The War on Cash is not merely continuing, it is intensifying. It began in the West, with relatively minor infringements on our right to use the currency of our own nation. The War has now shifted to India, been radically ratcheted up, and inflicted upon a population of 1.2 billion people, where 68% of transactions were conducted with cash.
Regular readers have been warned in the past about the insidious corruption of the Modi regime, when it attempted to literally steal the gold of its own people with its “gold deposit scheme” (scam). Out of the blue, this oppressive regime announced a ban on 500- and 1,000-rupee notes – which represented 86% of all currency. Now it is going even farther.
Thanks to Hugo Salinas Price Some readers may ask themselves; “What has gold to do with protecting jobs? Gold hoarders are certainly not creating jobs, and hoarding more gold will not help at all.”
Gold has everything to do with the loss of jobs in the US, and gold has everything to do with recovering jobs for the US economy. Let me go back to the 60?s. During those years, the US and the world were on a Gold-and-Dollar Standard.
Back in the 60?s, countries were very careful about maintaining a constant monetary balance between their exports and their imports. They all wanted to be in a situation where they would export more than they imported, so that they would have increasing balances of gold or dollars in their Treasuries.
Fragmentation, discord, discontent, class war: this is the inevitable result of a shrinking pie. The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the "pie" being cheap energy, government revenues and consumption, sales and profits.
Horsetrading over a growing pie is basically fun. There's always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus. Horsetrading over a shrinking pie is not fun. Everybody is shrilly demanding their piece of the pie should either grow or be left untouched; any cuts must come out of someone else's slice.
Dear Imperial America: the lifestyle you ordered is permanently out of stock. Our extraordinary misallocation of national treasure and political power has set a banquet of consequences that few are willing to face, much less address head-on. If we had to sum up this vast misallocation, we might start by characterizing it as the result of a multitude of elites playing Empire with money borrowed from future generations.
We can start the list of extraordinary misallocations of national treasure with the Neocon's endless wars of choice. Ten years ago, estimates of the total cost of the Iraq misadventure were $3 trillion: Cost of Iraq War: $3 Trillion; Cost of Solar Plants to Power all 105 million U.S Households: $500 Billion (April 10, 2008)
By Greg Hunter’s USAWatchdog.com (Early Sunday Release)
Investment advisor Catherine Austin Fitts says the oligarch, or establishment class, is on the attack. She calls this latest chapter in the Trump Administration “The Empire Strikes Back.” Fitts explains, “Number one, Trump came into Washington with an agenda that would really make America great again: tax reform, regulatory relief, infrastructure and Obama Care. Immediately, he got bogged down in those for a variety of reasons. If you look at Congress’s constituents, they can’t make money solving those things, particularly if it helps regular people. So, immediately you bog down on those issues. He’s trying to get his cabinet in place. In the meantime, you have the Empire worried about a variety of things. If you want to slow Donald Trump down or make sure the only thing he can get through Congress are things that are good for what I call the “piggies,” . . . the first thing you do is take out their loyal lieutenants. You take them out and try to put space between him and his lieutenants.”
Click through for the rest and the video interview.
In Hoisington’s Fouth Quarter Review (not yet posted online), Lacy Hunt takes a look at the Trump economy, policy lags, and impediments to growth. Hunt sees five major impediments, in his report. 1. Impediments to Growth: Unproductive Debt At the end of the third quarter, domestic nonfinancial debt and total debt reached $47.0 and $69.4 trillion, respectively. Neither of these figures includes a sizeable volume of vehicle and other leases that will come due in the next few years nor unfunded pension liabilities that will eventually be due. ...
Click through for the rest. Not much has changed. Debt is still king. King of the walking dead.
Gold prices built on last week’s gains and hit another 2.5-month high in early US trading Monday, boosting producers’ shares for the seventh consecutive day — the longest winning streak since August 2014.
Your skills, knowledge and social capital will emerge unscathed on the other side of the re-set wormhole. Your financial assets held in centrally controlled institutions will not.
Longtime correspondent C.A. recently asked a question every American household should be asking: which assets are most likely to survive the "system re-set" that is now inevitable? It's a question of great import because not all assets are equal in terms of survivability in crisis, when the rules change without advance notice. If you doubt the inevitability of a system implosion/re-set, please read Is America In A Bubble (And Can It Ever Return To "Normal")?
On June 29, 2016, US District Court Judge Paul Engelmayer dismissed a lawsuit against JP Morgan Chase & Co. which alleged that the bank had engaged in extensive manipulation of the price of silver, in violation of both state and federal antitrust laws. The plaintiffs appealed. On February 1, 2017, the US Appeals Court for the 2nd Circuit Court of Appeals held that their complaint contained sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This reverses the lower court and revives the lawsuit.
The United States suffered through a deflationary depression in the 1930s. Stock prices crashed, currency in circulation declined, commodity and real estate prices fell hard and human misery prevailed.
President Roosevelt revalued gold from $20.67 to $35.00 per ounce in 1933 – a substantial devaluation of the dollar. Make-work and government spending programs were implemented. War followed the depression.
Then the United States suffered through the “stagflation” of the 1970s. The economy stagnated and inflation rose to previously unheard of levels. The Vietnam war, inflation and social protests dominated the news, gold shot upward from $42.00 to over $800 per ounce and the dollar bought much less. Government spent massively on the Vietnam War and social programs. ...
You want to fix the economic system, reduce political bribery and reduce rising income inequality? Shut off the cheap unlimited credit spigot to banks, financiers and corporations. Cheap credit--newly issued money that can be borrowed at low rates of interest--is presented as the savior of our economic system, but in reality, it's why our system is broken. The conventional economic pitch goes like this: cheap credit enables consumers to buy more goods and services (and since the system needs growth or it implodes, that's good).
Cheap credit also enables companies to invest in new productive assets (capital).
Notwithstanding the strong demand for gold and silver globally, buying activity in the U.S. retail market for physical bullion has fallen noticeably in the wake of Donald Trump's election victory. And retail selling in the U.S. has increased. The bullion markets have entered a new phase. The two terms of President Obama included the aftermath of the 2008 financial crisis, zero interest rate policy from the Federal Reserve, and multiple rounds of Quantitative Easing. Reasons to buy gold and silver were plentiful. Today, the reasons to diversify into gold and silver are as strong as ever, but they're perhaps less obvious to the average retail buyer in the U.S. Many of the people who felt deeply concerned about the direction of the nation under Barack Obama are currently more optimistic now. U.S. stock markets are moving relentlessly upward. Artificially low interest rates are sending home prices higher. Even the U.S. dollar looks decent when compared to other world currencies.
Gold prices on Tuesday closed at break-even levels, confounding some market players as the commodity pared an earlier loss in the session, even as U.S. equities resumed their record run and the dollar strengthened.
April gold GCJ7, -0.03% slipped 20 cents, or less than 0.1%, to settle at $1,238.90 an ounce, after trading as low as $1,226.80, earlier in the session. May silver SIK7, +0.06% also reduced an earlier decline to settle down 2.9 cents, or 0.2%, at $18.074 an ounce Tuesday.
The ICE U.S. Dollar Index DXY, -0.24% was up 0.5% at 101.4000. A stronger dollar usually provides a headwind to dollar-pegged assets, making them less attractive to buyers using other monetary units.
Too much has been written what Mr. Trump can or can't do. In his first days in office he ambitiously reshaped trade, healthcare, immigration and American law. Dodd Frank is next to be scrapped. And in disturbing everyone, the only certainty is uncertainty. Trump's "America first" policies of tax cuts, less regulations, infrastructure spending and building the Mexican wall will widen America's budgetary deficits which could usher in the second of many rate increases by the Federal Reserve. Ironically a rate increase would lead to an even stronger dollar wiping out any possible advantage for Trump's manufacturing proposals. Moreover, the multitude of conflicting Trump's proposals on tariffs would certainly boost import prices, hurting his own constituency and aggravate his trade deficits, risking a worldwide trade war. And with the dollar rising to 14 year highs despite running up considerable trade deficits, he even started a war with the dollar bulls, signaling that the dollar is too strong. Since then the dollar has fallen for seven consecutive weeks of losses.
By Turd Ferguson | Wednesday, February 15, 2017 at 11:09 am
Isn't it interesting that, all of a sudden and after eight years of supposedly flat prices and deflation fears, all the rage is "surging inflation" and this phenomena may "force the Fed to act" to raise rates again as soon as March? I don't know. Maybe there really is a sudden surge of price inflation? How would I know when I'm just a dope with a MacBook? However, I think it's fair to be more than a little skeptical..especially when it comes to the efficacy of government-created data. Is it possible to prices at both the wholesale and consumer level to suddenly surge to multi-year highs simply because Trump was elected? I'm having a hard time connecting the dots because that doesn't seem likely or possible. Instead, it's almost as if The Fed is dying to hike rates for their Banks and they're getting the data they want/need to justify their ends. To that point, check this chart that I pulled from Twitter. Note that it's another one of those FRED charts from the Fed's own database. So, help me out with this...If the purchasing power of the dollar is down 30% over the past 17 years, how is it that NOW is the first time that we're actually seeing significant MoM and YoY inflation numbers??
On the heels of Janet Yellen’s testimony to Congress, bonds are falling and the dollar is moving higher. But this is not business as usual because these are dangerous times.
Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness: The NFIB small business optimism index held its recent sturdy gains at 105.9 for January vs 105.8 in December. It’s at the best level since December 2004. Plans to Hire rose another 2 pts to 18, the most since before the recession. After spiking by 38 pts last month, those that Expect a Better Economy fell by 2 pts as did those that Expect Higher Sales (after jumping by 20 pts). Those that said it’s a Good Time to Expand rose to the highest since 2004. Compensation plans continued to improve with it matching the best level in 15 years.
The only possible output of low social capital is rising inequality. One of the themes I've been addressing since 2008 is the neocolonial-plantation structure of the U.S. economy. The old models of colonial exploitation that optimized plantations worked by cheap imported labor (or situated in peripheral nations with plenty of cheap labor) have, beneath the surface, been adapted to advanced capitalist democracies.
Six years ago in my first book, Currency Wars, I wrote, “There is nothing today that suggests the currency wars will end anytime soon.” Today, those words seem as true as ever.
A currency war is a battle, but it’s primarily economic. It’s about economic policy. The basic idea is that countries want to cheapen their currency. Now, they say they want to cheapen their currency to promote exports. Maybe it makes a Boeing more competitive internationally with Airbus.
But the real reason, the one that’s less talked about, is that countries actually want to import inflation. Take the United States for example. We have a trade deficit, not a surplus. If the dollar’s cheaper it may make our exports slightly more attractive.
Neocolonial "capitalist paradise" or crony "socialist paradise": the net result is the same: expropriation and impoverishment. Yesterday I noted that not all assets will make it through the inevitable financial re-set. ( Which Assets Are Most Likely to Survive the Inevitable "System Re-Set"?)
Those that are easy to expropriate will be expropriated, and those assets vulnerable to soaring taxes, inflation and currency devaluation will also be hollowed out. There are two real-time examples of these dynamics we can profitably study: "capitalist" Greece and "socialist" Venezuela. Both nations have impoverished their citizenry to preserve an oligarchy and its cronies.
Rather than be seen to be further enriching the rich, I think central banks will start closing the "free money for financiers" spigots. Take a quick glance at these charts of the Federal Reserve balance sheet and bank credit in the U.S. Notice what happened to bank credit after the Fed "tapered" and stopped expanding its balance sheet?
Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending. Have you noticed that the breathless anticipation of the next central bank "save" has diminished? Remember when the financial media was in a tizzy of excitement, speculating on what new central bank expansion would send the global markets higher in paroxysms of risk-on joy?
Those days are gone. Nowadays, central banks cautiously continue the bond buying programs they've had in place for years, but their policy initiatives are tepid at best: they talk about expanding asset-buying programs to include more stocks, or discuss notching interest rates higher in some cases; but the talk is subdued, as expectations are being consciously lowered.
Economist John Williams warned last year the U.S. economy never really recovered, and it was going to turn down again. That downturn happened Friday when the latest GDP figures came in below 2% growth in the fourth quarter of 2016. Williams says the economy “contracted,” and he contends it’s going to get a lot worse before it gets better. Williams explains, “I think there is reason for optimism in terms of the economy down the road. The problem is irrespective of who is president. When you introduce new policies, it takes about nine months to a year before we see the impact. So, the impact of all the happy things that are happening now won’t start to surface until 2018 barring other complications. I expect you to see a pickup in the economy then. Unfortunately, we are still in an economy that is turning down. You are going to see that in the reporting in the next several months. We never really recovered from the economic collapse going into 2009. There was a little bit of a rebound, and we started to see the economy turn down again in 2014. If you look at the underlying series such as industrial production, freight indices and petroleum consumption, there has been no recovery. We are turning down again. This is the longest and deepest economic contraction since the Great Depression.”
Click through for the full post and video interview.
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