Thursday, March 21, 2019

CHINA IS ON GOLDEN WEEK HOLIDAY AND THUS THE CROOKS WILL RAID ALL WEEK

by Harvey Organ Blog, Harvey Organ Blog:

SURPRISINGLY NO GOLD OR SILVER LEFT THE GLD OR SLV: I WONDER WHY?/BILL HOLTER’S IMPORTANT PAPER..A MUST READ…

GOLD: $1274.25 down $8.25

Silver: $16.60  down 8 CENT(S)

Closing access prices:

Gold $1271.10

silver: $16.60

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $n/a DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $n/a

PREMIUM FIRST FIX:  $8.24 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $n/a

NY GOLD PRICE AT THE EXACT SAME TIME: $/na

Premium of Shanghai 2nd fix/NY:$13.00 (PREMIUMS GETTING LARGER)  

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LONDON FIRST GOLD FIX:  5:30 am est  $not important

NY PRICING AT THE EXACT SAME TIME: $not important

LONDON SECOND GOLD FIX  10 AM: $1283.10

NY PRICING AT THE EXACT SAME TIME. 1283.10

For comex gold:

OCTOBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 28 NOTICE(S) FOR2800OZ.

TOTAL NOTICES SO FAR: 439 FOR 43900 OZ  (1.3654 TONNES)

For silver:

OCTOBER

 

 19 NOTICES FILED TODAY FOR

 

95,000  OZ/

Total number of notices filed so far this month: 304 for 1,520,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

end

Let us have a look at the data for today

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In silver, the total open interest FELL CONSIDERABLY BY  1464 contracts from  184,424DOWN TO 182,960  CORRESPONDING TO ANOTHER RAID THAT SILVER UNDERTOOK IN FRIDAY’S TRADING (DOWN 14 CENTS ). WITH GOLDEN WEEK IN CHINA STARTING FRIDAY SEPT 29, OUR CROOKS BECOME EMBOLDENED TO CONTINUE THEIR WHACKING KNOWING FULL WELL THAT THEY DO NOT HAVE TO WORRY ABOUT PHYSICAL DELIVERIES FOR AT LEAST A WEEK.

RESULT: A FAIR SIZED FALL IN OI COMEX  WITH THE14 CENT PRICE RISE. IT LOOKS LIKE WE HAD A SMALL AMOUNT OF BANKER SHORTS COVERING AND THUS THEY HAD MILD SUCCESS.  

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.152 BILLION TO BE EXACT or 131{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 19 NOTICE(S) FOR 95,000OZ OF SILVER

In gold, the open interest FELL BY A SMALLER THAN EXPECTED 1800 CONTRACTS WITH THE FALLin price of gold ($3.75 ) WITH YESTERDAY’S COMEX TRADING.  The new OI for the gold complex rests at 530,883. WEHAVE NOW ENTERED GOLDEN WEEK (ONE WEEK OF CHINESE HOLIDAY)..SO EXPECT TORMENT FOR THE REST OF THE WEEK AS THE CROOKS DO NOT HAVE TO WORRY ABOUT PHYSICAL DELIVERIES FOR A WEEK.

 

Result: A SMALL SIZED DECREASE IN OI WITH THEFALL IN PRICE IN GOLD ($3.75) 

we had: 28 notice(s) filed upon for 2800 oz of gold.

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With respect to our two criminal funds, the GLD and the SLV:

GLD:   WOW

Tonight , NO CHANGESin gold inventory at the GLD AGAIN DESPITE THE CONTINUAL DRUBBING GOLD HAS TAKEN THESE PAST FEW WEEKS

Inventory rests tonight: 864.65 tonnes.

SLV

Today: a no changes in inventory:

INVENTORY RESTS AT 326.757 MILLION OZ

 

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FELL BY1464 contracts from 184,424DOWN TO 182,960 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT A TINY FRACTION OF OUR BANKERS WERE SUCCESSFUL IN COVERING THEIR SHORTS.  WITH GOLDEN WEEK IN CHINA, EXPECT THE BANKERS TO HAVE CONSTANT TORMENT THROUGH THIS COMING WEEK AS THEY TRY AND COVER AS MANY AS POSSIBLE OF THEIR SILVER/GOLD SHORTS.

RESULT:  A GOOD SIZED DROP IN SILVER OI  AT THE COMEX WITH THE FALL IN PRICE OF 19 CENTS IN FRIDAY’S TRADING. EXPECT CONSTANT TORMENT FOR THE REST OF THE WEEK.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed /Hang Sang CLOSED / The Nikkei closed UP 44.50 POINTS OR 0.22{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Australia’s all ordinaires CLOSED UP 0.81{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed/Oil DOWN to 50.30 dollars per barrel for WTI and 55.60 for Brent. Stocks in Europe OPENED GREEN .  ALL YUAN FIXINGS CLOSED

Read More @ HarveyOrganBlog.com

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?

Read More @ DailyReckoning.com

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.

http://www.institutionalinvestor.com/article/3751630/asset-management-macro/the-education-of-ray-dalio.html#/.Wcupk7le7bh

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.

Read More @ SilverSeek.com

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.

Read More @ InvestmentResearchDynamics.com

This is how China moves the world to a gold standard! – Bill Holter

by Bill Holter, Miles Franklin:

We have watched for years as China grew in strength economically, financially and militarily. They have pre positioned themselves by making trade deals, setting up credit facilities and even an alternative clearing system to the West’s “SWIFT”. We also know China has been gobbling up global mine supply of gold for going on 10 years now. As I’ve written in the past, just using the back of a napkin, it can be surmised they now have hoarded 20,000 tons or more compared to the “supposed” 8,133 tons held by the U.S..

It is clear China has meticulously readied themselves to take the role of world leadership from the U.S. but do they really want the responsibility AND burden of issuing the reserve currency? This has always been the question and the answer from logical thinkers is “no”. No, because we (and of course China) have seen the result of the “burdens” that comes along with the privilege of issuing the reserve currency. I must confess, I too did not believe China would desire or even accept the responsibility of reserve currency status. I now believe this thought is mistaken! I will explain shortly.

The announcement of “yuan for oil, convertible into gold” is a game changer http://www.zerohedge.com . China imports about 8 million barrels of oil per day, this works out to 3 billion barrels per year. At $50 per barrel, the oil trade by China is about $150 billion per year. If we compare that to total global production of gold, we find the 80 million ounces produced and priced at $1,300 currently amounts to just over $100 billion. In other words, China consumes more oil (in dollar terms) than ALL the gold produced in the world. Think about this for a moment, at current pricing, just one country uses more oil than the entire world produces money? Does the word “reset” at all come to mind?

Taking just one step back, China has over the last few years imported roughly 2,000 tons of gold per year. If we add India’s imports of roughly 1,000 tons per year, we see combined they are importing more than the 2,500 that are produced. These numbers by themselves illustrate that the gold supply had to come from somewhere …and that “somewhere” can only be from Western vaults. In order to extend and pretend their financial systems and currencies were sound, the West (led by the U.S.) has been bleeding their gold reserves.

Now, getting back to China, here is why I believe they are leading the world BACK to a gold standard! If China imports oil and pays with yuan and offers their yuan “convertible” into gold, how many oil producers will take them up on the conversion? Certainly not 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and maybe not 50{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Maybe the number is only 25{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} or even less but that’s not important as “time” will take over. You must ask yourself, how long can China and India import 3,000 tons while the world only produces 2,500 tons? Where will another 1,000 tons (or maybe much more?) of demand be satisfied if oil producer’s newly acquired yuan are converted to gold? The easy answer is “they cannot” …AT CURRENT PRICES!

Here is the interesting part and where I believe I was mistaken in previous thought. China watched as the U.S. was bled of gold leading up to 1971. They also know we have been bleeding gold ever since as a way to camouflage the credit bubble and gross over issuance of dollars. They understand the game and do not want to be placed in the same quandary if the yuan becomes the reserve currency. Instead, I believe China is leading the world toward a de facto gold standard by diverting what was previously “oil for dollars” into “oil for gold”. I believed China might mark gold higher by making a bid and ask price at much higher numbers, instead, facilitating and using natural demand makes so much more sense.

By making yuan convertible into gold, China in essences is creating a demand they know cannot be met by supply … (again) AT CURRENT PRICES! Why would they do this? It is actually so simple I feel dumb for not seeing this previously. China actually kills an entire flock of birds at one time!

First, they are THE largest owner of gold on the planet so they are in fact marking the value of their treasury up by multiples. The higher future price of gold will also make it very difficult if not impossible for other nations to catch up in gold accumulation. By freeing the gold price, China is assuring their place as a world financial leader for many years if not many centuries as that is their mindset. They know quite well, gold is lasting wealth and also the phrase “he who has the gold makes the rules”!

Second, they will in essence be devaluing the yuan versus gold. This will have many benefits and too broad of a subject to breach here but think back to 1934 when the U.S. devalued the dollar versus gold, it creates “inflation” and makes debt easier to pay and service as well as giving a bump to the real economy.

Next and of great importance, moving the world “naturally” to a gold standard means moving away from the dollar standard and all the unfairness that goes with it. A world moving toward gold (China) is a world moving away from the dollar. Surely the dollar will devalue versus the yuan via lower demand from the oil trade and also the lessening of “power” afforded as issuer of the reserve currency. The U.S has enforced the dollar standard by military use for years. Is this action by China “neutral” enough and free market enough to avoid military conflict? We can only hope and pray the U.S. does not kick the table over in reaction.

Read More @ MilesFranklin.com

Jim Rogers Tells ETF-Holders “The Next Bear Will Be Horrendous”

0

from ZeroHedge:

Legendary investor Jim Rogers, who in 1973 founded the Quantum Funds, a prominent family of hedge funds, with then-unknown Hungarian-born financier named George Soros, joined RealVision’s Steve Diggle for a wide-ranging interview where the legendary financier, who moved to Singapore in 2007 with his family because he wanted his children to be immersed in Asian culture, discusses his views on gold, bitcoin, and what makes a good investor – along with his belief that a major correction in financial markets is about to begin.

The interview, which was filmed two weeks ago in Singapore, begins with a discussion of a theme in finance that’s been at the forefront of discussions about the market outlook. Many investors believe that, with volatility at record lows and valuations at record highs, a major shock is imminent. However, these same investors have been burned by uncooperative markets, as an expected selloff has yet to materialize.

Rogers said he stumbled into his first job on Wall Street, but ended up falling in love with it because it allowed him to “follow the world and know about things.”

He added that, over his investing career, Roger’s has learned that he has a tendency for his calls to be early. So now when he makes an investment decision, he waits six months before buying.

SD: How do you know the difference between being early and being wrong? Because –

JR: You teach me that, OK? I’d like to know. I’m still trying to learn.

SD: I really don’t know, either. I mean, one of the things that has confounded, I think, all of us in this most recent unprecedented rally – I mean, it’s not unprecedented in history, but the sort of things that have gone up and the level of volatility we’ve had that’s been unprecedented. The only period that I can compare it to are the late 90s, where just everything in a certain area went up. Now it was almost– at least in the States, it’s almost everything across the board. And there have been plenty of people who’ve wanted to short the FANGs, to short some of the tech stocks, to short some of these very expensive blue chips. And they’ve been very badly punched.

And then even in the face of very good mutual fund investors, people with tremendous track records like Grantham Mayo, who have moved to a higher cash position – they’ve seen massive reductions, because their own investors don’t seem inclined to stick around and see how it plays out. So both on a personal and professional level, being early seems to be incredibly painful and destructive to your business.

JR: Sure can.

SD: So if you’ve got a conviction, do you wait for a change in momentum? Do you use moving averages, which is something that I know people have been used, and I’ve used something myself, which is to wait until the 5 and 20-day diverge, and that gives you a signal that momentum’s coming out of a trade? Or do you just need to size it to a degree which you can be persistent?

JR: Well, I usually – since I know I’m always early, I make a decision and then wait, and just make myself wait a month, six months, whatever it happens to be. And I’m still too early. I’m still too early nearly always, because I make the decision too soon, I realize. So maybe I better start making the decision later in life. Sometimes, you just have to throw in the towel. Especially on the short side, you have no choice. If they’re just racing against you all the time, you can sit there and meet the margin calls all day long, but one of the old adages is, never beat a margin call, which you may have heard from old-time traders. If you’ve got a margin call, just don’t meet it, because that means something is very seriously wrong.

SD: Right, that’s your stop loss.

JR: Yeah, well, stop losses are usually before a margin call comes. But I want to go back to something you said. You’re not as experienced as I am, obviously, because you’re not as old as I am, is what I’m saying. But I remember in the early 70s, there was something called the Nifty 50, and they were 50 stocks that everybody – the JP Morgan bought everyday. Didn’t matter. Avon, Xerox, IBM – they were stocks that always were eternal growth stocks.

And they just kept – we would short them, and they just kept going up. They never stopped. Polaroid– that was another. And they just never stopped going up. Everything else stopped going up but those Nifty 50, which would be something like the FANGs today, or maybe in the late 90s, some of the other kinds of stocks. So this has happened before in market history. They eventually crack, there’s no question.

And to today, if you look at the S&P 500, for instance, in the US, I think there are only 40 or 45 stocks that are above their 50-day moving average, to use technician’s kind of talk. Everything else is in a downtrend. And yet the market is making all-time highs.

SD: And so there’s a lack of breadth in the market.

JR: Definitely that lack of breadth. What is that – over 90{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the stocks are in downtrends. 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} are in uptrends, but they’re big companies. And since the S&P is capitalization weighted, those 50 stocks, 40 stocks, whatever it is, dragged the average to all-time highs.

Read More @ ZeroHedge.com

I THOUGHT I WAS MIDDLE CLASS

by Jim Quinn, The Burning Platform:

“The best way to teach your kids about taxes is by eating 30{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of their ice cream.” – Bill Murray

When I saw that slimy tentacle of the Goldman Sachs vampire squid, Gary Cohn, bloviating about Trump’s tax plan and how it was going to do wonders for the middle class, I knew I was probably going to get screwed again. And after perusing the outline of their plan, it is certain I will be getting it up the ass once again from my beloved government.

I know everyone’s tax situation is different, but I’m just a hard working middle aged white man with two kids in college and some hefty family medical expenses. I’m already clobbered with Federal, State, City, and real estate taxes, along with huge toll taxes, sales taxes, gasoline taxes, utility taxes, phone taxes and probably a hundred more hidden taxes and fees.

I fucking hate taxes and want nothing more than to see them cut dramatically. I voted for Trump for the following reasons:

  1. He wasn’t that evil hateful shrew named Hillary Clinton
  2. He promised to repeal and replace Obamacare
  3. He promised to build the wall
  4. He promised to keep out Muslims
  5. He promised to reduce our military interventions around the world
  6. He promised to reduce my taxes

Well, one out of six ain’t bad. Right?

I know the Trump sycophants have a million reasons why he has been thwarted, but his pathetic support of the last GOP Obamacare lite bill reveals him to becoming just another establishment pawn. He has taken war mongering on behalf of the military industrial complex to a new level. No wall on the horizon. Now it is a figurative wall. And now he is disingenuously selling this tax bill as a huge windfall for the middle class, which is a lie based on my analysis of the known details. The truth is they need to screw the upper middle class in order to reduce corporate tax rates.

You hear the talking head “experts”, paid for by corporations, spinning a yarn about the 35{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} corporate tax rate and how it makes our corporations terribly disadvantaged. The truth is corporate lobbyists (I don’t have a white working man middle class lobbyist working for me) have bribed Congress to insert so many exemptions, deductions, credits, and loopholes into the tax code, the big corporations pay an effective tax rate of 19{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} already. If overly burdensome corporate taxes were really a problem, would corporations be generating record after-tax profits while GDP grows at a pitiful 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} rate?

I don’t know how many people are in my boat, but I’m guessing it is a large portion of the middle class. We already know about 50{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the households in the U.S. don’t pay any Federal Income Tax. Some even get refunds for not working. That’s why there are tax preparation offices all over West Philly and other urban welfare enclaves around the country. Here are the tax brackets for a married middle class family:

Read More @ TheBurningPlatform.com

Debt-Slave Industry Frets over Impact of Mass Credit Freezes

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by Wolf Richter. Wolf Street:

Their doom-and-gloom scenario: Consumers suddenly becoming prudent.

“Let’s face it, 143 million frauds won’t be perpetrated right away; it will take some time to filter through,” Steve Bowman, chief credit and risk officer at GM Financial, the auto-lending subsidiary of General Motors, told Reuters.

He was talking about the consequences of the Equifax hack during which the most crucial personal data, including Social Security numbers, of 143 million American consumers along with equivalent data of Canadian and British consumers, had been stolen. These consumers have all at once become very vulnerable to all kinds of fraud, including identity theft – where a fraudster borrows money in their name.

The day Equifax disclosed the hack, I urged affected consumers to put a credit freeze on their credit data at the three major credit bureaus — Equifax, TransUnion, and Experian — to protect themselves against these frauds. Soon, the largest media outlets and state attorneys general urged consumers to do the same thing. Financial advisors are recommending it. Even Wells Fargo jumped on the credit freeze bandwagon.

As a result, consumers have flooded the websites of the three credit bureaus to request credit freezes in such numbers that the sites slowed down, timed out, or went down entirely for periods of time. This credit freeze frenzy is scaring the credit industry – not just the credit bureaus, but also lenders and companies that rely on easy credit to sell their wares, such as automakers and department stores with instant credit cards.

With a credit freeze in place, those consumers cannot be approved for new credit until they lift the credit freeze, which can take up to three business days. The time and extra hoops to jump through before applying for a new loan might deter consumers from buying that car at the spur of the moment.

No one knows how this is going to turn out – and how it will impact the debt-based consumer economy. But fears are mounting. If just 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of 324 million folks in the US put a credit freeze on their data, the credit industry will feel the impact painfully. Hence the efforts to contain the fallout.

On Wednesday, an apology by the interim CEO of Equifax, Paulino do Rego Barros Jr. – he succeeded CEO Richard Smith, who’d been sacked – concluded with tidbits of a service Equifax is hoping to roll out by January 31. It would allow “all consumers the option of controlling access to their personal credit data.” It would allow them to “easily lock and unlock access to their Equifax credit files.” This is going to be “simple,” and “free for life.”

This “credit lock” or whatever Equifax wants to call it is not a “credit freeze.” TransUnion is offering a similar service. Credit freezes are covered by state law, and credit bureaus have to conform to state law. With these “credit locks” credit bureaus can do whatever they want to, and consumers will have to read the fine print to figure out what that is and how well a “credit lock” will protect them.

But those credit locks offer the credit industry a huge advantage over a credit freeze: They can be designed to be lifted instantly. And this is a sign of how frazzled the credit industry, including the lenders, are becoming, about the credit freezes.

They’re worried that a credit freeze – because it takes a few days to lift – would prevent consumers from impulse-borrowing, such as getting a car loan when the mood strikes to buy new car. Some consumers, including myself, have had a credit freeze in place for years, but the numbers have been small. Now the numbers are soaring. The credit industry probably has data showing that consumers with credit freezes in place borrow less, or don’t borrow at all. That’s a scary thought for them.

Read More @ WolfStreet.com

Hard Assets In an Age of Negative Interest Rates

by Marcia Christoff-Kurapovna, Mises:

Time is the soul of money, the long-view — its immortality. Hard assets are forever, even when destroyed by the cataclysms of history. It is the outlook that perpetuated the most competent and powerful aristocracies in continental Europe, well up through World War I and, in certain prominent cases, beyond; it is the mindset that has sustained the most fiscally serious democratic republic in the Western world, that of Switzerland (as demonstrated in this article). In this view, the stewardship of money, formerly known as “banking,” is a serious matter of serious wealth management and not a weird-science lab experiment of investment products ultimately designed for hedge fund managers’ tax arbitrage schemes.

More than ever the focus on hard assets is a dire call to arms given the deformed market culture of central banking monetary magic. Despite the early promise of the Trump presidency to reinvigorate the economy, the United States remains mired in economic stagnation built up over so many years of debt-driven policies, easy-money policies, and the ZIRP fiasco fostering a bizarre-world situation in which the actual economy is doing poorly while the market is soaring. In such an environment, the allure of the centuries’-old tried and true has never had more appeal.

In a word, the hard asset vision is about building wealth outside the stock market. It refers to three main strategies overall:  1) land ownership and/or farmland, forestry and agriculture 2) gold, other precious metals, and certain base-metal commodities 3) The (Old Masters/Classic Modern) art market. Where this last is concerned, we mean art as investment and not art-as-commerce, such as that which contaminates today’s insipid and overpriced world of ‘Balloon-Dog’ bad art. The auction world of Rembrandt and Picasso; of El Greco and Gerhardt Richter has been on a tear, is smashing records, and cannot be ignored as an excellent safe-haven vehicle, as outstanding works of art traditionally always have been.

To begin with, physical gold and precious metals remain an investment enigma despite being market-leading performers for the past seventeen years. Gold is a must-have portfolio asset amid the aggressive debt levels and monetary debasement that have so unhinged the market. Silver, for its part, in addition to its prestige status, also has innumerable industrial applications and throughout the precious-metal bull market since 2000.

Russia, in this context, is leading the charge in the long-view outlook. For the past three years, the Bank of Russia has been the world’s number one stacker of gold, and, thus far in 2017, has taken the lead position among international central banks in buying the commodity. At its current pace, Moscow will unseat China for the number five spot of gold-holding nations by the first quarter of 2018. Currently, the gold-to-GDP ratios of the world’s leading powers are: Russia 5.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}; the Euro Zone 3.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}; the U.S. 1.8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and China 1.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Yet countries buying up gold versus investors who do so are two different worlds. Ninety-five percent of the world’s gold is held as a wealth store.

In other commodities, zinc and copper have been the big movers. Zinc, the key galvanizing agent, claimed the status of the best performing metal last year. Copper began its resurgence in 2017, and in late August of this year, a host of commodities broke out of multi-month consolidation patterns. Nickel and cobalt are also coming into the spotlight as metals essential to the rapidly growing lithium ion (Li-ion) battery sector.

The art world lags not too far behind that of precious metals in terms of history’s preferred storehouses of value as protection against uncertain times. Art as investment has long been a favored strategy of the European elite since, effectively, the High Middle Ages and has never gone out of style. In modern times, the phenomenon of an ever-growing collectors’ base and less supply of museum quality works has been accepted as a meaningful way to protect investors’ cash during economic difficulty. Though continually eclipsed in the media by the brasher contemporary art market, Old Masters (and Classic Modern—the great 20th century works) have shown stable, often spectacular, results over the past ten years with both categories reaching record-breaking highs.

Art, to be a safe haven, must be an investment and not a whim — just as it was for the Liechtenstein family who acquired Leonardo da Vinci’s Ginevra de Benci so many centuries ago. In the wake of the World War II near-bankruptcy of that eponymous principality (whose monarchs were not and are not supported by taxes), that painting was the first of the major, big-ticket art sales of the 20th century, when it was sold to Paul Mellon and The National Gallery of Art in Washington DC. Ginevra continues to hang there today (and to date, is the only Leonardo painting in possession of the United States).  While the average investor may not be in a position to store wealth in a Renaissance master or a Picasso, there are always the underrated gems or the new discoveries that can and will bring in the most unexpected of windfalls decades down the line.

Finally, farmland is seen by many as an excellent addition to a precious-metal portfolio. As Jim Rogers predicted in early September, fortunes will be made in agriculture “and when an industry breaks full faith, even mediocre people make a lot of money” in that sector. Hard asset investors continue to include farmland in their portfolios “for a combination of income generation, diversification and inflation-hedging”. Historically, farmland, like forestland in continental Europe or Latin America, has been a unique asset class demonstrating low-correlation to traditional asset classes, and which performs well as inflation rises.

Read More @ Mises.org

IT’S COMING: Surviving The Coming Bond Crash — Michael Pento

from Ron Paul Liberty Report:

You know it’s coming. US and global debt skyrockets. The financial system on life support. Investment advisor Michael Pento has seen it coming for years and he joins today’s Liberty Report to tell us what to expect and what we can do about it…

Did the Fed Just Broadcast An Inflationary Event is About to Hit?

from Gains Pains Capital:

Yesterday, Janet Yellen stated that the Fed was “wrong” about employment and inflation.

I realize that the significance of this might be lost on many individuals. The Fed’s ENTIRE purpose is to pursue “maximum employment” and “stable prices”(aka low inflation). Indeed, these are LITERALLY the words in the Fed’s official “Dual Mandate” from Congress.

So for the Fed Chair to admit that the Fed is wrong about these two items is almost unthinkable. This is like the CEO of Exxon Mobil saying, “we don’t understand oil or natural gas.” Actually scratch that, what Yellen admitted yesterday was even worse as the Fed is in charge of the ENTIRE FINANCIAL SYSTEM and controls the printing of the world’s reserve currency!

Put simply, what Janet Yellen admitted yesterday was the single most incredible admission in Federal Reserve history. She literally expressed that current Fed leadership has no clue what it is doing. Small wonder Fed Vice-Chair Stanley Fischer is resigning. Who in their right mind would want to be around for what’s coming?

What’s coming?

An inflationary storm. The $USD has already dropped 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} this year. And that was BEFORE the Fed went public about the fact it has no clue about inflation. And the long-term chart is even uglier.

This is THE trend of the next six months. If you’re not taking steps to actively profit from this, it’s time to get a move on.

Wepublished a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.

Read More @ GainsPainsCapital.com