Wednesday, December 11, 2019

The State of the American Debt Slaves, Q2 2018

by Wolf Richter, Wolf Street:

Let the good times roll.

Total consumer credit – or less soothingly, consumer debt – rose 4.8% in the second quarter from a year earlier, or by $176 billion, to $3.87 trillion (not seasonally adjusted), the highest ever, according to the Federal Reserve. This includes credit-card debt, auto loans, and student loans, but not mortgage-related debt. Given how passionate Americans normally are in spending money they don’t have – that 4.8% increase is moderate: In 2011, increases exceeded 11%.

The chart below shows the progression of consumer debt since 2006. After the seasonal hangover in Q1, following the spend-and-borrow party in Q4, consumer debt set a new record in Q2:

What The Fed Forgot To Mention…

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by Chris Marcus, Miles Franklin:

Last Wednesday the Federal Reserve held a meeting and indicated that they plan to go forward with more rate hikes. Yet they left a key question unanswered.

Specifically, if the Fed is going to continue to raise rates while also unwinding its quantitative easing balance sheet, who is going to buy all of the bonds?

While the Fed didn’t raise rates at this past meeting, there were changes in the language of the statement that indicate the central bank is even more committed to hiking than before.

Bankrupt America: Bankruptcy Soars As The Country Grapples With An Unprecedented Debt Problem

by Michael Snyder, The Economic Collapse Blog:

America, you officially have a debt problem, and I am not just talking about the national debt.  Consumer bankruptcies are surging, corporate debt has doubled since the last financial crisis, state and local government debt loads have never been higher, and the federal government has been adding more than a trillion dollars a year to the federal debt ever since Barack Obama entered the White House.  We have been on the greatest debt binge in human history, and it has enabled us to enjoy our ridiculously high standard of living for far longer than we deserved.  Many of us have been sounding the alarm about our debt problem for a very long time, but now even the mainstream news is freaking out about it.  I have a feeling that they just want something else to hammer President Trump over the head with, but they are actually speaking the truth when they say that we are facing an unprecedented debt crisis.

Where does it end? The authoritarian Left is trying to outlaw BANKING and financial services for all conservative groups

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by JD Heyes, Natural News:

The hard-Left in America, which is devouring the Democratic Party and filling it with hateful Marxists who seek to bully their way to power, has long targeted the National Rifle Association.

But not because the 147-year-old organization has done anything wrong – at least not in the eyes of most rational people. The NRA was founded by Union Army officers who were disappointed with the lack of marksmanship displayed by their troops during the Civil War; since then the organization has continued its marksmanship mission but also has come to serve as the country’s premier gun rights group.

Climbing the Milligram Ladder – Precious Metals Supply and Demand

by Pater Tenebrarum, Acting Man:

FRN Muscle Flexing

Shh, don’t tell the dollar-paradigm folks that the dollar went up 0.2mg gold this week. Or if that hasn’t blown your mind, the dollar went up 0.01 grams of silver.

It’s less uncomfortable to say that gold went down $10, and silver fell $0.08. It doesn’t force anyone to confront their deeply-held beliefs about money. But it does have its own Medieval retrograde motion to explain.

QT yet the Fed is Still “Effectively Printing Money”

from Silver Doctors:

Yesterday TraderStef reached out to us on Silver Doctors twitter (we’ve yet to be shadow banned).

She shared with us one of her latest post regarding the myth of QT vs growing US dollar cash in circulation.

Interesting points made below. The Fed has often targeted 2% inflation rates. even some suggesting making 4% inflation a potential target mark. They’ll use all sorts of con games to get there.

Ultimately our record debt levels and delusional unfunded liability mountains will get a mixed bag… both defaulted upon and inflated away.

Signs Point to a Global Slowdown

by Jim Rickards, Daily Reckoning:

As gold has struggled through 2018, (down over 10% from $1,363/oz. on January 25 to $1,215/oz. today), my forecast for a strong year-end for gold has remained unchanged.

This forecast is based on a better-late-than-never realization by the Fed that they are overtightening into fundamental economic weakness, followed quickly by a full-reversal flip to easing in the form of pauses on rate hikes in September and December.

Those pauses will be an admission the Fed sees no way out of its multiple rounds of QE and extended zero interest rate policy from 2008 to 2013 without causing a new recession. Once that occurs, inflation is just a matter of time. Gold will respond accordingly.

The Fantasy of “Balanced Returns” Funding Retirement

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by Charles Hugh Smith, Of Two Minds:

Consider how a “balanced portfolio” yielding “balanced returns” worked out for middle class retirees in Venezuela.

The fantasy that a “balanced portfolio” yielding “balanced returns” will fund a stable retirement for decades to come is widely accepted as a sure thing:inflation will stay near-zero essentially forever, assets such as stocks and bonds will continue yielding hefty income and capital gains, and all the individual or fund needs to do is maintain a “balanced portfolio” of various asset classes that yield “balanced returns,” i.e. some safe “value” lower-yield returns and some higher risk “growth” returns.

This fantasy is based on the belief that yields will exceed real inflation for decades to come. That is, if inflation is 2%, and the average yield of a “balanced portfolio” is 6%, then the inflation-adjusted return is 4% annually–not great, but enough to secure retirement income.

To Exit Free Trade and Build Infrastructure at Last: The North American Belt and Road Initiative

by Harley Schlanger, LaRouche PAC:

The world is currently seeing a new paradigm of cooperative relations and economic development take hold, from its initiation in China’s Belt and Road Initiative, across Eurasia, Southwest Asia, and Africa. It is also watching the major power centers of Europe, on London’s lead, insist on rejecting this new paradigm in favor of geopolitical “zero-sum, win-lose” economic policies and war confrontations with Russia and China.

In the center is the Presidency of Donald Trump: disrupting the confrontation with Russia to the murderous fury of the geopoliticians and their media; fully intending to build a new U.S. economic infrastructure and restore the American industrial worker; but in a hardening trade confrontation with China which threatens his peace diplomacy in Korea and his early good relationship with President Xi Jinping; and with his infrastructure plans having gone nowhere thus far.

COMEX Gold and the Commitment of Traders Report – Craig Hemke

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by Craig Hemke, Sprott Money:

Last week, we focused upon signals that might betray a PBOC effort to manage a lower price for COMEX gold. This week, let’s simply review the latest Commitment of Traders report on an absolute basis.

By any traditional sense, the positioning of Speculators and Banks in the COMEX gold market are at extremes that often precede price bottoms. The overriding question, though, is two-fold:

1. Is the People’s Bank of China intervening either directly or indirectly to “devalue” the dollar price of certain commodities at the same pace as they devalue the yuan versus the dollar in response to U.S. trade tariffs?

2. If this is the case, do traditional market metrics such as the Commitment of Traders report have any current significance?

Gold Company Makes Huge Blunder By Investing In U.S. Shale Assets

by Steve St. Angelo, SRSRocco Report:

Something took place in the gold industry that I thought would never happen. In a stunning press release, Franco-Nevada Gold announced that it was taking a financial stake in U.S. shale energy assets. Why on earth is one of the top gold royalty companies investing in an industry in which it has no expertise… especially in the shale oil industry??