Thursday, September 01, 2016

As The Fed & Other Central Banks Create Paper Money To Try To Cover Over The Problems, The Markets Are Starting To Pay More For Tangible Assets & Less For 'Paper' Financial Assets
"There is a very important change taking place in the stock market .. While subtle and little noticed so far, this change is starting to stick out like a sore thumb and can no longer be ignored .. Although the Dow Jones Industrials and other major indices are making new highs, the banking sector is glaringly underperforming .. Shares of companies owning real assets – like commodity producers – are glaringly diverging from shares of companies owning financial assets – like banks .. When you look at countries where the currency has hyperinflated – like Zimbabwe or more recently, Venezuela – their stock markets showed this same divergence we are now seeing on the NYSE .. The conclusion is obvious. Avoid shares of companies who assets consist of financial assets in the hyperinflating currency, and instead own shares of companies with a lot of tangible assets .. I have been forecasting hyperinflation of the U.S. dollar for some time because there are just too many new dollars being created by the Federal Reserve. So it has been my expectation that the U.S. dollar will be destroyed in a hyperinflationary blow-off, but it hasn’t happened – yet. Timing is always problematical and impossible to predict. So I have been focusing more on the outcome and road signs along the way that we are indeed headed to the destruction of the dollar’s purchasing power .. The biggest factor that has delayed the inevitable hyperinflation is the Fed’s intervention to keep interest rates near zero. With the Federal government’s debt level now approaching $20 trillion, a 1% increase in its borrowing cost would add $200 billion to its already gargantuan annual deficits."
LINK HERE to the article

1 comment:

Anonymous said...

Why Do Central Banks Need To Exist?

The short answer is, they don’t. Central Banks function as “legititmized” price control mechanisms. They control the price of money in order to help the elitists confiscate your wealth. That’s it. But price controls never last very long and neither do Central Banks. The U.S. is on its third CB in less than 300 years of existence and there’s been in a movement in place to get rid of the Fed for at least the last 8 years.

The Daily Coin featured a useful analysis – LINK – of the latest attempt by the western Central Banks to build a “currency sandbox” for everyone to play in because they know the U.S. dollar’s role as the reserve currency is coming to an end. The Utility Settlement Coin” is an act of desperation to head off the move by eastern hemisphere emerging economic powers, led by China and Russia, to create a level playing field.

Almost every year the precious metals sector experiences a price correction late in the summer. And almost every year the anti-gold propaganda floods the internet and media. This year is no exception. But the current pullback in the sector has about run its course. This was a healthy pullback after the huge run up in the sector. The next leg higher should be even more exciting.

Finally, the U.S. economy is starting to collapse. Blow away the propaganda smoke being blown by the likes of Janet Yellen, Stanley Fisher and Hillary Clinton and a clear view of the real economic data will show a nasty downturn emerging in housing, autos, general manufacturing and discretionary consumption. In the latest episode of the Shadow of Truth, we discuss these issues and infuse some humor to make it easier to digest – enjoy the podcast and enjoy your long holiday weekend – it could get ugly in Q4: