While sentiment towards gold in the West is abysmal - even as gold languishes at record lows when adjusted for inflation - Asian demand remains insatiable. It would be wise for investors to inform themselves as to why this should be so. Demand for gold in Asia is often written off by Westerners as an irrational impulse of uneducated Asian peasant farmers and workers.
Somewhere along the line, we lost the ability to distinguish between earning a profit and maximizing private gain by any means, i.e. Infinite Greed. All those angered by the mere question of the viability of this predatory pillaging in the name of capitalism are incapable of even admitting this cultural crisis exists.
Germany had lost the war, the Nazi industrialists agreed, but the struggle would continue along new lines. The Fourth Reich would be a financial, rather than a military imperium. The industrialists were to plan for a “postwar commercial campaign.” They should make “contacts and alliances” with foreign firms but ensure this was done without “attracting any suspicion.”... The State Department’s efforts on Schacht’s behalf worked. He was initially found guilty but was then acquitted, to the fury of the Soviet judge.
A look at the next week's events that could impact the global capital markets.
"The global economy is awash as never before in commodities like oil, cotton and iron ore, but also with capital and labor—a glut that presents several challenges as policy makers struggle to stoke demand," WSJ notes, suggesting yet again that QE can cause deflation when those who have access to easy money overproduce but do not witness a comparable increase in demand from those to whom the direct benefits of ultra accommodative policies do not immediately accrue.
It is undoubtedly a huge red flag when in one of the countries considered to be a member of the “highest economic freedom in the world” club, commercial banks are suddenly refusing their customers access to their cash. This money doesn’t belong to the banks, and it doesn’t belong to the central bank either. If this can happen in prosperous Switzerland, based on some nebulous notion of the “collective good”, which its unelected central planners can arbitrarily determine and base decisions upon, it can probably happen anywhere. Consider yourself warned.
It would appear the era of the dollar's global domination as a reserve currency is coming to an end, and the stage is now being set for gold to be officially accepted as the ultimate reserve money once again, this time by the next generation of advanced nations.
“Sometimes the side effects outweigh the benefits"...
Germany Prepares For "Plan B", Says Greece Would "Need Not Only A Third Bailout, But Fourth, Fifth Or Even More"Submitted by Tyler Durden on 04/25/2015 16:24 -0400
It has been a very disturbing 24 hours for Greece.
The trio of macro-prudential policy, the onset and evolution of shadow banking, and the nebulous concept of financial stability may have become a toxic cocktail which can be instrumental in moving forward the Federal Reserve’s timeline for lift-off zero bound rates. The intuition here is stooped in concepts of volatility and how market structure evolution may contribute or detract from asset volatility. Volatility is the square root of time. Financial repression times time equals volatility. Financial repression and/or macro-prudential policy times time equals the inverse of financial stability. Financial stability inverted equals volatility squared.
October 15th, 2014 wasn`t a market crash!
All problems, all crises, have at least one solution, if not many solutions. There is no such thing as an unwinnable scenario. Some may not be smart enough or courageous enough to see it, but the solution is always there, waiting to be discovered. The only fight that cannot be won is the fight in which the enemy makes all the rules and we foolishly abide by those rules. Life is not a game of chess, and a man can choose to be more than a pawn anytime he has the guts to do so. Collapse is already upon us; now we must decide who will determine what happens next.
"What is different this time? Central banks are driving all investment decisions, and what this implies is that they are in this trade so deeply that there is no obvious or practical exit.... This is a dangerous situation. The focus must return to the REAL economy; we cannot trade our way out of past mistakes."
Operating and reported earnings have turned sharply lower over recent quarters which has historically been associated with major market peaks. As shown below, it is also important to notice that revenue has tended to lag these downturns in earnings previously. This is because the measures used to substantially boost profitability from each dollar of revenue generated through accounting gimmickry, share repurchases, and cost cutting are finite in nature. When the effect of those manipulations fade, so does the inflated profitability generated from each dollar of revenue. This will be something worth watching closely over the next few quarters particular as the commentary of a "continued secular bull market" continues to hit the headlines.