• Sprott Money
    03/26/2015 - 11:56
    Take the S&P Index and multiply by the US dollar index. This removes most of the currency variation. Do the same with silver. The chart of silver times the dollar looks very much like silver...

Purchasing Power

Tyler Durden's picture

Why ZIRP/NIRP Is Killing Fractional Reserve Banking & Forcing Deposits Into Gold





With historically low long-term interest rates, the opportunity cost of holding gold and silver are close to zero or even negative, in other words you would “lose” money if you buy bonds (the benchmark) instead of gold and silver. When people realize that their money is not “safe” with the banks they will start withdrawing cash from their accounts and buy physical gold and silver instead. Depending on circumstances this could possibly bring down the (fractional) banking system. Why keep money in an account that gives you a negative return? Swiss banks are already witnessing stronger than normal interest for physical gold.

 
Tyler Durden's picture

How Did We End Up Here?





From here, the question is whether the current uptick is any more than a bout of short-covering which is doomed to relapse and print new lows once the overstretch inherent in an almost uninterrupted 60% plunge is worked off, or whether some more meaningful recovery can be staged. We still have our doubts about the latter outlook and would watch for behaviour near the 2009 low and the old range high (or in terms of the most heavily weighted of the constituents, crude oil, whether it will hold above first $40/bbl then $35). If not, we face the possibility of a reversion to the mean/mode of that 1974-2005 band at a level loosely corresponding to $20/bbl oil.

 
lemetropole's picture

GATA And Martin Armstrong Have Gone At It For Nearly 17 Years!





 

 

 

A couple of days ago a Café member sent me some of the latest commentary by Martin Armstrong of Armstrong Economics, formally of Princeton Economics International. As you will read, he continues his rant against "the gold promoters," a rant that seemed more than vaguely familiar.

What an understatement!

 
Tyler Durden's picture

Dollar & Bond Yields Are Plunging





US equity markets are quietly doing what they do - go up and stay up. But in the biggest markets in the world - US Treasury, Japanese bonds, and foreign exchange - something turmoily is happening. Yields are cratering today.. The USDollar is getting hammered on the back of JPY gapping dramatically stronger and EUR surging.

 
Tyler Durden's picture

Fourth Turning: The Shadow Of Crisis Has Not Passed - Part 2





The dominoes are beginning to fall. The initial spark in 2008 has triggered a series of unyielding responses by those in power, but further emergencies and unintended consequences juxtapose, connect and accelerate a chain reaction that will become uncontainable once a tipping point is reached. The fabric of society is tearing at points of extreme vulnerability, with depression, violence and war on the foreseeable horizon. Mr. President, the shadow of crisis has not passed. The looming shadow of crisis grows ever larger and darker by the day as this Crisis enters the most dangerous phase, where the existing social order will be swept away in a torrent of carnage and ferocious struggle. We are not a chosen people. We are not immune from dire outcomes.

 
Tyler Durden's picture

The Problem Of Debt As We Reach Oil Limits





Many people ask why we can’t just cancel all debt, and start over again. To do so would probably mean canceling all bank accounts as well. Most of our current jobs would probably disappear. We would probably be without grid electricity and without oil for cars. It would be very difficult to start over from such a situation. We would truly have to start over from scratch. Those holding paper wealth can’t count on getting very much.

 
Sprott Money's picture

Silver and Gold Truth Versus Fiat Lies





The Jefferson Airplane sang about truth and lies nearly 50 years ago.

“When the truth is found to be lies

And all the joy within you dies…”

Restating their insight to make it relevant to our global delusions about real money – gold and silver – and the much less real money we call dollars, euros, pounds, yen and so forth:

When the truths we want to believe are clearly lies,

Then CONFIDENCE in our currency dies…


 
Tyler Durden's picture

Jim Grant: The Greek Monetary Back-Story





Raging against its German creditors, the new Greek government is demanding reparations for Nazi-era depredations. Herewith - from Jim Grant’s archives - some timely context both for the Greek negotiating position and the underlying monetary issues.

 
Bruce Krasting's picture

Is 105 the New 120? - A Crazy Thought On What's Next?





"Fuck the CHF and the SNB!" "Those bastards lied to us - I'll never trust them again!"

 
Tyler Durden's picture

Swiss National Bank Scraps Hard Franc Ceiling, Replaces With Soft Ceiling Instead Local Press Reports





Three weeks ago, what the SNB really did was be the first developed central bank to admit defeat in the global currency wars, realizing that contrary to "popular" Magic Money Tree opinion, it does not have an infinite balance sheet. And now the time has come to pay the price for delaying reality by over three years. To many this was a welcome move as it means after several years of horrendous monetary policies, Switzerland has finally regained some monetary sense, and while the near-term economic (and stock market) pain may be acute, the long-term will be thankful. And then, earlier today, we read that the SNB didn't learn its lesson after all, and instead of a hard EURCHF 1.20 floor, it is now unofficially targeting an exchange rate of 1.05-1.10 per Euro, aka a "soft", kinda/sorta Swiss Franc cap, according to Schweiz am Sonntag.

 
Tyler Durden's picture

"First The Deflation - Then The Inflation"





Again and again through history, first you have the massive deflation and then government is forced to debase the money supply that finally reverses the economy sending it into a inflationary spiral. The second phase is when gold will rise. But you first have the deflation (that we are seeing now) that reduces tax revenues and then you have the inflation set in motion by rising costs (waiting in the background).

 
Tyler Durden's picture

The Fed's Message, Simplified: Shortest FOMC Statement Since 2012





While the Fed is clearly hinting that lower crude inflation doesn't bother it because "recent declines in energy prices have boosted household purchasing power" and is generally more hawkish on the economy and the labor force, the clearest message from the Fed is simple: or so it would like to convey. At 569 this was the shortest FOMC statement since November 2012! Which can only mean one thing: an attempt at renormalization, if only for now.

 
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