Tuesday, September 17, 2019

A Quarter Trillion Dollars In US Savings Was Just “Wiped Away”

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from ZeroHedge

As part of its historical revision to GDP, the BEA also had to adjust personal income and spending, with the full results released in today’s July report. What it revealed was striking: over the revised period, disposable personal income for US household was slashed cumulatively by over $120 billion to just under $14.4 trillion, while spending was revised higher by $105 billion, to just above $13.8 trillion. There were two immediate consequences of this result.

First, as the following table shows, while government pay has remained roughly flat over the past 3 years, growing in the mid-2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to mid 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} range, wages and salaries for private workers have been steadily declining as the blue line below shows, and after hitting a 4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} Y/Y growth in February, wage growth has slumped to just 2.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in June, the lowest since January 2014 when excluding the one-time sharp swoon observed at the end of 2016.

But a more troubling aspect of today’s revision is what the drop in income and burst in spending means for the average household’s bank account: following the latest annual revision, what until last month was a 5.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} personal saving rate was revised sharply lower as a result of the ongoing downward historical adjustment to personal income and upward adjustment to spending, to only 3.8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

In dollar terms, this revision means that a quarter trillion dollars, or $226.3 billion, in savings was just “wiped away” from US households – if only in some computer deep in the bowels of the BEA buildings –  who as a result have that much less purchasing power, and following the revision the total personal saving in the US as calculated by the BEA is now down to only $546 billion, down from $791 billion before the revision.

Read More @ ZeroHedge.com

SENATOR LINDSAY GRAHAM: “USA IS PREPARED TO STRIKE NORTH KOREA”/GOLD UP $4.95 BUT SILVER FLAT

by Harvey Organ, Harvey Organ Blog

GOLD AND SILVER EQUITY SHARES FALL AGAIN/CHAOS RUNS SUPREME IN VENEZUELA/USA SANCTIONS ONLY MADURO SO FAR/GENERAL MOTORS REPORTS HUGE DROP IN AUTOS/ALSO USA REPORTS BIG DROP IN CONSTRUCTION SPENDING

In silver, the total open interest surprisingly  ROSE BY 862 contracts from 206,781 up to 207,643 WITH THE GOOD RISE IN PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (UP 9 CENT(S). IT SURE LOOKS LIKE BOTH THE SPECULATOR SHORTS AND THE BANKER SHORTS ARE HAVING SEVERE PROBLEMS TRYING TO COVER THEIR SHORTFALL BUT IT IS TO NO AVAIL. THE LONGS REMAIN STOIC AND NOTHING WILL BUDGE OUR SILVER LEAVES FROM DEPARTING OUR SILVER TREE. TODAY’S TRADING IS EVIDENCE OF THAT

 In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.038 BILLION TO BE EXACT or 148{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 71 NOTICE(S) FOR 355,000OZ OF SILVER

In gold, the open interest fell by 2,686 with the fall in price of gold to the tune of $1.60 yesterday.  The new OI for the gold complex rests at 436,962. Yesterday we had some banker short covering but it was minimal and this was accompanied by some longs entering the arena sensing danger due to the firing of that ICBM missile by North Korea. The shorts tried their best on the last day of options expiry to nullify any gains from option traders. The result a small open interest fall with that fall in price.

we had, ON second DAY NOTICE: 1309 notice(s) filed upon for 130,900 oz of gold.

Read More @ HarveyOrganBlog.com

Precious Metals And Bitcoin-Twin Destroyers Of The Fiat Regime, Part lll

by Andy Hoffman, Miles Franklin

After Whirlybird Janet’s “ding dong, the Fed is dead” speech 2½ weeks ago, I predicted the “final currency war” I first warned of 4½ years ago would be taken to Defcon 1 – as all Central banks aggressively respond to the America’s increasingly inflationary monetary policy; particularly, after its “low interest rate person” President installs Yellen’s replacement early next year.  And lo and behold, last night’s Royal Bank of Australia policy statement “warned” that a stronger Aussie dollar would “contribute to subdued price pressures”; as it was “weighing on the outlook for output and employment”; which in turn, would “result in a slower pick-up in economic activity and inflation than currently forecast.”  In other words, its GAME ON in the global race to debase; simultaneous with, care of the gold Cartel, the lowest-ever inflation adjusted Precious Metal prices; and plunging gold and silver  production, as Steve St. Angelo pointed out last night – of how Chilean silver production is down a stunning 32{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-over-year.

Irrespective, the dollar continues to plunge to lows last seen more than a year ago; as now that the “reserve currency” issuer has made it clear that additional rate hikes aren’t happening; and likely, any hope of a balance sheet “exit strategy”; essentially nothing the administrators of “lesser fiat toilet papers” say or do matters.  Which is why it was so irritating watching PM’s yesterday, amidst maniacal Cartel capping featuring the time-honored DLITG, or “don’t let it turn green” algorithm.  And thus, why Precious Metal holders (like myself) become increasingly angry with each passing day; not just for the financial damage done to us personally, but the political, economic, and social damage incurred on the “99{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528},” for the benefit of the 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.  Which is why, per today’s second follow-up to May 2016’s “Precious Metals and Bitcoin – Twin Destroyers of the Fiat Regime,” I am so excited about the dramatic, generational impact of crypto-currency.

On the eve of this extremely important challenge for Bitcoin – i.e., the “Bitcoin Cash” hard fork that is anticipated to occur less than an hour from now, at 8:20 AM EST (ironically, the same time as the COMEX open) – I attended the Denver Bitcoin Society meetup, where I was honored to kick off the meeting with a few words.  Which were, that in my role as Marketing Director of one of the nation’s oldest, most trusted bullion dealers, I am proud to be the biggest Bitcoin advocate in the Precious Metal community.  The reason being, that Bitcoin’s technology is so powerful, it may well serve as the “straw” that finally broke the “camel’s back” of fiat currency.  Which, as you might imagine, drew a rousing round of applause; given how, like Precious Metal advocates, the principal reason Bitcoiners “hoddle” (i.e. hold) Bitcoin is its perceived ability to serve as a gold-like store of value.

Yes, on the same day “BIP 148,” or the “User Activated Soft Fork” symbolically activated – i.e., the people’s response to “big blockers”’ attempt to commandeer the network; Bitcoin Cash’s success – or more likely, failure – will in many ways, determine the pace of adoption of the real Bitcoin.  If “BCC” fails to gain traction, as I anticipate, next week’s SegWit, or Segregated Witness protocol upgrade of the real Bitcoin will likely serve as a major positive catalyst for the sound money movement – as discussed in last week’s “Bitcoin SegWit activation – the gold Cartel’s worst nightmare.”  As whether Bitcoin becomes the world’s day-to-day, utilitarian currency of choice, the trend toward decentralization as the future of monetary value will dramatically accelerate.

As I wrote in December’s “why Bitcoin will make gold and silver go up,” I (more than ever) believe the monetary disruption Bitcoin is capable of – potentially, NOW – could be so powerful, it will cause governments to refocus their manipulative efforts – from the “barbaric relics” gold and silver, to the “newfangled technology” Bitcoin.  Which, at a time when Precious Metal supply is already historically low; whilst money printing is primed for another, potentially hyper-inflationary leg higher; may well hasten the end of an increasingly “unnecessary” gold Cartel.

As, if Precious Metals’ inevitable surge is caused NOT by a catastrophic monetary event; but instead, a diversion of the powers that be’s’ attention by Bitcoin; gold and silver holders may well get to enjoy the financial windfall they’ve been waiting so long for.  Potentially, in an environment NOT characterized by economic and/or monetary disaster.  In other words, gold and silver could potentially rise five, ten, or even 20x in the “modern monetary world” due to “repricing” in a Cartel-deficient market – without catalyzing the draconian government responses that have always loomed over the sector like a sword of Damocles.  In other words, for the first time in generations, it will be acceptable to view Precious Metals as investment opportunities” – as opposed to age-old propaganda that they are only to be considered insurance against monetary cataclysm.

Read More @ MilesFranklin.com

Letters from India: How Bad Can the Crackdown on Cash and Tax Evasion Get? What’s Next?

by Mish Shedlock, Mish Talk

Reader “IB” an India businessman, writes about the crackdown on cash and tax evasion by Prime Minister Narendra Modi.

“IB” is very concerned about recent events, as well he should be.

Background for this story started on November 8, 2016, when Modi stunned the country with an announcement that 500-rupee ($7.30) and 1,000-rupee notes, which account for more than 85 percent of the money supply, would cease to be legal tender immediately. For details, please see Cash Chaos in India, 86{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of Money in Circulation Withdrawn; Cash Still King in Japan.

The crackdown on cash has hurt the poor the most, and likely the richest the least. Nonetheless, Modi has widespread popular support.

Modi’s latest set of mandates has small businessmen caught in the crossfire. Let’s tune into to an email from “IB” (India Businessman) for some details.

Hi Mish,

I am writing from Mumbai, India. I have been running a small business for a decade now. Since the business has been profitable we have also been paying tax as applicable. But with the introduction of Goods and Services Tax (GST) in India from July 1, 2017, it looks like business might start experiencing difficulties soon due to its plethora of rules, some of which are mind-bogglingly inane.

More than the tax rates, it is the implementation and the draconian measures that have been taken by the Government that has made me come to this conclusion. Given that the incumbent government has been winning elections despite steps like demonetization and the opposition is in complete disarray (Modi is a great orator), they have been emboldened to introduce measures that would be viewed as draconian by normal standards. In this context, I have to mention Modi has been able to mesmerize voters to an extent that he can make even pain appear as something that is pleasurable and he has been able to conquer state after state and has an invincible aura about him now. Such acts always bring Goebbels to my mind.

I am attaching an article that highlights three steps (of the many) that have been introduced in GST that I feel would impact businesses negatively.

Thanks for your time.

Regards,
IB

New Rules

“IB” emailed a lengthy document describing new rules. What follows is a short list of three key points that I condensed from the document.

  1. The government will not allow Input Tax Credit on GST paid to vendors if the vendors do not pay their own taxes. The issue here is the Modi is forcing the role of tax-enforcement on businesses who buy goods for resale.
  2. Tax payments are required every month. For all cash businesses, there is no problem. There is a huge problem for those who have to pay taxes on receivables, in advance, when the business owners might not even get paid. Liquidity will kill many small businesses.
  3. Modi now wants three tax filings every month plus an annual tax return making it 37 overall. Currently, businesses file service tax returns twice in a year while they pay their taxes every quarter. Now with GST, small businesses have to file 3 returns every month, month on month, year on year, with fines stipulated for non-compliance.

All Hail Modi

The Economic Times reports PM Narendra Modi steps up assault on Congress, eyes Indian supremacy

Prime Minister Narendra Modi’s ruling alliance is stepping up its assault on the opposition Congress party as it looks to expand its national dominance and moves closer to securing a majority in the upper house of parliament.

How to Destroy an Economy

This is the path that populist fools take to gain control and destroy economies.

When tax collections actually go into reverse as businesses fail, Modi will come up with another set of ill-advised reforms, perhaps a total ban on cash.

All it takes is a Congressional majority and Modi can and will do what he wants.

In all likelihood, Modi’s enemies will soon be silenced for the “good of society”.

Read More @ MishTalk.com

The Scaling Debate and Hard Fork Highlight Several Key Differences Between Bitcoin and Gold

by Michael Krieger, Liberty Blitzkrieg

You know stuff’s going down when I write two posts in a row about Bitcoin, something which almost never happens anymore. In Friday’s piece, Is the Bitcoin Civil War Over? Here’s How I’m Thinking About Bitcoin Cash, I discussed a potential strategy that “big blockers” might attempt to execute should the 2x part of Segwit2x not happen later this year. Today, I want to discuss how the entire episode has actually served to highlight one of Bitcoin’s (and cryptos in general) huge competitive advantages in the realm of monetary-type assets, but also examine why gold is still important.

There’s been a lot of FUD written at length about the whole scaling debate, in addition to the fair observation that network splits cause confusion and can be bad for the Bitcoin “brand.” As I mentioned in Friday’s piece, I don’t see this being the case with Bitcoin Cash (BCC), since I don’t think there will be any real debate about which one is Bitcoin and which is an alt-coin. Interestingly enough, although the nastiness of the scaling debate has left a bad taste in a lot of people’s mouths, it’s also highlighted one of Bitcoin’s greatest strengths.

Earlier today I came across a tweet from an account I had never seen before, but it was simply genius in its poignant simplicity.

What this person is referring to is how the lack of support for BCC from several popular wallet providers/exchanges like Coinbase and Bitstamp, has led to a flood of requests from Bitcoin holders to move their coins off the exchange in order to access the BCC if desired after August 1st. This is essentially akin to a run on the bank, and any third party playing games with their customers’ assets will be exposed in due course. The fact that it’s so easy for a Bitcoin holder to initiate a withdrawal from a third party holding their asset is a huge advantage of Bitcoin versus gold and other traditional monetary safe-havens. It doesn’t take long to see why if you think things through.

Storing your own Bitcoin private keys is very much like holding actual gold or silver in your possession. One thing that hardcore gold bugs like to say over and over is “if you don’t hold it, you don’t own it.” At the end of the day, I think that’s right. It’s also what makes a gold backed digital asset less appealing than you might think at first glance.

When you hold your own Bitcoin private keys, not only do you have possession, but you also have a spendable asset. Gold can never replicate this competitive advantage. If you trust someone else to hold your gold, you’re exposed to counter-party risk. You are trusting someone else to secure your asset and be honest. You don’t need to do that with Bitcoin. Likewise, if China, Russia or any other government launch a gold-backed digital currency, you’re trusting the honesty of governments to have the gold they say they do. We know governments lie constantly, so I think it’d be completely foolish to trust such a monetary regime, and we don’t have to.

Before gold bugs start turning red in the face and cursing my name, let me finish. This is not to suggest that Bitcoin is a substitute for gold, or that I think the advent of crypto-currencies makes gold irrelevant as an asset. If I really felt that way, I wouldn’t still own precious metals. In fact, whenever the next economic criss happens I think gold will do exceptionally well, particularly versus stocks and bonds, as the traditional financial world will not rush headlong into cryptos as a safe-haven asset (though some will). Most funds probably aren’t even set up to be allowed to do that, so they’ll go to what has always worked and what they’re comfortable with, and that is precious metals.

We don’t need to be binary when it comes to the question of gold and Bitcoin. Gold has advantages Bitcoin will never be able to surmount, including thousands of years of history and genuine immutability. On the flip-side, Bitcoin has advantages gold will never be able to totally overcome. Namely, it’s an easily spendable asset that you can hold in your possession with zero counter-party risk. Moving large amounts of Bitcoin around is trivial compared to gold, which is an undeniably important attribute in the world we live in. You still need someone else’s help to move gold from a vault in let’s say Zurich to one in Singapore. You have to ask permission. Such permission is unnecessary with Bitcoin.

Read More @ LibertyBlitzkrieg.com

It’s better to turn cautious too soon…

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by Simon Black, Sovereign Man

One of the greatest investors in the world is getting worried…

Howard Marks is the billionaire founder of Oaktree Capital, one of the largest and most successful investment firms in the world.

A few times each year Marks write up his thoughts about financial markets– he calls them ‘investment memos’.

And he just released his latest one with a very clear message: it’s time to be cautious.

From Marks’ memo…

I think it’s better to turn cautious too soon (and thus perhaps underperform for a while) rather than too late, after the downslide has begun, making it hard to trim risk, achieve exits and cut losses.

Marks admits this bull market could continue. But he’s happy taking chips off the table in today’s particularly dangerous market.

Asset prices are high across the board – the S&P 500 is trading at 25 times trailing 12-month earnings compared to a long-term median of 15 – and prospective returns are low.

Meanwhile, we’re also seeing record-low complacency amongst investors.

Just this morning the Wall Street Journal published data from Yardeni Research showing that percentage of ‘bearish’ investors who believe that the market will fall is near its lowest level since 1987.

The Volatility Index (VIX), a statistic which measures ‘fear’ in the market place, is at its ALL-TIME lowest point in its entire 27-year existence – hitting 8.84 last week, compared to above 80 in 2008.

The VIX hit 8.89 on December 27, 1993. From Marks:

The index was last this low when Bill Clinton took office in 1993, at a time when there was peace in the world, faster economic growth and a much smaller deficit. Should people really be as complacent now as they were then?

Compare that today, where market pitfalls abound…

– North Korea is threatening to nuke the US
– Donald Trump is firing his entire cabinet
– The Federal Reserve has dropped interest rates to record lows and drowned the world in trillions of dollars of cash
– Debt levels are at record highs
– Entire banking systems, especially in Europe, are in need of massive bailouts
– The US government will run out of money in less than 90-days and hit the debt ceiling once again

Marks points out an important thing to remember about the VIX… It doesn’t say what volatility will be, only what investors think volatility will be. And the crowd is almost always wrong.

We’re eight years into the current bull market. Stocks have been rising for eight straight years– the second-longest winning streak in history behind the S&P 500’s 417{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} gain between December 1990 and March 2000.

And investors seem to see nothing but clear skies ahead.

And their false sense of security is pushing them to take on greater amounts of risk.

For example, junk bonds today yield just 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

In other words, pitiful, low quality companies that few analysts expect them to even remain in business are able to borrow money at just 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

That’s insane.

Read More @ SovereignMan.com

Bitcoin, Gold and Silver Report – Keith Weiner

by Keith Weiner, Sprott Money

That’s it. It’s the final straw. One of the alternative investing newsletters had a headline that screamed, “Bitcoin Is About to Soar, But You Must Act by August 1 to Get In”. It was missing only the call to action “call 1-800-BIT-COIN now! That number again is 800 B.I.T..C.O.I.N.”

Is it about to go up? Maybe. We don’t know. And everyone should by now be skeptical of all “rocket to take off on XYZ date” claims. Between them, surely these newsletters have predicted thousands of the past zero blastoffs of gold and silver since 2011.

We have discussed bitcoin in the past, to argue that it is not money (a video here, and articles here and here). Bitcoin is not money because it is not a good. It’s just a number in a database. Money is a kind of good (genus). The most marketable kind (differentia).

Money must be a good because we are physical beings in a physical world and final payment—which is not demanded all the time, or even often—must be a physical thing that you can hold and touch in your physical hands. Bitcoin is not a physical good, so it represents, not final payment, but intermediate payment. It is not final until you trade the bitcoin for a real good. In the language of economics, a real good has utility apart from one’s hope to exchange it for something else. Bitcoin has no utility apart from this hope of its value in exchange, its price.

There is not one price but always two prices: bid and offer. When one has a thing and relies on someone else to buy it (or accept it in exchange), it is the bid price which is relevant. The offer price may be close above the bid, or it may be much higher. Typically sellers are reluctant to sell below their cost, but that has nothing to do with buyers. Buyers make a bid based on how they value it (or not).

This fact right here is sufficient to debunk the labor theory of value. Suppose producing a painting takes you 50 hours of labor plus $100 in materials. That does not matter. If your name is Banksy, people might be happy to pay tens of thousands of dollars for the painting. If your name is Keith Weiner, not so much (Keith is not known for having any skill at painting, though he can take some mean photographs).

For all commodities, for all real goods, for all tangible products, there is always a bid. Even a junk car is worth something to the scrap dealer. Even sand is worth something to the landscape contractor.

If a commodity is useful for something, it will have a robust bid. The price may be low or high, but the bid will be set by those who have a productive purpose in mind. If you can buy something, add a little bit of value from labor (e.g. cleaning it up) and sell it for $1,000 then you are willing to pay up to, say, $900.

Take copper. Copper can be used for wiring and plumbing (and many other things). If you manufacture plumbing, and you know that with a dollar worth of labor you can turn copper into a pipe that sells for $3.75, what are you willing to pay for the copper? Perhaps you would go up to $2.50 (it’s now about $2.85). If the price of copper drops, this new buyer will come into the market (for now, plumbing is made of plastic).

In this light, we now get to the 64 billion dollar question. What is the bid on bitcoin? What is it useful for, and who would buy it for that purpose?

Right now, bitcoin is a lot of fun. Its price is being driven up by frenzied speculators. With each new price level, proponents become bolder and more aggressive. Bitcoin will replace the dollar, bitcoin will go up to $1,000,000, the dollar is failing, get yours before August 1, etc. Many of these arguments were popular when the price of gold was rising relentlessly up through 2011.

But what’s the ultimate bid? Where is the floor, where it cannot go below because it’s just too profitable to buy it, transform it into a higher-value good to sell at a profit? Where is the floor where individuals will buy more and more because they want bitcoin in their living room, or in the tank of the car, or in their refrigerator, or in their basement?

It doesn’t exist, does it?

This is not a prediction for tomorrow morning. Indeed timing these things is impossible. However, there will come a point when the speculators turn. Perhaps their collective thumbs will move the planchette on the price-chart Ouija board to paint an ugly chart pattern (much uglier than head-and-shoulders). Whatever its initial cause, what will happen is clear in light of the above discussion.

The price of bitcoin could drop to any level. Incidentally, bitcoin could be used in exchange as it is now, whether its price is $0.01 or $1,000,000.

People often say that bitcoin is like gold, or even say it is “digital gold”. They are just trying to cash in on gold’s good name. The problem of the bid is another key difference between bitcoin and gold. Gold is an extremely useful commodity. Bitcoin is not any kind of commodity at all. It does not have a real bid at all, only the ever-changing bid of the fickle speculator.

The prices of the metals rose some more this week, with gold +$13 and silver +$0.24. However, that leads to the question: is it speculators getting ahead of the fundamentals, or is it real?

Three weeks ago, with the price of gold $56 lower and the price of silver $1.15 lower than today, we asked if that was capitulation. We cited some circumstantial evidence (plus a rising scarcity of both metals as measured by the cobasis). We did not call for a moonshot, but a “normal trading bounce within the range.”

Today it is time to ask if the bounce is down, and if now is the time for a normal correction. And if it’s the same answer for both metals.

Read More @ SprottMoney.com

The West lost at least another 1000 tonnes of large gold bars in 2015

by Ronan Manly, BullionStar

Over the last number of years, one of the most interesting trends in the physical gold world is the ongoing conversion of large 400 ounce gold bars into smaller high purity 1 kilogram gold bars to meet the insatiable demand of Asian gold markets such as China and India.

This transformation of 400 ounce bars into 1 kilogram bars is an established fact and is irrefutable given the large amount of evidence which proves it is happening, as has been documented on the BullionStar website and elsewhere.

It is also something which causes plenty of excitement in the gold world as it underscores the huge movement of physical gold from West to East, and the continual depletion of gold inventories from locations such as the London Gold Market.

The general movement is one of 995 purity 400 ounce gold bars coming out of gold-backed ETFs, central bank gold holdings and other wholesale gold holdings, and these bars making their way to the Swiss refineries where they are transformed / smelted / recast into smaller 9999 high purity gold bars. The smaller gold bars are then exported from Switzerland to India, China, Hong Kong, and the Middle East.

At the same time as the wider gold market acknowledges and publicises this trend, the establishment gold world and bullion banks (as represented by the London Bullion Market Association) tend to downplay this conversion of 400 ounce gold bars into 1 kilogram bars, presumably because it directly highlights the continual drain of real physical gold out of the London vaults into China and India, gold which has little chance of ever coming back again.

For an example of significant downplaying of conversion of 400 ounce gold bars into kilogram gold bars, see BullionStar post from September 2015 titled “Moving the goalposts….The LBMA’s shifting stance on gold refinery production statistics” which documents how a mammoth 2000 tonnes of LBMA gold refinery output attributed to the year 2013, mysteriously disappeared from the LBMA’s publications in early August 2015, after the original figure of 6,601 tonnes had been highlighted on this website, with the original figure being replaced by a far lower 4600 tonnes.

While gold refineries in countries other than Switzerland may be involved in these 400 ounce to 1 kilogram gold bar transformations, the Swiss refineries are the big players in this area, as they say so themselves. The names in question are Valcambi, PAMP, Argor Heraeus and Metalor. For a full understanding of the extent to which these large Swiss gold refineries process 400 ounce gold bars into kilobars and the importance that they attribute to this specific category of refinery activity, please see BullionStar blog from November 2015 titled “From Good Delivery bars to Kilobars – The Swiss Refineries, the GFMS data, and the LBMA“.

But if you thought the massive conversion of large gold bars into kilogram bars that occurred in years such as 2013 and 2014 was an anomaly or a one-off, then think again. Because it also happened in 2015, and in a very big way.

Read More @ BullionStar.com

The Accounting Ponzi Scheme Is Catching Up To Amazon

by Dave Kranzler, Investment Research Dynamics

“‘Faith’ is defined as “belief without evidence.” AMZN is a stock investment that thrives on
investor faith. Investor greed transforms into irrational faith when the faith is rewarded with stock gains. This will ultimately burn out but it’s impossible to predict timing. The stock is trading at 178x TTM net income. This is an insane multiple for a company with a deteriorating business model that is under attack from all angles by large, well-capitalized competitors who specialize in Amazon’s business segments.

Having said that, I continue to believe that money can be made trading AMZN from the short side but it requires discipline and diligent capital management. Amazon is one of those stocks in which you need to maintain some short exposure because, when it finally goes, it will go quickly and you’ll be waiting for a big bounce to short that will never materialize” – excerpt from the latest Short Seller’s Journal

In last week’s issue of the Short Seller’s Journal, I did an in-depth analysis of Netflix’s (NFLX) accounting and demonstrated how NFLX manipulates GAAP accounting to manufacture fake net income. I advised subscribers to short NFLX on Monday at $188. This week I focus on the key areas of Amazon’s quarterly financials and show how Jeff Bezos transforms actual negative free cash flow into the Bezos $9.6 billion LTM “free cash flow.”

I also demonstrate the ways in which Amazon’s business model is beginning to break down – that it’s e-commerce model is under attack from all angles by well-capitalized, more profitable retailers like Walmart and its cloud computing business is being attacked aggressively by traditional software development and applications companies like MSFT, IBM, GOOG and ORCL.

Read More @ InvestmentResearchDynamics.com