Posts tagged silver
Glenn Jacobs spoke to a group regarding Austian Economics several months back in the video shown below which I had intended to share. Today I realize that despite the best of intentions and saving the video I had not yet posted the presentation by Glenn Jacobs, published by messengersforliberty, which I would encourage all to watch. Should you have the opportunity to attend a meeting featuring Glenn Jacobs as speaker I would recommend attending, as you will find him to be a highly personable and intelligent individual, and that you will find your time very well spent.
Austrian Economics with Glenn Jacobs
Published by messengersforliberty
This economic presentation with Glenn Jacobs, aka Kane, was documented on September 5, 2013.
“It really ticks me off when I hear leftists and statists talk about how the free market causes wealth inequality, the free market doesn’t. The free market though out history has allowed poor people to pull themselves up and has given people more socio economic ability to move up and down the socio economic ladder, up, than anything else in history.
Paul Krugman, who is a keynesian economist par excellence, just wants to inflate like crazy, but yet he writes a column for the New York Times and it’s called ‘Conscience of a Liberal’, because he loves poor people despite the fact that he’s the guy that’s killing them, but then he’ll look at someone like me and say you hate the poor. I don’t hate the poor, I hate the fact that they’re poor.”
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By Greg Hunter
Dr. Paul Craig Roberts-U.S. Markets Rigged by its Own Authorities
Economist Dr. Paul Craig Roberts says, “We have a situation where all the markets are rigged. All the markets are manipulated.” As an example, Dr. Roberts points to the stock market. Dr. Roberts contends, “We have a stock market at all-time highs, and where is the economy? There’s not one. There’s no recovery.” Dr. Roberts goes on to say, “53% of Americans earn less than $30,000 per year. Well, the poverty rate for a family of four is something like $24,000. . . . If there is no income to drive the economy and there is no credit expansion to drive the economy, then how does it go anywhere? You can’t possibly have a recovery.”
China Is On A Debt Binge And A Buying Spree Unlike Anything The World Has Ever Seen Before
When it comes to reckless money creation, it turns out that China is the king. Over the past five years, Chinese bank assets have grown from about 9 trillion dollars to more than 24 trillion dollars. This has been fueled by the greatest private debt binge that the world has ever seen. According to a recent World Bank report, the level of private domestic debt in China has grown from about 9 trillion dollars in 2008 to more than 23 trillion dollars today. In other words, in just five years the amount of money that has been loaned out by banks in China is roughly equivalent to the amount of debt that the U.S. government has accumulated since the end of the Reagan administration. And Chinese bank assets now absolutely dwarf the assets of the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England combined. You can see an amazing chart which shows this right here. A lot of this “hot money” has been flowing out of China and into U.S. companies, U.S. stocks and U.S. real estate. Unfortunately for China (and for the rest of us), there are lots of signs that the gigantic debt bubble in China is about to burst, and when that does happen the entire world is going to feel the pain.
It was Zero Hedge that initially broke this story. Over the past several years, most of the focus has been on the reckless money printing that the Federal Reserve has been doing, but the truth is that China has been far more reckless…
You read that right: in the past five years the total assets on US bank books have risen by a paltry $2.1 trillion while over the same period, Chinese bank assets have exploded by an unprecedented $15.4 trillion hitting a gargantuan CNY147 trillion or an epic $24 trillion – some two and a half times the GDP of China!
Putting the rate of change in perspective, while the Fed was actively pumping $85 billion per month into US banks for a total of $1 trillion each year, in just the trailing 12 months ended September 30, Chinese bank assets grew by a mind-blowing $3.6 trillion!
I was curious to see what all of this debt creation was doing to the money supply in China. So I looked it up, and I discovered that M2 in China has grown by about 1000% since 1999…
So what has China been doing with all of that money?
Well, they have been on a buying spree unlike anything the world has ever seen before. For example, according to Reuters China has essentially bought the entire oil industry of Ecuador…
China’s aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador.
Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days.
And the Chinese have been doing lots of shopping in the United States as well. The following is an excerpt from a recent CNBC article entitled “Chinese buying up California housing“…
At a brand new housing development in Irvine, Calif., some of America’s largest home builders are back at work after a crippling housing crash. Lennar, Pulte, K Hovnanian, Ryland to name a few. It’s a rebirth for U.S. construction, but the customers are largely Chinese.
“They see the market here still has room for appreciation,” said Irvine-area real estate agent Kinney Yong, of RE/MAX Premier Realty. “What’s driving them over here is that they have this cash, and they want to park it somewhere or invest somewhere.”
Apparently a lot of these buyers have so much cash that they are willing to outbid anyone if they like the house…
The homes range from the mid-$700,000s to well over $1 million. Cash is king, and there is a seemingly limitless amount.
“The price doesn’t matter, 800,000, 1 million, 1.5. If they like it they will purchase it,” said Helen Zhang of Tarbell Realtors.
So when you hear that housing prices are “going up”, you might want to double check the numbers. Much of this is being caused by foreign buyers that are gobbling up properties in certain “hot” markets.
We see this happening on the east coast as well. In fact, a Chinese firm recently purchased one of the most important landmarks in New York City…
Chinese conglomerate Fosun International Ltd. (0656.HK) will buy office building One Chase Manhattan Plaza for $725 million, adding to a growing list of property purchases by Chinese buyers in New York city.
The Hong Kong-listed firm said it will buy the property from JP Morgan Chase Bank, according to a release on the Hong Kong Stock Exchange website.
Chinese firms, in particular local developers, have looked overseas to diversify their property holdings as the economy at home slows. Chinese individuals also have been investing in property abroad amid tight policy measures in the mainland residential market.
Earlier this month, Chinese state-owned developer Greenland Holdings Group agreed to buy a 70% stake in an apartment project next to the Barclays Center in Brooklyn, N.Y., in what is the largest commercial-real-estate development in the U.S. to get direct backing from a Chinese firm.
And in a previous article, I discussed how the Chinese have just bought up the largest pork producer in the entire country…
Just think about what the Smithfield Foods acquisition alone will mean. Smithfield Foods is the largest pork producer and processor in the world. It has facilities in 26 U.S. states and it employs tens of thousands of Americans. It directly owns 460 farms and has contracts with approximately 2,100 others. But now a Chinese company has bought it for $4.7 billion, and that means that the Chinese will now be the most important employer in dozens of rural communities all over America.
For many more examples of how the Chinese are gobbling up companies, real estate and natural resources all over the United States, please see my previous article entitled “Meet Your New Boss: Buying Large Employers Will Enable China To Dominate 1000s Of U.S. Communities“.
But more than anything else, the Chinese seem particularly interested in acquiring real money.
And by that, I mean gold and silver.
In recent years, the Chinese have been buying up thousands of tons of gold at very depressed prices. Meanwhile, the western world has been unloading gold at a staggering pace. By the time this is all over, the western world is going to end up bitterly regretting this massive transfer of real wealth.
Unfortunately for the Chinese, it appears that the unsustainable credit bubble that they have created is starting to burst. According to Bloomberg, the amount of bad loans that the five largest banks in China wrote off during the first half of this year was three times larger than last year…
China’s biggest banks are already affected, tripling the amount of bad loans they wrote off in the first half of this year and cleaning up their books ahead of what may be a fresh wave of defaults. Industrial & Commercial Bank of China Ltd. and its four largest competitors expunged 22.1 billion yuan of debt that couldn’t be collected through June, up from 7.65 billion yuan a year earlier, regulatory filings show.
And Goldman Sachs is projecting that China may be facing 3 trillion dollars in credit losses as this bubble implodes…
Interest owed by borrowers rose to an estimated 12.5 percent of China’s economy from 7 percent in 2008, Fitch Ratings estimated in September. By the end of 2017, it may climb to as much as 22 percent and “ultimately overwhelm borrowers.”
Meanwhile, China’s total credit will be pushed to almost 250 percent of gross domestic product by then, almost double the 130 percent of 2008, according to Fitch.
The nation might face credit losses of as much as $3 trillion as defaults ensue from the expansion of the past four years, particularly by non-bank lenders such as trusts, exceeding that seen prior to other credit crises, Goldman Sachs Group Inc. estimated in August.
The Chinese are trying to get this debt spiral under control by tightening the money supply. That may sound wise, but the truth is that it is going to create a substantial credit crunch and the entire globe will end up sharing in the pain…
Yields on Chinese government debt have soared to their highest levels in nearly nine years amid Beijing’s relentless drive to tighten the monetary spigots in the world’s second-largest economy.
The higher yields on government debt have pushed up borrowing costs broadly, creating obstacles for companies and government agencies looking to tap bond markets. Several Chinese development banks, which have mandates to encourage growth through targeted investments, have had to either scale back borrowing plans or postpone bond sales.
This could ultimately be a much bigger story than whether or not the Fed decides to “taper” or not.
It has been the Chinese that have been the greatest source of fresh liquidity since the last financial crisis, and now it appears that source of liquidity is tightening up.
So as the flow of “hot money” out of China starts to slow down, what is that going to mean for the rest of the planet?
And when you consider this in conjunction with the fact that China has just announced that it is going to stop stockpiling U.S. dollars, it becomes clear that we have reached a major turning point in the financial world.
2014 is shaping up to be a very interesting year, and nobody is quite sure what is going to happen next.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
A Caesar In Our Future?
What Happens If The Shutdown Causes The Treasury To Run Out Of Money
In a speech to the Commonwealth Club, San Francisco, November 23, 2010, Peter Dale Scott gave a history of the various directives concerned with government continuity during a state of emergency. He showed that these directives could be used to supersede the Constitution. http://www.globalresearch.ca/continuity-of-government-is-the-state-of-emergency-superseding-our-constitution/22089
The ease with which both the Bush and Obama regimes were able to set aside the due process protections of the Constitution that prohibit indefinite detention and execution without conviction in a trial indicate that Professor Scott’s concern is justified that these directives could result in executive branch rule.
Scott describes how the executive branch efforts to provide government continuity in the aftermath of a nuclear attack dating from the Eisenhower administration were gradually converted into executive or national security (later Homeland Security) orders that confer secret powers to the White House for any event that the executive branch considers to be an emergency.
Generally these various executive orders and directives refer to “national emergencies,” or “national disasters.” However, President Bush’s National Security Presidential Directive/NSPD 51 and Homeland Security Presidential Directive/HSPD-20 issued on
May 9, 2007 use the term “Catastrophic Emergency.” http://georgewbush-whitehouse.archives.gov/news/releases/2007/05/20070509-12.html
The directives speak of “enduring constitutional government” which the president maintains by coordinating “as a matter of comity with respect to the legislative and judicial branches,” but it is up to the president and his advisor, the National Continuity Coordinator, to decide what constitutes constitutional government during a catastrophic emergency.
What comprises a catastrophic emergency? It is reasonable for a president to regard a government shutdown, which can threaten everything from national security to default and economic collapse, as a catastrophic emergency, and to take such steps as are necessary to prevent it, such as raising the debt ceiling, on his own authority.
The Federal Reserve also has the power to prevent a government shutdown. If banks are too big to fail, so is the federal government. If the Federal Reserve on its own authority can issue more than $16 trillion in loans to US and European banks in order to prevent their failure, the Federal Reserve can issue a loan to the US government.
I don’t expect either of these two possibilities to come into play. A shutdown and default of US debt obligations would terminate the US as a superpower and dethrone the dollar as world reserve currency. Neither Congress nor President Obama desire such an outcome. Also, Congress would not want a presidential directive to be implemented that subordinates their position and possibly eliminates their meaningful participation in governance. Therefore, I expect a resolution of the current standoff prior to the Treasury running out of money.
I did interviews on this subject with King World News and with Greg Hunter. The interviews are played to the sensational side, but I do not expect it to go that far. However, it could.
My interview with King World News is relatively short, but Eric King knows how to bring it to the most controversial point. What everyone should wonder is, “How did we, a free people protected by the US Constitution, become one step away from rule by Caesar?
My interview with Greg Hunter of USA Watchdog is, in my opinion, one of my best. The interview covers a broad range of issues or possibilities and makes it unnecessary for me to write a column about the government shutdown and its implications and possible consequences. http://usawatchdog.com/paul-craig-roberts-obama-could-govern-as-a-dictator/
Reprinted with permission from www.paulcraigroberts.org
About Dr. Paul Craig Roberts
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
Too Poor To Prepare
Published by TruthNeverTold
Too Poor To Prepare is a short video offering suggestions for all, not only those in financial hard times, how they can prepare and make a positive impact in their life and those around them.
New Interview with SGT Report with Michael Krieger: The Great Awakening
Michael Krieger: It’s been a little while since my last interview with SGT Report, so I’m really pleased to be able release the recording of a chat we had last weekend. I was in an area with spotty internet connection, so you will notice some bad audio quality in the beginning, but I promise it gets better from there. It’s actually mind-boggling to think about all the topics we covered, so brace yourselves for a 27 minute political hurricane. Enjoy!
The Coming Shortage Of Physical Gold That Will Change Everything
Is the paper gold scam about to be brutally crushed by a crippling shortage of physical gold? If so, what will that do to global financial markets? According to the Reserve Bank of India, “the traded amount of ‘paper linked to gold’ exceeds by far the actual supply of physical gold: the volume on the London Bullion Market Association (LBMA) OTC market and the major Futures and Options Exchanges was OVER 92 TIMES that of the underlying Physical Market.”
In other words, there is a massive amount of paper out there, but very little actual physical gold to back it up. And right now, we are witnessing voracious hoarding of physical gold all over the globe. This is especially true in Asia. Just see this article and this article. All of this hoarding is putting a tremendous amount of pressure on those that have made all of these “paper promises”, because the truth is that there really isn’t all that much physical gold on the planet. In fact, Warren Buffett once estimated that if all of the gold in the entire world was brought into one place, it could be formed into a cube that would only be 69 feet long by 69 feet high by 69 feet wide.
As the emerging shortage of physical gold becomes increasingly apparent, the massive Ponzi scheme that the bullion banks have been running for decades is going to completely fall apart. The following is what Egon von Greyerz told King World News the other day…
Governments and central banks have, for decades, leased or sold their gold to the bullion banks. So they are very likely to own very little of the 23,000 tons that Western central banks are said to hold.
But now bullion banks also have a problem: They tried to replenish their (physical gold) coffers during the massive manipulative selling that we’ve seen over the last few months in the paper market. Although they took the price down, most of the physical (gold) that was released by selling from ETFs and hedge funds was absorbed by Asia.
So the bullion banks are still massively short of physical gold.
Right now there simply is not enough physical gold out there and the bullion banks and the central planners are starting to panic. One of the individuals that really has his hand on the pulse of what is going on is billionaire Eric Sprott…
We have seen the COMEX inventories decline rapidly. We know that all of the dealer inventory on the COMEX has already been spoken for by delivery notices, so essentially there will be zero (inventory) if they ever make the delivery.
And the central planners (also) went to India and said, ‘Look, you’ve got to do something about all of this gold buying in India.’ So we’ve had ten different steps by the Indian government to try to curb demand — a 2% tax, a 4% tax, a 6% tax, an 8% tax, and a ruling that banks couldn’t lend money for people to buy gold.
They also convinced the Jewelers Association that as of July 1st they couldn’t sell gold bars and coins. Just last week there was a new rule implemented that if you are importing gold you have to prove that a certain amount is being re-exported. We’ve probably had ten or twelve things (restrictions) happen in six months, all of which is a huge attempt to get the second biggest buyer of gold in the world, after China, to decrease consumption because the gold isn’t around.
The central planners have arranged all of these things. I think it’s just been one big scheme to try to get people dissuaded from owning gold and to cause supply to come out. As you mentioned, because of it (central planner actions) we have the gold forward rates (for gold) being negative, backwardation, and inventories plunging, all of which have been manifested because there is a shortage of gold.
Already the emerging shortage of physical gold is starting to cause some very unusual things to happen in the financial markets. A recent article by Reg Howe did a good job of explaining what we have been witnessing lately…
By undercutting normal gold lease rates, these super low interest rates have forced central banks to reduce their lease rates to nonsensical levels in order to prevent gold futures from going into overt backwardation. Recall that GOFO, the gold forward rate, is the interest rate for a given maturity less the lease rate for that maturity, and that a negative GOFO represents backwardation. See Gold Derivatives: GLD and Ass Backwardation (5/24/2010); Gold Derivatives: The Tide Turns (5/25/2009). Passing the argument that widely reported premiums for spot physical delivery represent a form of backwardation, figures from the LBMA have now shown a negative GOFO at the shorter maturities for almost three weeks (July 8 through July 25) due to a surge in lease rates, which still remain below more normal historical levels.
Indeed, this unusual event has attracted considerable attention even from those outside the narrow world of gold. See, e.g., J. Skoyles, Backwardation, negative GOFO and the gold price, The Real Asset Co. (July 24, 2013); M. Kentz, Gold futures hiccup indicates demand outpacing supply, Reuters (July 19, 2013); G. Williams, What If, Things that Make You Go Hmmm, Mauldin Economics (July 15, 2013).
The bottom line is that there is a very serious shortage of physical gold, and as this becomes increasingly apparent to the rest of the world, this is likely to cause a tremendous amount of instability in the financial markets in the months ahead.
For much more on this, please see the recent interview with Alasdair Macleod of goldmoney.com that is posted below…
Right now we are also witnessing tremendous demand for physical silver as well.
For example, the U.S. Mint is going to break the all-time record for July by a very wide margin, and it is being projected that sales of Silver Eagles will likely be above 45 million for the entire year.
And remember, unlike gold, silver is used in thousands of different consumer products. So silver is continually being used up and taken out of the overall global supply.
Image credit: http://endoftheamericandream.com
We’re Going Into the Greatest Depression: “They Will Not Be Able To Pull Off the Stimulus Game Again”1
Posted by Judy Morris
We’re Going Into the Greatest Depression: “They Will Not Be Able To Pull Off the Stimulus Game Again”
Look around and you can’t miss it.
The world is on the brink… politically, economically, financially, monetarily, and militarily.
Events are accelerating. Over the last decade trend forecaster Gerald Celente has been blaring the alarms.
If you’ve been paying attention, then you’ve heard them. You know we’re going under.
And this time they’re not going to be able to stop it.
It will be worse than the panic of ’08. It will be deeper. It will be more painful and there’s a reason why… because they will not be able to pull off the stimulus game again.
Everybody got hip to it and it didn’t work. You read even the Financial times, the major media, CNBC, Bloomberg… everyone will now admit that the stimulus only bought borrowed time. So the stimulus game doesn’t work anymore, and the governments are so in debt they can’t have the fiscal policy. So you have no monetary policy and you have no fiscal policy to stimulate the economy.
We’re going into the Greatest Depression.
But they will try to boost it some way. And that’s when I believe gold and silver prices will again skyrocket. They can stay low, I believe, for another several months… even a year. But I don’t see them staying down forever.
Read the rest at SHTFplan.com, here.
from Gold Silver Worlds:
MOSCOW EXCHANGE WILL OFFER PHYSICAL PRECIOUS METALS TRADING – A GAME CHANGER?
We have reported extensively about Russia’s love for gold, for instance here and here. The Russians are not too happy with the violent gold price crash since mid-April. It is widely known that the price decline was induced by the COMEX futures market. Russia is now leading the wave of reactions by launching a physical precious metals exchange. The exchange will start trading gold and silver by the end of this year. Platinum and palladium trading will be launched in 2014. Russia has so far only been trading futures on gold and silver, not dealing with real metals.
RTwrites: “Trading physical metals is expected to boost liquidity in the market and attract more participants.” Furthermore, “the Moscow stock exchange plans to transport precious metals from production companies, keep them in its own stores and deliver to the buyer the next day. The launch of trading in gold and silver on the Moscow exchange will boost liquidity on the market and attract more participants by these new financial instruments.”
Read More @ GoldSilverWorlds.com
LBMA GOLD FLIGHT, 580 GOLD TONS PURCHASED, SILVER & MORE
“However, by manipulating the gold price lower through the foreign exchange interventions, they’ve succeeded in forcing 600 tons of ETF redemptions, COMEX capitulation, and drawn in an unprecedented level of fresh managed money short supply. This has now successfully allowed the bailout of the bullion banks to the point where they have been able to get net long (gold) futures. The two primary bullion banks that we all know about are net long.
But from a cash forex trading (currency trading) point of view, we are definitely still seeing aggressive official intervention, including the post-Bernanke smash (in the metals). Any time he speaks we get the same thing. The problem is this cash market intervention is also causing precious (metals) bullion inventories to deplete at a much faster rate than if gold was priced at $1,900.
Editor’s Note: This clip below was relevant to the above…
The Golden (Sentiment) Rule: If It Isn’t Off The Chart Now, It Soon Will Be
Submitted by Tyler Durden (ZeroHedge) on 06/28/2013 – 19:49
Remember: what is unsustainable, can never crash…