In Defense of Gold

Submitted by Michael Pento – Pento Portfolio Strategies

There has been an unprecedented attack on gold and mining shares over the past three years emanating from financial institutions in order to support the government’s supposed success in bringing the economy back to health. And even though gold mining shares are down 85% during this tenure, the case for owning gold-related investments have never been more compelling.

The reason to own gold is the same today as it has been for thousands of years: it is the perfect store of wealth. Gold is portable, divisible without losing its value, beautiful, extremely scarce, and virtually indestructible. It is simply the best form of money known to mankind.

The case for keeping your wealth in gold only becomes more bolstered when real interest rates are negative, faith in fiat currencies is crumbling, and nation states are insolvent. The massive and unprecedented Quantitative Easing programs and Zero Interest Rate Policies among the Bank of Japan, Peoples Bank of China, European Central Bank and Federal Reserve clearly show that Central Banks have no escape from manipulation of their bond market, currencies, equities and economies. Ms. Yellen’s recent tacit admission that the Fed Funds Rate must remain at zero percent for at least a full seven years was a clear validation of this premise.

For example, if the BOJ were to stop buying every Japanese Government Bond issued; interest rates would skyrocket, the stock market would crash and the economy would melt down in a matter of days. This is because any nation that has a debt to GDP ratio of 250%, over a quadrillion yen in debt, and is in a perpetual recession should never be blessed with a 0.3% 10-Year Note yield. Continue reading

“If the Economy Surprises Us…”

Submitted by William Bonner, Chairman – Bonner & Partners

Congress Gets a Reprieve

On Thursday, the pope and the Fed chief fought for center stage. God and Mammon – or their earthly representatives – took the headlines. Pope Francis spoke to Congress. “Render unto Caesar” he did not recite.

Francis in CongressPope Francis in Congress: skipping over parts of his speech …

Photo credit: M. Scott Mahaskey

Nor did he even suggest that mammon might have gotten too big for its britches in the U.S. establishment. Apparently – according to Vatican sources – he forgot to mention it. MSN News has the report:

“Pope Francis omitted a short but powerful section of his speech to Congress – in which he warned politicians not to be a “slave” to the economy or finance – because he lost his place and accidentally skipped part of his script, the Vatican has said.

The remarks could have made the assembled crowd of lawmakers a little uncomfortable, given the widely held perception that members of Congress from both parties are too beholden to special interests.

Lawmakers raise tens of millions of dollars from companies and other interests – especially banks – to help fund their campaigns. Companies also pay lobbyists tens of millions of dollars every year to help sway, mold, and kill proposed legislation to suit their needs.”

Instead of warning the world to stay away from politics, Francis urged U.S. legislators to make common cause with the church in order to render the world a better place. Continue reading

Tick Tick Tick

Submitted by James Howard Kunstler  –  www.kunstler.com

Did Charlie Rose look like a fucking idiot last night on 60-Minutes, or what, asking Vladimir Putin how he could know for sure that the US was behind the 2014 Ukraine coup against President Viktor Yanukovych? Maybe the idiots are the 60-Minutes producers and fluffers who are supposed to prep Charlie’s questions. Putin seemed startled and amused by this one on Ukraine:how could he know for sure?

Well, gosh, because Ukraine was virtually a province of Russia in one form or another for hundreds of years, and Russia has a potent intelligence service (formerly called the KGB) that had assets and connections threaded through Ukrainian society like the rhizomorphs of the fungusArmillaria solidipes through a conifer forest. Gosh, Charlie, it’s like asking Obama whether the NSA might know what’s going on in Texas.

And so there is Vladimir Putin, a former KGB officer, having to spell it out for the American clodhopper super-journalist. “We have thousands of contacts with them. We know who and where, and when they met with someone, and who worked with those who ousted Yanukovych, how they were supported, how much they were paid, how they were trained, where, in which country, and who those instructors were. We know everything.”

The only thing Vlad left out of course was the now-world-famous panicked yelp by Assistant Secretary of State Victoria Nuland crying, “Fuck the EU,” when events in Kiev started getting out of hand for US stage-managers. But he probably heard about that, too.

Charlie then voice-overed the following statement: “For the record, the US has denied any involvement in the removal of the Ukrainian leader.” Right. And your call is important us. And your check is in the mail. And they hate us for our freedom.

This bit on Ukraine was only a little more appalling than Charlie’s earlier segment on Syria. Was Putin trying to rescue the Assad government? Charlie asked, in the context of President Obama’s statement years ago that “Assad has to go.” Continue reading

FOURTH TURNING: CRISIS OF TRUST PART 3

Submitted by Jim Quinn  –  The Burning Platform

In Part 1 of this article I discussed the catalyst spark which ignited this Fourth Turning and the seemingly delayed regeneracy. In Part 2 I pondered possible Grey Champion prophet generation leaders who could arise during the regeneracy. In Part 3 I will focus on the economic channel of distress which is likely to be the primary driving force in the next phase of this Crisis.

There are very few people left on this earth who lived through the last Fourth Turning (1929 – 1946). The passing of older generations is a key component in the recurring cycles which propel the world through the seemingly chaotic episodes that paint portraits on the canvas of history. The current alignment of generations is driving this Crisis and will continue to give impetus to the future direction of this Fourth Turning. The alignment during a Fourth Turning is always the same: Old Artists (Silent) die, Prophets (Boomers) enter elderhood, Nomads (Gen X) enter midlife, Heroes (Millennials) enter young adulthood—and a new generation of child Artists (Gen Y) is born. This is an era in which America’s institutional life is torn down and rebuilt from the ground up—always in response to a perceived threat to the nation’s very survival.

For those who understand the theory, there is the potential for impatience and anticipating dire circumstances before the mood of the country turns in response to the 2nd or 3rd perilous incident after the initial catalyst. Neil Howe anticipates the climax of this Crisis arriving in the 2022 to 2025 time frame, with the final resolution happening between 2026 and 2029. Any acceleration in these time frames would likely be catastrophic, bloody, and possibly tragic for mankind. As presented by Strauss and Howe, this Crisis will continue to be driven by the core elements of debt, civic decay, and global disorder, with the volcanic eruption traveling along channels of distress and aggravating problems ignored, neglected, or denied for the last thirty years. Let’s examine the channels of distress which will surely sway the direction of this Crisis. Continue reading

The Real Pressure On And Of ‘Inflation’

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

I think it worth noting one more reason Yellen was out front yesterday. Not only is liquidity suffering still globally but that is having an immensely negative effect on asset prices, especially at the bubble points. The S&P/LSTA Leveraged Loan 100 had not been updated since last Friday, which suggested (to me) continued pricing difficulties in leveraged loans. The combination of declining prices with further and greater uncertainty about those prices is highly, highly combustible. Thus Yellen’s feeble attempt at reassurance; it wasn’t quite as bad as “contained” but at this point I doubt you’ll ever hear the phrase “leveraged loans” escape her lips.

Now that S&P has updated the index through yesterday, we can appreciate it being as bad as expected: new low in terms of market value, significantly less than even the August 26 terminus for the global liquidation wave. Again, that isn’t unexpected given other institutional junk prices but especially the continually unsettled nature of the “dollar” and liquidity.

ABOOK Sept 2015 Update LevLoan

Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

Cash Beats Stocks And Bonds For First Time In 25 Years (MarketWatch)
US Bonds Flash Warning Sign (WSJ)
Waiting for Collapse: USA Debt Bombs Bursting (Edstrom)
China August Industrial Profits Fall 8.8% From A Year Earlier (Reuters)
Chinese Mining Group Longmay To Cut 100,000 Coal Jobs (China Daily)
VW Proves That Global Business Has Become A Law Unto Itself (Guardian)
Seven Reasons Volkswagen Is Worse Than Enron (FT)
German Transport Authority Demands VW Car Clean-Up Plan By October 7 (Bloomberg)
VW Scandal to Hurt Its Financing Arm (WSJ)
VW Staff, Supplier Warned Of Emissions Test Cheating Years Ago (Reuters)
VW’s New CEO Is Moving Forward With a Strategy Shift (Bloomberg)
Catalan Separatists Claim Election Win As Yes Vote For Breakaway (Guardian)
Sweden’s Negative Interest Rates Have Turned Economics On Its Head (Telegraph)
Zero Inflation Looms Again for ECB as Oil Drop Counters Stimulus (Bloomberg)
Tory Welfare Cuts Will Destroy Benefit Of UK’s New Living Wage (Guardian)
Corbyn Recruits Top Global Economists to Boost Economic Credentials (Bloomberg)
Swiss Watchdog Says Opens Precious Metal Manipulation Probe (Reuters)
Rousseff Worried About Brazilian Companies With Dollar Debt (Bloomberg)
Shell Halts Alaska Oil Drilling After Disappointing Well Result (Bloomberg)
Banksy’s Dismaland To Be Taken Down And Sent To Calais To Build Shelters (PA)
500 Migrants Rescued In Mediterranean This Weekend: Italian Coastguard (AFP)

Read much more here: Debt Rattle September 28 2015 – TheAutomaticEarth.com