing $2.3 trillion, and caused the morons in Washington to blame Afghanistan instead of Saudi Arabia.
Clearly, the Saudia Arabians who humiliated Ameria were involved in a conspiracy to do so.
Is it a believable conspiracy?
The ability of a few young Muslim men to pull off such a feat is unbelievable. Such total failure of the US National Security State means that America was blindly vulnerable throughout the decades of Cold War with the Soviet Union. If such total failure of the National Security State had really occurred, the White House and Congress would have been screaming for an investigation. People would have been held accountable for the long chain of security failures that allowed the plot to succeed. Instead, no one was even reprimanded, and the White House resisted all efforts for an investigation for a year. Finally, to shut up the 9/11 families, a 9/11 Commission was convened. The commission duly wrote down the government’s story and that was the “investigation.”
Moreover, there is no evidence to support the official conspiracy theory of 9/11. Indeed, all known evidence contradicts the official conspiracy theory.
For example, it is a proven fact that Building 7 came down at freefall acceleration, which means it was wired for demolition. Why was it wired for demolition? There is no official answer to this question.
It is the known evidence provided by scientists, architects, engineers, pilots, and the first responders who were in the twin towers and personally experienced the numerous explosions that brought down the towers that is described as a conspiracy theory.
The CIA introduced the term “conspiracy theory” into public discourse as part of its action plan to discredit skeptics of the Warren Commission report on the assassination of President John F. Kennedy. Any explanation other than the one handed down, which is contradicted by all known evidence, was debunked as a conspiracy theory.
Conspiracy theories are the backbone of US foreign policy. For example, the George W. Bush regime was active in a conspiracy against Iraq and Saddam Hussein. The Bush regime created fake evidence of Iraqi “weapons of mass destruction,” sold the false story to a gullible world and used it to destroy Iraq and murder its leader. Similarly, Gaddafi was a victim of an Obama/Hillary conspiracy to destroy Libya and murder Gaddafi. Assad of Syria and Iran were slated for the same treatment until the Russians intervened.
Currently, Washington is engaged in conspiracies against Russia, China, and Venezuela. Proclaiming a non-existent “Iranian threat,” Washington put US missiles on Russia’s border and used the “North Korean threat” to put missiles on China’s border. The democratically elected leader of Venezuela is said by Washington to be a dictator, and sanctions have been put on Venezuela to help the small Spanish elite through whom Washington has traditionally ruled South American countries pull off a coup and reestablish US control over Venezuela.
Everyone is a threat: Venezuela, Yemen, Syria, Iran, Iraq, Afghanistan, tribes in Pakistan, Libya, Russia, China, North Korea, but never Washington.
The greatest conspiracy theory of our time is that Americans are surrounded by foreign threats. We are not even safe from Venezuela.
The New York Times, the Washington Post, CNN, NPR, and the rest of the presstitutes are quick to debunk as conspiracy theories all explanations that differ from the explanations of the ruling interests that the presstitutes serve.
Yet, as I write and for some nine months to date, the presstitute media has itself been promoting the conspiracy theory that Donald Trump was involved in a conspiracy with the president of Russia and Russian intelligence services to hack the US presidential election and place Trump, a Russian agent, in the White House.
This conspiracy theory has no evidence whatsoever. It doesn’t need evidence, because it serves the interests of the military/security complex, the Democratic Party, the neoconservatives, and permits the presstitutes to show lavish devotion to their masters. By endless repetition a lie becomes truth.
There is a conspiracy, and it is against the American people. Their jobs have been offshored in order to enrich the already rich. They have been forced into debt in a futile effort to maintain their living standards. Their effort to stem their decline by electing a president who spoke for them is being subverted before their eyes by an utterly corrupt media and ruling class.
Conspiracy theories are the backbone of US foreign policy. For example, the George W. Bush regime was active in a conspiracy against Iraq and Saddam Hussein. The Bush regime created fake evidence of Iraqi “weapons of mass destruction,” sold the false story to a gullible world and used it to destroy Iraq and murder its leader. Similarly, Gaddafi was a victim of an Obama/Hillary conspiracy to destroy Libya and murder Gaddafi. Assad of Syria and Iran were slated for the same treatment until the Russians intervened.
Currently, Washington is engaged in conspiracies against Russia, China, and Venezuela. Proclaiming a non-existent “Iranian threat,” Washington put US missiles on Russia’s border and used the “North Korean threat” to put missiles on China’s border. The democratically elected leader of Venezuela is said by Washington to be a dictator, and sanctions have been put on Venezuela to help the small Spanish elite through whom Washington has traditionally ruled South American countries pull off a coup and reestablish US control over Venezuela.
Everyone is a threat: Venezuela, Yemen, Syria, Iran, Iraq, Afghanistan, tribes in Pakistan, Libya, Russia, China, North Korea, but never Washington.
The greatest conspiracy theory of our time is that Americans are surrounded by foreign threats. We are not even safe from Venezuela.
The New York Times, the Washington Post, CNN, NPR, and the rest of the presstitutes are quick to debunk as conspiracy theories all explanations that differ from the explanations of the ruling interests that the presstitutes serve.
Yet, as I write and for some nine months to date, the presstitute media has itself been promoting the conspiracy theory that Donald Trump was involved in a conspiracy with the president of Russia and Russian intelligence services to hack the US presidential election and place Trump, a Russian agent, in the White House.
This conspiracy theory has no evidence whatsoever. It doesn’t need evidence, because it serves the interests of the military/security complex, the Democratic Party, the neoconservatives, and permits the presstitutes to show lavish devotion to their masters. By endless repetition a lie becomes truth.
There is a conspiracy, and it is against the American people. Their jobs have been offshored in order to enrich the already rich. They have been forced into debt in a futile effort to maintain their living standards. Their effort to stem their decline by electing a president who spoke for them is being subverted before their eyes by an utterly corrupt media and ruling class.

Thursday, 24 August 2017

This Bubble Ain’t In Stocks, It’s In Mass Hysteria Explains Scott Adams

History is full of examples of Mass Hysteria. They happen fairly often. The cool thing about mass hysteria is that you don’t know when you are in one. But sometimes the people who are not experiencing the mass hysteria can recognize when others are experiencing one, if they know what to look for.

I’ll teach you what to look for.


A mass hysteria happens when the public gets a wrong idea about something that has strong emotional content and it triggers cognitive dissonance that is often supported by confirmation bias. In other words, people spontaneously hallucinate a whole new (and usually crazy-sounding) reality and believe they see plenty of evidence for it. The Salem Witch Trials are the best-known example of mass hysteria. The McMartin Pre-School case and the Tulip Bulb hysteria are others. The dotcom bubble probably qualifies. We might soon learn that the Russian Collusion story was mass hysteria in hindsight. The curious lack of solid evidence for Russian collusion is a red flag. But we’ll see how that plays out.

The most visible Mass Hysteria of the moment involves the idea that the United States intentionally elected a racist President. If that statement just triggered you, it might mean you are in the Mass Hysteria bubble. The cool part is that you can’t fact-check my claim you are hallucinating if you are actually hallucinating. But you can read my description of the signs of mass hysteria and see if you check off the boxes.

If you’re in the mass hysteria, recognizing you have all the symptoms of hysteria won’t help you be aware you are in it. That’s not how hallucinations work. Instead, your hallucination will automatically rewrite itself to expel any new data that conflicts with its illusions.

But if you are not experiencing mass hysteria, you might be totally confused by the actions of the people who are. They appear to be irrational, but in ways that are hard to define. You can’t tell if they are stupid, unscrupulous, ignorant, mentally ill, emotionally unstable or what. It just looks frickin’ crazy.

The reason you can’t easily identify what-the-hell is going on in the country right now is that a powerful mass hysteria is in play.
If you see the signs after I point them out, you’re probably not in the hysteria bubble.

If you read this and do NOT see the signs, it probably means you’re trapped inside the mass hysteria bubble.

Here are some signs of mass hysteria. This is my own take on it, but I welcome you to fact-check it with experts on mass hysteria.
1. The trigger event for cognitive dissonance

On November 8th of 2016, half the country learned that everything they believed to be both true and obvious turned out to be wrong. The people who thought Trump had no chance of winning were under the impression they were smart people who understood their country, and politics, and how things work in general. When Trump won, they learned they were wrong. They were so very wrong that they reflexively (because this is how all brains work) rewrote the scripts they were seeing in their minds until it all made sense again. The wrong-about-everything crowd decided that the only way their world made sense, with their egos intact, is that either the Russians helped Trump win or there are far more racists in the country than they imagined, and he is their king. Those were the seeds of the two mass hysterias we witness today.

Trump supporters experienced no trigger event for cognitive dissonance when Trump won. Their worldview was confirmed by observed events.
2. The Ridiculousness of it

One sign of a good mass hysteria is that it sounds bonkers to anyone who is not experiencing it. Imagine your neighbor telling you he thinks the other neighbor is a witch. Or imagine someone saying the local daycare provider is a satanic temple in disguise. Or imagine someone telling you tulip bulbs are more valuable than gold. Crazy stuff.

Compare that to the idea that our president is a Russian puppet. Or that the country accidentally elected a racist who thinks the KKK and Nazis are “fine people.” Crazy stuff.

If you think those examples don’t sound crazy – regardless of the reality – you are probably inside the mass hysteria bubble.
3. The Confirmation Bias

If you are inside the mass hysteria bubble, you probably interpreted President Trump’s initial statement on Charlottesville – which was politically imperfect to say the least – as proof-positive he is a damned racist.

If you are outside the mass hysteria bubble you might have noticed that President Trump never campaigned to be our moral leader. He presented himself as – in his own words “no angel” – with a set of skills he offered to use in the public’s interest. He was big on law and order, and equal justice under the law. But he never offered moral leadership. Voters elected him with that knowledge. Evidently, Republicans don’t depend on politicians for moral leadership. That’s probably a good call.

When the horror in Charlottesville shocked the country, citizens instinctively looked to their president for moral leadership. The president instead provided a generic law and order statement. Under pressure, he later named specific groups and disavowed the racists. He was clearly uncomfortable being our moral lighthouse. That’s probably why he never described his moral leadership as an asset when running for office. We observe that he has never been shy about any other skill he brings to the job, so it probably isn’t an accident when he avoids mentioning any ambitions for moral leadership. If he wanted us to know he would provide that service, I think he would have mentioned it by now.

If you already believed President Trump is a racist, his weak statement about Charlottesville seems like confirmation. But if you believe he never offered moral leadership, only equal treatment under the law, that’s what you saw instead. And you made up your own mind about the morality.

The tricky part here is that any interpretation of what happened could be confirmation bias. But ask yourself which one of these versions sounds less crazy:
1. A sitting president, who is a branding expert, thought it would be a good idea to go easy on murderous Nazis as a way to improve his popularity.

or…

2. The country elected a racist leader who is winking to the KKK and White Supremacists that they have a free pass to start a race war now.

or…

3. A mentally unstable racist clown with conman skills (mostly just lying) eviscerated the Republican primary field and won the presidency. He keeps doing crazy, impulsive racist stuff. But for some reason, the economy is going well, jobs are looking good, North Korea blinked, ISIS is on the ropes, and the Supreme Court got a qualified judge. It was mostly luck.

or…

4. The guy who didn’t offer to be your moral leader didn’t offer any moral leadership, just law and order, applied equally. His critics cleverly and predictably framed it as being soft on Nazis.

One of those narratives is less crazy-sounding than the others. That doesn’t mean the less-crazy one has to be true. But normal stuff happens far more often than crazy stuff. And critics will frame normal stuff as crazy whenever they get a chance.
4. The Oversized Reaction

It would be hard to overreact to a Nazi murder, or to racists marching in the streets with torches. That stuff demands a strong reaction. But if a Republican agrees with you that Nazis are the worst, and you threaten to punch that Republican for not agreeing with you exactly the right way, that might be an oversized reaction.
5. The Insult without supporting argument

When people have actual reasons for disagreeing with you, they offer those reasons without hesitation. Strangers on social media will cheerfully check your facts, your logic, and your assumptions. But when you start seeing ad hominem attacks that offer no reasons at all, that might be a sign that people in the mass hysteria bubble don’t understand what is wrong with your point of view except that it sounds more sensible than their own.

For the past two days I have been disavowing Nazis on Twitter. The most common response from the people who agree with me is that my comic strip sucks and I am ugly.

The mass hysteria signals I described here are not settled science, or anything like it. This is only my take on the topic, based on personal observation and years of experience with hypnosis and other forms of persuasion.

I present this filter on the situation as the first step in dissolving the mass hysteria. It isn’t enough, but more persuasion is coming.
If you are outside the mass hysteria bubble, you might see what I am doing in this blog as a valuable public service.

If you are inside the mass hysteria bubble, I look like a Nazi collaborator.

How do I look to you?

- Source, Scott Adams via Zero Hedge

Tuesday, 22 August 2017

John Williams Says Impeaching the President WILL TANK THE DOLLAR


John Williams is one of the finest American economists today. Williams calculates alternative statistics on the economy to give a more accurate and reliable analysis than that which is provided by the US government.

Williams recommends gold and silver as hedges against uncertainty and a weakening US dollar. John Williams is always fighting for “Main Street” America, and while his calculations are complex and in-depth, his forecasts for the coming US dollar fiat currency crisis and hyperinflation are not to be taken lightly.

- Source, USA Watchdog

Monday, 21 August 2017

Jim Rickards Exposes the Elite Plan to Freeze the System

Today’s complacent markets are faced with a number of potentially destabilizing shocks.

Any one of them could potentially lead to another financial crisis. And the next crisis could see draconian measures by governments that most people are not prepared for today.

You’ll see what I mean in a moment.

But first, what are the catalysts that possibly trigger the next financial crisis?

First off, a debt ceiling crisis is just over a month away. If the ceiling isn’t raised by Sept. 29, the federal government is likely to default on at least some of its bills.

If a deal isn’t reached, it could rock markets and possibly trigger a major recession.

Given Washington’s current political paralysis and intense partisan infighting surrounding President Trump, it’s far from certain that a deal will be reached.

Second, despite some official comments over the weekend downplaying the odds of a war with North Korea, a shooting war remains a very real possibility.

North Korea’s Kim is determined to acquire nuclear weapons that can threaten the lower 48 U.S. states, and Trump is equally determined to prevent that from happening.

Third, a trade war between the U.S. and China seems imminent.

Trump has backed off his campaign pledges to label China a currency manipulator and an unequal trading partner.

And today, Trump is expected to present his case for sanctions against China.

China would likely retaliate, and that could ultimately result in a 10–20% “maxi-devaluation” of the yuan, perhaps by early next year.

That would likely cause a stock market rout. Since China devalued in August 2015, markets fell hundreds of points in single sessions. And that was a much smaller devaluation, less than 2%.

And if markets collapse from either of these scenarios — which is entirely possible — governments will move dramatically to contain the damage.

In my book The Road to Ruin, I discuss a phenomenon called “ice-nine.” The name is taken from a novel, Cat’s Cradle, by Kurt Vonnegut.

In the novel, a scientist invents a molecule he calls ice-nine, which is like water but with two differences. The melting temperature is 114.4 degrees Fahrenheit (meaning it’s frozen at room temperature), and whenever ice-nine comes in contact with water, the water turns to ice-nine and freezes.

The ice-nine is kept in three vials. The plot revolves around the potential release of ice-nine into water, which would eventually freeze the rivers and oceans and end all life on Earth. Cat’s Cradle is darkly comedic, and I highly recommend it.

I used ice-nine in my book as a metaphor for financial contagion.

If regulators freeze money market funds in a crisis, depositors will take money from banks. The regulators will then close the banks, but investors will sell stocks and force the exchanges to close and so on.

Eventually, the entire financial system will be frozen solid and investors will have no access to their money.

Some of my readers were skeptical of this scenario. But I researched it carefully and provided solid evidence that this plan is already in place — it’s just not well understood. But the ice-nine plan is now being put into practice.

Consider a recent Reuters article that admitted elites would likely shut down the entire system when the next financial crisis strikes.

The article claimed that the EU is considering actions that would temporarily prevent people from withdrawing money from banks to prevent bank runs.

“The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,” said one source.

Very few people are aware of these developments. They get a brief mention in the media, if they get mentioned at all. But people could be in for a shock when they try to get their money out of the bank during the next financial crisis.

Think of it as a war on currency or a war on money. Even the skeptics can see how the entire financial system will be frozen solid in the next crisis.

The only solution is to have physical gold, silver and bank notes in private storage. The sooner you put your personal ice-nine protection plan in place, the safer you’ll be.


Friday, 18 August 2017

Charles Hugh Smith Breaks Down Exactly Why We’re Doomed

Anyone who thinks our toxic financial system is stable is delusional.

Why are we doomed? Those consuming over-amped “news” feeds may be tempted to answer the culture wars, nuclear war with North Korea or the Trump Presidency.

The one guaranteed source of doom is our broken financial system, which is visible in this chart of income inequality from the New York Times: Our Broken Economy, in One Simple Chart.


While the essay’s title is our broken economy, the source of this toxic concentration of income, wealth and power in the top 1/10th of 1% is more specifically our broken financial system.

What few observers understand is rapidly accelerating inequality is the only possible output of a fully financialized economy. Various do-gooders on the left and right propose schemes to cap this extraordinary rise in the concentration of income, wealth and power, for example, increasing taxes on the super-rich and lowering taxes on the working poor and middle class, but these are band-aids applied to a metastasizing tumor:financialization, which commoditizes labor, goods, services and financial instruments and funnels the income and wealth to the very apex of the wealth-power pyramid.

Take a moment to ponder what this chart is telling us about our financial system and economy.35+ years ago, lower income households enjoyed the highest rates of income growth; the higher the income, the lower the rate of income growth.

This trend hasn’t just reversed; virtually all the income gains are now concentrated in the top 1/100th of 1%, which has pulled away from the top 1%, the top 5% and the top 10%, as well as from the bottom 90%.

The fundamental driver of this profoundly destabilizing dynamic is the disconnect of finance from the real-world economy.

The roots of this disconnect are debt: when we borrow from future earnings and energy production to fund consumption today, we are using finance to ramp up our consumption of real-world goods and services.

In small doses, this use of finance to increase consumption of real-world goods and services is beneficial: economies with access to credit can rapidly boost expansion in ways that economies with little credit cannot.

But the process of financialization is not benign. Financialization turns evertything into a commodity that can be traded and leveraged as a financial entity that is no longer firmly connected to the real world.

The process of financialization requires expertise in the financial game, and it places a premium on immense flows of capital and opaque processes: for example, the bundling of debt such as mortgages or student loans into instruments that can be sold and traded.

These instruments can then become the foundation of an entirely new layer of instruments that can be sold and traded. This pyramiding of debt-based “assets” spreads risk throughout the economy while aggregating the gains into the hands of the very few with access to the capital and expertise needed to pass the risk and assets off onto others while keeping the gains.

Profit flows to what’s scarce, and in a financialized economy, goods and services have become commodities, i.e. they are rarely scarce, because somewhere in the global economy new supplies can be brought online.

What’s scarce in a financialized economy is specialized knowledge of financial games such as tax avoidance, arbitrage, packaging collateralized debt obligations and so on.

Though the billionaires who have actually launched real-world businesses get the media attention–Bill Gates, Jeff Bezos, Steve Jobs, et al.–relatively few of the top 1/10th of 1% actually created a real-world business; most are owners of capital with annual incomes of $10 million to $100 million that are finance-generated.

This is only possible in a financialized economy in which finance has become increasingly detached from the real-world economy.

Those with the capital and skills to reap billions in profits from servicing and packaging student loan debt have no interest in whether the education being purchased with the loans has any utility to the indebted students, as their profits flow not from the real world but from the debt itself.

This is how we’ve ended up with an economy characterized by profound dysfunction in the real world of higher education, healthcare, etc., and immense fortunes being earned by a few at the top of the pyramid from the financialized games that have little to no connection to the real-world economy.

Anyone who thinks our toxic financial system is stable is delusional. If history is any guide (and recall that Human Nature hasn’t changed in the 5,000 uears of recorded history), this sort of accelerating income/wealth/ power inequality is profoundly destabilizing–economically, politically and socially.

All the domestic headline crises–culture wars, opioid epidemic, etc.–are not causes of discord: they are symptoms of the inevitable consequences of a toxic financial system that has broken our economy, our system of governance and our society.

- Source, Two Minds

Wednesday, 16 August 2017

Jim Willie: Bond Carry Trade Fractured And Now In Climax Mode!


Americans have been living under the illusion consumption produces jobs. And the financial sector has been artificially inflated. Dr. Jim Willie reveals the United States is seeing the climax of collapse of the financial sector and consumer economy. 

Also in this interview, Willie reveals the Chinese are working on a major deal to pay for crude oil in Yuan. Other countries are moving away from the Dollar. He predicts the Dollar won't collapse. Instead, it will rise, then simply vanish.


Monday, 14 August 2017

Geopolitics & Cryptocurrencies


In this episode of the Keiser Report, Max and Stacy discuss the electric car boom driving a resource boom in Australia... and the biggest mines are now being acquired by Chinese companies. In the second half, Max interviews Gerald Celente of TrendsResearch.com about paradigm shifts: from cryptocurrencies to electric cars.

- Source, Max Keiser

Sunday, 13 August 2017

Dr. Ron Paul: Central Banks Pulling the Levers of Manipulation Daily


Join Jason and Dr. Paul as they discuss Alan Greenspan's recent comments warning about worsening stagflation and a bond market collapse, and whether organizations like the Plunge Protection Team (PPT) and Exchange Stabilization Fund (ESF) manipulate stocks up and gold prices down? Are these manipulations coordinated by central bankers in the US, Europe and Japan?


Friday, 11 August 2017

Ray Dalio: With Two Potential Crises, Buy Gold In Case "Things Go Badly"

It's been a while, years in fact, but suddenly it's gold's time to shine again.

The yellow metal - insurance against systemic collapse, hyperinflation and infinite political stupidity - which in recent years has seen its popularity fade as the younger generation has gravitated toward the far faster moving crypto currencies - is once again back in the spotlight.

As UBS' strategist Joni Teves, who has been recommending the precious metal for a long time despite the BOJ's relentless suppression, writes "gold bounces from recent lows in line with other safe havens amid risk-off sentiment across markets following geopolitical headlines over the past 24 hours." Below are the key considerations from today's UBS note:

"Key technical levels come into focus for gold, triggering some decent market activity in the middle of this typically quieter summer period. Geopolitical risks tend to have quite a volatile influence on prices and the immediate risk here is that $20 move from yesterday is quickly faded. Gold is holding well so far. We think the risks are somewhat skewed to the upside here, with a break of $1280 likely to attract further attention. Although speculative positions on Comex have increased in the past couple of weeks, overall levels remain lean. 

Subdued participation this year and lean positioning suggests that market participants would have to play catch-up on a break higher. On the flip side, this also suggests that a pullback is likely to be relatively contained. Additionally, we had previously argued that uncertainty on Fed policy expectations is likely to keep gold broadly supported, especially given downside risks to inflation. US CPI data on Friday should offer some insights; the next important signpost would be the Fed's Economic Symposium at Jackson Hole, for further guidance on policy."

[4]

Separately, in an unexpected endorsement from the head of the world's biggest hedge fund (excluding apple), overnight Ray Dalio said that clients should move 5% to 10% of their capital to gold as a hedge to the two biggest risk events unfolding today: the rapidly escalating North Korea crisis, and the seemingly intractible debt ceiling crisis, which as former CBO director Rudy Penner said yesterday, [5]would likely lead to a market crash this fall. Here are the highlights which Dalio posted on his LInkedIn page [6]:

... People adapt to the circumstances they have experienced and are then surprised when the future is different than the past. In other words, most people are inclined to assume that the circumstances they have recently encountered will persist, which leads them to change what they are doing to be consistent with that recently experienced environment. For example, low-volatility periods in which credit is readily available tend to lead people to assume that it’s safe to borrow more, which leads them to lever up their positions, which contributes to greater volatility and hurts them when things change.

That appears to be the case now—i.e., prospective risks are now rising and do not appear appropriately priced in because of a) a backward looking at risk and b) corporate leveraging up has been high because interest rates are low relative to many companies’ projected ROEs and because past risks have been low. The emerging risks appear more political than economic, which makes them especially challenging to price in. Most immediately, during the calm of the August vacation season, we are seeing 1) two confrontational, nationalistic, and militaristic leaders playing chicken with each other, while the world is watching to see which one will be caught bluffing, or if there will be a hellacious war, and 2) the odds of Congress failing to raise the debt ceiling (leading to a technical default, a temporary government shutdown, and increased loss of faith in the effectiveness of our political system) rising. It’s hard to bet on such things, one way or another, so the best that one can do is be neutral to such possibilities.

When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don't have a unique insight that we'd choose to bet on. We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen and treasuries) would benefit, so if you don't have 5-10% of your assets in gold as a hedge, we'd suggest you relook at this. Don't let traditional biases, rather than an excellent analysis, stand in the way of you doing this.

And in a surprisingly humble conclusion, Dalio then says the following: "if you do have an excellent analysis of why you shouldn't have such an allocation to gold, we'd appreciate you sharing it with us."

- Source, ZeroHedge

Thursday, 10 August 2017

Precious Metals Stocks Alert: Powerful Upleg Believed Imminent

The significant increase in Large Spec long positions this past week in gold and silver from a very low level might be cause of concern to some, since it of course increases the risk of a reaction in these metals, but there is another much more positive way of looking at it, which is that, in the face of a continued albeit incremental rise in the prices of gold and silver, the Large Specs have suddenly realized their mistake in bailing out over the past couple of months, and are scrambling to get back on board.

On gold’s 1-year chart we can see that it actually made an important breakout last week, from the Dome pattern shown. So far the breakout is marginal, and there is still no confirmation by momentum, which has not broken out of its downtrend, but that is not the case with silver, which as we will see HAS broken out above a similar Dome pattern. Gold is approaching a zone of considerable resistance approaching its April and June highs at the top of the Dome, and once it breaks out above this it should really get moving.


While there was a considerable increase in Commercial short and Large Spec long positions in gold last week, they are still at modest levels that permit a big rally by gold from here. Certainly they are a long way from being bearish.


Silver, meanwhile has made a more decisive breakout from its Dome pattern, after putting in a capitulative low a few weeks ago, and is in position to push on past its moving averages towards resistance in the $18.50 near to its February and April highs. Like gold there is still no momentum breakout (MACD) but it is close to it.


After falling to extremely bullish levels a week ago, there was an uptick in Commercial short and Large Spec long positions in silver last week, shown on the latest COT chart below, which is taken the mark the dawn of the realization of their mistake by Large Specs in dumping all of their long positions over the past couple of months, and such an uptick often occurs at the start of a major uptrend.


It is enlightening and useful to observe the long-term silver to gold ratio chart at this juncture, as it shows that the ratio is still close to levels that typically mark an important sector bottom. This chart by itself clearly says there is plenty of room for a major bull market to develop from here.


Lastly we will look at the important gold stocks to gold ratio, with stocks being represented by GDX. This ratio is at its lowest at bear market bottoms, because that is when fear is at its peak, and when investors are fearful they choose bullion over stocks, as they regard it as a more solid investment. At the end of 2015 we saw an extreme low in this ratio which marked the final bottom, and what has been happening since as far back as mid-2013 is that a giant relative Head-and-Shoulders bottom has been forming, and right now we appear to be at a great entry point for stocks, because the ratio is very close to the Right Shoulder low of this relative Head-and-Shoulders bottom. The huge surge by the ratio out of the Head of this pattern that occurred during the 1st half of last year was a game changing move, which showed that the tide was turning and that a new bull market was being birthed. Note that the ratio has to get to 0.26 before it even breaks out of the H&S bottom, which is quite a way above its current level, and once it does break out of the base pattern it is likely to push on quickly to the resistance level shown in the 0.36 – 0.38 zone, which will mean BIG gains for stocks.


We will now look at the GDX to gold ratio in more detail on its 2-year chart, for important guidance re timing. The 2-year chart is quite dramatic as it shows the massive advance in the ratio during the first half of last year, and remember that gold was rising at the same time, so this chart is showing the outperformance by gold stocks during that period, which was certainly very impressive and marked the birthing of a new bull market. After such a huge outperformance, stocks were certainly in need of a rest and that’s why the ratio bedded down into a big consolidation Triangle, but as we can see this Triangle is now fast closing up, which is why we have been buying the sector aggressively in recent weeks, because breakout should be to the upside and lead to a big uptrend, an outcome which is made much more probable by the now strongly bullish gold and silver COTs following the Large Specs giving up and bailing out at the worst possible time in recent months as they are always prone to do.


Conclusion: it couldn’t look better for the sector, which suits us, because we are bullish and now heavily long.


Wednesday, 9 August 2017

Danielle DiMartino Booth: The Economy is Weakening


Former Fed Analyst and Advisor Danielle DiMartino Booth to Federal Reserve Bank of Dallas President Richard W. Fisher, breaks down the current weakening economy through the jobs market.

- Source, Boom Bust

Tuesday, 8 August 2017

Jay Taylor & Michael Oliver Discuss The Bullishness of Precious Metals


Jay introduces the guests and sponsors for the day’s show, Michael Oliver returns this week to provide his usual guidance on the precious metals and related markets.

- Source, Jay Taylor Media

Monday, 7 August 2017

Robert Shiller: The Big Burning Issue, An Unregulated Free Market


Nobel Laureate Prof. Robert J. Shiller was awarded the Nobel Prize in Economic Sciences in 2013 together with Eugene F. Fama and Lars Peter Hansen 'for their empirical analysis of asset prices.' 

In this video, he takes a look at the future of economics and suggests that economists should work on designing systems that protect people against the possibility of rising inequality.


Friday, 4 August 2017

Greenspan Warns Again Today: Bond Market Is on the Cusp of Collapse


Former Federal Reserve Chairman Alan Greenspan issued a bold warning Friday that the bond market is on the cusp of a collapse that also will threaten stock prices.

In a CNBC interview, the longtime central bank chief said the prolonged period of low interest rates is about to end and, with it, a bull market in fixed income that has lasted more than three decades.

"The current level of interest rates is abnormally low and there's only one direction in which they can go, and when they start they will be rather rapid," Greenspan said on "Squawk Box."

That low interest rate environment has been the product of current monetary policy at the institution he helmed from 1987-2006. The Fed took its benchmark rate to near zero during the financial crisis and kept it there for seven years after.

Since December 2015, the Fed has approved four rate hikes, but government bond yields remained mired near record lows.

Greenspan did not criticize the policies of the current Fed. But he warned that the low rate environment can't last forever and will have severe consequences once it ends.

"I have no time frame on the forecast," he said. "I have a chart which goes back to the 1800s and I can tell you that this particular period sticks out. But you have no way of knowing in advance when it will actually trigger."

One point he did make about timing is it likely will be quick and take the market by surprise.

"It looks stronger just before it isn't stronger," he said. Anyone who thinks they can forecast when the bubble will break is "in for a disastrous" experience."

In addition to his general work at the Fed, which also featured an extended period of low rates though nowhere near their current position, Greenspan is widely known for the "irrational exuberance" speech he gave at the American Enterprise Institute in 1996. The speech warned about asset prices and said it is difficult to tell when a bubble is about to burst.

Those remarks foreshadowed the popping of the dot-com bubble, and the phrase has found a permanent place in the Wall Street lexicon.

"You can never be quite sure when irrational exuberance arises," he told CNBC. "I was doing it as part of a much broader speech and talking about the analysis of the markets and the like, and I wasn't trying to focus short term. But the press loved that term."


- Source, CNBC

Tuesday, 1 August 2017

Keiser Report: Wall Street’s Dean of Valuation


In this episode of the Keiser Report from Freedom Fest in Las Vegas Max and Stacy talk about Wall Street’s ‘dean of valuation’ declaring that bitcoin is replacing gold as the ‘go to’ trade in a time when investors don’t trust governments. 

In the second half Max interviews legendary investor, Jim Rogers, about China and Germany stepping up to lead the world as the U.S. retreats. They also discuss China’s One Belt, One Road policy and bitcoin as disruptors to U.S. hegemonic power.

- Source, Max Keiser