Saturday, December 03, 2016

Credit Cycles & Gold
"The Trump shock produced some unexpected market reactions, partly explained by investors buying into a risk-on argument,equities over bonds and buying dollars by selling other currencies and gold. This is because President-elect Trump has stated he will implement infrastructure investment and tax-cut policies. If he pursues this plan, it will lead to larger fiscal deficits, and higher interest rates. The global aspect of the markets recalibration focuses on the strains between the dollar on one side, and the euro and the yen on the other, both still mired in negative interest rates. The capital flows obviously favor the dollar, and are putting the Eurocurrency markets under considerable strain .. We currently face the prospect of a reallocation of capital from America’s financial sector into government and non-financial activities, driven by President-elect Trump’s expansionary plans. These plans, if pursued, will lead to money flowing from purely financial activities and will have a profoundly negative effect on asset prices. Furthermore, price inflation, the result of fiscal expansion, will raise consumer prices to unanticipated levels, forcing the Fed to raise interest rates more than expected today .. As all experience from the past clearly demonstrates, it is a mistake to believe that the gold price is set solely by dollar interest rates, or its relative strength in other currencies. This being the case, the current weakness of the gold price is simply a reflection of temporary dollar shortages, and nothing more."
- Alasdair Macleod
LINK HERE to the essay
The End Of Globalism
 - With Doug Casey
Dr. Ron Paul* report .. Is the globalism that seeks to concentrate power in a few unelected international bodies like the UN and IMF about to spectacularly crash? Will a new internationalism, driven by technology, replace the geographic nationalism of the 20th century? .. 25 minutes
Why Politics Is So Important Right Now
"The collapse that is underway started in Europe. It will then migrate to Japan, and finally come to the USA ,, CONFIDENCE underscores EVERYTHING. You accept a dollar bill for your labor only because you have the CONFIDENCE that someone else will accept it in return. All markets rest upon a seabed of CONFIDENCE. Undermine that foundation, and then the house of cards will fall. It will not fall without changing the mindset of the majority. You will never convince them with stories of fiat, money supply, or gold. Undermine their belief system, then you will see change – not before. You will NEVER convince the majority with stories of hyperinflation, quantity of money theories, or any economic theory. Once the political world changes, then there is no certainty left to support the future. Santa Claus is not there to make sure your life will be the dream. Suddenly, those in the West will have to learn the same lesson of those in Russia and Eastern Europe – you just cannot count on government for anything."
- Martin Armstrong
LINK HERE to the commentary
Jim Sinclair-Financial Pressure 
Cooker Bomb Cooking Now
Greg Hunter .. Renowned gold expert Jim Sinclair says, “You have a pressure cooker bomb cooking like the terrorists use. It’s cooking, and it makes gold a storehouse of value and not a currency. It’s just a storehouse of value. It turns it into a savings account. The only one that will work. The only one without a counter-party. The only one that doesn’t need a market that can trade in physical (metal) and huge size physical. China and Russia are not buying gold as some sort of investment. They are buying it as a policy because they see clearly that is no tool left in anybody’s toolbox to fix what the geeks have done. They have killed us, and they have killed themselves. There is one fat shark out there that is now about to experience starvation.” .. In closing, Sinclair says, “When it’s all said and done, there will be a catastrophic big bang, and then the only thing that will be left is your savings account. Your savings account is not silver, although it will outperform gold, your savings account is going to be gold. It’s going to happen because all currencies, even the roaring dollar, are falling in terms of being a storehouse of value. Capitalism is finished. I can’t tell you what the next system will be, but capitalism is over because the heart of capitalism is markets. Without markets, you cannot have a capitalistic system—it’s over.” .. 34 minutes

Thursday, December 01, 2016

Yra Harris:
POTENTIAL SPARKS TO IGNITE 
THE FLAMES OF A FINANCIAL FIRE 
"1. If the U.S. 2/10 curve begins to flatten–currently holding around 117 area–the bigger test will be in the 80 BASIS POINT area to signify the initiation of the flames of deflation;
2. There’s a new break in the currency wars. 
3. The dramatic fall in the price of OIL is significant but actually aids Europe, which has little production and benefits from a fall in the price of its energy imports. The larger problem, of course, is for the U.S. financial system, which has lent heavily to U.S. energy producers and is exposed via the bond markets. There is a complacency among some investors that the loan exposure of banks is minimal compared to the sub-prime crisis but as we know a single spark can ignite a large fire. The more important question: What are the Saudis up to? The last time the House of Saud drove the price of OIL dramatically lower it was 1986 and Vice President George H.W. Bush went to Saudi Arabia and convinced the Saudis to cut production because it was a disaster for U.S. producers in Texas. This time the Saudis seem to be sending a message but it’s not clear what and to whom. Given its anger at the Obama White House over its dealings with IRAN, the Saudi message my cut deeper then all previous political machinations.
4. The most dangerous spark of all is something I have warned about in this blog and on television with Rick Santelli and that is the rise of anti-euro fringe parties in Europe. More importantly, these parties are also opposed to the insular nature of the governing elites. Chancellor Merkel is under great pressure, even as she has been touted as the greatest Chancellor since Konrad Adenauer. It is amazing how quickly the winds change. Frau Merkel cancelled her trip to Davos because to leave Germany to cavort with the epitome of crony capitalists would not play well with the Burhgers of Bavaria.
The recent scandal of the rapes in Cologne over New Year’s Eve has lit the fires of the AFD and its anti-refugee platform. But the real spark to German political pressure on Merkel is the RAPE of German savers by the ECB-imposed negative interest rates that are condoned by the German Chancellor (yet vehemently opposed by Bundesbank President Jens Weidmann). It is this potential conflagration that can cause the greatest problem for the EU and global financial markets. The ECB’s swollen balance sheet has caused the sovereign debt of Spain, Portugal, Italy, France, Greece and others to be absurdly priced risk. The world is a tinder box."
LINK HERE to the commentary
Financial Repression In China:
China Curbs Gold Imports To Slow Capital Flight
"While all eyes were on India (as rumors swirled of an imminent gold import ban), The FT reports that China curbed gold imports in the wake of government attempts to clamp down on capital leaving the country, according to traders and bankers."
LINK HERE to the article
India Suddenly Goes 
Almost Completely Cashless 
McAlvany Commentary .. 82% of circulating currency in India banned by Modi. The New Populism “Not Extremist” but rather a signal of Democracy in trouble. Beginning of term for Reagan: Public debt 25%/GDP…For Trump it’s 105%/GDP! .. 40 minutes