Blog Archives

The Scapegoat For the Global Financial Collapse

Let’s face it, the system is coming down.
Have you ever wondered “who” would be blamed this time around?

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BTFD: The Crucial Difference in Gold & Silver Markets

Alasdair Macleod Joins the Show From London for a Special Edition of Metals & Markets, Discussing: 

Doc, Dubin, & Alasdair Macleod Break Down the Action In This Holiday Edition of Metals & Markets: 

 

DOC’S GOLD & SILVER MARKET UPDATE:

The Royal Canadian Mint finally released Q1 sales numbers for 2016 Silver Maples, and they were a doozy: last year’s record demand of 8.9 million oz was smashed with an all-time record sales quarter of 10.6 million oz of Silver Maples!   

The Royal Canadian Mint is on pace to surpass 40 million oz in Silver Maple sales in 2016, which doesn’t even include the mint’s sales of Silver Cougars, Silver Superman Shield bullion coins, 10 oz RCM silver bars, or 100 oz silver RCM bars

The US Mint sold just shy of another million 2016 American Silver Eagle coins again this week, bringing the Mint’s 2016 sales totals to 22.8 million coins.  The Mint also announced the release of the 3rd America the Beautiful 5 oz coin of the year: 2016 Harpers Ferry 5 oz Silver ATB

Signs of Industrial Silver Shortage?  First Majestic CEO Keith Neumeyer shocked Bloomberg (and the rest of us) this week by revealing that a major Japanese electronics company is attempting to lock up future silver supply directly from First Majestic, citing silver supply concerns. 

We’ll keep an eye on this as Ted Butler has warned for years that industrial users will one day frantically horde physical silver in a panic over supply concerns, shattering the banksters’ grip on the white metal.

The Week’s Top Silver News Stories

The Week’s Top Gold News Stories

 

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Jim Willie Issues RED ALERT WARNING: Immediate Risk of Systemic Lehman Event!

Golden Jackass Jim Willie has issued a true RED ALERT WARNING…

Click Here For Jim Willie’s Full URGENT WARNING On Immediate Risk of a Systemic Lehman Event:

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Global Financial Crisis Coming – Japan Warns of “Lehman-Scale” Crisis At G7

Japanese Prime Minister Shinzo Abe warned his Group of Seven counterparts Friday that the world may on the brink of a global financial crisis on the scale of Lehman Brothers.

GoldCore: Total Global Debt since 2007
The Japanese Prime Minister presented data yesterday at the G7 summit he is hosting, showing that commodities prices have fallen 55 percent since 2014, the same margin they fell during the global financial crisis, interpreting this as “warning of the re-emergence of a Lehman-scale crisis”.

The Japanese Prime Minister Shinzo Abe failed in his attempt to have the G7 leaders warn of the risk of a global economic crisis in a communique issued as their summit wrapped up today in Japan.

The final statement failed to address the scale of the financial crisis facing the world today and instead gave the impression that the worst is over with somewhat Orwellian language which declared that G-7 countries “have strengthened the resilience of our economies in order to avoid falling into another crisis.”

The communique gives the impression that there is little risk due to strengthened, resilient economies when the truth is that there are significant risks facing the global financial system and the global economy. Some of which include:

• The global economy remains vulnerable to recessions and new debt crises. There are fragile recoveries in the Eurozone, UK and U.S. while Japan remains in a recession
• Financial and banking systems remains vulnerable as seen in the very sharp falls in bank shares in recent weeks. Spanish, Italian, Greek and German banks have seen sell offs
• Geopolitical risk in the Middle East (Syria, Saudi, Iran etc.), increasing tensions amongst Russia, China and western powers and the increasing spectre of terrorism and war
• The Eurozone crisis is far from resolved and there is the risk of debt crises in China, the U.S., the Eurozone and indeed the UK

• BREXIT causes a short term risk but the real risk is the poor financial fundamentals of the UK economy – total debt to GDP ratio (public and private) is over 450% and completely unsustainable.

Japan had pressed G-7 leaders to note “the risk of the global economy exceeding the normal economic cycle and falling into a crisis if we did not take appropriate policy responses in a timely manner.” However, leaders again failed to take leadership and opted for spin and again lulling their electorates into a false sense of security about the financial and economic outlook.

Rather than doing the responsible thing in this regard, there appears to have been an attempt to focus on BREXIT and to scare UK voters into not voting for a UK exit from the EU. German Chancellor Angela Merkel went as far as to say that BREXIT had not even been discussed but that there was a consensus that they wanted the UK to stay in the EU.

Yet, a 32-page declaration putatively from the G7 leaders declared that “A UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth.” Brexit was listed alongside geopolitical conflicts, terrorism and refugee flows as a potential shock of a “non-economic origin”.

Japan is right to be warning that there is a danger of the world economy careering into another financial crisis on the scale of the 2008 Lehman shock given the scale of the debt in the world today is much, much more than it was prior to the first financial crisis – see McKinsey Global Institute chart above.

Diversification remains the key to weathering the likely impact of the next financial crisis on financial markets and assets including deposits. Paper and digital assets, including digital gold, contain unappreciated risks such as bail-ins and inability to transact, be paid, liquidity etc.

Direct legal ownership of individually segregated and allocated gold coins and bars will again protect and grow wealth in the coming years.

Recent Market Updates
– Gold Should Rise Above $1,900/oz -“New Bull Market”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold
– Gold As “Extremely Low-Risk Asset” – Rogoff Advises Creditor Nations
– Silver – “Best Precious Metals Trade”
– Bank Bail-Ins Pose Risks To Depositors, Investors & Economies
– Take Delivery of Gold and Silver Coins, Store Gold Bars – Hobbs
– George Soros Buying Gold ETF And Gold Shares In Q1
– Hedge Funds Take Record Long Silver Position As Silver Bullion Deficit Surges

7 Key Storage Must Haves - Copy (1)Learn the risks inherent in paper and digital gold

Truth About Markets – 28 May 2016

Evictions in Ireland by Big Banks Revive Famine Memories

As thousands of people now face evictions via their distressed loans being sold to vulture funds, word on the ground is that things are about to hot up.  New York based ‘Irish Central’ have an article drawing parallels between famine and bankster evictions. They ran this highly disturbing video. This is life under bankster occupation in all it’s grimness.

Irish Central Article here.

Article by Carol Hunt of the irish independent who was always a government lover until now -‘Noonan feeds the vulnerable to the vultures. Rather than Minister Noonan giving the unfortunate mortgage defaulter a break, he’s been fraternising with their enemy.’

[KR920] Keiser Report: Right Price for Surrender

We discuss the declaration of fracking war in North Yorkshire and yet without a prime minister vowing the defend the island, no matter the cost. In the second half Max interviews financial analyst, Rick Ackerman, about bonds, gold and pensions.

Get a #StartNode from @StartJOIN, operate, get verified and get some START – we are expecting to hear from you!!

Here’s Why All Pension Funds Are Doomed, Doomed, Doomed

It’s no secret that virtually every pension fund is dead man walking, doomed by central banks’ imposition of low yields on safe investments, i.e. Zero Interest Rate Policy (ZIRP).

Given that both The Economist and The Wall Street Journal have covered the impossibility of pension funds achieving their expected returns, this reality cannot be a surprise to anyone in a leadership role.

Many unhappy returns: Pension funds and endowments are too optimistic

Public Pension Funds Roll Back Return Targets: Few managers count on returns of 8%-plus a year anymore; governments scramble to make up funding

Here’s problem #1 in a nutshell: the average public pension fund still expects to earn an average annual return of 7.69%, year after year, decade after decade.

This is roughly triple the nominal (not adjusted for inflation) yield on a 30-year Treasury bond (about 2.65%). The only way any fund manager can earn 7.7% or more in a low-yield environment is to make extremely high risk bets that consistently pay off.

This is like playing one hand after another in a casino and never losing. Sorry, but high risk gambling doesn’t work that way: the higher the risk, the bigger the gains; but equally important, the bigger the losses when the hot hand turns cold.

Here’s problem #2 in a nutshell: in the good old days before the economy (and pension funds) became dependent on debt-fueled asset bubbles for their survival, pension fund managers expected an average annual return of 3.8%–less than half the current expected returns.

In the good old days, the needed returns could be generated by investing in safe income-producing assets–high-quality corporate bonds, Treasury bonds, etc. The risk of losing any of the fund’s capital was extremely low.

Now that the expected returns have more than doubled while the yield on safe investments has plummeted, fund managers must take risks (i.e. chase yield) that can easily wipe out major chunks of the fund’s capital if the bubble du jour bursts.

Here’s problem #3 in a nutshell: everyone who rode the great bubble of 1994 – 2000 (including pension funds) soon reckoned 10%+ annual returns on equities wasThe New Normal, so expecting 7.5% – 8% annual returns seemed downright prudent.

When that bubble burst, decimating everyone still holding equities, the Federal Reserve promptly inflated two new bubbles: one in stocks and another in housing. Once again, everyone who rode these two bubbles up (including pension funds) minted hefty profits year after year.

This seemed to confirm that The New Normal included the occasional spot of bother (a.k.a. a severe market crash), but the Federal Reserve would quickly ride to the rescue and inflate a new bubble.

When the dual bubbles of stocks and housing both burst in 2008, once again the Fed rushed to inflate another set of bubbles, this time in stocks, bonds and rental housing. Lowering interest rates could no longer generate a new bubble. This time around, the Fed had to lower interest rates to zero indefinitely, and embark on the most massive monetary stimulus in history–quantitative easing (QE) 1, 2 and 3–to inflate a third bubble in stocks.

This unprecedented expansion of free money for financiers and dropping interest rates to zero generated a bubble in bonds and an echo-bubble in real estate–specifically, commercial real estate and rental housing.

These three bubbles once again generated handsome yields for pension funds.Once again fund managers’ faith in the Federal Reserve maintaining a New Normal of occasional crashes quickly followed by even bigger bubbles was rewarded.

But the game is changing beneath the surface of Fed omnipotence. The returns on zero interest rates (or even negative rates) have diminished to zero, and the Fed’s vaunted monetary stimulus programs have been recognized as enriching the rich at the expense of everyone else.

Even with the unprecedented tailwinds of one massive bubble after another, pension funds are in trouble. The high-risk returns of Fed-induced bubbles followed by the inevitable crashes cannot replace the safe, high yields of the pre-bubble-dependent economy.

If funds are in trouble with stocks in a new unprecedented bubble high, how will they do when stocks fall back to Earth, as they inevitably do in boom-bust cycles?

The usual justification for nose-bleed valuations is sky-high corporate profits.But profits have rolled over, and irreversible headwinds are increasing: a stronger U.S. dollar, an aging populace desperate to save more for retirement, an entire generation burdened with student debt and often-worthless college diplomas, a global economy on the brink of recession, diminishing returns on firing workers, diminishing returns on financialization legerdemain, etc.

Meanwhile, commercial real estate loans have soared above the previous bubble highs.

This seems to prove that no bubble bursts for long with the Federal Reserve at the helm, but there are limits on what the Fed can do when this bubble bursts, as it inevitably will, as surely as night follows day.

The Fed can’t lower interest rates below zero without signaling that the economy is well and truly broken, and it can’t force people who are wary of debt to borrow more, even if it effectively pays borrowers to take on more debt.

All the Fed can do is extend new debt to unqualified borrowers who will default at the first sneeze. This will trigger the collapse of whatever new credit-fueled bubble the Fed might generate.

The political winds are also changing. The public’s passive acceptance of central banks’ let’s make the rich richer and everyone else poorer policies may be ending, and demands to put the heads of central bankers on spikes in the town square (figuratively speaking) may increase exponentially.

It’s looking increasingly likely that third time’s the charm: this set of bubbles is the last one central banks can blow. And when markets free-fall and don’t reflate into new bubbles, pension funds will expire, as they were fated to do the day central banks chose zero interest rates forever as their cure for a broken economic model.

A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

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A Tale of Two Stuningly Beautiful Women

I recently spent time with two people that superficially seem quite similar, but after some close observation are really quite different.  Both are middle-aged white women.
Both, I speculate, are considered VERY attractive by most people they encounter…

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Gold Price Likely Rise Above $1,900/oz -“Get In Now” Says Boockvar

The gold price is likely to rise above $1,900/oz in the next phase of the bull market and investors should “get in now,” Chief Market Analyst of the Lindsey Group, Peter Boockvar told CNBC’s “Futures Now” yesterday.

gold prices

“This is just the beginning of a new bull market in the metals,” Boockvar believes.

Ultimately, Boockvar believes that the 2011 highs of around $1,900 for gold are not only reachable, but surpassable, as he reasoned that bull markets historically exceed the previous bull market peak at some point.

As Boockvar sees it, it’s just a matter of when.

“In order to be bearish on gold, you have to believe that the Fed is going to embark on 100 to 200 basis points of hikes over the next couple of years, which I think is completely unrealistic,” added Boockvar. “This is an ideal opportunity for those who have not gotten in.”

Citing the relative strength index (RSI), Boockvar said that gold is the most oversold it has been since mid-December. He also added that global interest rates have given trillions of dollars’ worth of sovereign bonds a negative yield. Coupled with rising Fed rates, this development would theoretically provide gold investors with positive carry on gold. 

For additional context, Boockvar highlighted the mid-2000s, when the Fed raised the Federal funds rate from 1 percent to 5 percent. During that time, gold went from $400 to $700. The analyst also cited the start of 2016, when Bank of Japan Governor Haruhiko Kuroda adopted negative interest rates. However, the move failed to help the nation achieve stability in its currency.

Watch Boockvar’s interview on CNBC here

Recent Market Updates
– Gold and Silver “Bottom Is In” – David Morgan tells Max Keiser
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold
– Gold As “Extremely Low-Risk Asset” – Rogoff Advises Creditor Nations
– Silver – “Best Precious Metals Trade”
– Bank Bail-Ins Pose Risks To Depositors, Investors & Economies
– Take Delivery of Gold and Silver Coins, Store Gold Bars – Hobbs
– George Soros Buying Gold ETF And Gold Shares In Q1

www.GoldCore.com

Trump’s Decision to Debate Sanders in California is His Most Genius Move Yet

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If the Trump/Sanders debate proceeds as planned in California, you’re about to witness one of the most important moments of a 2016 general election that hasn’t even begun yet. To say such a debate would be an unmitigated disaster for Hillary Clinton would be the understatement of the century. Let’s explore why.

First of all, Hillary Clinton outright rejected a debate request from Bernie Sanders ahead of the June 7th California primary. Given Sanders’ recent momentum, as well as her need to persuade a significant number of his supporters to back her in November; such a denial was not only arrogant, it was highly insulting to voters in America’s largest state. From team Clinton’s perspective there was little upside to agreeing to a debate, versus easily manageable downside from a few days of negative media coverage. Or so they thought…

Read the rest here.

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