Monday, 24 July 2017

Mish on Gold and the Fed


Mish Shedlock with Gordon T. Long delve into Gold and the details of the Fed and other Central Bankers shenanigans and say's the assets bubbles will pop. Gold is doing very well in light of it all and will continue to do so.


Friday, 21 July 2017

The Global Impact of Central Bankers


Peter Atwater left behind a distinguished investment banking career to build his financial consulting operation and he has spent the best part of the past decade examining the role of confidence in markets. The biggest challenge is to understand when the market has reached its top as well as knowing when things have hit the floor and in this interview, Peter explains why some investors are psychologically better equipped to handle it than others.


Monday, 17 July 2017

The Smart Money Are Buying Gold and Silver

The Gold and Silver Freight Train looks to be leaving the station. All the bankers games will come to an end and when the tsunami of buy orders come it will blow them out of the water. But they knew that day will come thats why they hold it.

"The physical precious metals bid will go infinite — that is, big players holding useless cash will buy up all the gold and silver that’s available, at pretty much any price that’s demanded."





- Source, Zero Hedge

Friday, 14 July 2017

Trump Jr. Treason – NOT, Russian Lawyer Worked for Democrats


There is still no there there with the Russian collusion story in its latest version featuring Donald Trump Jr. This looks more like an episode of “Punk’d,” but there is no crime and no treason according to renowned lawyer Alan Dershowitz. What this really is all about is a fight between good and evil. It’s that simple. The Deep State and the MSM are doing everything they can to destroy Trump and his team. This is why President Trump held a prayer meeting at the White House where ministers laid hands on him in a prayer circle.

Breitbart.com is out with a new story about how the Russian lawyer at the center of the Donald Trump Jr. Russian collusion hype has a long history of working with Democrats. Attorney General Loretta Lynch gave Natalia Veselnitskaya a “special” visa extension in 2015. The question is why? The other question is how many traps are going to be set and debunked before the Deep State and the MSM accept that Donald Trump is the rightful elected President of the United States.

Fed Head Janet Yellen says the Federal Reserve may not raise rates much more, but that might not be enough to keep them from spiking when the Fed unloads its balance sheet of all the “toxic” mortgages it bought in the 2008 financial meltdown. Gregory Mannarino of TradersChoice.net says the Fed will not allow rates to rise because it would melt down the financial markets—again.

- Source, USA Watchdog

Monday, 10 July 2017

Hitting Rock Bottom: When There’s Nothing Left to Lose

"In the suite, on the news – Everybody dog food – Bang, bang shot dead – Everybody’s gone mad. All I wanna say is they don’t really care about us. […] Jew me, sue me, Everybody do me. Kick me, don’t you black or white me. [ Source]"

When I first heard these words it seemed like a sea-change had taken place in the individual who had first spoken them. When someone usually speaks of dancing, having fun and how wonderful the rainbow and unicorn parade is going it gets my attention when they begin to see the world anew. Dominique Strauss-Kahn (DSK), former head of the International Monetary Fund, was scheduled to make a presentation the day after his arrest in New York for the alleged rape of a chambermaid. Sexual crimes are one of the most effective tools the oligarchs use to destroy careers and fire the emotions of the general public. The general public, who barely have time to get to their second or third part-time job, only hear and see what the mainstream media tells them to believe and when it is a sexual crime this hits an emotional level that sparks anger, fear and hatred all at the same time. Mission accomplished; career destroyed. Once you take a look at what was actually happening, in the context of the allegations being thrown around, there is usually a lot more to the picture than meets the eye. 

According the Guardian:

But the alleged attempted rape of a chambermaid by Dominique Strauss-Kahn in a plush Manhattan hotel suite last month may also have compounded Europe’s year-long currency crisis, with the fate of the euro and the continent’s big banks hinging on how – and if – Greece can be saved from sovereign default for the second time in a year. As intense bargaining continued behind the scenes over Europe’s response to the escalating Greek turmoil, the Guardian has learned that the change in leadership at the top of the International Monetary Fund last month also brought an abrupt shift in IMF style and policy on Europe’s bailout of Greece. [emphasis mine]

The reason DSK was made to appear as a monster is he was the center of attention regarding the monetary future of the Greeks, the Euro currency and Europe’s role in bailing out Greece. Apparently, DSK had ideas that conflicted with the ruling oligarchy of Europe and had to be destroyed on the world stage. It turns out, some time later – long after the public has convicted DSK of sex crimes – he was acquitted of all charges. The person, who wrote the opening words in this article, was also accused of sexual crimes. Not just rape, but pedophilia. His career wasn’t just ruined it was utterly destroyed and he was made out to be an even bigger monster than DSK. Instead of being acquitted, which I feel confident that we would have been, he died under unusual circumstances and the person responsible for his death was never charged with any crime. How very convenient. Our world is in the midst of change unlike anything before. The Federal Reserves’ hijacking of the global economy, by way of the U.S. Dollar, the endless un-Constitutional wars, waged by the Pentagon and the warmongers, is beginning to take it’s toll on the people of this planet. This is to say nothing of the ever unfolding enslavement of humanity by a handful of oligarchs. The battered souls that are rising up to say “no more” are seeing their owners in the appropriate light – the dark light of corrupt, career politician/criminals. Just look at how the Republican party is attacking Republican Presidential candidate, Donald Trump and the Democratic party is attacking Democratic Presidential candidate Bernie Sanders. The oligarchs are fighting back, as we knew they would. Using the weapons of propaganda, as described above, technology of every type imaginable, combined with the useful idiots that make up the police state, are the current set of tools being used against us. This phenomenon is not confined to one country nor even a particular region; it is global.
Beat me, hate me, you can never break me. Will me, thrill me, you can never kill me. [Source]

It seems that more and more people are buying into these words. The mask is coming off the established career criminals within the U.S. government. Everyday we hear of more and more people attending Trump’s Presidential campaign rallies, Sanders' Presidential campaign rallies and questioning Hillary's record. The stench is rising and the people don’t like what they have been fed for the past 50+ years by these career criminals. They didn’t start out as career criminals; they began their life of crime as public servants, a politician, I believe most wanting to do something good for their community, their state and their country. The power corrupted their thinking and, more importantly , their actions. These embedded ticks/leeches that are attempting to suck the last few drops of life from their victims are being outed. The victims are awakening and seeing these criminals for what they are – criminals. When does a person finally begin to see the light of truth? For a great many people, if not 100% of the people, it is when they have hit rock bottom. When an alcoholic hits bottom he knows it, he can feel in his soul that he has been defeated by something that has taken complete control of his life. This is what has happened to the people who are turning out in droves at Trump and Sanders Presidential campaign rallies. These people are broke, enslaved and pissed. More importantly they are seeing how they arrived at this station in life. Not because they are lazy or ignorant, because they have been sold down the river by the people they trusted to represent them. It turns out, these people are not worthy of trust and the only interests they represent are their own.
Tell me what has become of my rights? Am I invisible because you ignore me? Your proclamation promised me free liberty! I’m tired of being the victim of shame; throwing me in a class with a bad name! I can’t believe this is the land from which I came!! You know I really do hate to say it The government don’t wanna see[Source]

As more and more people hit rock bottom and come to realize the man behind the curtain is nothing more than a scared little boy/girl, they will begin to use their great voice, great strength and return the rule of law to the once proud nation. We are all victims of the ruling and banking class’ crimes. It is time we stand together and let these criminals know, we see you, we laugh in your face and we are the ones that have the power.

"Beat me, bash me, You can never trash me. Hit me, kick me, You can never get me. [Source]"

Have you hit rock bottom or is the little boy/girl behind the curtain still pulling the strings? Just like an alcoholic, only the individual can decide where the bottom lies and whether it has been hit.

- Source, Rory Hall via Sprott Money

Friday, 7 July 2017

Ronald Stoferle and Jim Rickards Discuss the Current Outlook for Gold


Jim Rickards discussed with Ronald Stöferle and Mark Valek the key topics of the new In Gold We Trust Report 2017.

The key points debated were:

• Introduction – monetary surrealism – and where we stand
• Shadow Gold Price
• White Gray and Black Swans (esp. recession in the US)
• Populism and its true Cause
• De-Dollarization: Good-bye Dollar, Hello Gold (including the interview with Judy Shelton)
• A Coming War with North Korea
• Bitcoin and its Dangers

- Source

Tuesday, 4 July 2017

Ron Paul: Stocks to Crash 25 percent, Gold Up 50 Percent by October


A painful correction is coming and there's little that can be done to prevent it, according to former Republican congressman and libertarian firebrand Ron Paul.

Speaking to CNBC last week, the former GOP presidential contender argued the economy is not as strong as Wall Street consensus believes, and the situation could turn ugly as soon as October.

"If our markets are down 25 percent and gold is up 50 percent it wouldn't be a total shock to me," said Paul recently on "Futures Now."

That scenario would drag the S&P 500 Index as low as 1,819, and gold as high as $1,867 an ounce from current levels.

Paul, who's also a medical doctor and former U.S. Representative from Texas, is a well-known bear who has been sharply critical of Trump administration. He has also been putting a lot of blame on the Federal Reserve for keeping interest rates historically low for so long.

Although the Fed is undertaking a rate hike campaign after nearly a decade of ultra-accomodative monetary policy, some believe asset prices—and the economy—could still react badly.

"I think it's a very precarious market, and the Fed better be very careful. Since they are incapable of knowing what to do, I don't expect much good to come out of anything they do," said Paul. "There are so many mistakes made out there that the correction is almost unlimited."

This is not the first time Paul has called for a pullback on "Futures Now."

He made a similar prediction almost exactly a year ago on June 28, 2016, almost exactly a year ago. Since then, the S&P 500 has ripped by 21 percent and the Dow is up 24 percent, breaking several records along the way. The tech heavy Nasdaq bounced into record territory over that time period, and soared 34 percent.

However, Paul still makes the case that the rally is on borrowed time.

"People have been convinced that everything is wonderful right now and that stocks are going to go up forever," Paul said.

"I don't happen to buy this. The old rules always exist, and there's too much debt and too much mal-investment. The adjustment will have to come," he added.

- Source, CNBC

Monday, 3 July 2017

Stock Markets Hyper Risky – Zeal

History extensively proves that stock markets are forever cyclical, no trend lasts forever. Great bulls and bears alike eventually run their courses and give up their ghosts. Sooner or later every secular trend yields to extreme sentiment peaking, then the markets inevitably reverse. Popular greed late in bulls, and fear late in bears, ultimately hits unsustainable climaxes. All near-term buyers or sellers are sucked in, killing the trend.

This mighty stock bull born way back in March 2009 has proven exceptional in countless ways. As of mid-June, the flagship S&P 500 broad-market stock index (SPX) has powered 262.7% higher over 8.3 years! Investors take this for granted, but it’s far from normal. That makes this bull the fourth-largest and second-longest in US stock-market history! And the few superior bull specimens vividly highlight market cyclicality.

The SPX’s biggest and longest bull on record soared 417% higher between October 1990 and March 2000. After it peaked in epic bubble-grade euphoria, the SPX soon yielded to a brutal 49% bear market over the next 2.6 years. The SPX wouldn’t decisively power above those bull-peaking levels until 12.9 years later in early 2013, thanks to the Fed’s unprecedented QE3 campaign! The greatest bull didn’t end well at all.

The second-largest bull was a 325% monster between July 1932 to March 1937. But that illuminated the inexorable cyclicality of stock markets too, as it arose from the ashes of a soul-crushing 89% bear in the aftermath of 1929’s infamous stock-market crash. The third-largest bull was 266% from June 1949 to August 1956, which we’ve almost surpassed. And even that post-WW2 boom was followed by another bear.

All throughout stock-market history, this binary bull-bear cycle has persisted. Though some bulls grow bigger and last longer than others, all eventually give way to subsequent bears to rebalance sentiment and valuations. So stock investing late in any bull market, which is when investors complacently assume it will last indefinitely, is hyper-risky. Bear markets start at serious 20% SPX losses, and often approach 50%!

Popular psychology in peaking bull markets is well-studied and predictable. Investors universally believe “this time is different”, that some new factor leaves their bull impregnable and able to keep on powering higher indefinitely. This new-era mindset fuels extreme euphoria and complacency, with memories of big selloffs fading. Investors’ hubris swells, as they forget markets are cyclical and ridicule any who dare warn.

To any serious student of stock-market history, there’s little doubt today’s stock-market situation feels exactly like a major bull-market topping. All the necessary ingredients are in place, ranging from extreme greed-drenched sentiment to extreme near-bubble valuations. If this bull was merely normal, the risks of an imminent countertrend bear erupting to eradicate these late-bull excesses would absolutely be stellar.

But the downside risks in the wake of this exceptional bull are far greater than usual. That’s because much of this bull is artificial, essentially a Fed-conjured illusion. And that was even before the incredible recent Trumphoria surge in the wake of Trump’s surprise victory! Back in early 2013 as the SPX was finally regaining its previous bull’s peak, the Fed unleashed its wildly-unprecedented open-ended QE3 campaign.

Understanding the Fed’s role in fomenting this anomalous stock bull is more important than ever. Not only is the Fed deep into its 12th rate-hike cycle of the past half-century or so, it’s discussing starting to normalize its grotesque QE-ballooned balance sheet. Investors in a largely-artificial quantitative-easing-fueled late-stage stock bull ought to be terrified by the prospects of quantitative tightening soon being unleashed!

The Fed’s QE giveth, so the Fed’s QT taketh away. Literally trillions of dollars of capital evoked out of nothing by the Fed to monetize bonds directly and indirectly bid stock markets higher. The Fed’s deep intertwinement in this stock bull’s fortunes is easiest to understand with a chart. Here the SPX in blue is superimposed over its implied-volatility index, the famous VIX that acts as a proxy for popular greed and fear.


This anomalous stock bull was again birthed in March 2009 in the wake of the first true stock panic since 1907. After that epic maelstrom of fear fueled such an extreme plummet to climax a 57% bear market, a new bull was indeed overdue despite rampant bearishness and pessimism. The very trading day before the SPX bottomed, I wrote a hardcore contrarian essay explaining why a major new bull market was imminent.

Back in early 2009 stock-market valuations were so low after the panic that a new bull was fully justified fundamentally. And its first four years or so played out perfectly normally. Between early 2009 and late 2012, this bull market’s trajectory was typical. It rocketed higher initially out of deep bear lows, but those gains moderated as this bull matured. And its upside progress was punctuated by healthy major corrections.

Stock-market selloffs are generally defined in set ranges. Anything under 4% isn’t worth classifying, it is just normal market noise. Then from 4% to 10%, selloffs become pullbacks. Beyond that in the 10%-to-20% range are corrections. Selloffs greater than 20% are formally considered bear markets. In both 2010 and 2011 the SPX suffered major corrections in the upper teens, which are essential to rebalance sentiment.

As bull markets power higher, greed naturally grows among investors and speculators. They start to get very complacent and expect higher stocks indefinitely. Eventually this metastasizes into euphoria and even hubris. Major corrections, big and sharp mid-bull selloffs, rekindle fear to offset excessive greed and keep bulls healthy. Interestingly even in 2010 and 2011 the Fed played a key role in stock-market timing.

Those early bull years’ major corrections coincided exactly with the ends of the Fed’s first and second quantitative-easing campaigns. QE is an extreme monetary-policy measure central banks can use after they force interest rates, their normal tool, down to zero. The Fed’s zero-interest-rate policy went live in mid-December 2008 in response to that first stock panic in a century, and QE1 then QE2 soon followed.

Quantitative easing involves creating new money out of thin air to buy up bonds, effectively monetizing debt. While QE1 and QE2 certainly caused market distortions, both campaigns had predetermined sizes and durations. When traders knew a particular QE campaign was nearing its end, they started selling stocks which drove the major corrections. So the Fed decided to change tactics when it launched QE3.

As the SPX approached 1450 in late 2012, that normal stock-market bull was topping due to expensive valuations. After peaking in April, stock markets started rolling over heading into that year’s presidential election. Stock-market fortunes in the final several months leading into elections can greatly sway their outcomes. So in mid-September 2012 less than 8 weeks before the election, a very-political Fed hatched QE3.

QE3 was radically different from QE1 and QE2 in that it was totally open-ended. Unlike its predecessors, QE3 had no predetermined size or duration! So stock traders couldn’t anticipate when QE3 would end or how big it would get. Stock markets surged on QE3’s announcement and subsequent expansion a few months later. Fed officials started to deftly use QE3’s inherent ambiguity to herd stock traders’ psychology.

Whenever the stock markets started to sell off, Fed officials would rush to their microphones to reassure traders that QE3 could be expanded anytime if necessary. Those implicit promises of central-bank intervention quickly truncated all nascent selloffs before they could reach correction territory. Traders realized that the Fed was effectively backstoppingthe stock markets! So greed flourished unchecked by corrections.

This stock bull went from normal between 2009 to 2012 to literally central-bank conjured from 2013 on! The Fed’s QE3-expansion promises so enthralled traders that the SPX went an astounding 3.6 years without a correction between late 2011 to mid-2015, one of the longest-such spans ever. With the Fed jawboning negating healthy sentiment-rebalancing corrections, sentiment grew ever more greedy and complacent.

QE3 was finally wound down in late 2014, leading to the Fed-conjured stock bull stalling out. Without central-bank money printing behind it, the stock-market levitation between 2013 to 2015 never would have happened! One of the most-damning charts of recent years shows the SPX perfectly tracking the growth in the Fed’s balance sheet as its monetized bonds accumulated there. This stock bull is largely fake.

Without the Fed’s QE firehose blasting new money into the system, stock-market corrections resumed in mid-2015 and early 2016. After topping in May 2015 not much higher than QE3-ending levels, the SPX drifted sideways to lower for fully 13.7 months. That too should’ve proven this artificially-extended bull’s top, giving way to the overdue subsequent bear. But it was miraculously short-circuited by the Brexit vote.

Heading into late June last year, Wall Street was forecasting a sharp global stock-market selloff if British people actually voted to leave the EU. What was seen as a low-probability outcome promised to unleash all kinds of uncertainty and chaos. And indeed when that Brexit vote surprised and passed, the SPX fell sharply for a couple trading days. Then meddling central banks stepped in assuring they were ready to intervene.

So this tired old bull again started surging to new record highs in July and August, although they were not much better than May 2015’s. After that euphoric surge on hopes for post-Brexit-vote central-bank easings, the SPX started to roll over again heading into the US presidential election. Again Wall Street warned just like Brexit that a Trump win would ignite a major stock-market selloff, and again proved dead wrong.

The shocking post-election stock surge has been called a Trumpgasm, or Trumphoria. Capital flooded into stocks for a variety of reasons. In addition to hopes for far-superior government policies boosting corporate profits, funds rushed to buy to chase good year-end gains to report to their investors. And the resulting stock-market record highs, and fevered anticipation for big tax cuts, started seducing investors back.

This exuberant psychology greatly intensified this year, with the SPX periodically surging to series of new record highs on political news fanning investors’ optimism. Trump approved long-stalled big oil pipelines in January, teased on coming big tax cuts in early February, and sounded presidential while addressing the Congress as March dawned. That stock elation unleashed big spending, which boosted corporate profits.

But this Fed-goosed stock bull was already very long in the tooth, and stock valuations were already near formal bubble territory, even before Trump was elected. The resulting Trumphoria surge on hopes for big tax cuts soon really exacerbated serious pre-election risks! That included extending the span since the end of the last SPX correction to 16.5 months. Normal healthy bull markets see correction-grade selloffs annually.

Between the SPX’s original top soon after QE3 ended in May 2015 and Election Day 2016, at best stock markets simply ground sideways. At worst they were rolling over into what should’ve grown into a major new bear. Trumphoria short-circuited all that, sending stocks sharply higher and delaying the inevitable cyclical reckoning. By mid-June the SPX had rocketed a stunning 14.7% higher since Election Day alone!

An ominous side effect of that anomalous late-bull surge was extremely-low volatility, with all kinds of low-volatility records set. The VIX S&P 500 implied-volatility index on this chart reflects that, slumping to multi-decade lows in recent months! Low volatility reflects low fear and high complacency, the exact herd sentiment ubiquitous at major bull-market toppings. Just like stock markets, volatility is forever cyclical too.

Volatility often skyrockets off exceptional lows, as the great sentiment pendulum must swing back to fear after peaking deep in the greed side of its arc. And the only thing that generates fear late in stock bulls is sharp selloffs. No matter how bad news is, euphoric investors happily ignore it if it doesn’t drive stocks lower. But eventually some catalyst always arrives, usually unforeseen, that finally stakes the geriatric bull.

When the last stock bulls peaked in March 2000 and October 2007, there was no specific news that killed them. Lofty euphoric stock markets simply started gradually rolling over, mostly through relatively-minor down days which generated little fear. These modest grinds lower kept most investors unaware of the waking bears, boiling them slowly like the proverbial frog in the pot. But even little losses eventually add up.

Since nearly all the amazing stock-market gains between late 2012 to mid-2015 were directly fueled by the Fed’s QE3 money printing, fears of the coming quantitative tightening may prove the bull-slaying catalyst. The Fed conjured money out of thin air to buy bonds in QE, and it will destroy that very money by selling bonds in QT. QT’s capital outflows should prove as bearish for stocks as QE’s inflows were bullish!

The FOMC actually started discussing QT at its early-May meeting, and is planning to start implementing to begin unwinding the QE bond monetizations later this year. Prudent investors will anticipate QT even before it begins, and plenty will pre-emptively sell. QT has profoundly-bearish implications for these QE-boosted stock markets. The unwinding of the Fed’s massive QE-bloated balance sheet is unprecedented.

Back in the first 8 months of 2008 before that stock panic, the Fed’s balance sheet averaged $849b. By February 2015, it had ballooned to a freakish $4474b. That’s up a staggering 427% or $3625b over 6.5 years of QE! QE levitated the stock markets in two primary ways. That Fed bond buying bullied yields to artificial lows, forcing bond investors starving for yields to buy far-riskier stocks that were paying dividends.

More importantly, those unnatural contrived extremely-low yields courtesy of QE fueled a boom in stock buybacks by corporations unlike anything ever witnessed. American companies took advantage of the crazy-low interest rates to literally borrow trillions of dollars to buy back their own stocks! Between QE3’s launch and Trump’s victory, corporate stock buybacks were the dominant source of stock-market capital inflows.

QT along with the Fed’s rate-hike cycle will allow bond yields to rise again, eventually greatly retarding corporations’ desire and ability to borrow vast sums of money to use to manipulate their own stock prices higher. In late June, the Fed’s balance sheet was still way up at an extreme $4430b. These QE-inflated stock markets have never experienced QT, and it ain’t gonna be pretty no matter how slowly QT is implemented.

While the Yellen Fed is far too cowardly to fully reverse $3.6t worth of QE since late 2008, even a trillion or two of QT over the coming years is going to wreak havoc on these QE-levitated stock markets. That’s a serious problem for today’s extreme Fed-goosed bull with a rotten fundamental foundation. Underlying corporate earnings never supported such extreme record stock prices, and the coming reckoning is unavoidable.

Regardless of the Fed’s balance sheet, quantitative tightening, or valuations, the near-record-low VIX slumping into the 9s in May and June shows these stock markets are ripe for a major selloff anyway. At absolute minimum, it needs to be a serious correction approaching 20%. But with this stock bull so big, so old, and so fake thanks to the Fed, that selloff is almost certain to evolve into the long-overdue next bear.

And investors aren’t taking the threat of a new bear seriously. Crossing the bear threshold just requires a 20% retreat. Even such a baby bear would erase all SPX gains since mid-2014. A normal bear market at this stage in the Long Valuation Waves is actually 50%, cutting stock prices in half! That would wipe out the great majority of this entire mighty stock bull, dragging the SPX all the way back down to mid-2010 levels.

Even more ominously, bear markets naturally following bulls tend to be proportional. That makes sense since bears’ job is to rebalance sentiment and work off overvalued conditions. So there’s a high chance the coming bear after such an anomalous Fed-goosed bull won’t stop at 50%. The downside risks from here are utterly mindboggling after such a huge bull driven by extreme central-bank easing instead of profits!

And that finally brings us to valuations, this old stock bull’s core problem. This next chart looks at the SPX superimposed over a couple key valuation metrics. Both are derived from averaging the trailing-twelve-month price-to-earnings ratios of all 500 elite SPX companies. The light-blue line is their simple average, while the dark-blue one is weighted by market capitalization. Today’s valuations ought to terrify investors.


Unfortunately today corporate earnings are intentionally obscured by Wall Street to mask the dangerous overvaluation that is rampant. Analysts make up blatant fictions including forward earnings, which are literally guesses about what companies will earn in the coming year! These almost always prove wildly optimistic. Analysts also look at adjusted earnings, another Pollyannaish farce where companies ignore expenses.

Wall Street also plays a deceptive estimate game to make quarterly-earnings results look way better than they really are. Instead of comparing actual hard quarterly profits with the same quarter a year earlier, they intentionally lowball estimates so companies beat regardless of their actual earnings trends. Investors are being bamboozled, with the only honest way of measuring corporate profits buried and forgotten.

That is based on generally-accepted accounting principles (GAAP) which are required when companies actually report to regulators. The only righteous way to measure price-to-earnings ratios is using the last four quarters of GAAP profits, or trailing twelve months. Those numbers are hard, established in the real world based on real sales and real expenses. They are not mere estimates like totally-bogus forward earnings.

Every month at Zeal we look at the TTM P/Es of all 500 SPX companies. At the end of May, the simple average of all SPX companies actually earning profits so they can have P/Es was an astounding 27.5x! That is nearly in bubble territory, just as Trump had warned about during his campaign. 14x earnings is the historical fair value over a century and a quarter, and double that at 28x is where bubble levels start.

If you study the history of the stock markets, stock prices never do well for long starting from bubble valuations. Such extreme stock prices relative to underlying corporate earnings streams actually herald the births of major new bear markets. Again these usually cut stock prices in half. So buying stocks here, late in a huge old bull market artificially levitated by the Fed, is the height of folly. Massive losses are inevitable.

Remember stock markets perpetually meander through alternating bull-bear cycles. Back in late 2012 before the Fed stepped in to try and brazenly short-circuit these valuation-driven cycles, valuations were actually in a secular-bear downtrend. After secular bulls drive valuations to bubble extremes, with greed forcing stock prices far beyond underlying corporate earnings, secular bears emerge to reverse these excesses.

During secular bears, stock prices grind sideways on balance for long enough for earnings to catch up with lofty stock prices. Before QE3 temporarily broke stock-market cycles, that process had been happening as normal between 2000 to 2012. Secular bears don’t end until valuations get to half fair value, 7x earnings. So instead of being near bubble levels, valuations would normally be between 7x to 10x today.

That’s the massive downside risk stocks face due to their Fed-conjured bubble valuations! While the red line above shows the actual SPX, the white line shows where it would be trading at 14x fair value. Even that is way down around 1245 today, roughly half current levels. But mean reversions from extremes nearly always overshoot in the opposite direction, so the potential SPX bear-market bottom is much lower.

Sadly Wall Street will never bother telling investors that valuations matter. Stock-market history proves beyond all doubt that buying stocks high in valuation terms nearly always leads to considerable-to-huge losses. All the financial industry cares about is keeping people fully invested no matter what, since that maximizes their fees derived from percentages of assets under management. Talk about a conflict of interest!

The more expensive stocks are in valuation terms when they are purchased, the worse the subsequent returns will be. And no matter how awesome Trump’s policies may ultimately prove, they aren’t going to rescue corporate profits anytime soon. With all Trump’s political turmoil and the Republican lawmakers’ unproductive infighting, the big tax cuts investors hope for aren’t coming until 2018 at best. Maybe never.

In the meantime, corporate profits face major headwinds in the coming quarters that are likely to leave stock valuations even more extreme. Q1’17 corporate earnings surged almost certainly due to all the Trumphoria optimism. Between hopes for big tax cuts soon, and the wealth effect from record-high US stock markets, spending was far beyond normal. That will mean revert lower as hard political realities set in.

All kinds of hard economic data have already started deteriorating considerably since peak Trumphoria hit as March dawned. The consumers and companies spending big in the first quarter on hopes for big tax cuts soon are starting to pull in their horns. That will likely result in weaker corporate-profits growth, if not outright shrinkage, going forward. Lower profits at these stock prices will force valuations into bubble-dom.

The stock markets’ lofty valuations before the Trumpgasm and near-bubble valuations since are a very serious problem that can only be resolved by an overdue major bear market! Only that will drag stock prices low enough to where existing and future corporate earnings will support reasonable valuations again. Investors don’t believe a new bear market is possible, but they never do when bull markets are topping.

Investors really need to lighten up on their stock-heavy portfolios, or put stop losses in place, to protect themselves from the coming valuation mean reversion in the form of a major new stock bear. Cash is king in bear markets, as its buying power increases as stock prices fall. Investors who hold cash during a 50% bear market can double their stock holdings at the bottom by buying back their stocks at half price!

Put options on the leading SPY S&P 500 ETF can be used to hedge downside risks. They are cheap now with euphoria rampant, but their prices will surge quickly when stocks start selling off materially. Even better than cash and SPY puts is gold, the anti-stock trade. Gold is a rare asset that tends to move counter to stock markets, leading to soaring investment demand for portfolio diversification when stocks fall.

Gold surged nearly 30% higher in the first half of 2016 in a new bull run that was initially sparked by the last major correction in stock markets early last year. If the stock markets indeed roll over into a new bear in 2017, gold’s coming gains should be much greater. And they will be dwarfed by those of the best gold miners’ stocks, whose profits leverage gold’s gains. Gold stocks rocketed 182% higher in 2016’s first half!

Absolutely essential in bear markets is cultivating excellent contrarian intelligence sources. That’s our specialty at Zeal. After decades studying the markets and trading, we really walk the contrarian walk. We buy low when few others will, so we can later sell high when few others can. While Wall Street will deny the coming stock-market bear all the way down, we will help you both understand it and prosper during it.

We’ve long published acclaimed weekly and monthly newsletters for speculators and investors. They draw on our vast experience, knowledge, wisdom, and ongoing research to explain what’s going on in the markets, why, and how to trade them with specific stocks. As of the end of Q1, all 928 stock trades recommended to our newsletter subscribers in real-time since 2001 averaged stellar annualized realized gains of +22.0%! For only $10 per issue, you can learn to think, trade, and thrive like a contrarian. Subscribe today!

The bottom line is today’s euphoric near-record stock markets are hyper-risky. They are trading near bubble valuations thanks to the stunning post-election rally. Such lofty stock prices are risky any time, but exceedingly dangerous late in an enormous bull market artificially extended by the Fed. A major new bear market is long overdue that will at least cut stock prices in half. Don’t be fooled by the extreme complacency.

Prudent investors have to overcome this groupthink herd euphoria and protect themselves from what’s coming. That means lightening up on overvalued stocks, building cash, and buying gold. Central banks have a long history of trying and failing to eliminate stock-market cycles. The longer they are artificially suppressed, the worse the inevitable reckoning as these inexorable market cycles resume with a vengeance.

- Source, Silver Doctors


Thursday, 29 June 2017

MSM Propaganda Allows DC Looting to Continue


Geopolitical and financial analyst Warren Pollock gives his thoughts on the chaos going on in Washington, D.C. Pollock says it’s like the fake fighting of a TV wrestling match. Pollock explains, “It’s a great amount of propaganda. It provides a great smokescreen, and it basically allows the looting to go on another day…"


Monday, 19 June 2017

Physical Silver and Gold Bullion Demand Exceeding Storage Capacity at Major Vaults


Silver demand not paper but physical silver demand and Gold Demand is finding a lack of storage space. Since the financial crisis demand for precious metals has surged so much that major vaulting companies are finding it hard to take on more clients without expanding storage. The true nature of gold and silver demand is beginning to show through and it is much to large to contain.


Will The Falling Dollar Set Off Hyperinflation?


John Williams explains why he believes the dramatic decline of the U.S. Dollar will be the primary cause for hyperinflation and gives he view on owing gold.


Thursday, 15 June 2017

Dr. Ron Paul on Gold and Inflation


Dr. Ron Paul say's this is the biggest bubble economy in the history of the world. He goes on to say that over the last several decades, The Fed has created many trillions of dollars out-of-thin-air, but consumer prices have not spiraled out of control. Do the same economic laws that have destroyed countless currencies throughout history apply to the Fed? Have they avoided their day of reckoning? Have they outsmarted supply and demand? Are they really Masters of the Universe?


Monday, 12 June 2017

The Opening Of A Second Front Against the Gold Cartel


Will the Run Up of Cryptocurrencies Serve To Be The Undoing of the Gold & Silver Cartel?

Expert Analyst Rob Kirby Joins Us For A MUST LISTEN Show:

  • The Cartel Had to Get Their Gold Butt Kicking in Early! 
  • $4 Billion Shellacking An Attempt to SMASH Sentiment! 
  • Why is Silver Open Interest At Historic Highs At LOW Prices? 
  • Kirby Reveals Why Silver is Bankster KRYPTONITE 
  • Katie Bar the Doors: Once the Cartel is Overwhelmed With PHYSICAL Demand That Can’t Be Met – the Supressors of Price Will Become BUYERS 
  • You Will See Gold & Silver Trading the Way the Cryptos Have the Past 3 Months 

- Source, The Silver Doctors

Friday, 9 June 2017

Eric Sprott On Gold Breaking 5 Year Downtrend



Lots of Things Going Our Way!

Legendary Billionaire Gold & Silver Investor Eric Sprott Isn’t Too Worried About This Latest Act of Desperation By the Cartel.

- Source, Sprott Money

Wednesday, 7 June 2017

Piers Morgan Grills Sadiq Khan Over Jihadists in London


London Mayor and actual defender of terrorists, Sadiq Kahn, went on Good Morning Britain Tuesday with Piers Morgan and Susanna Reid to discuss Jihadi terrorists pouring into the UK. Kahn tried to weasel out of the notion that Britain - the most surveilled country in the world - can't keep track of 400 Jihadis...

Susanna Reid: How are you letting people back in to the UK who haven't just been trained - they've actually fought, potentially against our troops... Where are they? You're the mayor of this capitol city!

Kahn: With respect.. I can't follow 400 people, what I can do is make sure---

Morgan: Why can't you instruct the police, and say every one of those people that have come back from a war zone is in London, I want them followed?

Kahn: Cause the police budget, roughly speaking, 15-20% is funded by me, the mayor. The rest is from Central Government. The Met police government has been shrunk and reduced. They've got to prioritize...

Morgan: "What could be a bigger priority than people coming back from a Syrian battlefield with intent to harm British citizens? Why is it not the number one priority? Why are these people allowed to come back in?


- Source iBankCoin via Zero Hedge

Monday, 5 June 2017

Dave Kranzler: Is Bitcoin Standing In For Gold?


In a series of articles posted on www.paulcraigroberts.org, we have proven to our satisfaction that the prices of gold and silver are manipulated by the bullion banks acting as agents for the Federal Reserve.

The bullion prices are manipulated down in order to protect the value of the US dollar from the extraordinary increase in supply resulting from the Federal Reserve’s quantitative easing (QE) and low interest rate policies.

The Federal Reserve is able to protect the dollar’s exchange value vis-a-vis the other reserve currencies—yen, euro, and UK pound—by having those central banks also create money in profusion with QE policies of their own.

The impact of fiat money creation on bullion, however, must be controlled by price suppression. It is possible to suppress the prices of gold and silver, because bullion prices are established not in physical markets but in futures markets in which short-selling does not have to be covered and in which contracts are settled in cash, not in bullion.

Since gold and silver shorts can be naked, future contracts in gold and silver can be printed in profusion, just as the Federal Reserve prints fiat currency in profusion, and dumped into the futures market. In other words, as the bullion futures market is a paper market, it is possible to create enormous quantities of paper gold that can suddenly be dumped in order to drive down prices. Every time gold starts to move up, enormous quantities of future contracts are suddenly dumped, and the gold price is driven down. The same for silver.

Rigging the bullion price prevents gold and silver from transmitting to the currency market the devaluation of the dollar that the Federal Reserve’s money creation is causing. It is the ability to rig the bullion price that protects the dollar’s value from being destroyed by the Federal Reserve’s printing press.

Recently, the price of a Bitcoin has skyrocketed, rising in a few weeks from $1,000 to $2,200. Two explanations suggest themselves. One is that the Federal Reserve has decided to rid itself of a competing currency and is driving up the price with purchases while accumulating a large position, which then will be suddenly dumped in order to crash the market and scare away potential users from Bitcoins. Remember, the Fed can create all the money it wishes and, thereby, doesn’t have to worry about losses.

Another explanation is that people concerned about the fiat currencies but frustrated in their attempts to take refuge in bullion have recognized that the supply of Bitcoin is fixed and Bitcoin futures must be covered. It is strictly impossible for any central bank to increase the supply of Bitcoins. Thus Bitcoin is standing in for the suppressed function of gold and silver.

The problem with cryptocurrencies is that whereas Bitcoin cannot increase in supply, other cryptocurrencies can be created. In order to be trusted, each cryptocurrency would have to have a limited supply. However, an endless number of cryptocurrencies could be created that would greatly increase the supply of cryptocurrencies. If entrepreneurs don’t bring about this result, the Federal Reserve itself could organize it.

Therefore, cryptocurrency might be only a temporary refuge from fiat money creation. This would leave gold and silver, whose supply can only gradually be increased via mining, as the only refuge from wealth-destroying fiat money creation.

For as long as the Federal Reserve can protect the dollar by bullion price suppression and money creation by other reserve currency central banks, and as long as the Federal Reserve can keep the influx of new dollars out of the general economy, the Federal Reserve’s policy adds to the wealth of those who are already rich. This is because instead of driving up consumer prices, thus threatening the US dollar’s exchange value with a rising rate of inflation, the Fed’s largess has flowed into the prices of financial assets, such as stocks and bonds. Bond prices are high, because the Fed forced up the price by purchasing bonds. Stock prices are high, because the abundance of money bid prices higher than profits justify. As the US government measures inflation in ways designed to understate it, the consumer price index and producer price index do not send alarm systems into the markets.

Thus, we have a situation in which the Fed’s policy has done nothing for the American population, but has driven up the values of the financial portfolios of the rich. This is the explanation why the rich are becoming more rich while the rest of America becomes poorer.

The Fed has rigged the system for the rich, and the whores in the financial media and among the neoliberal economists have covered it up.

- Source, Sprott Money

Friday, 2 June 2017

Puerto Rican Exodus Is Speeding the Island’s Economic Collapse

The choice is heartbreaking: stay to help other families, or leave to help your own.

That’s the calculation thousands in Puerto Rico are making. The bankruptcy of the U.S. commonwealth, the culmination of years of decline, has accelerated an exodus that’s adding to the island’s economic misery.


“I had to choose for my family,’’ said Aledie Amariah Navas Nazario, 39, a pediatric pulmonologist who left behind young asthma patients when she, her husband and two small daughters moved to Orlando, Florida.

The population drop is astonishing. The island has lost 2 percent of its people in each of the past three years. A comparable departure from the 50 states would mean 18 million people moving out since 2013. About 400,000 fewer Puerto Ricans live on an island of 3.4 million today compared with a decade ago, when its economy began contracting.

The departures have trapped Puerto Rico in a downward spiral. A grinding recession, with joblessness at 11.5 percent, and $74 billion mountain of debt that pushed the island to insolvency has made collecting taxes key to an economic rebound. At the same time, more Puerto Ricans from all walks of life are moving away to better their lives, meaning government revenue is dwindling.
‘I’m Sad’

Reasons for leaving were compelling enough for Navas Nazario, who treated asthma on an island where it’s more prevalent than anywhere else in the U.S. Puerto Rico’s economy had taken yet another leg down, and she was worried about her future income because of uncertainty about health insurance.

“I’m sad about not being able to take care of those kids anymore,’’ said Navas Nazario, who keeps in touch with former patients on Facebook. “You have to make a hard decision to leave relationships with friends and family just to get out, just because you need a better life.’’

Puerto Rico’s bond debt has grown 87 percent since 2006. A simple way for individual islanders to avoid having to pay it is to move to the mainland.


The government doesn’t seem to have come to grips with the outflow. Puerto Rico’s turnaround plan -- a path to sustainability approved by a U.S. oversight board -- assumes the population will shrink just 0.2 percent each year for the next decade. It uses that number as the basis for its projections of tax receipts and economic growth.

“Most people believe that those forecasts in the fiscal plan are really, really optimistic and probably would have to be revised at some point,’’ said Sergio Marxuach, public policy director at the Center for the New Economy in San Juan.

Taxi Drivers

The exodus isn’t confined to professionals. Among the throngs leaving are construction workers and taxi drivers. Research by the Federal Reserve Bank of New York found that college graduates make up roughly the same proportion of emigres as they do in the island’s general population, suggesting that the departures have touched every corner of the commonwealth.

“If people continue to leave the island at the pace that has been set in recent years, the economic potential of Puerto Rico will only continue to deteriorate,’’ authors including Jaison Abel and Giacomo De Giorgi wrote for the New York Fed.

The earnings disparity between Puerto Rico and the mainland can be wide. Just ask John Starkey, principal of the Lafayette International Community High School in upstate Buffalo, New York, a destination since at least the 1960s for Puerto Ricans, also called Boricuas.

The Puerto Rican government has closed schools to save money, so Starkey traveled to the island in April to recruit teachers, many of whom have advanced degrees. On the mainland, educators find they can double or triple their earnings, he said, even if it means trading a balmy Caribbean island for the frigid shores of Lake Erie.

“Many of the candidates wanted to stay on the island to help their community,’’ Starkey said. “Our pitch was: come up to Buffalo and you’ll be able to better provide for your family, but you’ll also be able to help your community here.’’

Better Prospects

Puerto Rico has been a U.S. possession since American troops invaded in the Spanish-American War, and Puerto Ricans have been U.S. citizens since 1917. That means there’s little to prevent them from seeking better prospects on the mainland, something they’ve always done, just not to this extent.

While migration is the main driver in population fluctuation, a declining fertility rate isn’t helping either. The natural population increase -- excess births over deaths -- fell to 3,000 last year from 20,000 a decade ago, as families facing poorer economic prospects and the threat of the Zika virus put off having kids. At the same time, younger generations of child-bearing age are more likely to take off for the mainland...

- Source, Bloomberg, read the full article here

Tuesday, 30 May 2017

A Giddy Kim Jong-Un Vows To Send "Bigger Gift Package" To America

After a delighted Kim Jong Un supervised the latest successful test of North Korea's latest ballistic missile controlled by a precision guidance system, the leader ordered the development of more powerful strategic weapons, the official KCNA news agency reported on Tuesday.


According to Bloomberg, the missile launched on Monday - the ninth such test this year and coming two days after the G-7 pledged to “strengthen measures” aimed at prompting North Korea to cease nuclear and ballistic missile trials - was equipped with an advanced automated pre-launch sequence compared with previous versions of the "Hwasong" rockets.

In fact, according to KCNA, the latest ballistic missile test involved a precision guidance system that landed within seven meters of its target. As Reuters further adds, The North's test launch of a short-range ballistic missile landed in the sea off its east coast and was the latest in a fast-paced series of missile tests defying international pressure and threats of more sanctions.


The latest missile was first unveiled at an April 15 military parade celebrating the birth anniversary of North Korea’s founder Kim Il Sung, the news agency said. It flew 450 kilometers (280 miles) toward Japan, according to South Korean military officials, with the government in Tokyo saying it may have reached waters in Japan’s exclusive economic zone.

The accuracy claims, if true, would represent a potentially significant advancement in North Korea’s missile program. KCNA said Kim called for the continued development of more powerful strategic weapons, though the report didn’t mention whether the missile could carry nuclear warheads.

“We can’t prove if it’s bluffing, but North Korea is basically saying it can hit the target right in the center, which is scary news for the U.S.,” said Suh Kune Y., a professor at Seoul National University’s department of nuclear engineering. “If true, that means they’re in the final stage of missile development.”

The successful test was music to Kim's ears, who said the reclusive state would develop more powerful weapons in multiple phases in accordance with its timetable to defend North Korea against the United States. "He expressed the conviction that it would make a greater leap forward in this spirit to send a bigger 'gift package' to the Yankees" in retaliation for American military provocation, KCNA quoted Kim as saying.

KCNA said North Korea won’t be swayed by pressure from the G-7.

“The G-7 summit is a place where those nuclear- and missile-haves put their heads together to discuss how to pressure weak countries and those incurring their displeasure,” the news agency said. “The U.S. and its followers are seriously mistaken if they think they can deprive the DPRK of its nuclear deterrence, the nation’s life and dignity, through sanctions and pressure,” it said, using an abbreviation for North Korea.

Trump, who has sought more help from China to rein in its neighbor and ally, said on Twitter that “North Korea has shown great disrespect for their neighbor, China, by shooting off yet another ballistic missile...but China is trying hard!” Beijing also expressed its opposition to the test. All sides should “ease tensions on the Korean Peninsula as soon as possible and bring the Peninsula issue back onto the right track of peaceful dialog,” China’s foreign ministry said.

Meanwhile, South Korea said it had conducted a joint drill with a U.S. supersonic B-1B Lancer bomber earlier on Monday. North Korea's state media earlier accused the United States of staging a drill to practise dropping nuclear bombs on the Korean peninsula.

The U.S. Navy said its aircraft carrier strike group, led by the USS Carl Vinson, also planned a drill with another U.S. nuclear carrier, the USS Ronald Reagan, in waters near the Korean peninsula. A U.S. Navy spokesman in South Korea did not give specific timing for the strike group's planned drill.

North Korea calls such drills a preparation for war, and prompted yet another outburst from Kim on Tuesday:

"Whenever news of our valuable victory is broadcast recently, the Yankees would be very much worried about it and the gangsters of the south Korean puppet army would be dispirited more and more," KCNA cited leader Kim as saying.



Monday, 29 May 2017

SRSRocco Warns: It’s Going To Get Very Ugly…

While the U.S. oil and gas industry struggles to stay alive as it produces energy at low prices, there’s another huge problem just waiting around the corner. Yes, it’s true… the worst is yet to come for an industry that was supposed to make the United States, energy independent. So, grab your popcorn and watch as the U.S. oil and gas industry gets ready to hit the GREAT ENERGY DEBT WALL.

So, what is this “Debt Wall?” It’s the ever-increasing amount of debt that the U.S. oil and gas industry will need to pay back each year. Unfortunately, many misguided Americans thought these energy companies were making money hand over fist when the price of oil was above $100 from 2011 to the middle of 2014. They weren’t. Instead, they racked up a great deal of debt as they spent more money drilling for oil than the cash they received from operations.

As they continued to borrow more money than they made, the oil and gas companies pushed back the day of reckoning as far as they could. However, that day is approaching… and fast.

According to the data by Bloomberg, the amount of bonds below investment grade the U.S. energy companies need to pay back each year will surge to approximately $70 billion in 2017, up from $30 billion in 2016. That’s just the beginning…. it gets even worse each passing year:


As we can see, the outstanding debt (in bonds) will jump to $110 billion in 2018, $155 billion in 2019, and then skyrocket to $230 billion in 2020. This is extremely bad news because it takes oil profits to pay down debt. Right now, very few oil and gas companies are making decent profits or free cash flow. Those that are, have been cutting their capital expenditures substantially in order to turn negative free cash flow into positive.

Unfortunately, it still won’t be enough… not by a long-shot. If we use some simple math, we can plainly see the U.S. oil industry will never be able to pay back the majority of its debt:

Shale Oil Production, Cost & Profit Estimates For 2018

REVENUE = 5 million barrels per day shale oil production x 365 days x $50 a barrel = $91 billion.

EST. PROFIT = 5 million barrels per day shale oil production x 365 days x $10 a barrel = $18 billion.

If these shale oil companies do actually produce 5 million barrels of oil per day in 2018, and were able to make a $10 profit (not likely), that would net them $18 billion.

However, according to the Bloomberg data, these companies would need to pay back $110 billion in debt (bonds) in 2018. If they would use all their free cash flow profits to pay back this debt, they would still owe $92 billion.

Yes, it is true, I am not including all U.S. oil and gas production, but I am just trying to make a point here. We must remember, this debt is below investment grade and is likely more of the shale oil and gas producers. Furthermore, these shale oil and gas producers are using most of their free cash flow to drill more wells to produce more oil. So, in all reality, they would not take most all of their profits or free cash flow to pay down debt. They just wouldn’t have the funds to continue drilling.

The Bloomberg data on the U.S. oil and gas companies outstanding debt (bonds) came from the following chart:


I made my own chart (shown at the top of the article) by estimating Bloomberg’s debt figures (they did not provide actual figures) as it seemed more fitting to show U.S. energy debt in a BRIGHT RED color. Their chart seemed a tad boring, so I thought it would be nifty to jazz it up a bit. While I have reproduced their data in my own chart, I give them full credit for the figures.

That being said…. there is no way in hell the U.S. oil and gas companies are going to be able to pay back this debt. NO WAY…. NO HOW. So, we could either see a lot more bankruptcies, companies rolling over the debt to a later date, or Uncle Sam could come in and buy the debt. However, all these options won’t change the dire situation the U.S. energy sector will face as it becomes more difficult and less profitable to produce oil and gas in the future.

I would kindly like to remind all the precious metals investors as well as those who follow the alternative media…. ENERGY IS THE KEY PROBLEM…. not the debt. The debt is a symptom of the Falling EROI of energy. For some strange reason, a lot of people still don’t get that. We must remember the following:

DEBTS = UNBURNED ENERGY OBLIGATIONS

For example, a home mortgage is a debt owed by the homeowner. Energy must be burned every day, week, month and year(s) to create the economic activity that pays the homeowner a salary to pay off the home mortgage over the 20-30 year period. Thus…..

HOME MORTGAGE = UNBURNED ENERGY OBLIGATION

Now, I can go on and on by using other examples such as car loans, boat loans, RV loans, credit cards, second mortgages, company and public debt. All of these debts are “Unburned Energy Obligations.” When you can finally look at the market in the terms of “ENERGY”, and not “FIAT MONEY”, “ASSETS” or “DEBTS”, then you will finally understand why the debt is not the real problem.

Why? Because, even if we could get wipe away all the debt, that would still not solve the Falling EROI – Energy Returned On Investment of our oil and gas sources or the declining net energy that is available to the market. The massive increase in debt has just postponed the inevitable a while longer.

Lastly, precious metals investors who “wrongly assume” that falling oil and natural gas production is bad for gold and silver investments or stores of wealth, you are sadly mistaken. Gold and silver have been providing a store of wealth for 2,000+ years before oil and natural gas came onto the world market. Precious metals were storing mostly economic energy of human and animal labor (as well as capital created from human and animal labor).

So, when oil and natural gas production really starts to decline, the value of most STOCKS, BONDS & REAL ESTATE (where 99% of investors have their money tied up) will implode. Thus, only a 1% movement of that wealth into gold and silver will push them to values never seen before in history.

- Source, SRS Rocco

Wednesday, 24 May 2017

Martin Armstrong Rages: It’s Time to Take the Gloves Off!

No incoming President in history has ever been so constantly attacked than Donald Trump. Look, he says some stupid things and nobody is perfect. Still, there is a whole different agenda going on here with absolutely every issue being called a constitutional crisis worthy of impeachment.

Quite frankly, it is time to take off the gloves. Schumer demands a Special Prosecutor on this whole Russia nonsense that even Obama already said did not change any vote. What I would simply do is say fine, but also appoint a Special Prosecutor for Hillary Clinton standing trial for Treason selling influence that is obvious to everyone when as soon as she lost the election, he “charity” had to shut down. That was obviously pay-for-let’s make a deal. That was really Treason and let’s just see how many Democrats go down with the ship-Clinton.

This is not about Trump, every source I have is saying the same thing – this is an attempt to stop any reform process because the corruption in Washington runs so deep and they do not want anyone looking too closely.

The strategy is keep Trump occupied with scandal after sandal. The very fact that Trump called the NSA to inform them of his conversation with the Russian ambassador demonstrates that the NSA is out to get rid of Trump as is the CIA for they both ran to the New York Times and Washington Post. That in itself is Treason and putting National Security at risk far more than Trump warning Russia there was a plot to blow up one of their passenger planes again.


It’s time to take the gloves off. This is really war in Washington and it does not matter who is President, anyone trying to turn the money faucet off is not acceptable.

- Source, Martin Armstrong

Monday, 15 May 2017

Silver Demand Shows A Consumer In Trouble


Global demand for silver declined from 2015 to 2016 by 123 million ozs per numbers from the Silver Institute presented in an article on The Daily Coin yesterday. In fact, for the demand categories primarily driven by the consumer, demand plummeted 125 million ozs, or 15.3%. Industrial demand for silver increased slightly but this was because of the global expansion in the solar panel industry, primarily in India and China.

The consumer portion of global silver demand is derived from jewelry, coins and bars (investment), silverware and electronics. The 15.3% plunge in demand reflects the fact that consumer disposable income is drying up. After making required monthly expenditures – food, mortgage/rent, debt service, healthcare – consumers, especially in the United States, are out of money.

Disappearing disposable income explains only part of the equation. The illusion of economic improvement in the U.S. was created by debt issuance. Between Q3 2012 and now, total household debt expanded by $1.38 trillion dollars. In fact, total household debt is now at an all-time high, driven by auto, student, credit card and personal loans. The truth is that “discretionary” consumption was fueled by the Fed enabling the average U.S. household to accumulate a record level of debt.

The economy likely hit a wall in late 2016 and is now contracting. Today’s retail sales report – to the extent that the numbers have any credibility – showed a .4% gain in retail sales for April vs. March. But these are nominal numbers. On an inflation-adjusted basis, retail sales declined.

While demand for silver products reflects the fact that the average consumer is out of money, restaurant sales confirm this. April restaurant sales declined 1% in April and foot traffic into restaurants dropped 3.3%. This was the 12th month out of the last 13 that restaurant sales fell. Restaurant sales have dropped five quarters in a row. The last time a streak like this occurred was 2009-2010. Sound familiar?

Regardless of what the Fed says in public, the U.S. economy is in trouble. The illusion of economic growth post-2009 was a product of debt issuance. Now the consumer – 70% of the economy – has hit a wall with regard to its ability to take on more debt – look out below. In today’s episode of the Shadow of Truth, we review the silver demand numbers and discuss the implications for U.S. and global economy.

- Source, Sprott Money

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