Friday, November 24, 2017

Bitcoin is a Reflection of the Hidden Panic in the Markets

Bitcoin’s rapid rise in value is sending a warning signal, according to former Fed insider Danielle DiMartino Booth. She says, “To me, Bitcoin is a reflection of panic. It’s a reflection of people trying to get money into a safe place knowing the major governments of the developed world have got their printing presses running 24/7. 

It is a reflection of anxiety in fiat currencies and the fact it’s not practical to go back to a gold standard. What scares me about Bitcoin is the central bankers are studying it to figure out how the blockchain works.

They are going to be controlling our spending with blockchain technology that is being perfected in the crypto currency universe.I am not a gold bug, but we do know that in times of corrections that there is no place to hide in traditional asset classes that you can get at your Merrill Lynch brokerage. 

Gold and silver in the precious metals complex are the only places to hide and get true diversification and safety.”

- Source, USA Watchdog

Thursday, November 23, 2017

John Rubino: A Repeat of the 1970's Inflation or Even Worse?

John Rubino gives his thoughts on the increase in the money supply, velocity of money and what it means for the Fed’s monetary policy in light of debt levels.

- Source, Jay Taylor Media

Wednesday, November 22, 2017

Hyperinflation Watch: 300% Obamacare Premium Increases

Over the past several months, Democrats have jumped on every opportunity possible to blame the Trump administration for yet another year of staggering Obamacare premium increases. Ironically, despite arguments from the Left that Trump’s defunding of Obamacare’s marketing budget would cause 2018 signups to plunge, as Politico recently noted, they’re actually up in 2018…which begs the question:was the Obama administration just wasting $100 million a year in taxpayer money for nothing? Shocking thought, we know.

Meanwhile a fresh barrage of outcries from Democrats, most notably Ms. Nancy Pelosi, came after Trump’s decision to cut federal subsidies, an action which the CBO insisted could result in devastating premium increases of up to 20%.

Of course, if Trump is responsible for 20% of Obamacare’s premium hikes in 2018, then perhaps Nancy Pelosi should explain to the Dixon family in Charlottesville, VA precisely who is responsible for the other portion of the 235% premium hike they just received.

As the Washington Post points out this morning, the Dixons, a family of 4 in Virginia, were shocked earlier this month to find that their Obamacare premiums were going to surge from roughly $900 per month in 2017 to over $3,000 per month in 2018.

Ian Dixon, who left his full-time job in 2016 to pursue an app-development business, did so because the ACA guaranteed that he could still have quality coverage for his young family, he said.

But when the 38-year-old Charlottesville husband and father of a 3- and a 1-year-old went to re-enroll this month, his only choice for coverage would cost him more than $3,000 a month for his family of four, which amounted to an increase of more than 300 percent over the $900 he paid the year before. And this is for the second-cheapest option, with a deductible of $9,200.

“Helpless is definitely a good word for it,” Dixon said. “Rage is also a good word for it.”

Of course, Democrats and the MSM also applauded Obamacare’s ‘great success’ earlier this year when several counties that were previously feared to be left with no coverage options in 2018, suddenly picked up a carrier. That said, perhaps Bloomberg, Reuters, NBC, etc. should reconsider just how meaningful these Obamacare monopolies are if the premiums charged are so high that no one can afford them anyway…
Earlier this year, Aetna and Anthem pulled out of the Albemarle market, citing too much unpredictability and risk. A smaller carrier, Optima, came in to fill the void. Consumers in the area went from having 19 plans offered in the options from Aetna and Anthem to only five coverage options with Optima.

Several factors led to Optima’s offering such high-priced plans, said Michael Dudley, the president of Optima.

First, small communities like Charlottesville tend to be pricier to cover because there is a small patient pool to balance out risks. So Optima took a cue from the carriers who had already ditched the market when actuaries predicted it was a place where the insurance companies might be paying out more to cover claims than it receives in premiums.

It is also a more expensive coverage area because the primary provider is University of Virginia Health System, an academic medical center that charges higher rates for its care than a community hospital. Optima will include UVA Health System in-network, unlike many carriers who have dropped the big medical centers as a cost-saving measure.

…perhaps local business owner Shawn Cossette can provide the Obamacare cheerleaders within the media some helpful insights…
Among them was Shawn Marie Cossette, 55, who runs her own event and floral design business in Charlottesville. Last year, she purchased an Anthem silver plan for $550 a month for herself. This year, under Optima, a silver plan would cost her $1,859 monthly.

“It’s a huge percentage of my income,” she said. “I really believed in the ACA. I really feel everyone deserves the right to health insurance, but who can afford those prices if you don’t qualify for subsidies?”

- Source, Zero Hedge

Tuesday, November 21, 2017

How Much Longer Can the Petrodollar Survive?

Jerry Robinson, explains why a dollar crash may be imminent, what it will mean for your investments and how to protect yourself.

- Source, Jay Taylor Media

Monday, November 20, 2017

The FED's Bubblenomics Run Amuck

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sunday, November 19, 2017

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

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

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

Friday, November 17, 2017

China’s Plans For A Reserve Currency

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

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

China’ Staggering Blockchain Energy Usage

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

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

China To Create Its Own Digital Currency

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

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

- Source, Stephen Leeb via King World News

Wednesday, November 15, 2017

As the Dollar Falls Gold Bulls Prepare to Charge

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

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

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

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

- Source, Seeking Alpha

Monday, November 13, 2017

Here's How to Safeguard Your Money in Uncertain Times

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

- Source, TEDx Talks

Friday, November 10, 2017

James Rawles: Panic Early and Prosper, Wait and Suffer

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

Do any of these sound like you?

- Video Source, Reluctant Preppers

Wednesday, November 8, 2017

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Monday, November 6, 2017

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

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

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

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

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

- Source, X22 Report

Friday, November 3, 2017

Strange Things Are Happening In The Paper Gold Market

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

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

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

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

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

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

- Source, Sprott Money

Wednesday, November 1, 2017

The Stranglehold Of Property Taxes And Stunting Economic Growth

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

- Source, Crush The Street

Monday, October 30, 2017

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

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

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

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

Why don’t you know this?

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

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

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

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

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

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

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

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

Why are these questions not part of the public discourse?

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

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