Tuesday, February 25, 2020

Bitcoin Isn’t the Bubble — The Global Financial System Is

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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

The day I found out it was all rigged

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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

Quantum Change in Gold Demand Continues – Precious Metals Supply-Demand Report

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by Keith Weiner, Acting-Man:

Fundamental Developments

In this New Year’s holiday shortened week, the price of gold moved up again, another $16 and silver another 29 cents. Or we should rather say the dollar moved down 0.03mg gold and 0.03 grams silver. It will make those who borrow to short the dollar happy…

Let’s take a look at the only true picture of the supply and demand fundamentals for the metals. But first, here are the charts of the prices of gold and silver, and the gold-silver ratio.

 Gold and silver prices in USD terms
Gold and silver prices in USD terms

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio dropped.

In this graph, we show both bid and offer prices for the gold-silver ratio. If you were to sell gold on the bid and buy silver at the ask, that is the lower bid price. Conversely, if you sold silver on the bid and bought gold at the offer, that is the higher offer price.

 Gold-silver ratio, bid and offer
Gold-silver ratio, bid and offer

For each metal, we will look at a graph of the basis and co-basis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and co-basis in red.

Here is the gold graph showing gold basis and gold price.

 Gold basis, co-basis and the USD priced in milligrams of gold
Gold basis, co-basis and the USD priced in milligrams of gold

Look at that quantum change after Christmas. The basis (i.e., the indicator of abundance) had peaked, and the co-basis (i.e. scarcity) had bottomed. Up until it reversed, those moves were tracking the price. As the price of gold was rising (the green line shows the inverse, the price of the dollar!), gold was initially becoming more abundant, less scarce.

But after Christmas, something snapped. Gold started to become less abundant as its price kept rising. This violates no economic law, though it has been a rare occurrence of late. Until Christmas week.

It should be no surprise that our Monetary Metals Gold Fundamental Price rose $29 this week, to $1,336.

Read More @ Acting-Man.com

 

Russia-China combined gold reserves could shake US dominance in global economy – expert tells RT

from RT:

The gold accumulated by China and Russia could be seen as part of a strategy to move away from international trade denominated in US dollars, according to Singapore’s BullionStar precious metals expert Ronan Manly.

Manly exclusively told RT that there is a shift occurring regarding the two countries building up their gold reserves, to perhaps returning to gold-backed currencies in the future and a move away from the global dominance of the US dollar, which is no longer supported by gold.

“China and Russia have both been aggressively accumulating their official gold reserves over the last 10 – 15 years,” he said, adding that only a decade ago each of them held around or less than 400 tons. “But now both these nations hold a combined 3670 tons of gold.”

“Interestingly, both Russia and China publicize and promote their accumulations of gold and publicly refer to gold as a strategic monetary asset. They make no secret of this. But on the flipside, the US does the opposite, and constantly downplays the strategic role of gold.”

According to Manly, for Russia and China gold is the only strategic monetary asset that could provide independence from the US dollar.

Manly said the sides could conceivably be holding a lot more gold than they declare in their official reserves due to many channels through which they could buy the precious metal.

Read More @ RT.com

Gold & Silver At A Critical Juncture As Both The Fed And The Cartel Get Busy With Their Prep Work

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from SilverDoctors:

SD Outlook: The Fed and the cartel may be busy in the kitchen doing their prep work all week long. Here’s why…

Now that everybody is back for a full week of market action, the Fed will attempt to make it crystal clear just who is in charge.

As such, we’ve got Fed Heads galore coming in strides all week long, starting with a buy one get one free today:

Rounding out the latter half of the week we have afternoon speeches:

This makes sense from the Fed’s point-of-view, because the most significant data releases are scheduled for Thursday and Friday mornings, so the Fed will be able to clarify or massage an explanation of one of the data releases, such as the Producer Price Index (the cost that producers pay for raw materials), the Consumer Price Index (the price us consumers pay for finished goods and services) and Retail Sales (how awesome all the retailers are doing selling us all stuff we don’t need with credit we can’t afford) of for some reason the “markets” don’t like what they see in the numbers.

The thing about the events calendar this week is that it is commonplace to have this amount of Fed activity because it is simply part of their “jawboning” of the markets.

On the other hand, when the Fed has their FOMC meetings, or when the Fed Chair is giving (soon to be his) Humphrey Hawkins congressional Q&A show session, they don’t send out a barrage of central bankers to talk the markets because the data releases do it for them. A full slot of Fed speeches, like this week, fills the gaps between major market moving data releases.

The markets are so delicate that not one hour can go by without ESF and Fed direct intervention.

Last Friday the charts were setting up to show that a pullback could be imminent, and it appears this is still the case, though putting things into perspective, it is looking less like we will be getting a natural pull-back and more like we’ll be getting some good old-fashioned strong arming.

Why?

If the Yuan based crude oil futures contracts is indeed going to launch next week, the cartel is going to need to stay on top of their game this week in case there are swift and notable moves in gold & silver.

So with silver, we can see that whole number support is nearly where the 200-day moving average can be found:

While I took a lot of heat on Friday for saying we could see a pullback here, it is still looking that way on the charts. Let’s hope silver can stay above the 200-day. Regardless, if silver does nothing this week but consolidate, that could suffice for our pullback because it would be consolidation over time. Said differently, price is not the only thing that can re-balance the market by shaking out long traders and bring new ones in, but time can do it as well.

Read More @ SilverDoctors.com

GOLD CONTINUES TO REBOUND DESPITE CONSTANT CARTEL WHACKING: GOLD DOWN $1.40

by Harvey Organ, Harvey Organ Blog:

SILVER IS DOWN 11 CENTS. GOLD WITNESSES ANOTHER BIG 6,000 PLUS GOLD EFP/SILVER HAS 1723 EFP NOTICES/GOOD NUMBER OF SWAMP STORIES TONIGHT

Glad to be back as I was in Israel over the holidays.

I will resume my normal detailed commentary

 

GOLD: $1319.50 DOWN $1.40

Silver: $17.12 DOWN 11 cents

Closing access prices:

Gold $1320.50

silver: $17.11

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: $1323.92 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1320.00

PREMIUM FIRST FIX: $3.92

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SECOND SHANGHAI GOLD FIX: $1323.92

NY GOLD PRICE AT THE EXACT SAME TIME: $1318.25

Premium of Shanghai 2nd fix/NY:$5.67

SHANGHAI REJECTS NY /LONDON PRICING OF GOLD

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LONDON FIRST GOLD FIX: 5:30 am est $1380.80

NY PRICING AT THE EXACT SAME TIME: $1318.75

LONDON SECOND GOLD FIX 10 AM: $1268.85

NY PRICING AT THE EXACT SAME TIME. 1268.50??

For comex gold:

JANUARY/

NUMBER OF NOTICES FILED TODAY FOR JANUARY CONTRACT: 0 NOTICE(S) FOR nil OZ.

TOTAL NOTICES SO FAR: 242 FOR 24200 OZ (0.7527 TONNES),

For silver:

jANUARY

0 NOTICE(S) FILED TODAY FOR

nil OZ/

Total number of notices filed so far this month: 507 for 2,535,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $15,392/OFFER $15,512 DOWN $1155 (morning)

 Bitcoin: BID   14,763/OFFER  $14,871 DOWN  $1800(CLOSING)

 

end

Let us have a look at the data for today

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In silver, the total open interest  ROSE BY TINY  165 contracts from 194,264 RISING TO 194,429 WITH FRIDAY’S TINY 4 CENT RISE IN SILVER PRICING.  WE HAD ZERO COMEX LIQUIDATION BUT WITHOUT A DOUBT WE WITNESSED ANOTHER MAJOR BANK SHORT- COVERING OPERATION. NOT ONLY THAT , WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: A CONSIDERABLE 1721 EFP’S FOR MARCH (AND ZERO FOR OTHER MONTHS) AND THUS TOTAL ISSUANCE OF 1721 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE A MAJOR PLAYER TAKING ON THE BANKS AT THE COMEX. STILL, WITH THE TRANSFER OF 1721 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. YESTERDAY WITNESSED  EFP’S FOR SILVER ISSUED. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. I BELIEVE THAT WE MUST HAVE HAD SOME MAJOR BANKER SHORT COVERING AGAIN TODAY.

ACCUMULATION FOR EFP’S/SILVER/ STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY:

17,931 CONTRACTS (FOR 6 TRADING DAYS TOTAL 17,931 CONTRACTS OR 89.66 MILLION OZ: AVERAGE PER DAY: 2988 CONTRACTS OR 14.94 MILLION OZ/DAY)

RESULT: A SMALL SIZED GAIN IN OI COMEX DESPITE THE TINY 4 CENT RISE IN SILVER PRICE WHICH USUALLY INDICATES HUGE BANKER SHORT-COVERING. WE ALSO HAD A FAIR SIZED  EFP ISSUANCE OF 1721 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS.  FROM THE CME DATA 1721 EFP’S WERE ISSUED FOR TODAY (FOR MARCH EFP’S AND NONE FOR ALL OTHER MONTHS) FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE REALLY GAINED 1886 OI CONTRACTS i.e. 1721 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 165 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE TINY RISE IN PRICE OF SILVER BY 4 CENTS AND A CLOSING PRICE OF $17.23 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A GOOD AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.9720 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JANUARY MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER

In gold, the open interest ROSE BY AN HUGE SIZED 9,128 CONTRACTS UP TO 551,441 WITH THE SMALL RISE IN PRICE OF GOLD WITH FRIDAY’S TRADING ($1.40). IN ANOTHER HUGE DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED YESTERDAY FOR TODAY AND IT TOTALED A GOOD SIZED  6115 CONTRACTS OF WHICH THE MONTH OF FEBRUARY SAW 6115 CONTRACTS AND APRIL SAW THE ISSUANCE OF 0 CONTRACTS.  The new OI for the gold complex rests at 551,441.DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR JANUARY. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE ANOTHER HUMONGOUS GAIN OF 15,243 OI CONTRACTS: 9.128 OI CONTRACTS INCREASED AT THE COMEX AND A GOOD SIZED 6115 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.

FRIDAY, WE HAD 17,213 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY STARTING WITH FIRST DAY NOTICE: 57,605 CONTRACTS OR 5.760 MILLION OZ OR 179.16 TONNES (6 TRADING DAYS AND THUS AVERAGING: 9,600.8 EFP CONTRACTS PER TRADING DAY OR 960,000 OZ/DAY)

Result: A STRONG SIZED INCREASE IN OI WITH THE SMALL SIZED RISE IN PRICE IN GOLD TRADING ON YESTERDAY ($1.40). WE HAD ANOTHER FAIR SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6115. THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 6115 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 15,243 contracts:

6115 CONTRACTS MOVE TO LONDON AND  9128 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the gain in total oi equates to 47.40 TONNES)

we had: 0 notice(s) filed upon for NIL oz of gold.

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

GLD: with gold up for 11 consecutive days, we still have no changes in gold inventory

Today, with gold down a tiny $1.40 after rising for 12 straight days, gold inventory declines by a huge 1.44 tonnes today/

Inventory rests tonight: 834.86 tonnes.

SLV/ 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

INVENTORY RESTS AT 318.423 MILLION OZ/

end

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

1. Today, we had the open interest in silver ROSE BY A SMALL 165 contracts from 194,264 UP TO 194,429 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE TINY RISE IN PRICE OF SILVER TO THE TUNE OF 4 CENTS  ON FRIDAY.  WE HAD WITHOUT A DOUBT ANOTHER MAJOR SHORT COVERING FROM OUR BANKERS AS THEY HAVE CAPITULATED. NOT ONLY THAT BUT OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 1721 PRIVATE EFP’S FOR MARCH (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM).  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD NO COMEX SILVER COMEX LIQUIDATION. BUT, IF WE TAKE THE SMALL OI GAIN AT THE COMEX OF 165 CONTRACTS TO THE 1721 OI TRANSFERRED TO LONDON THROUGH EFP’S WE OBTAIN A GAIN OF 1886 OPEN INTEREST CONTRACTS DESPITE THE MAJOR BANKER SHORT COVERING. WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ: 9.43 MILLION OZ!!!

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE TINY SIZED RISE OF 4 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). BUT WE ALSO HAD ANOTHER 1721 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR JANUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(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 SUNDAY night/MONDAY morning: Shanghai closed UP 17.73 points or 0.53% /Hang Sang CLOSED UP 84.89 pts or 0.28% / The Nikkei closed UP 208.20 POINTS OR 0.89%/Australia’s all ordinaires CLOSED UP 0.11%/Chinese yuan (ONSHORE) closed UP at 6.4974/Oil UP to 61.90 dollars per barrel for WTI and 67.85 for Brent. Stocks in Europe OPENED MOSTLY GREEN.   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.4974. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.4943 //ONSHORE YUAN  STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS  HAPPY TODAY.(GOOD MARKETS)

Read More @ HarveyOrganBlog.com

Melt-up, Up, and Away

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by Michael J. Ballanger, The AU Report:

While the moniker for this missive is “Gold and Gold Miners,” I just sit back in absolute AWE as the global equity investors (otherwise known as “Stock jockeys”) have decided that “cash is TRASH!” and despite a massive “miss” in the employment numbers this morning, within seconds of the release, the spin doctors manning the equity trading desks deemed that number “bullish” because it is less inflationary and may cause the Fed to “pause.” So dollar-yen rallies, the USD index has a minor pop, gold sells off, and stocks come out of the gate up another 0.25% with all of the bubblicious bravado of a high school quarterback getting his first win.

The chart of the S&P shown below is a classic illustration of what occurs when global central banks open up the monetary spigots and flood the world financial markets with unchallenged credit and liability-free liquidity. It is this “inflationary spiral” that enhances “the replacement value of equities” and sends literally everything skyward. Since the two biggest collateral risks to the banks are real estate and stock buyback loans, it is no surprise that this tsunami of phony, counterfeit currency of all colors indiscriminate of flag has not only mitigated those risks but also floated the underlying collateral into the ozone layer. Don’t forget that even Ben Bernanke admitted that no one could predict the outcome of all of that “quantitative easing” that saved JPM and Goldman and Citi and BofA from disappearing from the face of the earth and now we are seeing what currency debasement exercises are truly all about. Record highs EVERYWHERE (except gold and silver) as monetary inflation sows its price inflation seeds.


My buddy David Chapman was the first to predict this final-stage blow-off top or “melt-up” and is quick to remind me that RSI has stayed in the 70s for the S&P and NASDAQ for many, many weeks before succumbing to profit-taking and that if this truly is a new bull move for gold, the HUI [Amex Gold BUGS Index] (and the Gold and Gold Miner ETFs) can too stay elevated above 70 for quite awhile. I can’t recall the period of time when the RSI resided in or neared 70 for more than a few weeks before correcting but the S&P chart illustrates overbought conditions starting in the typically weak October period with RSI breaking above 70 six times by year-end. That, my friends, was too much liquidity chasing too few stocks—and it isn’t the “too few stocks” that should be deemed the scapegoat.

David Tepper came out this morning with the “stocks are as cheap today as they were in 2016” mantra, citing “extraordinarily low interest rates” and “low inflation” as the reasons for this call but as I hurled a half-eaten Western sandwich at the monitor sending Fido and the missus running for the sanctuary of locked powder rooms and subterranean foxholes, the sounds of exploding coffee mugs and shattering ceramic plates reverberating throughout the halls, I was immediately screaming back at him that he should “come down off that cloud of reefer smoke” and recognize that low yields are a function of one thing and one thing alone—government intervention. The “low inflation” meme is a function of manufactured CPI and PPI numbers not even remotely close to reality. However, stocks are now gunning for Dow 26,000 so my emotive protests and vitriolic outbursts are useless and a waste of time and breath. I am NOT playing in the Wall Street cesspool and there is NOTHING that will deter me.

Another headline that caught me off guard tonight was the ZeroHedge article stating that incoming Fed Chairman Jerome Powell has admitted that “The Fed Has A Short Volatility Position” and it can be accessed here. This incredible admission basically throws down the gauntlet and says “Do we manipulate markets? Of COURSE we do or stocks would CRASH!” Read the part in the article where he says that Fed behavior is “encouraging risk-taking” and then let’s have a debate over why market forecasters (including technical analysts) stand zero chance in calling a top to this current fiasco. Not one CNBC commentator could ever offer anything of value other than predicting when the Fed was going to cease and desist in tampering with what should be free market economics. Earnings, cash flow, price-to-book, price-to-sales, dividends—wrap them all up and throw them into the waste bin of stock market analysis whose traditional tools have gone the way of the buggy whip, the corset, and the trusted Hollywood executive.

I thought to myself that the very second that Powell allowed that statement to be entered into the FOMC minutes, it was the final thumb-nosing of the die-hard free market advocates like me. The blatancy of that admission is due now to be followed up with a comment like “Why on earth would anyone not want to own stocks?” And Donald Trumps tweeting that “Dow 30,000 is next” really sounds like the passions of a true swamp-drainer, doesn’t it? Lastly, to read all of this and maintain that gold and silver are NOT interfered with by the 33 Liberty Street robots is to maintain that the world is flat and Trump still has all his hair.

Read More @ TheAUReport.com

A Tale of Two Americas: Where the Rich Get Richer and the Poor Go to Jail

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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

Chris Martenson – The Untold Oil Story

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