Monday, October 24, 2016

Jean-Marie Eveillard Warns On
The Possibility Of ‘Extreme Outcomes’
"The behavior of central bankers is mindless and I think there will be unintended consequences. I suspect that it might end badly, and we have to worry about the long-term. I want to be careful here because I’m so old that I’ve been in this business one way or the other for a little more than half a century .. Equities are very historically expensive. The fact that interest rates are zilch cannot continue forever, so I suspect that one needs some protection against risks .. Central banks should not pretend they know what will happen .. The price of money is probably the most important price. And it is being manipulated in a very artificial manner by central bankers."
LINK HERE to the article & podcast
Dr. Jeffrey Herbener: Demystifying The Fed
Mises Media .. Even well-read fans of Austrian economics often have a hard time understanding & conceptualizing what the Fed really does .. Dr. Jeffrey Herbener on the basic blocking & tackling of central bank mechanics: how commercial bank reserves are created, the difference between the monetary base & the money supply, & how the Fed Funds rate impacts lending and the structure of production .. how Austrian business cycle theory describes the distortions created by artificially low interest rates, how interest rates ought to operate as price signals .. how early recipients of newly created money and credit benefit in ways that ordinary citizens don't. .. 26 minutes
Inflation: Next Year's Ticking Time Bomb
Ambrose Evans-Pritchard highlights how the cost of food, clothing & fuel is jumping & likely to escalate into next year .. "This is a political time bomb that will detonate next year when the inflation ‘pass-through’ from imports bites in earnest." .. sees the possibility of stagflation - rising inflation & recession at the same time - as being increasingly possible & likely.
LINK HERE to the article
Is Gold's Real Value $2,000/oz? 
- Bloomberg Intelligence 
Ken Hoffman of Bloomberg Intelligence sees the cards stacked in gold's favor .. Hoffman says that tailwinds for gold may also be brewing in the mining sector with rising production costs & falling output .. 5 minutes
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Felix Zulauf:
"We Are In The Last Inning"
Speaking at Barron's Art of Successful Investing conference, the global investor sees significant losses for the S&P, but an opportunity in bonds, a currency play .. does not matter who wins the elections on fate of U.S. stock market . a low around just after elections .. if Trump wins, protectionism bad for world economy .. if Clinton wins, gridlock in the U.S. Congress - no necessary structural reforms  .. "We are in the last inning of the bull market cycle .. " - early next year - stocks likely to peak .. will lead to lengthy bear market .. yields in bond market - rising yields into mid next year .. mid next year advises to go long on bonds into 2018 .. U.S.$ is main beneficiary of rising nationalism, deglobalization, weak world trade - bullish rally on U.S.$ into first part of next year.
LINK HERE to the video
Peak Prosperity On How
Losses Hurt More Than Gains Help
The short video below uses these insights to deliver a simple message: In today's over-inflated, over-leveraged, over-manipulated markets, why on earth would a rational person not be prioritizing protecting their financial wealth? Given the outsized risks, as well as our natural programming to feel losses more severely, pursuing incremental gains at this point is downright dangerous if one doesn't already have a contingency plan in place for a market downturn .. 7 minutes
LINK HERE to the summary
China Moves Forward With 
Its De-Dollarization Strategy
Mises essay highlights the increasing accumulation of gold by China's central bank, & China's moves for its currency to be included in the IMF basket of top-tier currencies .. "It now shares SDR status with the U.S. dollar, euro, British pound, and Japanese yen." .. implications on geo-politics: "China and Russia have mutual geostrategic interests in helping to promote de-dollarization. Toward that end, the two powers are engaging in bilateral trade deals that bypass the dollar. Annual bilateral trade between China and Russia has surged from $16 billion in 2003 to nearly $100 billion today. When China hosted the G20 summit in September, it will make Russian President Vladimir Putin its premier guest of honor. U.S. officials are none too pleased. They fear Putin aims to expand his global reach by forging stronger ties with China .. The Russians and the Chinese aren’t counting on cyber warfare to dethrone King Dollar. In addition to bilateral trade deals and strategic plays for regional economic dominance, the two powers are bulking up on gold. Over the past several years, Russia and China have each been adding massively to their gold holdings."
LINK HERE to the essay
Myth-Busters: The Next President 
& The Economy
Dr. Ron Paul* report .. Since both candidates are interventionists, the prospects for the U.S. economy don't look good no matter who happens to win. Dr. Ron Paul debunks the latest debate myths on today's edition of Myth-Busters .. 24 minutes
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Fiat Money & Gold
"The expansion of bank credit is not being picked up yet by many commentators, but it is a serious issue .. The Fed has a problem with raising rates by the required amount, because it would widen interest rate differentials with other major currencies. The dollar is strong enough as it is, and any rise in dollar interest rates seems likely to encourage further dollar strength, leading to potential currency instability. Then there is the question of the effect on asset values, particularly government bonds, not only in the U.S. but particularly in the Eurozone. If bond yields rise, valuations of equities and property will also be threatened, not to mention the cost of government borrowing rising. At the moment there are political pressures on the Fed to do nothing during the presidential election, but that will no longer be an issue by December’s FOMC meeting .. Banks are drawing down their excess reserves to increase their lending. The inflationary implications at the price level are obvious. Gold is already under-priced to a substantial degree. Therefore, further expansion of Fiat Money Quantity (FMQ) seems certain to eventually lead to a complete reassessment of the price relationship between fiat dollars and physical gold, to gold’s benefit and the dollar’s detriment."
- Alasdair Macleod
LINK HERE to the analysis
Catherine Austin Fitts
The Clintons Are Addicted To Privilege
Greg Hunter .. So, what needs to be done to fix the economy? Investment adviser Catherine Austin Fitts contends, "We have a win/lose relationship between human productivity and labor productivity. If we want to get more labor productivity, and if we want a stronger stock market, then we need to change those models to win/win. The problem is you have folks like the Clintons who only know how to play in the win/lose model. They only know how to slap out government money .. They are very vested in the current model, and they don’t want to change. They think if you change the model, you are going to have to change to different kinds of people, which is true. You are going to need engineers instead of lawyers. They (Clintons) are not willing to change .. They are basically addicted to privilege. The question is how do we change the leadership? It now appears the leadership is not willing to change without a crisis." .. 39 minutes
Renzi’s Gamble Is Even Bigger 
Than Most People Think
It Could Mean Italy Leaving The Euro & The Breakup Of The Eurozone
Mish Shedlock* sees Italian Prime Minister Matteo Renzi as staking his continued role on an upcoming referendum in Italy in December relating to dramatically reduce the power of the Senate in Italy .. "It will also give a parliamentary majority to the party that gets the most votes. Renzi wants that authority. Ironically, if the referendum does pass, Italy is more likely to leave the Euro than if it doesn’t .. Beppe Grillo’s Five Star Movement party (M5S) is now neck and neck with Renzi’s PD party. M5S is decidedly eurosceptic .. Should the referendum pass, but Renzi lose the next election, a eurosceptic party will have control over Italy .. Renzi’s gamble is that he will win the referendum, consolidate power ahead of the next election, and stave off election of M5S. That’s quite the gamble given how support for Renzi has collapsed."
LINK HERE to the commentary