Is Gold Set To Hit $1,500 Per Ounce?

Rising macroeconomic risks, low real interest rates, and a decline in the dollar versus emerging market currencies are major price catalysts for gold.

Since hitting its high of over $1,900 an ounce in 2011 after a 12 year bull run, gold fell steadily until 2015 when it reached a low near $1,000. However, this year alone we have seen a 25% increase in the yellow metal. It hit a high of $1,370 pre-Brexit and while this new bull run seems to be currently taking a breather, many analysts feel that there is still plenty of steam left in this rally.

An article in Forbes today cites continued stimulus measures by Central Banks and the current under-bought nature of gold as being indicative of a prolonged rally to come for gold.

You can read the full article here 


Could This Rally Be a Head-Fake?

Let’s say you wanted to engineer a stock market rally that triggered every technical “buy” signal and wiped out those who are short the market–what would you do? First, you’d engineer a new all-time high to signal “all clear for further advances.”

Then you’d crush volatility as measured by the VIX, signaling that there is nothing standing in the way of more advances.

Next, you’d engineer new highs every day for a week or more.

To do this, you’d unleash a wave of strong buying at every bit of “good news,” no matter how jury-rigged, to trigger computer-trading buying: bogus earnings “beats,” any M&A activity, rumors of more stimulus in Japan, a pop up in crude oil, etc.–whatever could be construed as even modestly good news.

This entire rally has an engineered feel. All the technical “buy” signals are precisely what you’d expect in a rigged rally.

The rally’s strength is reminiscent of the 1999-2000 Internet-era stock market, but compare the fundamental backdrop of then and now. Back then, earnings, sales, profits and employment were all up strongly globally, and China and the emerging markets were experiencing trade-based organic (i.e. not the result of central bank stimulus) expansion.

Can the same be said of the present? No. Employment is stagnant once low-paying part-time jobs are stripped out of official cheerleading statistics, and corporate profits are sliding–especially if “one-time charges” and other accounting trickery are stripped out.

As for global trade–it’s stagnant or down. Whatever “growth” is officially reported is either suspect or based on unsustainable expansion of private credit or central bank/state stimulus. Consider the following chart: three major economies out of five are already experiencing declining private credit, and China’s rocket-like trajectory is clearly unsustainable:

The list of global financial weaknesses and potential crises is long and varied. 2016 is not 1999.

If there’s nothing supporting this rally but euphoric sentiment arising from orchestrated buying, any eruption of reality will reveal the rally as a head-fake:having exterminated short-sellers, there won’t be many who will benefit should the rally be transformed into a rout by reality.

My new book is #10 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book’s website.

Tagged with: , ,

Older Financial Institutions Are “Losing Their Shine” To Nimble and Smarter FinTech Startups

Fintech Bitcoin IRA

Introduction

The financial services industry is a highly regulated, highly technical, and highly traditional industry where ancient companies reign supreme and new entrants do not have good odds of survival. The Internet and the rise of the digital age have disrupted the old order in the financial services industry and now, FinTech is threatening the existence of traditional financial institutions.

FinTech broadly refers to the act of exploiting digital technology to provide products and services that traditional banks typically offer. FinTech companies are able to offer the financial services with innovations, a faster processing time (sometimes in real time) and at a cheaper cost than traditional financial institutions.

An overview of the performance of bank stocks

Bank stocks have started to face strong headwinds since UK voted to leave the EU. Now, investors are worried that the decline in bank stocks bears an uncanny resemblance to the collapses of traditional financial institutions in the eve of the 2008 global economic meltdown

Christopher Whalen, senior managing director with Kroll Bond Rating Agency in a report covered by CNN observed that “The disruption to commercial and legal structures caused by the extraordinary legal process that looms ahead will… cause systemic contagion à la Lehman Brothers as some analysts have worried.”  Whalen also observes that one of the pitfalls of Brexit is “a slowdown in economic activity that could materially impact volumes and earnings in the global banking industry.”

Read more ›


KR943] Keiser Report: Revolving Doors

We talk first to former banker, now author, Nomi Prins, about a solution to the revolving door between Wall Street and DC. We discuss whether or not Hillary Clinton’s highly paid speeches to Goldman Sachs matter and whether or not Wall Street expects anything in return for its contributions to her campaign. In the second half, we talk to UK activist Tina Rothery about fracking being forced upon the people of North Yorkshire, who have overwhelmingly expressed their resistance to the ‘controversial’ natural gas and oil extraction method. We ask what the solution is going forward when elected officials choose corporations over populations.


Why Italy’s bank crisis could be a ‘ticking time bomb’

Just as the dust begins to settle on Brexit, Italy’s banking system looms as the next threat to global financial markets.

Previous attempts to resolve Italy’s banking sector woes have proven to be less than effective. Non Performing Loans on the balance sheets of Italian banks represent over 8% of the total loan portfolios. However some analyst fear that this is set to grow to a whopping 15% in the near future.

Results of a stress tests by the European Banking Authority due on July 29 are expected to shed more light on the capital needs of the Italian banking sector, potentially serving as a spark to renewed financial turmoil.

While foreign exposure to Italian banks is relatively low, the bigger worry is that a backlash over a bailout leads voters to revolt, empowering the euroskeptic 5 Star Movement, a political party that is growing in poularity, which has called for a referendum on eurozone membership.

Could we be moving from Brexit to Italeave?

You can read the full article here 


Podcast: the #PanamaPapers scoop journalists, and #Brexit: what does it mean for tax justice?

In the July 2016 Tax Justice Network podcast:

Hello. This is John Doe. Interested in data? I’m happy to share.‘ We talk to the two journalists who got the Panama Papers scoop, Bastian Obermayer and Frederik Obermaier who’ve written a book about their experience.

Plus: what does Brexit mean for tax justice? We discuss the F4 (unholy) alliance between Switzerland, Hong Kong, Singapore and the UK, and the accelerated corporate tax race to the bottom.

‘Unfortunately there is the world people like you and me are living in and there is a second world, a parallel world, the offshore world where people with enough money will always find possibilities to hide their money…there are people out there choosing which law they want to stick to and that is a problem for democracy.’

Frederik Obermaier

‘I am very clear about what would happen if you take away the secrecy, if you take away the anonymity. I am completely sure that the whole system would crash because why would they go to the British Virgin Islands for a company when you can see who owns it? You know, it’s not rocket science.’

Bastian Obermayer

Post-Brexit: ‘I think that Britain’s likely development strategy will be to actually deepen its tax haven role sitting offshore Europe.’

John Christensen

Featuring: The Tax Justice Network’s John Christensen, Bastian Obermayer and Frederik Obermaier of the Sudduetsche Zeitung newspaper and authors of the new book: The Panama Papers: Breaking the Story of How the Rich and Powerful Hide Their Money. Produced and presented by Naomi Fowler for the Tax Justice Network. Also available on iTunes.

You can subscribe to our youtube channel or email Naomi [at] taxjustice.net to be added to the subscriber email list, or subscribe to the Taxcast on our rss feed. You can also follow The Taxcast and the Tax Justice Network on twitter.

Join us on facebook https://www.facebook.com/TaxJusticeNetwork

Home websites: www.tackletaxhavens.com/taxcast www.taxjustice.net/taxcast

Tagged with: , , ,

The Real Reason Pharma Companies Hate Medical Marijuana (It Works)

Screen Shot 2016-07-20 at 1.13.31 PM

Whenever an irrational and inhumane law remains on the books far longer than any thinking person would consider appropriate, there’s usually one reason behind it: money.

Unsurprisingly, the continued federal prohibition on marijuana and its absurd classification as a Schedule 1 drug is no exception. Thankfully, a recent study published in the journal Health Affairs shows us exactly why pharmaceutical companies are one of the leading voices against medical marijuana. It has nothing to do with healthcare and everything to do with corporate greed.

Read more here.

Tagged with: , , , , ,

What is a Bitcoin IRA?

What is a Bitcoin IRA

A Bitcoin IRA or Digital Currency IRA is an Individual Retirement Account in which Bitcoin or other approved digital currencies are held in custody for the benefit of the IRA account owner. It functions the same as a regular IRA, only instead of holding paper assets, it holds the popular digital currency, bitcoin, in custodian managed wallets. Bitcoin IRAs are usually self-directedIRAs, a type of IRA where the custodian allows more diverse investments to be held in the account.

The Bitcoin IRA model is similar to Gold, which is one of the more popular self-directed IRAs and can include other types of retirement accounts such as, Roth IRAs, SEP IRA, SIMPLE IRA, HSA, Thrift Savings Plan (TSP), and 401(k)s.

Investors often use bitcoin as a long-term hedge against inflation, to diversify their portfolio. Internal Revenue Code requirements state that the bitcoin must be stored in a specific manner.

Bitcoin IRA, bills themselves as America’s #1 Bitcoin IRA Provider and they manged to meet the IRS requirements by partnering with BitGo and Kingdom Trust. BitGo is the industry leader in multi-sig security, full custody and multi-user access controls and Kingdom Trust offers Self-Directed IRA solutions for individual investors, investment sponsors, family offices, advisory firms and broker-dealers.

Bitcoin IRA provides a Free Bitcoin Investor Kit for United States residents.

Read more ›


Globalization’s Few Winners and Many Losers

I often write about the Tyranny of Price, the rarely examined assumption that lower prices are all that matters.

Thanks to the Tyranny of Price, the quality of many goods has plummeted.Obsolescence is either planned or the result of inferior components that fail, crippling the entire product. As correspondent Mark G. has observed, the poor quality we now accept as a global standard wasn’t available at any price in the 1960s– such poor quality goods were simply not manufactured and sold.

There is another even more pernicious consequence of the Tyranny of Price: globalization, which makes two promises to participants: 1) lower prices everywhere and 2) manufacturing work that will raise millions of poor people in developing economies out of poverty.

Globalization is presented as a win-win solution: the developed countries get cheaper goods and the developing world get the benefits of industrialization.

But now a new study, Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies, finds that globalization has been a bad deal for 80% of the people in developed economies, as their income and wealth has stagnated or declined.

A Cheerleader for Globalization Has Second Thoughts: A new study from the McKinsey Global Institute finds that changes in the world economy have left many people worse off..

The McKinsey report focuses on the 540 million residents of developed nations who have lost ground in the era of globalization. But if we look at the terrible pollution in China, we find that rapid industrialization hasn’t been as win-win for developing nations as advertised.

The mainstream cheerleaders of globalization have been forced to accept that globalization exacerbates wealth/income inequalities by boosting the rewards for the 20% who benefit from global markets and capital-friendly central bank policies (zero interest rates and quantitative easing) that have pushed asset valuations to incredible bubble heights around the world.

Domestically, the American ruling class and the mainstream punditry are struggling to square the circle, that is, defend the globalization of the U.S. economy that has greatly enriched corporations, the wealthy and the top 5% of the work force but also alleviate the stagnation in the incomes and wealth of the bottom 80%.

Correspondent Graham R. summed up the situation very succinctly in a recent email:

“Focusing on the minimum wage is a false flag. The society as a whole is now stressed at every level because Globalism has promised us cheaper prices at the cost of destroying societal structures and their meaning for its members.”

Graham identifies a key consequence of globalization that the mainstream media has ignored: the erosion of social/economic structures that supported communities and provided purpose, meaning and stability to their residents.

When price is all that matters, factories and offices are closed overnight and the work is shipped elsewhere. When production costs go up, the production is moved to another locale.

In this environment, employees are competing with workers globally, which suppresses wages everywhere. Since global corporations have gained political power in globalization, they can buy lobbying and political influence that raises the cost of commerce for small businesses–a process known as regulatory capture that erects walls that stifle competition.

Regulatory capture is the inevitable result of globalization’s rewarding of capital and erosion of labor.

Price is not the sole absolute good. Price is only one kind of information. Since price is easily quantified and converted into any currency, it has achieved total dominance in markets and mindspace. Quality, quality of life, and well-being are not easily quantified, so they are ignored. Stagnation, insecurity and a loss of social cohesion are the inevitable result once price is all that counts.

This essay was drawn from Musings Report 29. The weekly Musings Reports are emailed exclusively to subscribers and major contributors ($5/month or $50 annually).

My new book is #10 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book’s website.

Tagged with: ,

IMF Scraps Forecast for Global-Growth Pickup on Brexit Fallout

Following on from the Brexit vote last month the IMF have decided to re-evaluate their forecast for global growth.

Bloomberg  reports that they have revised their original 3.2% forecast down to 3.1% for 2016 and from 3.5% to 3.4% for 2017. While these feel like very modest revisions ,the IMF would not be known for radical changes of direction preferring slow and steady revisions.

Their new forecast is based on the assumption that British and EU officials reach new trade agreements that avoid a “large increase in economic barriers.” However, if talks break down, Britain will slip into recession as more financial institutions relocate to the euro area and consumption and investment contract more than expected, the fund said. In a “severe” scenario, global growth is seen sliding to 2.8 percent this year and next.

You can read the full article here 


[KR942] Keiser Report: Crisis of Capitalism

We talk to Dmitry Orlov, author of The Collapse Gap, about a “pathway to a different future.” Orlov suggests that “150 strong” can solve many of the problems present in our economies and societies – smaller communities of 150 who can trust each other and work together as a unit during the crisis of capitalism. We also discuss the drumbeat of war and how war is not the answer to the global economic depression.


America is Being Divided and Conquered Into Oblivion

Or take the right to vote. In principle, it is a great privilege. In practice, as recent history has repeatedly shown, the right to vote, by itself, is no guarantee of liberty. Therefore, if you wish to avoid dictatorship by referendum, break up modern society’s merely functional collectives into self-governing, voluntarily co-operating groups, capable of functioning outside the bureaucratic systems of Big Business and Big Government.

-Aldous Huxley, in Brave New World Revisited (1958) 

It’s been eight years since the financial crisis and look at our choices for President. An ego-maniac with authoritarian tendencies and zero respect for civil liberties/the Constitution and a neocon, war criminal, Wall Street-owned corporatist in liberal sheep’s clothing. Unfortunately, this is how far we’ve progressed politically in the near decade since the status quo bailed out the privileged and crushed everyone else.

So what does this mean? It means we are in for a very real struggle in the near-term. Both Donald Trump and Hillary Clinton are unabashed authoritarians who worship at the altar of state power and centralization. If I’m right and the real battle of our time is between decentralization/liberty and centralization/authoritarianism, neither one of these candidates offer anything for us in the freedom camp. Unless some sort of miracle occurs, the next President will be someone who strongly believes in the centralization of power and will push with all of his or her might to further aggregate power in the office of the executive and in themselves. The negative macro trends will continue.

Read the rest here.

Tagged with: , , , , ,