Can it get worse? Of course it can. We have only seen the beginning of the collapse of the credit enhanced bubble economy. Every single country in the world is having problems. In addition to the European and US economies, the economies of India, China, Japan, Korea to mention just a few are all turning down fast.
Read More @ GoldSwitzerland.com
"Hoover-esque. Spain's has unemployment near 25% and yet the govt is proposing tax increases and a raiding of social security funds in an effort to rein-in its budget deficit. (The deficit was 4.77% for the first 8 months.) The rub is whether Spain will be able to cut enough to obtain EU support (probably) and whether there will be an eventual haircut for current debtholders (probably). Catalonia, Valencia and other regions will probably need $20B of aid, the sen. debtholders of the weak banks will be forced to take losses, and there might be some sharing of losses among all banks. An estimated decline in GDP of 1.7% (per the Economy Ministry), the IIF's recent estimate of addl bank loan losses up to EUR260B, and depositor flight hurt. From 2008 to 2011, Spain's debt jumped from EUR436B to EUR735B while its GDP declined from EUR1.09T to EUR1.07T."
The Fed can create money but if it doesn’t end up as household income it is “dead money.”
In the consensus view, the Federal Reserve’s unlimited quantitative easing (QE3) programs will do two things: 1) boost stocks and other “risk on” assets and 2) generate inflation. The two follow-on effects are related, of course; gold and other hard assets are rising in anticipation of higher inflation.
But all is not quite as it seems when it comes to the inflationary effect of creating money. I’m going to cover a lot of ground here so buckle up and grab your favorite stimulating beverage.
Let’s use some examples to illustrate key features of the relationship between money creation and inflation. Let’s say a central bank prints $1 trillion in cash currency, digs a big hole and buries it. Does that $1 trillion in new money cause inflation? No, because it never got into the hands of people who might trade it for goods and services in the real world.
Read More @ OfTwoMinds.com
This matter has been discussed in a number of newspapers/emags:
A quick summary of this fast moving story:
Standard and Poors (S&P) came out with a paper that said that the SNB had bought Euro 80Bn of core EU country bonds the past few months. S&P went on to blame the SNB for the unusual activity in the EU bond market that followed. Two-year debt instruments of Germany, Austria, Netherland and Finland went into negative territory. At the same time, bonds in Italy and Spain tanked. S&P flat out point the finger at the SNB:
SNB bond-buying is “exacerbating” the gap between borrowing costs for stable countries like Germany and the rest of the 17-nation euro zone.Read More @ BruceKrasting.blogspot.com
With EURUSD now 100pips higher, equities holding gains, and Monti confirming to the world that his Spanish friends have made considerable moves here, we leave it up to BNP to point out the sad reality of what we have just been sold. The 2013 budget does indeed focus on spending cuts (worth potnetially 0.75% of GDP next year) which is providing a headline of epic austerity, but the use of the social-security fund to buy time, the overly optimistic growth forecasts for 2013, and the lack of detail on structural reform was disappointing (or should have been to anyone who actually listened). It seems Spain has effectively agreed the terms for financial aid, without agreeing the terms of financial aid and while their hope is that the leftovers from the banking bailout fund will ease some pain; it seems the regional angst (Catalonia for example) and the fact that, as we noted a month ago, Spain only has enough cash to see it through to October, leaving them likely to need EUR30-50bn minimum asap.
Last summer, two researchers from the New England Complex Systems Institute published a short paper examining the correlation between rising food prices and civil unrest. It was a timely analysis, to say the least. A number of food riots were occurring throughout the world, not to mention waves of revolution sparked by the high cost of food. This is nothing new; throughout history whenever people have struggled to put food on the table for their families, social unrest has been a common consequence. If food prices continue to rise, agriculture will be one of the best investments of the decade. Even if all the world's food challenges are magically solved, it's hard to imagine being worse off for having your own food supply.
Got enough food?...
written today, Telegraph's Ambrose Evans-Pritchard unleashes a scathing critique of Europe's AAA club for daring to demand that Spain actually follow through with what they have been pretending to be doing, namely cutting spending and promoting improved government tax collections. We now know that Spain did neither, with spending increasing while tax revenues dropped from last year (and as we will not tire of pointing out, if the government has lost sight of the ball, and the economy is collapsing, it is not due to a cut in spending but due to its own inability to govern - something the people in a democratic regime usually are quite capable of fixing on their own). But complying with agreements in a broke Europe is not part of the New Normal. His summation, phrase briefly is as follows: "We discover – yet again, you might say – that Germany, Holland, and Finland will not stand behind their solemn pledge of solidarity when push comes to shove. Spain’s premier Mariano Rajoy has been betrayed. Nobody should be entirely surprised if he and the Spanish arch-nationalists in his circle offer a condign riposte, and bring down the entire temple on the heads of the creditor powers." Of course, none of that is true, and what Germany, Holland and Finland are doing is doing their best to get dragged into the money pit that the rest of their insolvent socialist neighbors can so efficiently dug in the last several years. What the article really is, is simply Ambrose's contrition for misreading the balance of power in Europe. Like so many others, he was all too eager to swallow the misdirection narrative that as a result of Mario Monti's stubborn gambit at the June 27th Euro-summit, the balance of power had finally shifted from the exporting, rich and quite solvent nations, to their liquidity and bailout addicted neighbors, something we claimed all along was a major mistake.
- *BERLUSCONI SAYS EURO A `SCAM' WITHOUT CENTRAL BANK BACKING IT
- *BERLUSCONI SAYS GERMANY LEAVING EURO WOULDN'T BE A TRAGEDY
- *BERLUSCONI: BAILOUT CONDITIONS WOULD LEAD ECONOMY TO COLLAPSE
- *BERLUSCONI SAYS ITALY RISKS HEADING TOWARD 'ENDLESS CRISIS'
As the words were spewing from the mouths of Saenz, Montoro, and Guindos - with little to no substance at all, so EURUSD started to push higher - in a hurry. In today's quiet market, the correlated-monkeys took over and US equities - thanks to weakness in the USD - and Gold and Oil spurted higher. AAPL - as the high beta proxy for all things market - surged 2% (we assume as the Spaniards will need to buy more AAPL stock to fund the shortfalls in their pension funds). The bottom-line is we have fallen for a few days and so a bounce is not unlikely but the timing and size smells very fishy and the front-running of quarter-end front-running wind-dressing front-runners remains a quagmire of circular logic to us. The bottom-line is that the media can now say the words "the market seemed to 'like' what Spain was saying - is the bottom in?" despite there being no news at all.
- SAENZ SAYS SPAIN PLANS 43 NEW LAWS TO BOLSTER ECONOMY
- SAENZ SAYS REFORM PLAN IS TO MEET PLEDGES TO EU PARTNERS
- SPANISH BUDGET BASED ON UNCHANGED ECONOMIC FORECASTS, SEES GDP DOWN 0.5%
- SPAIN TO TAP €3 BILLION FROM SOCIAL SECURITY RESERVES IN ORDER TO FUND LIQUIDITY NEEDS.
There was a time when student loans, now almost entirely funded by the US government, and thus a general obligation of all US taxpayers who however have no recourse to ever collect on any collateral, were spent on such trivial things as, well, higher education. Sadly, it appears that that is increasingly no longer the case. To wit: "feds accuse Newport man of using school loans on drugs, motorcyles, games and tattoos." At least no iPhone 3, 3S, 4, 4S or 5 was purchased using private and taxpayer cash.... in this case.
Dear Friend of GATA and Gold (and Silver):
A fascinating little controversy has developed in our camp.
On Monday GATA’s great friend David Schectman of the Miles Franklin coin and bullion dealership in Minnesota related in his blog the account of a bullion trader friend, Trader David R, who says that major investment banks are making a risk-free trade out of gold by obtaining free money from the Federal Reserve, buying real metal, selling futures against the metal, and collecting the contango. That is, the big dealers would not be naked short, or at least not as naked short as long suspected.
As Schectman did not identify his friend and the story thus rested on an anonymous source, it was less than authoritative. But it was plausible and there aren’t too many people in the gold business more trustworthy than Schectman, and he wasn’t attesting to the veracity of his source’s account but rather just passing it along because it was so relevant. Schectman’s commentary was headlined “The Cartel and Hedgies Are Short Paper but Long Physical Gold” and it’s posted at the Miles Franklin Internet site here:
Read More @ GATA.org
Every big financial crisis has its own defining characteristics, but both in origin and consequence, such implosions tend to be remarkably similar. In virtually every case, you first see a long period of excess in financial risk-taking, where credit spirals out of control. This ultimately proves unsustainable, and in the resulting bust the process of credit expansion goes violently into reverse, causing often catastrophic economic damage, from which it will typically take many years to recover. There is no quick bounce back from recessions caused by financial crises.
In one important respect, however, the present maelstrom is unique. Never before have we seen a financial crisis result in such all-encompassing and explosive growth in public indebtedness. This is not a problem exclusive to Britain, nor is the UK even the worst example of it. To a greater or lesser extent, all advanced economies that were directly involved in the financial crisis have suffered the same phenomenon, with public debt climbing to previously unthinkable levels. This might be understandable in the event of a no-holds-barred military conflict, where nations are fighting for their very existence, but for public indebtedness to be approaching such extremes in peacetime is quite without precedent.
Read More @ Telegraph.co.uk
Did you BTFD...
The dramatic rises in gold and silver prices that followed the Federal Reserve’s “QE3” announcement earlier this month has stalled over the last few days. Gold is encountering selling pressure on trips above the $1,770/oz mark, while silver was hit hard yesterday afternoon along with stocks and commodities, as European problems again start to hog financial headlines.
Unnamed IMF sources are said to want more stringent terms for future loans to Greece, while Spanish bond yields are on the rise again; the yield on Madrid’s two-year note rose 25 basis points yesterday to 3.41%. Regarding the Spanish situation, readers may be interested in the video below, which features James Turk interviewing Felix Moreno de la Cova, a contributor to this website. Felix is a trader and student of economics, and is based in Madrid, which gives him an intimate look at the issues facing the country. Alas, Felix is no optimist – would you really expect to find any on this site? – as the video title hints at.
Read More @ GoldMoney.com
The revised stated purpose behind President George W. Bush’s invasions of Afghanistan and Iraq was to build a new world order by forcing democracy on populations to whom it was truly alien. The original stated purpose for invading Afghanistan was to destroy the folks who provided shelter to the 9/11 attackers, and the original stated purpose for invading Iraq was to rid it of a government that possessed and might use weapons of mass destruction.
But when we learned that the real support for the 9/11 attacks came from folks protected by our so-called friends in Saudi Arabia, and when we learned that the only weapons of mass destruction possessed by Iraq were the ones the U.S. sold to Saddam Hussein in the mid-1980s, which he no longer possessed, the Bush administration changed the rhetoric but not the violence or its cost.
Read More @ LewRockwell.com
by Clyde Russell, MineWeb.com
The Gold Report: We just had a third round of bond buying in quantitative easing (QE). Will QE3 help the economy?
Brien Lundin: It will not help the economy, but it will help Wall Street. It will help elevate the stock market, including precious metals and resource stock prices. Although that was not the Fed’s stated goal, it will be the ultimate result.
As I have written lately, we now have “QE as far as the eye can see.” There is no end to it. The Federal Reserve will use QE until it works. If it does not work, the Fed will ratchet up the program and print more money until it does work.
Read More @ MineWeb.com
Thunder rumbled and rain pattered on the leaves as Connor Stevens tramped through the darkness down a wooded path to the base of the Brecksville-Northfield High Level Bridge. A sad-eyed 20-year-old poet from the Cleveland suburbs, Stevens was crouched in the foliage, his baby face obscured by a bushy lumberjack’s beard. Beside him ducked two friends from Occupy Cleveland – the group that had come to define Stevens and his place in the world – both as gaunt and grungy as Stevens himself. Farther up the trail, Stevens knew, three other comrades were acting as lookouts. Gingerly, the young men opened the two black toolboxes they’d carried down from their van. Inside were eight pounds of C4 explosives. They were actually going through with it. The six of them were going to blow up a bridge.
That they were on the brink of something so epic was surprising, even to the crew, a hodgepodge of drifters plus a pair of middle-class seekers: quiet Stevens and puppyishly excitable Brandon Baxter, also 20. Anarchists who had grown disenchanted with the Occupy movement, which they considered too conservative, they yearned to make a radical statement of their own – to send a message to corporate America, its corrupt government and that invisible grid underlying it all, the System.
Read More @ RollingStone.com
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It reminds me something a police officer told me once. He said, in a brawl he always uses overwhelming force because if he loses a fist fight the suspect may steal the weapon he’s carrying. Expand that logic, and the State is in a fist fight with hackers, and so they must use overwhelming force against all of us.
The Department of Homeland Security challenged Humphrey’s crew to hack into a standard drone and take command of it’s operation. They did this with less that $1,000 in spare parts.
The researchers were able to “spoof” the GPS system on board the drone. The technique involves mimicking the signals sent to the global positioning device and then tricking the target into following different orders.
Read More @ Silver Underground
Today King World News is reporting on important developments taking place in the gold market. Acclaimed commodity trader Dan Norcini told KWN that many of the small speculators have now been “flushed out” of gold. Norcini has been stunningly accurate in his predictions of the movement of the gold and silver markets.
Now the acclaimed trader discusses the latest important developments in gold: “As I mentioned over the weekend, the small specs were at a record level in terms of their long positions, but the important thing is many of them had bought near the top of the market when the bullish enthusiasm for QE3 was at its peak.”
“Many of the large traders had already positioned themselves long ahead of the announcement, but many of the small specs came into the trade in gold at $1,775 and above. So we had small specs heavily long near the top of the market, and that’s why I warned that we would see a selloff.
Dan Norcini continues @ KingWorldNews.com
Many medical professionals and members of the general public are losing faith in the credibility of the clinical trial and drug approval process, and rightfully so in light of all the corporate corruption and criminal behavior that has recently come to light. Two new papers published in the New England Journal of Medicine (NEJM) suggest that drug industry corruption is so pervasive nowadays that even the most rigorously-conducted studies and trials are not being taken seriously by many doctors.
Over the past three years, nearly every major drug company on the planet has been convicted of some kind of criminal behavior, whether it is fudging drug safety data; pushing drugs for off-label uses; bribing doctors and medical professionals to prescribe dangerous drugs; or conducting fraudulent clinical trials. Collectively, these companies have been forced to pay roughly $11 billion in fines for these and other crimes, which have apparently become a normal part of their corporate operating procedures.
Read More @ NaturalNews.com
Iran’s Press TV Channel says its correspondent Maya Nasser has been shot dead by a sniper while reporting on air about today’s twin blasts in Damascus. Patrick Henningsen – a geopolitical analyst for the current affairs website “UK Column” – believes the Iranian journalist’s death is unlikely to be an accident. Henningsen also highlights the role of foreign fighters in Syria, who are logically, materially and financially supported by US and western governments.
A writer’s greatest disappointments are readers who have knee-jerk responses. Not all readers, of course. Some readers are thoughtful and supportive. Others express thanks for opening their eyes. But the majority are happy when a writer tells them what they want to hear and are unhappy when he writes what they don’t want to hear.
For the left-wing, Ronald Reagan is the great bogeyman. Those on the left don’t understand supply-side economics as a macroeconomic innovation that cured stagflation by utilizing the impact of fiscal policy on aggregate supply. Instead, they see “trickle-down economics” and tax cuts for the rich. Leftists don’t understand that the Reagan administration intervened in Grenada and Nicaragua in order to signal to the Soviets that there would be no more Soviet expansion or client states and that it was time to negotiate the end of the cold war. Instead, leftists see in Reagan the origin of rule by the one percent and the neoconservatives’ wars for US hegemony.
In 1981 curtailing inflation meant collapsing nominal GNP and tax revenues. The result would be budget deficits–anathema to Republicans– during the period of readjustment. Ending the cold war meant curtailing the military/security complex and raised the specter in conservative circles of “the anti-Christ” Gorbachev deceiving Reagan and taking over the world.
Read More @ PaulCraigRoberts.org
In the midst of the Great Depression, Treasury Secretary Andrew Mellon famously advised President Hoover to “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate” instead of propping each industry up with tax dollars. This liquidation doctrine would “purge the rottenness out of the system” and make certain that “people will work harder” and “live a more moral life.” Contrary to popular belief, Hoover did not take Mellon’s advice and went forth with his own version of the New Deal that gave relief to farmers and supported wage rates in certain industries. These efforts, which were exacerbated under the presidency of Franklin Roosevelt, effectively prevented the market from clearing. The boom of the late 1920s that was driven by the Federal Reserve’s monetary inflation was not allowed to bust. Instead of liquidating the debt and allowing the economy to reach a sound footing, both the Hoover and Roosevelt administrations attempted to manage it back to health. The result was the longest period of unemployment ever recorded in American history.
Today, Mellon’s advice is still spurned by most of the economic profession. The media establishment, not to be outdone, is also on the side of intervention.
Read More @ Mises.ca
Sometime in the near future the world as we know it will change drastically. The financial and economic systems we have come to depend on will finally buckle, and when they do, those things that we take for granted today – our ability to conveniently engage in commerce, to depend on police and medical responders to be there in an emergency, and even turning on our lights at night – will become a thing of the past.
When this ‘crunch’ happens, those who are unprepared for it are destined to suffer the worst of what mankind has to offer. There will be no food, no fuel, no ease of travel and no rule of law.
This worst case scenario is the background story of the trilogy introduced by Survival Blog author James Rawles.
In his first book, Patriots, Rawles introduced to a tight-knit group of individuals who had for years taken steps to prepare for just such a scenario, and when the crunch came they were ready for it. His second novel, Survivors, which took place during the same ‘event’ followed a variety of characters in the United States and abroad as they struggled to come to terms with what had happened and the challenges they faced as crime rose exponentially and hordes of gangs overtook villages and towns in an effort to acquire critical resources.
Read More @ SHTFPlan.com
Will the S&P 500 nose dive down to 800? Nomura International Plc.’s bearish co-head of cross-asset allocation strategy, Bob Janjuah, believes it will.
Janjuah was previously at Royal Bank of Scotland Group Plc. where he was the chief market strategist and co-head of the bank’s global macro strategy unit. He accurately predicted last year’s second-half retreat in U.S. stocks.
In spite of a small rally after QE3 was announced, he is sticking by his prediction. Underlying concerns about growth, debt and policymakers’ inadequate reaction to the debt crisis, Janjuah believes any potential upside will be limited to a 10% gain.
In his own words: “Until and unless the S&P 500 index demonstrates a weekly close below 1,450, I believe it is premature to go aggressively short risk — tactically at least — at this precise moment.”
Read More @ WealthWire.com
The hypno-induced psychotic public can’t even hear the war drums any more, no matter how loud and obvious. They’re intoxicated with intense, repetitive and confusing war propaganda and images of overthrown dictatorships that have only given birth to more chaos.
But that’s OK in La La land.
All the distracted dystopian subjects can hear is that for some reason American boots march unopposed into far regions of the world, protecting liberty and democracy.
So “keep up the good work, boys. Honey, put the game back on, I have to go to f*ing work in the morning and this is my only chance to think…..”
WW3 Conditioning Complete – They Won’t See It Coming
Such is today’s surreal world environment. 11 years of genocidal wars and now these latest barbaric atrocities have made their inroads even broader, not just in the middle east but in the human mind. And as they continue their saber rattling and massive propaganda campaigns, little do people realize these globalist warmongers are garnering a tsunami of unspoken public permission with each passing day.
Read More @ ZenGardner.com
Despite government assurances that the economy is on the mend, a number of the world’s richest people have been quietly dumping their American Stocks.
Billionaires who are dumping their stocks:
Warren Buffett, who has been the current administrations top ally when it comes to propping up the markets, might not be as optimistic as he pretends to be in public. In fact, Buffet has recently begun to dramatically reduce his exposure to stocks that depend on consumer purchasing. He has reduced his stock exposure in these companies by over 21% and has even sold of his entire stake in the computer parts company Intel (7,745,000 shares).
The controversial billionaire George Soros, has also been moving at a frenzied pace to sell off his stocks in all financial companies. According to his SEC filings, Soros dumped his entire stake in all major financial stocks. He completely dumped Citigroup (420,000 shares), JP Morgan (701,400 shares) and Goldman Sachs (120,000 shares), leaving himself with no exposure to the American financial markets.
Read More @ OffGridSurvival.com
A veritable chorus of large US corporations has chopped their forecasts down a few sizes, citing the China slowdown, wobbly demand from emerging markets, the ongoing fiasco in Europe, or weakness in the US. Among the usual bellwether suspects:
Caterpillar raised eyebrows on Monday when it lamented “fairly anemic” global growth and a slowdown in China, not just for the quarter or the year, but through 2015. FedEx cut its outlook on September 18 due to lower shipping volumes and a shaky global economy. On September 7, Intel slashed its third-quarter revenue outlook, ominously on weakness in the enterprise segment and in emerging markets. On August 30, the International Air Transport Association announced that July air-freight was down 3.2% worldwide from last year. And in July, UPS lowered its guidance.
But you wouldn’t know it from the stock markets, which are supposed to predict future turns in the economy better than any other measure, based on the collective wisdom of innumerable astute market participants—or rather computers, algos, and fat fingers. The S&P 500, for example, is up 22% over the last 12 months. A phenomenal run.
Read More @ TestosteronePit.com
Total Donations over the last 3 1/2 years. approx $165.00 (Thank You).
Donations will help defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.