Monday, 16 January 2017

Could Trump’s Border Tax Ignite CHAOS in the US Silver Market?


Doc & Dubin Are Back in the Saddle Breaking Down the Big PM Rally to Start 2017.

Doc Presents A Potential Black Swan For Silver Entirely Off the Radar:

Could Donald Trump's Border Tax Plan Unleash Absolute CHAOS in the US Silver Market?


Friday, 13 January 2017

Manipulation Crushed Profit Margins At Largest Primary Silver Mining Producer

The profit margin trend at the world’s largest primary silver mining company has experienced a rapid decline over the past several years. Fresnillo PLC in Mexico, is the largest primary silver mining company in the world. Last year, Fresnillo PLC produced 47 million of silver and 762,000 oz of gold.

For all their hard work, Fresnillo’s profit margin versus its cost of sales fell to an all-time low of 7% in 2015. This can most certainly be blamed on market intervention, which I will discuss in more detail in upcoming articles.

The chart below shows how the company’s cost of sales has increased to $1.01 billion while their attributable profit fell to only $70 million:



Now compare the huge difference between the 2015 figures to 2005. In 2005, Fresnillo PLC’s cost of sales were only $196 million versus their attributable profit of $136 million. Thus, the company’s attributable profit margin to their cost of sales was 70%… ten times higher than it was in 2015.

Furthermore, Fresnillo PLC produced a lot more silver and gold in 2015 versus 2005.

Fresnillo PLC Silver & Gold Production (Moz = million oz.)

2005 Silver production = 35.2 Moz

2005 Gold production = 277,000 oz

2015 Silver production = 47 Moz

2015 Gold production = 762,000 oz

Even though Fresnillo PLC increased their silver production significantly over the past decade, it is their gold production that experienced the most rapid growth. However, the company enjoyed a much higher profit margin on its cost of sales in 2005 when it was producing a lot less gold and silver.

If we look at the chart above, we can clearly see that the attributable profits for years 2013-2015 were about the same as what Fresnillo PLC made from 2005-2008, but, the cost of sales were three to four times less during the early period than they were from 2013-2015.

As we can see, something clearly changed on Fresnillo PLC’s income statement after 2012. Again, this was due to market invention by the Federal Reserve and Central Banks via the bullion banks paper trading markets.

That being said, I need to clarify a few things. While the chart above shows Fresnillo PLC’s cost of sales, this does not include all their total costs. The cost of sales figures only represent what takes place at the actual mine. If we add additional costs, such as administration, exploration, selling expenses and even income tax, the total (more realistic) cost is much higher.

For example, Fresnillo PLC’s additional costs were in 2015:
Administration cost = $63 million
Exploration cost = $140 million
Selling expenses = $14 million
Income tax expense = $143 million

Thus, Fresnillo PLC’s attributable profit of $70 million was even less at only 5% when we compare it to their total revenue of $1.44 billion.
Fresnillo PLC Capital Expenditures Have Jumped Nearly Eight Times While Profits Evaporated



Fresnillo PLC’s capital expenditures were $475 million in 2015 versus $61 million in 2005. The increased capital costs were due to expansion of new projects as well as increased higher sustaining capital costs. It would have been nice for Fresnillo PLC to make better profits on the large amount of capital and money they spend to provide gold and silver to the market.

I stated in the beginning of the article that “Market Invention” was the cause of Fresnillo’s deteriorating profit margins. While many things can be blamed on “market intervention” or “manipulation”, new evidence released from Wikileaks cable published on GATA’s website, states that it was done on purpose to keep the public from hoarding physical gold.

Again, I will be writing articles discussing this in detail. However, the primary gold and silver miners are few of the only companies producing REAL WEALTH in the world. It is a shame that “market intervention” is crippling the only industry that provides the world with real wealth.

Lastly, even though I have shown how Fresnillo PLC’s profit margin has really fallen in the past several years, I believe this is one of the strongest primary silver and gold mining companies in the world. Most other gold and silver mining companies lost money in the past two-three years, but Fresnillo PLC still made some profits.

Furthermore, the best performing mining companies in the future when the GREATEST FINANCIAL PONZI SCHEME in history starts to unravel will be those who produce mostly gold and silver. What I mean by that is a company’s revenue that predominately comes from both gold and silver mining.

For example, Fresnillo PLC’s silver and gold metal sales in 2015 accounted for 91% of their total revenues. Compare that to Pan American Silver’s 73% of total revenues came from silver and gold metal sales for the same year.

Regardless, the market has no clue just how undervalued physical precious metals are as well as the primary gold and silver miners. When the FIAT MONETARY FAN finally hits the COW EXCREMENT, the market price of these extremely rare assets will surge higher.

- Source, SRS Rocco

Sunday, 8 January 2017

Accounting Gimmicks Won’t Stop The U.S.A. Titanic From Sinking

The U.S. Government has gone to great lengths in using accounting gimmicks to prop up the financial system and domestic economy. One area where this is readily apparent is the disconnect between the rising U.S. debt versus the annual budget deficits.

Mish Shedlock wrote about this in his article, U.S. Deficit at $590 Billion But Debt Up $1.2 Trillion: Sleight Of Hand Magic:

The US deficit is up $590 billion so one might think total US debt would rise by that amount or at least something close to that amount.

Instead, total US debt for the fiscal year that just closed soared by over $1.2 trillion. What’s going on?

The shortest answer is “deficit lies”. The longer answer involves numerous off budget items like social security do not count towards the deficit but do count towards debt.

I calculated the increase of total U.S. debt from 2000 to 2016 as well as the annual budget deficits:



From 2000-2016, the total U.S. debt increased by $13.9 trillion while the annual budget deficits equaled $9.1 trillion. Thus, we had a net difference (or shortfall) of $4.8 trillion. Basically, the total U.S. debt increased $4.8 trillion more than the annual budget deficits during that time period.

So, how could this be? From the article linked above Hoisington Management stated the following about the increase in debt versus the deficits:

“From 1956 until the mid-1980s, the change in gross federal debt was always very close to the deficit (Chart 1). However, over the past thirty years the change in debt has exceeded the deficit in 27 of those years, which served to conceal the degree to which the federal fiscal situation has actually deteriorated. The extremely large deviation between the deficit and debt in 2016 illustrates the complex nature of the government accounting.



The increase in debt for that period was over $1.2 trillion while the deficit was $524 billion, a near $700 billion difference. The discrepancy between these two can be broken down as follows (Table 1): (a) $109 billion (line 2) was due to the change in the treasury cash balance, a common and well understood variable item; (b) $270 billion (line 3) reflects various accounting gimmicks used in fiscal 2015 to limit the size of debt in order to postpone hitting the Debt Limit. Thus, debt was artificially suppressed relative to the deficit in 2015, and the $270 billion in line 3 is merely a reversal of those transactions, a one-off, non-recurring event; (c) $93 billion (line 4) was borrowed by the treasury to make student loans, and this is where it gets interesting. Student loans are considered an investment and therefore are not included in the deficit calculation.

Nevertheless, money has to be borrowed to fund the loans, and total debt rises; (d) In the same vein, $70 billion (line 5) was money borrowed by the treasury to increase spending on highways and mass transit. It is not included in the deficit calculation even though the debt increases; (e) $75 billion (line 6) was borrowed because payments to Social Security, Medicare and Affordable Care Act recipients along with the government’s civilian and military retirees were greater during this time frame than the FICA and other tax collections, a demographic development destined to get worse; (f) Finally, the residual $82 billion (line 9) is made up of various unidentifiable expenditures including “funny money securities stuffed in various trust funds”.

What is interesting to take notice in the chart in the quoted text above, is that the high spike in total U.S. debt versus the annual budget deficit took place during the 2008-2009 U.S. financial and economic crash. However, another large spike took place in 2016 as the total debt increased $1.2 trillion versus $590 billion in the budget deficit.

So, why such a big increase in 2016 if the U.S. economy and stock market is supposedly very strong??? Or is the financial situation much worse than we are led to believe?

Well, to get an idea of where we are going, we need to look at how the U.S. Government forecasted its budgets in the past. Here is the CBO – Congressional Budget Office ten-year budget from 2008 to 2017. The excel table below also includes years 2006 and 2007:



It’s kind of hard to read all the data, but the highlighted RED AREA is the annual deficits or surpluses, and the YELLOW is the debt held by the public. Now, this public debt amount is not the entire U.S. debt, just the public debt. The figures highlighted in YELLOW do not include the “Intragovernmental Holdings.”

For example, in 2006, the total public debt (yellow) was $4.829 trillion. However, the total U.S. Government debt was $8.5 trillion that year. Thus, the Intragovernmental holdings were approximately $3.7 trillion.

So, according to the CBO ten-year budget in for 2008-2017, there would be a net surplus of $800 billion (this is all the way to the right of the highlighted yellow line) and the total public debt (minus intergovernmental holdings) would fall to $4.274 trillion in 2017.

So, what really happened? Here is the CBO’s ten-year budget for 2017-2026:



If we look at 2017, the total U.S. public debt is forecasted to reach $14.743 trillion. Thus, the CBO blew their previous 2008-2017 budget by a cool $10 trillion. Again, the CBO forecasted that the total public debt would only be $4.274 trillion in 2017, nowhere near the $14.473 trillion they forecast for next year.

Furthermore, the CBO forecasts the cumulative deficits will be an additional $8.571 trillion from 2017-2026 (this is all the way to the right of the yellow highlighted line).

Let’s put the CBO ten-year budget forecasts into perspective. According to their 2008-2017 budget made in 2007, they forecasted the total pubic debt would fall from $4.995 trillion in 2008 to $4.274 trillion in 2017. It didn’t. Instead it is forecasted to jump by $10 trillion to $14.743 trillion in 2017. Again, the CBO understated the rising public debt by $10 trillion.

Moreover, the CBO forecasted that the U.S. government would enjoy a $800 billion net surplus from 2008-2017. Instead, the net annual deficits from 2006 to 2016 accounted to over $8 trillion. So, they blew that by almost $9 trillion. We get that $9 trillion figure by adding the $800 billion surplus to the $8 trillion deficit.

If the CBO got their ten-year budget from 2008-2017 off by $10 trillion in public debt and $9 trillion in cumulative annual deficits, how much will their 2017-2026 budget forecast be off by???

Hell, the CBO forecasts $9 trillion more in public debt by 2026 and $8.5 trillion in cumulative annual deficits. So, in all likelihood, their forecast will be off by at least 50%, or more.

Again, total current U.S. debt is $19.9 trillion. This includes $14.4 trillion in public debt and $5.5 trillion in Intragovernmental Holdings. If the CBO is budgeting $23 trillion in just public debt, we can add another $6-7 trillion for Intragovernmental Holdings, for a total of $30 trillion by 2026. But, wait… they are probably going to be off by at least another $10-$15 trillion

What kind of interest on the debt would it be if U.S. total debt reached $40 trillion?

Actually, I doubt we are going to make it that long. If you have been reading my energy analysis, the WHEELS FALL OFF THE ECONOMY well before 2026. And in all likelihood, the sinking of the U.S.A TITANIC will probably take place during President-elect Trump’s administration.

Lastly…. there seems to be a many disillusioned precious metals investors who are throwing in the towel due to the supposed Trump Kool-Aid. This doesn’t surprise me one bit. It takes a special person to stick to their guns when the GOING GETS ROUGH.

While the U.S. debt will continue higher, along with the broader stock markets, trying to time the EXIT STRATEGY will be the worse mistake anyone can make.

- Source, SRS Rocco

Thursday, 5 January 2017

China Threatens Trump With "Big Sticks" If He Wages A Trade War

In the latest not too subtle threat lobbed by China's official press aimed at Donald Trump, the mainland media warned the President-elect that he’ll be met with "big sticks" if he tries to ignite a trade war or further strain ties.

"There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door -- they both await Americans," the Communist Party’s Global Times newspaper wrote in an editorial Thursday in response to Trump’s plans to nominate lawyer Robert Lighthizer, who has criticized Beijing’s trade practices, as U.S. trade representative.

The latest lashing out at Trump from a state-run outlet, noticed first by Bloomberg, followed others last month aimed at Peter Navarro, a University of California at Irvine economics professor and critic of China’s trade practices whom Trump last month named to head a newly formed White House National Trade Council. Those picks plus billionaire Wilbur Ross, the nominee for commerce secretary, will form an "iron curtain" of protectionism in Trump’s economic and trade team, the paper wrote.

The three share Trump’s strong anti-globalization beliefs and seem unlikely to keep building the current trade order, it said, adding that they will be more interested in disrupting the world trade order.

Concurrently, SCMP reported that China’s state media have lambasted US president-elect Donald Trump for commenting on and conducting foreign policy on Twitter. The state-run news agency Xinhua ran a signed commentary headlined “Addiction to Twitter diplomacy is unwise” late on Tuesday night.

The article came after Trump fired another salvo at China through Twitter on Tuesday, accusing Beijing of refusing to help contain North Korea’s nuclear ambitions.

Trump first questioned in a tweet North Korea’s claims that it was in the final stages of testing a ballistic missile capable of reaching American soil. He later tweeted: “China has been taking out massive amounts of money & wealth from the US in totally one-sided trade, but won’t help with North Korea. Nice!”

The Xinhua commentary said Trump’s use of Twitter had aroused widespread concern among US politicians and academics.

For now China appears to have fallen off Trump's radar, and instead over the past few days the president-elect has been focusing on the ongoing Russian hacking fiasco as well as slamming "head clown" Chuck Schumer for the mess that is Obamacare.


- Source, Zero Hedge

Monday, 2 January 2017

Bitcoin Surges Above $1,000 As China Unveils New Capital Controls

As noted yesterday, for the first time in three years, and only the second time in history, bitcoin rose above $1,000 in Yuan-denominated Chinese trading, however it was limited to the lower side of this "round number" psychological barrier in US trading, as BTC flirted with $999.99 for most of the day on the popular Coinbase exchange, without crossing it.


Overnight, however, Chinese demand proved too great and US markets had no choice but to arb the difference. So with Bitcoin trading in China at an implied price of over $1,050 at this moment, bitcoin finally soared above $1,000 in the US as well, trading just around $1,024 on Coinbase as of this moment.


Various catalysts for the recent surge have been cited, chief among which is the ongoing crackdown against cash in India providing a new source of demand for bitcoin. However, the most immediate driver of the recent burst in Chinese demand originates, not unexpectedly, from China where Beijing over the weekend implemented even more of what we have said since September 2015 will keep pushing bitcoin relentlessly higher: capital controls.

Recall that as we noted over the weekend, in order to further curb capital outflows, Chinese banks will be required to report all yuan-denominated cash transactions exceeding 50,000 yuan (around 7,100 US dollars) to the People's Bank of China (PBOC), down from the current level of 200,000 yuan, according to a PBOC document released on Friday. Cross-border transfers more than 200,000 yuan by individuals will also be subject to the report process. In terms of foreign currencies, the report threshold remains at the equivalent of 10,000 US dollars for both cash transactions and overseas transfers.

- Source, Zero Hedge

Friday, 30 December 2016

FORENSIC EVIDENCE: Why Silver Price Manipulation Will End

To Make Sense Of Silver Price Manipulation, You Have To Understand The True Fundamentals

Even though Deutsche Bank finally came out and provided evidence that they have been manipulating the silver market, this didn’t do much to change the falling price trend. Ironically, after Zerohedge published the Deutsche Bank Silver Manipulation article on December 8th, the price of silver fell another 8%.

I would imagine this must have done wonders for already disenchanted silver investor. Which is why I decided to write this article. Even though the present downturn in the paper silver price can be quite frustrating to many investors, SILVER’S REAL VALUE is totally misunderstood by the market.

To understand how the silver price is being manipulated, we have to first understand the silver pricing mechanism. To explain this, I decided to use one of the largest primary silver mining companies in the industry, Pan American Silver.

Unfortunately, the majority of the market still believes that “Supply & Demand” are the leading drivers of price. They aren’t. While I used to believe in this economic theory, I no longer do. I have made the case for this in several of my past articles, but I will show it again using Pan American Silver as another example

I have updated my chart below to show Pan American Silver’s “Estimated Break-even” from 2004 to 2016:



This chart may seem a bit complicated, but it’s not. The top of the BLUE AREA is Pan American Silver’s estimated break-even, the WHITE LINE represents the realized annual silver price and the GREEN or RED figures show the estimated profit or loss per ounce each year.

Basically, when the white line is above the blue area, Pan American Silver made a profit and when it fell below, they suffered a loss. So, except for a few really good years (2011 & 2012), Pan American Silver did not make much money for each ounce of silver they produced. Pan American Silver enjoyed a $9.02 profit per ounce in 2011 and $5.20 in 2012. However, they lost money in 2004, 2013, 2014 and 2015.

- Source, SRS Rocco, Read More Here

Tuesday, 20 December 2016

Silver Prices Still Up For 2016 After FED Rate Hike


With so much action in gold & silver, unfortunately to the downside, we had to get back the biggest expert on their price that we know (well him and Andy Hoffman). Just this week the Federal Reserve raised rates like they did December last year and in the short term the metals are contracting. David's predicting a end of january time for the next wave up in the rally to commence.


Friday, 16 December 2016

Why Europe Must End in Tears

The latest consequence of economic mismanagement in Europe was the failed attempt at constitutional reform in Italy this week.

The Italian people have had enough of their government’s economic failure, and is refusing to give it more power.

The EU and the euro project have been an economic disaster for all participants, including Germany, which will eventually be forced to write off the hard-earned savings she has lent to other Eurozone members. We know, with absolute certainty, that the euro will self-destruct and the Eurozone will disintegrate.

We know this for one reason above all. The political class and the ECB are guided by economic beliefs – I cannot dignify them by calling them reasoned theory – which will guarantee this outcome. Furthermore, they insist on using statistics that are incorrect for the stated function, the best example being GDP, which I have criticised endlessly and won’t repeat here. Furthermore, the numbers are misrepresented by government statisticians, CPI and unemployment figures being prime examples.

This article takes a column written by William Hague for the Daily Telegraph published earlier this week to illustrate the depths of misunderstanding even a relatively enlightened politician suffers, with this mix of nonsense and statistical propagandai. This article also refers to a speech delivered this week in Liverpool by Mark Carney, Governor of the Bank of England, showing how out of touch with reality he is as well. Many of his and Lord Hague’s misconceptions are shared by almost everyone, so for the most part go unnoticed.

Lord Hague basically blames the euro for all Europe’s ills: “…... it has made some countries, like Italy and Greece, poorer while others get richer”, he opines, and it is certainly a common sentiment. But it is never the currency that’s to blame, but those that attempt to use it to achieve policy outcomes, and inevitably fail in their quest.

Before the euro came into existence, different currencies offered different interest rates, reflecting the market’s appraisal of lending risk. So, the Greek government, borrowing in drachmas, would typically have to pay over 12% interest, while Germany might pay 3% for the same maturity in marks. The fact that there were differing rates in different currencies imposed market discipline on borrowers.

After the introduction of the euro, interest rates for sovereign borrowers converged towards the lowest rate, which was Germany’s. The reason for this was banks could gear up their lending in the bond and money markets to make easy money from the spread between German rates and the others, risk-free on the assumption that the whole caboodle was guaranteed by the EU and the ECB. It was perfectly reasonable to expect this outcome, but whether the panjandrums in Brussels were smart enough to know this would happen is not clear. If they were, they displayed ignorance of the eventual consequences, and if not, they were simply ignorant, full stop.

These same operatives bent the rules they themselves had originally set to allow countries to join the euro. Under the Maastricht Treaty, budget deficits were to have been less than 3% and government debt to GDP less than 60% for a state to qualify for membership. Neither Germany nor France qualified at the outset. And when it came to Greece, the Greek government simply lied, with the full knowledge and encouragement of the other members. No, Lord Hague, it was the policy makers that were at fault, not the currency itself.

But he continues: “Membership of the euro has put the Italians on a permanent path to being poorer”. Not so. It was the Italians who used cheap euro-denominated money to borrow profligately. They, and they alone are responsible for the mismanagement of their economy and their debt problems, which incidentally now exceed the Maastricht 60% limit by a further 75%.

So, who is policing that?

Lord Hague also trots out the canard about how the euro benefits Germany: “Germans keep exporting easily and running up a surplus, while the Italians struggle and go deeper into debt”. This statement in quotes is undoubtedly true on face value, but it is wrong to blame the poor euro. Instead, the blame lies with fiscal imbalances, relative rates of bank credit expansion, and the additional horror of TARGET2. This last artifice is intended to even out the monetary imbalances that would otherwise occur from trade imbalances. But its designers seem to have been completely unaware that the only way trade imbalances can be controlled is through the money shortages and accumulations that result from trade deficits and surpluses respectively. Instead, TARGET2 makes good the money deficiency that results from excess imports, and reduces the money surplus that accumulates in the hands of the exporters. It recycles the money spent by Italians so that it can be spent again, or even hoarded outside Italy, ad infinitum. TARGET2 is living proof of the ridiculousness behind the euro project.

Lord Hague provides an exception to his argument and conclusion, by citing Germany’s greater productivity and suggesting that the only way out was for Mr Renzi to enact bold reforms to raise Italian productivity to the same level as Germany’s. He doesn’t say what these reforms might be. I can tell him: the new government should downsize from 52% of GDP to less than 40%, the lower the better. The redeployment of capital from government destruction to private sector progression will work wonders. Tax policies should favour savers. At the same time, ordinary Italians should be allowed to get on with their lives and made to understand the state is not there to support them with handouts.

Finally, Lord Hague’s conclusion, while correct legally, is incorrect from a strictly economic point of view. He states that leaving the euro is a far more difficult problem than leaving the EU, there being no Article 50 to trigger. He implies that if Italy simply returns to the lira, there can be little doubt that it will rapidly collapse taking its banks with it, because Italy’s creditors will still expect to be repaid in euros while the cost of borrowing in lira is bound to increase rapidly, undermining government finances.

However, contrary to everything Keynesians have been taught and in turn teach gullible students, the economic objective of monetary independance should be sound money, not continual depreciation. Italy has enough gold to arrange a gold exchange standard for herself, or alternatively she could run a currency board with the euro, to ensure the lira retains value for foreign creditors. Either course requires something novel from Italian politicians: they must bite the bullet on government finances and permit capital to be redeployed from moribund businesses to new dynamic entrepreneurial activities. It can be done, and Italy would rapidly emerge as a new industrial force.

But will it be done? Sadly, there’s not a snowball in hell’s chance, and here we must agree with Lord Hague. In common with their opposite numbers everywhere else, Italian politicians have surrounded themselves with economic yes-men, trained at the expense of the state to justify state interventions in the economy. It has become a feed-back loop that ultimately concludes with economic instability, crisis and eventual collapse.

Carney’s groupthink

Lord Hague, while respected as a senior British politician is at least not involved in Italy’s monetary or fiscal policies. Far more dangerous potentially is someone with his hand on the monetary tiller, Mark Carney, Governor of the Bank of England. This week he made a speech in Liverpool, which put the blame for the failure of his monetary policies on everyone but the Bankii. He said politicians need to foster a globalisation that works for all. Really? How are they going to do that? He blames economists for been at fault for not recognising “the realities of uneven gains from trade and technology”. But surely, we all know that establishment economists, including the Bank’s own, have an unrivalled track record of getting things wrong. To expect them to suddenly exhibit forecasting prescience is Carney’s personal triumph of hope over reality. Carney berates companies for not paying tax. This is the classic “someone else’s fault” line, and ignores the easily proven fact that money deployed by the private sector in pursuit of profit is productive, while giving it to government is wasteful. More tax paid may be desired by the state, but it is anti-productive.

The Governor then claims the Bank’s monetary policy has been “highly effective” and that “the data do not support the idea that the period of low rates has benefited the wealthy at the expense of the least wealthy.” He has obviously been unable to make the connection between the falling purchasing power of fixed salaries for the low paid and for pensioners relying on interest income, while stock markets roar to all-time highs on the back of suppressed interest rates and injections of money through quantitative easing. Yes, Mr Carney, my middle-class friends have done very well out of their investments and property, thanks to monetary inflation, but they still pay their gardeners and maids roughly the same depreciated wages.

This is relevant not only to the mismanagement of the UK’s economy, but also that of Europe. Carney attracted considerable criticism, rightly, for falsely threatening economic hell and damnation in the event of a vote for Brexit. This presupposes that everything in Europe is considerably better than for Britain on its own, and confirms that his opposite numbers in Europe, who were pushing the same line, have as much grasp of the economic situation as he has. Carney got this as wrong as he possibly could, but there’s no mea maxima culpa.

If Mr Carney and Lord Hague want to criticise current economic events, they should start by properly understanding the negative effects of fiscal and monetary intervention. They should realise that propping up defunct enterprises by lowering the cost of borrowing and supporting them with government contracts is Luddite and destructive. And above all, they should realise that ordinary people going about their business are infinitely adaptable, have an ability to withstand government and central bank silliness to a remarkable degree, and would deliver their taxes much more effectively if they were simply allowed to just get on with their business without having to suffer from government and central bank micro-management.

- Source, Goldmoney

Monday, 12 December 2016

David Skarica: Even Trump’s Best Policies Can’t Stop the Crash


Some investors are getting carried away with ‘Trump trades’. Now that he is elected we see the psychological optimism linked to cutting taxes, deregulation, and infrastructure spending being reflected in the stock market. David Skarica thinks the stock market is overvalued, and this upward trend won’t last long. He is preparing for a crash between the summer and fall- which is the common historical trend, as is a crash under a Republican majority.

Many are comparing Trump to Reagan, and David points out some key similarities and differences. In 1980 as well as present day- we have high unemployment, stagnant wages, and are coming out of a 6 or 7 year bull market. There are some glaring differences though. When Reagan took office, the debt to GDP of the US was around 30%.. the interest rates were higher, and people had very little personal debt. When they increased spending and cut taxes, they could run the huge deficits because it was at a low level, while interest rates were coming from a secular top.

Now the debt to GDP is over 100%. Interest rates likely bottomed this past summer, and should be headed higher for the next decade. The tax cuts probably won’t work like they did in the 80’s, because people are too indebted with mortgages, student, and car loans. The tax cuts savings will go to pay off debt, not back into the economy. Stock market capitalization to GDP is 125% right now. It has only been higher during the 2000 bubble in stocks. So we are very overvalued. Even the best of policies probably can’t change that.

The Fed is expected to raise rates in December and a few times next year, while Japan and Europe are still printing money- and every other central bank is either standing pat, or loosening. This means the dollar might go higher in the short to intermediate term, but If the US policy divergence in interest rates continues, it could burst the stock market bubble. Democrats tend to tax and spend, while Republicans borrow and spend- so we can expect huge deficits.


Sunday, 11 December 2016

The Silver Guru - Can Trump Stop Economic Collapse?


David Morgan joins Silver Doctors with a word of warning. Morgan says changing the president is like changing the captain on the Titanic. The ship is sinking. The issues are systemic. Trump can't put us back on track to overcome the debt burden.

Morgan says people may feel a "Trump Euphoria" for a while. The stock market will continue to rise beyond reason.

Where are precious metals headed? 2017 should be good for gold and silver, Morgan says. He expects gold and silver to rise starting around Trump's inauguration. Morgan says investors may hedge their stock portfolio and move towards precious metals.

Friday, 2 December 2016

END OF FREE SPEECH? The Hoaxing MSM Creates Bogus "Red Flag" List


The mainstream media is reporting that Russia meddled in the American election by spreading "fake news." Silver Doctors and David Kranzler’s Investment Research Dynamics Blog are now on mainstream media's “red-flag” list of supposed "Russian propaganda outlets." Kranzler says the mainstream media is trying to discredit the alternative media. Even the websites of Ron Paul, David Stockman, and Paul Craig Roberts were found on the list. Smearing these patriots is disgraceful, Kranzler says.

The mainstream media are the true propaganda artists, Kranzler says. The mainstream media is guilty of the same crime they’re accusing the Russian government of. Kranzler says the mainstream media this election season was obviously biased in favor of Hillary Clinton. Will Trump hold the mainstream media accountable? Will he “drain the swamp” in D.C.? Kranzler has his doubts. The corrupt system won’t change substantially, he says. Kranzler isn’t excited for Trump. “The good news is Hillary lost,” Kranzler says, “The bad news is Trump won.”

Market manipulation also shapes the public’s perception. With gold dropping and the stock market hitting all-time highs, the public sees the economy booming. Kranzler ends by giving his insight on how to filter out the mainstream propaganda and find out what’s real.



Monday, 28 November 2016

Greece Is Not India? Hellenic Banks Plan "Tax On Cash Withdrawals" To Combat Black Economy

Greek banks have proposed a series of measures to combat tax evasion, strengthen the electronic transactions and limit the use of cash in the economy, and as KeepTalkingGreece.com reports, one of the measures proposed is a special tax on cash withdrawals.

Bankers reportedly stress that cash money can easily and largely be channeled in the black economy. Therefore, a tax on cash withdrawals will drastically reduce cash transactions and by extension the black economy.

The bankers suggest that also credit and debit cards as wells as new technologies enabling cash-less transactions even for small amounts and mobile phones can be used for the purchase of a transport ticket or a newspaper at the kiosk.

The bankers proposal to the government also includes:

-Mandatory use of cards or other electronic payment networks for every transaction with professions where there is strong evidence of tax evasion or where cash is mainly used [ like bakeries, kiosks, street vendors and chestnut sellers?].

-Mandatory use of cards or electronic networks for transactions above a certain amount [this measure is already in effect].

–Reforming the tax system by introducing a revenue-expenditure system. Households or professionals will only be taxed on the amount of income that is has not been spent. In this way, households and professionals will have a strong incentive to seek receipts for any expenditure in order to increase their expenditure and reduce the tax amount they will have to pay.

-Obligation for all businesses and regardless of their size to pay electronically every salary and wage. (source: Kathimerini via Liberal.gr)

I cannot say who came with this revolutionary idea, some genius young academics or the Greek bankers themselves, those over 60 who have their secretaries or their kids doing their transactions for them using their own iphones and ipads.

I have no idea whether they have asked the country’s creditors to reform the tax system in a cash-less more-incentives Greek world, where households will be obliged to use revenue-expenditure books.

I absolutely do not understand how can one sleek and glossy group of bankers propose such measures and rule the economic system of a country where some 30% of population lives or is at risk of poverty, the welfare system has collapsed and thousands of families live on the 20- or 50-euro banknote a relative or a friend secretly stick in their pockets so that they buy some food, medicine or pay a small bill.

Not to mention those over 60 with minimum knowledge of electronic devices and applications and those over 80 who cannot even use a mobile phone.

Tax cash withdraws will of course give “capital controls” a new dimension.

I suppose the whole proposal has been drafted by a group of some academic professionals stuck in a huge bubble- Prove me wrong!

Are we going now about to ban cash and become India?

- Source, Zero Hedge

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