from The Money GPS:
by Michael Krieger, Liberty Blitzkrieg:
Last week, I was offered an opportunity to write an opinion piece for The Hill. I took advantage of the offer and put something together addressing the whole “is Bitcoin a bubble” debate, and I’m pleased to say it was published earlier this morning.
It’s important to me that I don’t just preach to the choir when it comes to my unconventional views, and I hope this will help me reach a wider and more mainstream audience.
Below are a couple brief excerpts from the piece, published in full at The Hill:
For one thing, bubbles don’t do what bitcoin has done since its inception in 2009…They don’t come right back a couple of years later and soar again to a new price 10 times greater than the previous bubble’s high, which is what bitcoin has done after each one of its three or four previous “bubbles” burst.
The real bubble is larger and far more dangerous, and it lies at the heart of the global financial system. If anything, bitcoin and other crypto assets are merely providing an escape hatch from this legacy system, while simultaneously offering an opportunity for a better and more decentralized future.
Read More @ LibertyBlitzkrieg.com
by Simon Black, SovereignMan:
May 6, 2010 started off as a pretty boring day.
The most exciting stories from the morning’s newspapers were reviews of the upcoming Iron Man 2 film.
But all that changed at around 2:45pm when, without warning, the stock market crashed, and the Dow Jones Industrial Average dropped 1,000 points within minutes.
It was unprecedented… especially because there was absolutely no reason why stocks should have fallen so much.
It’s not like Apple had declared bankruptcy, or the Central Bank had jacked interest rates up to 50%. Up until that point it had been pretty quiet in the markets.
As it turned out, the reason behind the crash was that the investment banks’ fancy trading algorithms had gone completely haywire.
Several of the largest banks had developed autonomous software that was capable of trading billions of dollars without the need for human beings.
And at 2:45PM that day, their software started to fail… inexplicably selling stocks to the point that prices collapsed nearly 10% in minutes.
They called it the Flash Crash, and, even though stocks had largely recovered by the end of the day, the banks lost an enormous amount of money.
Then something interesting happened. Within a few days, the major exchanges announced that they would CANCEL many of the trades that took place during the Flash Crash window.
In other words, they were handing the banks their money back.
I never forgot that moment… because I received an email from my broker informing me of the news.
They were canceling a profitable trade that I had placed during the Flash Crash window, effectively giving it back to the banks.
When the banks’ trading algorithms performed well and they all made money, the profit was theirs to keep.
But when the software failed and the banks lost money from their own mistakes, the exchanges gave them a do-over.
Sadly that episode only begins to scratch the surface of all the ways that the market is rigged against the little guy– high frequency traders, brokerage rehypothecation, manipulation of interest rates, exchange rates, and asset prices, etc.
It’s not to say that there’s no opportunity in the market for individual investors–
Owning shares of a successful business that’s run by honest, talented executives can be a fantastic investment.
The key lesson for me, though, was that I should NOT buy unless the odds of success are remarkably in my favor… or as Jim Rogers says, to wait until the money is just lying in the corner, and all I have to do is walk over and pick it up.
Coincidentally we’re having this conversation at a time when stocks (at least in the United States) have hit fresh, record highs.
The Dow Jones Industrial Average passed 25,000 last week, and the NASDAQ Composite Index hit 7,000.
By themselves these numbers are meaningless, except to suggest that stock prices have never been higher.
The numbers that really matter are the valuations, i.e. how expensive is a company’s share price relative to its earnings, assets, sales, etc.?
To put things in perspective, the average Price/Earnings ratio across the companies in the S&P 500 Index is now 26.36.
If you flip that number around, it means that the current profits of the average company in the S&P 500 are just 3.8% of its share price.
That’s pretty pitiful; it suggests that investors are paying way too much for shares, and receiving far too little profit in return.
Historically, today’s level is nearly 70% more expensive than the S&P 500’s long-term average Price/Earnings ratio.
And the only other times in history that it’s consistently been this high were just prior to the 2008 crash, the 2000 crash, and the 1929 crash.
The story is the same looking at other indicators.
The Cyclically-Adjusted Price/Earnings Ratio (or CAPE ratio) which adjusts earnings for inflation over a 10-year business cycle, is now 33.27, more than DOUBLE its long-term average.
In fact it’s only ever been higher ONCE in history– during the dot-com bubble in the late 1990s.
Read More @ SovereignMan.com
from John W. Whitehead, Rutherford Institute:
“It is said that no one truly knows a nation until one has been inside its jails. A nation should not be judged by how it treats its highest citizens, but its lowest ones.” ― Nelson Mandela
This is the tale of two Americas, where the rich get richer and the poor go to jail.
Aided and abetted by the likes of Attorney General Jeff Sessions—a man who wouldn’t recognize the Constitution if it smacked him in the face—the American dream has become the American scheme: the rich are getting richer and more powerful, while anyone who doesn’t belong to the power elite gets poorer and more powerless to do anything about the nation’s steady slide towards fascism, authoritarianism and a profit-driven police state.
Not content to merely pander to law enforcement and add to its military largesse with weaponry and equipment designed for war, Sessions has made a concerted effort to expand the police state’s power to search, strip, seize, raid, steal from, arrest and jail Americans for any infraction, no matter how insignificant.
Now Sessions has given state courts the green light to resume their practice of jailing individuals who are unable to pay the hefty fines imposed by the American police state. In doing so, Sessions has once again shown himself to be not only a shill for the Deep State but an enemy of the people.
First, some background on debtors’ prisons, which jail people who cannot afford to pay the exorbitant fines imposed on them by courts and other government agencies.
Congress banned debtors’ prisons in 1833.
In 1983, the U.S. Supreme Court ruled the practice to be unconstitutional under the Fourteenth Amendment’s Equal Protection clause.
“Despite prior attempts on the federal level and across the country to prevent the profound injustice of locking people in cages because they are too poor to pay a debt,” concludes The Atlantic, “the practice persists every day.”
Where things began to change, according to The Marshall Project, was with the rise of “mass incarceration.” As attorney Alec Karakatsanis stated, “In the 1970s and 1980s, we started to imprison more people for lesser crimes. In the process, we were lowering our standards for what constituted an offense deserving of imprisonment, and, more broadly, we were losing our sense of how serious, how truly serious, it is to incarcerate. If we can imprison for possession of marijuana, why can’t we imprison for not paying back a loan?”
By the late 1980s and early 90s, “there was a dramatic increase in the number of statutes listing a prison term as a possible sentence for failure to repay criminal-justice debt.” During the 2000s, the courts started cashing in big-time “by using the threat of jail time – established in those statutes – to squeeze cash out of small-time debtors.”
Fast-forward to the present day which finds us saddled with not only profit-driven private prisons and a prison-industrial complex but also, as investigative reporter Eli Hager notes, “the birth of a new brand of ‘offender-funded’ justice [which] has created a market for private probation companies. Purporting to save taxpayer dollars, these outfits force the offenders themselves to foot the bill for parole, reentry, drug rehab, electronic monitoring, and other services (some of which are not even assigned by a judge). When the offenders can’t pay for all of this, they may be jailed – even if they have already served their time for the offense.”
Follow the money trail. It always points the way.
Whether you’re talking about the government’s war on terrorism, the war on drugs, or some other phantom danger dreamed up by enterprising bureaucrats, there is always a profit-incentive involved.
The same goes for the war on crime.
At one time, the American penal system operated under the idea that dangerous criminals needed to be put under lock and key in order to protect society. Today, the flawed yet retributive American “system of justice” is being replaced by an even more flawed and insidious form of mass punishment based upon profit and expediency.
Sessions’ latest gambit plays right into the hands of those who make a profit by jailing Americans.
Sharnalle Mitchell was one such victim of a system for whom the plight of the average American is measured in dollars and cents. As the Harvard Law Review recounts:
On January 26, 2014, Sharnalle Mitchell was with her children in Montgomery, Alabama when police showed up at her home to arrest her. Mitchell was not accused of a crime. Instead, the police came to her home because she had not fully paid a traffic ticket from 2010. The single mother was handcuffed in front of her children (aged one and four) and taken to jail. She was ordered to either pay $2,800 or sit her debt out in jail at a rate of fifty dollars a day for fifty-nine days. Unable to pay, Mitchell wrote out the numbers one to fifty-eight on the back of her court documents and began counting days.
This is not justice.
This is yet another example of how greed and profit-incentives have not only perverted policing in America but have corrupted the entire criminal justice system.
As the Harvard Law Review concludes:
[A]s policing becomes a way to generate revenue, police start to “see the people they’re supposed to be serving not as citizens with rights, but as potential sources of revenue, as lawbreakers to be caught.” This approach creates a fugitive underclass on the run from police not to hide illicit activity but to avoid arrest for debt or seizure of their purportedly suspicious assets… In turn, communities … begin to see police not as trusted partners but as an occupying army constantly harassing them to raise money to pay their salaries and buy new weapons. This needs to end.
Unfortunately, the criminal justice system has been operating as a for-profit enterprise for years now, covertly padding its pockets through penalty-riddled programs aimed at maximizing revenue rather than ensuring public safety.
All of those seemingly hard-working police officers and code-enforcement officers and truancy officers and traffic cops handing out ticket after ticket after ticket: they’re not working to make your communities safer—they’ve got quotas to fill.
Read More @ Rutherford.org
by Kerry Lutz, Financial Survival Network:
Chris Martenson joined us for another update…
in 2017 new oil discoveries hit an all time low. Prices are up over $60 the barrel and they could go a lot higher. Chris believes that there’s just not enough in the pipeline to satisfy world demand. Same with many other things that society demands. There are limits to our ability to produce in many areas. Challenges are ahead and if there’s another crash, all bets are off.
Click HERE to listen
Read More @ FinancialSurvivalNetwork.com