Ron Paul will not go quietly into the night - and rightly so, it would seem, given his truthiness. In a recent brief interview on CNBC's Futures Now, he managed to diss Romney, smash the 'belief' in a 'two-party' system, and undermine any hope for economic change from the farce of an election. Summed up simply: "There is essentially no difference between one administration and another, no matter what the platform."
As we noted last week, the US, long considered the standard bearer for economic freedom among large industrial nations, has experienced a rather remarkable plunge in economic freedom over the last decade. This excellent infographic summarizes what factors drove us here, which countries are on the rise, and why we are more like Venezuela, Argentina, and Iceland than many would like to believe.
With the election right around the corner, the chickens are going to come home to roost. Our ability to print our own currency and buy all the commodities we want with it is the exorbitant privilege that allowed us to export most of the problems within the monetary system elsewhere first. As Nixon’s Treasury Secretary John Connelly said when confronted by a group of European Finance Ministers: “it’s our currency, but your problem.” At the time he was correct, as we were at the very beginning of the fiat dollar standard. 41 years later the system is in its final days and our currency is about to become our problem as well. There were always going to be massive consequences to keeping this ponzi alive. The main point here is one I was hammering on in my last piece The Global Spring. You can only push people so far into hardship before things snap. They snapped in North Africa. They snapped in Southern Europe. They snapped in China. They are about to snap here. Oh, and one last thing. What do you think all of this signals for corporate margins?
In response to recent articles in mainstream military journals discussing the use of the U.S. Army to quell insurrections on American soil, I offer an alternate vision of the future. Instead of a small town in the South as the flash point, picture instead a score of U.S. cities in the thrall of riots greater than those experienced in Los Angeles in 1965 (Watts), multiple cities in 1968 (MLK assassination), and Los Angeles again in 1992 (Rodney King). New Yorkers can imagine the 1977 blackout looting or the 1991 Crown Heights disturbance. In fact, the proximate spark of the next round of major riots in America could be any from a long list cribbed from our history.
We have seen them all before, and we shall see them all again as history rhymes along regardless of the century or the generation of humankind nominally in control of events. But the next time we are visited by widespread, large-scale urban riots, a dangerous new escalation may be triggered by a fresh vulnerability: It’s estimated that the average American home has less than two weeks of food on hand. In poor minority areas, it may be much less.
Read More @ SHTFPlan.com
by David Levenstein, SilverBearCafe.com:
After trading within a hair of $1800 an ounce last week, gold prices have met with some resistance and have pulled back slightly. As the yellow metal struggled to break through this key level of resistance, it notched up new record highs in euros and Swiss Francs. And, in South Africa as the gold price has risen, the Rand fell by around 10% in a month due to the on-going strikes at the various gold and platinum mines as well as general unrest throughout the country. This pushed the prices of Krugerrands on the domestic market to above R16, 000 each for the first time ever.
Although it is evident that we are still in a major bull market in gold, which is unlikely to peak for a long time to come, and despite the fact that South Africa has a long history with gold, having been a major producer for decades, thanks to the local radio and TV business channels, so much misinformation has been propagated about gold, it is unbelievable. During the run up in prices from $700 an ounce to $1900 almost all of the so called experts who appeared on CNBC continually denigrated gold as an investment as they were totally incapable of distinguishing between gold bullion and gold mining shares.
Read More @ SilverBearCafe.com
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Filed under False Flag event...
As the day approaches when Israel may decide to launch a preemptive strike against Iran in order to cripple its nuclear infrastructure, Israeli policymakers and their allies abroad would carefully assess how the Lebanese-based group Hezbollah would react. With the debacle of the 2006 war against the Lebanese group still fresh in Israeli minds, the possibility that the "Party of God" Shi’a organization would renew hostilities against the Jewish state through cross-border raids, terrorism, or rocket attacks against its cities, will have to be part of Israel’s calculations for any “day after” scenario.
The state of Americans’ retirement accounts is dismal is how ConvergEx's Nick Colas begins his critically important-to-read note on the reality that millions face. According to an early 2012 study by the Employee Benefit Research Institute, Colas notes only 58% of us are currently saving money for retirement – and 60% of those that are have less than $25,000. Thirty percent have less than $1,000. Needless to say, it’s a far cry from the 8x-10x final earnings suggested by most retirement planners. So why are we so far behind? Americans aren’t exactly known for impressive savings habits, but that alone does not explain our poor preparation for retirement. Rather, Colas cites a general lack of financial literacy, including basic understandings of savings growth and retirement income needs, superseding financial obligations, and basic behavioral finance biases keep us from putting cash away. But if we keep up at this pace, you can expect the ongoing political debate about Social Security to take on new and more strident tones.
The usual definition of a recession is GDP goes negative. But this isn't necessarily true. Notice that GDP never went below the zero line in the 2001 recession. Dipping close to zero was good enough. The more interesting line is our composite of economic activity. We can pose the "recession" question in this way: if real investment, net earnings after debt service and M2 money are all puking, how can the economy be "growing slowly but steadily"?
AAPL slumbered today (fading at VWAPs) and GOOG stumbled on FTC settlement chatter - dragging Nasdaq to its biggest weekly loss in almost 5 months. Financials were also sold hard (following what every talking head said was 'good' earnings by JPM and WFC this morning) - leaving the sector down 3.7% from post-QEternity highs with previous darling WFC slapped down to BofA/MS levels post-QE -6.5%. Dow Transports outperformed its peers on the week (ending very slightly red) but this remains more a pairs-trade story than anything to hang a 'recovery' on. The S&P has auctioned back to the top of the post-Draghi spike - battle is commencing. Treasury yields legged down once again (long-bond down 18bps on the week at lows) but pulled off the lows after Europe closed -5bps to -14bps as the curve flattened. The USD limped lower for the last few days but ended the week +0.45%. While Oil managed a 2% rise on the week, we saw commodities getting sold today with Gold/Silver sliding (-1.44% and 2.9% respectively on the week). After an early spike down, VIX leaked back higher all day ending at the magical 16% level - up 1.5vols on the week.
We talk a lot about the importance of owning precious metals… and often for the sake of convenience, we lump gold and silver together in the same category. But while the two share similar characteristics as excellent inflation hedges and stores of value, silver has unique fundamentals worth considering. For starters, while the entire gold market is small, the silver market is even smaller. This means that, in a boom, silver is going to rise more rapidly than gold. In a bust, silver is going to drop more rapidly. This gives silver an interesting edge as a speculation. And one way to play this is to buy specific types of silver whose premiums soar during financial panics.
With equities sat the edge of an ugly-looking cliff and precious metals leaking lower, FX markets remain somewhat less shell-shocked (for now). Citi's Steve Englander provides a quick-and-dirty view of the five key issues FX investors are focusing on.
Last month, mainstream media reported on the cyber-attacks to our banking institutions that disrupted business and caused havoc for customers. National Security officials stated that although the attacks have begun to subside, they are remaining vigilant.
A nameless, faceless group of alleged Iranian hackers is being blamed for the attacks to JPMorgan Chase, Bank of America (BoA), Wells Fargo, US Bancorp and Citigroup. Initially, the hacker group claimed they were upset by the 14 minute trailer produced by the US government and distributed by Israeli citizen and FBI informant, Sam Bacile. Now their story is changing and Iran is the culprit behind these attacks.
Read More @ OccupyCorporatism.com
GOLD – The Simple Facts
Nicholas J. Johnson, Mihir P. Worah
For more than a millennium, gold has broadly managed to maintain its real value, even as various currency regimes have come and gone.
The supply of gold is constrained, and we see demand increasing consistent with global economic growth on a per capita basis.
Given current valuations and central bank policies, we believe investors should consider including gold and other precious metals in a diversified investment portfolio.
When it comes to investing in gold, investors often see the world in black and white. Some people have a deep, almost religious conviction that gold is a useless, barbarous relic with no yield; it’s an asset no rational investor would ever want. Others love it, seeing it as the only asset that can offer protection from the coming financial catastrophe, which is always just around the corner.
Our views are more nuanced and, we believe, provide a balanced framework for assessing value. Our bottom line: given current valuations and central bank policies, we see gold as a compelling inflation hedge and store of value that is potentially superior to fiat currencies.
We believe investors should consider allocating gold and other precious metals to a diversified investment portfolio. The supply of gold is constrained, and we see demand increasing consistent with global economic growth on a per capita basis. Regarding inflation in particular, we feel that the Federal Reserve’s decision to begin a third round of quantitative easing makes gold even more attractive.
We see the Fed’s actions in the wake of the financial crisis as a paradigm shift whereby the Fed is attempting to ease financial conditions and encourage risk-taking by increasing inflation expectations. Its policies will likely result in continuous negative real interest rates because nominal rates will be fixed at close to 0% for the foreseeable future.
To be sure, gold isn’t the only asset with the potential to hold its value in inflationary times. For U.S. investors, at least, Treasury Inflation-Protected Securities (TIPS) offer an explicit inflation hedge. What’s more, TIPS tend to be less volatile than gold and, if held to maturity, are guaranteed to receive their principal back – barring a U.S. government default (which we see as incredibly improbable). Still, history shows that gold is highly correlated to inflation and has unique supply and demand characteristics that potentially lead to attractive valuations.
A unique store of value
For more than a millennium, gold has served as a store of value and a medium of exchange. It has broadly managed to maintain its real value, even as various currency regimes have come and gone. The reason is that the supply of gold is not at the whim of any governmental power; it is fundamentally supply constrained. Total outstanding above-ground gold stocks – the amount that has been extracted over the past few millennia – are roughly 155,000 metric tons. Each year mines supply roughly 2,600 additional metric tons, or 1.7% of the outstanding total. This is why gold can be thought of as the currency without a printing press.
The downside of gold is that it generates no interest. One ounce of gold today will still be only one ounce next year and the year after that. Because of this, gold is sometimes referred to as a non-productive financial asset, but we feel this characterization is misleading. Rather, we believe gold should not be thought of as a substitute for equities or corporate bonds. These have equity or default risk and therefore convey risk premiums.
Instead, gold should be thought of as a currency, one which pays no interest. Dollars, euro, yen and other currencies can be deposited to receive interest, and this rate of interest is meant to compensate for the decline in the value of paper currencies via inflation. Gold, in contrast, maintains its real value over time so no interest is necessary.
Jim Sinclair’s Commentary
The administration seems to be on a roll where US economic statistics are concerned.
If this is what I think it is... we really are lost.
According to the Labor Department, the producer price index climbed 1.1% in September after a 1.7% gain in August. The 1.1% gain exceeded the Street’s consensus forecast which called for a 0.8% increase.
A Bit of a Shocker: The University of Michigan preliminary October consumer sentiment index increased to 83.1, the highest level since September 2007, from 78.3 last month. The gauge was projected to fall to 78 according to consensus estimates.
Jim Sinclair’s Commentary
John Williams shares extremely important comments with us. If it is true, and it certainly looks like government economic statistics are under the control of the White House, be it actively or passively, all is lost.
America as we knew it is over. Corporate Fascism then rules the US and the day.
- Third-Quarter Wholesale Inflation Jumps to an Annualized 6.2%
- August Trade Deficit Suggests Downside Pressure on Third-Quarter GDP Estimate
- Political Manipulation of Economic Data: It Has Happened Before
Jim Sinclair’s Commentary
This was carried in the Washington Times so it qualifies for consideration. It always has to make you ask where this country is going.
Cops of any kind with devices to spy will always spy. Who gets the information, who keeps the information, and for how long?
The New York City police force is a prime example.
New software uses smartphone camera for spying
By Shaun Waterman
Researchers from the U.S. Naval Surface Warfare Center have developed malicious software that can remotely seize control of the camera on an infected smartphone and employ it to spy on the phone’s user.
The malware, dubbed “PlaceRaider,” “allows remote hackers to reconstruct rich, three-dimensional models of the smartphone owner’s personal indoor spaces through completely opportunistic use of the camera,” the researchers said in a study published last week.
The program uses images from the camera and positional information from the smartphone’s gyroscopic and other sensors to map spaces the phone’s user spends a lot of time in, such as a home or office.
“Remote burglars” could use these three-dimensional models to “study the environment carefully and steal virtual objects [visible to the camera] … such as as financial documents [or] information on computer monitors,” the researchers reported.
U.S. budget deficit tops $1 trillion for fourth straight year
WASHINGTON | Fri Oct 12, 2012 3:20pm EDT
(Reuters) – The United States reported a budget surplus for the final month of the 2012 fiscal year, but the tiny bump in revenues did not prevent the country’s deficit from exceeding $1 trillion for the fourth year in a row.
The 2012 budget gap was $1.089 trillion, smaller than last year’s deficit of $1.297 trillion largely because of higher corporate income tax receipts and less spending, the Treasury Department said on Friday.
The September budget surplus of $75 billion, which topped analyst expectations for a surplus of $42 billion, marked only the second month in the fiscal year ended September 30 that the country was in the black.
The year-end budget report comes in the final weeks of the presidential campaign, where the massive budget gap and President Barack Obama’s economic policies have dominated the debate.
The Obama administration spent $3.538 trillion in the 2012 fiscal year, 1.7 percent less than last year due to the expiration of stimulus provisions, a stronger economy, the end of military operations in Iraq and the continued drawdown in Afghanistan, the Treasury said.
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