Peter says there are many signs that speculation has gotten out of hand. Junk bonds and securitized subprime auto loans are out of control. They could be the next bubble to pop. The signs are there. When even a rigged casino starts losing money, it’s time to head for the exits, witness Atlantic City, New Jersey.
Danielle Park was on today, really on. With all that’s going on in the world, this is a time where people need to be more concerned about return of investment, rather than return on investment. Each day that the bull market continues means that the risk of staying in increases. The average non-professional investor has no means of assessing that risk. Even the so-called professionals are lacking in that skill. But soon, they’ll get the necessary education.
We also discussed Elizabeth Warren. In a Congress where most members are beholden to the financial powers that be, Warren is different. While she is clearly ignorant of the benefit of free markets, she has proven herself to be a worthy adversary of the banksters. Let’s see where it get her.
Property Rights of Money Market Fund Investors Are Weakened
Here is one more reason (as if one was needed …) why one should hold physical gold outside of the system for insurance purposes. We already briefly alluded to the new rules that are mulled with respect to bond funds, but it seems that they are now implemented for money market funds first. According to Reuters:
U.S. regulators are expected to adopt rules on Wednesday that force “prime” money market funds used by large institutions to float their share price. Proponents have suggested that moving from the current stable $1 per share net asset value (NAV) to a floating NAV would help prevent investors from getting spooked by the prospect of funds “breaking the buck,” or falling lower than that amount.
Americans hate Congress. They will totally teach it a lesson by not voting … Americans are angry at Congress – more so than basically ever before. So it’s time to throw the bums out, right? Well, not really. In fact, Americans appear prepared to deal with their historic unhappiness using perhaps the least-productive response: Staying home. – Washington Post
Dominant Social Theme: People need to vote. Each vote is like a snowflake, unique and precious.
Free-Market Analysis: We heartily encourage people not to vote. Your vote doesn’t really matter within the larger scheme of things. Anyway, many voting districts are so gerrymandered that the incumbent would have to perform a ghastly crime in broad daylight to stand any chance of losing.
But even more importantly, say that your vote does make a proverbial “difference” – what then? Is Congress going to change? Is Leviathan going to be reduced? Really? …
What about DC’s ubiquitous intel agencies: the FBI, CIA, NSA, etc.? If someone comes in with an agenda of significant change, will he or she be subject to some sort of intimidation or blackmail? Perhaps this explains the lack of enthusiasm on the part of US voters … and politicians as well. They’re not disabused. They’re realistic.
Just as the Federal Reserve cannot directly force you to stick the needle of monetary heroin (debt) into your arm, it also can’t force employers to pay employees more.
The official policy of the Central Bank (Federal Reserve)/government is: inflation is necessary for “growth,” i.e. economic expansion. The unstated reason for this official support of inflation is that it’s easier for borrowers to service their debts as their income inflates.
To take an extreme example: let’s say a homeowner has a mortgage of $100,000, an annual wage of $40,000 and annual mortgage payments of $10,000. At 100% annual inflation in both prices and wages, the home mortgage remains fixed at $100,000, the payment remains fixed at $10,000 but his earnings double to $80,000.
Financial newsletter writer Jim Willie says no matter who shot down the Malaysian commercial jet over Ukraine recently, there is going to be massive fallout. Willie contends, “Here’s the big, big consequence. The U.S. is basically telling Europe you have two choices here. Join us with the war against Russia. Join us with the sanctions against Russia. Join us in constant war and conflicts, isolation and destruction to your economy and denial of your energy supply and removal of contracts. Join us with this war and sanctions because we’d really like you to keep the dollar regime going. They are going to say were tired of the dollar. . . . We are pushing Germany. Don’t worry about France, don’t worry about England, worry about Germany. Germany has 3,000 companies doing active business right now. They are not going to join the sanctions—period.”
Willie goes on to say, “It’s a war game and Europe is sick of U.S. war games. The defense of the dollar has come to war versus trade. Are you with us or are you against us?” As far as the NSA spying on Germany, Willie says, “I think they are looking for details on assisting Russia on dumping the dollar. I think they are looking for details for a secret movement for Germany to get away from the dollar and join the BRICS (Brazil, Russia, India, China and South Africa.) This is exactly what I think they are going to do.”
“What the government is good at is collecting taxes, taking away your freedoms and killing people. It’s not good at much else.” —Author Tom Clancy
Call it what you will—taxes, penalties, fees, fines, regulations, tariffs, tickets, permits, surcharges, tolls, asset forfeitures, foreclosures, etc.—but the only word that truly describes the constant bilking of the American taxpayer by the government and its corporate partners is theft.
We’re operating in a topsy-turvy Sherwood Forest where instead of Robin Hood and his merry band of thieves stealing from the rich to feed the poor, you’ve got the government and its merry band of corporate thieves stealing from the poor to fatten the wallets of the rich. In this way, the poor get poorer and the rich get richer. All the while, the American Dream of peace, prosperity, and liberty has turned into a nightmare of endless wars, debilitating debt, and outright tyranny.
Shortly after we highlighted the utter ridiculousness of the bubble frenzy in Dubai stocks (30x IPO oversubscription for a firm that did not exist), the Dubai General Financial Markets Index tumbled 30% popping an epic 250% rally since The Fed started QE3. It seems Saudi Arabia is getting nervous at its neighbor’s fall and so The Kingdom has decided it needs more great fools to keep its dream alive… and as The WSJ reports today, Saudi Arabia plans to open its $530 billion stock market to foreigners for the first time early next year, a move that will allow the Middle East’s biggest economy to attract more international investment and reduce its dependence on oil revenue. Did we just find another China inflation outlet?
Today one of the wealthiest people in the financial world spoke with King World News about the possibility of another 2008-style event, mainstream media propaganda, and the $64 billion question. Rick Rule, who is business partners with Eric Sprott, also discussed where gold, silver, and the rest of the commodities are heading.
Rule: “Right now in the resource sector we strength across the board. We think it’s interesting that we are seeing this strength in the face of an economic recovery that isn’t happening. So this can only be as a result of the continuing supply shortages….
Today’s AM fix was USD 1,307.50, EUR 971.04 and GBP 767.54 per ounce. Yesterday’s AM fix was USD 1,307.00, EUR 969.44 and GBP 765.76 per ounce.
Gold fell $6.40 or 0.49% on yesterday to $1,306.50/oz and silver remained unchanged at $20.94/oz.
Gold remains in a very tight range in London this morning as did gold bullion in Singapore overnight. Futures trading volumes were low and 7% below the average for the past 100 days for this time of day, according to Bloomberg data.
Silver, platinum and palladium are slightly firmer this morning. Silver for immediate delivery added 0.2% to $21.00 an ounce in London. Platinum was little changed at $1,485.84/oz. Palladium rose 0.1% to $874.01/oz and remains near the 13-year high of $889.75 reached on July 17.
In the history of Western philosophy and social theory, no really silly idea has been more successful than the theory of the social contract.
It is in fact not a theory of the social contract. It is a theory of the political contract. It is the idea, promoted by Thomas Hobbes, John Locke, and Jean-Jacques Rousseau, that, at some point in history, people got together and voluntarily transferred their personal rights to the state. Their rights, in short, were alienable.
It looks like at least one country is still taking advantage of the extremely low paper price of silver. From information just released, India continues to import a near record amount of silver in 2014. Even though silver imports slumped in June compared to last year, demand is still extremely strong.
Market sources added that import of silver in the calendar year of 2013 was around 5,819 tonnes, the highest ever. The previous high was in 2008, when import was 5,048 tonnes. However, despite the fall in June, sources said the first half of 2014 has seen silver imports at 2,882 tonnes, as against 2,980 tonnes last year, for the first six months of 2013.
First the good news. The House Financial Services Committee has held a hearing on “Legislation to Reform the Federal Reserve on its 100-year Anniversary.” The hearing focused on a bill introduced by Scott Garrett and Bill Huizenga which would require the Fed to provide Congress with a clear rule to describe the course of monetary policy. Now for the bad news. The rule is to be an equation showing how the Fed would adjust interest rates in response to changes in certain economic variables. And the star witness before the committee proposing his own version of such a rule is renowned neo-Keynesian economist, ex-Bush official Professor John B. Taylor.
Inputs into the so-called “Taylor Rule” involve key magnitudes such as “the neutral rate of interest” and “the natural rate of unemployment” as well as the “targeted rate of inflation.” One might have hoped that the Republicans by now would have realized that monetary reform should involve first and foremost jettisoning neo-Keynesian economics.
Eddie Overholt was attending his second county board meeting last Friday when he was arrested by police for interfering with a public meeting and resisting arrest for the dastardly act of asking county officials to speak up so that the audience could hear the proceedings.
According to 76-year old Overholt and others present at the meeting, the board had assembled around a table at the front of the room. Some city officials were turned with their backs facing the crowd making it difficult to hear what was being said.
Members of the audience began interrupting the proceedings with shouts, laughter, applause and complaints that they couldn’t hear, at which point the mayor warned the next outburst would lead to someone being removed from the building.
The concept of “rights” was developed, in part, from the concept of “right” – correct, true – as used in the tradition of natural law ethics (concerning how we ought to act or not act because we are human beings). In time, a natural rights theory was produced by John Locke (1632-1704). It addressed our political life – how our human communities should be governed, organized. Supposedly because of our human nature, certain standards of conduct apply to us as we carry out our community affairs, how we relate to each other, etc.
1. What did the theory contend are our basic individual rights? Locke argued that each of us has rights to our lives and resources, including what we produce or create. We are supposedly sovereign, so no one may rule us; slavery, serfdom, involuntary servitude are forbidden.
“The rebels attacked our camp. We had to make a run for it. The government troops, who were supposed to be guarding us, ran too.”
“‘Musungu! Musungu!’ I heard them yelling. A ‘musungu’ is a white person. They wanted to capture us.”
This springs not from the fertile imagination of an early 20th century novelist. It came to us yesterday via an email from our youngest son, Edward, who was on a summer job at a mining project in the Democratic Republic of the Congo. (More from Edward in just a moment…)
Though it has only very briefly brushed against the $21-an-ounce mark, the silver price today reversed course from last week when the white metal was down for the first time in six weeks.
Silver was trading at $20.93 an ounce by the time markets opened yesterday (Monday) and has been trending upward, albeit very slightly, to $20.97 an ounce at 2 p.m. EDT today (Tuesday).
Prices saw their biggest jump at around 8:30 a.m., after the U.S. Labor Department released data that indicated inflation rose 0.3% on higher gas prices, which rose 3.3% in May, accounting for two-thirds of the spike in prices. Silver was trading up 1.1% to $21.02 minutes after the release.
Earlier today, and several times recently, I received emails accusing me of being a Russian spy and asking me how much I was receiving from RT. I find such accusations highly amusing.
Here’s the deal: Few bloggers are willing to discuss MH17 for fear of getting it wrong. Whereas I suspect nearly everything, but especially reports coming from Kiev and the US. My reasons are threefold:
There are more questions surrounding Kiev and US reports than Russian reports.
Kiev has been caught twice in lies and distortions
While neither US nor Russia is unbiased, the extremely one-sided, jump-to-conclusion reporting from Western media suggests close consideration of competing versions of stories is warranted.
The topic of whether college is worth it (costs vs benefits) has been discussed at length (here, here, and here most recently) but no lesser entity than the San Francisco Fed’s PhDs have crunched the numbers and found that in the new normal, median starting wages of recent college graduates have not kept pace with median earnings for all workers. Furthermore, they are not optimistic – “because college grads face wages and hiring conditions that are especially responsive to business cycle conditions, this low earnings growth, together with shifts in the distribution of graduates’ labor market status, suggests continued weakness in the overall economy.”
Indoctrination 101: Oh yes…let’s play the race card again with racial inequality at another progressive university in Madison, Wisconsin. Folks, it’s never-ending and it’s mind-bending madness…insanity I tell ya…pure insanity! Just how much lower can we go when it comes do dumbing-down our youths that attend institutions such as UW-Madison intentionally…hmm?
Here’s the preface before I get to the main story via this site:
A new policy at the University of Wisconsin – Madison states that good grades should be distributed equally among students of different races.
The policy, named the “Framework for Diversity and Inclusive Excellence,” calls for “proportional participation of historically underrepresented racial-ethnic groups at all levels of an institution, including high status special programs, high-demand majors, and in the distribution of grades.”
HOUSTON – One of our longtime members, who, because of the firm he works for (as a senior officer), has to remain anonymous, checked in to make an observation about the large trader positioning and we thought it worthy of sharing with the entire readership.
Our friend … let’s call him “Mike” … writes: “Gene, what do you think about bringing back your “view-from-30,000-feet” section for the COT? I used to cut and paste it to my monitors to keep me focused on your long term expectation. That was one of the most valuable segments of the old Resource Investor Crew email service. I still miss it. … If I had to guess it would be the lack of producer merchants net shorts giving the COT a long term long bias. … How did I do? Hope you are feeling better. … (Mike)
Not bad, “Mike,” not bad at all. Let’s do take a view from 30,000 feet. That’s where we focus on what is OUT OF KILTER or ABNORMAL and really nothing else in the large trader positioning on the theory that when things are out of kilter they will almost certainly return to form in a predictable, but not necessarily imminent fashion.
Why are so many plagues hitting the United States all of a sudden? Yes, one can always point out bad stuff that is happening somewhere in the country, but right now we are facing a nightmarish combination of crippling drought, devastating wildfires, disastrous viruses, dying crops and superbugs that scientists don’t know how to kill. And as you will see, we even have a plague of flies down in Mississippi. So what in the world is going on? Is this just a case of bad luck, or is something else happening? At the conclusion of this article, please feel free to tell me what you think. The following are ten plagues that are hitting America right now…
Here’s a question for you: Has higher education become another great American scam?
I’m not talking about the rich getting scammed. They get what they pay for. They can afford to be scammed, and they don’t wind up saddled with student loan debt after they graduate.
A lot of rich people send their kids to expensive private colleges hoping they’ll get a good education that will lead them into their chosen careers. If they haven’t chosen a career, rich parents are more than happy to give their kids the “experience” of college, with all its social aspects, country club accommodations, and alumni status.
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