I know that headline sounds completely outrageous. But it is actually true. The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this. When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months. And as I wrote about recently, the U.S. national debt has increased by more than a trillion dollars in fiscal year 2014. But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that. ...
Click through for the rest. But I'll tell you what, with that kind debt, gold's rise won't be tiny once the chains are loosed.
I believe an entirely new system will be needed in view of the world being choked on ever-increasing debts. But before a new system can be instituted, the old (current) system will have to be destroyed. This, I'm afraid, will necessitate a brutal bear market that will bring about the absolute need for change.
Change will be very painful. I don't know what will survive the coming changes, but I'm convinced that there will be two survivors -- silver and gold.
In its battle to make its fiat currency the only legal currency, the Fed has adopted a strategy of denouncing the precious metals. But ultimately the truth will win out, and the fiat dollar will join all the other dead fiat currencies that have become footnotes in economic history. Remember every currency that has left the gold standard has died. Without the backing of gold, no currency has survived, and there are no exceptions. Sooner or later, a new world reserve currency will be adopted. It will be at least partly backed by gold.
Click through for all the charts and for the rest of the article.
“I have been watching the silver price as we speak, Eric, and December delivery is trading between 2-to-3 cents below spot. So silver is clearly in backwardation according to the price quotes I receive here in London, which are based on dealings in the actual physical market. In fact, silver has been in a persistent backwardation in London even as the price of silver continued to fall these past few weeks....
Just about everybody and their mother dislikes gold now. While very oversold and due for a technical rebound, you can see how determine the bears are to sell into any pop and get a break below $1,180. I think it’s best to stand aside and if there is a dramatic washout to the downside, step in when the overwhelming number of bearish articles run the inevitable headline, “last one out, turn the lights off in the gold market.”
Click through for the rest of his thoughts on the markets.
“The action in silver is becoming more and more bizarre with each passing day. Silver is the cheapest asset in the world today. Silver was hit hard once again shortly after the opening of trading in the access market. Silver fell about 25 cents, or 1.5 percent, in the quiet trading period.
Wholesale demand, measured by withdrawals from the SGE vaults, accounted for an astonishing 50.3 tonnes in week 38 (September 15 -19), up 22.79 % w/w. Year to date SGE withdrawals stand at 1381 tonnes.
Because the SGE International Board started trading on September 18, I checked with the SGE if the total withdrawal ...
Over the longer term, expectations for rising rates and a stronger dollar will continue to pressure gold, keeping the price-negative macro backdrop too large a burden for any seasonal uptick in physical consumption to overturn, according to Barclays.
Bloomberg has a story today on the faltering of Draghi’s latest scheme to levitate Europe’s somnolent socialist economies by means of a new round of monetary juice called TLTRO—–$1.3 trillion in essentially zero cost four-year funding to European banks on the condition that they expand their business loan books. Using anecdotes from Spain, the piece perhaps inadvertently highlights all that is wrong with the entire central bank money printing regime that is now extirpating honest finance nearly everywhere in the world.
On the one hand, the initial round of TLTRO takedowns came in at only $100 billion compared to the $200 billion widely expected. It seems that Spanish banks, like their counterparts elsewhere in Europe, are finding virtually no demand among small and medium businesses for new loans.
The incestuous embrace of privilege and power by entrenched, socially isolated Elites characterizes failed states and brittle, doomed regimes throughout history.
Every system is optimized to serve a specific purpose. As noted in my recent essay What Metric Are We Optimizing For?, what the system optimizes is rarely explicitly stated.
Sometimes this results from not understanding the metric that the system is designed to optimize; but in other cases, explicitly describing what the system optimizes would trigger social instability.
The Status Quo around the world--from France to China to the U.S.--is optimized to protect its Elites and the sprawling Upper-Caste of academics, managers, think-tank toadies, technocrats, apparatchiks, functionaries, factotums, lackeys and apologists who serve the Elites, and are well-paid for enforcing the Status Quo on the disenfranchized castes below.
In China, the Lunar New Year is Feb. 15, so manufacturers are likely to start restocking in December and January ahead of the holiday, he said.
By Debbie Karlson (Kitco News): Gold jewelry demand from China and India is expected to pick up as festival seasons arrive later this year and into early 2015, but buyers might be waiting for gold prices to stop skidding.
General Asian gold demand has been weak, with imports into India and China down year-to-date. Part of that has to do with import restrictions in India, and part of it has to do with the idea, at least in China, that buyers are already well-supplied after last year’s “gold rush” when prices fell about $200 an ounce in the second quarter, industry experts said. ...
The pool of greater fools willing and able to buy assets at higher prices with leveraged free money has been drained by six years of credit/risk expansion.
Is the top in U.S. stocks in? The consensus is "no"--corporate profits are rising, the U.S. economy is recovering and has reached "escape velocity," i.e. it can continue expanding even as the Federal Reserve ends its monetary stimulus (QE) and plans the first increase in interest rates since the zero-interest rate policy (ZIRP) was launched in response to the Global Financial Meltdown.
Many observers have noted that global capital flows (from the risky periphery to the less-risky core) favor U.S. stocks and bonds--another reason to see the 5.5-year rally continue to new highs.
James pointed out that there is so much money being printed by central banks, and its got to end up somewhere, and a lot of this money is ending up in what are perceived as safe-havens
NEW YORK: Gold prices could rebound quickly as it is undervalued according to James Turk, founder of Goldmoney.com.
In an interview to Palisaderadio.com, James Turk said that gold rebound is possible simply for the reason that gold has had so much downwards pressure, and that gold has been so undervalued. The recent downturn could be a short-squeeze, and if it is, then we could see a 'rubber band' effect in the price. ...
By Michael Pento of Pento Portfolio Strategies September 27 (King World News) - Global Markets Set To Collapse
Wall Street came to a halt recently as Chinese e-commerce giant Alibaba made its initial public offering. The media became myopically focused over this so-called “historic event” and by its celebrity founder, Jack Ma. By the time the closing bell had rung, the hype and fanfare propelled Alibaba up 36 percent on its first day of trading and caused the world’s largest IPO to display a market cap worth $231 billion. The investing public seems to have forgotten the dangers associated with disregarding valuation metrics -- Alibaba is trading at a price-to-book value ratio north of 27!....
Macy's CEO Terry Lundgren said he was expecting a rebound this year.
It didn't happen.
"The consumer has not bounced back with the confidence that we were all looking for," Lundgren said at the Goldman Sachs Annual Retail Conference earlier this month, weeks after the company reported sluggish second-quarter sales.
Lundgren also said he doesn't expect things to get better in time for the holiday season.
"The performance I think we had in the second quarter, and we expect to have in the second half, is going to be a continuation of what we’ve been able to do over the last several years — and that is to capture market share and get the most out of the consumers that are in our stores," he said.
Click through for the rest. Hat tip to @EdSteerGSD
A “poisonous combination” of record debt and slowing growth suggest the global economy could be heading for another crisis, a hard-hitting report will warn on Monday. The 16th annual Geneva Report, commissioned by the International Centre for
This week saw gold rally $15 to $1233 on Tuesday before sliding to $1207 yesterday morning, then rallying in the afternoon. Silver's moves tracked gold's, bottoming out at $17.30 yesterday at the London opening. This morning precious metals ...
“It’s important to look at the consumption of commodities in China. Right now they are declining rapidly. Then we have the shadow banking system in China which is in a massive bubble. In Europe, only one major economy, which is Germany, has kept the eurozone alive. But German growth has now come to a halt.
And as we’ve discussed many times, Spain, Italy, Greece, and Portugal will not survive in their present construct. And in spite of that these countries can borrow money at ridiculously low rates, as if there was no risk at all. The markets don’t even understand what risk means today.
In the U.K. we have seen a slight improvement but it’s all debt and deficit based so it’s not sustainable. ...