Thursday, May 28, 2015
Video: Who Owns the Federal Reserve
(Truthstream Media) It’s not like we don’t have half a clue who actually “owns” the Federal Reserve, but we just wanted to know, superficially, who the Fed itself claims it is owned by (and, additionally, how the agency justifies its unchecked power).
Apparently the agency never officially answers that question. See for yourself in the video above.
Sticker Shock for Some Obamacare Customers: "51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon."
EXCUSE ME, DID YOU SAY 51 PERCENT? PHOTOGRAPHER: NICHOLAS KAMM/AFP/GETTY IMAGES
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HEALTH-CARE REFORM
Sticker Shock for Some Obamacare Customers
1274 MAY 25, 2015 8:00 AM EDT
By Megan McArdle
So the proposed 2016 Obamacare rates have been filed in many states, and in many states, the numbers are eye-popping. Market leaders are requesting double-digit increases in a lot of places. Some of the biggest are really double-digit: 51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon. The reason? They say that with a full year of claims data under their belt for the first time since Obamacare went into effect, they're finding the insurance pool was considerably older and sicker than expected.
Don't panic, says Kevin Drum. This is just the opening bid in a regulatory dance that will end up somewhere very different: "A few months from now, the real rate increases — the ones approved by state and federal authorities — will begin to trickle out. They'll mostly be in single digits, with a few in the low teens. The average for the entire country will end up being something like 4-8 percent."
He's right, of course, that the proposed rates will not end up being the final rate. Regulators are going to push back on these rates as hard as they can, with some success.
But in the case of the companies cited by the Wall Street Journal, I'd bet they're not going to go down to 4-8 percent. As it turns out, the insurer filings are public information, available on state websites. And in the three cases where I could see supporting data about premium revenue and losses, those losses appear to be large. Moda of Oregon says that its claims were 139 percent of revenue, making for a margin of -61 percent. If I am reading their somewhat confusing table right, Health Service Corporation of New Mexico says it lost $23 million on revenue of $121 million. CareFirst of Maryland says that claims were 120 percent of revenue, which if we add in some money to pay for overhead, amounts to ... less than or equal to what they're asking from regulators. I can't find claims experience data for Tennessee, but that state told the Wall Street Journal that it lost $141 million on exchange plans last year.
Now, this is not the whole story. These are only the biggest insurers in some states. Smaller insurers may price lower in an attempt to grow their business (though if their claims experience matches the biggest insurers, that's going to be a recipe for a quick bankruptcy). And the median request on a list of the biggest insurers in 12 states was more on the order of 10-15 percent, and three states -- Maine, Connecticut and Indiana -- had insurers ask for increases in the low single digits.
That's only 12 states, of course, and none of the biggest-population ones. But even if we assume that the regulators cut the increases in half, that's a median increase of 5-6 percent, with a mean considerably higher than that. Even if you weight by population -- well, actually population-weighting makes that worse, not better, because the states with the lowest rate requests are disproportionately sparse.
Read more: http://www.bloombergview.com/articles/2015-05-25/sticker-shock-for-some-...
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HEALTH-CARE REFORM
Sticker Shock for Some Obamacare Customers
1274 MAY 25, 2015 8:00 AM EDT
By Megan McArdle
So the proposed 2016 Obamacare rates have been filed in many states, and in many states, the numbers are eye-popping. Market leaders are requesting double-digit increases in a lot of places. Some of the biggest are really double-digit: 51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon. The reason? They say that with a full year of claims data under their belt for the first time since Obamacare went into effect, they're finding the insurance pool was considerably older and sicker than expected.
Don't panic, says Kevin Drum. This is just the opening bid in a regulatory dance that will end up somewhere very different: "A few months from now, the real rate increases — the ones approved by state and federal authorities — will begin to trickle out. They'll mostly be in single digits, with a few in the low teens. The average for the entire country will end up being something like 4-8 percent."
He's right, of course, that the proposed rates will not end up being the final rate. Regulators are going to push back on these rates as hard as they can, with some success.
But in the case of the companies cited by the Wall Street Journal, I'd bet they're not going to go down to 4-8 percent. As it turns out, the insurer filings are public information, available on state websites. And in the three cases where I could see supporting data about premium revenue and losses, those losses appear to be large. Moda of Oregon says that its claims were 139 percent of revenue, making for a margin of -61 percent. If I am reading their somewhat confusing table right, Health Service Corporation of New Mexico says it lost $23 million on revenue of $121 million. CareFirst of Maryland says that claims were 120 percent of revenue, which if we add in some money to pay for overhead, amounts to ... less than or equal to what they're asking from regulators. I can't find claims experience data for Tennessee, but that state told the Wall Street Journal that it lost $141 million on exchange plans last year.
Now, this is not the whole story. These are only the biggest insurers in some states. Smaller insurers may price lower in an attempt to grow their business (though if their claims experience matches the biggest insurers, that's going to be a recipe for a quick bankruptcy). And the median request on a list of the biggest insurers in 12 states was more on the order of 10-15 percent, and three states -- Maine, Connecticut and Indiana -- had insurers ask for increases in the low single digits.
That's only 12 states, of course, and none of the biggest-population ones. But even if we assume that the regulators cut the increases in half, that's a median increase of 5-6 percent, with a mean considerably higher than that. Even if you weight by population -- well, actually population-weighting makes that worse, not better, because the states with the lowest rate requests are disproportionately sparse.
Read more: http://www.bloombergview.com/articles/2015-05-25/sticker-shock-for-some-...
Axel Merk: Will Gold Zoom Higher with Greece on the Brink of Default? “The dollar is overvalued relative to the Euro.”
Jay Taylor, Turning Hard Times Into Good Times, Released on 5/27/15
Axel Merk explains why the dollar is overvalued relative to the Euro, the likely outcome of a Greek default and the function gold may play as a result.
Axel Merk explains why the dollar is overvalued relative to the Euro, the likely outcome of a Greek default and the function gold may play as a result.
Kiyosaki: Pension tension & the eroding of American capitalism. “It’s not just bad for tax payers, it’s bad for pensioners.”
Robert Kiyosaki & Kim Kiyosaki, Rich Dad Radio, Release on 5/27/15
This is a very emotional subject: pensions. Politicians and unions promised pensions they had no way to fund for the last 40 years and the bill has come due. It’s not just bad for tax payers, it’s bad for pensioners. If you think local governments won’t take away the pensions they promised, you clearly aren’t paying attention. This week we have Sal Diciccio (Phoenix City Council) and Dan DiSalvo (City College of NY) to talk about the consequences of pensions gone wild and how a communist mindset by labor is eroding capitalism in America.
http://marketsanity.com/kiyosaki-pension-tension-how-the-communist-mindset-is-eroding-american-capitalism/
This is a very emotional subject: pensions. Politicians and unions promised pensions they had no way to fund for the last 40 years and the bill has come due. It’s not just bad for tax payers, it’s bad for pensioners. If you think local governments won’t take away the pensions they promised, you clearly aren’t paying attention. This week we have Sal Diciccio (Phoenix City Council) and Dan DiSalvo (City College of NY) to talk about the consequences of pensions gone wild and how a communist mindset by labor is eroding capitalism in America.
http://marketsanity.com/kiyosaki-pension-tension-how-the-communist-mindset-is-eroding-american-capitalism/
The Six Too Big To Fail Banks In The U.S. Have 278 TRILLION Dollars Of Exposure To Derivatives
The very same people that caused the last economic crisis have created a 278 TRILLION
dollar derivatives time bomb that could go off at any moment. When
this absolutely colossal bubble does implode, we are going to be faced
with the worst economic crash in the history of the United States.
During the last financial crisis, our politicians promised us that they
would make sure that “too big to fail” would never be a problem again.
Instead, as you will see below, those banks have actually gotten far
larger since then. So now we really can’t afford for
them to fail. The six banks that I am talking about are JPMorgan Chase,
Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells
Fargo. When you add up all of their exposure to derivatives, it comes
to a grand total of more than 278 trillion dollars. But when you add up
all of the assets of all six banks combined, it only comes to a grand
total of about 9.8 trillion dollars. In other words, these “too big to
fail” banks have exposure to derivatives that is more than 28 times greater than their total assets.
This is complete and utter insanity, and yet nobody seems too alarmed
about it. For the moment, those banks are still making lots of money
and funding the campaigns of our most prominent politicians. Right now
there is no incentive for them to stop their incredibly reckless
gambling so they are just going to keep on doing it.
https://www.thesleuthjournal.com/the-six-too-big-to-fail-banks-in-the-u-s-have-278-trillion-dollars-of-exposure-to-derivatives/
So precisely what are “derivatives”? Well, they
can be immensely complicated, but I like to simplify things. On a very
basic level, a “derivative” is not an investment in anything. When you
buy a stock, you are purchasing an ownership interest in a company.
When you buy a bond, you are purchasing the debt of a company. But a
derivative is quite different. In essence, most derivatives are simply
bets about what will or will not happen in the future. The big banks
have transformed Wall Street into the biggest casino in the history of
the planet, and when things are running smoothly they usually make a
whole lot of money.
But there is a fundamental flaw in the system, and I described this in a previous article…The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect. The reason these algorithms are not perfect is because they are based on assumptions, and those assumptions come from people. They might be really smart people, but they are still just people.Today, the “too big to fail” banks are being even more reckless than they were just prior to the financial crash of 2008.
https://www.thesleuthjournal.com/the-six-too-big-to-fail-banks-in-the-u-s-have-278-trillion-dollars-of-exposure-to-derivatives/
Two CEOs in one day…. Snapchat and Red Hat: Tech bubble will end badly
Jim Whitehurst, Red Hat CEO, and "Open Organization" author, discusses
why he thinks cheap money is producing a tech bubble; the transition
into the cloud, and how to inspire passion and performance in the
workplace.
CNBC's Julia Boorstin provides highlights from an interview with Snapchat CEO Evan Spiegel at Re/code's annual conference.
http://investmentwatchblog.com/two-ceos-in-one-day-snapchat-and-red-hat-tech-bubble-will-end-badly/
CNBC's Julia Boorstin provides highlights from an interview with Snapchat CEO Evan Spiegel at Re/code's annual conference.
http://investmentwatchblog.com/two-ceos-in-one-day-snapchat-and-red-hat-tech-bubble-will-end-badly/
Economic Collapse Warnings Going Mainstream: World Drowning in Debt, Mass Default, Market Bloodbath
Today on The Janssen
Report: “The world is drowning in debt, warns Goldman Sachs”, “Liquidity
drought could spark market bloodbath, warns IIF”, “Negative interest
rates put world on course for biggest mass default in history”.
These are some of the headlines appearing in the mainstream media over the past few months.
[more coming soon]These are some of the headlines appearing in the mainstream media over the past few months.
Sources:
http://www.telegraph.co.uk/finance/ec…
http://www.telegraph.co.uk/finance/ma…
http://www.telegraph.co.uk/finance/co…
http://www.telegraph.co.uk/finance/ma…
www.thejanssenreport.net
Say “Cheese!” — Whole Foods cheese made by prison labor
Whole Foods shoppers who imagine that their expensive artisanal cheese is made on a quaint rural farm by happy workers may be surprised to discover that the cheese is really made by prison inmates. According to Fortune, Colorado cheese maker Haystack Mountain gets their milk from a goat farm run by Colorado Corrections Industries (CCI), where 1,000 goats are milked by six inmates twice a day. This is becoming a commonplace practice, as “nationwide 63,032 inmates produce more than $2 billion worth of products a year,” according to Forbes.Wow! [UPDATE: The mass appeal article (from which I originally quoted) misquoted Fortune. The original article says the inmates make only 60 cents PER DAY, not per hour!
And it’s not just license plates that are being made in prison. Today, inmates “produce apple juice, raise tilapia, milk cows and goats, grow flowers, and manage vineyards.” CCI pays only 60 cents per hour for the inmates’ labor, although some manage to earn a whopping $3-400 a month.
Americans (on the outside) can’t possibly compete with that. In the near future, prison will be the only way Americans can keep a roof over their heads and have some job “security.”]
I won’t be buying anything from “Whole Foods” again. Not the wholesome establishment it claims to be.
State-Run Lotteries: The Desperation Tax
STAFF NEWS & ANALYSIS
What if I told you there was a $70 billion tax that the poor pay the most. You'd probably say that isn't very fair. But that's exactly what the lottery is: an almost 12-figure tax on the desperation of the least fortunate...esearchers have found that the bottom third of households buy more than half of all tickets. So that means households making less than $28,000 a year are dishing out $450 a year on lotteries. And, as a result, everybody else doesn't have to pay the higher taxes they would if gaming revenues weren't underwriting our schools.o what? Lotteries might be just like a tax for all but the one-in-a-hundred-million who win them, but they're still a voluntary tax. It's not the government's fault that people either don't care or don't realize that, once you account for taxes and the possibility of splitting the pot, it never makes financial sense to buy a lottery ticket. Right? Well, no. It's not that poor people don't understand that the lottery has a near-zero chance of making them dynastically wealthy. It's that they think everything else has an actually-zero chance...P]eople making less than $30,000 are 25 percent more likely to say that they buy lottery tickets for money than for fun, while it's the opposite for everyone else. State lotteries, in other words, don't just prey on poor people's dreams—they do that for everyone—but rather on desperate dreams. – Washington Post, May 14, 2015s taxes go, state-run lotteries seem like a good idea. No one forces you to pay, they don't infringe on your privacy, and the games raise money very efficiently.he Washington Post writer points out that lotteries prey disproportionately on the poor. People who can least afford to take the risk are actually more likely to do it. This seems irrational. Why do they do it?e suspect the answer is ignorance. People who buy lottery tickets simply don't understand how much the odds are against their winning. Lottery marketers certainly don't help, either. They use the same techniques Las Vegas casinos employ to keep you playing slots. A series of small wins entice players to keep on pulling and increase their bets. The mathematical facts remain in effect, though. The longer you play the more certain you are to lose.ottery players don't conduct a cost-benefit analysis before buying tickets. If they did, they would know they are far more likely to be hit by a truck and killed on the way home than they are to win the Powerball jackpot.ot coincidentally, whatever math most lottery players do know came from a public school education. They didn't learn much in the first place and retained very little of it. This makes them susceptible to clever, hope-laden marketing.irabile dictu, what governmental activity do lotteries fund in most states? Public schools, of course. The schools then create more mathematically ignorant citizens to become the next generation of lottery customers – a never-ending cycle.he real winners are the lottery authorities and the private contractors they employ. They get to ignore the consumer protection laws other merchants must follow and enjoy a near-permanent revenue stream skimmed from lottery proceeds.his "voluntary" tax may be better than forcible confiscation, but it is not harmless. Government never is... no matter how we pay for it.
De-Dollarization Accelerates: China And Chile Sign Multibillion Dollar Currency Swap Deal, Washington’s “Allies” Defect To China-Led Bank, Large Speculators /Traders Buying Gold & Silver At Fastest Pace In Over A Decade
Washington’s “Allies” Defect To China-Led Bank
South Korea called on Saturday for deeper cooperation with Japan on a China-led development bank, while Japan remained cautious about the lender, which it and ally the United States have held back from joining.
A meeting between the Japanese and South Korean finance ministers was “an impetus to deepen cooperative relations” regarding the Asian Infrastructure Investment Bank (AIIB), South Korea’s Choi Kyung-hwan told host Taro Aso.
Aso and Choi “agreed on the importance of assessing enormous demand for infrastructure investments in Asia”, including through Abe’s new “Partnership for Quality Infrastructure”, both countries said in a statement.
Choi, whose government expects a 4-5 percent stake in the AIIB, did not elaborate on the China-sponsored bank in brief remarks, or speak to the media after the meeting of the two officials, who are also deputy prime ministers.
Asked about Choi’s reference to the AIIB, Aso told reporters only that he had explained Japan’s position that it was seeking more details from China about the transparency and governance of the AIIB, which is scheduled to begin operations next year.
http://www.reuters.com/article/2015/05/23/us-asia-aiib-southkorea-japan-idUSKBN0O804X20150523
http://www.reuters.com/article/2015/05/19/us-asia-aiib-singapore-idUSKBN0O409X20150519
China and Chile sign multibillion dollar currency swap deal
SANTIAGO — China and Chile on Monday signed a host of cooperation deals including a multi-billion-US-dollar currency swap pact as the two countries move to enhance their trade and financial ties.
The latest development came after a meeting between visiting Chinese Premier Li Keqiang and Chilean President Michelle Bachelet, who jointly witnessed the signing of a series of bilateral business contracts and governmental accords in areas including politics, trade, finance, mining, agriculture, production capacity and science and technology.
http://www.chinadaily.com.cn/world/2015livistsa/2015-05/26/content_20816109.htm
Large Speculators /Traders Buying Gold & Silver At Fastest Pace In Over A Decade
The last time large speculators were as aggressively buying silver as last week was September 1997. The net long non-commercial positioning in Silver futures, according to the CFTC rose almost 22,000 contracts last week to a 3-month high (which is closing in on the ‘longest’ since 2005). Gold, not be out-precious’d also saw major buying. Net speculative longs in gold added over 45,000 contracts – the most since July 2005 – lifting net long positions to their highest in 3 months. Perhaps, just perhaps, as Alhambra’s Jeffrey Snider notes, this is due to Yellen putting the ‘dollar’ back on suicide watch.
Large speculators increased Silver net long position to $4.4bn from $2.4bn notional.
image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150522_silv1_0.jpg
Large speculators increased their net long gold exposure to $14.8bn from $9.2bn notional.
image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150523_gold_0.jpg
Charts: Bloomberg
South Korea called on Saturday for deeper cooperation with Japan on a China-led development bank, while Japan remained cautious about the lender, which it and ally the United States have held back from joining.
A meeting between the Japanese and South Korean finance ministers was “an impetus to deepen cooperative relations” regarding the Asian Infrastructure Investment Bank (AIIB), South Korea’s Choi Kyung-hwan told host Taro Aso.
The Beijing-sponsored $100 billion lender is seen
as a rival to the U.S.-dominated World Bank and Japan-led Asian
Development Bank.
Japanese Prime Minister Shinzo Abe countered China’s push on
Thursday, announcing $110 billion in aid for Asian infrastructure
projects over five years.Aso and Choi “agreed on the importance of assessing enormous demand for infrastructure investments in Asia”, including through Abe’s new “Partnership for Quality Infrastructure”, both countries said in a statement.
Choi, whose government expects a 4-5 percent stake in the AIIB, did not elaborate on the China-sponsored bank in brief remarks, or speak to the media after the meeting of the two officials, who are also deputy prime ministers.
Asked about Choi’s reference to the AIIB, Aso told reporters only that he had explained Japan’s position that it was seeking more details from China about the transparency and governance of the AIIB, which is scheduled to begin operations next year.
http://www.reuters.com/article/2015/05/23/us-asia-aiib-southkorea-japan-idUSKBN0O804X20150523
http://www.reuters.com/article/2015/05/19/us-asia-aiib-singapore-idUSKBN0O409X20150519
China and Chile sign multibillion dollar currency swap deal
SANTIAGO — China and Chile on Monday signed a host of cooperation deals including a multi-billion-US-dollar currency swap pact as the two countries move to enhance their trade and financial ties.
The latest development came after a meeting between visiting Chinese Premier Li Keqiang and Chilean President Michelle Bachelet, who jointly witnessed the signing of a series of bilateral business contracts and governmental accords in areas including politics, trade, finance, mining, agriculture, production capacity and science and technology.
China agreed to grant a quota of 50 billion yuan
($8.1 billion) to yuan qualified foreign institutional investors in the
Southern American country, according to a joint declaration issued here
Monday after their meeting.
The three-year currency swap deal worth 22 billion yuan ($3.5
billion) signed between the central banks of China and Chile is aimed at
promoting the bilateral trade and investment, according to a statement
on the website of the People’s Bank of China, China’s central bank.http://www.chinadaily.com.cn/world/2015livistsa/2015-05/26/content_20816109.htm
Large Speculators /Traders Buying Gold & Silver At Fastest Pace In Over A Decade
The last time large speculators were as aggressively buying silver as last week was September 1997. The net long non-commercial positioning in Silver futures, according to the CFTC rose almost 22,000 contracts last week to a 3-month high (which is closing in on the ‘longest’ since 2005). Gold, not be out-precious’d also saw major buying. Net speculative longs in gold added over 45,000 contracts – the most since July 2005 – lifting net long positions to their highest in 3 months. Perhaps, just perhaps, as Alhambra’s Jeffrey Snider notes, this is due to Yellen putting the ‘dollar’ back on suicide watch.
Large speculators increased Silver net long position to $4.4bn from $2.4bn notional.
image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150522_silv1_0.jpg
image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/05-overflow/20150523_gold_0.jpg
Charts: BloombergThe End Game Continues: Austria Repatriates Gold
After Germany and the Netherlands decided to repatriate
a substantial amount of gold from vaults abroad to the vaults in
respectively Amsterdam and Frankfurt, now Austria is joining the ‘bring
our gold home’ movement.
After increasing pressure from the Austrian people on the government and the central bank to increase the ratio of the gold effectively held in the Austrian Central Bank in Vienna, the central bank has finally made the decision to effectively do so. Less than 20% of Austria’s (relatively) sizeable gold reserves were held in its own vaults with the remainder being stored in Switzerland and London. Austria will now remove 63% of the gold from London and transport it to both Switzerland and Austria. This will be an interesting test case to see how long it will take the Bank of England to ship the 140 tonnes of gold (4.5 million ounces) to Vienna, and we dare to bet this will either take much longer than anticipated, or we’ll suddenly see another gold withdrawal from the Federal Reserve which will very likely be the magical 125-150 tonnes number.
That’s an interesting move, as Vienna originally said it stored the gold in London because it would make their lives much easier to trade the gold as London obviously still is a major center of the international gold market. This seems to be indicating Austria has no intention to trade any of its gold at all in the near future as there seems to be no apparent need to keep the gold in London.
This follows right on the heels of the news China is setting up a gold investment fund with several other countries, and the fact that Russia has once again added in excess of a quarter of a million ounces of gold to its reserves. On top of that, semi-satellite state Kazakhstan has also bought an additional 2.44 tonnes of gold (78,500 ounces) and its total amount of gold held as reserves has now surpassed the 200 tonnes mark. Kazakhstan is really stepping up its investments in gold as in just 3.5 years time, the country has now more than doubled (!) the amount of gold on the balance sheet of its central bank.
Source: Tradingeconomics
This might not sound like a big deal, but it definitely is. China is setting up a new fund to facilitate investments in gold, its new best friends Russia is buying more gold and Austria is reducing its gold holdings in London by 63%. And whilst all of this is happening, the western governments and central banks are still trying to tell the masses to trust the financial system.
And oh, while they’re at it, they might also ban cash transactions. For your own safety, of course!
>>> Check Out Our Latest Gold Report!
After increasing pressure from the Austrian people on the government and the central bank to increase the ratio of the gold effectively held in the Austrian Central Bank in Vienna, the central bank has finally made the decision to effectively do so. Less than 20% of Austria’s (relatively) sizeable gold reserves were held in its own vaults with the remainder being stored in Switzerland and London. Austria will now remove 63% of the gold from London and transport it to both Switzerland and Austria. This will be an interesting test case to see how long it will take the Bank of England to ship the 140 tonnes of gold (4.5 million ounces) to Vienna, and we dare to bet this will either take much longer than anticipated, or we’ll suddenly see another gold withdrawal from the Federal Reserve which will very likely be the magical 125-150 tonnes number.
That’s an interesting move, as Vienna originally said it stored the gold in London because it would make their lives much easier to trade the gold as London obviously still is a major center of the international gold market. This seems to be indicating Austria has no intention to trade any of its gold at all in the near future as there seems to be no apparent need to keep the gold in London.
This follows right on the heels of the news China is setting up a gold investment fund with several other countries, and the fact that Russia has once again added in excess of a quarter of a million ounces of gold to its reserves. On top of that, semi-satellite state Kazakhstan has also bought an additional 2.44 tonnes of gold (78,500 ounces) and its total amount of gold held as reserves has now surpassed the 200 tonnes mark. Kazakhstan is really stepping up its investments in gold as in just 3.5 years time, the country has now more than doubled (!) the amount of gold on the balance sheet of its central bank.
Source: Tradingeconomics
This might not sound like a big deal, but it definitely is. China is setting up a new fund to facilitate investments in gold, its new best friends Russia is buying more gold and Austria is reducing its gold holdings in London by 63%. And whilst all of this is happening, the western governments and central banks are still trying to tell the masses to trust the financial system.
And oh, while they’re at it, they might also ban cash transactions. For your own safety, of course!
>>> Check Out Our Latest Gold Report!
Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.
Follow us on Facebook @SecularInvestor [NEW] and Twitter @SecularInvest
Bernie Sanders: Tax The Income Of The Wealthiest Americans At 90%
(Bryce Covert) In an interview
with CNBC’s John Harwood, Sen. Bernie Sanders (I-VT), who is running
for the Democratic presidential candidacy, said he could back a 90
percent top marginal tax rate.
Harwood brought up that some have likened efforts to combat income inequality to Nazi Germany. Sanders noted sarcastically, “When radical, socialist Dwight D. Eisenhower was president, I think the highest marginal tax rate was something like 90 percent.”
Harwood followed up by asking, “When you think about something like 90 percent, you don’t think that’s obviously too high?” to which Sanders replied, “No.”
He continued, “What I think is obscene…when you have the top one-tenth of one percent owning almost as much as the bottom 90.”
Sanders is right that the top marginal tax rate, that paid by the wealthiest Americans, was around 90 percent under Eisenhower — it was actually 92 percent in the 1950s. Today, the top marginal tax rate is 39.6 percent, although the richest 1 percent end up paying less than that on average and the average rate actually fell for many years.
Republicans have consistently claimed that higher tax rates on the wealthy will hold back economic growth, while lowering rates further will spur it forward.
But that’s not likely the case. Last year, economists found that the point at which the top tax rate is high enough to maximize government revenues but not so high that it discourages the rich from trying to earn more is quite high: about 95 percent for the 1 percent. History bears that out. Economists havepointed out that post-war American growth has been higher during periods with much higher top marginal tax rates and lower when tax rates were substantially lower. When the top rate was more than 90 percent in the 50s, economic growth averaged more than 4 percent a year. But recently when the top rate has been closer to 35 percent, growth has been less than 2 percent a year on average.
The point of higher tax rates isn’t just to penalize the rich, of course. They would need to serve a policy function. For Sanders, that’s combatting income inequality. “If you have seen a massive transfer of wealth from the middle class to the top tenth of one percent, you’ve got to transfer that back,” he told Harwood.
A 90 percent top tax rate could achieve that goal. The same economists who found that the rich can swallow a 95 percent rate also found that a 90 percent tax rate for the 1 percent could significantly reduce the Gini index, a measure of income inequality. It would also help lower wealth inequality. Meanwhile, everyone’s wellbeing would improve, rich and poor alike.
So far, many Republican presidential candidates have proposed a radically different approach: a flat tax. Sen. Ted Cruz (TX), Sen. Rand Paul (KY), and Ben Carson have all backed this idea. The details of each proposal differs, but the basic premise is an attempt to simplify the tax code by only having one rate that everyone pays, rather than the current system in which rates increase as income increases. An analysis of one flat tax plan put forward by Texas Gov. Rick Perry (R) found that it would raise taxes for those at the bottom of the income scale by between $102 and $462, while the tax bill for those making more than $1 million a year would decrease by about a half million dollars.
It would also lower government revenue by between $500 billion and $1 trillion a year. If a candidate wanted to maintain the current level of revenue, it would require taxing everyone, rich or poor, by at least 25 percent.
Harwood brought up that some have likened efforts to combat income inequality to Nazi Germany. Sanders noted sarcastically, “When radical, socialist Dwight D. Eisenhower was president, I think the highest marginal tax rate was something like 90 percent.”
Harwood followed up by asking, “When you think about something like 90 percent, you don’t think that’s obviously too high?” to which Sanders replied, “No.”
He continued, “What I think is obscene…when you have the top one-tenth of one percent owning almost as much as the bottom 90.”
Sanders is right that the top marginal tax rate, that paid by the wealthiest Americans, was around 90 percent under Eisenhower — it was actually 92 percent in the 1950s. Today, the top marginal tax rate is 39.6 percent, although the richest 1 percent end up paying less than that on average and the average rate actually fell for many years.
Republicans have consistently claimed that higher tax rates on the wealthy will hold back economic growth, while lowering rates further will spur it forward.
But that’s not likely the case. Last year, economists found that the point at which the top tax rate is high enough to maximize government revenues but not so high that it discourages the rich from trying to earn more is quite high: about 95 percent for the 1 percent. History bears that out. Economists havepointed out that post-war American growth has been higher during periods with much higher top marginal tax rates and lower when tax rates were substantially lower. When the top rate was more than 90 percent in the 50s, economic growth averaged more than 4 percent a year. But recently when the top rate has been closer to 35 percent, growth has been less than 2 percent a year on average.
The point of higher tax rates isn’t just to penalize the rich, of course. They would need to serve a policy function. For Sanders, that’s combatting income inequality. “If you have seen a massive transfer of wealth from the middle class to the top tenth of one percent, you’ve got to transfer that back,” he told Harwood.
A 90 percent top tax rate could achieve that goal. The same economists who found that the rich can swallow a 95 percent rate also found that a 90 percent tax rate for the 1 percent could significantly reduce the Gini index, a measure of income inequality. It would also help lower wealth inequality. Meanwhile, everyone’s wellbeing would improve, rich and poor alike.
So far, many Republican presidential candidates have proposed a radically different approach: a flat tax. Sen. Ted Cruz (TX), Sen. Rand Paul (KY), and Ben Carson have all backed this idea. The details of each proposal differs, but the basic premise is an attempt to simplify the tax code by only having one rate that everyone pays, rather than the current system in which rates increase as income increases. An analysis of one flat tax plan put forward by Texas Gov. Rick Perry (R) found that it would raise taxes for those at the bottom of the income scale by between $102 and $462, while the tax bill for those making more than $1 million a year would decrease by about a half million dollars.
It would also lower government revenue by between $500 billion and $1 trillion a year. If a candidate wanted to maintain the current level of revenue, it would require taxing everyone, rich or poor, by at least 25 percent.
‘De-dollarisation’ continues across Asia, Gold offers protection from growing risks today.
by GoldCore
– Gold is a “100% guarantee from legal and political risks”
– Russia’s central bank buys another 300,000 ounces in April
– Russia views its overseas assets as vulnerable
– ‘De-dollarisation’ continues across Asia
– Gold offers protection from growing risks today
Russia’s central bank once again increased its gold holdings substantially in April. They added another 300,000 ounces to their existing stockpile bringing the total up to 40.1 million ounces (see chart below).
It marks the continuation of a policy which was only slightly
affected by last year’s rouble crisis following the collapse in the
price of oil and Western imposed sanctions.
In an address to Russia’s lower house, a senior policy maker at Russia’s central bank indicated that while gold prices fluctuate they offer invaluable insurance against external factors. Dmitry Tulin, manager of monetary policy said,
Reuters reports that western sanctions “have not targeted government assets abroad” to date and suggest that Russia’s reduction of its exposure to U.S. Treasury bills is a symptom of its fear that state assets will be targeted next.
Gold is absolutely central to monetary policy in Eurasia and Asia. China openly refer to their yuan as “the reserve currency of the world”. While this ambitious slogan may be slightly premature it is likely that by backing the yuan with gold it would become a major reserve currency that would challenge the debt-bloated dollar.
Investors would be wise to take heed of Russia’s attitude to gold as a “100% guarantee”. In the crisis that approaches physical gold held outside the banking system in safe vaults in safe jurisdictions will prove to be such a guarantee to individuals, companies, pension funds, family offices, as well as nations.
Must Read Guide: 7 Key Bullion Storage Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,187.85, EUR 1,088.07and GBP 770.64 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,194.00, EUR 1,095.56 and GBP 774.77 per ounce.
Gold fell $19.30 or 1.6 percent yesterday to $1,187.70 an ounce. Silver slipped $0.36 or 2.11 percent to $16.74 an ounce.
image: http://www.goldcore.com/ie/wp-content/uploads/sites/19/2015/05/goldcore_chart4_27-05-15.png?4b2353
The positive U.S. economic data fuelled the U.S. dollar’s rally which ramped up to an eight year high against the beleaguered Japanese yen.
Greek finance ministers and creditors continue bailout negotiations today. Its payment of 1.6 billion euros is due to the IMF next week and government sources indicate that the nation may not be able to make the payments without a deal.
The ECB kept the cap on emergency liquidity assistance Greek banks can draw from the country’s central bank unchanged at 80.2 billion euros, a banking source told Reuters on Wednesday.
The lack of any solid progress in recent talks has pushed European equities lower yesterday, with the FTSE 100 falling 80 points. Emerging market equities slumped to six-week lows, with sentiment poor due to concerns about the Chinese and indeed the global economy.
In late European trading gold was at $1,186.10 an ounce down 0.19 percent. Silverwas at $16.71 an ounce off 0.21 percent, and platinum was at $1,123.90 an ounce down 0.04%,
Breaking News and Research Here
– Gold is a “100% guarantee from legal and political risks”
– Russia’s central bank buys another 300,000 ounces in April
– Russia views its overseas assets as vulnerable
– ‘De-dollarisation’ continues across Asia
– Gold offers protection from growing risks today
Russia’s central bank once again increased its gold holdings substantially in April. They added another 300,000 ounces to their existing stockpile bringing the total up to 40.1 million ounces (see chart below).
In an address to Russia’s lower house, a senior policy maker at Russia’s central bank indicated that while gold prices fluctuate they offer invaluable insurance against external factors. Dmitry Tulin, manager of monetary policy said,
“The price of it swings, but on the other hand it is a 100 percent guarantee from legal and political risks.”image: http://www.goldcore.com/ie/wp-content/uploads/sites/19/2015/05/goldcore_chart3_27-05-15.png?4b2353
Reuters reports that western sanctions “have not targeted government assets abroad” to date and suggest that Russia’s reduction of its exposure to U.S. Treasury bills is a symptom of its fear that state assets will be targeted next.
Of course, Russia’s reducing of its Treasury bill
holdings may also be part of the policy of de-dollarisation which Russia
and China are energetically pursuing. As may the insatiable appetite of
their central banks for gold.
Countries across central Asia continue to buy gold
eagerly. The government of Kazakhstan banned the export of mined gold
and is stockpiling its reserves – although its current holding of 200
tonnes is dwarfed by those of its Russian and Chinese neighbours.Gold is absolutely central to monetary policy in Eurasia and Asia. China openly refer to their yuan as “the reserve currency of the world”. While this ambitious slogan may be slightly premature it is likely that by backing the yuan with gold it would become a major reserve currency that would challenge the debt-bloated dollar.
Investors would be wise to take heed of Russia’s attitude to gold as a “100% guarantee”. In the crisis that approaches physical gold held outside the banking system in safe vaults in safe jurisdictions will prove to be such a guarantee to individuals, companies, pension funds, family offices, as well as nations.
Must Read Guide: 7 Key Bullion Storage Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,187.85, EUR 1,088.07and GBP 770.64 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,194.00, EUR 1,095.56 and GBP 774.77 per ounce.
Gold fell $19.30 or 1.6 percent yesterday to $1,187.70 an ounce. Silver slipped $0.36 or 2.11 percent to $16.74 an ounce.
image: http://www.goldcore.com/ie/wp-content/uploads/sites/19/2015/05/goldcore_chart4_27-05-15.png?4b2353
Gold in Singapore for immediate delivery was up 0.3 percent at $1,189.65 an ounce while gold in Zurich fell to $1,185.96.
Gold held near a two week high after dipping in the prior session when positive economic data hinted that the U.S. economy
may be picking up. The U.S. business investment spending plans
increased for its second consecutive month in April and consumer
confidence moved upward along with new U.S. home sales that increased
last month.The positive U.S. economic data fuelled the U.S. dollar’s rally which ramped up to an eight year high against the beleaguered Japanese yen.
Greek finance ministers and creditors continue bailout negotiations today. Its payment of 1.6 billion euros is due to the IMF next week and government sources indicate that the nation may not be able to make the payments without a deal.
The ECB kept the cap on emergency liquidity assistance Greek banks can draw from the country’s central bank unchanged at 80.2 billion euros, a banking source told Reuters on Wednesday.
The lack of any solid progress in recent talks has pushed European equities lower yesterday, with the FTSE 100 falling 80 points. Emerging market equities slumped to six-week lows, with sentiment poor due to concerns about the Chinese and indeed the global economy.
In late European trading gold was at $1,186.10 an ounce down 0.19 percent. Silverwas at $16.71 an ounce off 0.21 percent, and platinum was at $1,123.90 an ounce down 0.04%,
Breaking News and Research Here
Retail Sales are Down for Major Companies
Retailers recently announced their latest sales numbers and things aren’t looking so good.
“Retailer numbers are going to be important,” said Paul Nolte, portfolio manager at Kingsview Asset Management. “Nationally they weren’t great so a lot of people are going to try to reconcile that with the companies reporting.”
While consumer spending in April won’t be reflected in earnings reports this week,growth in retail sales has been steadily dropping since the beginning of the year.
One of the management concerns most often cited this earnings season is that falling oil prices have done little to boost consumer spending, according to a recent Goldman Sachs note.
“Retailer numbers are going to be important,” said Paul Nolte, portfolio manager at Kingsview Asset Management. “Nationally they weren’t great so a lot of people are going to try to reconcile that with the companies reporting.”
While consumer spending in April won’t be reflected in earnings reports this week,growth in retail sales has been steadily dropping since the beginning of the year.
One of the management concerns most often cited this earnings season is that falling oil prices have done little to boost consumer spending, according to a recent Goldman Sachs note.
Find out more at Market Watch.
Renowned Experts Warn of Slow-Motion Financial Collapse, Governments Dig In And Prepare As Economy Continues Slide
Here are five renowned experts who warned of the now-present, slow-motion financial collapse.
Ron Paul
Former presidential candidate Ron Paul is known best in financial circles for his clear 2003 prediction of the housing bubble crisis. Paul joined the Alex Jones Show in late 2014 to once again warn of the country’s slide into economic disaster.
Ron Paul
Former presidential candidate Ron Paul is known best in financial circles for his clear 2003 prediction of the housing bubble crisis. Paul joined the Alex Jones Show in late 2014 to once again warn of the country’s slide into economic disaster.
Paul Craig Roberts
Known as the father of Reaganomics, Paul Craig Roberts gave his views on the coming collapse during a show last January.
Gerald Celente
A renowned trends forecaster, Gerald Celente, known worldwide for his accuracy on global events, provided tips on surviving hard economic times earlier this year.
A renowned trends forecaster, Gerald Celente, known worldwide for his accuracy on global events, provided tips on surviving hard economic times earlier this year.
Peter Schiff
Peter Schiff, a respected financial expert who also
predicted the housing bubble crisis, talked last January on America’s
future and what he feels will happen once this latest bubble bursts.
Max Keiser
Economist and television broadcaster Max Keiser discussed the dollar’s sluggish collapse and other telltale signs of the sinking economy during a 2014 interview.
Economist and television broadcaster Max Keiser discussed the dollar’s sluggish collapse and other telltale signs of the sinking economy during a 2014 interview.
Kiss Your Pension Fund Good-Bye, “Employers have a duty to protect workers in their 401(k) plans from mutual funds that are too expensive or perform poorly.”
By: Martin Armstrong
Armstrong Economics
I have been warning for some time that government was eyeing up pensions. The amount in private pension funds is about $19.4 trillion. The question that has been debated in secret behind the curtain is how to justify to the people taking that over. I have been warning that if this is seized by government, it will come after 2015.75. Just how that is to be accomplished was finally settled by the Supreme Court without any justification constitutionally.The US Supreme Court ruled last week in the unanimous, 8-page decision in Tibble v. Edison holding that employers have a duty to protect workers in their 401(k) plans from mutual funds that are too expensive or perform poorly. That is simply astonishing since there is no constitutional requirement for even government to provide social benefits. The Supreme court held in HARRIS v. McRAE, 448 U.S. 297 (1980) it was explained that the constitution is negative not positive. There is no duty imposed upon the state to provide a program for that would convert the constitution from a negative restrain upon government to a positive obligation to provide for everyone.
If we take the fact that the constitution is NEGATIVE and
was a restrain upon government, then this latest ruling is completely
unfounded. Monday’s unanimous ruling sends a warning to employers that
they now must improve their plans and it is now an obligation to project
employees. This comes just in time for then the next step is government
to seize private funds and prosecute employers who choose badly a fund
manager. This fits perfectly just in time for the Obama administration’s
next assault as they prepare a landmark change of its own by issuing
rules requiring that financial advisers put the interest of customers
ahead of their own. This creates a very gray area wide enough to justify
public seizure of pension funds under management.
This ruling will have a dramatic impact upon investment management
and we have already received calls asking about using our model for
management purposes since it has one of the longest track records that
can be verified in the industry. What this ruling imposes is a
tremendous duty upon the plan fiduciary who must now back up his
decision with proof. This may also have the impact of foreclosing new
fund managers from entering the business since they will lack the track
record.Yet this decision is even deeper. It sets the stage to JUSTIFY government seizure of private pension funds to protect pensioners. When the economy turns down and things get messy, they are placing measures in place to eliminate money in and physical dimension, closing all tax loopholes, shutting down the world economy with FATCA, and preparing for the final straw of Economic Totalitarianism with the Supreme Court reversing its entire construction of the Constitution to impose a duty upon employers to ensure the 401K plans perform in a world where interest rates are going negative. You really cannot make up this level of insanity.
http://news.goldseek.com/LewRockwell/1432649471.php
Pray For Graccident—–It Will Trigger The Demise Of The ECB And The World’s Toxic Regime Of Keynesian Central Banking
by David Stockman
It is not surprising that in a few short months Yanis Varoufakis has proven himself to be a thoroughgoing Keynesian statist. After all, what would you expect from an economics PhD who co-authored books with Jamie Galbraith? The latter never saw an economic malady that could not be cured with bigger deficits, prodigious printing press “stimulus” and ever more intrusive state intervention and redistribution.
If it holds firm to its leftwing statist agenda and takes Greek democracy back from the clutches of the EU/IMF apparatchiks, Syriza will strike a blow for democracy and capitalism in one great historic event. That is to say, defiance of the Germans and the troika would amount to a modern monetary Marathon; it would trigger a thundering collapse of the ECB and the cancerous superstate regime built upon it in Frankfurt and Brussels—–and the worldwide Keynesian central banking regime, too.
The hour comes none to soon. In a few short years under Draghi and in the context of Europe’s fiscal and economic enfeeblement, the ECB has been transformed into a hideous reverse Robin Hood machine. So doing, it has transferred hundreds of billions of ill-gotten gains to the financial gamblers and front-runners of the euro debt markets.
While it is extremely difficult to think of a reason that would
justify such wanton redistribution to financial gamblers, the ECB
rationale is so astoundingly threadbare as to be laughable. In a word,
Draghi and his minions claims that Europe’s economic torpor stems from
too little inflation and too little borrowing by private households and
businesses. Hence, they have no choice except to drastically falsify
prices in Europe’s entire $20 trillion bond market in order to rekindle
2% inflation and get economic growth off the flat line.
In fact, the euro area core CPI is up by nearly 1% during the last
year, and has gained about 1.5% per annum during the past eight years
during which time the global oil prices have soared and collapsed twice.
image: http://www.tradingeconomics.com/charts/euro-area-core-consumer-prices.png?s=euroareacorconpri&d1=20070101&d2=20151231
Stated differently, private sector loan growth since 1997 still amounts to 6.0% per annum compared to 3.3% average growth of nominal GDP. At some point, every debt addicted economy runs out of balance sheet runway——a condition that Europe attained long ago.
image: http://www.tradingeconomics.com/charts/euro-area-loans-to-private-sector.png?s=emuevolvloatoprisec&d1=19970101&d2=20151231
No, its actually such a complete financial zombie as to make the US savings and loan industry of the late 1980s look like a paragon of financial health in comparison. Yet week-by-week the clueless apparatchiks in Frankfurt have been metering out a couple of billions of ELA funding to keep the Greek banking zombie alive. When the scam finally blows, there witch-hunt in the halls of the ECB grand new palace like Europe hasn’t seen in generations.
It is not surprising that in a few short months Yanis Varoufakis has proven himself to be a thoroughgoing Keynesian statist. After all, what would you expect from an economics PhD who co-authored books with Jamie Galbraith? The latter never saw an economic malady that could not be cured with bigger deficits, prodigious printing press “stimulus” and ever more intrusive state intervention and redistribution.
In what is apparently a last desperate game theory
ploy, however, Varoufakis has done his countrymen, Europe and the world a
favor. By informing his Brussels paymasters that they must continue to
subsidize his bankrupt Greek state because its the only way to preserve
the European Project and vouchsafe the Euro, the Greek Finance
minister blurted out the truth of the matter, albeit perhaps not
intentionally:
“It would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end for the common currency project in Europe,” he said.He sure got that right. People who believe in democracy and economic liberty anywhere in the world should pray for a Graccident. During the next several weeks, when $1.8 billion in IMF loans come due that Greece cannot possibly pay, there will occur a glorious moment of irony for Syriza.
“Whatever some analysts are saying about firewalls, these firewalls won’t last long once you put and infuse into people’s minds, into investors’ minds, that the eurozone is not indivisible,” he added.
If it holds firm to its leftwing statist agenda and takes Greek democracy back from the clutches of the EU/IMF apparatchiks, Syriza will strike a blow for democracy and capitalism in one great historic event. That is to say, defiance of the Germans and the troika would amount to a modern monetary Marathon; it would trigger a thundering collapse of the ECB and the cancerous superstate regime built upon it in Frankfurt and Brussels—–and the worldwide Keynesian central banking regime, too.
The hour comes none to soon. In a few short years under Draghi and in the context of Europe’s fiscal and economic enfeeblement, the ECB has been transformed into a hideous reverse Robin Hood machine. So doing, it has transferred hundreds of billions of ill-gotten gains to the financial gamblers and front-runners of the euro debt markets.
In the days shortly before Draghi issued his
“whatever it takes” ukase, for example, the Italian 10-year bond was
trading at 7.1%. So speculators who bought it then have made a cool 350%
gain if they were old-fashioned enough to actually buy the bonds with
cash. And they are laughing all the way to their estates in the South of
France if their friendly prime broker had arranged to hock them in the
repo market even before payment was due. In that case, they’re in the
1000% club and just plain giddy.
image:
http://research.stlouisfed.org/fredgraph.jpg?hires=1&type=image/jpeg&chart_type=line&recession_bars=off&log_scales=&bgcolor=%23e1e9f0&graph_bgcolor=%23ffffff&fo=verdana&ts=12&tts=12&txtcolor=%23444444&show_legend=yes&show_axis_titles=yes&drp=0&cosd=2011-11-01&coed=2015-03-01&width=670&height=550&stacking=&range=Custom&mode=fred&id=IRLTLT01ITM156N&transformation=lin&nd=&ost=-99999&oet=99999&lsv=&lev=&scale=left&line_color=%234572a7&line_style=solid&lw=2&mark_type=none&mw=1&mma=0&fml=a&fgst=lin&fgsnd=2007-12-01&fq=Monthly&fam=avg&vintage_date=&revision_date=
While it is extremely difficult to think of a reason that would
justify such wanton redistribution to financial gamblers, the ECB
rationale is so astoundingly threadbare as to be laughable. In a word,
Draghi and his minions claims that Europe’s economic torpor stems from
too little inflation and too little borrowing by private households and
businesses. Hence, they have no choice except to drastically falsify
prices in Europe’s entire $20 trillion bond market in order to rekindle
2% inflation and get economic growth off the flat line.
Oh, puleeze. The Eurozone economies have had no
problem whatsoever in generating an ample quotient of inflation ever
since the inception of the single currency. In fact, the CPI has gained
an average of 2.1% per annum during the last decade and one-half.
Self-evidently, the temporary flattening of the inflation curve in the
last year is a consequence of the plunge of oil and other commodity
prices, not anything that could possibly account for Europe’s
languishing growth rate.
image:
http://www.tradingeconomics.com/charts/euro-area-consumer-price-index-cpi.png?s=euroareaconpriindcp&d1=19990101&d2=20151231
In fact, the euro area core CPI is up by nearly 1% during the last
year, and has gained about 1.5% per annum during the past eight years
during which time the global oil prices have soared and collapsed twice.image: http://www.tradingeconomics.com/charts/euro-area-core-consumer-prices.png?s=euroareacorconpri&d1=20070101&d2=20151231
So there is really nothing behind the low-flation
mantra except the spurious argument that consumers will defer purchase
if they are not assured that prices will not continue to rise and eat
away at their paychecks. No, Mario, European consumers are not spending
because their incomes are not growing, their take home pay is
eviscerated by taxes and their balance sheets are already saturated with
more debt than they can sustain.
Indeed, private sector borrowing nearly tripled during the decade
before the financial crisis. That it has flattened out since then only
means that the supply of credit worthy borrowers has been exhausted, not
that their exists some mysterious economic malady that can be cured by
the ECB’s printing press.Stated differently, private sector loan growth since 1997 still amounts to 6.0% per annum compared to 3.3% average growth of nominal GDP. At some point, every debt addicted economy runs out of balance sheet runway——a condition that Europe attained long ago.
image: http://www.tradingeconomics.com/charts/euro-area-loans-to-private-sector.png?s=emuevolvloatoprisec&d1=19970101&d2=20151231
The good thing is that this whole misbegotten euro
project cannot survive the impending Greek default. The ECB is now on
the hook for $138 billion of Greek liabilities—–an amount that is equal
to the remaining deposits in its entire banking system. Needless to say,
when the impending “Graccident” explodes onto the front pages, there
will be pandemonium at the ECB and in Brussels and capitals throughout
the 19-nation Eurozone.
Did the German politicians and voters really understand that their
Bundesbank representatives in Frankfurt were not the watchdogs of
monetary rectitude after all, and in crab-like fashion backed their
national central bank into $35 trillion of liabilities——–debts that are
owed by a Greek banking system and central bank that is hopelessly
insolvent.No, its actually such a complete financial zombie as to make the US savings and loan industry of the late 1980s look like a paragon of financial health in comparison. Yet week-by-week the clueless apparatchiks in Frankfurt have been metering out a couple of billions of ELA funding to keep the Greek banking zombie alive. When the scam finally blows, there witch-hunt in the halls of the ECB grand new palace like Europe hasn’t seen in generations.
Source: @FGoria
The fact is, the ECB can’t survive the coming Graccident. It will not
only be insolvent, but also stripped of every vestige of credibility.Stocks Began Falling Right At This Time Of The Year Just Prior To The Last Financial Crisis. Hopefully More People Will Start Listening To The Warnings, Because We Have Almost Run Out Of Time To Prepare.
By Michael Snyder
image: http://theeconomiccollapseblog.com/wp-content/uploads/2015/05/Stock-Market-Crash-Bear-Public-Domain-460x325.jpg
Have
you heard of the saying “sell in May and go away”? Traditionally, the
period from May through October has been a time of weakness for stocks.
In fact, on average stocks hit their lowest point of the year on October 27th.
And most people don’t remember this, but the Dow Jones Industrial
Average actually began plunging right at this time of the year just
prior to the financial crisis of 2008. Most people do remember the huge
stock crash that happened in the fall of that year, but the market
actually started to slide in May. Throughout the first four and a half
months of 2008, stocks moved up and down in a fairly narrow range, and
the Dow closed at a short-term peak of 13,028.16 on May 19th. From
there it was all downhill for the rest of the year. So will a similar
thing happen in 2015 as we approach the next great financial crisis?
Since March 20th, the Dow Jones Transportation Average has already
fallen by almost 800 points. So will the Dow Jones
Industrial Average soon follow? Well, only time will tell, but the Dow
was down 190 points on Tuesday. Signs of trouble are popping up all
over the place, and the “smart money” is getting out while the getting
is good.
Like I stated earlier in this article, red flags and warning signs
are starting to pop up all over the place. The following are just a few
of the trouble signs that we have seen this week…
-On Tuesday, the VIX (a closely watched measure of market volatility) jumped by the highest percentage that we have seen so far in 2015. As I have explained so often before, markets tend to go up in calm markets and they tend to go down in volatile markets. So the fact that volatility is on the rise is not a good sign.
-In the U.S., orders for durable goods have fallen year over year for four months in a row. When orders for durable goods start going negative for a few months, it is usually a signal that we are entering a recession.
-After rebounding a little bit, the price of crude oil is falling again. It just hit a new one-month low, and the number of oil rigs in operation has declined for 24 weeks in a row. Once again, this is highly reminiscent of what happened back in 2008.
-Unfortunately, it isn’t just oil that is declining. A whole host of other commodity prices are going down right now as well. This happened just prior to the financial crisis of 2008, and it is a sign that we are heading into a deflationary economic slowdown.
The reason why I talk so much about what happened the last time around is that we should be able to learn from it.
Looking back, there were so many warning signs leading up to the financial crisis of 2008 but most people totally missed them. Now, so many of those exact same signs are appearing once again, but they are being ignored.
Only this time the global financial system is in far worse shape than it was back in 2008. Debt levels all over the planet have absolutely exploded over the past seven years, and the debt to GDP ratio for the entire world is now up to a mind blowing 286 percent. In the United States, our national debt has approximately doubled since just prior to the last recession, and at this point it is mathematically impossible to pay it off. We are in the midst of the greatest stock market bubble of all time, the greatest bond bubble of all time (76 trillion dollars) and the greatest derivatives bubble of all time. Anyone that cannot see the trouble that is approaching is willingly blind.
Hopefully more people will start listening to the warnings, because we have almost run out of time to prepare.
image: http://theeconomiccollapseblog.com/wp-content/uploads/2015/05/Stock-Market-Crash-Bear-Public-Domain-460x325.jpg
Have
you heard of the saying “sell in May and go away”? Traditionally, the
period from May through October has been a time of weakness for stocks.
In fact, on average stocks hit their lowest point of the year on October 27th.
And most people don’t remember this, but the Dow Jones Industrial
Average actually began plunging right at this time of the year just
prior to the financial crisis of 2008. Most people do remember the huge
stock crash that happened in the fall of that year, but the market
actually started to slide in May. Throughout the first four and a half
months of 2008, stocks moved up and down in a fairly narrow range, and
the Dow closed at a short-term peak of 13,028.16 on May 19th. From
there it was all downhill for the rest of the year. So will a similar
thing happen in 2015 as we approach the next great financial crisis?
Since March 20th, the Dow Jones Transportation Average has already
fallen by almost 800 points. So will the Dow Jones
Industrial Average soon follow? Well, only time will tell, but the Dow
was down 190 points on Tuesday. Signs of trouble are popping up all
over the place, and the “smart money” is getting out while the getting
is good.
The chart that I have posted below shows how the
Dow Jones Industrial Average performed during 2008. As you can see,
stocks began plummeting long before the financial crisis in the fall.
From May 19th through early July, the Dow fell by about 2,000 points.
Should we expect to see a similar pattern this summer?…
image: http://theeconomiccollapseblog.com/wp-content/uploads/2015/05/Dow-Jones-Industrial-Average-2008-460x306.png
Like I stated earlier in this article, red flags and warning signs
are starting to pop up all over the place. The following are just a few
of the trouble signs that we have seen this week…-On Tuesday, the VIX (a closely watched measure of market volatility) jumped by the highest percentage that we have seen so far in 2015. As I have explained so often before, markets tend to go up in calm markets and they tend to go down in volatile markets. So the fact that volatility is on the rise is not a good sign.
-The U.S. dollar index is surging again. In fact, we just witnessed the largest seven day rise in the U.S. dollar index since the collapse of Lehman Brothers. This is another indication that big trouble is ahead. For much more on this, please see my previous article entitled “Guess What Happened The Last Time The U.S. Dollar Skyrocketed In Value Like This?…”
-Thanks to the ongoing Greek crisis,
the euro is falling again. It just hit a fresh one-month low, and if I
am right it is going to go quite a bit lower as the European financial
crisis intensifies.-In the U.S., orders for durable goods have fallen year over year for four months in a row. When orders for durable goods start going negative for a few months, it is usually a signal that we are entering a recession.
-After rebounding a little bit, the price of crude oil is falling again. It just hit a new one-month low, and the number of oil rigs in operation has declined for 24 weeks in a row. Once again, this is highly reminiscent of what happened back in 2008.
-Unfortunately, it isn’t just oil that is declining. A whole host of other commodity prices are going down right now as well. This happened just prior to the financial crisis of 2008, and it is a sign that we are heading into a deflationary economic slowdown.
The reason why I talk so much about what happened the last time around is that we should be able to learn from it.
Looking back, there were so many warning signs leading up to the financial crisis of 2008 but most people totally missed them. Now, so many of those exact same signs are appearing once again, but they are being ignored.
Only this time the global financial system is in far worse shape than it was back in 2008. Debt levels all over the planet have absolutely exploded over the past seven years, and the debt to GDP ratio for the entire world is now up to a mind blowing 286 percent. In the United States, our national debt has approximately doubled since just prior to the last recession, and at this point it is mathematically impossible to pay it off. We are in the midst of the greatest stock market bubble of all time, the greatest bond bubble of all time (76 trillion dollars) and the greatest derivatives bubble of all time. Anyone that cannot see the trouble that is approaching is willingly blind.
In the western world, we have extremely short
attention spans and we suffer deeply from something called “normalcy
bias”. The following is how “normalcy bias” is defined byWikipedia…
The normalcy bias, or normality bias, is a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster and its possible effects. This may result in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in itsdisaster preparations.That is such a perfect description of what is happening in the western world today. But just because things have always been a certain way in our past does not mean that they will continue to be that way in the future. A great economic storm is rapidly approaching, and the signs of the times are all around us.
The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It can result in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.
Hopefully more people will start listening to the warnings, because we have almost run out of time to prepare.
Bill Holter: The top two banks in the world alone have $150 trillion in derivatives. The amount of collateral they need to post to keep the game going overnight could be in the hundreds of billions of dollars. Where are they going to get that from? The Fed will not be able to put out this fire.”… $50,000 gold may turn out to be laughably low.
Will the U.S. be forced to do an audit
to verify its 8,000 tons of gold if the Chinese reveal how much gold
they have? Holter says, “The market place will say do an audit or we
will keep selling the dollar. You very well could see an implosion. I
have said for many years now that there is going to be an implosion. You
are going to go to bed Friday night in a world that resembles the
current reality, and you wake up Monday morning and everything has
changed. You will be locked into your position. Markets are closed. . . .
Think about the brokers or banks that have a huge amount of
derivatives. . . . The top two banks in the world alone have $150
trillion in derivatives. The amount of collateral they need to post to
keep the game going overnight could be in the hundreds of billions of
dollars. Where are they going to get that from? The Fed will not be able
to put out this fire.”
Join Greg Hunter as he goes One-on-One with gold expert Bill Holter, now of JSMineset.com.
Saturday, May 23, 2015
Why One of the Wealthiest Countries in the World Is Failing to Feed Its People
On May 8 2015 I awoke to discover that not only were we not looking
forward to a new coalition government in the UK, but that the overall
collapse of the Liberal Democrats and the Labour Party had given the
Conservative government a mandate. At an individual level I’m likely to
see some benefits from the strong neo-liberalism that underpins this
government’s ideology, but I’m concerned about a further deepening of
the division between those who have and those who have not.
This will mean the continued exponential growth in the numbers of people requiring emergency food assistance and increased numbers of children and elderly with inadequate food supply. This will also translate into higher rates of obesity, diet-related illness and malnutrition.
The Most Vulnerable
In the United Kingdom there are nearly 5m people today living as food insecure. Wendy Wills, an expert in food and public health, defines this as those who are unable to acquire or consume an adequate quality or sufficient quantity of food made available in socially acceptable ways, or who have the (regular) uncertainty that they will be able to do so.
In 2014, more than 20m meals were provided to people unable to provide for themselves. Since 2010 there has been an exponential growth in the number of households relying on emergency food aid. In 2009-10 nearly 50,000 households received three days of emergency food aid but by 2014-15 the number had increased to more than a million. Oxfam UK has estimated that: “36% of the UK population are just one heating bill or broken washing machine away from hardship”.
Read more
This will mean the continued exponential growth in the numbers of people requiring emergency food assistance and increased numbers of children and elderly with inadequate food supply. This will also translate into higher rates of obesity, diet-related illness and malnutrition.
The Most Vulnerable
In the United Kingdom there are nearly 5m people today living as food insecure. Wendy Wills, an expert in food and public health, defines this as those who are unable to acquire or consume an adequate quality or sufficient quantity of food made available in socially acceptable ways, or who have the (regular) uncertainty that they will be able to do so.
In 2014, more than 20m meals were provided to people unable to provide for themselves. Since 2010 there has been an exponential growth in the number of households relying on emergency food aid. In 2009-10 nearly 50,000 households received three days of emergency food aid but by 2014-15 the number had increased to more than a million. Oxfam UK has estimated that: “36% of the UK population are just one heating bill or broken washing machine away from hardship”.
David Stockman on the factors leading to the widening wealth gap, poor economic growth, “The problem is central banks that are out of control”
Neil Cavuto, Fox Business, Released on 5/21/15
“The problem is central banks that are out of control, printing money like no one ever imagined, and have created a massive worldwide financial inflation. When you have a financial inflation, the people that have the stocks and bonds get the windfall.”
“The problem is central banks that are out of control, printing money like no one ever imagined, and have created a massive worldwide financial inflation. When you have a financial inflation, the people that have the stocks and bonds get the windfall.”
Breaking: California's new water legislation held under top secret status; no one's allowed to know the details
California's new water legislation held under top secret status; no one's allowed to know the details
May 21, 2015
http://www.naturalnews.com/049787_California_climate_drought_legisl...
The U.S. government is becoming less transparent than it has been at any time in our history, as evidenced by pending water legislation in the nation's capital that voters, via their elected representatives, are not permitted to see.
As reported by McClatchy Papers, five months into a new Congress and years into a punishing drought that still continues to ravage most of California, legislation dealing with dwindling supplies of water confounds and splits the state's lawmakers.
Moreover, draft copies of bills are kept so close to the vest that they appear to be a top secret. The myriad details surrounding each draft are constantly changing. Timing to introduce the legislation is not yet settled, although a June 2 Senate hearing might go off as planned. Democrats are divided, and some are just angry.
Sound familiar?
Feinstein and her staff are behind her chamber's drought legislation, but so far it has been developed under what a number of California water experts have independently called a "cone of silence."
Although the Republican-controlled House is expected to pass drought legislation this summer, House Majority Leader Kevin McCarthy, R-California, has told Western growers last week that the Senate will either make or break any legislation.
"We've met with people. We've talked with people," Feinstein told McClatchy Papers. "We've taken ideas. We have done everything we can."
Other California Democrats have panned Feinstein's legislative effort as "very disappointing," labeling it the "same old story." This does not bode well for future political initiatives.
As McClatchy further reported:
Feinstein and House Republicans agreed last year on language to boost water exports south of the environmentally sensitive Sacramento-San Joaquin Delta, encourage the completion of water storage project feasibility studies and capture more runoff from early storms, among other provisions. A version passed the House in December and died in the Senate.
Staffers for House GOP members have drafted more than 75 pages of proposed language. McCarthy told growers that a bill could be introduced again in the House by June.
However, Gov. Jerry Brown, a Democrat, opposed legislation that was drafted last year. Now, other California lawmakers are being asked what kind of bill they would like to see, but so far, nothing has come of the effort.
"Sen. Feinstein is moseying around with something, but she won't tell us what," Rep. John Garamendi, who represents part of the worst-affected areas of the state, told McClatchy. "Same old story. . . . Those of us that represent the Delta and San Francisco Bay are not included in the process."
For her part, Feinstein defended her secrecy, actually blaming the other lawmakers for any criticisms or alternatives they may offer. "It doesn't do any good to say, 'Let us see your language so we can rip it apart," she said, intimating that only her views and solutions were valid.
Meanwhile, the state continues to wither under heat and drought. In January, Governor Brown declared a drought state of emergency and imposed strict water consumption and use measures, but not all parts of the state are sacrificing equally. For example, daily water usage in ritzy Palm Springs is 201 gallons per person, which is about double what it is for residents elsewhere.
Worse, California is responsible for the bulk of food and produce grown in the U.S. As the drought worsens and lawmakers continue to prove incapable of coming to an agreement on drought legislation, the people, as usual, will continue to suffer.
Sources:
http://www.mcclatchydc.com
http://www.cbsnews.com
http://www.washingtontimes.com
The U.S. government is becoming less transparent than it has been at any time in our history, as evidenced by pending water legislation in the nation's capital that voters, via their elected representatives, are not permitted to see.
As reported by McClatchy Papers, five months into a new Congress and years into a punishing drought that still continues to ravage most of California, legislation dealing with dwindling supplies of water confounds and splits the state's lawmakers.
Moreover, draft copies of bills are kept so close to the vest that they appear to be a top secret. The myriad details surrounding each draft are constantly changing. Timing to introduce the legislation is not yet settled, although a June 2 Senate hearing might go off as planned. Democrats are divided, and some are just angry.
Sound familiar?
Feinstein channeling Obama administration secrecy practices
"Right now, I don't know," a negative-sounding Sen. Dianne Feinstein, D-California, said recently when she was asked about the prospects for new legislation. "It's very difficult to put something together. Obviously change is controversial, so to propose something and then not to be able to do it makes no sense."Feinstein and her staff are behind her chamber's drought legislation, but so far it has been developed under what a number of California water experts have independently called a "cone of silence."
Although the Republican-controlled House is expected to pass drought legislation this summer, House Majority Leader Kevin McCarthy, R-California, has told Western growers last week that the Senate will either make or break any legislation.
"We've met with people. We've talked with people," Feinstein told McClatchy Papers. "We've taken ideas. We have done everything we can."
Other California Democrats have panned Feinstein's legislative effort as "very disappointing," labeling it the "same old story." This does not bode well for future political initiatives.
As McClatchy further reported:
Feinstein and House Republicans agreed last year on language to boost water exports south of the environmentally sensitive Sacramento-San Joaquin Delta, encourage the completion of water storage project feasibility studies and capture more runoff from early storms, among other provisions. A version passed the House in December and died in the Senate.
Staffers for House GOP members have drafted more than 75 pages of proposed language. McCarthy told growers that a bill could be introduced again in the House by June.
However, Gov. Jerry Brown, a Democrat, opposed legislation that was drafted last year. Now, other California lawmakers are being asked what kind of bill they would like to see, but so far, nothing has come of the effort.
Why is this legislation so difficult?
Complaints about collusion and secrecy last year helped doom that legislative effort."Sen. Feinstein is moseying around with something, but she won't tell us what," Rep. John Garamendi, who represents part of the worst-affected areas of the state, told McClatchy. "Same old story. . . . Those of us that represent the Delta and San Francisco Bay are not included in the process."
For her part, Feinstein defended her secrecy, actually blaming the other lawmakers for any criticisms or alternatives they may offer. "It doesn't do any good to say, 'Let us see your language so we can rip it apart," she said, intimating that only her views and solutions were valid.
Meanwhile, the state continues to wither under heat and drought. In January, Governor Brown declared a drought state of emergency and imposed strict water consumption and use measures, but not all parts of the state are sacrificing equally. For example, daily water usage in ritzy Palm Springs is 201 gallons per person, which is about double what it is for residents elsewhere.
Worse, California is responsible for the bulk of food and produce grown in the U.S. As the drought worsens and lawmakers continue to prove incapable of coming to an agreement on drought legislation, the people, as usual, will continue to suffer.
Sources:
http://www.mcclatchydc.com
http://www.cbsnews.com
http://www.washingtontimes.com
We stand on the verge of Economic Totalitarianism that will lead to the total control of money by the state. No one will be able to buy or sell without government approval.
Denmark is not
part of the euro; they have their own currency, the krone. So far, they
appear likely to become the first country to abolish cash. The Danish
government is currently pushing to free some stores, restaurants, and
petrol stations from accepting cash payments as Britain was testing last
year in Manchester. The Danish government is currently are proposing to scrap cash transactions entirely as part of a package of cost-saving measures introduced ahead of the Danish election in September.
image: http://i0.wp.com/armstrongeconomics.com/wp-content/uploads/2015/05/DENMA-Y-5-15-2015.jpg?resize=584%2C438
image: http://i0.wp.com/armstrongeconomics.com/wp-content/uploads/2015/05/DENMA-Y-5-15-2015.jpg?resize=584%2C438
We stand on the verge of Economic Totalitarianism that will lead to the total control of money by the state. No one will be able to buy or sell without government approval. The USA has already provided for the revocation of a passport if you owe the government more than $50,000. Passports in Rome were invented not to travel between nations, but to be able to travel to prove you did not owe money to the state and hence were free to travel. History simply always repeats – only the names change.
http://armstrongeconomics.com/archives/30671
The Nationalization of Banks?
If we continue down this road of economic implosion, then the
socialists will demand government seizes all control just as Gordon
Brown is promising in Britain. Despite the fact there is no
precedent for anyone to eliminate the business cycle,
Brown’s pronouncement will be as always, government will save the day
when they have routinely destroyed society throughout history with their
greed and corruption. The socialists just hate anyone who has more than
they do and it is more about robbing other people than learning how to
really manage society.The socialist will argue to nationalize all banks, and the banks will end up being their own worst enemy for all they care about is profit on the next transaction. It would be very nice to split the world and say all those who are socialist go live there and those of us who do not desire to be your economic slave, or believe that the Ten Commandments prohibit socialism outlawing coveting their neighbor’s goods, should equally be allowed to leave. After all, that is why people fled Europe and traveled to America for it was the freedom and land of opportunity. The socialists have destroyed America and turned it into the land we once fled.
No one has a right to suppress the other for that is what makes war. This trend against banking will lead to the nationalization of banks for the debt is now consuming nations and compelling them to act ruthlessly and tyrants. They will now move to control all accounts and nobody will be able to buy or sell anything without government approval.
The New Age of Economic Totalitarianism & the London Meeting to End Currency
We face the worst economic crisis perhaps in modern history with the distinct risk of moving into a state of Economic Totalitarianism. The governments are well aware of the Economic Confidence Model (ECM). Many people have asked the question why have they not killed me since it appears that most others central to events covered in the movie, the FORECASTER, are dead. I believe the answer is rather simple, for even when I was released and appeared on Capitol Hill, I was introduced as this is the guy with the model they are trying to suppress.
Governments may indeed be now using the ECM for timing since it certainly appears they are now aware of cycles. Nonetheless, they are retreating from the world in any democratic position for they are preparing for what appears to be a shift toward Economic Totalitarianism rather than reform. Governments shifted at the G20 in favor of more Draconian taxation enforcement. They have not yet changed their way of thinking and you cannot solve a crisis by following the same path of thinking that has created the nightmare in which you are trapped. Governments as a whole are imposing extra taxes at least through enforcement that is tearing the world economy apart at the seams.
Clearly, behind the curtain there appears to be underway for the first time actual preparation for an economic downturn. However, the possibility of a dramatically sharpened financial crisis looming in the fall appears to be considered and now broadly accepted as inevitable. There is obviously a serious threat of a possible global bank run thanks to the faulty structure of the Euro and its lack of a consolidated debt from the outset. The European bank reserves lack a single status and as the member states get into trouble, so will the banking system. This could spill over into a global crisis as people see banks fail in Europe and prudent people begin to withdraw cash in North America as a precaution setting in motion a contagion.
The governments are well aware of the Economic
Confidence Model (ECM). It certainly appears as though they are now
focusing on the cycle rather than just the trend.Nevertheless, they
have not changed their thinking process and in that line the future
appears very grim – we are headed into economic totalitarianism unless
the people wake up.
http://armstrongeconomics.com/archives/30145Derivatives are a $1 quadrillion ticking time bomb, soaked in gasoline and sprinkled with gunpowder.
….Is it even possible that eurobonds are being sold because fear of a Greek default?Is the fear of a default cascade the reason bonds are being dumped in wholesale batches? I have heard the explanation that “net issuance” has again gone positive as the reason for these air pockets. Maybe this is true, I do not think so but if it is then there is a very real problem! If this is true, it means the market cannot absorb the issuance and yields are going higher not by design but because there are simply not enough buyers, an “uh oh moment” so to speak.I have a little different theory which if not so now, or “yet”, it will be soon!I believe much of the bond market weakness is being caused (and saved) by OTC derivatives. I believe and have said multiple time before, “someone(s) out there is already dead”. I believe that “bankrupts” are strewn all over the place and have been hidden with overnight loans… but there is a new problem. The recent volatility has created more and more losers …which creates more and more FORCED SALES! (Please don’t scoff at this as there are a handful of “choice” firms who have not had a single day of trading losses in over four years, with a whole string of losers in their wake? )You see, for all intents and purposes we have lived through a global bull market in bonds since 1982. This has culminated in negative interest rates and we ended up with everyone on the same side of the boat with no one left to “buy”. Of course you could ask the question “why would anyone buy?” with zero or even negative interest rates. Only a few of the “sane ones” out there have asked this question until now, it seems maybe a few of the insane may be regaining at least some sense of sanity!?As I did yesterday, I will repeat “why” all of this is important. “Credit” is what our entire system is based upon. It has become the basis for all paper wealth and the lubricant for all real economic activity. Should credit collapse (it will), everything we have come to believe in (been fooled by) will change. Credit has come to be viewed as “wealth”, it is considered an “asset”… with just one problem, it is neither! Credit is only an asset and can be considered wealth as long as the borrower “can pay”.And herein lies the rub, Greece cannot pay which means the holders of Greek debt (along with issuers of CDS) cannot pay and so on. It is not just Greece of course, it is the entire Western world, it just happens that Greece is first because they lied the most with the help of Goldman Sachs and other “benefactors”. If counterparty risk did not matter, there would be no problem. The reality is this, the whole show from single dollar bills to trillions in derivatives will be engulfed in this “counterparty risk”!Derivatives are a $1 quadrillion ticking time bomb, soaked in gasoline and sprinkled with gunpowder. The volatility we are now seeing are the matches! While we have had two “saves” where the central banks have stepped in and bought debt to steady the markets, the day will come when it does not work. This game has gone on for a very long time and resulted in a mania where most all of the players are “long”. The only potential new longs left are the central banks themselves who can only buy more debt with money created by debt. The day will come when the ability to “save” is overcome. Along with it will come the freedom of prices created by Mother Nature herself. Stocks, bonds, currencies, commodities and yes, even silver and gold will finally break the chains of “algo mania”.Finally, this you must understand, “power” is currently debt. The control of debt is also the power of prices. Once debt breaks loose and trades out of the control of central banks, these central banks will also lose the control to price everything else. We have come very close twice in the last four trading days of the credit market control being broken. Will loss of control be on the next convulsion? Or the next? I nor anyone else knows this answer, I do know the greatest margin call in all of history will be issued … and it cannot be met!
WARNING: Wealth Confiscation has Begun as U.S. to Tax Driving and Bank Deposits!
Sources:
“My Way News – Oregon to test pay-per-mile idea as replacement for gas tax”
http://apnews.myway.com/article/20150…
“HSBC to charge for holding deposits – FT.com”
http://www.ft.com/intl/cms/s/0/6ad3f9…
“40 percent of unemployed have quit looking for jobs”
http://www.cnbc.com/id/102694868
“?www.gao.gov/assets/680/670313.pdf
http://www.gao.gov/assets/680/670313.pdf
“For Many American States, It’s Like the Recession Never Ended – Bloomberg Business”
http://www.bloomberg.com/news/article…
“BIRD FLU SUPPLY PINCH; EGG PRICE SURGE…”
http://apnews.myway.com/article/20150…
“Police cash confiscations on rise…”
http://www.cnbc.com/id/102679948
“Exclusive: China warns U.S. surveillance plane – CNNPolitics.com”
http://www.cnn.com/2015/05/20/politic…
“My Way News – Oregon to test pay-per-mile idea as replacement for gas tax”
http://apnews.myway.com/article/20150…
“HSBC to charge for holding deposits – FT.com”
http://www.ft.com/intl/cms/s/0/6ad3f9…
“40 percent of unemployed have quit looking for jobs”
http://www.cnbc.com/id/102694868
“?www.gao.gov/assets/680/670313.pdf
http://www.gao.gov/assets/680/670313.pdf
“For Many American States, It’s Like the Recession Never Ended – Bloomberg Business”
http://www.bloomberg.com/news/article…
“BIRD FLU SUPPLY PINCH; EGG PRICE SURGE…”
http://apnews.myway.com/article/20150…
“Police cash confiscations on rise…”
http://www.cnbc.com/id/102679948
“Exclusive: China warns U.S. surveillance plane – CNNPolitics.com”
http://www.cnn.com/2015/05/20/politic…
The Fed has Lost Its Ability to Rescue the Dollar
Published on May 20, 2015
This is one of five catalyst discussed in an
exclusive Money Morning interview with Jim Rickards, the Financial
Threat and Asymmetric Warfare Advisor for both the Pentagon and CIA.
To read the full interview transcript with Jim Rickards go here: http://mney.co/1K17J6dTo watch the full video interview with Jim Rickards go here: http://mney.co/1Af5QmN
———–
Many in the U.S. Intelligence Community warn a
severe economic collapse is unavoidable…One that will ignite a 25-year
Economic Depression.
Money Morning is proud to publish this presentation because the
impending economic collapse could begin within the next six months.Which is why every American should hear Rickards’ warnings before it’s too late.
This Clip Features Catalysts #5 that could ignite an unimaginable economic collapse.
Catalyst #5: The Fed has Lost Its Ability to Rescue the Dollar
Playlist: 5 Catalysts That Will Trigger an Economic Collapse – http://mney.co/1HuBXB9
Catalyst #1: 5 Catalysts That Will Trigger an Economic Collapse: U.S. Debt – http://mney.co/1Fo1E2T
Catalyst #2: The Petrodollar Will Collapse and Take Down the U.S. Dollar With It – http://mney.co/1K18mwK
Catalyst #3: China’s Secret Gold Reserves Could Crash the Dollar at Any Moment – http://mney.co/1IPBV5H
Catalyst #4: There’s a $5 Trillion Threat to the World’s Largest Economy – http://mney.co/1dklovl
Catalyst #5: The Fed has Lost Its Ability to Rescue the Dollar – http://mney.co/1Fo44yl
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