Wednesday, April 24, 2019

Social destruction by the abuse of money

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by Alasdair Macleod, GoldMoney:

In Britain, the top 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of earners pay over a quarter of all income tax collected, and while super-rich British residents perhaps don’t have the tax breaks the Macklowes enjoy, the bulk of the burden falls on lawyers, bankers, company executives and owners of successful private enterprises. And it should, say the collectivists….

One of the juicier stories doing the rounds in New York society is the Macklowe divorce. Harry, the husband, kept a French mistress for two years before seeking a divorce from his wife of 58 years. So far, this is a run-of-the-mill marital split. But what made it the subject of gossip is the extraordinary lifestyle of the Macklowes, the mud being slung, and the expectations of the wronged 79-year old wife, seeking a billion or so to see out her remaining days.

They say hell hath no fury, and all that. Here is one of New York’s richest couples, washing their laundry in public, and it emerges that Harry has not paid tax since 1983. Harry’s lawyer bluntly stated in court that “people in real estate don’t pay taxes”. It echoes Leona Hemsley’s infamous quote that emerged at her trial thirty years ago, when the Queen of Mean said “We don’t pay taxes, only little people pay taxes.”

This still surprises many of us little people, but we must believe a top New York lawyer when he makes a statement in a court of law. The source of immense personal wealth in cities like New York is often from property development, and if this is a tax-free activity, it makes a mockery of the state redistributing money from the haves to the have-nots.

And sociologists wonder why there is so much discontent aimed at the establishment! This discontent finds expression in doubled-down socialism – morality-driven socialism rather than the Marxian version perhaps. It seems obvious to the masses that government is failing to collect taxes through not trying hard enough. But all that the Macklowe divorce evidence proves is one of life’s truisms: the rich are very good at finding legal ways not to pay tax.

Wealth-destruction and the state

Government welfare promises are never funded by the very rich. Anyway, there are too few of them to make any difference to the enormous scale of statist demands for tax revenue. But there is nonetheless an enormous burden imposed upon the successful wealth creators. In Britain, the top 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of earners pay over a quarter of all income tax collected, and while super-rich British residents perhaps don’t have the tax breaks the Macklowes enjoy, the bulk of the burden falls on lawyers, bankers, company executives and owners of successful private enterprises. And it should, say the collectivists.

But when we look at the next layer down, those that earn more than the average wage, we see the state’s taxes have caused the worst economic distortions. We are referring to taxes on the wages of skilled blue-collar workers, and upwards. These are ordinary people with aspirations to do better for themselves and their families. These are the people who pay most of the other 75{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the income tax and sales taxes collected by the state. These are the people, who, if allowed to keep their earnings, would be incentivised to become more productive for the benefit of everyone. These are the people who would reduce the welfare burden on the state, given the choice, by being able to save for private healthcare and to pay for the education of their children.

Instead, they are forced to subsidise a far costlier state system. I was recently told by a credible source that the only form of surgery in the US that has fallen in price in recent years is the one not covered by highly regulated Medicare and Medicaid: plastic surgery. Some time ago I did a rough calculation of the cost of educating a child of primary school age in Britain, and found that the “free” state system costs about twice as much as educating a child privately. Keeping a male young offender locked up in Britain costs £85,975 per annum all-in, while it costs less than £40,000 to educate a child of the same age at Eton. And it’s not as if British borstals are bristling with expensive upper-class facilities, either.

I can think of very few parents who prefer to put their children through the state system rather than private education. Even left-wing Labour politicians in the UK send their children to private schools. Trade unions offer private healthcare to their own staff in preference to facing the queues at the National Health Service, while publicly damning private healthcare for taking resources away from the state system.

Money diverted in taxes from productive use to bolster state spending is an enormous unseen drag on the economy. It destroys personal wealth, and produces inferior or unwanted services in return. And while we can debate the benefits to the lowest earners in society and the long-term unemployed, we should not ignore the wealth that might otherwise have been accumulated, upon which ultimately the standard of living of even the poorest in society depends.

Lifestyles are now based on debt

State intervention has become so extensive and costly, that those with ambitions to better themselves and improve the conditions for their families have long been unable to do so out of heavily-taxed earnings. Instead, they resort to borrowing. A typical young couple buying a newly-built home on a housing estate, parking two cars in the driveway, well-dressed, and with children who no longer walk to school but are driven by a parent, represent the aspirations of your country’s future.

But how much of this visible wealth does the model couple own? The mortgage deeds are with the mortgage lender, representing most of the home’s value. The cars are not theirs until the end of the loan agreement, and then they must relinquish them, buy them, or trade them in for another car on finance. And the credit cards are expensive borrowing which for many people are a necessary financial bridge to the next payday. It is a sad fact that most salaried people have no financial buffer at all, and if their next pay-check fails to arrive, they risk losing their credit rating and possibly their home as well.

Read More @ GoldMoney.com

Keiser Report: Time for #CrashJPMBuyBitcoin? (E1129)

from RT:

In the second half, Max interviews Roger Ver, aka ‘Bitcoin Jesus,’ about the scaling debate, Bitcoin Cash, China’s crackdown on Initial Coin Offerings and the exchanges that offered access to them and Jamie Dimon’s ‘bitcoin is a fraud’ statements.

This Small Move Could Send a Tidal Wave of Money into Gold Stocks

by Marin Katusa, Katusa Research:

At 3,950 feet wide and 176 feet tall, the legendary Niagara Falls is the most powerful waterfall in North America.

Straddling the border between the U.S. and Canada, Niagara sees approximately 3,160 tons of water go over its edge it every second. It’s said The Great Lakes contain 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the world’s freshwater. Most of it passes over Niagara Falls as it drains into the Atlantic Ocean via the St. Lawrence River.

Many of us can remember a trip to Niagara Falls and recall hearing the water’s power as it roared from below.

Now, think if all that water tried to go over the falls through a single fire hose. If you had a miracle hose that wouldn’t bust, the pressure would create a water jet that goes for miles.

Yes, it’s a ridiculous scenario. But it’s a useful analogy for explaining how the gold mining sector would be affected if some of the world’s largest investment funds decided to make even a small increase in their allocation to physical gold and gold stocks. It would be like trying to drain Niagara Falls with a fire hose. Just a small percentage increase in allocation towards gold and gold stocks among global fund managers would make gold stocks double… and then double again… and double again.

Below, we’ll look at the numbers. But first, let’s review who really moves stock and bond prices…

When it comes to the investment markets, a small investor has no effect on asset prices. Even the buying and selling of a wealthy individual with $200 million has no effect on stock and bond markets. The guy with $200 million is a mouse when it comes to the elephants.

By elephants, I mean large pension funds, large hedge funds, large insurance funds, and large sovereign wealth funds. These funds invest the money for tens of thousands of people. They control not just hundreds of millions… but often hundreds of billions. For example, oil-rich Norway’s $1 trillion sovereign wealth fund controls 5,000 times more money than the rich guy with $200 million. Elephants like Norway’s fund managers are the people that move markets and create long-term price trends.

Now realize that the managers of these mega funds are just regular people. They are as likely to fall victim to groupthink as anyone. They don’t like to stray far from the herd. They tend to make the same decisions at the same time.

When a group of large investment funds decides to buy into a market, they can put well over $100 billion to work. So, elephants typically stick to very large, very liquid markets like large-cap U.S. stocks and corporate bonds.

However, some elephants occasionally stray from the herd. They buy into less liquid markets. For example, some of them will buy gold stocks and physical gold. If concerns over the safety of the global monetary system increase (as they did in 2008), more than a few elephants will want to buy gold and gold stocks for both protection and profit potential.

That elephant money will flow into a relatively tiny sector. The current market value of all major publicly-traded gold companies is around $330 billion. This might sound large, but it’s actually tiny in global finance terms.

The entire gold mining industry is smaller than just Facebook ($500 billion market cap) or Google ($650 billion market cap). The chart below shows this comparison, along with Apple and U.S. oil and gas industry for good measure.

To look at it from another angle, consider the $20 billion market cap of the world’s largest gold mining company, Newmont. Newmont is a giant that shapes the industry. It does some of the biggest deals. It has the resources to hire the industry’s best people. It produced over 5 million ounces of gold in 2016. That’s a tremendous amount of gold.

Yet, a $20 billion market cap won’t even get you a spot on the top 20 North American oil and gas companies. Newmont is smaller than 266 companies in the benchmark S&P 500.

If just 10 out of the hundreds of money managers around the world with more than $50 billion to invest were to each place just 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of their portfolios into Newmont, they would buy 25{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of Newmont. That very small ripple in the ocean of large fund management would produce a buying tsunami that lands on the shores of the gold mining industry.

You might be thinking, “Sounds good in theory, Marin, but this wouldn’t happen in real life.”

If you’re thinking that, you’re dead wrong. This line of thinking isn’t theoretical. Two situations in recent history show how small sectors can stage extraordinary moves when even a small percentage of the world’s capital flows into it.

***In 2003, I spent a lot of time and energy researching the uranium market. I became convinced the industry would face a supply/demand crunch which would send uranium into a major bull market I took a huge position in uranium stocks.

At the time, the uranium market was much smaller than the gold market is today. The world’s largest miner, Cameco, had a market cap of just $2 billion.

My thinking turned out to be right. Uranium entered a bull market and attracted a lot of investor interest. But because the industry was so small, investment capital could only flow into a handful of legitimate uranium miners. During the uranium bull market of 2003 – 2007, Cameco climbed 1,300{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Pitchstone Energy climbed 700{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Paladin Uranium climbed over 1,000{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Read More @ KatusaResearch.com

Surviving The Coming Bond Crash

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from RonPaulLibertyReport:

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…

China NEEDS $13,000 GOLD PRICE To Implement Oil-For-Gold Contract

by Bill Maher, via SilverDoctors:

If China launches the highly anticipated oil-for-gold contract by the end of this year, those $10,000 forecasts for gold may be off by some 30{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Here’s how China could launch the new oil contract in just a few short months from now…

This Could Send Gold Much Higher Than $10,000

Jim Rickards is on record forecasting $10,000 gold.

But is China about to provide the catalyst to send gold even higher? And by how much?

Today, we fare forth in the spirit of speculation… follow facts down strange roads… and arrive at a destination stranger still…

China — the world’s largest oil importer — struck lightning through international markets recently.

According to the Nikkei Asian Review, China has plans to buy imported oil with yuan instead of dollars.

Exporters could then exchange that yuan for gold on the Shanghai Gold Exchange.

Not only would the plan bypass the dollar entirely… it would restore gold’s role in international commerce for the first time since 1971, when Nixon hammered the last nail through Bretton Woods.

If the rumors hold true, China’s plan could enter effect by the end of this year.

Billionaire business magnate and sound money advocate Hugo Salinas Price ran China’s plan through his calculator.

It turned up a basic math problem that spells drastically higher gold prices — if the plan is to work.

Details to follow.

But first some background on oil and gold… a brief detour down Bretton Woods Lane…

Price:

By 1970, it was evident to those running the U.S. that it would very soon be necessary to import large quantities of oil from Saudi Arabia. Under the Bretton Woods Agreements of 1945, the immense quantities of dollars that would shortly flow to Saudi Arabia in payment of their oil would be claims upon U.S. gold, at the time quoted at $35 an ounce. Those claims would surely deplete the remaining gold held by the U.S. Treasury in short order.

Washington found itself on the sharp hooks of a dilemma…

Dramatically raise the price of gold to limit redemptions — and devalue the dollar in the process — or repudiate its commitments under Bretton Woods.

Dishonor, that is… or dishonor.

It chose dishonor.

Price again:

To continue under the Bretton Woods monetary system would have meant that the U.S. would have been forced to raise the price of gold to an enormous figure in order to reduce the amount of gold payable to the Saudis to a tolerable level. But raising the dollar price of gold in that manner would have constituted a great devaluation of the dollar and collapsed its international prestige; that in turn would have ended the predominance of the U.S. as the No. 1 power in the world. The U.S. was not willing to accept that outcome. So Nixon “closed the gold window” on Aug. 15, 1971.

If China is willing to trade gold for oil under its latest plan, a similar dynamic enters play.

Consider:

China takes aboard some 8 million barrels of oil a day.

That’s 2.92 billion barrels per year — nearly 3 billion in all.

But China holds only a few thousand metric tons of gold (officially about 1,850. Some estimate the true figure much higher).

You see the problem, of course.

China rapidly depletes its gold reserves if too many oil exporters choose to exchange yuan for gold.

If the plan’s to be sustainable at all, gold must rise — drastically — in order to balance the vast amounts of oil it’s supporting.

As Price explains, “To balance the mass of oil received by China against a limited amount of available gold… it will be necessary for gold to skyrocket upward in yuan terms and, necessarily, in dollar terms as well.”

Price crunched the numbers…

One ounce of gold (about $1,300) currently fetches 26 barrels of oil (about $50 per).

One barrel of oil is worth 1.196 grams of gold.

Price calls this ratio “an unsustainably low purchasing power of gold vis-a-vis oil.”

Only a drastically higher gold price would render the plan plausible.

How far would gold have to climb before the relationship was stable in Price’s estimate?

Ten times. Thus, Price arrives at a reasonable gold price:

$13,000 per ounce.

Price:

At $13,000 per gold ounce, one barrel of oil, at $50, will be bought with 0.1196 grams of gold; perhaps we may see $13,000 per oz gold in the not distant future.

Read More @ SilverDoctors.com

The Stock Market Is Seriously Overvalued Based On This Benchmark

by Steve St. Angelo, SRSrocco:

As Americans place a record amount of bets into a stock market that continues to rise towards the heavens, few realize how much the Dow Jones Index is overvalued.  While some metrics suggest that the Dow Jones Index is very expensive, there is another indicator that shows just how much of a bubble the market has become.

If we compare the Dow Jones Index to the price of oil, we can see how much the market has to fall to get back to a more realistic valuation.  For example, if the Dow Jones Index were to decline to the same ratio to oil back to its low in early 2009, it would need to lose 14,500 points or 65{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of its value.

To get an idea just how overvalued the Dow Jones is compared to the price of oil, look at the chart below:

The oil price (BLACK line) increased with the Dow Jones Index (BROWN area) until it peaked and declined in 2008.  Even though the oil price line overshot the Dow Jones by a wide margin in 2008, after it corrected and moved higher in 2010, both the Dow Jones and oil price moved up in tandem.

If you look at the movement in the oil price and Dow Jones Index from its low at the end of 2008 to 2013, you will see just how similar the two lines moved up and down together.  While the oil price shot up higher than the Dow Jones during the peaks (2010-2013), they paralleled each other quite strongly.

THE BIG DISCONNECT:  Dow Jones Index & The Oil Price

However, the BIG disconnect between the Dow Jones and the oil price took place when the price of oil fell from over $100 in the middle of 2014, to a low of $33 at the beginning of 2016.  Currently, the Dow Jones Index will buy 430 barrels of oil.  However, at the peak of the market in 2007, the Dow Jones Index could only purchase 175 barrels of oil:

We can see that the Dow Jones Index currently can buy nearly 200 more barrels of oil than it did at the peak before the stock market crash and Great Depression in 1929.  At the depths of the Great Depression, the Dow Jones Index could only purchase 90 barrels of oil in 1933.

Interestingly, the lowest ratio was reached in 1980, when the Dow Jones Index could only buy a mere 25 barrels of oil.  The ultra-low Dow Jones-Oil Ratio in 1980 took place during the huge inflationary period as a result of two Middle East oil price shocks.  In 1980, the price of oil reached $36.83 a barrel versus the average 902 points for the Dow Jones Index.

However, after Fed Chairman Volcker raised interest rates to double-digits, the price of oil, gold, and silver plummeted over the next two decades.  And by 1999, the Dow Jones-Oil Ratio surged to a high of 534.  The high Dow Jones-Oil Rato came as a result of a low $19.34 oil price versus the Dow Jones Index average reaching a new high of 10,339 in 1999.

Now, let’s explore what has occurred more recently.  As the price of oil increased from 1999 to 2007, the Dow Jones-Oil ratio declined to 175, even though the market reached a new high of 14,200 points.  Furthermore, during the first quarter of 2009 when the stock market collapsed to a low of 6,500, and the oil price fell to $42, the Dow Jones-Oil Ratio only declined to 155… 20 barrels less than at the peak in 2007.

Read More @ SRSrocco.com

A New Challenge to the Dollar

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by John Browne, Euro Pacific Capital:

In a move that was little noticed outside of the financial world, China announced the creation of an oil futures contract (open to international traders) that will be denominated in Yuan and convertible into gold. This move provides the first official linkage of oil to gold, and more importantly a linkage between the Chinese currency and gold. While the contract volumes that will be traded on this new platform will certainly be minuscule in comparison to those in the dominant markets of New York and London (at least initially), I believe the move is the latest, and perhaps most significant, step that China has taken down the path that could lead to a global economic system that is not fully dependent on the U.S. dollar. The move amounts to a direct challenge to the dollar’s privileged reserve status and could threaten U.S. dollar price erosion.

The move comes at a time when the U.S is particularly vulnerable to an economic challenge. Given the bold, but not particularly diplomatic, efforts of the Trump Administration to push an America First agenda, the U.S. finds herself somewhat isolated. Add to this the widening political polarity in the U.S.,which will make it that much less likely that Washington can take needed action in passing economic reforms to prevent a looming debt crisis. The dollar has been neglected far too long, and its strength may be far more tenuous than many imagine. 

By way of background, the United States emerged from World War II as the world’s undisputed economic, financial and military leader. In 1944, at Bretton Woods, the U.S. dollar, convertible into gold exclusively by central banks, was adopted as the world’s main reserve currency. This status meant that the dollar was used to price most commodities, used to transact nearly all international trade. This status further strengthened the dollar and helped make Americans the richest people in the world.

Naturally, such privileges engender jealousy, especially when they are abused. But, whereas the Soviet Union challenged the U.S. militarily, no nation was powerful enough to offer an economic or financial challenge. All that began to change, albeit slowly, in the 1980’s when after the death of Chairman Mao, China adopted capitalism under the guise of communism. Less than 40 years later, the country has boomed to become the world’s second largest national economy with a GDP of some $11.2 trillion in 2016, according to figures from the International Monetary Fund (IMF), or more than that of Japan, Germany and the UK combined. China is currently the world’s largest importer of oil with Reuters reporting that some 212.4 million tons has been brought in through the first half of 2017. Russia and Saudi Arabia are its two largest suppliers. In the still somewhat opaque gold market, it is rumored that China is now the world’s largest holder of gold. More importantly, China is still growing far faster than the United States, and may likely become the largest economy in the world by the middle years of the next decade. Clearly such an economic change could invite a monetary one. 

Many Americans are blissfully unaware that through the power of the printing press (and its digital age equivalents), the Federal Reserve has depreciated the U.S. Dollar against gold by more than 98 percent since the Bank was chartered in 1914. The decline went largely unnoticed because most other governments engaged in the same covert robbery. When President Nixon broke the dollar’s last link to gold in August 1971, the debasement accelerated rapidly. And President Trump’s just concluded deal with Democrats to suspend the Constitutional debt limit, removes the last road blocks that would prevent even greater dollar depreciation. That deal allowed the U.S. Treasury to borrow a staggering $317 billion, the most ever in a single day, which pushed the official U.S. funded debt past $20 Trillion for the first time.

In October last year the IMF, the central bankers’ central bank, expressed concern that non-financial sector debt had risen to $152 trillion or 2.25 times global GDP. The avalanche of computer generated money that has been dumped on the global economy has created the illusion of great stock, bond and real estate wealth. But while the elites bathe in the riches, the underlying reality of declining living standards and social unrest are laying the groundwork for changes. Those nations with surpluses, which have been making loans to the debtor nations, are showing the strains of this openended endeavor.

These factors place China in a potentially powerful position versus the United States. According to data from the Treasury Dept., China is the holder of $1.17 trillion in U.S. Treasuries, the second largest stockpile in the world, after the Federal Reserve itself. Like many other surplus nations, China has shown increasing concern over the U.S. monetary debasement policies and has called for an overhaul of the international monetary system.

By moving into the top position as largest oil importer, China has developed the power to challenge the universal dollar pricing of oil that has been in place since the early 1970’s. By creating a domestic oil contract denominated in Yuan and traded internationally, China will be able, potentially, to divert the petrodollars now held by oilproducing countries towards its Yuan, thus eroding much of the current crucial support enjoyed by the U.S. dollar. If successful with oil, China could create similar contracts on other internationallytraded strategic commodities (such as copper) to extend its possible attack on the U.S. dollar.

However, the world does not yet trust fully China or its currency. But by making the Yuan convertible into gold, even in this narrow sense, China now presents its currency in a much more attractive light. Many nations with large holdings of depreciating dollars and euros may be tempted increasingly to diversify into goldbacked Yuan, placing it and the Chinese government in an increasingly powerful position in international monetary affairs.

Read More @ Europac.net

Landlord’s View of the Brick and Mortar Meltdown

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by John McNellis, Wolf Street:

We are faced with weekly tenant bankruptcies, defaults, and requests for rent or space reductions.”

I received an invitation to attend a cocktail party in Los Angeles at next week’s International Council of Shopping Center (ICSC) meeting. In declining, I explained that we would not be attending the ICSC, our first absence in decades. Somewhat forlornly, our host replied he was hearing that a lot.

Why the shopping center industry’s premier West Coast event may go lightly attended is worth considering. One answer is simple: Pizzazz is in short supply at an event where the chalk talks will be about playing defense and even the biggest liars you ever met will admit to challenges facing their portfolios.

The writing may not be on the wall, but it’s sitting every afternoon on our front porch. A cardboard box waits outside almost daily. These boxes contain everything from hair products to prescriptions to pillows. While hard-put to tell a tweet from a text, the household’s reigning monarch can nevertheless shoot the e-commerce rapids blindfolded, ordering any item in a trice.

When the first few raindrops splash you after a long drought, you don’t necessarily think monsoon. When one package a month arrives at your door, and it’s a pair of shoes that are being returned the next day, you’re unlikely to worry about the future of traditional retail. But when that occasional delivery becomes a reliable year-round stream, it’s time to scope the bricks and mortar. If half a dozen friends confirm that they too receive a daily box, you might – if you’re a retail developer – begin to consider your business in a new light, possibly wondering what the ratio is between doorstep deliveries and skipped trips to your mall.

We have been in the retail development business for thirty-five years, developing a couple projects a year. Through more luck than strategy, we focused on smaller, supermarket-anchored, service-oriented neighborhood centers in towns with high barriers to entry.

That is, we just happened to pick the most internet-resistant strain of retail long before the net began its march to the sea. And because our best properties are in smug towns that encourage new development about as much as high school smoking, we have a bulwark against retail’s far greater problem, its staggering over-building from coast to coast. But even with this tight portfolio, we are faced with weekly tenant bankruptcies, defaults, and requests for rent or space reductions. In short, our retail is no fun.

Yet despite the Wall Street Journal’s almost daily pronouncements, traditional retail is not dead. But it is so badly overweight, so bloated with unwanted shopping centers, that it has Type 2 diabetes. America was choking from a vast oversupply of empty storefronts long before the internet and changing buying patterns rendered tens of millions of additional square footage redundant. But unlike most dieters, retail will ultimately – painfully – shed its excess weight.

How?

Retailers will do it the same way the savviest brick tenants are thriving today: by selling at the same price one can get anywhere on the net (never being undersold), by having great customer service, and by absorbing on-line ordering as an in-store service – you try on one shirt in the store, buy it, and then order five more on the spot from the retailer’s web site.

Having successfully executed this playbook, Best Buy’s stock is up 44{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} over the past year. This means of course that the next generation of brickers will be shrinking their store sizes, creating even more vacancies for landlords.  And many tenants will be unable to compete in this new razor-margined, twin-river world and will fall by the curbside, further jamming landlords.

Read More @ WolfStreet.com

New Economic Study Presents a Disturbing Map of the United States

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by Pam Martins and Russ Martins, wallstreetonparade.com:

A new study backs up a theory that many Americans have long suspected: the U.S. is no longer the land of opportunity, despite what national statistics would have us believe. Rather, America is now narrowly constrained to zip codes of opportunity.

The new research comes from the Economic Innovation Group (EIG), a bipartisan public policy organization funded by successful tech entrepreneurs. The study provides detailed data on the economically distressed communities that have fundamentally changed the economic landscape of America. The authors write:

“A remarkably small proportion of places fuel national increases in jobs and businesses in today’s economy. High growth in these local economic powerhouses buoys national numbers while obscuring stagnant or declining economic activity in other parts of the country. EIG’s prior work shows that this trend represents a fundamental shift in the geography of economic growth in the United States.  Geographic disparities have, of course, always existed in this country, but the prospects of different communities used to rise or fall together to a far greater extent than they do today. Now, national statistics are often far removed from the experience of the typical American community.”

Some of the key findings from the groundbreaking study are the following:

Read More @ http://wallstreetonparade.com

Stocks and Precious Metals Charts – The Big Banks Cometh

from jessescrossroadscafe:

“While the largest banks can correctly claim that they have offloaded risky assets and bolstered the amount of cash on their balance sheets over the last decade, their business model has become fundamentally disconnected from the very people and entities it was designed to serve. Small community banks, which make up only 13 percent of all banking assets, do nearly half of all lending to small businesses.

Big banks are about deal making. They serve mostly themselves, existing as the middle of the hourglass that is our economy, charging whatever rent they like for others to pass through. (Finance is one of the few industries in which fees have gone up as the sector as a whole has grown.) The financial industry, dominated by the biggest banks, provides only 4 percent of all jobs in the country, yet takes about a quarter of the corporate profit pie.”

Rana Foroohar, How Big Banks Became Our Masters, NYT

Why doesn’t Washington reign in the obvious excesses and blatant frauds and abuses of the Big Banks?  I will let you answer that one for yourself.

The Dollar rally and a ‘risk on’ attitude continued to pressure the precious metals today.

Read More @ http://jessescrossroadscafe.blogspot.com

Putin Supports Crypto Currencies – His Central Bankers Do Not

by John Driscot, Russia Insider:

“Russia, which missed its opportunity to be a part of the personal computing revolution in the last century due to its isolation, is grasping this opportunity to get ahead of its geopolitical competitors.”

Imagine my shock: the head of Russia’s central bank, Elvira Nabuilliana, has expressed doubt that Russia should legalize cryptocurrencies.

Nabuilliana, dubbed “Putin’s right-hand woman” in an article in the Economist last April, suggested to the 15th International Banking Forum in Sochi last week that the future of cryptocurrencies is uncertain in Russia, especially after the news that China was banning ICO’s. Her deputy governor, Dmitry Skobelkin said that “China doesn’t recognize cryptocurrency as payment and forbids ICOs,” according to Bloomberg.

Conveniently left out is the fact that China has not banned cryptocurrency outright, but merely banned new ones. Projects such as NEO still exist and cooperate with the Chinese government.

As was widely reported, Putin met with the founder of Ethereum, Vitalik Buterin, back in June. Ethereum is one of the biggest cryptocurrencies, with the second largest market capitalization (behind Bitcoin), and some believe it has the potential to overtake Bitcoin sometime in the future. Putin’s meeting suggested to many that the Russian government would be for the economics of the future by embracing blockchain technology.

Read More @ Russia-Insider.com