Tuesday, July 7, 2020

Get Ready for the “100-Year Flood”


by Jim Rickards, Daily Reckoning:

One of the long-standing reasons to own physical gold or invest in gold mining shares is to hedge geopolitical risk or the risk of natural disaster.

From the Black Death in the 14th century to the Thirty Years’ War in the 17th century to the world wars of the 20th century, gold has been a reliable store of wealth. There is no reason to believe that such existential events are no longer a danger.

Below is a copy of Albrecht Dürer’s woodcut titled The Four Horsemen of the Apocalypse (1498). That title is a reference to the New Testament Book of Revelation 6:1-8. Conventionally the horsemen are called Conquest, War, Famine and Death, but those names are subject to scholarly debate. The “Famine” passage refers literally to high prices for food, which could also be taken as a reference to financial ruin through inflation.

Here’s How Systems (and Nations) Fail

by Charles Hugh Smith, Of Two Minds:

These embedded processes strip away autonomy, equating compliance with effectiveness even as the processes become increasingly counter-productive and wasteful.

Would any sane person choose America’s broken healthcare system over a cheaper, more effective alternative? Let’s see: the current system costs twice as much per person as the healthcare systems of our developed-world competitors, a medication to treat infantile spasms costs $8 per vial in Europe and $38,892 in the U.S., and by any broad measure, the health of the U.S. populace is declining.

This is how systems and nations fail: nobody chose the current broken system, but now it can’t be changed because the incentive structure locks in embedded processes that enrich self-serving insiders at the expense of the system, nation and its populace.

America’s Largest Creditor: Will China End U.S. Trade War with a “Debt Reset”, by Dumping U.S. Treasury Holdings?

by Chris Marcus, Global Research:

One of the reasons why it has seemed so bizarre that the United States would engage in a trade war with its largest creditor in China, is that China has a move that the United States simply can’t defend against.

In terms of any sort of engagement between the United States and China, for at least the last decade or so, it’s always seemed to me that China has an incredibly large amount of leverage over the United States. To the degree that if push comes to shove, China has available actions that the U.S. simply has no answer to.

Oil to Skyrocket to $200 Per Barrel -UN Policy Responsible for Coming Global Economic Collapse

by Dave Hodges, The Common Sense Show:

In the summer of 2007, I was returning to Arizona from Colorado. We arrived at about midnight, very tired and very low on gas. And to our dismay, we could not find an open gas station. Even the 24 hour gas stations were out of gas, except for the 4th station we visited on that night. After filling up, we returned finally arrived at our home, breathed a collective sigh of relief and promptly went to bed.

The next morning we were discussing how the price of gas was on its way to doubling after just a week of increases. I inaccurately predicted that the escalation of gas prices was going to continue and a global war was on the horizon. I stated that the price of gas would cause an inflationary spiral in food costs. Water, that had to be shipped, would become cost prohibitive. Water wars would develop as the number one resource to fight over. Oil would become the number two resource to fight over because the increased travel expense, would make oil cost prohibitive for most entities. The just-in-time deliveries would stop. There would be massive food shortages as well. People could afford to drive to work. The economy would enter into a tail spin.

Valuing Gold In A World Awash With Dollars


by Alasdair Macleod, GoldMoney:


In this article I point to the pressures on the Fed to moderate monetary policy, but that will only affect the timing of the next cyclical credit crisis. That is going to happen anyway, triggered by the Fed or even a foreign central bank. In the very short term, a tendency to moderate monetary policy might allow the gold price to recover from its recent battering.

Unlike the last credit crisis when the dollar rose sharply in a general panic for safety, on the next crisis, the dollar is likely to fall substantially. The reason is that foreign ownership of dollar investments (typically in US Treasuries) appears greatly overextended, and an additional $4 trillion of liquidity is in the wrong (non-US) hands. This is likely to be unloaded during a general credit crisis, driving the dollar lower.


by Egon Von Greyerz, Gold Switzerland:

“The winner takes it all, the loser standing small” (an Abba song) is the next phase in the world economy. Sadly there will be few real winners since the world and its people will be the loser in the coming phase of destruction of asset values, implosion of debts as well as a breakdown of the fabric of society.

I do realise that this all sounds very gloomy, and also that bearers of bad news are not popular. But the world is now facing an inevitable breakdown of the biggest debt and asset bubble in history. It is absolutely certain that this will happen, so it is in my mind not a question of if but only when.

Keiser Report: How much do Wall St. managers cost US taxpayers? (E1258)

from RT:

In the second half, Max interviews author and banker, Mitch Feierstein of PlanetPonzi.com, about Trump’s trade war, stock buybacks and the latest in the bond markets.

Carmageddon in Detroit


by Wolf Richter, Wolf Street:

Suddenly it gets ugly – but these are still the good times.

It’s confession time among the Detroit automakers: GM, Fiat Chrysler, and Ford all got ugly, in unison, in one day, something we haven’t seen since the Financial Crisis.

Back at the end of May, GM shares (GM) were trading at $38 when it announced that SoftBank, the Japanese company that is blowing borrowed billions left and right, would invest $2.25 billion in GM’s self-driving car unit Cruise. By June 11, GM shares had shot up to $45. But this morning they’re at $37.16. That’s a 17% plunge from June 11, including the 5% drop Wednesday and today.

Fed Concerns About Growth AND Inflation?!

by Chris Marcus, Miles Franklin:

Federal Reserve chairman Jerome Powell gave his latest economic update last week, and his assessment that he’s concerned about both growth and inflation means that the case for investing in precious metals is as strong as ever.

Federal Reserve Chairman Jerome Powell delivered an upbeat assessment of the economy and said it justified continued interest rate increases. But he opened the door to a potential policy shift and outlined risks if escalating trade tensions result in permanently higher tariffs.

The Fed expects recent tax cuts and an increase in federal spending to boost spending and investment at a time when the labor market is already tight. This has put officials on the lookout for signs the economy could be overheating.


by Harvey Organ, Harvey Organ Blog: