When Money Is “Free,” Discipline Evaporates; When Discipline Evaporates, Decisions Are Disastrous

Whatever is free is squandered. When water is free, it’s freely wasted. When electricity is free, there’s no motivation to use it wisely.

The same principle holds true for money. If money is free, or nearly free, there is no motivation to invest it wisely, or consider the opportunity costs of spending it versus investing it or preserving it as savings.

Money that can be borrowed for next to nothing is essentially “free” because the costs of interest are negligible. Money that can be borrowed in virtually unlimited quantities is also “free,” as whatever funds are squandered or lost to malinvestment can be easily replaced with more borrowed money.

Nothing enduringly productive can be built without discipline and a steady focus on the bottom line of production costs, revenues, overhead expenses and opportunity costs, i.e. what else could have been done with this capital and labor?

These dynamics are scale-invariant, meaning they apply to individuals and households as well as to companies, institutions and nation-states.

Thus we see the same poor results in trust-funders whose income is “free” (pouring in monthly whether the individual was productive or not) and national governments that can simply borrow another trillion dollars (or $10 trillion, hey why not?) when they’ve squandered all the tax revenues.

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Jim Willie Issues ALERT: Path to Global Currency Reset Begins HERE AND NOW

Something BIG is Afoot in Shanghai.  
The Chinese Have CHANGED THE GAME Suddenly.  The Jig Is Up.
From the Chinese Reaction in the Gold Market, Expect the Path to the Global Currency RESET to be Entered HERE AND NOW WITH URGENCY:

A contact at Evolution Consulting has reported that his best contact notified him that VIPs are being invited to take tours of the Shanghai Gold Exchange operation. This man was among one of the guests. These tours are not being arranged in some congenial welcoming event, not at all. Rather they are informational and official in granted preview. They are almost surely being staged to inform the opposition that it is all over for them now. With a cherry on top, the VIP guests were required to pay for the tour. The above juicy tidbit was provided by a client, passing the word along. Something big is afoot.

CHINA CHANGED POSITION

China seems to have changed its position toward aggressive in the gold market introduction with gusto and emphasis. Conclude easily that where there is smoke, there is fire, and the heat will be on physical gold metal demand in Asia. In turn the pressure will be put on the USDollar, whose custodians are not honorable and for perhaps the last time, have betrayed the Chinese. Lower USDollar valuation combined with already chronic low bond yield could have turned the Chinese hostile in the wake of the USFed rate hike. The Jackass raises the conjecture (stronger and more classy than guess) that the USGovt and its bankster masters lied to China about a rate hike, and the Chinese are very angry.

The sleazy central banker crew defaulted on the gold lease from 1999, evident in 2014. The same sleazy vile crew have used tricks like bank derivatives to create phony bond demand, tricks like Reverse REPO to undo the last rate hike by ramping up to dangerous levels the bond leverage, alongside massive bond default on legacy bonds from nearly a century ago. The fact that a bond is old does not invalidate the bond’s integrity and requirement for honoring it. The criminal central banker crew in all likelihood stole at least $3 trillion in Saudi USTBonds as well, which serve as ESFund core. China has probably seen enough, and will proceed with the Global Currency RESET. Their nation is under stress, and the imposition of the Gold Standard should right their course well enough, even if it derails the United States to the point of entry into the Third World.

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Gold Cup – Horse Racing’s Greatest Show, Gambling and ‘Going for Gold’

– Gold Cup at Cheltenham – Most important event on horse racing calendar

– Gold Cup trophy contains 10 ounces of gold

– Today’s prize is worth over £9,000 in gold terms

– £600 million bets on horses, 220,000 pints of Guinness will be drunk, 9 tonnes of potato eaten

– Gold constantly and universally awarded as top prize

– Ultimate prize to award our heroes as early as 408 BC

– Humanity recognises it as very rare and very valuable

– Gold a great prize and a good bet but works best as hedge and a safe haven

– Better to take a ‘punt’ on gold than the horses

Cheltenham Gold Cup – Wikipedia

This week 65,000 people have been gathering in Cheltenham for one of the most important events on the horse racing calendar, the world famous Cheltenham Festival and the Gold Cup race.

Over 25 races will be raced over the four day gathering with £4,305,000 of prize money will be handed out this week at Cheltenham Festival.

The Cheltenham Gold Cup is the most famous race of the festival and happens on the final day of the four-day event. The Gold Cup is the most prestigious of the most prestigious of all National Hunt events and it is sometimes referred to as the Blue Riband of horse jump-racing.

The race takes place over 3 miles 2½ furlongs (5,331 m) and includes 22 fences to be jumped.

The prize? 10 ounces of gold and £575,000. The prize for those who turn up to watch the world famous event? The chance to experience the excitement and fun of race day and likely lose a few bob – with a massive £600 million staked on the outcome of the races. The bookie always wins … well nearly always.

10 ounces of gold and over half-a-billion British pounds of cash surrounding one event. What does this say about the state of our economy today and how we award our sporting heroes?

Read full story here…

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[KR1045] Keiser Report: Jon Corzine’s Big, Bad Bond Bet

We discuss the lawsuit by the administrator of MF Global against PwC for, ultimately, Jon Corzine’s big, bad European bond bet. In the second half Max interviews Charles Hugh Smith of OfTwoMinds.com about whether or not the Federal Reserve Bank has already lost control.


Now That Everyone’s Been Pushed into Risky Assets…

If we had to summarize what’s happened in eight years of “recovery,” we could start with this: everyone’s been pushed into risky assets while being told risk has been transformed from something to avoid (by buying risk-off assets) to something you chase to score essentially guaranteed gains (by buying risk-on assets).

The successful strategy for eight years has been buy the dips because risk-on assets always recover and hit new highs: housing, stocks, bonds, bat guano futures–you name it.

Those who bought the dip in hot housing markets have seen spectacular gains since 2011. Those who bought every dip in the stock market have been richly rewarded, and those buying bonds expecting declining yields have until recently logged reliable gains.

The only asset class that’s lower than it was in 2011 is the classic risk-off asset: precious metals.

Investors who avoided risk-on assets–stocks, bonds, REITs (real estate investment trusts) and housing in hot markets–have been clubbed, while those who piled on the leverage to buy every dip have been richly rewarded.

Those who bet volatility–once a fairly reliable reflection of risk–would finally rise have been wiped out. By historical measures, risk has fallen to levels not seen since… well, just before the last Global Financial Meltdown.

Globally, financially assets have soared from a 2008 low around $222 trillion to over $300 trillion. Even in today’s financially jaded world, $80 trillion is an impressive number: over 4 times America’s GDP of $18 trillion annually, and roughly equal to global GDP.

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Gold Up 1.8%, Silver Up 2.6% After Dovish Fed Signals Slow Rate Rises

– Gold up 1.8%, silver up 2.6% – Fed signals slow rate rises
– Dollar sells off as Fed raises 0.25% to target range of 0.75 percent to 1 percent on inflation outlook and “ebullient” stocks
– Gold’s biggest 1 day percentage gain since September 2016
– Fed raises rates for only the third time since crisis
– Fade out Fed “jibber jabber” and focus on still ultra low rates (see chart)

– Rising rates bullish for gold as seen in 1970s and 2003 to 2007 (see table)
– Silver rose 26% in 2003, 14% in 2004, 29% in 2005 and 46.6% in 2006
– Raise is too little, too late … Dovish Fed creating asset bubbles

– Dutch pro EU government have marginal win and populist Wilders does not see gains expected
– Pro-EU Dijsselbloem PvdA party likely biggest losers – risking his position as head of  Eurogroup of Euro zone’s finance ministers
– Europeans will continue to reject increasingly undemocratic federal EU super state and risk of contagion remains high

– Geopolitical risk in form of Brexit talks and French elections seeing safe haven demand in UK, France and other EU countries

Gold in USD – 24 Hours

Gold rallied 1.8 percent yesterday as the U.S. Federal Reserve raised interest rates by an expected 25 basis points for the second time in three months.

Spot gold maintained those gains and moved as high as $1,228/oz overnight in Asia and gold has consolidated on those gains in European trading.

Gold had its biggest one-day jump since September. The Fed said in its policy statement that further hikes would only be “gradual,” with officials sticking to their outlook for two more rate hikes this year and three more in 2018.

Fed raises rates for the third time since crisis
Source: Newsreportonline.com

Silver rose 2.6 percent to $17.31 an ounce and traded another 1% in trading this morning to $17.50 an ounce. Platinum was up 2.8 percent at $965 per ounce while palladium was up 2.5 percent at $771 an ounce.

The Fed remains ‘dovish’ and signaled just three more rate hikes in 2017 as expected. They attempted to appear hawkish and suggested they would increase interest rates three times in 2017.

It is worth remembering that they promised three rate hikes for 2016 and yet only one rate hike materialised. We expect given the fragile nature of the so called economic recovery that this will be the case again.

Read full story here…

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Is the Apptrade ITO following the same path as Snapchat IPO?

Apptrade Profit From Portfolios

Following the recent Snapchat IPO having skyrocketed to a $32 billion market capitalization, technology investors worldwide have had their eyes opened wide to just how profitable mobile apps can be. Meanwhile, trends in blockchain technology have been innovating the way investment is taking place, with increasingly more startup companies turning to crypto-token-based crowdfunding solutions for simplifying fundraising for budding entrepreneurs while providing non-conventional opportunities for smaller investors to get in on profiting from potentially-disruptive business models. At the convergence of these two trends of mobile apps and crypto-crowdfunding, has come a new US-based venture: Apptrade.

Aiming to become the “Kickstarter for apps on the Blockchain,” Apptrade recently launched a crowdfunding campaign to generate the capital to build a platform supporting the funding, development and marketing of a curated selection of mobile apps. Issuing investors royalty-backed tokens to share in profits from multiple portfolios of apps – the basic premise of Apptrade is to serve as a “stock market of apps” using a SaaS (software as a service) platform.

For app developers seeking capital to build out their ideas for the newest, hottest apps – whether mobile applications, music and digital art programs, games, ebooks, or other digital media – Apptrade could potentially prove a simplified vehicle for accessing funds through networks directly supporting their vision. Bringing together a diverse group of developers for mutual benefit, app creators & publishers are able to launch their own portfolios of up to 100 apps per portfolio or join others to raise both awareness and revenue for their applications without creating debt or giving up equity. The business model fundamentally differs from conventional crowdfunding by collaborative funding going towards supporting multiple rather than single projects per campaign. Every portfolio designed to ensure all included apps are supporting the one another through regularly scheduled updates, cross-promotion, and high quality standards – and a number of strategies have been planned, including coordinated launches, app flipping, deep linking, portfolio leagues, and branding partnerships. As such, potential advantages of the model extend far beyond just the funding component – providing players with a rich ecosystem of resources.

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Contrarian Trading Practices with an Eye to Easier Profits

federal reserve

Fed chair, Janet Yellen is expected to act decisively on Wednesday, 15 March 2017. On that date, the Fed will have concluded its 2-day meeting of FOMC members. At the heart of the meeting is the state of the US economy and whether the Fed can adopt monetary policy to stabilize and strengthen the status quo. Recall that the Fed has several overarching objectives as it plots out its monetary policy agenda. Foremost among them are price stability, and full employment. To achieve these objectives, the Fed must adopt policies that help to grow the economy without allowing it to overheat. An overheating of the economy takes place when aggregate demand exceeds aggregate supply.

Currency Traders Back the Greenback

Excess demand is a feature of the current US economy, and that’s precisely why the Fed is looking to put the brakes on to prevent inflation from rising too quickly. The Fed has been targeting an inflation rate of 2%, and we are rapidly approaching that level. As a trader, there are many reasons to be excited about Fed policy. For starters, a rate hike (increase to the Federal Funds Rate) will boost the attractiveness of the US economy to foreigners. This will mean capital inflows will take place at a rapid rate. Foreign currency such as the GBP, EUR, JPY, ZAR, CNY, and others will be sold en masse to purchase USD. Naturally, greater demand for the greenback will result in a sharply appreciating currency, coupled with reciprocal declines in competing currencies. Read more ›


Why Fragmentation Is the Solution, Not the Problem

The fragmentation of political consensus (i.e. the consent of the citizenry) is presented by the Powers That Be and their media servants as being a disaster.The implicit fear is real enough: how can we rule the entire nation-empire if it fragments?

As I noted the other day, fragmentation terrifies the Establishment of racketeers and insiders, for when the centrally-enforced rentier skims and scams collapse, those who own and control the rentier skims, scams and rackets will lose the source of their wealth and power.

To understand why fragmentation is the solution rather than the problem, we have to look at how power is leveraged in centralized government. Let’s take the recent increase in a common pinworm treatment from $3 to $600: Pinworm prescription jumps from $3 to up to $600 a pill (via J.F.).

In a top-down, centralized hierarchy of political power (i.e. the central state), the pharmaceutical company only needs to lobby a few authorities in the central state to impose its rentier skim/scam on the entire nation.

Lobbying/bribing a relative handful of federal officials and elected representatives is remarkably inexpensive: a financier or corporation only needs to focus on these few key players, and smoothing the PR pathway via a highly concentrated corporate media.

A mere $5 million spent in the right places guarantees $100 million in future profits– profits earned not from open competition in a transparent market, but profits plundered as rentier skims: the product didn’t get any better or effective when the price leaped from $3 to $600, and competition was squelched by regulatory capture and high barriers to entry.

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“Ryancare” Dead on Arrival: Can We Please Now Try Single Payer?

The Canadian plan also helps Canadians live longer and healthier than Americans. . . . We need, as a nation, to reexamine the single-payer plan, as many individual states are doing.

— Donald Trump, The America We Deserve (2000)

The new American Health Care Act has been unveiled, and critics are calling it more flawed even than the Obamacare it was meant to replace. Dubbed “Ryancare” or “Trumpcare” (over the objection of White House staff), the Republican health care bill is under attack from left and right, with even conservative leaders calling it “Obamacare Lite”, “bad policy”, a “warmed-over substitute,” and “dead on arrival.”

The problem for both administrations is that they have been trying to fund a bloated, inefficient, and overpriced medical system with scarce taxpayer funds, without capping its costs. US healthcare costs in 2016 averaged $10,345 per person, for a total of $3.35 trillion dollars, a full 18 percent of the entire economy, twice as much as in other industrialized countries.

Ross Perot, who ran for president in 1992, had the right idea: he said all we have to do is to look at other countries that have better health care at lower cost and copy them.

So which industrialized countries do it better than the US? The answer is, all of them. Read more ›

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Most Overvalued Stock Market On Record — Worse Than 1929?

Stock Market Most Overvalued On Record — Worse Than 1929?

The US stock market today has never been more dangerous and overvalued, according to respected Wall Street market analyst John Hussman.

Indeed, Hussman goes as far as to say that “this is the most dangerous and overvalued stock market on record — worse than 2007, worse than 2000, even worse than 1929” as reported by Marketwatch.

For some months now, Hussman of Hussman Funds’ has been warning in his research that investors are ignoring extremely high stock market valuations and are being lulled into a false sense of security by central bank liquidity, massive quantitative easing and zero percent and negative interest rates.

Hussman begins his latest research note by quoting the late, great Sir John Templeton:

“Bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria.”

He then warns

“A week ago, bullish sentiment among investment advisers soared to the highest level in 30 years (Investor’s Intelligence), joined last week by a 16-year high in consumer confidence. When one recognises that the prior peak in bullish sentiment corresponds to the 1987 market extreme, and the prior peak in consumer confidence corresponds to the 2000 bubble, Sir Templeton’s words take on both relevance and urgency.”

Hussman advises investors become more defensive, because the market could be about to enter a brutal bear market as seen throughout history.

Read full story here…

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