October 6 (King World News) – Richard Russell – “I’ve been thinking about the concept of making money. Money can provide two things: the first is security, in that money can buy a roof over your head and three meals a day. The second thing money can provide is stuff, mostly items that you use once and forget about, or items that you don’t really need.
Warren Buffett lives in a house he bought in 1956 and eats at most three meals a day. Most of his vast millions have gone to the Gates Foundation. His money has brought him fame, and perhaps the ability to do whatever he wants to do. Has his money brought him happiness? You’d have to ask Warren. His answer might surprise you. ...
If you want to understand why Rome declined, look no further than the moral decay of ruling Elites. There are many reasons why Imperial Rome declined, but two primary causes that get relatively little attention are moral decay and soaring wealth inequality. The two are of course intimately connected: once the morals of the ruling Elites degrade, what's mine is mine and what's yours is mine, too.
I've previously covered two other key characteristics of an empire in terminal decline: complacency and intellectual sclerosis, what I have termed a failure of imagination. Michael Grant described these causes of decline in his excellent account The Fall of the Roman Empire, a short book I have been recommending since 2009:
Click over for the rest. This is something I've been believing for quite some time. It only gets worse from here on out.
I woke up this morning knowing that, for whatever reason, the S&P 500 would be up a least 20 points. Of course I flip on the telly and see the Spoos up 23 and gold down $5.
Upon investigating possible news triggers, I see that civil unrest is fomenting in China (we’ll investigate that later because the Shadow of Truth is hosting “our man on the ground in Beijing,” Jeff Brown today) and the military confrontation by proxy (ISIS) between Russia and the U.S. is escalating in Syria.
Those are obvious reasons for the stock markets around the world to retreat and for gold to be higher.
With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators - some 10 years behind the curve as usual - finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators.
That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany's Bafin launched a probe into Deutsche Bank for gold and silver manipulation, it has been very clear that the only question is how many banks will end up paying billions to settle the rigging of the gold market (with nobody going to prison as usual, of course).
Earlier today, we learned that the Swiss competition watchdog just became the latest to enjoin the ongoing gold manipulation probe when as Reuters reported, it launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.
You'd have to be in full denial mode not to see that it's getting ugly out there in global markets: currencies are melting down, trade and shipping are tanking, commodities are swooning and global stock markets are increasingly on central-bank life support. Gordon Long and I recently discussed just how ugly it might get in a 28-minute video program. One focus was Gordon's forecast that the market may yet recover from its current downtrend and trace out a M Top: one more buy the dip rally that would then be followed by a bone-crushing downtrend as the wheels completely fall off the global "growth" story.
By Paul Wiseman | AP September 25 at 10:23 AM WASHINGTON — The University of Michigan says consumers lost confidence for the third straight month in September, worried about bad news about the global economy.
The university’s consumer sentiment index fell to 87.2 this month, lowest since October 2014 and down from 91.9 in August.
Richard Curtin, chief economist for the survey, said consumers are worried about signs of weakness in the Chinese economy and continued stresses on Europe’s economies.
“Consumers now believe that that global economic trends can directly influence their own job and wage prospects,” he said.
Do you really think that the average consumer is worried about China's problems?
I don't. I think the average consumer is worried about how he or she is going to pay their rent and put food on the table given how expensive it all is getting and how little they are making.
I would suggest that today’s $23 move up in the price of gold on Comex options expiry day – an event on which gold is usually slammed hard in the paper market – is a direct reflection of the growing scarcity of immediately available “wholesale” gold bars which can be purchased on the global market.
Posted on September 22, 2015 by Gary Christenson Gold prices peaked in January 1996 and then fell for 3.5 years into a multi-decade low. It was the age of stocks, debt, leverage, and good times; nobody needed or wanted gold.
Since the gold price peak in 2011 the Federal Reserve has “generously” supplied the world with trillions of dollars of newly created digital and paper debt, all backed by nothing but faith and credit. Bonds have rallied and the S&P is higher by 50% or so. The Japanese Central Bank has similarly produced trillions of yen, bought stocks and bonds, and extended their recession several more years.
Yes, the past four years have been a repeat of the age of stocks, debt, and leverage, but only the financial and political elite experienced good times. Debt is massively higher and gold is still bumping around a bottom.
Click through for the rest of the article and charts.
"The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology."
Most economists and financial analysts think that 'currency war' merely refers to the competitive devaluations that nations sometimes engage in to help boost their domestic economies, as they had done in the 1930's for example.
This time the currency war is a much more profound confrontation of differing agendas revolving around the historically unusual role of the US dollar, based on nothing more than the will of the Federal Reserve and the 'full faith and credit' of the US, as the reserve currency for global central banks and international trade.
When a single nation begins to wield such an 'exorbitant privilege' to underwrite the speculative excesses of a crony capitalist banking system, and perhaps even more importantly, as an instrument in support of their international policy, one ought not be surprised that the rest of the world will begin to resist it.
Click through for the rest of this important read.
From Ron Paul at The Ron Paul Institute for Peace and Prosperity:
Reports that the official unemployment rate has fallen to 5.1 percent may appear to vindicate the policies of easy money, corporate bailouts, and increased government spending…
However, even the mainstream media has acknowledged that the official numbers understate the true unemployment rate. This is because the government’s unemployment figures do not include the 94 million Americans who have given up looking for work or who have settled for part-time employment. John Williams of Shadow Government Statistics estimates the real unemployment rate is between 23 and 24 percent.
Disappointingly, but not surprisingly, few in Washington, D.C. acknowledge that America’s economic future is endangered by excessive spending, borrowing, taxing, and inflating. Instead, Congress continues to waste taxpayer money on futile attempts to run the economy, run our lives, and run the world.
We have seen articles suggesting that COMEX gold warehouse gold stocks are low to the point of serious concern in the ability to provide physical gold on contracts which demand it. There was an immediate response from other analysts – some rather more aimed at the individuals suggesting that the COMEX stocks might be at a critical level – in refuting the claims, but who is right. Unfortunately the answer is both sides are at least correct in part, but one side – the accused ‘crazies’ - are at least dealing in fact, while the other, being the mainstream, in what is a partial truth.
The original article on which the furore was based came, as far as I can ascertain, from Bill Holter, writing on Jim Sinclair’s JS Mineset website. Bill noted: “One other area to look at before we get back to the Fed is the COMEX gold circus. Registered gold available for delivery by dealers has dropped significantly because of last month’s deliveries http://www.zerohedge.com/news/2015-09-09/something-just-snapped-comex
The total is now about seven tons left (JP Morgan has less than 1 ton) which leaves total contracts divided by deliverable gold at the crazy multiple of 207 potential claims for every deliverable ounce.
No one knows for sure. If the Fed raises interest rates on Thursday (which we do not expect), the effect will be highly deflationary and gold prices could move lower, at least temporarily.
Conversely, if the Fed doesn’t raise rates and offers some reason to believe it won’t raise them for the foreseeable future (so-called “forward guidance”), then gold prices could rally in anticipation of inflation.
It’s unfortunate that markets are now reduced to reading Janet Yellen’s mind. But that’s what happens after seven years of market intervention and central planning by the Federal Reserve.
This is a stark depiction of underlying stagnation: paid work is not being created as population expands.
Heroic efforts are being made to cloak the stagnation of the U.S. economy. One of these is to shift the unemployed work force from the negative-sounding jobless category to the benign-sounding Not in the Labor Force (NILF) category ...
Just when the Federal Reserve thinks it has the interest-rate situation figured out, something has come along that may complicate its plans.
The complication? The US economy just refuses to cooperate. It’s not growing fast enough to justify a rate rise.
I think that point will be made again on Friday when the Labor
Department announces how many new jobs were created in September. But the Fed has had interest rates so low for so long that it needs to raise them. The low rates are devastating savers’ income — all the Fed really cares about — and causing less spending in the US economy. ...
With continued uncertainty in global markets, the Godfather of newsletter writers, 91-year-old Richard Russell, warned that a devastating bear market will destroy the current monetary system.
September 30 (King World News) – Richard Russell: “For those of us who are hoping for the best for the US, (Monday) was a discouraging day. I’m seeing something I haven’t seen in years. Four of the big averages that I follow are all showing triple digit declines. This includes the Industrial average, the Transports, the Nasdaq and the NYSE Composite. ...
Simple version: Gold is good. Sovereign debt is bad.
The world has added approximately $60 Trillion in debt since 2007, much of it sovereign debt created from deficit spending on social programs, wars, and much more. In that time the world has mined perhaps 30,000 tons of gold, or about 950 million ounces, worth at September 2015 prices a little more than a $Trillion. It is easy to create debt – central banks “print” currencies by BORROWING those currencies into existence. Debt increases, currency in circulation increases, and until it crashes, life is good for the financial and political elite. But debt increasing 60 times more rapidly than gold indicates that debt is growing too rapidly and due for a reset.
It is a tangled web of debt, counter-party risk, obligations, and unintended consequences.
The middle class has been embued with such a strong sense of entitlement that they are blinded to the massive “two-by-four” that is being swung at the back of their heads. By the time they see it coming, it will be too late to duck.
This has been one of my great worries for the USA middle class for a rather long while. You can see it coming and it just seems like no matter how loud you scream about the danger and coming proverbial 2x4 that the majority is willfully ignoring you.
Click through for the full post and video discussion.
September 24 (King World News) – Richard Russell: “The initial shock hasn’t dawned on the public yet, but it will. The reality is that the U.S. is sinking back into recession. I think we have reached the inflection point, and the bad news is coming out. This will obviously terrify the Fed, which has been trying with all its might to push up core inflation to the much desired 2%. Soon I think the newspapers will start breaking the disturbing news: the fact that the US has sunk back into recession after six years of pumping by the Fed. So what’s next?
The Feds raising rates is out of the question. What’s more likely is the return of QE, because the Fed is terrified of the current position in which deflation is taking over from the much desired inflation. It would not surprise me to see QE4 established as the Fed addresses the deflationary trend.
We can give you our opinion but it is just that, opinion. No one has an all seeing crystal ball. We do believe the next crash will be the “final crash” that sweeps away the current Western financial system. The problems as you know are numerous, too much debt on all levels, undercapitalized banks and brokers in relation to assets carried, grossly bloated derivative balances and counterparty risk, not to mention the fact that no currency in the world is anything more than a “promise to pay” …more of that very same currency. ...
Warren Pollock warns the global economy is headed for a brick wall. Pollock explains, “It’s good you are using the term brick because that’s the part of the economy which is crashing first, the emerging markets, the BRICS (Brazil, Russia, India, China and South Africa). That’s on the edge of empire, and now it is imploding inward. So, we can look at all of these peripheral economies, and that’s where the crash has occurred right now. When you talk about crash and people asking, ‘When is this going to happen?’ It’s happening right now, but it is not happening at the center of empire, it’s happening on the extremities of empire. These emerging markets, these miracle economies, the few countries in the world that had productive economies, they’ve hit a brick wall. They’ve crashed. China has crashed. When you look at Brazil–crash. When you look at Russia–crash. When you look at oil prices–crashing now. People keep asking when is this blowing up? And the answer is it’s blowing up right before your eyes right now, this minute. The domestic indicator is the declining velocity of money.”
Click through for the full post and video interview. Worth a view.
In a world where the Fed. articulates its reasoning for any policy decisions as “data dependent.” One has to now ask – exactly who’s data? For if one originally assumed “data dependent” meant U.S. data – one would now be incontrovertibly proven wrong.
The parlor game projections as to whether or not the Fed. would, or, would not raise rates by many of the so-called “smart crowd” on Wall Street was often hysterical. And the word hysterical could be used twice in the same sentence. Once, as to describe the sheer hysterical begging by those whose salary is based (as well as bonuses) solely on whether or not the Fed. give-ith or the Fed. take-ith away their “punch-bowl.” And second; for the sheer comedic value in that begging. I guess when you’re charging 2 and 20 – you gotta do, what’cha gotta do. And If you’re not begging clients against redemptions – might as well beg the Fed. for it.
There were quite a few discrepancies made manifest in the Fed’s decision not to begin the ...
One of the rules by which the elite aristocrats abide is they consider it rude to not issue a warning before they do something bad to us. They’re like criminals with manners. In other words, it’s gauche to flush the toilet while the serfs are in the shower without giving a “heads up.” – John Titus, Best Evidence
I want to preface this post with the stipulation that it is, at this point, only a theory that may be completely off-the-rails. But, then again, it might be simplistic enough to meet the requisite explanative demands of Occam’s Razor.
Most commentators and bloggers do a fine job regurgitating and repackaging information and developments which have already become obvious. But the large majority refuse to take the analytic and intellectual risks required to advance ideas based on “tracks in the snow.” Or they may just not see or be aware of the “tracks” that have appeared. ...
Click over for the rest and be sure to grab the RSS feed. IRD is a must read.
When Counterfeiters Are In Charge You Must Protect Yourself
I just heard Janet Yellen speak. It seems to me that Yellen and the Fed are bullish on the economy. I’m afraid that they’re going to be wrong. I think any rate increase will be put off until next year. The whole picture of the US and world economy is so confusing that the best thing to do is simply follow the stock market.
Once again the Federal Reserve was too scared to raise interest rates.
After a two-day policy meeting that ended Thursday — that had everyone on Wall Street on the edge of their seats — the Fed decided to leave interest rates near zero. The world economy is just too iffy, it said, to increase borrowing costs at this time.
Even more important, the Fed — which hasn’t increased rates in nine years — seemed to indicate in post-meeting statements that an increase may not come until 2016.
In fact, one of the 12 members of the Federal Open Market Committee (FOMC), which decides these things, doesn’t believe rates will be hiked until 2017.
A majority of the FOMC still thinks rates will rise by the end of this year, said Fed Chair Janet Yellen at a press conference — but those thoughts will blow away like so many fallen ...
Click through for the rest of the article.
The FED is without choice in the this matter. Doomed if they do, doomed if they don't. Might as well play it out as long as they can.
It seems increasingly likely the next Global Financial Meltdown will arise in the FX/currency markets. Central banks are like generals: they tend to fight the last war. The Great Financial meltdown of 2008 was centered in too big to fail, too big to jail transnational banks and other financial entities with enormous exposure to collateral risk (such as subprime mortgages), highly leveraged bets and counterparty risk (the guys who were supposed to pay off your portfolio insurance vanish in a puff of digital smoke, leaving you to absorb the loss).
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