What NIRP, Rising China Tensions, and “AK-47 Nations” Are Signalling Right Now

Via International Man

NIRP

Legendary speculator Doug Casey has been in the commodities markets for over 40 years. It’s been the key to some of his most significant investment wins.

Gold and silver have broken out of a six-year trading range and seem to be going higher. We think this signals the start of a new bull market and the chance at life-changing profits, just as it has during numerous cycles in the past.

That’s why we’re bringing you a discussion we recently had with resource expert Marin Katusa.

Doug and Marin have known each other for more than 15 years. Doug says Marin stands out as perhaps the most competent and successful person he has met in his years in the resource markets.

Continue reading “What NIRP, Rising China Tensions, and “AK-47 Nations” Are Signalling Right Now”

GREY CHAMPION ASSUMES COMMAND (PART TWO)

In Part One of this article I discussed the arrival of Grey Champions in previous Fourth Turnings; their attributes, deficiencies, and leadership skills; and why Donald Trump is the Grey Champion of this Fourth Turning – whether you like it or not. Now I will try to make sense of what could happen next.

“Our movement is about replacing a failed and corrupt political establishment with a new government controlled by you, the American people. The establishment has trillions of dollars at stake in this election. For those who control the levers of power in Washington and for the global special interests, they partner with these people that don’t have your good in mind. The political establishment that is trying to stop us is the same group responsible for our disastrous trade deals, massive illegal immigration and economic and foreign policies that have bled our country dry.

It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities. The only thing that can stop this corrupt machine is you. The only force strong enough to save our country is us. The only people brave enough to vote out this corrupt establishment is you, the American people.” Donald Trump

Seventy year old Donald Trump has assumed the Grey Champion flagstaff. In an increasingly chaotic world, normal working class Americans in flyover country were seeking a leader who could bring order, defeat the corrupt establishment, make tough decisions, and capture the zeitgeist of this moment in history. The ruling elite oligarchs and their fawning minions, occupying their strongholds in New York, California, Illinois, and D.C., are infuriated the peasants have dared to resist. In their secretive secure spaces, the elites are plotting with one purpose in mind – this uprising must be quelled.

Continue reading “GREY CHAMPION ASSUMES COMMAND (PART TWO)”

Don’t Bet on Deflation Lasting Forever

Guest Post by Bill Bonner

More Mumbo-Jumbo

OUZILLY, France – Imagine the poor economist without a sense of humor. How he must suffer! This week was to be dominated by central banks. Two big ones – the Bank of Japan (BoJ) and the Fed – were to make important policy announcements.

 

kuroda-blackboardThe BoJ’s chief lunatic Haruhiko Kuroda with one of his famous diagrams. How can this not work? It looks so neat!

Photo credit: Yuya Shino / Reuters

 

The speculators placed their bets, front-running the news, and sat on the edge of their chairs. This week, the BoJ came out with more mumbo-jumbo. “Yield curve control,” it promised. The central bank says it will target a 0% yield on 10-year Japanese government bonds.

It added that it would continue buying the nation’s stocks (by way of exchange-traded funds) and charging a negative interest rate of 0.1% on the accounts banks keep with it.

Continue reading “Don’t Bet on Deflation Lasting Forever”

Jim Grant Rejects Rogoff’s “Curse Of Cash”, Warns “Government Wants To Control Your Money”

Authored by Jim Grant, originally posted at The Wall Street Journal,

If there is a curse between the covers of this thin, self-satisfied volume, it doesn’t have to do with cash, the title to the contrary notwithstanding. Freedom is rather the subject of the author’s malediction. He’s not against it in principle, only in practice.

Ken Rogoff is a chaired Harvard economics professor, a one-time chief economist at the International Monetary Fund and (to boot) a chess grandmaster. He laid out his case against cash in a Saturday essay in this newspaper two weeks ago. By abolishing large-denomination bills, he said there, the government could strike a blow against sin and perfect the Federal Reserve’s control of interest rates.

“The Curse of Cash,” the Rogoffian case in full, comes in two parts. The first is a helping of monetary small bites: a little history (in which the gold standard gets the back of the author’s hand), a little central-banking practice, a little underground economy. It’s all in the service of showing where money came from and where it should be going.

Terrorists traffic in cash, Mr. Rogoff observes. So do drug dealers and tax cheats. Good, compliant citizens rarely touch the $100 bills that constitute a sizable portion of the suspiciously immense volume of greenbacks outstanding—$4,200 per capita. Get rid of them is the author’s message.

Continue reading “Jim Grant Rejects Rogoff’s “Curse Of Cash”, Warns “Government Wants To Control Your Money””

Trump Slams Yellen: The Fed Has Created A “Stock Bubble” And “A False Economy” To Boost Obama

Tyler Durden's picture

One month ago, Donald Trump urged his followers to sell stocks, warning of “very scary scenarios” for investors, and accused the Fed of setting the stage for the next market crash when he said that “interest rates are artificially low” during a phone interview with Fox Business. “The only reason the stock market is where it is is because you get free money.”

Earlier today, speaking to a reporter traveling on his plane who asked Trump about a potential rate hike by the Fed in September, Trump took his vendetta to the next level, saying that the Fed is “keeping the rates artificially low so the economy doesn’t go down so that Obama can say that he did a good job. They’re keeping the rates artificially low so that Obama can go out and play golf in January and say that he did a good job. It’s a very false economy. We have a bad economy, everybody understands that but it’s a false economy. The only reason the rates are low is so that he can leave office and he can say, ‘See I told you.'”

Continue reading “Trump Slams Yellen: The Fed Has Created A “Stock Bubble” And “A False Economy” To Boost Obama”

The Financial System Is Breaking Down At An Unimaginable Pace

Submitted by Simon Black via SovereignMan.com,

Now it’s $13 trillion.

That’s the total amount of government bonds in the world that have negative yields, according to calculations published last week by Bank of America Merrill Lynch.

Given that there were almost zero negative-yielding bonds just two years ago, the rise to $13 trillion is incredible.

In February 2015, the total amount of negative-yielding debt in the world was ‘only’ $3.6 trillion.

A year later in February 2016 it had nearly doubled to $7 trillion.

Now, just five months later, it has nearly doubled again to $13 trillion, up from $11.7 trillion just over two weeks ago.

Think about that: the total sum of negative-yielding debt in the world has increased in the last sixteen days alone by an amount that’s larger than the entire GDP of Russia.

Continue reading “The Financial System Is Breaking Down At An Unimaginable Pace”

IT’S NOT THE BREXIT STUPID

Just over a week ago the world was coming unglued, as enough British citizens grew a pair and spit in the face of the EU establishment and global elite by voting to exit the EU. The fear mongering by central bankers and their puppet political hacks failed to deter people who have become sick and tired of being abused and pillaged by bureaucrats working on behalf of bankers and billionaires.

Stock markets around the world plummeted on Thursday and Friday. The world braced for another Black Monday. The phone lines were buzzing between central bankers around the world over the weekend as their banker constituents demanded relief. If one thing has been proven over the last seven years, its a coordinated effort between central bankers and Wall Street banks to rig the stock market higher can work over a short time period.

The titans of finance were able to once again confound short-sellers and the prophets of doom with a 5% surge from the Friday lows over the next week. It was surely a coincidence the Fed declared all Wall Street banks, safe, sound, and capable of buying back their stocks to the tune of billions early in the week.

These insolvent zombies were now free to borrow billions to buy back their overvalued stocks, destroying shareholder value, while boosting executive compensation. Poor Jamie Dimon is struggling to get by on his $27 million per year. The Wall Street banks obliged by immediately announcing multi-billion dollar buyback schemes to capitalize on the short-term trading mentality of the 30 year old MBA trading geniuses who bought the news without worrying about the actual value of the stocks they were buying.

Continue reading “IT’S NOT THE BREXIT STUPID”

Hillary’s Scary New Cash Tax

Hillary’s Scary New Cash Tax

 

By Justin Spittler

The largest underground currency market in history…how to make huge investment gains from negative interest rates…none dare call it a tax.

Editor’s Note: This is the most important Dispatch we’ve published all year.

You won’t find our regular daily market commentary in this issue. Instead, you’ll find an urgent message from Casey Research director Brian Hunt. Right now, the government is planning a secret new tax. It involves a new way of taking money directly from your bank account…

Casey Daily Dispatch will return to its regular format next week.

Regards,

Justin Spittler
Delray Beach, Florida
March 4, 2016


Dear reader,

Have you heard of “negative interest rates?”

It’s become a phenomenon with economists and the media.

There’s a good chance you’ve read an article about it. We’ve covered it many times in the Dispatch.

I’m writing to tell you something about negative interest rates you haven’t heard. You certainly won’t hear about it in the mainstream press.

What’s coming at you is a historic event. It’s something our grandchildren will hear stories about…much like the Great Depression or the Cold War.

What’s coming could send the price of gold much higher in the coming years…and hand gold stock owners 500%+ gains.

If you know what’s coming, it could mean the difference between having lots of free cash in retirement or barely getting by.

To understand the gravity of this moment, let’s cover one of the most bizarre ideas in the world…

Negative Interest Rates.

In a normal world, your bank pays you interest on your savings. It takes your money, pools it with other people’s money, and loans it out.

The bank makes money by paying out less in interest on your deposit than it earns in interest from borrowers.

For example, it might pay out 3% to depositors while earning 6% from borrowers.

Continue reading “Hillary’s Scary New Cash Tax”

German Banks Told To Start Hoarding Cash

Submitted by Simon Black via SovereignMan.com,

Just stunning.

German newspaper Der Spiegel reported yesterday that the Bavarian Banking Association has recommended that its member banks start stockpiling PHYSICAL CASH.

Europe, of course, has been battling with negative interest rates for quite some time.

What this means is that commercial banks are being charged interest for holding wholesale deposits at the European Central Bank.

In order to generate artificial economic growth, the ECB wants banks to make as many loans as possible, no matter how stupid or idiotic.

They believe that economic growth is simply a function of loans. The more money that’s loaned out, the more the economy will grow.

This is the sort of theory that works really well in an economic textbook. But it doesn’t work so well in a history textbook.

Cheap money encourages risky behavior. It gives banks an incentive to give ‘no money down’ loans to homeless people with no employment history.

It creates bubbles (like the housing bubble from 10 years ago), and ultimately, financial panics (like the banking crisis from 8 years ago).

Banks are supposed to be conservative, responsible managers of other people’s money.

When central bank policies penalize that practice, bad things tend to happen.

Continue reading “German Banks Told To Start Hoarding Cash”

The Global Run On Physical Cash Has Begun: Why It Pays To Panic First

Tyler Durden's picture

Back in August 2012, when negative interest rates were still merely viewed as sheer monetary lunacy instead of pervasive global monetary reality that has pushed over $6 trillion in global bonds into negative yield territory, the NY Fed mused hypothetically about negative rates and wrote “Be Careful What You Wish For” saying that “if rates go negative, the U.S. Treasury Department’s Bureau of Engraving and Printing will likely be called upon to print a lot more currency as individuals and small businesses substitute cash for at least some of their bank balances.

Well, maybe not… especially if physical currency is gradually phased out in favor of some digital currency “equivalent” as so many “erudite economists” and corporate media have suggested recently, for the simple reason that in a world of negative rates, physical currency – just like physical gold – provides a convenient loophole to the financial repression of keeping one’s savings in digital form in a bank where said savings are taxed at -0.1%, or -1% or -10% or more per year by a central bank and government both hoping to force consumers to spend instead of save.

For now cash is still legal, and NIRP – while a reality for the banks – has yet to be fully passed on to depositors.

The bigger problem is that in all countries that have launched NIRP, instead of forcing spending precisely the opposite has happened: as we showed last October, when Bank of America looked at savings patterns in European nations with NIRP, instead of facilitating spending, what has happened is precisely the opposite: “as the BIS have highlighted, ultra-low rates may perversely be driving a greater propensity for consumers to save as retirement income becomes more uncertain.”

Call it another massive error on behalf of Keynesian central planners who once again fail to appreciate the nuances of the common sense and the liquidity preference of ordinary consumers.

Continue reading “The Global Run On Physical Cash Has Begun: Why It Pays To Panic First”

Safes Sell Out In Japan, 1,000 Franc Note Demand Soars As NIRP Triggers Cash Hoarding

Submitted by Tyler Durden on 02/22/2016 09:11 -0500

Negative rates may not have found their way to bank deposits in most locales (yet), but that doesn’t mean the public isn’t starting to see the writing on the wall.

At first, NIRP was an anomaly. An obscure policy tool that most analysts and market watchers assumed would be implemented on a temporary basis in a kind of “let’s see if this is even possible” experiment with an idea that, from a common sense perspective, makes no sense.

But then a funny thing happened. Central banks from Denmark to Sweden to Switzerland went negative and stayed there. They even doubled down, taking rates even more negative and before you knew it, the public started to catch on.

When NIRP failed to resuscitate global growth and trade, the cash ban calls began. The thinking is simple (if crazy): if you do away with physical banknotes, the effective lower bound is thereby eliminated. You can make rates as negative as you like because the public has no recourse as people aren’t able to push back by eschewing their bank accounts the mattress.

If that seems far-fetched, consider that the ECB is seriously considering pulling the €500 euro note and the calls are growing louder for the Fed to drop the $100 bill. Of course officials are pitching the big bill bans as an attempt to fight crime – because only a criminal would pay with a $100. But the underlying push is for a cashless society wherein monetary authorities can effectively force citizens to spend and thereby boost the economy by simply making interest rates deeply negative.

Now that the cash ban calls have gotten sufficiently loud to be heard by the generally clueless masses and now that the likes of Jose Canseco are shouting about negative rates, savers are beginning to pull their money out of the banks.

Continue reading “Safes Sell Out In Japan, 1,000 Franc Note Demand Soars As NIRP Triggers Cash Hoarding”

SHOULD YOU BELIEVE THE VAMPIRE SQUID?

I find it fascinating the mainstream corporate media and Wall Street shysters spend SO MUCH time talking down gold and spending an inordinate amount of electronic ink trying to convince the masses that only nutjobs would buy it. I believe less than 2% of people have gold in their investment portfolio, so why the endless articles bashing it?

Newsletter hawkers like Martin Armstrong take every opportunity to shit on gold as an investment. I wonder if he was shitting on it from 2001 through 2011? We don’t know, because he was in prison for investment fraud during most of that time. Fatass Barry Ritholtz is in the same boat. He’s nothing but a failed lawyer pretending to be an investment guru. He’s gleeful when gold falls. It’s because he completely missed a 10 year bull market.

The suppression of gold prices through the paper market since 2011 by the Fed and their Wall Street bank co-conspirators has thus far been successful, but it is fraying at the edges as China continues to accumulate physical gold and pushing the ponzi scheme towards its inevitable conclusion. Soaring gold prices tells the masses central bankers are a fraud, that’s why they are desperate to keep the price capped.

With zero and negative interest rates throughout the world, gold should be skyrocketing. It is showing signs of calling the central banker bluff. Jesse’s comments below should be heeded. The stock market dead cat bounce and the holiday manipulation of gold down $30 will fail. If there is a lesson from the Big Short, do the opposite of what Goldman says to do.


Chart of the Day

Gold Daily and Silver Weekly Charts – Goldman Says Have No Fear and Buy Our Paper

 

Goldman analyst Jeffrey Currie came out this morning with a ‘sell gold’ recommendation for Ma and Pa Muppet.

I was fortunate enough to hear his explanation for this in his own words on Bloomberg TV, which had touted his gold call about every fifteen minutes all day.

The net summary of Mr. Currie’s forecast is that Goldman’s economists think that there ought to be no fear in the financial paper markets, since there is an historically low chance of a recession, less than fifteen percent, and he sees no real possibility of negative interest rates.

Continue reading “SHOULD YOU BELIEVE THE VAMPIRE SQUID?”

Larry Summers Launches The War On Paper Money: “It’s Time To Kill The $100 Bill”

Could these fucking elitist douchebags be any more blatant in their attempt to fuck us over? Eliminate cash, introduce negative interest rates, tax every electronic transaction, outlaw gold and force us to spend our electronic currency before it evaporates. There will be blood.

 

Tyler Durden's picture

Yesterday we reported that the ECB has begun contemplating the death of the €500 EURO note, a fate which is now virtually assured for the one banknote which not only makes up 30% of the total European paper currency in circulation by value, but provides the best, most cost-efficient alternative (in terms of sheer bulk and storage costs) to Europe’s tax on money known as NIRP.

That also explains why Mario Draghi is so intent on eradicating it first, then the €200 bill, then the €100 bill, and so on.

We also noted that according to a Bank of America analysis, the scrapping of the largest denominated European note “would be negative for the currency”, to which we said that BofA is right, unless of course, in this global race to the bottom, first the SNB “scraps” the CHF1000 bill, and then the Federal Reserve follows suit and listens to Harvard “scholar” and former Standard Chartered CEO Peter Sands who just last week said the US should ban the $100 note as it would “deter tax evasion, financial crime, terrorism and corruption.”

Well, not even 24 hours later, and another Harvard “scholar” and Fed chairman wannabe, Larry Summers, has just released an oped in the left-leaning Amazon Washington Post, titled “It’s time to kill the $100 bill” in which he makes it clear that the pursuit of paper money is only just starting. Not surprisingly, just like in Europe, the argument is that killing the Benjamins would somehow eradicate crime, saying that “a moratorium on printing new high denomination notes would make the world a better place.

Yes, for central bankers, as all this modest proposal will do is make it that much easier to unleash NIRP, because recall that of the $1.4 trillion in total U.S. currency in circulation, $1.1 trillion is in the form of $100 bills. Eliminate those, and suddenly there is nowhere to hide from those trillions in negative interest rate “yielding” bank deposits.

Continue reading “Larry Summers Launches The War On Paper Money: “It’s Time To Kill The $100 Bill””

BREAKING BAD (DEBT) – EPISODE THREE

In Part One of this three part article I laid out the groundwork of how the Federal Reserve is responsible for the excessive level of debt in our society and how it has warped the thinking of the American people, while creating a tremendous level of mal-investment. In Part Two I focused on the Federal Reserve/Federal Government scheme to artificially boost the economy through the issuance of subprime debt to create a false auto boom. In this final episode, I’ll address the disastrous student loan debacle and the dreadful global implications of $200 trillion of debt destroying the lives of citizens around the world.

Getting a PhD in Subprime Debt

“When easy money stopped, buyers couldn’t sell. They couldn’t refinance. First sales slowed, then prices started falling and then the housing bubble burst. Housing prices crashed. We know the rest of the story. We are still mired in the consequences. Can someone please explain to me how what is happening in higher education is any different?This bubble is going to burst.” Mark Cuban

 http://www.nationofchange.org/sites/default/files/StudentLoanDebt070313_0.jpeg

Now we get to the subprimiest of subprime debt – student loans. Student loans are not officially classified as subprime debt, but let’s compare borrowers. A subprime borrower has a FICO score of 660 or below, has defaulted on previous obligations, and has limited ability to meet monthly living expenses. A student loan borrower doesn’t have a credit score because they have no credit, have no job with which to pay back the loan, and have no ability other than the loan proceeds to meet their monthly living expenses. And in today’s job environment, they are more likely to land a waiter job at TGI Fridays than a job in their major. These loans are nothing more than deep subprime loans made to young people who have little chance of every paying them off, with hundreds of billions in losses being borne by the ever shrinking number of working taxpaying Americans.

Student loan debt stood at $660 billion when Obama was sworn into office in 2009. The official reported default rate was 7.9%. Obama and his administration took complete control of the student loan market shortly after his inauguration. They have since handed out a staggering $500 billion of new loans (a 76% increase), and the official reported default rate has soared by 43% to 11.3%. Of course, the true default rate is much higher. The level of mal-investment and utter stupidity is astounding, even for the Federal government. Just some basic unequivocal facts can prove my case.

There were 1.67 million Class of 2014 students who took the SAT. Only 42.6% of those students met the minimum threshold of predicted success in college (a B minus average). That amounts to 711,000 high school seniors intellectually capable of succeeding in college. This level has been consistent for years. So over the last five years only 3.5 million high school seniors should have entered college based on their intellectual ability to succeed. Instead, undergraduate college enrollment stands at 19.5 million. Colleges in the U.S. are admitting approximately 4.5 million more students per year than are capable of earning a degree. This waste of time and money can be laid at the feet of the Federal government. Obama and his minions believe everyone deserves a college degree, even if they aren’t intellectually capable of earning it, because it’s only fair. No teenager left behind, without un-payable debt.

Continue reading “BREAKING BAD (DEBT) – EPISODE THREE”

BREAKING BAD (DEBT) – EPISODE TWO

‘If you’re committed enough, you can make any story work. I once told a woman I was Kevin Costner, and it worked because I believed it’ Saul Goodman – Breaking Bad

“As calamitous as the sub-prime blowup seems, it is only the beginning. The credit bubble spawned abuses throughout the system. Sub-prime lending just happened to be the most egregious of the lot, and thus the first to have the cockroaches scurrying out in plain view. The housing market will collapse. New-home construction will collapse. Consumer pocketbooks will be pinched. The consumer spending binge will be over. The U.S. economy will enter a recession.”Eric Sprott – 2007

In Part One of this article I provided the background of how our current debt saturated economy got to this point of ludicrousness. The “crazy” bloggers, prophets of doom, and analysts who could do basic math were warning of an impending financial crisis in 2006 and 2007, which would be caused by the issuance of hundreds of billions in subprime slime by the Too Big To Trust Wall Street shysters. Subprime mortgages, auto loans, and credit card lines provided the kindling for the 2008 conflagration.

Under normal circumstances we wouldn’t have seen such irrational, reckless, greedy behavior from Wall Street for another generation. But, Wall Street didn’t have to accept the consequences of their actions. They were bailed out and further enriched by their puppets at the Federal Reserve, the lackey politicians they installed in Washington D.C., and on the backs of honest, hard-working, tax paying Americans. The lesson they learned was they could continue to take excessive, reckless, unregulated risks without concern for losses, downside, or consequences.

In reality, the Fed and government have worked in tandem with Wall Street to create the subprime economic recovery. The scheme has been to revive the bailed out auto industry by artificially boosting sales through dodgy, low interest, extended term debt. With the Feds taking over the entire student loan market, they have doled out hundreds of billions to kids who don’t have the educational skills to succeed in college, in order to keep them out of the unemployment calculation.

That’s why you have a 5.7% unemployment rate when 41% of the working age population (102 million people) is not working. The appearance of economic recovery has been much more important to the ruling class than an actual economic recovery for average Americans, because the .1% have made out like bandits anyway. Who has benefited from the $650 billion of student loan and auto debt disseminated by the oligarchs in the last four years, the borrowers or lenders?

Continue reading “BREAKING BAD (DEBT) – EPISODE TWO”

COMING TO A COUNTRY NEAR YOU

Under your mattress guarded by a loaded gun is a better investment than keeping your money in criminal Wall Street bank.

Bank Of America Has A Message For Its European Depositors: “We May Charge You”

Tyler Durden's picture

Because Mario Draghi wasn’t joking about that whole NIRP thing. And yes, negative deposit rates mean just that.

As the letter says, don’t worry: Bank of America has an extensive team of “liquidity and investment management solutions” experts who will gladly advise you to rotate your money out of deposits and into financial stocks, preferably that of BAC itself.