The debt to GDP ratio for the entire world is 286%. In other words, global debt is almost 3 times the size of the world economy. Both public and private debt are exploding and - despite what mainstream economists think - 141 years of history shows that excessive private debt can cause depressions.
If the government’s official statistics are to be believed the U.S. economy is moving full steam ahead. Consumer are spending, the job market is expanding, real estate has recovered, stocks are soaring and the U.S. dollar is stronger than it has been in a decade. But if you have yet to realize it, billionaire investor Eric Sprott says "it’s all a lie." The manipulation of precious metals, coupled with the supply and demand fundamentals which Sprott says will lead to shortages over the next few years as mining companies reduce output or close up shop, will leave many investors who think their gold holdings are easily convertible to physical assets with nothing more than depreciating Yellen Bucks at exactly the moment they’ll need precious metals in their possession.
Under normal circumstances, after 2008's conflagration of the calamitous collateralizations, we shouldn’t have seen such irrational, reckless, greedy behavior from Wall Street for another generation. But, Wall Street didn’t have to accept the consequences of their actions. They were bailed out and further enriched by their puppets at the Federal Reserve, the lackey politicians they installed in Washington D.C., and on the backs of honest, hard-working, tax paying Americans. The lesson they learned was they could continue to take excessive, reckless, unregulated risks without concern for losses, downside, or consequences.
Gas prices are some of the highest in the country in San Diego, California, and it still cost me only $2.96 a gallon to fill up my tank last week.
There’s an excess of oil supplies, according to analysts. You can see from the chart below that global oil production has been rising steadily over the last three years.
"The economy is booming, according to recent data. GDP grew by 2.6% annualized in the last quarter. And yet oil prices have dropped faster than they did in the crisis of 2008. The US dollar is at record strength. And the gold price has spiked in many currencies ... Something’s not right here." So says Eric Sprott in his latest report observing what may lie in store for oil and gold in the near future.
We’ve now created a situation unfortunately in the market where between high frequency trading and algorithms and interference by the planners they can make things happen that looks like everything is OK. And it’s the "OK" part where I think we can really relate to gold not being allowed to go up. Because that's the canary in the coal mine. If gold was above $2,000 we’d all be wondering: What the hell is going on here? And so they haven’t allowed it to happen. However, there is a tremendous imbalance currently seen between global supply and demand for precious metals, and a true price recovery has got to come from the physical market first - or China will continue to buy 60 tons a week until a prodigious upward price correction is forced.
Chris Martenson is an economic researcher and futurist, specializing in energy and resource depletion, and co-founder of PeakProsperity.com. As one of the early econobloggers who forecasted the housing market collapse and stock market correction years in advance, Chris rose to prominence with the launch of his seminal video seminar, The Crash Course, that interconnected forces in the economy, energy, and the environment that are shaping the future, one that will be defined by increasing challenges as we have known it. Chris’s insights are in high demand by the media as well as academic, civic, and private organizations around the world, including institutions such as the U.N., the U.K. House of Commons, and the U.S. State Legislatures. So with that we’d like to welcome Mr. Chris
The gold price manipulation scheme will go down as the biggest financial market scandal in US history for numerous reasons. They include the destruction of the free market system in the United States.
Economic laws are not optional. They are like the laws of physics - inexorable!
If one looks past headline figures, things are not really getting better. As shown in Figure 1, real disposable income per capita in the U.S. has increased only modestly since the Great Recession. However, all of this increase is due to Government Transfers, not from an improvement in the real economy.
- Obama Administration Widens Export Potential for U.S. Oil (BBG)
- WTI Pares Gains as U.S. Export Ruling Seen Limited (BBG)
- Senator Cochran defeats Tea Party rival in Mississippi Republican runoff (Reuters)
- Militants attack Iraq air base, U.S. assessment teams deploy (Reuters)
- Maliki rules out national emergency govt (AFP)
- Koch to Start EU Power Trading as It Plans LNG Expansion (BBG)
- Obama Said to Ready Sanctions on Russian Industries (BBG)
- Ghana Sends Plane With $3 Million to Calm World Cup Team (BBG)
- Ghana’s First Hedge Fund Planned by Ex-Exchange Regulator (BBG)
- SEC Is Gearing Up to Focus on Ratings Firms (WSJ)
- Abe Declares Deflation End as Growth Plan Confronts Skeptics (BBG)
After a long and agonizing winter which was attributed to the so-called “Polar Vortex”, we thought it would be appropriate to highlight for precious metal investors the implications of what we call the “Chinese Gold Vortex”. Over the past year, we have been very vocal about what we consider an aberration: the complete disconnect between gold supply and demand fundamentals and the actual price of the metal.
Gold Equities are on their way to a parabolic rise
Gold declined from $1,900 in September 2011 to $1,188 on December, 19, 2013. Silver declined from $48.50 to $18.50 over approximately the same time frame. Precious metal equities declined by approximately 70% over this period. This move down played out exactly as was scripted. However, let us review the causes of this decline. We start out with the most important words ever written by a regulator: BaFin, the German equivalent of the SEC, said that precious metals prices were manipulated worse than LIBOR. What are we to read into this, particularly the word “worse”? Obviously, worse than LIBOR could not mean that more money was fraudulently earned since the LIBOR markets are many orders of magnitude larger than the precious metals markets. Then it must mean that the egregiousness of the pricing dysfunction was materially larger in precious metals.
The Inteligencia Financiera Global blog (Global Financial Intelligence Blog) is honored to present another exclusive interview now with GATA’s Bill Murphy.