Even those at the top of the neofeudal debtocracy know our economy and political order need real reform. Behind closed doors, they will discuss this with others in the Power Elite and gloomily shake their heads. The usual reasons why real reform is impossible are duly trotted out: political stalemate/gridlock, the power of vested interests, etc. The real reasons are deeper than economics or politics.
In yet another worse-than-expected macro data point, Spain has just breached the 27% unemployment level - the highest since at least 1976, when data began following dictator Francisco Franco's death. At 27.2% this is already higher than the IMF's year-end estimate of 27% suggesting growth estimates are already overly optimistic. What is more concerning is the rate of increase in the joblessness is rising once again. The 1.1 percentage point rise is the largest in a year and 177,700 more households now have no actively employed members than a year ago. The greatest fear though, for European leaders and the Spanish people themselves, is the surge in youth unemployment. As we have noted a number of times in the past, the possibility of social unrest is exaggerated significantly by this number and at an incredulous 57.2% of under-25s out of work, Spain is closing in on Greece, according to official data, for the worst youth unemployment situation in Europe.
The political class set in motion the eventual obliteration of our economic system with the creation of the Federal Reserve in 1913. Placing the fate of the American people in the hands of a powerful cabal of unaccountable greedy wealthy elitist bankers was destined to lead to poverty for the many, riches for the connected crony capitalists, debasement of the currency, endless war, and ultimately the decline and fall of an empire. The 100 year downward spiral began gradually but has picked up steam in the last sixteen years, as the exponential growth model, built upon ever increasing levels of debt and an ever increasing supply of cheap oil, has proven to be unsustainable and unstable. Those in power are frantically using every tool at their disposal to convince Boobus Americanus they have everything under control and the system is operating normally. Nothing could be further from the truth.
It appears, once again, that the government's inept approach to spending 'other people's money' has blown up in their face. As HotAir.com reports, newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan. Just as with Solyndra, Congress seemed convinced to spend billions of taxpayer money 'investing' in green-tech startups - only to lose everything. Simply put, in our humble opinion, the pattern is explained by the 'monopoly money' perspective we suspect these funds are viewed as in light of Bernanke's inexorable funding of the government's largesse. None other than the great Joe Biden reveled in the news in 2009 that Fisker would re-open a closed GM plant creating jobs, jobs, jobs; it never completed the task and never created one job. When the money isn't yours, 'investing' public funds is oh so easy and it appears, with zero consequence for the decision makers - again. But this story is not over yet, as Fisker heads to Congress looking for the right "financial and stretgic resources" once again.
“This isn’t the end of the world,” says Rick Rule. “This is a normal – and ultimately healthy – cyclical decline in a longer term bull market. This is a sale.” None of the macroeconomic, geopolitical, or global demographic conditions pointing to a long term increase in gold and commodity prices are any different today than before the metal’s price began a multi-day slide last week.
We have been reporting extensively on the terminal disconnect between the paper gold market, which tumbled ten days ago for a variety of reasons, and the physical gold market which one can safely say, has seen a record surge in demand by those who wish to take advantage of the tumbling prices, depleting inventories of gold and silver in virtually all jurisdictions, and leading to the a record purchase of gold in the US mint a week ago as also reported here. Today, we learn that, as expected, none other than the US Mint has officially run out of small denomination gold coins, in this case One-Tenth ounce American Eagle gold bullion coins. We are confident this incontrovertible proof of soaring retail demand for physical will somehow result in JPM or another bullion bank dumping a few extra thousands ounces of paper/electronic gold or silver to further disconnect the paper price from what is actually going on with physical demand. As for the US Mint, first it's fractions of an ounce: look forward to the mint running out of all bullion denominations in the coming days and week, first in gold, then in silver as well.
“Recovery” has become the shibboleth constantly invoked by people running things after the crisis of 2008. Unfortunately, no such recovery was underway. It was papered over by the twin Federal Reserve policies of quantitative easing and financial repression – a combination of the nation’s central bank loaning vast new amounts of money into existence at ultra-low interest rates (hardly any interest to pay back) and creating steady monetary inflation to reduce the burden of existing debt by shrinking the dollar value of the debt. The program was a racket in the sense that it was fundamentally dishonest. The presumed purpose of these shenanigans from the point of view of the Federal Reserve and the White House was to keep the financial system stable and afloat, and therefore to keep “normal” American daily life going. Unfortunately, it was based on the unreal assumption that the financial norms of, say, 2006 could be ginned back up again, and this premise was just inconsistent with the reality of a post-Peak-Cheap-Oil world. Unfortunately, there was no organized counter-view to this wishful thinking anywhere within the boundaries of the political establishment.
The parallels between games like chess and poker and trading are many-fold, but poker is probably a little closer to trading, as it involves things like incomplete information, bet sizing and 'reading opponents', none of which play a role in chess. The following infographic, from tradimo.com, lists a number of famous traders and poker players who are good at both activities as well as a number of characteristics applying to both trading and poker. What really caught our attention though was the statistic right at the end...
After a disastrous few days in early April, bitcoin is back over $100 and up on the month, the year and its short lifetime. ConvergEx's Nick Colas is intrigued and continues to believe that this phenomenon is the most provocative economic experiment since the invention of the euro and well worth watching. The next chapter of the story, he believes, will be the entry of a host of "Smart money" venture capitalists looking to build the currency's infrastructure. Money and currency are exactly the kind of large, scalable and complex opportunity that gets VCs very, very excited. Yes, it could all still end in tears, either by regulation or mismanagement. But bitcoin isn’t dead just yet, and it remains one of the most potentially disruptive forces in modern finance. In summary, bitcoin is what he calls a "Beta currency." How it all shakes out, however, will be both instructive to watch and potentially profitable for those on the right side of this very novel trade.
Participants don’t see them. Outsiders shake their heads, until they get sucked in. Central banks create them, but deny their existence. Risks no longer exist. Take natural gas.
With European stocks and bonds, US bonds, commodities and precious metals all hinting at problems, the near-all-time-highs levels of the US equity market remain a mirage. We discussed here whether we had seen 'peak economic recovery' and today we extend that analysis. The point of this exercise is to allow your brain to juxtapose visual data to the ongoing mainstream diatribe of economic recovery. Evidence continues to mount that we have seen the peak of activity for the current economic cycle. The implications of such an occurrence are broad and suggests that the Fed's liquidity driven interventions, and zero interest rate policy, may have well seen the end of their effectiveness.
Every scheme in Europe than can be rigged has been or is being rigged and, in the end, it will only be the fools that are left in this game. It is not the greater fools either but the mandated fools who take directions from Brussels who takes their directions from Berlin. We cannot emphasize enough the great risk that anyone takes now by investing in anything in Europe. You can ignore liabilities, you can play pretend and not count liabilities but in the end they are still there and the losses must be finally acknowledged. Gold gave you a head's up.
Buy PHYSICAL Gold. NOW: The Discount of a Lifetime: Or Why You Must Abandon the Fake Paper Gold MarketSubmitted by Gordon_Gekko on 04/17/2013 06:00 -0500
It's time to go in for the kill. Buy as much physical Gold as you can.
We all know that double digit inflation in HPA is not a good thing for the long term recovery of the housing market.
That the IMF is the most unwavering optimist despite fundamentals, facts and reality has been well-documented over the years. For those who still haven't seen the agency's perpetual upward bias in forecasting world growth, a quick scan of the charts below will cement the understanding that all the Washington-based serial bail-outer of insolvent countries is, is a dispenser of optimism and whose agenda is simply to preserve confidence that all is still well. The charts show how just over the past year's six outlook revisions, the IMF has been forced to downgrade, with quarterly precision, its overly optimistic forecast for virtually every part of the world, from the US, to the Euroarea, to China, and of course, the entire world: the black line is the most recent revision set - it also happens to be the lowest one. However, one chart which deserves particular attention not because it is accurate, but because the rate of deterioration is truly troublesome, is the IMF's view on global trade volume of goods and services. It is here that one can clearly see the disastrous impact of global central bank micro-mismanagement, capital misallocation and central planning. In short: global trade is collapsing - even from the point of view of one of the staunchest macro optimists - at a rate unseen since the Great Financial Crisis, and the Great Depression before it.