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Eric De Groot: The Formula Makes The Debt Ceiling Debate Meaningless

Confusion and uncertainty will remerge [sic] as the headlines focus on the debt ceiling debate over the coming weeks. 

If politicians use the debt ceiling to contain big government, already anemic economic growth will implode rather quickly. We have talked about this for years both here and on jsminset.com, infinite liquidity in terms of fiscal and monetary policy are no longer options but rather necessities. Failure support the market with both translates to economic suicide for Western economies. 

Failure to raise the debt ceiling in the coming months means failure to pay interest on past debt and international default. The Chinese and Japanese both showing a tendency to play ball with the US (cooperate with their own agenda) won’t forgo interest payments on existing debt without extreme compensation. Failure to appease means the old economic game as ended; this means immediate monetary and economic...

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Click over for the rest. Eric makes reference to a formula that Jim Sinclair created that details how raising taxes reduces economic growth. 

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LearCapital | Download Lear Gold & Silver Daily Today!

LearCapital | Download Lear Gold & Silver Daily Today! | Gold and What Moves it. | Scoop.it

Download the Free Lear Gold & Silver Daily Today!

 

Stay on top of the latest breaking commodities market news, coin prices, real time charts and special promotions from Lear Capital's “Lear Gold and Silver Daily” app for both iOS  and Android devices .

 

The Lear Gold and Silver Daily app is a special new benefit brought to you by Lear Capital at no additional cost.

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Gold is a Durable Investment in Good or Bad Times - American @HardAssetsMag

Gold is a Durable Investment in Good or Bad Times - American @HardAssetsMag | Gold and What Moves it. | Scoop.it
(American Hard Assets) – It has become a bromide in the subject of global economics – that the US economy, during recessions, will drive gold price up when many of its investors run to gold as a safe haven or hedge; and that, during times of economic expansion or financial plenty, US investors prefer to let their money ride on the riskier but better paying stock or real estate markets.
No matter that the Federal Reserve is trying to wean American investor trends into more flexible and balanced diversification that will keep them less volatile and help keep the majority of investors afloat in good or bad times, the pattern has become a settled one. This double edged economic sword has come to prove that there is no perfect, ironclad system of maintaining national wealth through the markets.
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The Federal Reserve is intentionally attacking savers. Here’s proof…

The Federal Reserve is intentionally attacking savers. Here’s proof… | Gold and What Moves it. | Scoop.it
All of the talk about the Fed focusing on unemployment or inflation or whatever are red herrings. What the Fed is really trying to do is to create a set of macro conditions that will allow the federal government to slowly crawl out from under a pile of debt and entitlement obligations that it literally cannot pay by honest, above board means.
Hal's insight:

This is a must read. Click through for the full post. It's long but worth it.

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Does Anyone Else Think the Stock Market Is Living on Reds, Vitamin C and Cocaine?

Does Anyone Else Think the Stock Market Is Living on Reds, Vitamin C and Cocaine? | Gold and What Moves it. | Scoop.it

This state of delusion would be amusing if it wasn't so tragic.


The stock market's wild swings of sentiment have got me thinking it's living on reds, vitamin C and cocaine. This is a famous line from the Grateful Dead songTruckin'.

I've marked up a one-month chart of the S&P 500 (SPX) to illustrate what I mean:
Hal's insight:

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India Gold prices 7% lower this Diwali season

India Gold prices 7% lower this Diwali season | Gold and What Moves it. | Scoop.it
Rajesh Exports Ltd. anticipated jewelry sales rising between 30% and 40% during Dhanteras, and, as noted by several news reports, gold purchases were running 15% to 20% higher on average for Dhanteras
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The Swiss Gold Vote: Should Investors Worry? - American Hard Assets

The Swiss Gold Vote: Should Investors Worry?  - American Hard Assets | Gold and What Moves it. | Scoop.it
Should the Swiss National Bank buy gold? Lots and lots of gold? The country’s electorate goes to the polls on Nov. 30 to decide.
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the interesting thing is how gold keeps trading with the action in the Chinese Shanghai Composite Index

the interesting thing is how gold keeps trading with the action in the Chinese Shanghai Composite Index | Gold and What Moves it. | Scoop.it

Victor Sperando tells King World News:

 

So gold is forming a major bottom.

But the interesting thing is how gold keeps trading with the action in the Chinese Shanghai Composite Index.  If you look at the action in the Shanghai Index and the action in gold, they are very similar in terms of building a bottom.  The Shanghai Index made its low in November of last year.  Now the Chinese stock market is trading well even though the economy is growing less than expected.

But gold is doing exactly what Shanghai’s Index is doing in that...

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Gold Lower As Dollar Strengthens

Gold Lower As Dollar Strengthens | Gold and What Moves it. | Scoop.it
Gold prices gave back some ground today as stocks fell and the dollar index rose. Many are still wondering if the recent volatility seen in stocks is over. Judging by the V bottom made on the daily chart, stocks may have put in a near-term bottom. This could be potentially bearish for gold prices as investors look to continue to ride the stock market higher. Perhaps the even bigger story right now when it comes to gold, however, is the dollar and the euro. The dollar index appears to be heading back to its recent highs as the euro continues to drop. This drop in the euro is likely based on the notion that the ECB will be forced to act with additional stimulus measures in order to combat its slowing economy.
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It Will Take 398,879,561 Years To Pay Off The US Government's Debt | Zero Hedge

Submitted by Simon Black of Sovereign Man blog,

The US government’s debt is getting close to reaching another round number—$18 trillion. It currently stands at more than $17.9 trillion.

But what does that really mean? It’s such an abstract number that it’s hard to imagine it. Can you genuinely understand it beyond just being a ridiculously large number?

Just like humans find it really hard to comprehend the vastness of the universe. We know it’s huge, but what does that mean? It’s so many times greater than anything we know or have experienced.

German astronomer and mathematician Friedrich Bessel managed to successfully measure the distance from Earth to a star other than our sun in the 19th century. But he realized that his measurements meant nothing to people as they were. They were too abstract.

So he came up with the idea of a “light-year” to help people get a better understanding of just how far it really is. And rather than using a measurement of distance, he chose to use one of time.
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Can the Indian Chinese Gold Frenzy Boost Prices? - Shanghai Metals Market

Can the Indian Chinese Gold Frenzy Boost Prices? - Shanghai Metals Market | Gold and What Moves it. | Scoop.it
By Charlotte McLeod+ - Exclusive to Gold Investing News

Many investors aren’t pleased with the current price of gold , which closed Wednesday at $1,241.10 per ounce, but for buyers in India, the metal’s ill fortune has turned into an opportunity.

CNBC reported that a better Indian economy has prompted those in the country to buy the yellow metal during this year’s five-day Diwali festival, which will peak on Thursday. “[T]here is more money around to spend,” Matthew Turner, a precious metals analyst at Macquarie, told the news outlet.

Also helping sales is a slight relaxation in the 80:20 rule. Put in place by the Indian government back in 2012, it mandates that 20 percent of imported gold be set aside for re-export. Along with a concurrent jump in the country’s gold tax from 2 to 10 percent, it put quite a damper on gold sales last year. ”Many jewelers in Delhi and Mumbai witnessed up to a 40% drop in sales last Diwali,” The Wall Street Journal points out.
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Gold Manipulation - Is It Treason? | David Jensen | Safehaven.com

Gold Manipulation - Is It Treason? | David Jensen | Safehaven.com | Gold and What Moves it. | Scoop.it
Is the Manipulation of Gold and Stripping it from the Treasuries of Sovereign States an Act of Treason?
MP3: Interview with Jay Taylor taped October 20, 2014.
Hal's insight:

You might find this an interesting listen.

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Caterpillar global sales down 10% in September

Caterpillar global sales down 10% in September | Gold and What Moves it. | Scoop.it
The equipment maker is scheduled to report third-quarter earnings Thursday.

 

Caterpillar (NYSE:CAT), the world's largest maker of mining and construction equipment, said Wednesday that its worldwide dealer machinery sales dropped 10% for the three months ended in September.

The worst affected of its division was the resources segment, made up mainly by mining equipment, which sank by 28% compared to the same period last year. Construction sales for the period also fell, but only by 3%.

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The Designated Losers Of Central Bank Policy –----Wage Earners And Savers

The Designated Losers Of Central Bank Policy –----Wage Earners And Savers | Gold and What Moves it. | Scoop.it
Since the financial crisis, the government of the UK and the Bank of England have jumped through hoops and twirled around in extraordinary gyrations to bail out one of the largest financial centers in the world, the uniquely powerful and at once unaccountable speck of land, the City of London, an incorporated area within London known as the Square Mile; or rather bail out its financial institutions, its way of doing business, and its bonuses; and along the way, bail out banks further afield.

Done in the now classic way. Key ingredient: the Bank of England printed enormous amounts of money, repressed interest rates, and stirred up inflation, which hit 5% in 2011. But somebody had to pay for it: savers and workers. It demolished real wages and purchasing power of the people who make up the rest of the country.
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Swiss gold campaigns compete in Bern - American @HardAssetsMag

Swiss gold campaigns compete in Bern - American @HardAssetsMag | Gold and What Moves it. | Scoop.it
Yesterday witnessed the launch of both the “Save our Swiss Gold” (Gold Initiative)” campaign and the opposing “Cross-party Committee against the Gold Initiative” campaign in Switzerland’s political capital, Bern.
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Why Gold Is Undervalued | Zero Hedge

Why Gold Is Undervalued | Zero Hedge | Gold and What Moves it. | Scoop.it
Gold has been in a bear market for three years. Technical analysts are asking themselves whether they should call an end to this slump on the basis of the "triple-bottom" recently made at $1180/oz, or if they should be wary of a coming downside break beneath that level. The purpose of this article is to look at the drivers of the gold price and explain why today's market value is badly reflective of gold's true worth.

First, I think a reminder would be timely. Those who seek to trade gold are at substantial disadvantage:

they line themselves up against too-big-to-fail banks which have the implicit backing of the taxpayer to bail them out of their trading positions;
furthermore markets have become so manipulated and dangerous that gold should be considered as insurance against systemic risk instead of a punt.
Because the majority of market investors don't fully grasp these risks, when the current global financial bubbles eventually burst, there will only be a tiny minority who end up possessing gold -- by which I mean physical gold held outside the fiat money system.
Hal's insight:

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They've created so much debt that the very process of the debt is forestalling consumption.

They've created so much debt that the very process of the debt is forestalling consumption. | Gold and What Moves it. | Scoop.it

John Mauldin tells King World News:

 

First of all, the authorities are absolutely Keynesian.  And so Ambrose gave the standard Keynesian response -- you’ve got to put more stimulus into the system, otherwise the system will collapse.  So rather than acknowledging that debt is the problem, they don’t see debt as the problem, they see consumption as the problem.  They refuse to acknowledge the fact that we’ve created so much debt that the very process of the debt is forestalling consumption. 

Hal's insight:

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"Alternative BRICS monetary system will be operational from 2017": Jim Sinclair's Mineset

Last GEAB excerpt – The world afterwards: towards a BRICS gold backed multi-currency system

Our team thus anticipates that, before anyone actually realizes it, an alternative BRICS monetary system will be operational from 2017. Not a common currency, but a lightweight system, multi-currency, mainly based on the Yuan, the Ruble, the other BRICS currencies and perhaps even the yen, all backed by gold and easily exchanged thanks to modern digital tools; a system also upgradable with the ability and ambition to host other currencies one day.

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Paying people their salary in gold - a first in Singapore - YouTube

How would you like to be paid your worth in gold? Singapore-based precious metals dealer BullionStar is doing just that, by rewarding staff with the commodit...
Hal's insight:

Pretty cool. Of course you won't see this happening in the US. The government won't allow it. Kind of destroys the whole "not money" position.

 

And technically, I don't think this is a first in Singapore. Certainly a first in recent history. But Gold and Silver have both been used as currency at some point in their history I'm sure.

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Gold, silver remain weak in Diwali trade on global cues - The Economic Times

Gold, silver remain weak in Diwali trade on global cues - The Economic Times | Gold and What Moves it. | Scoop.it
Gold prices fell by Rs 50 to Rs 27,800 per ten grams in special Diwali trading in national capital largely in tandem with a weakening global trend.
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Gold or Crushing Paper Debt | GE Christenson | Safehaven.com

Gold or Crushing Paper Debt | GE Christenson | Safehaven.com | Gold and What Moves it. | Scoop.it
A Yahoo headline: Pentagon Readying For Long War in Iraq, Syria. More war means more debt and higher inflation. Increasing national debt is as certain as death and taxes. Increasing consumer prices follow.
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US Mint Sales: Gold Coins Stronger, Hoover Set Debuts

US Mint Sales: Gold Coins Stronger, Hoover Set Debuts | Gold and What Moves it. | Scoop.it
On Thursday, Oct. 16, the United States Mint started selling Hoover Presidential $1 Coin & First Spouse Medal Sets. Holding an uncirculated quality 2014-P Herbert Hoover Presidential $1 Coin an...
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Why India's love affair with gold is set to deepen - American Hard Assets

Why India's love affair with gold is set to deepen - American Hard Assets | Gold and What Moves it. | Scoop.it
Oct 22 (BBC) — For the last two days Neeta Malhotra has been busy shuttling from one jewellery store to another in Mumbai. Her elder daughter is getting married next year but she’s trying to buy as much jewellery as possible for the wedding now.
‘I was waiting for this period to start buying gold jewellery for my daughter’s wedding’ says Mrs Malhotra, as she checks out a necklace in the store.
But why is she in such a hurry to buy so much jewellery right now? After all, her daughter’s wedding is still a year away.
“This is the best time to purchase gold and the prices are also low right now. I am not sure whether I will get the same rate next year,” she says.
Neeta is one among millions of Indians who have been thronging stores over the last two weeks to purchase jewellery, as the festive and wedding season kicks in.
Hal's insight:

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Census workers manipulated economic data: whistleblower

Census workers manipulated economic data: whistleblower | Gold and What Moves it. | Scoop.it
The city known as America’s story factory is making up Census data.

 

In the latest allegation of The Post’s exclusive probe into fishy goings-on at the Census Bureau, a new whistleblower says workers in the Los Angeles region have been manipulating economic data.


Contact information for the veteran Census worker — who reached out to me by e-mail recently and whom I interviewed by phone — has been turned over to congressional investigators who are looking into data falsification in other parts of the country.


“Everybody knows falsification is going on,” the whistleblower told me, adding the malfeasance in the LA region is so obvious that it’s hard to miss. ...

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An ebola Armageddon could trigger a rebirth in gold and silver prices: Eric Sprott

An ebola Armageddon could trigger a rebirth in gold and silver prices: Eric Sprott | Gold and What Moves it. | Scoop.it
Could an infectious disease kill the monster that has been choking gold and silver prices for more than a year? On the heels of a lively Sprott Precious Metals Roundtable discussion, The Gold Report caught up with investor Eric Sprott to ask how a tragedy in Africa could impact the price of precious metals and mining stocks. We also spoke to his Executive Vice President of Corporate Development John Ciampaglia about a new way to gain exposure to gold.

The Gold Report: Deutsche Bank warned in a recent note that the Ebola virus could impact commodity markets, including gold and cocoa, as it spreads to producing countries in West Africa, particularly Ghana and Mali. In a recent article titled "Ebola, The Tipping Point," you mourned the unnecessary loss of life and predicted 5% less global production next year than this year. Could a lack of supply due to Ebola-related closures really cause the price of gold to rise?

Eric Sprott: There is already a shortage of gold and silver in the markets without a corresponding increase in the price. I wrote an open letter to the World Gold Council questioning its data on China. If you believe the Shanghai Gold Exchange data, China consumes more than 2,000 tons (2 Kt). In 2011, it consumed only about 1 Kt. In the last two years, China has bought an extra 1 Kt gold—25% of a 4 Kt market. If any country came in and bought 25% of the oil market, the wheat market or the orange juice market, the commodity price would not go down. Obviously, the physical gold market is not manifesting itself in the price changes.
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Waiting for Something bad to happen - Golem XIV - Thoughts

I think Friday saw a power-shift from the central banks to the global private banks. I think the global banks served notice that the Central bank plan of 1) reining in the risk-taking of the TBTF banks and 2) stimulating growth in the real economy is now dead in the water. There is a new plan.

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Huge, honkin’ gold nugget hits the market in S.F. - American Hard Assets

Huge, honkin’ gold nugget hits the market in S.F.  - American Hard Assets | Gold and What Moves it. | Scoop.it
Here we go again — what is believed to be the biggest gold nugget found in modern times in California’s historic Gold Country is going on sale Thursday in San Francisco.
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