By Tyler Durden
With markets and monetary policy already reduced to Seussian fantasy, and the average insta-American incapable of comprehending anything but snapchat-‘memes’, we thought the following summed up the state of US politics perfectly…
Source: "I Do Not Like This Uncle Sam…"
By Tyler Durden
Submitted by Alasdair Macleod via GoldMoney.com,
In my view, this new bout of turmoil in financial markets is the prelude to the final demise of government currency.
If I’m right, a long-expected collapse in the purchasing power, and of the very concept of fiat currency, will evolve from current events. The purpose of this article is to explain why monetary theory predicts a currency collapse.
The question at the heart of today’s market instability is the validity of fiat currency; that is to say, forms of money issued and sanctioned by individual governments, with no backing other than faith in those governments’ creditworthiness, and the enforcement of its use by law. The risks they impose on all of us will be evidenced one day by both the speed of the fall in each individual fiat money’s purchasing power, and inevitably by their comparison with gold’s more stable purchasing power. Essentially, an awareness of the dangers of unsound money will gradually become evident to every economic actor.
So far, or at least since the days when fiat money was freely exchangeable for gold, central banks have managed to enforce upon us their currencies as money, originally on the basis they were gold substitutes. That pretence was finally dropped in 1971. The purchasing power of fiat currencies has never been seriously challenged since, except in relatively few extreme cases, such as Zimbabwe and Venezuela. Not even the financial crisis eight years ago threatened a collapse in fiat currencies, when banks had to be rescued with unlimited extra quantities of money and credit.
The current crisis has commenced while there are determined efforts to stop the purchasing power of the major currencies from rising, even leading to the deployment of negative interest rates in this quest. None of the central banks’ policies appear to have worked. The increasing purchasing power of the yen, despite all attempts to lessen it, is the clearest example of the abject failure of a central bank to achieve its monetary objectives. The same can be said of the ECB and the euro, a currency even more synthetic than those it replaced. It is clear that the central banks are setting monetary policy more in hope than in a true appreciation of their own hopelessness.
They place an undue emphasis on empirical evidence. That’s why charts and statistics are so important to them and all their epigones. When you don’t understand and cannot explain something, you turn to the so-called evidence. And when very few people actually have a reasonable grasp of what money is about, you can rely on empirical evidence being unchallenged. For monetary policy, this tells us two things: central banks are clueless about monetary theory, and in the event of a second systemic crisis, they will be misguided by their experiences of the last one.
Today’s empirical evidence reflects the bail-out of the global banking system in 2008/09. Neo-classical monetarists were initially worried by the potential for price deflation in the wake of the banking system’s rescue, and so central bankers …read more
Source: The Prospects For Money
By Tyler Durden
Submitted by Michael Shedlock via MishTalk.com,
The warmongers and gun manufacturers are cheering today as Shinzo Abe Wins Sweeping Victory in Japan Elections.
Shinzo Abe has won a sweeping victory in elections to Japan’s upper house, leaving him within reach of a parliamentary supermajority that would allow the government to revise Japan’s pacifist constitution.
With seven proportional representation seats left to declare on Sunday night, Mr Abe’s ruling Liberal Democratic party and its allies had won 72 out of the 78 seats they need for a two-thirds majority.
Toru Takigishi, a 76-year-old chemistry professor in Tokyo and a long-time LDP supporter, said he voted for the Communist party for the first time. “I’m happy with the current constitution and I want peace to be maintained. At least there is a checking mechanism for constitutional change under the Communist party,” Mr Takigishi said.
Japan Election Boosts Shinzo Abe’s Bid to Revise Constitution
The Wall Street Journal reports Japan Election Boosts Shinzo Abe’s Bid to Revise Constitution
With most results in, Mr. Abe’s Liberal Democratic Party and its junior partner, Komeito, were on track to win nearly 70 of 121 seats that were up for grabs in the 242-seat upper house. A handful of seats remained undecided early Monday.
The coalition parties plus smaller opposition parties and unaffiliated lawmakers who favor constitutional revision were likely to control two-thirds of Parliament’s upper house after the election, projections by Japanese media showed. Revision requires two-thirds of both houses of Parliament, after which the changes must be approved by a majority of voters in a national referendum. The coalition already controls two-thirds of the lower house, which wasn’t up for election, meaning Mr. Abe has the votes to start the revision process.
Any move to change the constitution is likely to spark a divisive battle. Last year, Mr. Abe’s government enacted a bill allowing Japanese troops to fight overseas along with the country’s allies, following a controversial reinterpretation of one article of the constitution.
The move prompted months of protests, some attracting tens of thousands of people. Though the security bill was passed by both houses of Parliament, experts testified that it was unconstitutional.
With the election over, Mr. Abe will likely focus on passing the stimulus package, a task that has gained urgency since the U.K.’s decision last month to leave the European Union cast further uncertainty over the global economy.
Mr. Abe hasn’t disclosed any details, but the stimulus program is expected to be a multiyear effort to upgrade the nation’s transport infrastructure, expand child care and nursing-care services and create scholarships for students.
Meanwhile, the Bank of Japan is widely expected to expand its efforts to stoke growth and inflation when its policy board meets July 28-29. Its most likely options are increasing the size of its unprecedented asset-purchase program and pushing a key interest rate on bank reserves further into negative territory.
For further discussion of warmongering possibilities, please see Japan’s Abe Angling for War with …read more
Source: Warmongers Delight: Abe Hits Super-Majority With Sweeping Victory In Japan Election
By Tyler Durden
With both stocks and US Treasury prices at all time highs the market is sensing that something has to give, and that something may just be more QE, which likely explains the move higher in gold to coincide with both risk and risk-haven assets. As of moments ago, gold rose above $1,370, and was back to levels not seen since 2014. Curiously, the move higher is taking place after Friday’s “stellar” jobs report, suggesting that someone does not believe the seasonally-adjusted numbers goalseeked by the BLS.
And while we reported last week that one way investors are rushing into the anti-QE safety of gold is by buying paper gold derivatves such as ETFs, which rose above 2,000 tons for the first time since 2013, many others have bypassed paper claims on gold such as GLD entirely, and are rushing into physical.
Case in point, Japanese savers who, fearing domestic confiscation, have been accumulating gold in Switzerland. It’s not just the Japanese: as Nick Laird shows, the past week saw the second largest ever increase in physical gold holdings, as the total published holdings of physical funds rose by 2.5 million ounces to 85.8 million, second only to the 4 million ounce increase in early 2009.
Finally, with even the sellside starting to turn, there may be more upside as the slow money starts to move in. In a whimsical note released on Friday, Bank of America’s metals team writes “Gold: always believe in your soul. Glad you are bound to return. You’re indestructible.”
Yes, we were surprised too, but it’s true.
Strange golden “poetry” aside, this is why BofA thinks gold is going to $1,500 and silver’s next stop is an “overshoot” to $30.
The world has been walking from crisis to crisis and we see risks that this may not change. The importance of that dynamic for the precious metals is mirrored by the high correlation between potential US GDP growth and gold quotations. Many of the underlying issues affecting the global economy are structural, with Brexit merely a symptom of the problems many countries are facing. To that point, we called a bottom in gold in February and Brexit reinforces our view. As such we are upgrading next year’s gold price forecast from $1,325/oz to $1,475/oz. We called a bottom in silver in April on supply and demand dynamics; an overshoot of prices to $30/oz is possible.
Gold heading for $1,500/oz
After a weak US labour market report earlier in June, the risk of Brexit added to the gold price rally ahead of the vote (Chart 11) and after. In our view, Brexit has affected gold through various transmission channels. On the fixed income side, US Treasuries and German bunds have benefited from a flight to quality; the current uncertainty also suggests that an accelerated rate hiking cycle is unlikely, so interest rates globally are set to remain low, which in turn reduces the opportunity costs of holding a non-yielding asset …read more
Source: "The World Is Walking From Crisis To Crisis" – Why BofA Sees $1,500 Gold And $30 Silver
100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps
Looking for something special ? Find The Lowest Price HERE
By Tyler Durden
From Russell Napier of ERI-C
Now only one question matters for global investors — Wo ist der Hubschrauber? (Where is the helicopter?).
The decline of European commercial bank share-prices before Brexit made it clear that a monetary reflation of Europe was failing. The collapse in these same share-prices post-Brexit means that even the politicians now realise that the ECB acting alone cannot stabilize the European economy. Indeed, given the evident political strains in the European Union, saving the economy from recession is now key to saving the European political union project itself.
So, will Mrs Merkel abolish fiscal austerity across Europe and permit each of the states of the European political union expand their debt mountains at the same time that the ECB is buying that debt? Are the keys to der Hubschrauber to be handed over? To save the European political union Germany must now confront its greatest fear and enfranchise the political union’s central bank to conduct outright monetary financing of all its constituent governments.
Investors need to remain very cautious indeed as it is in no way clear that Mrs Merkel will hand over the keys to der Hubschruaber. Should she do so, however, major changes in investment allocation are necessary as helicopter money will be raining from the skies in Japan, the Eurozone, the UK and even in the USA if President Clinton also wins the House and the Senate. This form of reflation will likely work and in due course work too much. Few things are binary in investment, but this huge decision to be taken in Berlin is the biggest binary event for investors this analyst has yet come across. The repercussions will reverberate throughout this century.
This analyst would like to present you with a firm forecast as to the possibility of ‘helicopter money’ coming to the European political union. However, it is too close to call. Even if that assertion is correct, this is truly dire news for financial markets.
Investors seem to have no doubt that Mrs Merkel will indeed endorse an end to fiscal austerity in the Eurozone and, in the process, further breach the constitution of the ECB and ignore the ghost of Herr Haverstein (Germany’s Weimar/hyperinflation central banker). These are truly existential decisions for any Chancellor of Germany to make and it is too dangerous to invest clients’ hard-earned savings on a bet that The Chancellor will sacrifice everything for the political union project.
Time is ticking away and a decision will have to be made within weeks if a European recession, which will raise severe questions about the survivability of the European political union, is to be averted. We will know soon enough just how large the ghost of Herr Haverstein still looms in Germany, as a failure to endorse helicopter money within a few weeks most likely means Germany is ultimately backing away from the European political union project. This is amongst the most important political decisions of the 21st century and one full of pain for global equity …read more
Source: Russell Napier Reveals The "Only Question That Matters For Global Investors"
By Tyler Durden
Submitted by Michael Shedlock via MishTalk.com,
French president Francois Hollande endorsed Hillary Clinton while warning “U.S. Election Risks Turning Into Brexit Vote II”.
French President Francois Hollande, who last month endorsed Hillary Clinton in the U.S. presidential race, said the November ballot threatens to play out along similar lines to the U.K.’s European Union referendum.
Just as U.K. voters rejected calls from political leaders and institutions to stay in the EU, a similarly anti-establishment sentiment may be brewing in the U.S., potentially damaging relations with Europe, Hollande said.
“The arguments in the Brexit vote and in the American presidential campaign are about the same,” Hollande told reporters Saturday at a NATO summit in Warsaw. “In a friendly way, may I also give some advice to the American people to make the right choice when the moment comes.”
Quite a Hoot
Francois Hollande giving advice is quite a hoot.
On June 2, 2016 Bloomberg reported:
“About 15 percent of voters have confidence in Hollande’s leadership, down from 33 percent in December and 58 percent when he took office in May 2012, according to the survey.
Only 33 percent of respondents who identify as left-leaning say they have confidence in the president, down 8 points in a month.”
Marine Le Pen Surges in Polls
On June 3, Breitbart reported Marine Le Pen Surges in Polls.
It is less than a year until the French public will vote on the highest office in the country, and new polls suggest that the current president François Hollande could be in serious trouble.
A survey published by Le Monde on Thursday shows the French president polling at 14 per cent while likely Republican candidate and former president Nicolas Sarkozy scored 21 per cent. The clear winner of the poll was anti-mass migration Front National party leader Marine Le Pen who was favoured by 28 per cent of those surveyed.
The biggest loser in the poll is Mr. Hollande whose disapproval rating rose among the group surveyed. The percentage of those totally dissatisfied with the Socialist leader have gone from 43 per cent in March to 53 per cent. The level of satisfaction with Mr. Hollande, on a scale of 1 to 10, now rests at 2.1.
If the polling numbers remain steady going into 2017, the FN leader is guaranteed a place in the second round of the French presidential elections.
The French presidential election system is much like the Austrian system. The Austrian presidential election this year saw anti-mass migration Freedom Party of Austria (FPÖ) candidate Norbert Hofer win 36.4 per cent of the vote in the first round, but lose by a mere 31,000 votes in the second round to former Green Party leader Alexander Van der Bellen.
French Election Polls
It’s amusing that someone whose overall popularity is 14% would be giving advice to anyone.
“Beginning of the End of the EU”
On March 25, Euractive reported Following Cameron, Marine Le Pen Pledges EU Exit Referendum.
On June 28, Time magazine posted this headline: …read more
Source: Irony Of The Day: Hollande Lectures US About Trump; Two-Way Frexit?
By Tyler Durden
In the wake of all of the Brexit vote furore, a chilling blurb made headlines and it went largely unnoticed and uncommented upon. The line was couched within comments made by Boris Titov, an economic policy maker for Russia’s Kremlin. Actually all of the following merits attention, but one line stands out. The source for this excerpt is a Facebook post by Titov. Here it is:
“…it seems it has happened — UK out!!! In my opinion, the most important long-term consequence of all this is that the exit will take Europe away from the anglo-saxons, meaning from the USA. It’s not the independence of Britain from Europe, but the independence of Europe from the USA. And it’s not long until a united Eurasia — about 10 years.”
This is a very revealing post to show how unfavorably the past 50 years of post-World War II American imperialism has been viewed. The tipping point, as mentioned in a previous article was the outright 180-degree that George H.W. Bush pulled on Mikhail Gorbachev: the promise of NATO membership upon reunification of the two Germany’s and the dissolution of the Soviet Union, and then not fulfilling that promise.
The American corporate interests inserted themselves, as the communist government shattered, leaving in its wake oligarchs, the Russian mafia, and a “Wild West” environment within Russia proper and the ex-SSR’s, the former Soviet satellite nations. A tremendous amount of chaos occurred for a decade that was both enabled and further fostered by the United States. The perception in Russia even before the Soviet Union came into being was that Russians were in an economic war with Great Britain, and the United States was looked upon as an “extension” of Britain: a country with language, law, and cultural parallels,especially in terms of expansion.
As of the past several years, the United States has been encroaching upon Russian territory and economic interests. That encroachment has intensified into a U.S.-created “Cold War Resurrection” stance with the bolstering of NATO forces in the Baltic states. The U.S. is virtually thumbing its nose at Russia with the distribution of the “anti-ballistic missile systems” emplaced in places such as Moldova. As Putin pointed out, it takes not even a sneeze and a couple of hours to convert those platforms into use for Tomahawks with nuclear capability. The Russians did not exercise “en passant” with such an opener, and are placing missiles of their own to face the U.S. assets.
The U.S. and Russia are fighting one another indirectly. Two weeks ago we were treated to the U.S. aircraft attempting to throw Russian bombers off of their mark in bombing forces hostile to Assad, and the Russians were blocking our planes from bombing their intended targets as well. The Russians support Assad’s defense against insurgents that wish …read more
Source: 10 Years (Or Less): Orwell’s Vision Coming True
By Knave Dave
![By Lucian.amarii (Jup) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons](http://thegreatrecession.info/blog/wp-content/uploads/Terrorist_banker.jpg)
Nothing is more shameless in a bedazzling sort of way than rich banksters standing on the public curb with their hands out. First, we had the admission this past week by a major French bank that Italian banks are so sick (and so too big to fail) they could cause systemic banking failure throughout Europe if not bailed out by over-taxed taxpayers.
Lorenzo Bini Smaghi — who was a member of the European Central Bank’s executive board and who is now Chair of French megabank Societe Generale — said the only way to save European banks, if they start to fall like dominoes due to Italy’s banking problems, is with taxpayer-funded bailouts.
Europe’s banking market faces the risk of a systemic crisis unless governments accept the idea of taxpayer money as the ultimate recourse in a crisis, Bini Smaghi said. Any intervention should be as swift as possible, he said. (Newsmax)
A French CEO says his massive bank and others could fall like dominoes due to Italy’s problems? That has to be good for his falling stocks. So, you ask yourself, why would he say something to spook an already scared stock market?
Then we had Italy’s prime minister, Matteo Renzi, pressuring Europe to bail out Italy’s banks by pointing out that Italian bank problems with bad loans pale in comparison to Deutsche Bank’s towering derivatives problem over in Germany.
“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred,” Renzi said. (Zero Hedge)
Gee, you’d think they were trying to talk the EU into a panic … as if it weren’t already there. Considering that 17% of Italy’s bank loans have gone sour (which sounds monumental to me), Deutsche Bank must be bad beyond belief at a hundred times worse! That’d be an undoable 170% bad, which is pretty dang bad!
Italian banks are deep into the sour apple bin because their solution to bad loans during the last crisis was to just roll them along by not foreclosing and hope that future economic growth would make the borrowers solvent again, but that kind of economic expansion never came. That left a lot of decay down in the apple bin after the Great Recession, and not too surprisingly the rot has spread. The amount of decay is now four times bigger than it was back then … and it was deadly then! As horrible as that sour mess is, Italy’s premier tells us Deutsche Bank is a hundred times more dangerous than that!
Why are banksters and politicians taking this beggar-thy-neighbor approach by pointing out how bad other European banks are — the Frenchy pointing at Italy, the Italian pointing at Germany? Statements like “Our own banks are so bad they need immediate bailouts, but they’re only a hundredth as bad as yours” are …read more
Source: Brexit-Beleaguered Banksters Back to Begging for Bailouts!
By Tyler Durden
Submitted by David Stockman via Contra Corner blog,
The boys and girls on Wall Street are now riding their bikes with no hands and eyes wide shut. That’s the only way to explain Friday’s lunatic buying spree in response to another jobs report that proves exactly nothing about an allegedly resurgent economy.
When the S&P 500 first hit 2130 back in May 2015, reported LTM earnings were $99.25 per share, and that was already down 6.4% from the cyclical high of $106 per share in September 2014. Thus, stocks were being valued at a nosebleed 21.5X in the face of falling earnings.
During the four quarters since then, reported LTM earnings have slumped by a further 12.3% to $87 per share. So that brings the “cap rate” to 24.5X earnings that have shrunk by 18% over the last six quarters. Wee!
You have to use the parenthetical because the casino is not capitalizing anything rational. It’s just drifting higher in daredevil fashion until something big and nasty stops it.
That something would be global deflation and US recession. Both are racing down the pike at accelerating speed.
Needless to say, when these lethal economic forces finally hit home, the puppy pile-up on Wall Street is going to be one bloody mess. But that’s the price you pay when you have destroyed honest price discovery entirely, and have transformed the money and capital markets into robo-machine driven venues of rank speculation.
Janet Yellen and the other 100 clowns who run the world’s central banks, of course, have no clue as to the financial doomsday machine they have enabled. Indeed, they apparently think efficient pricing and allocation of capital doesn’t matter.
After all, their entire modus operandi is to peg the price of money, bonds and the yield curve sharply below market-clearing levels—–so that households and business will borrow and spend more than otherwise.
Likewise, they aim to goose stock prices to ever higher levels. That’s so the top 10% and the top 1%, who own the preponderant share of equities, will feel the wealth(effects) and then spend-up and invest-up a storm.
But the economic gods created market-based price discovery for a reason. It was to insure that in the great arena of financial market supply and demand, the forces of fear and greed would contend on a level playing field. Short-sellers and contrarians heading south were to intercept the lemmings of greed heading north before they reached the edge of the cliff.
Now there is nothing but cliff. Central bankers have euthanized the short-sellers and empowered the lemmings of greed with free money to fund every manner of speculation while gifting them with cheap downside hedging insurance.
There is an awful price to be paid for one-way markets, however. The latter never correct; they crash.
And the suddenness, unexpectedness, and violence of these episodic crashes slam the main street economy with gale force. That confidence shock, in turn, cancels out the gains that the resilient forces of capitalism have eked out since the previous crash, thereby causing trend rates of gain in …read more
Source: Stockman Warns Of "Awful Price To Be Paid For One-Way Markets"
Welcome to Esh Carmel Blog.
