Thursday, August 5, 2021



The Fed Stares Reality in the Face

by Jim Rickards, Daily Reckoning:

Janet Yellen maintains a persistent belief in the Phillips curve, which assumes an inverse relationship between unemployment and inflation.

As unemployment goes down, labor scarcity leads to wage increases above growth potential, which leads to inflation.

The only problem with the Phillips curve is that it has no empirical support. In the late 1970s and early 1980s, we had high unemployment and high inflation. Today, we have low unemployment and low inflation. Both results are the exact opposite of what the Phillips curve would predict.

In a recent speech, Fed governor Lael Brainard, an ally of Yellen, said the Phillips curve today is “flat.” That’s a polite way of saying there is no curve.

Yellen is also confused about what causes inflation other than the Phillips curve. She believes that monetary ease, acting with a lag, feeds inflation. Therefore, it is necessary to tighten policy before inflation appears to avoid getting behind the curve.

But money supply does not cause inflation. It may add fuel to a fire, but it’s not the spark. The Fed has created $3.5 trillion of new money since 2008 and there’s no inflation in sight.

What causes inflation is not money supply but psychology, expressed as velocity. Velocity is the speed at which money turns over through lending and spending. It depends on behavioral psychology, what Keynes called “animal spirits,” regardless of the amount of money around.

Assume GDP is $20 trillion and maximum real growth is 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. That means nominal GDP growth above $600 billion (3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of $20 trillion) will be inflationary. Now consider two cases. In the first case, money supply is $300 billion and velocity is 2. In the second case, money supply is $250 billion and velocity is 3.

The first case yields $600 billion in nominal growth ($300 billion times 2), which is noninflationary because it matches potential growth. In the second case, nominal growth is $750 billion ($250 billion times 3), which is inflationary because it exceeds potential real growth.

In other words, the example with the larger money supply has lower inflation. Sorry, Janet.

In recent remarks, both at the FOMC press conference on Sept. 20 and a speech last Monday, Yellen left markets with the impression that the Fed would raise rates in December based on the arguments noted above (low unemployment and monetary policy acting with a lag).

At the same time, she noted that inflation has been going down sharply and that the Fed really doesn’t understand why (a refreshing note of humility).

Yellen dismisses the weak inflation data as “transitory” and clings to her forward-looking Phillips curve fears as a reason to raise rates in December. Markets seem to agree.

Yet as with all false belief systems, reality intrudes sooner or later. In this case, reality intruded at exactly 8:30 a.m. EDT last Friday, Sept. 29.

That was when the August core PCE year-over-year (YoY) inflation figure was released.

Core PCE YoY is the one inflation metric the Fed focuses on. The Fed’s target for that measure is 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Here are the data so far this year:

  • January: 1.9{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • February: 1.9{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • March: 1.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • April: 1.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • May: 1.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • June: 1.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • July: 1.4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

You get the picture.

The real data have moved in the opposite direction from the Fed’s 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} target by a full 0.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in seven months. That’s a big move, and that’s a long period of time to cling to the “transitory” explanation.

I told Rickards’ Intelligence Triggers subscribers on Thursday that if core PCE came in at 1.4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} or lower Friday morning, it would drive a stake into the heart of Wall Street research departments and kill any chance of a December rate hike.

If it was 1.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, I said it wouldn’t move the needle much one way or the other. Yellen would take a “wait and see” approach. If it was 1.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} or higher, I said that would have increased the odds of a December rate hike and given encouragement to Yellen and her “transitory” theory.

So what did August core PCE come in at Friday?

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Beretta APX 9mm Handgun, by Pat Cascio

by Pat Cascio, Survival Blog:

The new Beretta APX 9mm handgun is a hot seller, and it’s the subject of our review in this article. No other handgun has fit my hand better than the grand old Browning Hi-Power 9mm pistol, and I’m not alone in this feeling, either. I’ve heard the same thing over and over again from folks who own a Hi-Power. Well, all of that changed the moment I picked-up the new Beretta APX 9mm handgun. I have never, and I mean never, had a handgun feel so good in my hand, no exceptions! I just had to get that out of the way at the onset of this review.

SurvivalBlog First to Review U.S. Military Adopted SIG Sauer P320 9mm

As many readers know, the U.S. Army, and now all the other military services, have adopted the SIG Sauer P320 9mm handgun. SurvivalBlog was the first to review this outstanding handgun. We often get the jump on others with new product reviews. I own the SIG P320 Compact model and love it. The competition for a new U.S. military service handgun had many competitors. However, in the end, the SIG was the winner. Needless to say, there were sour grapes from some other competitors, and the usual lawsuits were filed, though they have been dismissed. Beretta modified their outstanding current military issue handgun and called it the Model 93A3. I don’t understand Beretta’s thinking. It really wasn’t a “modular” handgun, and that is what the U.S. Army was looking for. Though there’s nothing wrong with the new Model 93A3.

Beretta’s APX Might Have Beat SIG Sauer P320

Now, if Beretta had entered the APX in the competition, it may have well beat out the SIG Sauer P320. I kid you not. It is “that” good of a 9mm handgun. However, the APX wasn’t manufactured in time to enter the testing, which is too bad. It would have been an outstanding contender against all comers. I’m sure of it. BTW, the APX is also available in .40 S&W. However, since the FBI switched from the .40 caliber and back to 9mm because of improved bullet designs and stopping power, numerous law enforcement agencies are doing the same and dumping the .40 S&W. Now everyone is looking at the APX in 9mm over the .40 S&W.

Beretta APX Barrel and Frame

The APX has a 4.25-inch barrel, which is a nice length for duty carry. There is the polymer black frame, and the slide is also black with slide grasping grooves from the front to the back of the frame on both sides. This is another outstanding feature that I love. The magazines (and you get two) hold 17 rounds, and this is my only source of contention. The magazines are extremely difficult to fully load with 17 rounds, even with the outstanding Butler Creek ASAP magazine loader. That last round is a bear to get into the magazine. The slide has the three dot system, and the front white dot is a little bit larger than the two white dots on the rear sight. The system is very fast to pick up under stress. Of course, as is the trend, the APX is striker-fired. The unloaded gun weighs in a 28.24 ounces, which is about par compared to other polymer framed handguns.

APX Disassembly

There is a button you can press with a pointed object or tool on the right side of the frame that deactivates the striker, so you can safely disassemble the APX without pulling the trigger. However, it is a little bit of pain to do this. So, I simply racked the slide to make sure the chamber is empty and then pull the trigger to deactivate the striker. Then, I press the slide release button, which is stout, on the right side of the frame and turn the take-down lever on the opposite of the frame. The slide then comes off. It’s easier done than said but very Beretta Model 92 in design.

APX Grip and Backstraps

The grip frame can be replaced. You can do that by removing the serialized chassis from inside the frame, very much like that of the SIG Sauer P320. So, the chassis is actually the “firearm”, because it carries the serial number. There is an ambidextrous slide release/stop on either side of the frame. Also, there is a trigger stop lever built into the trigger itself, so there is no trigger over-travel when the gun is fired, in theory, making the gun a bit more accurate. You can also change out the backstraps. Several backstraps come with the gun, however it is tedious to change them out, and I don’t see people swapping out the backstraps on a regular basis.

The backstrap on my sample, which I purchased out of my own funds, fit my hand perfectly. The magazine release is switchable from side to side, so it’s not ambidextrous, but it’s easy to change from one side to the other. The frame has the Picatinny-style rail for installing lights and/or lasers, too. The texturing on the frame is also perfect. It grips you but isn’t overly aggressive, which is another outstanding feature I like on the APX. The front of the trigger guard is squared off without serrations on it; they’re not needed. No one wraps the finger of their off-hand around the trigger guard these days. (It was very popular at one time, for some reason.)

Seventeen-Round Mags

The above is quite a lot of features on the new Beretta APX 9mm handgun, and there isn’t anything I would do away with. However, I would sure love it if the 17-rd mags were a little easier to load. I rarely have to use a magazine loader, as I have been loading hi-cap mags for many years with just my hands. But the last round is difficult to get into the APX mags. Even after I loaded them and let them sit for several weeks and emptied the mags. Then, during target practice when I went to reload them, nope, I still found it hard to get that last round into the mag. Yet, the mags easily seat when loading them into the APX.

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Thunder Down Under: Some Australian Junior Gold Miners Take Off


by John Rubino, Dollar Collapse:

Gold mining stocks have been treading water for what seems like forever. But in a remote part of Australia, a potentially big find by a tiny exploration company is generating some welcome excitement.

The story in a nutshell: Back in the 1990s, Newmont Mining geologist Quinton Hennigh came up with a novel theory about the origin of South Africa’s immense Witwatersrand Basin gold deposit. He left Newmont and spent the next couple of decades searching for similar geologic structures that he hoped would contain similar amounts of metal.

He eventually found one in a remote part of western Australia, and formed Novo Resourcesto explore it.

A few more quiet years ensued. But in mid-2017 the floodgates opened as reports of serious deposits – including large numbers of gold nuggets right near the surface, documented on YouTube – caught the imagination of some heavy hitters in the gold world, turning Novo’s stock into a ten-bagger and taking several other explorers with nearby claims along for the ride.

Now lots of people are paying attention. Here’s an interview with 321gold’s Bob Moriarty, an early Novo fan:


Bob Moriarty isn’t Selling His Novo Shares


Novo Resources (TSX-V:NVO, OTC:NSRPF) shares caught rocket fuel the week after my last interview with Bob Moriarty when videos of prospectors using metal detectors at Purdy’s Reward made the rounds on the internet.

We had the pleasure to catch up with Bob a couple of days ago after he returned from an expedition to Australia to have a look at Novo’s latest discovery, Purdy’s Reward. After a 300{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}+ run-up in the span of a month have the shares gotten ahead of themselves? And if not, how much more upside might be available to Novo shareholders?

CEO Technician: I want to start off by saying I am not currently a shareholder of $NVO even though I recently made nearly 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} on a short term trade in the shares (in which Trading Lab subscribers were able to monitor and participate in real time). What has you so interested in Novo Resources right now?

Bob Moriarty: The key to understanding it is that the Hamersley basin is an analog of the Witwatersrand Basin; same age, and gold got there the same way. Gold got there through precipitating out of salt water. This was the theory that Quinton Hennigh came up with 24 years ago when he was a doctoral candidate at the Colorado School of Mines. He was working for Newmont and he identified six basins around the world of a similar age and he told me you could go to one of these basins and find a lot of gold.

The way they found the gold at Purdy’s Reward was really interesting because it’s completely different from Beatons Creek and the type of gold mineralization in the Witwatersrand Basin; it’s at surface, it’s very high grade, they came out with assays today. Their first bulk sample which they just released had a 67 gram/tonne average. I’ll be real candid with you, I think it’s going to be a 2 ounce per tonne average across the resource.

CEO Technician: The market was enthused by the release of the first bulk sample results, but my question is how much of this news was already priced in considering how much the stock has run up in recent weeks? And how much can we decipher about the much larger property package from a couple of bulk samples?

Bob Moriarty: We have no idea of how thick the conglomerate area is, we have no idea if the entire conglomerate area is mineralized, we have no idea what the length of the conglomerate is, we have no idea if the conglomerate extends into the basin. However, if you accept Quinton’s theory that the gold precipitated out of water and that this is a Witwatersrand analog the answer is that there’s a lot of gold and they appear to have found some very high grades. The chances of that first sample being the highest grade sample they’ll ever recover is zero; they’ve been mining that area for 110 years and you have to understand the theory to understand that they’re all connected. It’s a big deal.

CEO Technician: What are your major takeaways from your trip to Australia?

Bob Moriarty: I always want to know what the grade is and what the potential is. We went to the local gold buyer and he showed us gold from a town about 110 km away and you could look at it and tell it was absolutely identical to the gold from Purdy’s Reward. That told me that the potential is really enormous.

I said in 2012 that Novo had the potential to be a 10-bagger and at the time the shares were only C$.45 so they’re well on their way to being a 10-bagger, and the potential for being a 100-bagger is absolutely real.

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Are You Ready to Die?


by Paul Craig Roberts, Paul Craig Roberts:

Glenn Greenwald of The Intercept exposes the fake news put out by the US Department of Homeland Security (an euphemistic name for a Big Brother operation that spies on US citizens) that Russia hacked 21 US state elections, news that was instantly spread around the world by the presstitute media. The propagandists running Homeland Security were contradicted by the state governments, forcing Homeland Security to retract its fake news claims.

The unasked/unanswered question is why did Homeland Security put out a FAKE NEWS story?

Greenwald explains that the US media is so conditioned by the National Security State to see Russian President Putin lurking behind and masterminding attacks on America that it is “now religious dogma”—a requirement—to find Russian perfidy everywhere. The result Greenwald correctly says is that “an incredibly reckless, anything-goes climate prevails when it comes to claims about Russia. Media outlets will publish literally any official assertion as Truth without the slightest regard for evidentiary standards.”

In other words, the United States no longer has a media. It has a propaganda ministry for the military/security complex, the neoconservatives, and the Israel Lobby. And the idiot Americans sit in front of the TV and absorb the propaganda, and they read the New York Times and think that they are sophisticated and in the know.

What Greenwald doesn’t address is the effect of the massive amount of fake news on Russia, China, Iran, and North Korea. Russia knows that Washington knows that the accusations against Russia are false. So why is Washington making false accusations against Russia?

This is a serious question, not only for Russia but for the entire world. All previous false accusations from the Clinton regime criminals, the Bush/Cheney regime criminals, and the Obama regime criminals ended in miiltary attacks on the falsely demonized targets. Russia, China, Iran, and North Korea would be within reason to wonder if the false news propaganda attack on them is a prelude to military attack.

Iran and North Korea cannot attack the US and its European vassals, but Russia and China can. I have written about the Operational Command of the Russian armed forces conclusion that Washington is preparing a surprise nuclear attack on Russia. Instead of reassuring the Russians that no such planning is in the works, Washington has instead pushed further the fake news Russiagate story with the false report that Russia had hacked the elections of 21 states.

What is the point of US security agencies such as Homeland Security, CIA, FBI, NSA constantly filling the propaganda machine known as the American Media with lies about Russia? Russia must wonder as well. Russia knows that they are lies. Russia knows that it does no good to refute the lies because the West has a Propanganda Ministry instead of a media. Russia knows that Washington told lies about the Taliban, Saddam Hussein, Gaddafi, Assad, Iran. What does Russia conclude from the constant stream of lies about Russia that flow out of Washington and are
presented as truth by the Western presstitutes?

If you were the Russian government, would you conclude that your country was the next to be attacked militarily by Washington? If you were the Russian government, you would know that Washington/NATO cannot possibly attack Russia except by surprise nuclear strike. Knowing this, if you were the Russian government, would you sit there and wait on the strike? Imagine yourself the Russian government listening day in, day out, to endless wild improbable charges against Russia. What can Russia possibly conclude other than this is preparation of Western peoples for a nuclear attack on Russia?

Russia is not going to be hung like Saddan Hussein or murdered like Gaddafi.

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Vitamin C found to sharply reduce cardiovascular mortality in latest study


by Lance D Johnson, Natural News:

Vitamin C, also known as L-ascorbic acid, is one of the most abundant antioxidants. It’s necessary for cellular health and is easy to include in the diet/lifestyle. The recommended dietary allowance for vitamin C is 90 mg/day for men and 75 mg/day for women. Vitamin C is a water soluble vitamin that quickly passes through the body; therefore, intake should be frequent. A clean vitamin C supplement keeps levels up, assisting the immune system. Vitamin C is highest in super foods such as camu camu, acerola, and amalaki berry, and is also prevalent in mangoes, kiwi, strawberries, pineapples, peppers or citrus fruits.

Vitamin C is necessary for the synthesis of the following: L-carnitine for mitochondria protection, collagen for connective tissue strength, and some neurotransmitters for brain health. Vitamin C strengthens the thymus gland, empowering T-cells to help fight infections. Intravenous vitamin C helps the body eliminate cancer.

Vitamin C could benefit more body systems than previously thought

As an antioxidant, Vitamin C’s role in the human body is vast and often overlooked. Since a diet high in fruits and vegetables is associated with a healthy heart and strong cardiovascular system, a team of researchers from Spain and the U.S. wanted to investigate a vital nutrient that is often overlooked for its role in improving cardiovascular health. The team of researchers took a closer look how vitamin C could reduce cardiovascular mortality. Since cardiovascular disease is related to oxidative stress, vitamin C could be of great benefit for the mere fact it is an antioxidant and plays a role in protecting the cellular energy process.

The researchers initially found a promising inverse association with cardiovascular risk factors and dietary vitamin C intake, indicated by ascorbic acid plasma levels. While vitamin C seemed to be of tremendous benefit to the heart, previous studies have had a hard time adjusting for confounders such as fiber intake, which typically coincides with vitamin C intake. In their research, supplementation of vitamin C beyond recommended levels didn’t seem to exhibit any greater preventative effect on cardiovascular mortality rates. High does supplementation with vitamin C (500 to 2000 mg/day) gave conflicting results. In two analyses, supplementation was associated with reduced blood pressure and improved endothelial function. However, in observational and interventional studies, supplementation of vitamin C actually coincided with slightly higher cardiovascular mortality.

Vitamin C protects against cardiovascular mortality

The newest analysis of vitamin C accounted for fiber intake using Cox proportional hazard models and validated the diets of all the participants using a semi-quantitative food frequency questionnaire. The researchers questioned 13,421 participants in the Seguimiento Universidad de Navarra (University of Navarra follow-up) (SUN) cohort every two years for a mean time of 11 years. Cardiovascular events were confirmed by physicians and broken down into two categories. Incident CVD included incident-fatal or non-fatal myocardial infarction, all strokes, or death due to any cardiovascular event. Alternately, death due to cardiovascular causes was differentiated as CVM. On the final results, the researchers revealed:

When vitamin C was adjusted for total fiber intake using the residuals method, we found a significant inverse association with CVM (HR (95{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} confidence interval (CI)) for the third tertile compared to the first tertile, 0.30 (0.12–0.72), but not with CVD in the fully adjusted model.

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Is That a Feature or a Bug? – Keith Weiner


by Keith Weiner, Sprott Money:

We have covered many reasons why bitcoin is unsound and not money. It’s a ledger of unbacked liabilities. It is designed to have finite quantity but therefore indeterminate and hence volatile value. This makes it unusable for borrowing or lending and hence savings, but a great a vehicle for conversion of one person’s wealth into another’s income. It is not a commodity—discussion of the usefulness of the network notwithstanding—nor is it backed by a commodity or any asset. It is a perfect, cryptographically secure record—of itself. People use it to get rich quick. In other words, it’s the very model of a (post)modern monetary marvel (OK, Keith is not the next Gilbert and Sullivan).

And bitcoin has a questionable feature. Transactions are irreversible.

First it should be addressed that irreversible transactions have an appeal to merchants. Everyone who sells on eBay knows the frustration of shipping merchandise to a customer only to have the customer claim it was never received. Merchants would surely love the idea that once payment is made, it cannot be unmade.

However, there are good reasons why our payments system was designed as it is. Sometimes there is a clear mistake. No one has an interest in allowing the payee to keep $100,000 when $10,000 was the purchase price of the used car. No one wants to see Jon Schmidt get the money that was intended for John Smith. There is also the occasional case of fraud. If someone breaks into your account, you want recourse to recover the lost funds. Irreversible transactions are not a dream come true for consumers who are defrauded by merchants.

Consider that bitcoin’s designer, Satoshi, built the system so that transactions cannot be reversed. Is this a merchant’s dream come true? Or a criminal’s? Qui bono (who benefits?) It is hard to even think of a good legitimate case for this.

Now also consider that bitcoin was designed so payments can be sent and received anonymously. You not only cannot reverse a transaction, but you don’t even know who got it, so there is no way to know who to sue in court. Your money (well your bitcoin) is irretrievably lost.

The combination of irreversible and anonymous may still seem to have some legitimate appeal, but let’s acknowledge the elephant in the room. It’s perfect for criminals. Anyone who sells fake driver’s licenses or murder for hire would love it.

As an aside, bitcoin’s anonymity is not perfect. The ledger shows every transaction, which means that if your identity is ever discovered, anyone can go through the history of what you have done. For example, if you sell bitcoins in an account at an exchange, and wire the dollars to your bank account.

To address this problem, there is the bitcoin mixer. It is designed to mix up your bitcoins with the bitcoins of others who also want to hide the identity of their coins and their origin. It seems almost as if it is designed for money laundering. While irreversible transactions may have some legitimate use cases, this is a whole ‘nother beast. If you steal millions of dollars of bitcoin from an exchange, hack a DAO, sell rocket launchers to terrorists, or even infect companies with ransomware, the mixer is great. You need a way to get paid, without anyone being able trace your loot.

It’s just like bags of cash left in the phone booth at 2am across the street from the all-night diner (as we recall from detective shows in the 1970’s), only better. In those shows, the bad guy always demanded “unmarked” bills, but no one ever clearly showed what “marked” vs. “unmarked” looked like. Well (we assume) bitcoins that have been tumbled are unmarked.

Irreversibility, anonymity, and untraceable unmarked bills. That may still sound attractive to a consumer, an end user of the system. However, that is not the main question, which is: are these desirable features for businesses who sell you things? Are they appropriate features for financial businesses who ask you to trust them with your life savings?

If no trust is possible, if civil society ever breaks down so far that no one can trust anyone else, that transactions are conducted between two armed groups with cash exchanged for goods under cover of more armed men with rifles, then we will have arrived in Keynes’ long run—a dark age. This has not happened just yet. So let’s continue with our inquiry into the nature of anonymity, irreversibility, and untraceability.

It takes us now to the concept of transparency. Let’s look at some examples outside finance. A grocer sells tomatoes labeled “locally grown”. Consumers want to be able to trust the label, and not have to be suspicious that they were really grown in Venezuela. If E Coli breaks out, everyone has an interest in tracing the tainted produce back to the packaging plant or farm which introduced the bacteria.

If a solar panel company tells you that its panels generate 15 watts per square foot, you want to trust that it is not only telling the truth but the whole truth. Is this figure for residents of a high altitude southern desert like Albuquerque or is it for a northern city like Oslo?

If an electric car company claims that its HEPA air filter is good enough to block biological warfare agents, buyers want to know if this has been validated by a credible third party.

It’s one thing if such marketing claims are mere puffery. We don’t know if any Tesla buyers are planning to drive through war zones where anthrax bacteria are in the air. We assume it is more about so calledbragging rights:

“Oh yeah, your 911 turbo S can out-accelerate my Tesla in super-duper ludicrous insane mode?! Well can it do it under conditions of biological warfare??”

It is quite another when a company custodies client assets, or brokers or conducts financial transactions. A responsible financial business thinks constantly about—and establishes systems and controls for—conflicts of interest, unsustainable structures, shady transactions, and all factors which affect pricing or execution for its clients. For example, Monetary Metals publishes graphs of the offers that set the gold interest rate in its lease auctions.

You would expect disclosure statements, documented processes, guidance from a credible law firm, and an auditor—not to mention due diligence. Conversely, if a firm seems optimized to avoid government scrutiny, if there is no way to discover who owns it much less its liabilities, then it may not be seeking to build a great business for the long term.

Like it or not, we live in a world which is demanding more transparency from the companies we trust. And consumers and savers should like it.

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Thoughtful Disagreement – Ted Butler

by Ted Butler, SilverSeek:

I caught a good interview by Charlie Rose on Bloomberg TV the other night of Ray Dalio, founder and head of Bridgewater Associates, the world’s largest hedge fund with some $150 billion in assets under management. Dalio has been making the rounds recently in promoting his new book, “Principles”, in which he lays out his beliefs for the investment business and the business of life. Now in book form, Dalio previously offered his work for free and which was downloaded more than three million times. For very good reason, when Dalio speaks, he is listened to even more than EF Hutton.

One of the best things about Dalio (and if you’re unfamiliar with him, please do a search on Google) is his rags-to-riches real life experience and his strong belief that we learn through our mistakes. In his case, his biggest failure and the cause of his near financial ruin was a mistaken bet on a stock market collapse in the summer of 1982.  Instead of the market tanking for all the reasons Dalio had (correctly) anticipated, it exploded with a vengeance, creating losses and forcing him to lay off his employees (with whom he held close personal relationships) and resort to borrowing $4000 from his father to survive. For a more detailed version of the affair, here’s a good link.

Staring into his own personal abyss, Dalio vowed to learn from it and set about to do just that, succeeding far beyond what anyone could have ever imagined. What resulted was an organized and disciplined approach to dealing with decisions and mistakes. Please recognize that I am paraphrasing in very simple terms what is a detailed plan for action on his part. In essence, Dalio’s design was to come up with investment ideas not currently widely-embraced (allowing for big rewards if correct), but then to subject those ideas to intense and deliberate critique. In Dalio’s words, the critique should take the form of “thoughtful disagreement”. Spend time and energy uncovering and developing new ideas, but then spend just as much effort in trying to uncover what’s wrong with the new ideas (before the market tells you that the idea was flawed). All in all, pretty good stuff.

The reason I bring all this up is because I feel it directly relates to silver as an investment idea and, all along and quite unknowingly, I may have been applying Dalio’s principles in my analysis of silver. Certainly, silver meets Dalio’s prerequisite for a profitable investment idea since it is far from widely embraced by the investment community, but there is a lot more to it than that. In fact, Dalio has been a long-time and strong proponent for gold and in the interest of full disclosure, some six or seven years ago, I wrote to him and his chief investment officer, Greg Jensen, about the merits of investing in silver. I remember having to print out and snail mail my thoughts to Dalio and Jensen because no email contact was available on the Bridgewater website.

Just like the vast majority of my attempts to contact those of great influence in the investment world on silver, I received no reply from Dalio, not that I was really expecting one. That mattered little, since I promised myself long ago that I would do whatever I could imagine to get others to see what I saw in silver and no response wasn’t a crushing blow or deterrent. So why am I bringing up Dalio’s principles?

Unbeknownst to me, it seems that I have been following Dalio’s advice about seeking serious critique for my ideas on silver, particularly of the thoughtful disagreement variety. How else would you characterize what I do? By writing on a public and semi-public basis, including to those at the very top of regulation and the organizations I claim are manipulating the price of silver (JPMorgan and the CME Group), I would contend that what I am doing is nothing but looking for thoughtful disagreement (including perhaps from Dalio himself). Sure, I get plenty of personal insults from some, mostly anonymous, but serious critique about the body of what I write?  Never.

Here are the issues. Silver (and gold) prices are set by paper dealings on the COMEX by a few large speculators (banks and managed money traders), to the exclusion of input from real producers and consumers, making the price discovery process and the resultant price artificial. For the past nearly ten years, CFTC data have indicated that JPMorgan has been the dominant paper silver short seller, along with a few other large banks and as a result of that dominance and control none have ever taken a loss when adding short positions. In addition, for the past six and a half years, JPMorgan has accumulated a massive amount of actual silver (650 million oz) at rock-bottom and self-created depressed prices, all while never taking a loss while shorting silver on the COMEX.

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Former FOMC Member Admits The Fed Manipulates Asset Prices

by Dave Kranzler, Investment Research Dynamics:

The Fed often treats financial markets as a beast to be tamed, a cub to be coddled, or a market to be manipulated. It appears in thrall to financial markets, and financial markets are in thrall to the Fed, but only one will get the last word. – Former FOMC member, Kevin Warsh – The Fed Needs New Thinking

Please note, a large portion of the source links, plus the idea for this commentary, were sourced from GATA’s latest dispatch regarding the possible appointment of Warsh as the next Fed Chairman.

The quote above is from former FOMC board member,  Kevin Warsh, who appears to be Trump’s top candidate to assume the Fed’s mantle of manipulation from Janet Yellen.   By way of relevant reference, Warsh happens to be the son-in-law of Ronald Lauder,  who is a good friend of Trump’s.  He is also a former Steering Committee member of the Bilderberg Group.    GATA has published a summary reprise of direct evidence from previous written admissions by Warsh the the Fed actively manages financial asset prices, “including bolstering the share price of public companies” (from link above).

In addition to stocks, Warsh admitted in the same essay that, “The Fed seeks to fix interest rates and control foreign-exchange rates simultaneously” (same link above). This task is impossible without suppressing the price of gold, something which began in earnest in 1974 when, under the direction of then Secretary of State, Henry Kissinger, paper gold futures contracts were introduced to the U.S. capital markets. This memo, written by the Deputy assistant Secretary of State for International Finance and Development, was sent to Kissinger and Paul Volcker in March 1974: Gold and the Monetary System:  Potential U.S.-EC Conflict (note:  the source-link is from GATA – it was discovered in the State Department archives by Goldmoney’s John Butler).

The nature of discussions after that memo, the minutes of which are now publicly available, center around the fact that several European Governments were interested in re-introducing gold into the global monetary system.  This movement was in direct conflict with the interests of U.S. elitists and banking aristocrats, as U.S. had successfully established  the petro-dollar as the reserve currency.

In 2009 GATA sent a Freedom Of Information Act request to the Fed in an attempt to get access to documents involving the Fed’s use of gold swaps (this letter written by Warsh confirms the existence of the use of gold swaps).  Warsh, who was the FOMC’s “liaison” between the Fed and Wall Street, wrote a letter back to GATA denying the request.

The fact that Warsh has openly acknowledged that the Fed manipulates assets, including an implicit admission that the Fed seeks to suppress the price of gold,  might give some in the gold community some hope that Warsh, if appointed to the Chair of the Fed, might reign in the Fed’s over interference in the financial markets.

On the contrary, I believe this makes him a bigger threat to democracy, capitalism and freedom than any of his recent predecessors.  Warsh is better “pedigree’d” and politically connected than either Bernanke or Yellen.  His high level involvement in the Bilderberg Group ties him directly to the individual aristocrats who are considered to be the most financially and politically powerful in the western world.    Without a doubt he has far more profound understanding of the significance of gold as a monetary asset than any modern Federal Reserve FOMC member except, perhaps, Alan Greenspan.

The good news for the gold investing community is that it becomes increasingly evident that China, together with Russia and several other eastern bloc countries, is working to remove the dollar as the reserve currency and reintroduce gold into the global monetary system.  A contact and subscriber to my Mining Stock Journal who happens to live and work in Shanghai has sent further evidence  (and here) that China is working toward launching a gold-backed yuan oil futures contract.

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Catalan Officials Meet to Plan Independence

by Stephen Lendman, StephenLendman:

On Monday, Catalan officials met in Barcelona. Referendum results showed 90{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the autonomous region’s residents support independence from fascist Spain.

Catalan President Carles Puigdemont chaired a Monday cabinet meeting. He’s expected to ask regional parliamentarians to vote on an independence declaration within days, calling Sunday’s vote valid, binding, and had to be applied, adding:

“My government in the next few days will send the results of the vote to the Catalan parliament, where the sovereignty of our people lies, so that it can act in accordance with the law of the referendum.”

EU officials can no longer “continue to look the other way.” At the same time, Puigdemont called for international mediation to help resolve a standoff with Madrid, saying “(w)e don’t want a traumatic break…We want a new understanding with the Spanish state.”

Catalan trade unions and associations called a region-wide strike for Tuesday, protesting Madrid’s “grave violation of rights and freedoms.”

In Madrid, PM Mariano Roy is meeting with ruling People’s Party officials, discussing how to confront Catalonian independence if declared as expected.

Spain’s El Pais broadsheet blamed Catalan officials for Sunday’s “shameful” events, Madrid bears full responsibility for. It also blamed Rajoy’s regime for failing to prevent the independence referendum from taking place – calling Sunday “a defeat for our country.”

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“Systemic” Age Discrimination in Tech, even as Tech Workers Get “Better with Age”


by Wolf Richter, Wolf Street:

But “ageism” exists “across all industries,” not just Tech.

Many people have seen this with their own eyes as it happened to others, or have experienced it themselves even as companies have vigorously denied it. So finally, here are some numbers that expose blatant age discrimination in the Tech industry, both in hiring and promotions, and it’s even worse than the age discrimination in Non-Tech industries.

The study boils down to this: if you’re a Baby Boomer, forget it. And if you’re Gen X, it’s tough.

These numbers are not based on VC-funded startups where the two founders may be 27 and 28 and the oldest people of the bunch. No one even bothers to mention age discrimination in these outfits. It’s just a fact of life. No, these numbers are based on an analysis of over 330,000 US-based employees – 63,000 in Tech and 267,000 in other industries – from 43 large companies. This is Corporate America.

Here is what the study by Visier, which provides workforce analytics for HR professionals, found: “Systemic ageism is occurring in Tech hiring practices.”

Here are some nuggets:

  • Millennials (aged 20 to 33) make up 43{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the workforce in Tech, compared to 26{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in Non-Tech.
  • Gen X workers (aged 34 to 51) make up 45{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the Tech workforce, compared to 47{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} for non-Tech.
  • Baby Boomers (aged 52 to 70) make up less than 12{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the Tech workforce, compared to 27{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in Non-Tech.
  • Non-manager workers in Tech are on average 38 years old and thus five years younger than Non-Tech workers (43 years old).
  • Managers in Tech are on average 42 years old, vs. 47 in Non-Tech – not that managers in Non-Tech industries don’t face age discrimination, it’s just not as brazen.

But performance is not the problem.

The study found that the older workers in Tech had more “Top Performer” ratings in their respective jobs. Some nuggets:

  • “From age 40 onward, non-manager workers in Tech enter the ‘Tech Sage Age’ and are increasingly likely to receive a Top Performer rating as they age, mature, and gain experience, compared to Non-Tech.”
  • The proportion of Top Performers in Tech increases with age, but in Non-Tech industries the proportion decreases.
  • “This suggests that maturity and experience are more important drivers of high performance in Tech than in Non-Tech industries.”

Despite the high performance of older workers in Tech, they’re being discriminated against via both, hiring practices and promotions:

  • Tech hires a higher proportion of younger workers and a smaller proportion of older workers than Non-Tech.
  • Notably, the Tech Sage Age does not translate into higher promotion rates for older non-manager workers in Tech. Rather, promotion rates for Tech workers decrease continuously with age as they do in Non-Tech.

This produces a “disconnect” for older workers between their rising performance and their declining promotions with age. In a sidebar, Visier’s report cited a study by researchers from the computer science department at North Carolina State University that found that programming knowledge actually improved with age:

Using Stack Overflow user data, they found a correlation between age and reputation. They found that: “…programmer reputation scores increase relative to age well into the 50s, that programmers in their 30s tend to focus on fewer areas relative to those younger or older in age, and that there is not a strong correlation between age scores in specific knowledge areas.”

As older programmers are “getting better with age,” what are their salaries doing?

Turns out, non-manager workers in Tech and Non-Tech experience similar salary trajectories: The median salary for workers in both sectors increases in the first phases of the career and peaks in their early 40s, at which point it “stabilizes” for both – that is, it begins to decline slightly for both.

However managers in Tech experience some salary increases as they age – if they remain employed in Tech, which, as the above numbers show, is very hard to do.

The study summarizes: “We found that hiring decisions in Tech do indeed favor younger candidates” compared to Non-Tech industries. Millennials are the big winners – at the expense of Gen X candidates and Baby Boomers.

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