The 30 statistics that you are about to read prove beyond a shadow of a doubt that the middle class in America is being systematically destroyed. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a staggering pace. Yes, the stock market has soared to unprecedented heights this year and there are a few isolated areas of the country that are doing rather well for the moment. But overall, the long-term trends that are eviscerating the middle class just continue to accelerate.
Look for a speech on Friday August 22nd by Janet Yellen where she officially signals financial markets that they better start finding their respective chairs.
The continuity bias is astounding as many with assets address this as an “extra rough patch” to get through rather than the clear paradigm shift it has been telegraphed to be.
We are entering a completely new era in economics. Either (1) if countries perceive that their borrowings curtail their ambitions (thus we have a check and balance), however (2) if countries cannot borrow, then they may invade and revert to the old Conquest Model relying upon the spoils of war, which included the confiscation of assets belonging to an adversary. Either Putin backs down, or he asserts the same principles and is then forced to invade in short-order just to economically survive.
Even if you don’t buy that QE and ZIRP will lead to a dollar collapse, you do have to admit that these Fed policies have severely brainwashed investors. The Federal Reserve is the boiler room operation that has pumped up the equities market by way of QE and ZIRP. You are investing in a pump-and-dump scam. And like in all such scams, you will lose. Clear enough for ya?
It has been revealed, thanks to Edward Snowden, that Google and other US tech companies received millions of dollars from the NSA for their compliance with the PRISM mass surveillance system. So just how close is Google to the US securitocracy?
"Google is getting WH [White House] and State Dept support and air cover. In reality they are doing things the CIA cannot do"
That Google was taking NSA money in exchange for handing over people’s data comes as no surprise. When Google encountered the big bad world, Google itself got big and bad.
With the ongoing musical chairs at the COMEX (focused on JPMorgan's volatile holdings), the bank's precious metals team now sees a number of reasons to be long gold. Noting the market's shrugging off of Paulson's unwind ("delivering an exclamation mark to define the end of the fall in gold stocks"), JPMorgan (ironically) suggests the questionable price action in the paper markets in light of unprecedented physical demand combined with the seasonal positives (and physical supply restrictions) all points to "getting long the gold space," with gold and silver miners offering value. The question remains, given that none of these are 'new' facts, why the change of heart now (especially as JPM is also buying)?
It would seem the demand for physical gold and the apparent limit on paper-gold decompression (given recent musical chairs in COMEX and Gold ETF holdings rising) are hitting at an inopportune time for the confidence-inspiring central banks of the world... Seasonally (for 30 years), August has marked the cylical low.
Sales of silver coins by the U.S. Mint have set a record high in the first half of 2013 seeing the best start to a year ever.
Year to date Silver Eagle sales are at 30.3 million, a record pace that was supported by soaring July sales. Silver Eagle sales had a record year in 2011. That year, it took until September 21, 2011, to reach above 30 million in sales for the year.
Therefore, 2013 looks set to be a record year for Silver Eagle sales.
The next day, following a shut out by HSBC, JPM had no choice but to go to the second largest vault, that of Scotia Mocatta and get more than triple times that, or just over 20k ounces.
Today, the Comex gold crunch has gotten so confusing, nothing short of a color-coded schematic can do it justice.
Iran is a right old sorry state (of affairs). Plunged into recession, inflationary pressure that Abenomics wouldn’t mind having a bit of and Bernanke might just be getting if he carries on printing the greenbacks at the rate they are churning out of the Federal Reserve faster than a Ford-T in 1908.
As the markets elevate higher on the back of the global central bank interventions it is important to keep in context the historical tendencies of the markets over time. Here we are once again with markets, driven by inflows of liquidity from Central Banks, hitting all-time highs. Of course, the chorus of justifications have come to the forefront as to why "this time is different." The current level of overbought conditions, combined with extreme complacency, in the market leave unwitting investors in danger of a more severe correction than currently anticipated. There is virtually no “bullish” argument that will withstand real scrutiny. Yield analysis is flawed because of the artificial interest rate suppression. It is the same for equity risk premium analysis. However, because the optimistic analysis supports the underlying psychological greed - all real scrutiny that would reveal evidence to contrary is dismissed. However, it is "willful blindness" that eventually leads to a dislocation in the markets. In this regard let's review the three most common arguments used to support the current market exuberance.
Aside from light volume there’s no argument with the tape. It’s quite positive but much overbought. Earnings news is beginning to wane leaving less for bulls to respond to. Many previous reliable technical indicators are succumbing to all the money printing. Looking at those markets where QE is not taking place perhaps reveals the real market conditions.
For well over a year now, we have been writing about how this whole “buy to rent” investment strategy is one of the biggest disasters waiting to happen within the U.S. economy. We have repeatedly noted that these private equity clowns were crowding into these markets with reckless abandon and that this would ultimately crush their business model as there’s no way rents can rise enough to keep yields attractive in a country where most people are struggling to meet their daily expenses. Well it seems the day of reckoning may be at hand.