Rick Ackerman: The FED has Gone Crazy

Financial writer and professional trader Rick Ackerman says, “I think they have gone crazy. 

Powell says no rate hikes in 2019, and then, this guy Harker (Philadelphia Fed) says maybe one rate hike in 2019 and one in 2020. They are nuts. 

I talked about the $1 quadrillion derivatives bubble, and a hike is subjecting that to one more turn of the screw every time you hike another 25 basis points. 

So, that’s crazy talk.” If the economy gets into trouble, can rate cuts save the day one more time? Ackerman says, 

“The question now is do we get some sort of stimulus effect if we lower interest rates with stocks already on the moon and home prices that have recovered more than before the 2007/2008 crash? 

We are stimulating, and we are in a completely different place. I think there is good reason for skepticism that the little bit of margin to bring rates down to zero can accomplish what it accomplished in the past.” 

Ackerman also says there is a place for gold and silver coins in your portfolio, but he thinks cash will be most useful in the next crash where banks are closed and the electronic payment system goes dark.

- Source, USA Watchdog

Unbelievable: Silver Bullion is Cheaper than Dirt

Join Mike Maloney as he reviews why the #1 asset in his own portfolio is silver bullion. 

Which as you'll see from this video, is selling for not much more than the cost to get it out of the dirt it comes from.

How much longer can it stay at these artificially suppressed prices before it break higher?

We very well might soon find out...

- Source, Gold Silver

Dane Wigington: Geoengineering is an Assault Against Life Itself

Climate engineering researcher Dane Wigington says, “We don’t face global warming. We face abrupt climate collapse.” Wigington says, “We must reach a critical mass of awareness. 

We must awaken families of military members so that those military members know what they are doing to their own family and, hopefully, stand down. 

The only way to stop this issue is from the inside out to wake our military brothers and sisters to what they are doing. We are asking people to prioritize this most immediate threat we face. The radio frequencies that I want to weave into this, as well, that’s an immense threat. 

We are about to hit 5G. 5G is the same frequency as crowd control. It is an extremely dangerous frequency. These frequencies are part of climate engineering, as well. 

They are used to manipulate the particulates in the atmosphere. All these issues intertwine. They are all incredibly lethal. This is nothing short of an assault against life itself.

Please look past the theater of the absurd, and focus on the threat we face right here and right now. It’s an existential threat, and please help us sound the alarm. We need all of us in this battle or we have no chance.”

- Source, USA Watchdog

Juggling Dynamite: Boomers Now Generation Downsize

I have been pointing out for a few years, that two decades of falling interest rates and rising real estate prices enabled much malinvestment in oversized, expensive-to-maintain homes, that an aging population will want to downsize. This is happening now.

When the Greenspan-led, US Fed first turned a blind-eye to ‘irrational exuberance’ in financial markets in 1996, the leading edge of the baby boomers (born 1946-1965) was 50 years old, and the majority were already homeowners.

After 22 years of asset inflation efforts from central banks and governments driving boom, bust, and repeated bail-outs of lenders and speculators, the average age of boomers is now 61, and 10,000 are turning 65 every day in America alone. Meanwhile, safe yields on savings have been moribund for a decade. Not surprisingly, boomers en masse are now looking to downsize high-maintenance, expensive real estate in favour of smaller, more efficient shelters that are easier to look after and within walking distance of amenities.

There are 73.8 million baby boomers in America alone and millions more in this cohort worldwide. While they own an estimated 40% of homes today, their ownership concentration in the more expensive real estate is higher.

The next demographic behind the boomers–Generation X, people (born 1965 to 1980)–are an average age of 44.5 today, smaller in number (65.8 million in the US) and less well-off. (See Just Do The Math). Most still owe mortgages on their existing homes (bought at inflated prices in the last decade) and have more consumer debt, of all kinds, than any generation before them.

The Millennials coming behind Gen X–born 1981 to 2000, now an average age of 26.5–are today too young, under-employed, cash-strapped and struggling with record debt of their own, to be meaningful asset buyers or investors for the next several years. Moreover, amid escalating environmental and financial strain, people of all ages are quite rationally becoming more focused on more sustainable lifestyles, spending less and saving more, rather than taking on massive single-family dwellings.

The trouble is, with prices falling and life-clocks ticking, selling pressure is already swamping buyer demand in most markets, and this is likely to worsen over the next decade as more boomers move into their 70’s and 80’s. For more insight see A growing problem in real estate: too many, too big houses.

Large, high-end homes across the Sunbelt are sitting on the market, enduring deep price cuts to sell.

That is a far different picture than 15 years ago, when retirees were rushing to build elaborate, five or six-bedroom houses in warm climates, fueled in part by the easy credit of the real estate boom. Many baby boomers poured millions into these spacious homes, planning to live out their golden years in houses with all the bells and whistles.

Now, many boomers are discovering that these large, high-maintenance houses no longer fit their needs as they grow older, but younger people aren’t buying them.

Tastes—and access to credit—have shifted dramatically since the early 2000s. These days, buyers of all ages eschew the large, ornate houses built in those years in favor of smaller, more-modern looking alternatives, and prefer walkable areas to living miles from retail.

Rightsizing will require lower prices and in some cases, a repurposing of McMansions into multi-use dwellings. (See Property markets and the road back to affordable shelter.) There will be opportunity in this process, but not quick and painless fixes here. The panic to get into sky-high property and security prices in recent years is now set up for panic in the other direction. Unfortunately, most have not anticipated this cycle nor prepared in advance.

- Source, Juggling Dynamite

Over $10 Trillion In Debt Now Has A Negative Yield

NIRP is back.

On Friday, when Germany reported disastrous mfg and service PMI prints, the 10Y German Bund finally threw in the towel, with the yield sliding back under zero for the first time in three years. When that happened, and when the 3M-10Y yield curve inverted in the US right around that time, just over $400 billion in global debt changed the sign on its yield from positive to negative.

As a result, the total notional of global negative yielding debt soared on Friday, rising above $10 trillion for the first time Since September 2017, and which according to Bloomberg has intensified "the conundrum for investors hungry for returns while fretting the brewing economic slowdown."

Paradoxically, the amount of negative-yielding debt has nearly doubled in just six months, and confirms that the global asset bubble is back because as Gary Kirk, a founding partner at London-based TwentyFour Asset Management, said "money managers face increasing pressure to reprise the yield-chasing mentality synonymous with quantitative easing."

“This obviously tempts those investors holding cash to move along the maturity curve -- or down the rating curve -- to seek yield, which is once again becoming a scarce commodity,” he said. “It’s a classic late-cycle conundrum.”

Despite the Fed's renewed herding of investors into the riskiest assets, Kirk is so far "resisting the temptation" to snap up longer-dated credit obligations that will be the first to default when the next recession hits, and prefers duration bets in interest-rate markets.

Others won't be so lucky: as we noted last Friday, the 'reverse rotation', or flood into fixed income instruments, is accelerating and fund flows confirmed the fresh panic for yield just as the specter of QE4 returns as investors in the latest week parked $6.6 billion into investment-grade funds, $3.2 billion into high-yield bonds and $1.2 billion into emerging-market debt, according to EPFR data.

"The extraordinary abrupt end to central bank hiking cycle + Fed paranoia of credit event is uber-bullish credit & uber-bearish volatility," BofA's Michael Hartnett wrote on Thursday night.

Meanwhile, negative yields mean that investors will lose money just by holding bonds to maturity, and are merely hoping that the Fed's insanity will push prices even higher, allowing them to sell to other panicked bond investors at even lower yields down the road, which wouldn't be that difficult if a global depression emerges, resulting in negative growth and/or outright deflation. But - as Bloomberg notes- along the way, risk assets may be entering the danger zone.

- Source, Zero Hedge

Central Banks See No Value in Issuing Digital Currency...

The general manager of the Bank for International Settlements (BIS) has again warned that caution is needed when considering central bank digital currencies.

In a speech at the Central Bank of Ireland on Friday, Agustin Carstens said that central banks today “are not seeing the value” of venturing into the unknown when it comes to issuing a central bank digital currency (CBDC), as such a move could bring fundamental changes to both financial stability and the monetary system.

The current monetary system, he explained, consists of two tiers – the customer-facing banking system and the central bank – which both work together. However, with a CBDC, the deposit and lending business would shift from commercial banks to central banks, producing a one-tier system

Carstens continued:

“There are historical instances of one-tier systems where the central bank did everything. In the socialist economies before the fall of the Berlin Wall, the central bank was also the commercial bank. But I do not think we can hold up that system as something that will serve customers better.”

At times of financial stress, money tends to move away from banks that are seen as high risk towards banks that are considered more secure, the BIS chief continued. Therefore, it is “not far-fetched” to picture a scenario in which a CBDC could command a premium over a fiat currency. For example: “where one euro of deposits in the commercial bank buys less than one euro’s worth of central bank digital currency,” Carstens said.

A central bank digital currency would also impact the monetary policy environment, he said, adding that it would “change the demand for base money and its composition in unpredictable ways.”

Furthermore, with demand for cash still high in most countries, there is “no urgency” to come up with a substitute for cash in the form of a CBDC, Carstens said, adding that the technology is also still “broadly untested.”

As a result of all these uncertainties, central banks prefer to “tread cautiously” into the area of CBDCs. “Before we open up the patient for major surgery, we need to understand the full consequences of what we’re doing,” Carstens cautioned.

He stated:

“So far, experiments have not shown that new technologies would work any better than existing ones. There is no clear demand for CBDCs on the part of society. There are huge operational consequences for central banks in implementing monetary policy and implications for the stability of the financial system.”

Last July, the BIS head predicted a bad ending for cryptocurrencies, saying that they represent “a bubble, a Ponzi scheme and an environmental disaster.” And in February 2018, Carstens warned that cryptocurrencies could become “parasites” on the financial system. He also claimed that cryptocurrencies are “not sustainable as money,” adding that they fail to meet the “basic textbook definition” of a currency.

Earlier this month, the Basel Committee on Banking Supervision, part of the BIS, also warned that the growth of cryptocurrencies poses a number of risks to banks and global financial stability.

- Source, Coin Desk

Merk's Forecast: Rate Hikes Later This Year?

Axel Merk from Merk Investments expects the Fed to hike rates later this year. Merk says the Fed is still in an easing mode. This is not justified with such low unemployment. 

Raising rates is what's ahead, he says. Merk sees a risk of inflation in the future. We are in the late stages of an economic cycle. 

Higher inflation is common in the late stages. When looking at investments, Merk says the most important thing is to have a strategy. 

Gold is the “easiest," while not necessarily the "best," diversifier because it has no correlation with the stock market.

- Source, Silver Doctors

Silver and Gold are Looking Very Under-priced

After the predictable dovish turn from the Fed, silver and gold should have responded in a much more bullish way.

- Source, Silver Fortune

A Change In The QE Weather Will Impact Savers!

We review recent changes in central bank policies which will involve another bout of quantitative easing, and the impact on the saver community, a sector which silently are being taken to the cleaners. Why no fuss?

- Source, Walk the World

Which Sector is the Pin That Pricks the Everything Bubble?

With seemingly everything except precious metals in a bubble, it can be quite hard to keep your eye on the ball. 

Join Mike Maloney as he uncovers what could potentially be a huge factor in the next crash, insane levels of corporate debt.

- Source, Gold Silver

USA's Monstrous Debt Time Bomb Just Got Bigger...

Today brings news of the latest federal budget proposal, a $4.75T presidential wishlist doomed to defeat in the House that spends money we don’t have. 

Perhaps most striking is that we are on pace to shatter the all-time debt-to-GDP record established in 1946 — when the country was in the midst of the life-or-death crisis of World War II — for no other reason than politicians lying to us about what the country can afford. 

One unrealistic promise after another campaign exaggeration from Democrat and Republican alike, one after the next, has gotten us here. Interest rates are still near historic lows. 

As the US economy begins to slow, the Fed knows that by capitulating to demands to keep the Everything Bubble inflated at all costs, by ceasing interest rate hikes, they’ve left themselves scant few tools to combat the coming recession...

- Source, Gold Silver

Nigel Farage: The Impending Collision, Rome vs Brussels

Nigel Farage, member of European Parliament for South East England, is synonymous with Brexit. 

He is a former head and founding member of the UK Independence Party. In this interview with Bear Traps Report founder Larry McDonald, Farage outlines why he became a eurosceptic, and why he thinks Britain will eventually leave the EU. 

He also forecasts a general rise in confrontations in Europe ahead, as national politicians’ interests collide with those of the EU.

- Source, Real Vision

Assets Values & Interest Rates Near 5000 Year Extremes

Founder of Tocqueville Bullion Reserve Simon Mikhailovich says asset values and interest rates are close to 5000 year extremes. Mikhailovich says financial times are uncertain. 

Current asset values are ultra high and interest rates are ultra low. Over the last 30 or 40 years, American’s income has increased nominally, but not in real value, Mikhailovich. 

He says this may be the reason for the recent political divisiveness. Mikhailovich grew up in the Soviet Union. He shares how this experience helped him learn about preparing for uncertain times. 

He said in the Soviet society, people had to rely on one another. The key to resilience is having relationships with those in one’s local community. 

When it comes to financial preparedness, Mikhailovich appreciates gold because of liquidity, portability, and independence from the financial system.

- Source, Silver Doctors

Walk the World: Just How Much Trouble Are We In?

We look at the latest data from the BIS on GDP to Debt and Servicing ratios. Where does Australia stand? Data on New Zealand is also included.

- Source, Walk the World

Trump Vows Executive Order Removing Fed Cash from Colleges Which Don't Defend Free Speech

Jeff Clark: Silver Myths Busted & US Mint SOLD OUT

Just back from the Vancouver precious metals conference, senior precious metals analyst at GoldSilver.com, Jeff Clark, returns to Reluctant Preppers to give us an eye-opening history lesson from the last two record run-ups silver in (1980 and 2011.) 

Clark offers 3 fact-based arguments to debunk the myth that the Hunt Brothers, who were blamed for trying to corner the silver market to the 1970s and into the 80 run-up, were the real cause. 

Clark lays out what we can learn from a current outage of US Silver Eagles at the US mint, and what that means about the opportunity to accumulate physical metals opportunistically for those who want to be prepared!

- Source, Reluctant Preppers

The Great Home Price Unwinding

We look at the latest real estate data from the US, where sales volumes are falling and home price growth is stalling.

And we read across to the local scene, where despite the hype about auction clearance rates, home price falls are accelerating. Indeed, we expect more ahead.

- Source, Walk the World