• When Complexity Becomes Chaos

    Modern achievements, especially in medicine and technology (fueled by cheap energy), have made the human experience longer and easier.
    Yet, at the base of it all lays the irrational man, still flinging immorality from the cages of his ongoing existential dilemma.
    Despite the existence of natural governors, humans are still prone to abuse of power for the sake of power alone.
    Unsound money and finance are not immune. They are fuel for the fire. They play an evermore powerful role in the rationalization of this age-old abuse.
    Whatever you want to call the system that makes the modern civilization go around, there are four basic sub-systems at work here:
    Finance Politics The Media/Academia Energy/Economy
    These four areas are in a constant state of fluctuating overlap. We can separate them just enough to observe the interactions. I’m lumping energy in with what I see as the ‘raw economy” experienced by most people.
    Finance is enormous. Way beyond anything the world has ever seen.
    Finance is sector of the economy. But it is so big that it wields influence as if it were a separate entity.
    Politics will always be around. It could be worse. In a real crisis, a political vacuum can lead to much worse than we see. More extremes.
    For now, the political system and finance are about as enmeshed as they could be. Finance is more influential. That system runs the show.

    This post was published at Silver-Coin-Investor on Aug 31, 2014.


  • Obama’s ‘Loyalties’ Makes the Course of WW III Impossible to Accurately Predict

    It should be child’s play to to militarily chart the course of World War III. The sides are drawn and the options available to each side has become obvious. However, the true nature of our current President makes predictions a difficult proposition.
    It should be a simple manner to state that President Obama has found his way into Syria, and ultimately Iran, in order to preserve the Petrodollar. In this scenario, the CIA created ISIS has captured abandoned military equipment and is raging through Iraq and Syria. As ISIS continues to wreak havoc and cause more devastation, ISIS will ultimately will launch a series of false flag attacks upon the United States. A largely unaware public will demand revenge and we will have boots on the ground in Syria before you can say ‘false flag attack’.
    Both Russia and China have threatened to attack the United States if we invade Syria and/or Iran. If the United States moves quickly enough upon entering Syria, through a combination of parachuting troops into the country and also through a land invasion, the US can install its mobile medium range missile batteries and keep the Russians from moving into the region. It is a fools errand to believe that Russia can oppose and American invasion of Syria, as a prelude and ultimately and invasion of Iran, in order to preserve the Petrodollar that the BRICS are undermining by purchasing oil for gold. Russia cannot win. However, Russia has pinned its economic future on destroying the Petrodollar. Russia will react, just not in the manner that most would expect.

    This post was published at The Common Sense Show on September 1, 2014.


  • Spain Sells First-Ever 50 Year Bonds At 4% Coupon

    Perhaps in order to celebrate its manufacturing PMI dropping from 53.9 to a below expectations 52.8, refuting the “growth story” promoted by its definitionally re-revised GDP (where the long overdue boost from hookers and blow is finally leading the country to new and improved Keynesian growth curves), moments ago Spain joined the likes of Canada, Caterpillar and Goldman and just issued, for the first time in its history, 50 Year bonds in a private placement. From Bloomberg:
    SPAIN SELLS EU1B 50-YR BONDS SPAIN TREASURY SELLS FIRST-EVER 50-YR BONDS, COUPON 4%

    This post was published at Zero Hedge on 09/01/2014.


  • Eurozone Manufacturing PMI at 13-Month Low, with Germany Worse than Expected, Italy and France in Contraction

    The Markit Eurozone Manufacturing final data shows Eurozone Manufacturing PMI at 13-month low in August.
    The rate of expansion in eurozone manufacturing production eased to its lowest during the current 14-month growth sequence in August, as companies faced slower increases in both total new orders and new export business. The final seasonally adjusted Markit Eurozone Manufacturing PMI posted 50.7 in August, down from 51.8 in July, its lowest reading since July last year. The headline PMI was also below its earlier flash estimate of 50.8. National PMI data signalled a broad easing in the manufacturing recoveries underwa y across much of the currency union. Although Ireland was a noticeable exception, with its PMI at the highest level since the end of 1999, rates of expansion slowed in Spain, the Netherlands and Germany.

    This post was published at Global Economic Analysis on September 01, 2014.


  • Sean Corrigan argues gold and silver prices look vulnerable

    Top professional investor Sean Corrigan, chief investment strategist at Diapason Commodities Management, says gold and silver look ‘vulnerable’ with a tight trading range.
    That seems a bit pessimistic as the Indian religious buying season is now upon us and geopolitical issues are looking very shaky…

    This post was published at Arabian Money on 01 September 2014.


  • The Critical Mind, Inner Scripting, & The “Game” of Trading

    As the prices of gold and silver flick up and down, moving towards the end of their first trading rangeI thought to myself “What should I write about today?” This is always a difficult question to answer, and I expect I begin four or five essays for each one that actually gets finished, and that’s not counting the several versions of the final blog contribution!
    The range of possible subjects is indeed very wide, but I have special skills in some areas and I prefer to return to these in order to know I am presenting something which is of value and maybe not all that commonplace already. I like to pick topics which are somehow related to trading, timing the markets, and the pitfalls and obstructions which pop up either expected or unexpected to bar the route of progress and encourage diversion away from the best direction.
    Cycles, politics, geopolitics, TA, the behaviour of markets through recorded history, weakness within the individual which must be overcome, interpretation of recent events, or clues so as to gain insight into the plans of larger movers and shakers, and the next expected stages of the western/global fiat money system all can pass within the orbit of these weekly articles.
    Hmmm …. the passage of time and fiat (paper) vouchers for actual things? Did you ever see Peter Sellars and Spike Milligan’s best work on that?
    Classic! And also the seeds of many great things which followed. Other great comedians stood upon the achievements of these giants to add their own achievements to the world of laughter.
    So for today let’s look at another original giant in his field, an often overlooked giant – what he did for us that we can use. I will in the process reintroduce that subject of Zen and the art of trading, which good traders appreciate, but newcomers just have not yet got. That’s because balance always is a tough thing to describe and explain.

    This post was published at TF Metals Report on August 31, 2014.


  • Europe’s Fantastic Bond Bubble: How Central Banks Have Unleashed Mindless Speculation

    Capitalism gets into deep trouble when the price of financial assets becomes completely disconnected from economic reality and common sense. What ensues is rampant speculation in which financial gamblers careen from one hot money play to the next, leaving the financial system distorted and unstable – a proverbial train wreck waiting to happen.
    That’s where we are now. And nowhere is this more evident than in the absurd run-up in the price of European sovereign debt since the Euro-crisis peaked in mid-2012. In that regard, perhaps Portugal is the poster-boy. It’s fiscal, financial and economic indicators are still deep in the soup, yet its government bond prices have soared in a triumphal arc skyward.
    Unfortunately, the recent crashing landing of its largest conglomerate and financial group (Espirito Santo Group) is a stark remainder that its cartel-ridden, import-addicted, debt-besotted economy is not even close to being fixed. Notwithstanding the false claims of Brussels and Lisbon that it has successfully ‘graduated’ from its EC bailout, the truth is that the risk of default embedded in its sovereign debt has not been reduced by an iota.
    At the time of the 2011-2012 crisis, its central government was already sliding rapidly into a debt trap with a ratio of just under 100%. Self-evidently, the nation’s so-called EC bailout has only made its public debt burden dramatically worse. Today Portugal’s debt to GDP ratio is 129% and there is no sign of a turnaround.
    But that has not deterred the rambunctious speculators in peripheral sovereign debt. Since mid-2012 and Draghi’s ‘whatever it takes’ ukase, the price of Portugal’s public debt has soared. This means that leveraged speculators – -and they are all leveraged on repo or similar forms of hypothecated borrowings – -have made a killing, harvesting triple-digit gains on the thin slice of non-borrowed capital they actually have at risk in these carry trades.

    This post was published at David Stockmans Contra Corner on September 1, 2014.


  • Inflation – Crash Course Chapter 11

    Chapter 11 of the Crash Course is now publicly available and ready for watching below.
    For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather’s did.
    But something changed after inflation spiked yet again during World War 2. With the permanent mobilization of the military industrial complex and the start of the decades-long Cold War, combined with a related acceleration in government deficit spending, inflation did not come back down. It remained elevated, and in fact, rose further.
    That is, until the “Nixon shock” in 1971, when the dollar’s remaining ties to gold were severed. Then inflation EXPLODED. And the inflationary moon-shot has continued since, up to present day.
    So, we’ve become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it’s pretty much all we’ve ever known.
    CLICK HERE TO WATCH

    This post was published at PeakProsperity on August 29, 2014,.


  • And The Best Performing Asset In August Was…

    August is the month in which the third try for a global economic recovery officially snapped, with first China, then Europe and finally Latin America succumbing to pre-recession forces and/or outright contraction. Which, in the New Normal, is great news as it means more hopes for even greater imminent central bank easing and “stimulus” if only for the wealthiest (and also please ignore the fact that 6 years of more of the same has not worked, this time will be different). Which explains why August, otherwise the sleepiest month of the year, proved to be fairly strong with both equities and bonds moving higher in tandem.
    In fact, the situation in Europe is so dire, that European government bonds yields reached/retested their record multi-century all time lows. As Deutsche Bank summarizes, the 10yr government bond yields for Germany, France, Italy, Spain, and Switzerland declined by 27bp, 28bp, 26bp, 28bp and 11bp in August to 0.89%, 1.25%, 2.44%, 2.23% and 0.44% respectively. From a total returns perspective, a 2% gain in August was the best monthly performance for Bunds and OATs since January which brings their YTD gains to around 8-9%. Not bad in the context of a 7% and 4% YTD gains in Stoxx 600 and the FTSE 100. Italian and Spanish government bonds are still ahead though on a YTD basis with total returns to date at around 12-13%. Staying in rates, US Treasuries were somewhat of a laggard relative to its European peers in August with a monthly return of around 1.2%. Nonetheless, it was still the biggest gain for Treasuries since January and the outperformance in long bonds has also driven the 10s/30s curve to its flattest since June 2009. The search for yield has also benefited Credit on both sides of the Atlantic. Total returns were positive across the main European, US and Sterling credit benchmarks although the highlight was a rebound in US HY. The asset class gained 1.8% in August after having lost 1.7% in July as outflows steadied and reversed as the month progressed.

    This post was published at Zero Hedge on 09/01/2014.


  • Events Impacting The Gold And Silver Price In The Week Of September 1st

    The primary focus of our website is to report on the different aspects of the gold market: fundamentals, economic and monetary analysis, basic technical analysis. Our view on the real price setting in the gold and silver market differs from the mainstream view. Price changes happen to coincide with events or announcements; mainstream media are used to report a relationship between both. However, we believe that the real price setting for the time being is taking place in the COMEX futures market. Market expert Ted Butler does an outstanding job analyzing the weekly evolution in the COMEX market and how it affects price setting.
    In this article, we summarize the key events of the running week that could have an impact on the price of gold and silver price because of trading in COMEX futures.

    This post was published at GoldSilverWorlds on September 1, 2014.