Economics

Economics
Max and Stacy give you all the financial news you need as the Global Insurrection Against Banker Occupation gathers pace. Occupy Wall Street, Crash JP Morgan, Buy Silver and DEFINITELY visit MaxKeiser.com!
Updated: 1 hour 13 min ago

[KR1113] Keiser Report: ‘Bitcoin’s going to be worth a trillion dollars soon’

1 hour 51 min ago

We discuss the Trump administration starting some trade wars – from renegotiating Nafta to looking at China’s treatment of ‘intellectual property’. We also discuss the trillions in unexploited mineral resources in North Korea. In the second half Max interviews Dan Collins of TheChinaMoneyReport.com to discuss the ‘Doklam Transgression’ and the ‘Line of Actual Control’. The media has largely ignored the confrontation between India and China but will they notice if a hot war breaks out?

Are We Fiddling While Rome Burns?

5 hours 38 min ago

It turns out Nero wasn’t fiddling as Rome burned–he was 60 km away at the time. Did Nero Really Fiddle While Rome Burned?

The story has become short-hand for making light of a catastrophe, either out of self-interest (one theory had Nero clearing a site he desired for a palace with the fire) or out of a mad detachment from reality.

Are we fiddling while Rome burns? I would say yes–because we’re not solving any of the structural problems that are dooming the status quo. Instead, we’re allowing a corrupt, corporate mainstream media to distract us with fake “Russians hacked our election” hysteria, false “cultural war” mania, and a laughably Orwellian frenzy over fake news which magically avoids mentioning the propaganda narratives pushed 24/7 by the mainstream media–narratives that are the acme of fake news.

The media is only half the problem, of course; the audience doesn’t want to hear about structural problems that can only be fixed by disrupting the status quo. If we don’t accept that the financial system we inhabit is imploding, maybe all the problems will go away.

The system is coughing up blood and we still want to believe it is “recovering” from a cold.

Here’s a short list of structural problems we should be tackling:

1. Soaring inequality and the institutionalization of economic privilege.Systemic economic privilege doesn’t exist in a vacuum–it’s enforced by a centralized hierarchy, a dynamic I describe in my book Inequality and the Collapse of Privilege. Systemic inequality doesn’t just undermine the economy–it also undermines the social and political orders.

2. The central state (government) has one default setting: endless expansion into every nook and cranny of daily life. There are no mechanisms for contraction and no institutional memory of government reducing its control of every aspect of life.

As I explain in my book Resistance, Revolution, Liberation: A Model for Positive Change, this concentration of power attracts concentrations of wealth which then buy the machinery of governance: democracy is reduced to an auction that excludes the bottom 99.9%.

3. Finance has detached from the real-world economy, distorting every function via financialization, which concentrates income and wealth in the hands of the few. As I have often explained in the blog (and in my book Why Our Status Quo Failed and Is Beyond Reform), if we don’t change the way we create and distribute credit-money, we change nothing.

4. Our educational system is obsolete but the the current system is incapable of transformation for structural reasons. These include high sunk costs, bureaucratic sclerosis, self-serving fiefdoms that fear disruption of their gravy trains, a lack of understanding of the emerging economy, a dysfunctional centralized hierarchy and the state-funded exploitive machinery of student-loan debt.

I explain all this and present a model that would cut costs by 90% in my book The Nearly Free University and the Emerging Economy.

5. The economy and thus our society (i.e. our mode of production) are changing beneath our feet in dramatic ways. Highly centralized hierarchies (government, corporations) are the wrong unit size and structure to manage this transformation to the benefit of all rather than to the benefit of the few.

I present a decentralized non-state, non-corporate, non-financialized model in my book A Radically Beneficial World: Automation, Technology & Creating Jobs for All.

For individuals navigating these disruptive forces, I wrote an overview guide to the emerging economy, Get a Job, Build a Real Career and Defy a Bewildering Economy.

Solutions abound, but they require the retirement of obsolete systems that defend entrenched interests and soul-crushing inequalities. The world is changing rapidly, and centralized systems that worked well in the past are failing because they are optimized for a world that no longer exists.

The status quo is coughing up blood, and the situation is dire. Denial won’t fix what’s broken, and neither will magical thinking (the economy is “recovering,” symbolic gestures and virtue-signaling will fix everything, etc.) Clinging to the absurd hope that the status quo just has a nagging cold will only increase the disorder when the system breaks down. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Better A Year Early Than A Day Too Late

22-Aug-2017

When it comes, change happens swiftly. And life after — for better or worse — is forever different.

For those who put off taking advance action, it may be simply “too late” in a number of scenarios should the status quo quickly change.

Don’t be an ‘avoidable victim’. For the events you calculate are likely to happen, assess your current level of preparedness and take steps now to shore up any deficiencies.

Remember: Preparation only has value if it’s done in advance.

Click here to read the full article

U.S. Treasury Secretary: I Assume Fort Knox Gold Is Still There

22-Aug-2017

  • US Treasury Secretary Steve Mnuchin visits Fort Knox Gold
  • Later tweeted ‘Glad gold is safe!’
  • Only the third Treasury Secretary to visit the fortified vault, last visit was 1948
  • Last Congressional visit was 1974
  • Speculation over existence of gold in Fort Knox is rife
  • Concerns over Federal Reserves lack of interest in carrying to an audit on gold
  • Gold was last counted in 1953, nine years before Mnuchin was born
  • Mnuchin may be looking to prevent countries and states from worrying about and repatriating their gold

US Treasury Secretary ‘assumes’ the gold is still in Fort Knox, 64 years after it was audited.

81 years after it was built Fort Knox received its third visit from a US Treasury Secretary yesterday, Steven Mnuchin.

The fortified facility is reportedly surrounded by 30,000 soldiers, tanks, armored personnel carriers, attack helicopters, and artillery. Despite this, there is still concern as to whether the gold is there.

As he headed in, Mnuchin told an audience “I assume the gold is still there…It would really be quite a movie if we walked in and there was no gold.”

With a background in Hollywood it was unsurprising that Mnuchin’s imagination appeared to be getting carried away with tales of finding the $200 billion of gold missing.

Missing gold: fact or fiction?

An empty Fort Knox is an issue far removed from the hills of Hollywood  and has far more basis in reality than many give it credit for.

For many decades campaigns have been led for the US Treasury and government to audit the gold and to testify to its existence.

The gold has not been ‘counted’ since 1953. This was less than 20 years after Fort Knox was built. Since then there has been no official count or audit.

The facility (purportedly) holds 147 million ounces of gold, worth around $186 billion. This is small compared to the amount purportedly held at the Liberty Street facility, in New York.

As with Fort Knox, the New York gold is yet to be audited.

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Beware the “The Cultural Civil War” Narrative: You’re Being Played

22-Aug-2017

Remember the “Russians hacked our election!” hysteria–or have you already forgotten? That entire narrative collapsed under a deluge of factual evidence that the Democratic National Committee (DNC) data release was an insider job, and a compelling lack of evidence of any other Russian hacking.

That failed narrative has now been replaced with a new mass hysteria: “a new cultural Civil War is inevitable.” In this narrative, America has succumbed to us-versus-them divisions divided by all-or-nothing ideological bright lines.

Snap out of it, America: you’re being played, just as you were played by the absurd “Russia hacked the election” mania.

The core strategy here is the destruction of any common ground: 

once the delusion that there is no common ground left has been cemented by relentless mainstream and social media hysteria/ propaganda, the populace fragments into echo-chamber fiefdoms of ideological conformity that are easily manipulated by the political-financial power structure.

Once the populace has been fragmented into ideologically divisive camps, controlling the resulting mass of warring mobs is easy. Rather than recognize the commonality of their powerlessness and impoverishment, the fragmented fiefdoms are easily turned on each other:

From the point of view of each fragmented fiefdom, the problem isn’t structural, i.e. the dominance of extreme concentrations of wealth and power; the “problem” is the other cultural-ideological fiefdoms.

Once the masses accept this false division and the destruction of common ground, their power to reverse the extreme concentrations of wealth and power is shattered. The play is as old as civilization itself: conjure up extremists (paying them when necessary), goad the formation of opposing extremists, then convince the populace that these extremists have been normalized, i.e. your friends and neighbors already belong to one or the other.

This normalization then sets up the relentless demands to choose a side– the classic techniques of misdirection and false choice.

Just as you’re sold a triple-bacon cheeseburger or a hybrid auto, you’re being sold a completely fabricated cultural civil war. There have always been extremists on every edge of the ideological spectrum, just as there have always been religious zealots.

In a healthy society, these fringe pools of self-reinforcing fanaticism are given their proper place: they are outliers, representing self-reinforcing black holes of confirmation bias of a few.

In times of social, political and financial stress, such groups pop up like mushrooms. In times of media saturation, a relative handful can gain enormous exposure and importance because the danger they pose sells adverts and attracts eyeballs/viewers.

Add a little fragmentation, virtue-signaling, demands for ideological conformity and voila, you get a deeply fragmented and deranged populace that is incapable of recognizing the dire straits it is in or recognizing the structural sources of its impoverishment and powerlessness.

In other words, you get an easily mallable populace at false war with itself.

There is always common ground for those who dare to seek it. The Powers That Be are blowing up the bridges as fast as they can, whipping up fear and hatred of the Other, fanning the flames of extremism and claiming extremists are now normalized and everywhere.

All of this is false. Would you buy an entirely manipulated cultural civil war if it was advertised as such? If not, then don’t buy into the false (but oh so useful to the ruling elites) narrative of an “inevitable cultural Civil War.”

 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Buffett Sees Market Crash Coming: His Cash Speaks Louder Than Words

21-Aug-2017

The Sage of Omaha’s adage is “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”


Editor: Mark O’Byrne

But for Warren Buffett the current environment doesn’t appear to be offering up any wonderful companies at fair valuations. The situation is so bad that the cash stockpile of Berkshire Hathaway has more than doubled in the last four years, from under $40 billion to $100bn.

The infamous investor is famed for his investment approach of pouncing on companies when they run in to problems and are seemingly undervalued. At the moment though, there aren’t many out there.

The large stockpile is a likely indicator of not only how Buffett negatively views the current market environment but also how he sees the near future and what opportunities it will bring.

Buffett hates cash, he wants to spend it

Buffett has previously stated how much he hates cash, telling investors at the Berkshire AGM that it was a poor way to keep their money.

During the Omaha-based meeting Buffett expressed his frustration with a cash pile that is approaching $100 billion, “We shouldn’t use your money that way for long periods…The question is, ‘Are we going to be able to deploy it?’”

It may well be the case that Buffett is prepared to pay a dividend, stating that dividends could be paid “reasonably soon, even while I am around.” But this is unlikely.

Buffett is known for his dislike of paying dividends. Since he took over Berkshire over half a century ago the company has paid a single $0.10 dividend in 1967. Instead, shareholders have been rewarded with value through investments that have increased the company’s earning power.

Given the company’s track record of generating more than twice the S&P 500’s annualized returns over the past half-century, it’s more likely that Buffet is looking for an attractive acquisition or investment opportunity rather than pay dividends.

Making investments is all very easy when there are good value ones to be picked up but right now there are none.

Buffett can see this and his lack of investment suggests he sees opportunities on the horizon. These can only come about in the event of a market crash or a sharp market correction.

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

[KR1112] Keiser Report: Uber Subprime Business

20-Aug-2017

Max and Stacy discuss subprime auto leases running over Uber. Max continues his interview with Stephen Baldwin about plans for the Great American Pilgrimage across America in an RV, looking to meet the people overlooked by mainstream television media.

Dragonglass Derivatives

19-Aug-2017

Are Profit and Healthcare Incompatible?

18-Aug-2017

As I have been noting for a decade, the broken U.S. healthcare system will bankrupt the nation all by itself. We all know the basic facts: the system delivers uneven results in terms of improving health and life expectancy while costing two or three times more per person compared to our advanced-economy global competitors.

U.S. Lifestyle + “Healthcare” = Bankruptcy (June 19, 2008)

Sickcare Will Bankrupt the Nation–And Soon (March 21, 2011)

How Healthcare Is Dooming the U.S. Economy (Three Charts) (May 2015)

You Want to Fix the Economy? Then First Fix Healthcare (September 29, 2016)

This chart says it all: the global outlier in low life expectancy and exorbitant cost is the U.S.

The profit motive is supposed to lower costs, not increase them. In the idealized model of a completely free market, the profit motive is supposed to lower costs as customers are free to choose the best product/service for the lowest price.

In U.S. healthcare, the profits are stupendous, yet the costs are even more stupendous. Rather than lower costs, the U.S. system of for-profit healthcare has sent costs spiraling into the stratosphere, to the point that the system’s costs are threatening to bankrupt the government and the nation.

Why is this so? Karl Marx provided the answer in the 19th century. In the idealized model of free-market capitalism, those who provide superior services for the lowest price reap more profit than their less agile/productive competitors.

But as Marx observed, in real-world capitalism, open competition drives profits to zero. Every attempt to gain a competitive advantage in price increases supply and further commoditizes the product/service. This dynamic pushes prices down to the point that nobody can make a profit until competitors are driven out of business and a cartel or monopoly secures the market and controls supply, price and profit.

The most profitable structures in real-world capitalism are monopolies or cartels– which is precisely what characterizes U.S. healthcare. The only way to maximize profits is to ruthlessly eliminate competition in the marketplace–which is exactly how the U.S. healthcare system operates: the pharmaceutical industry is a cartel, hospital chains are a cartel, insurance companies are a cartel, and so on.

In the real world of state-cartel-capitalism, competition is eliminated so cartels can maximize profits.

Do-gooders are always claiming that the system could be fixed by re-introducing competition– this was the core idea behind Obamacare’s insurance exchanges–but the do-gooders are blind to the core dynamic of state-cartel-capitalism, which is cartels own the machinery of governance via lobbying and campaign contributions. The state creates and protects the cartels, period.

In state-cartel-capitalism, there is no way to maintain real competition, as the cartels instruct the state to protect their monopolies/cartels. State reformers can try all sorts of complex reform schemes (ObamaCare) but they fail to lower costs because they all leave the cartel structure and cartel ownership of governance intact.

In the good old days of the 1950s and 1960s, U.S. healthcare was more localized, and the central state (federal government) wasn’t the Sugar Daddy for the cartels. Hospitals were community hospitals (what a quaint idea in today’s hyper-cartelized system) managed by physicians and administrators who saw their role as serving the community rather than arranging for $20 million annual salaries and millions of dollars in stock options.

This is why the cartels love Medicare For All proposals: the federal government–protector and funder of the cartels–will give the cartels a blank check not just for the 120 million people currently drawing benefits from Medicare/Medicaid but for all 325 million Americans.

Fast facts on Medicare and Medicaid (Center for Medicare and Medicaid Services)

Medicare Beneficiaries: 57.7 million 
Medicaid Beneficiaries: 72.3 million 
estimated dual Beneficiaries (drawing benefits from both programs): 10 million

Total Beneficiaries: 120 million

Medicare/Medicaid budget, 2015: $1.2 trillion

Total U.S. healthcare costs: $3.2 trillion, 18% of GDP

Department of Defense budget, 2015: $575 billion 
source

Are profit and healthcare incompatible? In the real world of state-cartel-capitalism, the answer is yes: a profit-maximizing system fails to deliver prevention while pushing costs higher, eventually bankrupting the Sugar Daddy government and the nation.

Prevention, like a bag of carrots, is intrinsically low-profit. Illness, especially chronic illness, is highly profitable because the profits flow continuously from treatments, medications, procedures, tests, visits, hospitalization, home care, a constant churn of billing, etc.

The only way to systemically lower costs is to make prevention and transparency the top priorities. Prevention, community ownership of healthcare services, transparency and unfettered competition kill profits, period. Yet these are the only way to lower costs to be in line with our competitors.

You can reconfigure the system any way you want, but you have to eliminate cartels, cartel ownership of governance, opaque pricing, government blank checks and incentives for profiteering from chronic illness. If you don’t eliminate all these, you’ve fixed nothing.

 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High

18-Aug-2017

– Gold and silver rise as stocks fall sharply after Barcelona attack
– Gold, silver 0.6% higher in week after last weeks 2%, 5% rise
– Palladium +36% ytd, breaks out & reaches 16 year high (chart)
– Gold to silver ratio falls to mid 75s after silver gains last week
– Perfect storm of financial and geopolitical tensions is driving safe haven demand and should see higher prices
– Weekly close over $1,300 could see gold quickly test $1,400
– Palladium at 16 year highs today; gold, silver in coming months?

2017 YTD Relative Performance (Finviz)

Editor Mark O’Byrne

This morning readers woke to the news that a second attack in 24 hours had taken place in Barcelona. So-called Islamic State claimed responsibility for the attacks in Spain.

Global stocks has fallen and precious metals have eked out gains this morning as investors seek out safe haven assets. Gold has risen to trade at its highest level since the beginning of June.

Gold’s reaction to the Barcelona events is likely to last and may continue today. The combination of heightened risk in the global geopolitical sphere is likely to support both gold and silver, pushing them through recent resistance. A weekly close above $1,300 per ounce will be very positive for gold and should see a rapid move to test the $1,400 level.

Gold and silver outperforming stocks

After losses earlier in the week, gold and silver have come right back and are now up 0.55% and 0.64% respectively. This is very positive as profit taking was to be expected after last weeks strong gains.

Gold and silver have consistently remained in the top-performing assets throughout the year and are beginning to outperform stocks.

In the year to date, gold is up nearly 13% whilst silver has climbed over 7.5%. The benchmark S&P500 is up 8.6% after weakness last week and this.

Both precious metals have performed well thanks to safe haven demand, much of which has been driven by very strong demand in India, China and Asia and ETF-demand in Europe.

Palladium at 16 year highs today; gold and silver in coming months

Palladium is up over 36% in the year-to-date and is the best performing commodity and market this year.

Palladium in USD – 20 Years (Macrotrends.net)

Consumption of the rare industrial precious metal is expected to hit 10.8 million ounces this year, an all-time high. Demand from the automotive industry, the biggest buyer of the metal, is up 4% this year.

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

[KR1111] Keiser Report: ‘Silver lining’ of US mortality rates

17-Aug-2017

Up for discussion in this episode is ‘the silver lining’ of the shocking increase in US mortality rates – reduced pension costs for corporations, increased profits for shareholders. At least this is the upside, according to the financial press. Max also interviews Stephen Baldwin about their plans for The Great American Pilgrimage as they cross America in an RV looking to meet the people overlooked by mainstream television media. By the end of the pilgrimage, they hope to have had a whole lot of fun and a little bit of enlightenment.

Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since “Tricky Dicky”

17-Aug-2017

– Gold hedges massive ongoing devaluation of U.S. Dollar
– 46th anniversary of ‘Tricky Dicky’ ending Gold Standard (see video)
– Savings destroyed by currency creation and now negative interest rates
– Long-term inflation figures show gold a hedge against rising cost of fuel, food and cost of living
– $20 food and beverages basket of 1971 cost $120.17 in 2017
– Household items increased by average of 2000% and oil by 5,373% since 1913
– Gold gained 5,669% since 1913; by nearly 3,000% since 1971
– Dollar has been reserve currency of world in the period and most other currencies have seen greater devaluation
– Evidence of gold’s role as inflation and currency devaluation hedge

 Editor: Mark O’Byrne

US dollar Purchasing Power As measured By Gold’
Source: Goldchartsrus

You don’t need ‘Tricky Trump’ to devalue the dollar, it’s been doing that since 1913 and ‘Tricky Dicky’ in 1971

In 2015 President Donald Trump made headlines when he told a town hall event in Atkinson, New Hampshire about how his father had once given him a ‘small loan of a million dollars.’

Outcry swept around the media who asked how much the future President was really in touch with the common voter.

Whilst Trump’s reference to ‘small’ was in relation to the (apparent) size of the empire he subsequently built he may as well have been referring to the value of a million dollars now and how small it is compared to in 1975 when he was lent the money.

$1 million dollars was a lot of currency in 1975. Today it will barely buy you a nice house in a nice city.

Using today’s CPI data Trump Sr’s $1 million loan would today be equivalent to $4.4 million. The purchasing power of a 1975 US dollar has fallen by over 400%. It has fallen a lot more since 1971.

In this week 46 years ago on August 15 1971, President Nixon announced the U.S. Dollar would completely cut ties with sound money gold (see video below).

Without gold backing and gold as a monetary anchor, we can now see just how much the purchasing power of the consumer dollar has declined since 1971.

You can see an even better example of the dollar’s collapse in purchasing power when measured in gold ounces (see charts above).

Prices climb by over 2000% since 1913 and creation of the Fed

‘[Since 1913] the general public and policymakers have focused almost constantly on inflation; they have feared it, bemoaned it, sought it, and even tried to whip it.’ Bureau of Labour Statistics 

In 1970, after many decades of dollar devaluation, Herbert W. Armstrong quoted the Labor Department’s figures for how much $5 would have purchased in 1913:

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

[KR1110] Keiser Report: Trend reversals

16-Aug-2017

Max & Stacy discuss Obamacare death spirals and towns left to die post-trade deals. In the second half, Max continues his interview with Gerald Celente of TrendsResearch.com about paradigm shifts: from cryptocurrencies to electric cars.

ps – sorry, I didn’t know that this had stayed in draft mode! thought I had published it yesterday. – Stacy

World’s Largest Hedge Fund Bridgewater Buys $68 Million of Gold ETF

16-Aug-2017

– World’s largest hedge fund Bridgewater buys $68 million of gold ETF in Q2
– Investors poured $870 million into SPDR Gold in Q2

– Billionaire Paulson keeps 4.36 million shares in SPDR Gold
– “Risks are now rising and do not appear appropriately priced in” – warns Dalio on Linkedin
– Investors should avoid ETFs and paper gold and own physical gold
– Given negative interest rates, companies should consider allocating some of corporate deposits to physical gold as done by Munich Re

From Bloomberg:

Hedge-fund managers including billionaire John Paulson are being rewarded as investor worries over everything from uneven economic data to U.S.-North Korean tensions fuel a rally in bullion.

At the end of June, Paulson & Co. owned 4.36 million shares of SPDR Gold Shares, a U.S. government filing showed Monday. That’s unchanged from the three months through March. Bridgewater Associates, the world’s largest hedge fund, added the ETF to its portfolio in the quarter, with the purchase of 577,264 shares valued at $68.1 million, a regulatory filing showed Aug. 10. Templeton Global Advisors Ltd. boosted its stake in Barrick Gold Corp.

Click here to read full story on Goldcore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Buy Gold Urges Dalio on Linkedin – “Militaristic Leaders Playing Chicken Risks Hellacious War”

15-Aug-2017

– Don’t let “traditional biases” stop you from diversifying into gold – Dalio on Linkedin
– “Risks are now rising and do not appear appropriately priced in” warns founder of world’s largest hedge fund
– Geo-political risk from North Korea & “risk of hellacious war”
– Risk that U.S. debt ceiling not raised; technical US default
– Safe haven gold likely to benefit by more than dollar, treasuries
– Investors should allocate at least 5% to 10% of assets to gold
– “If you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this”
– “If you do have an excellent analysis of why you shouldn’t have such an allocation to gold, we’d appreciate you sharing it with us …”

Image courtesy of Quotefancy


by Ray Dalio via Linkedin

There are returns, and there are risks. We think of them individually, and then we combine them into a portfolio.

We think of returns and opportunities as coming from those things we’d bet on, and we think of risks as the adverse market consequences of us being wrong due to our being out of balance. We start with our balanced beta portfolio—i.e., that portfolio that would most certainly fund our intended uses of the money.

Everyone should have their own based on their own projected uses of money, though more generally, it’s our All Weather portfolio.

We then create a balanced portfolio of opportunity/alpha bets based on what we think is likely to happen. We then combine them.

We bet on the events/outcomes that we think we have an edge in understanding. For events/outcomes where we don’t think we have a particular edge—e.g., political events—we aim to construct our portfolio to be relatively neutral or balanced to those risks.

Risk and Volatility

As a rule, periods of lower risk/volatility tend to lead to periods of greater risk/volatility. That is reflected in our aggregate market volatility gauge (see below), and markets are pricing in volatility to remain low next year too.

As a related rule, people adapt to the circumstances they have experienced and are then surprised when the future is different than the past.

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Are We Already in Recession?

15-Aug-2017

How shocked would you be if it was announced that the U.S. had just entered a recession, that is, a period in which gross domestic product (GDP) declines (when adjusted for inflation) for two or more quarters?

Would you really be surprised to discover that the eight-year long “recovery,” the weakest on record, had finally rolled over into recession?

Anyone with even a passing acquaintance with the statistical pulse of the real-world economy knows the numbers are softening.

— Auto/light truck sales: either down or off a cliff, depending on how much lipstick has been applied to the pig.

— Restaurant/dining sales: down.

— Tax receipts: down.

— Retail sales: flat, stagnant or down, depending on the sector and if the numbers have been adjusted for inflation/loss of purchasing power.

— Rents in high-rent regions: finally softening after years of relentless increases.

— Consumer debt: hitting new highs.

— Corporate profits: stripped of gimmickry, stagnant or down.

Those who study recessions know that employment often tops out just before the economy rolls over into recession. Strong employment is the last gasp of an expansionary phase.

There are several fundamental reasons why we might be in a recession that manages to avoid the official definition. The starting place is the artificial nature of the eight-year long “recovery” since 2009; in the view of many observers, the economy never really exited the 2008-09 recession.

Those in this camp look at fundamentals, not the stock market, which has been held up as a proxy for the real economy, when in fact it is only a proxy for financialization and official selection of the market as the (easily manipulated) signifier of economic vitality and prosperity.

Recessions are supposed to clear the financial deadwood–failed enterprises are liquidated, borrowers who are in default are bankrupted, and bad debt is wiped off the books via the acceptance of losses.

The story of the “recovery” 2009-2017 is that these clear-the-deadwood dynamics were suppressed. Rather than accept painful losses, the authorities saved bankrupt banks and encouraged a Zombie Economy in which zombie borrowers and enterprises are kept alive via low-cost loans and the masking of default via financial trickery: student loans that are non-performing, for example, aren’t labeled “in default;” they’re placed in a zombie category of forgiveness without actual writedowns of the debt.

If households can no longer afford to pay interest on new debt, the “solution” in a Zombie Economy is to offer them 0% loans. If corporations need to roll over debt, the Zombie Economy “solution” is the companies sell near-zero yield bonds to credulous investors.

If households can no longer afford to buy homes, the Zombie Economy “solution” is for federal agencies such as FHA to offer near-zero down payment mortgages and guarantee private lenders against any loss.

When these agencies get into trouble due to the horrendous costs of encouraging uncreditworthy borrowers to take on debt they can’t afford, the “solution” is for the taxpayers to fund yet another $100 billion bail-out.

The stark reality is fulltime jobs, productivity and profits are all subpar. As I have noted many times, wages for the bottom 95% have gone nowhere since 2000 when adjusted for inflation. Households can no longer afford more debt unless it’s at near-zero rates of interest.

Fulltime employment–the bedrock of consumer spending and borrowing–has barely moved in eight years. Part-time waiters can’t afford to buy homes or new vehicles.

Wealth and income can only be generated in the real world by increases in productivity. Unfortunately for the “recovery” narrative, productivity is tanking.

Corporate profits are also going nowhere.

In essence, the “recovery” economy is a zombie economy living on great gulps of new debt that it can’t service. As sales, profits and tax receipts weaken, eventually employment weakens, too, as employers trim costs by cutting positions, hours worked, etc.

Eventually, zombie borrowers give up trying to service unpayable debts, zombie companies close their doors, and the illusion of “growth” collapses in a heap of corrupted numbers and false signifiers.

The “recovery” game will shift to massaging GDP so it ekes out .1% “growth” every quarter until Doomsday. The Zombie Economy can be kept alive indefinitely–look at Japan–but it not a healthy or vibrant or equality-opportunity economy; it is a sick-unto-death economy of fake narratives (growth is permanent) and fake statistics (we’ve revised previous numbers so that, surprise, GDP is still positive.)

If we stop counting zombies, we’re already in recession. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

How Medicine May Harness the Power of Gold to Fight Cancer

14-Aug-2017

– Gold has yet another purpose and may help fight cancer
– Gold increases effectiveness of drugs used to treat cancer cells by acting as catalyst – research shows
– Use of gold in technology and health growing each year
– Tech use to increase- number of patent applications in 2017 grew
– Industrial applications such as solar and bio-metrics reduce availability of above ground supply and gold for investment
– Another string to the bow of gold and potential impact on sentiment towards gold and on the gold price
– ‘Could gold finally have a purpose?’ bizarre headline ignores gold’s 2,500 plus year history as a means of exchange, money and a store of value

Source: Pinterest

Editor: Mark O’Byrne

Real, scientific evidence has been popping up for a while now which suggests the precious metal can make some major contributions to the world of science and medicine.

As a fan of Goldschläger I have long been convinced of the health benefits of gold and just last week a research team at Edinburgh University announced results that showed gold nanoparticles could increase the effectiveness of drugs used to treat lung cancer cells.

This latest announcement from the field of science is one of many which have been cropping up outside of the investment space, from medicine to solar panels to space technology, gold is making significant strides when it comes to its place outside of the financial world.

In the last quarter, gold used in technology rose 2% y-o-y, according to the World Gold Council. This was mainly thanks to a growth in demand for bonding wire, Printed Circuit Boards (PCBs) and LEDs.

It is not surprising that gold has a place beyond money. Due to it high conductivity, chemical stability and compatibility with other elements it is an ideal candidate in many applications.

As technology and research improves the number of use cases for gold is growing each year. This is beneficial for those who are investing in physical gold bullion.

Demand for gold’s physical properties in science takes it out of circulation and increases the demand for physical gold thereby reducing the availability for investment purposes.

Below, we take a quick look at some of the use cases of gold and explain why this is good news for the gold market.

Gold compounds

Scientific research into the health benefits of gold has been going on for some time. But, as we have seen with other alternative treatments …

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The Disruptive Effects of Fintech in the Insurance Industry

14-Aug-2017

Insurance and FinTech have largely remained on opposite sides of the spectrum, until recently. Financial technology companies paid scant attention to the insurance industry, preferring to focus on peer to peer lending, Forex, and payments. That trend is changing. FinTech and insurance have merged to become known as Instech, or Insurtech. Many investors are now plowing funds into this industry, seeking to capitalize on untapped markets.

Entrepreneurs already see the opportunity inherent in the insurance industry – a multi-billion-dollar enterprise around the world. Insurance is attracting FinTech investors in their droves. According to CB Insights’ Mathew Wong, the FinTech industry continues to attract scores of entrepreneurs from various fields, and they see the benefit of tapping into the insurance sector. Consider that in 2014, Instech attracted $740 million worth of funding, and that rose sharply to $2.7 billion by 2015. The next year, 2016, showed tremendous growth potential and these trends continue. Early-stage investments are seeing strong levels of interest among entrepreneurs, and this is accelerating as the insurance industry and FinTech pool their talents.

Entrepreneurs are investing heavily in all types of insurance. This includes accidental death, life policies, funeral plans, travel insurance, homeowner’s insurance, automobile insurance etc. Conventional insurance companies have been behind the eight ball in terms of effectively utilizing technology to distribute their products and services to a large global audience. FinTech is filling the void. It is also working alongside large insurance corporations to provide them with detailed analytics for underwriting purposes. Insurance premiums vary widely from one provider to the next. The insurance giants are quickly adapting their services to reach customers more efficiently and effectively via mobile technology, and online communication media.

Perhaps the most important area of FinTech development is found in blockchain technology. This is the structural framework upon which all cryptocurrency trading takes place – Bitcoin, Ether, Dogecoin, Litecoin, Dash etc. In the United States, the health insurance FinTech boom is particularly bullish. Broadband Internet has facilitated rapid growth in FinTech technology, and the Internet of things is making data collection from a myriad of devices (smartphones, tablets, phablets, smart wearable technology etc.) possible.

Fintech & Insurance in South Africa

An innovative new solution to FinTech and insurance recently launched in South Africa. This new Insurtech company is already making waves. The South African insurance industry is robust and highly profitable. However, it is also ready for the disruptive effects of FinTech technology. The chief executive officer of the company – Anthony Miller – has teamed up with Shaun Dippnall and Simon Nicholson (both actuaries) to provide insurance to households earning less than R30,000 ($2,200) per month. Every year, the South African life insurance market writes an estimated R10 billion in premiums (2014 figures).

According to Miller, a third of South Africans have funeral cover and some 40% of them have multiple insurance policies. On the flip side, just 6% of SA citizens have life coverage, with an even smaller number having disability insurance. The problem according to the Insurtech company is that traditional insurance policies are aggressively collecting on their premiums, and too many South African households have no life insurance at all. This means that when the primary breadwinner passes, families are left to fend for themselves with little or no support.

A stunning 50% of South Africans are in debt and this is a complicating factor in people who are seeking life insurance coverage. The inability of traditional insurance giants to provide cutting-edge FinTech services to the clients is their Achilles’ heel. The approximate cost of R100,000 life coverage is R92 per month, ($7), and the registration process is quick and easy to complete. Since FinTech is geared towards mobile functionality, the new startups are going after South Africans on their mobile phones. Land-based Internet services are few and far between in South Africa, but mobile Internet is huge. This FinTech startups has already sold 2,500 insurance policies with over R1.1 billion in life cover alone.

[KR1109] Keiser Report: Geopolitics & Cryptocurrencies

13-Aug-2017

In this episode of the Keiser Report, Max and Stacy discuss the electric car boom driving a resource boom in Australia . . . and the biggest mines are now being acquired by Chinese companies. In the second half, Max interviews Gerald Celente of TrendsResearch.com about paradigm shifts: from cryptocurrencies to electric cars.

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