Saturday, February 23, 2019

Governments to Control Large Cash Transactions

by Martin Armstrong, Armstrong Economics:

I have been pointing out the crisis we face moving forward. The gist of this is the total fiscal mismanagement of government for which we, the people, are always blamed. This hunt for taxes has led down the path of eliminating currency. While people think Bitcoin is an answer, they do not understand government no less the law. The need only pass a law that anyone who fails to report what they have in Bitcoin is criminal and they get to confiscate all your assets.

Switzerland has its “wealth tax” which they argue is nothing just 0.02{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. However, it requires you to report all assets worldwide. They then know what you have and it is merely one vote away at anytime to raise the tax or impose criminal penalties for failure to report everything.

We have stood by and what India cancel all high denomination notes. Try walking around with €500 notes in Europe and they look at you funny or won’t accept them. ATM machines have been reduced in Europe to taking a maximum of €200 in cash at best. This is all th hunt for taxes because government cannot function ethically no less morally.

Now the German Federal Minister of Finance Wolfgang Schäuble is proposing to control large cash transactions claiming this will prevent black money transactions and money laundering. Of course, they see these two issues not as typical crime like drugs, but tax avoidance.

Schäuble is coming up with an alternative for the resistance to eliminating cash is rising globally. He knows he cannot abolish cash. If you cannot eliminate cash, then Schäuble said there should be an upper limit placed on cash transactions, from which cash transactions must be registered and reported to the tax authorities. This will also happening in Europe where you cannot pay for a hotel bill greater than €1000. Schäuble said cash transactions must be registered who are the parties to the transaction to prevent the black money transactions, money laundering and terrorist financing.

It has become painfully obvious that the real winner in the Terrorism War was Ben Laden. What this single man did was change the entire world into a hunt for taxes. He destroyed our liberty like no other invader in history. He has certainly made the list of the top 10 most influential people in history, but has not surpassed Karl Marx.

Read More @ ArmstrongEconomics.com

THE FALLING EROI KILLS WESTINGHOUSE: 2 U.S. Nuclear Reactors Construction Halted

by Steve St. Angelo, SRSrocco:

Yes… it’s true.  Two state of the art nuclear power projects bankrupted the mighty Westinghouse Electric Corporation, a company founded in 1886.  Actually, this is old news as Westinghouse filed for bankruptcy back in March 2017.  However, the breaking news is that the Westinghouse bankruptcy has now forced two utility companies to stop construction on two nuclear power reactors in South Carolina. (photo: courtesy of 12 News, Augusta, Ga)

While many factors will be attributed to the halting of these two nuclear power reactors, such as rising costs, construction delays, decreasing electricity demand and the bankruptcy of Westinghouse, the real reason is the FALLING EROI – Energy Returned On Investment.

As a refresher for newer readers, the falling EROI means that it’s taking more and more energy inputs to produce less and less net energy for the market.  For example, in 1970 the U.S. EROI of its oil and gas industry was 30/1.  Thus, the burning of one oil barrel worth of energy produced 30 oil barrels to the market.  Today, shale oil production comes in at a whopping 5/1 EROI, six times less that the profitable energy in 1970.

Moreover, those who have been following my analysis on energy, understand that the falling EROI of oil and natural gas are gutting the entire global economy.  Even though nuclear power generation doesn’t come from burning oil and natural gas, the construction of the reactors most certainly consumes a massive amount of fossil fuels.  Actually, it takes a great deal of the burning of coal, natural gas and oil to produce nuclear, solar and wind power plants.

This was especially true for the construction of Westinghouse’s two nuclear power plant projects, the Vogtle Plant in George and the V.C. Summer plant in South Carolina.

Two Nuclear Power Plant Projects That Bankrupted Westinghouse

The Vogtle Nuclear Plant (Units 3 & 4), located near Waynesboro, Georgia, started construction with the new Westinghouse AP1000 nuclear reactors in 2013.  Here is a picture of Vogtle Plant under construction last year.

As you can see, Vogtle 3 & 4 are the extension of the original Units 1 & 2 that were commissioned in 1987.  Originally, the Vogtle 3 & 4 were to cost $14 billion and be operational by 2016 (Plant #3) and 2017 (Plant #4).  However, the total costs are now estimated to reach $29 billion for the Vogtle Plant, and it won’t be operational until at least 2022. (source: Reuters article).

Read More @ SRSrocco.com

ABSOLUTE MUST WATCH: Timeline for Global Crypto-Currency Acceptance, Digitizing Commodities & Mini Ice Age Crop Losses

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from Adapt 2030:

This documentary covers the method to internationalize ALL property, commodities, labor and assets onto their ACC Blockchain & Token, controlled by the Bank of International Settlements through China’s quantum network. China was given the task of making the SDR a reality, so control of the facilities and network build out go to the creator. USA developed .com for the internet, China developed Quantum Network and ACChain for digitization of all global assets. 

Is North Korea Showing the Emperor is Naked?

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by Pepe Escobar, Sputnik News:

Amid the thick fog of (rhetorical) war between Washington and Pyongyang, it’s still possible to detect some fascinating writing on the (unbuilt) wall.

A case can be made that President Trump is using North Korea to kick the 24/7 Russia-gate narrative out of the US news cycle. It’s certainly working. After all, in Exceptionalistan weltanschauung, the prospect of war and its possible rewards certainly trumps hazy accusations of Russian hacking and election interference.

Capitol Hill would never even consider an attempt to impeach a president — on top if it surrounded by generals — while American geopolitical primacy is in danger. Besides, Congress has already made it explicit Trump does not even need permission to bomb North Korea.

So, according to this working hypothesis, if Robert Mueller finds anything seriously damaging to the Trump brand, the president might actually consider a bomb North Korea/wag the dog operation.

Meanwhile, anybody paying attention to what Edward Snowden has disclosed in detail knows hackers of all persuasions are fine tuned to all Mueller-related IT systems and cell phone communications. They will know what Team Mueller has managed to find on Trump in real time — and plan their contingencies accordingly.

As for the rhetorical war itself, a US intel source used to thinking outside the Beltway box points to the crucial variable, South Korea; “South Korea will not maintain its alliance with the US the day they believe that the US will attack North Korea to protect itself at the expense of the death of thirty million people in South Korea. South Korea is in secret talks with China for a major security treaty because of the US position that they will bomb North Korea in their own defense irrespective of the destruction of South Korea which the US would regard as most unfortunate.”

Don’t expect to read about these secret Beijing-Seoul talks on Western corporate media. And that’s only part of the equation. The source adds, “there are secret talks between Germany and Russia over the US joint sanctions against those two nations and a realignment of the German position back to the Bismarckian Ostpolitik of a new Reinsurance Treaty with Russia.”

Assuming these secret negotiations bear fruit, the consequences will be nothing short of cataclysmic; “The European and Asian security systems of the United States may be about to collapse due to the turmoil in Washington which is unhinging all of the United States alliances. As Congress undermines Donald Trump, the United States is presently jeopardizing all its major strategic relationships.”

Seoul Framed as “Collateral Damage”

Meanwhile, serious questions remain over North Korea’s true military capabilities. As an independent Asia intel source familiar with the Korean peninsula observes, “submarine launched ballistic missiles (SLBMs) as well as land-based nuclear missiles are available on the black market, so North Korea would have no trouble acquiring them. North Korea knows that if they do not have a nuclear deterrent capacity they could be subject to a similar destruction that occurred with Iraq and Libya. In addition, the irresponsible threats against North Korea by [US Secretary of State] Tillerson, who should retire to his fishing haunts, could do grave damage to the US, for if North Korea believes the US will strike they will not wait as Saddam Hussein, having learned their lesson from that, but they will strike first.”

So the real issue, once again, is whether Pyongyang already is in possession of SLBMs as well as land-based nuclear capacity, acquired through the black market. The Asia intel source adds, “North Korea presently has twenty Romeo class submarines which, according to Heritage expert Bruce Klingner, have the capacity to carry nuclear SLBMs. These Romeo class submarines have a range of 9,000 miles and the distance from Pyongyang to New York City is 6,783 miles. These submarines could be refueled, for instance, in Cuba, Therefore, it is not inconceivable to find a North Korean submarine offshore New York City equipped with a ballistic nuclear missile in a showdown at the O.K. Corral with Washington D.C.”

US Think Tankland is developing a creepy consensus when it comes to North Korea. Every analyst worth his paycheck knows that North Korea’s nuclear program sites are widely dispersed and ultra-reinforced; everyone also knows that devastating North Korea artillery is concentrated near the demilitarized zone (DMZ) within striking distance of Seoul. Still, this is all being spun as part of an aseptic narrative where the US is “extremely reluctant” to bomb.

It’s obviously hard for CIA types to publicly acknowledge that Pyongyang is — successfully — creating the framework for a new brand of negotiation with the US as well as with South Korea, China and Russia. Any rational, non-Dr. Strangelove intellect knows there is no military solution to this drama. North Korea is already a de facto nuclear power — and diplomacy will have to take it into account.

Neocon/neoliberalcon War Party/CIA types though bet on — what else — war. And fast — before the much-hyped point of no return when Pyongyang acquires a deliverable nuclear weapon. That’s where, predictably, most factions of the deep state converge with Trump. And that’s the stuff of all sorts of chilling scenarios, pointing once again to Washington having no qualms sacrificing its South Korean “ally”.

Read More @ SputnikNews.com

After 100 Months of Buying The Dips — Peak Crazy

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by David Stockman, Daily Reckoning:

Just call it Peak Crazy and move on. There is absolutely no reason for the stock markets to be at current levels, let alone melting-up day after day. The fact that this is happening is a measure of how impaired capital markets have become as a result of massive central bank intrusion.

The robo-machines and day traders keep buying the dips because that has “worked” for the last 100 months. There is nothing more to it than residual momentum.

Under a regime of honest money and price discovery, the stock market discounts the future. There is no plausible future from here that’s worth 24 times S&P 500 value or 96 times the Russell 2000.

Surely the year-ahead earnings boom that Wall Street’s artists have penciled in is not in the slightest bit plausible. With 84{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the S&P 500 reporting Q2 results, LTM earnings are still 1.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} below where they were in September 2014.

Nothing has happened to corporate earnings in the last three years except deflation in the energy, materials and industrial sectors. After hitting $106 per share in September 2014, the global deflation cycle brought them to a low point of $86.44 per share in March 2016 in response to low $30s oil prices. The latter has since recovered to the $50 dollar zone – bringing S&P 500 earnings back to $104.61 during the current quarter.

The question remains: How does an aging business cycle and immense global headwinds justify the expectation of a red hot earnings breakout during the next 18 months? Yet that’s what’s happening on Wall Street. We’ve hit nearly $133 per share of GAAP earnings (and $145 of the ex-items variety) for the LTM period ending in December 2018, meaning a prospective surge of 27{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Even if you credit Wall Street’s ex-items approach to operating earnings, the story is the same. Why will the eventual 2018 outcome be any different than the cliff-diving of the last three years?

As things stand, 2018 expectations look way elevated.

The current earnings growth estimated for 2018 would amount to more than the 23{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} gain that has been recorded during the past decade!

In June 2007, reported LTM earnings for the S&P 500 was posted at $85 per share. That would mean that earnings have grown at the tepid rate of 2.1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} per annum for the last 10-years; and those are nominal dollars.

Take out inflation and share buybacks and there’s essentially no gain at all on a peak-to-peak basis.

When it comes to robo-traders, there are some very powerful muscle memory aspects pushing the averages relentlessly higher. It’s the deformation you get when the normal mechanisms of market discipline, such as short sellers and economic pricing of options and hedges, that are destroyed by wealth effects based central planning.

It is Wall Street’s extreme vulnerability to violent crashes that come when two-way markets are destroyed in the name of tricking people into believing they are wealthier than they actually are. The bubble reaches its height and then there is nothing left below because stock prices have become decoupled from economic and profit fundamentals.

Read More @ DailyReckoning.com

The Banks Are Preparing to Steal All of Your Money- Another Wells Fargo Crime-Homeowners You Are at Risk!

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by Dave Hodges, The Common Sense Show:

I have no doubt that when I look at banking actions over the past three years, they are clearly posturing to take every financial asset you own, but not everyone agrees as evidenced by this email.

Hodges just shut up!!!!  You are an _____. The economy is just fine. If it was as bad as you say we would already be eating out of garbage cans. Shut your piehold and get a real job you ____ _____!

Is this emailer correct, or are the recent actions of the banks and the courts telling us something. It is my contention that we are not just going to have a series of false flag event in America. We are going to get his with everything the globalists have to throw at us because America must be taken down in order to usher in the New World World Order.

The 800 lb Gorilla In the Room

In the past, I have written about the credit swap derivatives exposure and the topic got very little traction. So long as people are driving to work and have some food on the table, and there is no looming crisis, most Americans will have a case of tunnel vision due to the fact that most of only live for Friday and cannot see into the future. Many of us in the independent media and even knowledgeable and respected economists such as John Williams and Joseph Meyer are all saying that we are on the verge of a complete economic collapse. And it will almost assuredly begin with a collapse of the banks. How do I know, read on, the banks, themselves, have already told you as much.

AS A NATION, WE OWE $2.5 QUADRILLION IN CREDIT SWAP DERIVATIVES DEBT WHEN THE ENTIRE GNP OF THE PLANET IS $70 TRILLION

Do you remember when Wells Fargo fired 5,300 employees for opening millions of fake accounts? As John Cruz, former Senior V.P. of HSBC Bank would point out, that in all of these cases there is money laundering from drug trafficking and illegal gun-running.

I have interviewed John Cruz on three occasions, former whistle blower from HSBC Bank where he was a Senior VP. Cruz pointed out the following:

The 2017 Economic Crisis Is Worse Than 2008

The very same banks that created the last economic crisis have now created a 278 TRILLION dollar derivatives nuclear time bomb that could tear down the American economy in single and unannounced moment.

Much of this article deals with the blatant corruption of Wells Fargo, however, they are just the tip of the icebeg.

Interestingly and tragically, Wells Fargo appears to be a sound manager of its debt compared to the other banks.

From the John Cruz interview as well as the  Economic Collapse Blog:

“JPMorgan Chase

Total Assets: $2,573,126,000,000 (about 2.6 trillion dollars)

Total Exposure To Derivatives: $63,600,246,000,000 (more than 63 trillion dollars)

Citibank

Total Assets: $1,842,530,000,000 (more than 1.8 trillion dollars)

Total Exposure To Derivatives: $59,951,603,000,000 (more than 59 trillion dollars)

Goldman Sachs

Total Assets: $856,301,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $57,312,558,000,000 (more than 57 trillion dollars)

Bank Of America

Total Assets: $2,106,796,000,000 (a little bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $54,224,084,000,000 (more than 54 trillion dollars)

Morgan Stanley

Total Assets: $801,382,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $38,546,879,000,000 (more than 38 trillion dollars)

Wells Fargo

Total Assets: $1,687,155,000,000 (about 1.7 trillion dollars)

Total Exposure To Derivatives: $5,302,422,000,000 (more than 5 trillion dollars)

Compared to the rest of them, Wells Fargo looks extremely prudent and rational.”

Confirming Data

Fifteen months ago, America did not want to listen. Can you hear me now?

Read More @ TheCommonSenseShow.com

The U.S. Stock Market Mega-Bubble – Jeff Nielson

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by Jeff Nielson, Sprott Money:

Dow Hits Record High as Street Rallies on Strong Q2 Results

– July 31, 2017

That’s a nice message, isn’t it? U.S. markets are higher because of “strong Q2 results”. Move along people, no bubbles to see here. The Dow had eight straight record closes because of (supposedly) “strong Q2 results”.

There is just one problem. It’s 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} fiction. There are no strong results. However, before looking more closely at this blatant falsehood it is necessary to provide some context, especially for readers who do not follow U.S. markets closely.

Going into the second quarter earnings season, stocks in the S&P 500 were trading at 18X “forward 12-month earnings” (i.e. projected earnings for the next 12 months). This doesn’t simply make stocks in the S&P 500 expensive, it makes them insane.

Market experts claim that the “historical average” for this earnings multiple is around 15:1. But this overlooks the fact that U.S. markets (in particular) are perennially pumped to absurd valuations, versus almost anywhere else on the planet.

What is a rational valuation level for the market, as a whole? Ten-to-one. Understand what this ratio means. If you were wealthy enough to purchase an entire company, at a 10:1 earnings ratio it would take you ten years just to get your money back.

This is an acceptable level of risk for investment. There is no guarantee that the company you buy will continue making profits for one more year – let alone ten. You may never get your money back.

Skeptics will scoff at such prudence. “Invest in a blue-chip company like Coca-Cola and you’re guaranteed to make a profit.”

We’ll return to that argument later. How did U.S. markets reach a valuation level (going into Q2) which was already extreme, even by U.S. standards? It’s the “beat expectations” game, played by the lying prostitutes who are dubbed market experts.

The game goes like this. Before earnings are released, the experts predict “earnings growth”, collectively, for the S&P 500. They prance in front of the cameras and claim that this (predicted) higher earnings justifies U.S. markets in going even higher.

But then these sleazy double-talkers change their tune entirely when it comes to predictions for individual companies. Individually, they predict terrible results for these companies. Then, when the results are slightly-less-than-terrible, the experts crow that those results “beat expectations”, and thus the higher valuations of U.S. markets are supposedly justified.

Notice the bait-and-switch.

Before earnings season, the experts claim (rightfully) that higher earnings would justify higher valuations. Then, after the results are released, these sleazy liars claim that higher valuations are justified because individual companies simply beat their dismal “expectations”.

Suddenly earnings are irrelevant. This allows U.S. markets to go higher and higher, even if earnings go lower and lower.

Observe these prostitutes in action in Q2. This is what they were saying at the beginning of earnings season:

Goldman Sachs pegs the consensus estimate of S&P 500 earnings growth at 7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}…The real ‘winners’ among sectors could be tech and financials, which have led the stock market’s gains this year. They are estimated to report 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} earnings growth respectively, according to Goldman Sachs.

It seems like a fairly impressive target – until you look at recent quarterly results for U.S. companies.

The first quarter ended a five-period streak of S&P 500 earnings declines that were worsened by the energy sector’s turmoil. Analysts expect a repeat of earnings growth, even if it’s not by as much.

U.S. earnings have declined in five of the last six quarters, as the U.S.’s market bubbles have spiraled higher and higher. Earnings levels going into Q2 of 2017 weren’t much higher than they were in 2011 – when valuations were much, much lower. Even if earnings were to rise by 7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in Q2, this wouldn’t come close to recovering to where they were a year-and-a-half ago.

However, such earnings growth has not occurred. Observe the bait-and-switch. Let’s use JPMorgan as an example, since the banks were supposed to be a leading sector in Q2. JPMorgan “beat expectations”. But let’s take a closer look at those expectations.

In Q1 2017; JPMorgan reported earnings of $1.65/share. What were the prostitutes predicting for JPMorgan for Q2? Earnings of $1.58/share.

The same prostitutes who were predicting robust profit growth for the market at a whole, and robust profit growth for the banking sector as a whole, were predicting that JPM’s profits would fall. Beating expectations means nothing when those expectations are usually at some rock-bottom level.

Coca-Cola “beat expectations” in Q2. Sounds good, right? Wrong. Profit for Coca-Cola fell 60{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} — but the prostitutes were expecting even worse (or so they claim). Keep in mind that this 60{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} plunge in profit comes immediately after a 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} plunge in profit in Q1.

That’s a 60{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} drop in profit on top of a 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} drop in profit, and the prostitutes claim they were expecting even worse from this Dow Jones bellwether. Is there anyone still willing to step up and pay 18X forward 12-month earnings for a company like Coca-Cola? Eighteen years to get your money back – if you’re lucky.

It’s not just Coca-Cola that has reported terrible results so far in Q2, as the U.S. stock bubbles keep rising. General Electric? Profit down 60{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Amazon? Profit down 77{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. And the NASDAQ has been leading the spiral higher in recent months.

How secure would shareholders feel who paid 18X Q1 earnings for Amazon stock, after hearing this news? That would have increased the Amazon multiple to over 70:1.

Then there are U.S. department stores: terrible results almost across the board. This comes following quarter after quarter of terrible results for these companies. This comes after the largest spike in U.S. retail sector bankruptcies since the Crash of ’08. These are supposed to be the survivors in the dying U.S. retail sector.

What excuse do the prostitutes have for the terrible performance of U.S. department store chains? They say they are losing business to Amazon and Walmart. Hello? Amazon’s profit was down 77{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. This is a consumer economy. Where are the consumers?

It doesn’t matter. The bubbles keep going higher anyways.

Read More @ SprottMoney.com

The Government’s Retail Sales Report Borders On Fraud

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by Dave Kranzler, Investment Research Dynamics:

As a quick aside, I got an email today from a colleague, a self-admitted “very small fish,” who told me he was now getting cold calls from Goldman Sachs brokers offering “very interesting structured products.” I told him the last time I heard stories like that was in the spring of 2008. One of my best friends was getting ready to jump ship from Lehman before it collapsed – he was in the private wealth management group. He told me he heard stories about Merrill Lynch high net worth brokers selling high yielding structured products to clients. He said they were slicing up the structured garbage that Merrill was stuck with – mortgage crap – that institutions and hedge funds wouldn’t take and packaging them into smaller parcels to dump into high net worth accounts. Something to think about there…

As conditions worsen in the real world economy and political system, the propaganda fabricated in an attempt to cover up the truth becomes more absurd.  Today’s retail sales report, prepared and released by the Census Bureau which in and of itself makes the numbers extraordinarily unreliable, showed a .6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} gain in retail sales in July from June.  As I’ll show below, not including the affects of inflation, in all likelihood retail sales declined in July.

The biggest component of the reported gain was auto sales, for which the Census Bureau attributed a 1.1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} gain over June.  While this correlates with the SAAR number reported at the beginning of the month, the number does not come close to matching the actual industry-reported sales, which showed a 7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} decline for the month of July.  Note: the SAAR calculation is fictional – it implies that auto sales, which are declining every month, will continue at the same rate as the rate measured in July.  Per the stark contrast between the Census Bureau number and the industry-reported number, the number reported by the Government is nothing short of fictional.

The automobile sales component represents 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the total retail sales report on a revenue basis.  If we give the Government the benefit of doubt and hold the dollar value of auto sales constant from June to July (remember, the industry is telling us sales declined sharply) and recalculated the retail sales report, we get a 0.03{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} gain in retail sales.

Another huge issue is the number recorded for building material and sales.  In the “not seasonally adjusted” column, the report shows a huge decline from June to July (a $1.3 billion drop from June to July.  But through the magic of seasonal adjustments , the unadjusted number is transformed in a $337 million decline.   Given the declining trend in housing starts and existing home sales, it would make sense that building and supply stores sold less in July vs. June.  But the Government does not want us to see it that way.

Yet another interesting number is in the restaurant sales category, which the Census Bureau tells us increased .3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in July from June.   Restaurant sales are also one of the largest components of retail sales, representing 12.1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of what was reported.   This number was diametrically opposed to the Black Box Intelligence private sector report for monthly restaurant sales, which showed a 2.8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} drop in restaurant sales in July (a 4.7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} drop in traffic).   The Census Bureau survey for total retail sales is based on 4,700 questionnaires mailed to retail businesses.  The Black Box restaurant survey is based on data compiled monthly from 41,000 restaurants.   We don’t know how many restaurants are surveyed and actually respond to the Government surveys.

Here’s the Census Bureau’s dirty little secret 

The sections highlighted in yellow are marked with an asterisk.  In the footnotes to the report, the Census Bureau discloses that the asterisk means that, “advance estimates are not available for this kind of business” (Retail Sales report).  In other words, a significant percentage of the Government’s retail sales report is based on guesstimates. Lick your index finger and stick it up in the political breeze to see which way you need to make the numbers lean.

Read More @ InvestmentResearchDynamics.com

Fed’s Dudley Drops Bombshell: Low Inflation “Actually Might Be a Good Thing”

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by Wolf Richter, Wolf Street:

QE unwind in September, “another rate hike later this year.”

The media have been talking themselves into a lather about how the less-than-2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} inflation would force the Fed to stop hiking rates. But William Dudley, president of the New York Fed and one of the most influential voices on the policy-setting Federal Open Markets Committee (FOMC), just dropped a stunning bombshell about low inflation – why it might be low and how that “actually might be a good thing.”

The kickoff for unwinding QE appears to be in the can. There’s unanimous support for it on the FOMC. It appears to be scheduled for the September meeting. The market has digested the coming “balance sheet normalization.” Stocks have risen and long-term yields have fallen, and financial conditions have eased further, which is the opposite of what the Fed wants to accomplish; it wants to tighten financial conditions. So it will keep tightening its policy until financial conditions are tightening.

QE was designed to produce the “wealth effect,” as Bernanke himself explained it to the public, where those with assets get wealthier and then spend some of that wealth in the real economy. Part one worked. Part two didn’t. Now the experiment is over and will be partially unwound. Asset holders are requested to hang on – that’s the message.

In his interview with the Associated Press (transcript), Dudley confirmed this. As the Fed allows its portfolio to “run down,” he said – dropping about $2 trillion of securities over the next few years – “the private sector has to absorb somewhat larger amounts of Treasury securities and agency mortgage-backed securities, that will probably put some modest upward pressure on long-term yields.”

So bond prices, which move in the opposite direction of yields, are going to decline. But no biggie; bond holders had it so good for so long.

And rate hikes?

He expects the economy to keep muddling through with growth at “around 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.” He said, “We’re still on the same trajectory we’ve been on for several years.” This growth is “sufficient to continue to tighten the labor market.” While inflation is “somewhat below our objective,” he expects “to see firmer wage gains, and that will ultimately filter into inflation moving up towards our 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} objective,” but “it’s going to take time.”

However, that below-objective inflation may not stop the rate hikes:

“Now the reason why I think you’d want to continue to gradually remove monetary policy accommodation, even with inflation somewhat below target, is that:

“One, monetary policy is still accommodative, so the level of short-term rates is pretty low, and

“Two — and this is probably even more important — financial conditions have been easing rather than tightening. So despite the fact that we’ve raised short-term interest rates, financial conditions are easier today than they were a year ago.

“The stock market is up, credit spreads have narrowed, the dollar has weakened, and those have more than offset the effects of somewhat higher short-term rates and the very modest increases that we’ve seen in longer-term yields.”

If the economic forecast evolves “in line” with his expectations, he said, he “would be in favor of doing another rate hike later this year.”

In other words, the market’s reaction to the Fed’s action – that stocks and bonds have risen and that spreads have narrowed since the Fed has started tightening, which is the opposite of what the Fed wants to accomplish – is a primary reason for further tightening. Low inflation, no problem.

That rate hike “later this year” would be at the December meeting, after kicking off the QE unwind at the September meeting. In this cycle, the Fed has only made policy changes at meetings that were followed by a press conference. The September and December meetings are the only such meetings left this year. The Fed is sticking to its plan.

Then he was challenged on inflation, which has been below the 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} target for a long time. What should the Fed do?

“So, I think the jury’s out of whether there is sort of structural, secular changes in place that are holding inflation lower on a sustained basis,” he said. And these changes have to do with the internet economy where price comparisons are instantly possible and the environment has become very price competitive:

“The distribution methods of how goods and services are provided have changed pretty dramatically. So this — and I think that’s probably eroding pricing power and brand loyalty. It’s possible that that could be putting downward pressure on inflation.

“But if that’s the case, that’s not really a bad thing. That means we can actually allow the economy to operate at a higher level potentially of resource utilization.

“So, I think the jury is out, whether this lags or is just going to take some time for it to show through, or whether we’re in a different regime.”

Read More @ WolfStreet.com

ANOTHER RAID BY THE CROOKED BANKERS: GOLD DOWN $11.00 AND SILVER DOWN 44 CENTS

from Harvey Organ, Harvey Organ Blog:

KIM AND TRUMP SILENT ON THE NORTH KOREAN POWDER KEG/CHINA REINS IN ITS SHADOW BANKING SECTOR AND WE SHOULD EXPECT BANK RUNS SHORTLY/CARNAGE IN THE USA RESTAURANT BUSINESS AND BRICKS AND MORTAR

GOLD: $1273.70  DOWN $11.00

Silver: $16.70  DOWN 44 cent(s)

Closing access prices:

Gold $1271.90

silver: $16.64

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: $1281.93 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1274.90

PREMIUM FIRST FIX:  $5.02

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1279.81

NY GOLD PRICE AT THE EXACT SAME TIME: $1274.15

Premium of Shanghai 2nd fix/NY:$5.66

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1274.60

NY PRICING AT THE EXACT SAME TIME: $1274.80 

LONDON SECOND GOLD FIX  10 AM: $1282.30

NY PRICING AT THE EXACT SAME TIME. $1282.30 

For comex gold:

AUGUST/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 26 NOTICE(S) FOR  2600  OZ.

TOTAL NOTICES SO FAR: 4547 FOR 454700 OZ (14.14 TONNES) 

For silver:

AUGUST

 

 70 NOTICES FILED TODAY FOR

 

350,000  OZ/

Total number of notices filed so far this month: 900 for 4,500,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

end

 

Today, the bankers succeeded in their raid on both gold and silver. The open interest in silver continues to fall despite a rise in price (yesterday) and it sure looks like banker capitulation as they try to extricate themselves from their mess. It will be important to see how much open interest in both gold and silver evaporated.  It will get the numbers late tonight  (after 11 pm) and I will insert them between the xxx’s

 

 

xxxxxxxxx

preliminary OI for tonight 11 pm est

 xxxxxxx

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY FELL AGAIN BY573 contracts from 189,478 DOWN TO 188,905 DESPITE THE  RISE IN THE PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (UP 6 CENT(S) AND THE FAILED RAID. SIMPLE EXPLANATION SAME STORY AS YESTERDAY: THE BANKERS HAVE CAPITULATED….THEY ARE TRYING TO COVER THEIR SHORTFALL AT HIGHER AND HIGHER PRICES. THE BANKERS ARE HAVING EXTREME DIFFICULTY IN SUPPLYING ADDITIONAL SHORT PAPER AND LONGS CONTINUE TO ADVANCE TAKING ON THE BANKER SHORTS. THE BATTLE OF WATERLOO WILL BE FAST APPROACHING

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.945 BILLION TO BE EXACT or 135{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 70 NOTICE(S) FOR 350,000OZ OF SILVER

In gold, the open interest FELL by A TINY 772 WITH the FALL in price of gold ($3.10 GAIN YESTERDAY.)  The new OI for the gold complex rests at 480,143. A raid was called upon by the bankers and it failed.  The bankers supplied the short paper but just as many longs entered the arena as banker shorts covered.  Thus a small gain in open interest.

we had: 26 notice(s) filed upon for 2600 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

Today, no changes in gold inventory:

Inventory rests tonight: 791.01 tonnes

IN THE LAST 22 TRADING DAYS: GLD SHEDS 45.96 TONNES YET GOLD IS HIGHER BY $35.85 . 

SLV

Today: : WE NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 335.825 MILLION OZ

 

end

.

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

1. Today, we had the open interest in silver FALL BY 573 contracts from 189,478 down to 188,905 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787). THE FALL IN OPEN INTEREST WAS ACCOMPANIED BY A SMALL RISE IN PRICE AND FOR THE FIRST TIME WE ARE WITNESSING BANKER CAPITULATION.  BANKERS ARE LOATHE TO SUPPLY NEW SHORT PAPER AND THE LONGS CONTINUE TO ENTER THE ARENA PURCHASING WHATEVER SILVER THEY CAN AND WILLING TO TAKE ON OUR CROOKED BANKERS. 

(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 MONDAY night/TUESDAY morning: Shanghai closed UP 13.90 POINTS OR 0.43{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}   / /Hang Sang CLOSED DOWN 75.27 POINTS OR 0.28{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} The Nikkei closed UP 216.21 POINTS OR 1.11{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Australia’s all ordinaires CLOSED UP 0.43{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed DOWN at 6.6817/Oil DOWN to 47.37 dollars per barrel for WTI and 50.36 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN , Offshore yuan trades  6.6930 yuan to the dollar vs 6.6817 for onshore yuan. NOW THE OFFSHORE IS WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY

Read More @ HarveyOrganBlog.com

Keiser Report: Trend reversals (E1110)

from RT:

Max & Stacy discuss Obamacare death spirals and towns left to die post-trade deals. In the second half, Max continues his interview with Gerald Celente of TrendsResearch.com about paradigm shifts: from cryptocurrencies to electric cars.

Audioblog #206-Gold’s Win-Win Scenarios, In The Upcoming, Historic Crypto-Currency Explosion

by Andy Hoffman, Miles Franklin:

Andrew (“Andy”) Hoffman, CFA joined Miles Franklin as Marketing Director in October 2011. For more than a decade, he was a U.S.-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his investment focus has been entirely on Precious Metals – and since 2006, has written free, public missives regarding gold, silver, and macroeconomics.  Prior to joining the company, he spent five years working as an Investor Relations officer or consultant to numerous junior mining companies.

Read More @ MilesFranklin.com