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: 10 hours 55 min ago

Want Widespread Prosperity? Radically Lower Costs

20-Nov-2017

It’s easy to go down the wormhole of complexity when it comes to figuring out why our economy is stagnating for the bottom 80% of households. But it’s actually not that complicated: the primary driver of stagnation, decline of small business start-ups, etc. is costs are skyrocketing to the point of unaffordability.

As I have pointed out many times, history is unambiguous regarding the economic foundations of widespread prosperity: the core ingredients are:

1. Low inflation, a.k.a. stable, sound money

2. Social mobility (a meritocracy that enables achievers and entrepreneurs to climb out of impoverished beginnings)

3. Relatively free trade in products, currencies, ideas and innovations

4. A state (government) that competently manages tax collection, maintains roadways and harbors, secures borders and trade routes, etc.

Simply put, When costs are cheap and trade is abundant, prosperity is widely distributed. Once costs rise, trade declines and living standards stagnate. Poverty and unrest rise.

These foundations characterize stable economies with widely distributed prosperity across time and geography, from China’s Tang Dynasty to the Roman Republic to the Byzantine Empire to 19th century Great Britain.

The “Secret Sauce” of the Byzantine Empire: Stable Currency, Social Mobility(September 1, 2016)

The Lesson of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable(April 18, 2016)

I have estimated the realistic cost of a conventional middle class lifestyle, and found that only the top 20% can afford a middle class lifestyle. Needless to say, this destroys the notion of being “middle.”

The squeeze on households comes from both the soaring cost of big-ticket items such as childcare and healthcare and from the stagnation of wages/income.

Why the Middle Class Is Doomed (April 17, 2012)

Priced Out of the Middle Class (June 28, 2012)

The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016)

Inflation Isn’t Evenly Distributed: The Protected Are Fine, the Unprotected Are Impoverished Debt-Serfs (May 25, 2017)

The Disaster of Inflation–For the Bottom 95% (October 28, 2016)

About Those “Hedonic Adjustments” to Inflation: Ignoring the Systemic Decline in Quality, Utility, Durability and Service (October 11, 2017)

So your new TV cost $100 less but your healthcare costs $10,000 more: the big expenses are soaring, costing households tens of thousands of dollars more while cheap TVs and clothing decline a few bucks.

Labor’s share of the economy keeps stairstepping down: every boom/bubble benefits the financier and technocrat class, but labor’s share of the economic “boom” flatlines for a few years and then tanks in the inevitable unwinding/recession.

The third dynamic is the dominance of anti-competitive cartels and state guilds which are no longer accountable or competent. (The two are related, of course; when accountability is lost, there’s no way to identify or weed out graft and incompetence.)

This report on the causes of the decline of New York’s subway system reads like a summary of the entire U.S. economy: the politicization of public services, corruption that evades the legal definition of corruption, self-enriching guilds, cartels and elites and gross incompetence enabled by zero accountability.

How Politics and Bad Decisions Starved New York’s Subway (New York Times)

As long as this is business as usual, it’s impossible to slash costs and boost widespread prosperity. 

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.

Thanksgiving Dinner Is Not Usually Served On A Silver Platter But This Year We May See Just That

20-Nov-2017

In November of 2015 when silver was bottoming, we all had to endure 15 consecutive days of pure disgust:

2016 was not quite as bad, but not any easier:

Which brings us to November 2017:

Notice the theme here.

Silver bottomed in 2015. In 2016, silver began (or resumed) its bull market. This is further supported by the huge moves on the 2016 chart above. This is because, generally speaking, in bull markets, the biggest moves are to the downside, and in bear markets, the biggest moves are to the upside.

And what do we see in 2017? A very slow and painful grind to the upside full of emotional hope and hopelessness all wrapped into eleven months.

So far, we have been spared the massive drop in price this November. This is not to say it’s not coming. We don’t know if it is or not, but we do now this:

The cartel absolutely loves to smash price during the holidays. Most people who are working on Wednesday are ineffective in their jobs as they have one thing in mind, the markets are closed on Thursday for Thanksgiving, and on Black Friday, again, work is about the last thing on most people’s mind.

And so for silverbugs it can be painful to watch, because the cartel has been successful in strong-arming the market during the holiday week.

If somehow we can manage a close above $17.45 on the daily in the chart above, then silver will have managed to take a big step forward in resuming the uptrend. Not shown with an arrow because we’d all rather have some hope, but a close below $16.71 and it most likely will, yet again, be a painful close to 2017.

At $17.20 we have a ray of hope because the price action has been positive to the upside and we are above both the 50-day and the 200-day.

Silver has also come back down on the GSR:

Silver is below the 200-day in terms of how many ounces of silver it takes to buy one ounce of gold.

Gold ended the week well last week with momentum:

Gold has broke out of what was essentially a $20 trading range. Plus, the surge on Friday put the gold price above its 50-day.

It’s not shown on the graph above, but the resistance is the October 13th close at $1306.

At only $10-$15 it seems so close, but we can be certain the cartel will not give up that price level without a fight.

Platinum also had a huge surge on Friday:

Yet overnight we can already see the precious metal coming down off of the move.

But this is not to cast a negative light, because palladium is holding up and in fact rose overnight:

Palladium is the only precious metal that has not pulled back from the move on Friday.

Copper begins the week looking as if the base metal is going to ride the 50-day to either side for a while:

Which is exactly what it did last time it revisited the moving average.

Crude is still above $56 going into the holiday-shortened trading week:

If there is a current example of “climbing a wall of worry” then it is with crude. The doubt in the rise is exactly what everybody was feeling when the metals began moving up in 2016. Nobody was ready to call it a new bull market for some time.

The yield on the 10-year note is right smack in the middle of the 2.3% to 2.4% range:

On Wednesday, the Fed minutes from the November FOMC meeting (Nov 1) are going to be released. That may have an effect on the treasury market, and it’s shown in the range-bound yield above.

The Fed always releases their minutes three weeks after the meeting. This is a key way they can fundamentally manipulate or “jawbone”. You see, we are told that the release is the notes on what was discussed at their last meeting, but for those who are unaware, what the minutes really represent is an opportunity for the Fed to re-work the markets in any way they may need re-working to the Fed’s liking.

That is to say, the Fed will be looking to talk the markets for themselves and their banker cohorts, and the MSM will be cheering and supportive in whatever way they can.

What we need to know for the prices of gold & silver is that the minutes can be released and the metals can move off of the headlines. We know which way the Fed wants them to move so we must all be on guard for a price attack.

The dollar is barely treading water above its 50-day:

If the dollar breaks down through the 50-day, that will be bullish for gold and silver, however, just like the minutes can have an affect on the treasury market, the minutes can also have an effect on the dollar.

If the Dow is going to reach 24,000 it better get moving:

Because if it’s not reaching record highs every other day, do we then dare say it’s run out of gas?

Finally, presented with no comment:

Stack accordingly…

– Half Dollar

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

Money and Markets Infographic Shows Silver Most Undervalued Asset

20-Nov-2017

Money and Markets Infographic Shows Silver Most Undervalued Asset

– Silver remains severely under owned and under valued asset
– Entire silver market worth tiny $100 billion shown in one tiny square
– “All of the World’s Money and Markets in One Visualization”

– Must see ‘Money and Markets’ infographic shows relative size of key markets: silver bullion, gold bullion, cryptocurrencies/ bitcoin, largest companies, 50 richest people, Fed balance sheet, currency, stocks, property, cash, debt & derivatives
– Small allocation by investors and world’s richest will see silver surge like bitcoin

Click to enlarge. Source: Visual Capitalist

by Visual Capitalist

Millions, billions, and trillions…

When we talk about the giant size of Apple, the fortune of Warren Buffett, or the massive amount of global debt accumulated – all of these things sound large, but they are actually extremely different in magnitude.

That’s why visualizing things spatially can give us a better perspective on money and markets.

HOW MUCH MONEY EXISTS?

This infographic was initially created to show how much money exists in its different forms. For example, to highlight how much physical cash there is in comparison to broader measures of money which include saving and checking account deposits.

Interestingly, what is considered “money” depends on who you are asking.

Are the abstractions created by Central Banks really money? What about gold, bitcoins, or other hard assets?

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.

[KR1151] Keiser Report: Will Weapons of Mass Financial Destruction Be Used against Qatar?

18-Nov-2017

In this episode of the Keiser Report Max and Stacy discuss the bizarre documents leaked to TheIntercept.com exposing an alleged financial plan to attack Qatar with weapons of mass financial destruction. In the second half Max continues his interview with Max Blumenthal about #russiagate, #TheResistance, AIPAC and more.

The Great Retirement Con

18-Nov-2017

40 years ago, a grand experiment was embarked upon. One that promised US workers: Using new ‘defined contribution’ retirement savings vehicles such as IRAs and 401k,, they’d be better off when they reached retirement age.

Which raises a simple but very important question: How have things worked out?

The answer? Not well at all for the vast majority of Americans, for whom “retirement” will remain a perpetual myth. Click here to read the full article

Today No Metals Die: Gold & Silver Prices Rise To Finish The Week Strong

18-Nov-2017

It’s nice to see a volume spike on the bid side for a change:

We have been saying for weeks now, and probably sound like a broken record, that sooner or later the open interest has to come down. There are two ways it can come down, by a brute force paper dump and then the bullion banking cartel, also known as the commercials, step in and buy back all those contracts they sold short.

The other way is just to buy them back, which would drive the price up in a “short covering” event. We’ll have to see what happened to the level of open interest to start to see if the banks are covering their shorts.

The cartel has tried to smash all week, starting on Sunday night at 10:30 p.m. EST, but each time the dip has been bought:

And then the surge into the afternoon happened. We were reluctant to put out an article, because looking at the chart above, the last time gold hit $1290 – BAM! That was on Wednesday and it got knocked right back down.

Although the precious metals have held on to their gains into the close:

Gold and silver faded the move but started turning up again late in the afternoon.

Not helping the cartel is a US dollar that is breaking down:

 

We are not even going to post the inverse head-n-shoulders pattern because it’s a done deal. We are now at 93.666 on the chart.

A chart of the US Dollar/Japanese Yen shows similar breakdown, meaning that the yen is strengthening against the dollar.

So a combination of a weakening dollar, and strengthening yen and any short covering would be a step in understanding the rise on the day.

Because it had nothing to do with “fear”:

The VIX has actually fallen for two days in a row nad is now below 12 (though still above the 200-day moving average).

But back to the metals, individually.

Things are actually starting to shape up nicely on the silver weekly chart:

That’s a fairly respectable bullish candle, and it really highlights silver’s resilience. Silver has put in a second higher-low on the weekly. We are now back on the right track. A weekly close above $17.45 and we will have put in a second higher-high.

Gold is also looking decent on the weekly:

In the cartel’s ultimately futile attempt at holding gold back, it is nice to see that the volume is still very high. For a second week in a row the yellow metal is up with a respectable bullish candle. Again, all things considered.

Though we end the week with our chins up, there is the nastiness of the moving averages to deal with because the cartel is desperately trying to smash both gold and silver through to the downside.

But it wasn’t today. Both gold and silver, on their surge in price today, finished above the 50-day moving averages.

And it’s starting to look like things we want to see:

Shown on the GSR above, the number of ounces of silver it takes to buy one ounce of gold is now under the 200-day moving average.

Palladium may be reversing the down move over the last several days:

Palladium is up nicely on the year and all of the action on the chart is bullish. Those are nice, healthy pullbacks one wants to see which are the sign of a healthy bull market.

Platinum may be finally showing some signs of life:

On the daily, there is confirmation that we are on track is that there is now a bullish trend underway. Platinum has been under severe strain lately, but today the metal surged and gained more than the other three (up $17.60 or 1.88%).

Everybody is doubting this oil rally:

It stands to reason that the bulls would “climb a wall of worry”, because that is exactly what we did in early 2016 after gold & silver resumed their bull market super-cycle. What will it take before crude is declared in a new bull market? A close above $58 on the daily would certainly add another rung to the ladder.

Copper found support at the level we called “minor support” earlier in the week:

If copper can stay above the psychological support of $3, then this will be even further confirmation that the commodities bull market is under way.

A commodities bull market means inflation is about to run hot as the input costs of basically everything goes up.

The Ten Year Note yield is still in the 2.3% – 2.4% range it has been in for some time now:

With Fed Head Williams droppin’ the truth bombs that the Fed may begin a policy of negative interest rates, that yield would be going lower. It has been a common belief that they can’t raise yields gradually anyway. Sooner or later, the bond bubble is going to pop, and the Fed would be forced into a Paul Volcker style hike by the markets.

The Fed and the ESF can control the markets for some time, but not forever.

The Nasdaq didn’t make a new record high today after pulling it off yesterday:

But today’s chart of the day goes to Bitcoin:

After the drop to $5,500 last weekend, the ascent has been near vertical.

Consider this: If Bitcoin is in a bubble (which many feel it is), when it pops, all the Bitcoin holders will yet again need to find a place to go (if they can get out in time) and since none of them like sovereign fiat, we could see a panic rush into gold and silver like no other.

Stack accordingly…

– Half Dollar

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

The Demise of Dissent: Why the Web Is Becoming Homogenized

18-Nov-2017

We’ve all heard that the problem with the web is fake news, i.e. unsubstantiated or erroneous content that’s designed to mislead or sow confusion.

The problem isn’t just fake news–it’s the homogenization of the web, that is, the elimination or marginalization of independent voices of skepticism and dissent.

There are four drivers of this homogenization:

1. The suppression of dissent under the guise of ridding the web of propaganda and fake news–in other words, dissent is labeled fake news as a cover for silencing critics and skeptics.

2. The sharp decline of advertising revenues flowing to web publishers, both major outlets and small independent publishers like Of Two Minds.

3. The majority of advert revenues now flow into the coffers of the quasi-monopolies Facebook and Google.

4. Publishers are increasingly dependent on these quasi-monopolies for readers and visibility: any publisher who runs afoul of Facebook and Google and is sent to Digital Siberia effectively vanishes.

The reason why publishers’ advert incomes are plummeting are four-fold:

1. Most of the advert revenues in the digital market are being skimmed by Facebook and Google, as the chart below illustrates.

2. Ad blockers have become ubiquitous.

3. Few people click on the display ads that are the standard in desktop web publishing; in other words, these ads simply don’t work very well, and much of the revenue being generated is click-fraud, i.e. bots not real people clicking on adverts because they’re interested in the product/service. As a result, advertisers are pulling away from these type of ads as they search for advert models that aren’t so vulnerable to click-fraud.

4. The web is increasingly shifting to mobile, which has fewer advert spots due to the small size of the display. In addition, major third-party advert services such as Google Adsense place restrictions on the number and size of ads being displayed on publishers’ sites.

The systemic erosion of advert revenues for everyone other than FB and Google is evident everywhere: for example, BuzzFeed Set to Miss Revenue Target, Signaling Turbulence in Media Prospects for a 2018 initial public offering by the high-profile publisher now appear remote.

Digital publisher BuzzFeed is on track to miss its revenue target this year by a significant amount, the latest sign that troubles in the online-ad business are making it tough for new-media upstarts to live up to lofty expectations.

As a result of these two dynamics–the censorship of dissenting views under the excuse of limiting fake news, and the erosion of advert income–independent publishers are losing ground. While those posting on Facebook and other social media sites have little expectation of monetizing their content, many web publishers made enough income off adverts or affiliated income (from YouTube channels, for example) to justify the enormous time and effort they expended keeping their channel/site going.

As advert income has dwindled, there are only two other revenue models available to publishers: a subscription service or Patreon, i.e. the direct financial support of users/readers/viewers. Major publishers are struggling to build a subscription base large enough to fund their operations, a task made more difficult by the expectation that all content is free or should be free.

Patreon has been a boon for thousands of independent writers, journalists, cartoonists, filmmakers and other creators of content. The Patreon model (as I understand it, and yes I have a Patreon campaign) is not based on content that’s behind a paywall available to subscribers only, but on providing incentives in the form of content or other rewards to those who choose to contribute.

The Patreon model only works if enough users/readers/viewers step up to support content creators they value. I think the success of Patreon suggests that many people are willing to support the content creators they value. But like all voluntary revenue models, there’s the free-rider issue: people who may have the income to pay a bit for content choose not to, and in essence free-ride on those few who do contribute/pay for content.

Some people have advanced the model of micropayments as the solution to the problem of compensating content creators fairly. While this model has some obvious benefits–pennies charged for access to content might add up to a living for content creators if their audience was large enough–it would still be a voluntary system, and thus it would have the same free-rider issue as every other voluntary payment-for-content idea.

Posting “free” content on social media ends up driving advert revenues to the social media and search monopolies, leaving nothing for the content creators. There is only so much serious content that can be created for free.

If what we’re left with is “free” content (i.e. the creator gets no income for creating and posting content), Facebook, Google and click-bait link farms of sensationalist headlines, we’ll end up with a thoroughly homogenized web of “approved content” underwritten by lobbyists, the entertainment industry and elitist foundations/think tanks, and little in the way of real dissent or diversity of independent analysis.

In other words, we’ll be left with officially generated and sanctioned fake news and “approved” dissent: unemployment is at record lows, inflation is near zero, the “recovery” is alive and well, Russia is the enemy and any suggestion to the contrary is propaganda that must be eradicated as fake news, etc.

Simply put, the web is becoming Orwellian. There’s plenty of approved “diversity of opinion,” but dissent is being sidelined to the fringes as a risk to the perfection of managed content.

 

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.

[KR1150] Keiser Report: Business of #Russiagate

17-Nov-2017

In this episode of the Keiser Report, Max and Stacy discuss ‘the international oligarchy’ exposed by the ‘Paradise Papers.’ In the second half, Max interviews Max Blumenthal about the business of #Russiagate.

New Fed Chief Powell – A “Swamp Critter Extraordinaire”

17-Nov-2017

– Is the New Fed Chief Jeremy Powell a “Swamp Critter Extraordinaire”?
– Trump surrounding himself with elites disconnected from everyday society
– Realities of America’s difficulties not recognised by US power makers
– Powell will likely continue to protect Wall Street over Main Street
– Savers should diversify to protect themselves from Fed’s ponzi policies

Just like many of his other campaign promises, Trump isn’t doing a great job of draining the swamp. His nominee for Fed Chair is Jerome Powell.

Powell is a ‘swamp critter extraordinaire’ so declared by Bill Bonner last week. We’re inclined to agree. Name-calling is poor sportsmanship when it comes to politics, but hey, Trump started it.

When Trump traveled around the United States campaigning for the most privileged position in the country he lashed out at the seemingly abstract promise to ‘Drain the Swamp’ at every opportunity. He used it to criticise anything he didn’t like about the status-quo.

He made the ‘swamp critters’ the fall-guys for every hardship Americans were facing. In many ways he was right.

Yet as has been the case throughout the last eleven months, Trump hasn’t done a great job of turning rhetoric into reality.

He has continued to fill the swamp rather than drain it. Spending by lobbyists has reached levels unseen since 2012. Secretaries are flying in private government jets and Trump uses Republican Party money to fund his own legal expenses.

This is nothing compared to the senior appointments he has made. Trump has taken ‘swamp critters’ and placed them in positions of such power and influence one wonders what his supporters make of it all.

Hypocrisy was a word heard frequently during the Obama Presidency. Obama was great with words and preached peace while practicing war. Trump’s hypocrisy is on a whole new level.

Powell is just his latest appointment. With an estimated fortune of $55 million the likely new Fed Chair  has spent his career in Washington flip-flopping between roles in both regulation and industry. He is now set to take the wheel at a job whose sole role is to steer the US economy. Indeed, some more imperially minded Americans see the job as being to steer the global economy.

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.

As Traders’ Array of Assets Widens, Bitcoin Looks Less Tempting

16-Nov-2017

Bitcoin, the original electronic peer-to-peer digital currency system, was created in 2009. Along with it came blockchain technology, which fintech firms have since started using for purposes outside of simply mining more currency, or rivaling bank payment systems. While bitcoin remains by far the best known and most valuable cryptocurrency, some have started to express doubts about its future. Even as its price-per-coin soars, many see signs that point to bitcoin losing its popularity. One of the biggest catalysts of this notion is the number of new and more widely applicable uses that innovators have found for both blockchain and new alternative coins.

Bitcoin is in Retrograde

Bitcoin is a cryptocurrency with a strong presence in the global market and the fintech industry. Though it continues to rise in value, this digital coin is not keeping up with other newer assets on the market. It appears bitcoin is losing its touch with the trading community. Whether as a currency itself or as part of an ETF or other index, bitcoin may have a challenging time keeping up.

Today, almost any firm can have its own initial token sale (ITS) to raise money for a service that will incorporate these alternative coins down the road. This move lets companies garner investments in their idea without having to cede creative control, and it creates better engagement with their new platforms. These tokens derive value both from how popular they are (like bitcoin), but also have a more unique value proposition (use in a service).

Additionally, the very system on which bitcoin relies has far outstripped the usefulness of bitcoin itself. Banks, online exchanges, eCommerce websites, and countless other firms are beginning to use blockchain to create new services in existing industries, hoping to disrupt the status quo. Finally, Bitcoin may quickly be reaching overvalued territory. Though the coin’s value has consistently seen upward momentum, the current price point just might be too high for some people. This can cripple its popularity because of the way it’s denoted in the public. Advertising the price of a single bitcoin makes it sound much too expensive to the average retail investor, and deters investment in fractions of the coin that drive much of volume.

New Assets on the Rise

As more online trading companies and exchanges go with blockchain technology, clients have a more varied and comprehensive list of assets with new lucrative additions. This isn’t yet a problem, but could spell big trouble for bitcoin down the road. As new coins and tokens offer unique capabilities, bitcoin remains mostly one-dimensional in uses. Ethereum, for example, revolutionized blockchain with its implementation of smart contracts.

Newly-created cryptocurrencies are not hard to come by, and smart companies are increasingly choosing to mint their own digital coins rather than use existing ones. Naga Group AG, for example, is a digital asset trading innovator that has recently launched an exchange around their NGC token, where clients can trade currencies (fiat or crypto), commodities, stocks, indices and other virtual assets. The Naga platform makes all investable assets accessible to those with Naga Coin in a single comprehensive interface. This new cryptocurrency solution is the latest addition to the Naga’s trading ecosystem, which already includes SwipeStox, a platform for social investing across more than 700 assets. Other fintech companies are also looking towards blockchain to make assets more reachable to a wider audience, but Naga has a significant head start due to the infrastructure they’ve already built, and their stunning market achievements.

The team is already responsible for successful fintech products that serve hundreds of thousands of traders daily, and have a wildly successful IPO under their belts. Driven by industry experience and a stellar product, the company’s initial public offering was the Frankfurt Stock Exchange’s most successful in over 15 years.

Alongside industry experience with compliance and customer service, another unique component of Naga’s value proposition is the ability for game developers to list their in-game items on the exchange. This special API, called Switex, unlocks the true market demand for virtual property by itself, and as an investment vehicle as well. With 500% performance on their stock since being listed, Naga is looking to take their upcoming initial token sale to a new level and capitalize on their momentum.

ETFs (Exchange Traded Funds) consisting of groups of classic digitized assets such as commodities are also available on blockchain. Creative fund managers can develop algorithms for autonomously managed indices of real or crypto-assets. Platforms like Naga provide firm infrastructure and liquidity for such investment instruments, which could be integral in reducing the volatility of cryptocurrency.

Why Choose New Assets Over Bitcoin?

Despite Bitcoin’s popularity, the digital coin has run into some serious issues, most of which have to do with cybersecurity. First, Bitcoin wallets have been hacked before, with more than 2,600 cyber-attacks taking place before January 2016 alone. While blockchain technology is considered a more secure system to store data, it is not bulletproof just yet, and increasing popularity makes it a bigger target.

Second, new wallets can become vulnerable if old passwords are appropriated from backups. There exist exploits that drain old and new wallets both, instead of just emptying the old wallet into the new one. For users to avoid this situation, they must create a new account and a new address, to which the purchased bitcoins would be sent from the old wallet. This roundabout, bootstrapped way of using bitcoin has a long way to go before being able to support a real economy.

Though Bitcoin is considered untraceable because it is not connected to a bank account or credit card, this statement is not entirely true. A hacker can track the transactions history of the digital coin, which would allow him to connect identities to addresses. Once he manages to do that, he may be able to find whatever financial information is necessary through other databases.

Bitcoin and Its Competition

Bitcoin is a popular choice among crypto traders, but its rivals might be able to overthrow it sooner than some realize. Nowadays, anyone who has access to the internet can have his or her own coin, a fact supported by the sheer number of companies that now have their own digital coins. Furthermore, bitcoin is being pushed aside due to the widening variety of new assets that are now available online to. Some have even called Bitcoin a bubble that is just waiting to implode on itself. Regardless, unless the original cryptocurrency can finally find a way to justify its high valuation, it may soon be left in the lurch by its more useful and affordable competitors.

The Superhero Complex: Are We Incapable of Saving Ourselves?

16-Nov-2017

It’s been widely noted that the U.S. film industry ably functions as a pro-global hegemony propaganda machine: even when the plot features evil rogue elements at work in a global-hegemony agency (Pentagon, CIA, NSA, etc.), the competence of the agency is never in doubt, nor is the agency’s ability to rid itself of the evil rogue element.

Evil conspiracies are revealed and the Good Guys/Gals win.

This depiction of official competence and the moral righteousness of patriotic employees is not surprising; these agencies have long “cooperated” with Hollywood on many levels.

More troubling is the recent film-industry depiction of our dependence on superheroes and their superpowers to set things right. The benign view is that Hollywood is always seeking new billion-dollar source materials for multi-film franchises, and comic book heroes are tailor-made for franchises: not only can multiple films be made about individual superheroes, but the potential for mix-and-match combinations of superheroes is practically endless.

The less benign view is that the popularity of superhero movies reflects a deep insecurity and worrisome desire for fantasy saviors, as if mere mortals can no longer save themselves with their pitiful real-world powers.

Psychoanalyzing the zeitgeist of films has long been a popular parlor game: much has been written about the popularity of monster films (often featuring nuclear radiation as the trigger of the mayhem) in 1950s Japan, and the meaning of the American Noir films in the 1950s.

Correspondent C.D. recently submitted an interpretation of Hollywood’s superhero movies: is our collective fascination with superheroes reflecting a sense that we no longer have the power to save ourselves?

“One of the things I’ve been thinking about lately is the idea of TPTB (the Powers That Be) using entertainment, specifically movies, to keep the masses from rising up. Have you noticed how many modern movies use the archetype of the hero, but place that hero in opposition to some type of system (e.g. the Empire in Star Wars), or we have superheros. In both instances, there is a type of cathartic release for the audience’s frustrations with the current system. When the evil empire is defeated in the movie, people get an emotional release and they feel less motivated to deal with the real world empire.

When a superhero takes care of the problem, the audience is lulled into the pattern of thinking that someone else will take care of things. Also, often these superhero movies present the average Joe/Jane and the authorities as incompetents who need saving, which reinforces a feeling of helplessness to take on big powers. I’m sure others have come up with this type of analysis and I may be repeating what they have said, but it’s worth further consideration.”

Thank you, C.D. I don’t think it’s much of a stretch to say that many people sense their power within the system is extremely limited, as is their power to radically transform their own situation.

As for cheering for the ragtag rebels resisting the Empire–how many people feel divested from America, that is, they sense their “ownership” in the Empire’s wealth and power is near-zero? How many feel disempowered and disenfranchised?

It’s not much of a leap from social, political and financial divestiture to feeling that it takes superpowers to change one’s circumstances or save the system from disorder and destruction.

Are we incapable of saving ourselves from a self-destructive status quo owned and operated by the few at the expense of the many? If we felt empowered in daily life, would we be so enamored of superheroes constantly saving our world from destruction? If we felt the system still had the wherewithal to restore itself, would we need so many superheroes?

Or maybe it’s all just good clean (highly profitable) fun, or a sci-fi/fantasy updating of Greek Mythology. Still, that practically every other movie is another installment of the superhero franchise seems to beg for a look beneath the surface appeal of these escapist extravaganzas.

 

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.

Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe Show Why Physical Gold Is Ultimate Protection

16-Nov-2017

– Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe
– Real inflation in Zimbabwe is 313 percent annually and 112 percent on a monthly basis
– Venezuela’s new 100,000-bolivar note is worth less oday thehan USD 2.50
– Maduro announces plans to eliminate all physical cash
– Gold rises in response to ongoing crises

A military coup-de-grace in Zimbabwe and a bankrupt Venezuela. Both countries have extreme hyperinflation, citizens are starving and basic medical treatment is near impossible to find. These are the real world problems 47.5 million people are currently facing.

Presidents Robert Mugabe and Nicolas Maduro both deny the crises in their respective countries. For Maduro it is the media propagating false truths. In Zimbabwe the response to hyperinflation has been to declare it illegal.

Both countries are in the media spotlight after a significant week that has left one man powerless and another scrambling to restore faith in his bankrupt country.

Each country’s mess is thanks to mismanagement of resources and the central banking system. Citizens have had their rights almost decimated as the cash in the bank is worth increasingly less and fewer people are receiving income. Basic goods and services are near impossible to come by, with little sign of let-up.

The hyperinflation and economic situations in both the Latin American and south African country are a reminder of the damage caused by governments. Both Maduro and Mugabe have acted under the premise of serving the electorate. Citizens as a result have only suffered and seen their wealth diminish on a daily basis.

Both countries may seem a million miles away from the West in terms of political situation and cultures. However there is a strong lesson to be learnt. Savers should learn the need to protect their earnings and wealth from the manipulative decisions of governments and destructive monetary policies.

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.

Is This Why Productivity Has Tanked and Wealth Inequality Has Soared?

15-Nov-2017

One of the enduring mysteries in conventional economics (along with why wages for the bottom 95% have stagnated) is the recent decline in productivity gains (see chart). Since gains in productivity are the ultimate source of higher wages, these issues are related. Simply put, advances in productivity are core to widespread prosperity.

But that’s only half the problem–productivity gains have flowed to the top of the income-wealth pyramid as financialization and cartels have replaced real-world wealth creation as the source of wealth-income.

Longtime correspondent Zeus Y. recently identified one cause of declining productivity and the narrowing of financial gains in the top: the quasi-cartels that dominate our economy profit by introducing and maintaining inefficiencies, not eliminating them. This runs counter to the accepted wisdom in classical free-market capitalism that generating efficiencies increases profits.

Here is Zeus’s explanation of this perverse dynamic:

“With Big Data and Big Profit dominating the products, services, and platforms of everything from iOS operating updates to delivery of healthcare, let’s make the plain-as-day argument: PROFIT and EXTRACTION MEANS PRODUCING INEFFICIENCIES, NOT ELIMINATING THEM.

They make their money by creating inefficiencies, bottlenecks, and gatekeepings that they can profit from. Every middleman function they can stick in their system is a potential profit source for them.

This was especially apparent to me in all the bugs I have experienced with Apple upgrades on my phone. I have to take the time to fix their screw-ups, which are designed to aggregate my data and usage to profit them. You see this with the manipulation of Facebook, creating a very black and white world that motivates and manipulates people to a froth with filters and algorithms that reinforce their biases.

This is not free and democratic access, but inefficient and narrow manipulation, cutting down on alternatives, possibilities, and better ways to think and do. What would a more efficient and democratic system look like, one where access, freedom, and, yes, real efficiencies (especially democratic and community efficiencies) would predominate?”

Thank you, Zeus. As Marx observed 150 years ago, the most profitable arrangement is monopoly, or failing that, a cartel that controls a specific market. Thus it is no surprise that Google, Facebook and Amazon are attempting to become quasi-monopolies in their respective spaces, just as Standard Oil gained a near-monopoly on the oil market in the early 20th century.

Corporations no longer seek a coercive old-style monopoly that violates anti-trust laws; today they eliminate competition by scaling up to dominate a sector. I covered this in Are Facebook and Google the New Colonial Powers?(September 18, 2017).

Once a corporation achieves dominance, it can impose profitable inefficiencies (for example, healthcare and higher education), force customers to perform labor that was once done by companies as part of their service (self-checkout, endless software updates), and profit from customer data with little fear of blowback: now that you need us, we can extract maximum profit from you without fear of regulation or competition.

Once customers are dependent (or addicted, in the case of opioids, mobile telephony, Facebook, etc.), then corporations can impose all sorts of burdens on their customers and demand annual ransom, a.k.a. software licensing and/or update fees.

Consider Microsoft’s dominance in operating systems and Office. Microsoft can sell buggy, insecure software, and require constant purchases of “upgraded” software that has lower functionality than the product it replaces.

The same dynamic is in play with Apple and Android OS in the mobile space. I was recently forced to upgrade my perfectly functional iPhone 4 because some apps only work now in the latest iOS. Meanwhile, Windows 10 is demanding I upgrade my BIOS so my laptop can accept the latest Win10 update. Needless to say, Microsoft offers zero assistance beyond the nag-box.

Needless but highly profitable forced-upgrades are the bread and butter of the tech industry. If we actually valued efficiency and productivity, our system would encourage durability, efficiency and reducing waste. Alas, all three of these worthy traits drastically reduce profits, so instead our maximizing profits by any means available system incentivizes planned obsolescence, inefficiencies controlled by cartels and endless waste of goods, services, customer time and resources.

The immense profitability of inefficiencies controlled by monopolies, quasi-monopolies and cartels is a key reason productivity has faltered and gains flow only to the top. There are other models for distributing software and services, for example, open-source software. There are other models of ownership, for example community ownership of resources and enterprises. But given the financial and political dominance of cartels, these options have been neutered or marginalized. 

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.

UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off

15-Nov-2017

– UK debt crisis is here – consumer spending, employment and sterling fall while inflation takes off 
– Personal debt crisis coming to fore – litigation cases go beyond 2008 levels
– October consumer spending fell by 2% in October, the fastest year-on-year decline in four years
– Britons ‘face expensive Christmas dinner’ as food price inflation soars
– Gold investors buying physical gold due to precarious UK and US outlook

Editor: Mark O’Byrne

The long heralded UK debt crisis is here and data released in the U.K. this week clearly shows this.

This is seen in UK retail sales and consumer spending which plunged in October, employment falling, pay stagnant and inflation ticking higher as sterling remains under pressure.

Yesterday, official UK figures showed prices were up by 4.2% last month on 12 months earlier, the highest level in four years. Britons ‘face expensive Christmas dinner’ as food price inflation soars reported The Guardian yesterday.

Meanwhile stock markets make new highs every week but the underlying economic data is not reflecting the “irrational exuberance” being seen in global stock markets.

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.

Mideast Turmoil: Follow the Oil, Follow the Money

14-Nov-2017

While there are numerous dynamics at work in the turmoil roiling Saudi Arabia and by extension, the Mideast, one way to cut to the chase is to follow the oil, follow the money. Correspondent B.D. recently posited a factor that has been largely overlooked in the geopolitical / fate-of-the-petrodollar discussions:

Perhaps the core dynamic is a technical one of diminished oil production. Here is B.D.’s commentary:

“I think the Saudis may be quickly running out of profitable oil to produce/export.

I think they tried to over-produce for a while to damage the competition… and they now have production issues resulting from that. (As has happened in the past)

I think they may have recently slipped over the event horizon for being the world’s swing producer of ‘cheap-ish and abundant’ oil. That has huge ramifications for the global markets ability to quickly respond to supply/demand fluctuations.

I suspect they’re no longer cutting production voluntarily … they are now in the grip of a technically driven decline in output. (Why else begin selling off ARAMCO now?)

I doubt that many national economies can handle $70+ oil for very long… price will be limited by the ability of the consumers to pay. What I assume should happen is relentless severe volatility in the absence of a big swing producer that can open up or shut in production with comparative ease.”

Thank you, B.D. Let’s start with what’s well-established about Saudi oil production:

1. The days of sticking a straw in the sand and oil gushing out are long gone. Oil production now depends on costly technologies such as pressurizing the wells with seawater, CO2, etc.

2. The soaring population of Saudi Arabia is dramatically increasing domestic consumption of the Kingdom’s oil, reducing the amount of oil available for export.

3. The industry is skeptical of official Saudi estimates of proven reserves and production capacity.

Let’s sketch a conjectural scenario which explains the extraordinary purges and power plays underway in Saudi Arabia:

1. As B.D. posited, Saudi production is already flat-out, and there is no million-barrel-per-day slack that can be brought online to depress global prices, crushing competitors and maintaining control of crude prices. In other words, the Saudis no longer have the technical / production capability needed to control global oil pricing– a power that they’ve enjoyed since 1973.

2. Saudi production is declining due to technical/real-world factors (depletion of super-major fields, etc.) that cannot be overcome at a financial cost that make sense at $50/barrel oil.

3. The possibility of a global recession unfolding in 2018 is rising. In a global recession, oil demand will fall, crushing the marginal pricing power of exporters.

4. The Saudi royal family and the Kingdom’s vast state welfare system is no longer sustainable should oil fall into the $30-$35/barrel range due to a collapse of global demand.

5. The only way out is to grab the power now that will be needed to slash domestic welfare and domestic consumption of oil/gas, i.e. the power to overcome resistance within the royal family to severe reductions in royal/central state budgets.

Geopolitically speaking, very few if any oil exporters are able to prosper and fund their regional/global ambitions if oil plummets to $35/barrel and stays there for years. Every oil exporter makes brave statements about being just fine with $25/barrel oil, but the reality is every major oil exporter is dependent on oil revenues of a scale that can only be generated at $50/barral and up.

The discovery of new oil fields has fallen far below global consumption.

Meanwhile, U.S. producers have taken market share away from OPEC exporters, effectively reducing their influence over prices, as U.S. producers are to some degree the marginal swing producers.

The costs of exploration and production changed around the turn of the 21st century. The cost of discovering, extracting, refining and transporting new oil have increased dramatically.

All this suggests oil will have to become more costly for it to make financial sense to produce it. But as B.D. observed (and analyst Gail Tverberg has explained in great detail), oil-consuming economies will be pushed into stagnation/recession by significantly higher oil prices.

Will China Bring an Energy-Debt Crisis? (Our Finite World, Gail Tverberg)

In this scenario, time is running out for Saudi Arabia’s free-spending royalty and state– and for all the other free-spending oil exporters. As a global recession looms ever closer, every oil exporter edges closer to the event horizon of financial, social, and political disorder and upheaval. Venezuela is just the first domino that’s toppling. The Saudi leadership is trying to avoid being in the line of oil exporting dominoes that will fall in the 2018 global 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.

Protect Your Savings With Gold: ECB Propose End To Deposit Protection

14-Nov-2017

– Protect Your Savings With Gold: ECB Propose End To Deposit Protection
– New ECB paper proposes ‘covered deposits’ should be replaced to allow for more flexibility
– Fear covered deposits may lead to a run on the banks
– Savers should be reminded that a bank’s word is never its bond and to reduce counterparty exposure
– Physical gold enable savers to stay out of banking system and reduce exposure to bail-ins

It is the ‘opinion of the European Central Bank’ that the deposit protection scheme is no longer necessary:

‘covered deposits and claims under investor compensation schemes should be replaced by limited discretionary exemptions to be granted by the competent authority in order to retain a degree of flexibility.’

To translate the legalese jargon of the ECB bureaucrats this could mean that the current €100,000 (£85,000) deposit level currently protected in the event of a bail-in may soon be no more.

But worry not fellow savers as the ECB is fully aware of the uproar this may cause so they have been kind enough to propose that:

“…during a transitional period, depositors should have access to an appropriate amount of their covered deposits to cover the cost of living within five working days of a request.”

So that’s a relief, you’ll only need to wait five days for some ‘competent authority’ to deem what is an ‘appropriate amount’ of your own money for you to have access to in order eat, pay bills and get to work.

The above has been taken from an ECB paper published on 8 November 2017 entitled ‘on revisions to the Union crisis management framework’.

It’s 58 pages long, the majority of which are proposed amendments to the Union crisis management framework and the current text of the Capital Requirements Directive (CRD).

It’s pretty boring reading but there are some key snippets which should be raising a few alarms. It is evidence that once again a central bank can keep manipulating situations well beyond the likes of monetary policy. It is also a lesson for savers to diversify their assets in order to reduce their exposure to counterparty risks.

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.

Forget the Bogus Republican “Reform”: Here’s What Real Tax Reform Would Look Like

13-Nov-2017

As has been widely noted, the Republicans’ proposed “tax reform” is not only just more BAU (business as usual, i.e. cut taxes for the wealthy), it’s also not real reform. At best, it’s just another iteration of D.C. policy tweaks packaged for PR purposes as “reform.”

You want real tax reform? This is what real tax reform would look like:

1. Shred the entire 2,700 page tax code and replace it with a 25-page code. As I explained in The Fetid Swamp of Tax Reform (November 10, 2017), the 2,700 page current tax code is a complexity thicket designed to hide tax breaks and subsidies for big political donors.

Politicos give lip service to simplifying the tax code for PR purposes, but no politico actually wants radical simplification because this would eliminate the biggest grab-bag of political favors available to pass out to big donors.

Though radical simplification is politically impossible, it’s the first and most important real reform.

2. Replace the entire convoluted mess of income tax for the bottom 99.5% with transaction taxes collected at the point of transaction. A transaction tax is similar to a value-added tax (VAT) or sales tax, but it’s radically different in key ways: a transaction tax is levied on financial transactions, not just sales.

A transaction tax would be levied on every high-frequency stock trade, every loan that was sold, every financial transaction anywhere in the U.S. or any transaction anywhere in the world involving a U.S.-based entity or asset.

Since the vast majority of financial transactions are executed on behalf of banks, corporations and wealthy individuals, a transaction tax would naturally collect more taxes from those at the top of the wealth-power pyramid. The transaction tax could be very modest because it would be collected on billions of transactions–everything from stock trades to purchases to loan payments.

A transaction tax couldn’t be dodged by moving assets to offshore tax havens or renouncing citizenship. The model here is property taxes, which are collected regardless of who owns the property, where they do their banking, their citizenship, etc. The entity that owns the property must pay the tax, or forfeit ownership via an eventual auctioning off of the property to pay the tax liens.

Nobody cares if the owner banks in a tax haven, or declares taxes in another country; either they pay the property tax due or they forfeit their ownership.

A transaction tax eliminates all tax returns, all accounting for income, deductions and expenses, and correlates to wealth/income. The working-poor household would pay a transaction fee when they buy something at a dollar store, but the fee would be much less than current state sales taxes. The point of the transaction tax is that it includes all the transactions of the wealthy class that aren’t simple purchases of goods and services.

To insure a progressive tax structure, financial transactions above certain thresholds of size and frequency would be taxed at a higher rate.

The fundamental idea behind a progressive tax structure is that taxes paid reflect the financial benefits flowing to the top class. In other words, taxes collected should reflect this chart of where the the gains have flowed in recent years:

As I noted last week, the wealthy class already pays most of the taxes. But the chart above makes it painfully clear that most of the financial gains aren’t flowing to the top 10%; they’re flowing to the top 1/10th of 1%.

3. This reality demands a tax structure that correlates to where the gains in income and wealth are flowing. Once again the model should be property taxes: whatever entity owns assets in the U.S. should pay a slice of those assets in taxes.

It doesn’t matter whether the entity is in Timbuktu or the Cayman Islands, or if they have a formidable array of attorneys slaving away for them; if they own an asset in the U.S.– real property, stocks, bonds, mortgages,etc.–they have to pay the equivalent of a property tax on assets above a high threshold; high enough that the bottom 99.5% are for the most part excluded (for example, above $10 million).

There is no other way to break the injustice of offshore tax havens described in this article: Why have we built a paradise for offshore billionaires?

If an individual or corporation doesn’t want to pay any tax in the U.S. in this tax structure, fine, all they have to do is sell all their U.S.-based assets and execute no transactions with any U.S.-based entities or assets.

The point is to end the current system in which billionaires get all the privileges and financial benefits of owning assets in the U.S. but don’t pay taxes that are proportional to the benefits they extract. If billionaires want to move all their assets and transactions to some other nation, that’s their prerogative. But at least they won’t be pillaging the U.S. and its residents and getting away with financial murder.

A transaction-asset-based tax structure would free the bottom 99.5% of an immense burden of complexity and compliance while ensuring that taxes were levied in proportion to one’s financial activities and that those benefiting the most from owning U.S. assets would pay taxes that were proportional to their benefits.

A levy of 3% (0.03%) on $1 trillion is $30 billion. Total net worth of U.S. households rose to $95 trillion this year. Excluding pensions, IRAs, and 401K accounts of the bottom 99.5%, total net assets–the majority of which are owned by the super-wealthy–total around $60 trillion.

A 3% tax on all assets above $10 million would bring in around $1.5 trillion, the total amount collected in federal income taxes in 2015. A two-tiered transaction tax would bring in a similar amount, replacing the entire payroll taxes of Social Security and Medicare.

Amount of Federal Revenue by Source (Tax Policy Center)

These two taxes would eliminate income and payroll taxes and all the enormous costs of compliance, and wipe out offshore tax havens. Since both transaction and asset taxes would be low, the motivation to sell all U.S. assets and execute no transactions involving U.S. based assets or entities would be low. Would it really be worth giving up all the enormous income streams flowing from U.S. assets to evade a 3% tax?

Is it worth going to a lot of trouble to evade a 36% corporate income tax and a 39.6% individual income tax? Definitely. Is it worth going to a lot of trouble to evade a 3% tax? To the super-wealthy, that’s mere friction. 

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.

The Cartel Is In A Box With Gold & Silver Prices But Don’t Start Celebrating Yet

13-Nov-2017

Both gold and silver ended last week with bad omens. Let’s look at those omens as it pertains to the problem the cartel has had for months: Open Interest In silver, open interest needs to come down:

If it comes down this week, the cartel will have painted the chart rather bearishly in the short-term.  If we drop below $16.59, then we will have put in another lower-low on the charts, and if open interest is going to come down, it looks like silver very well might get below that price level.

Gold looks relatively smoother on the chart, but the open interest is still too high:

The key level to hold on to is $1263. A drop below that price will again have painted the chart very bearishly. One has to wonder, how much lower either gold or silver could drop before the dip is bought, however? If the dip is bought after the spec flush-out, open interest will literally shoot back up again as the cartel will attempt to issue as much paper as possible to contain the rally.

This really highlights the fact that the cartel is stuck in a box. They are having the darnedest time flushing out the longs, but at the same time, once they do, the longs will come right back in. It goes to show that it really is impossible to contain laws of economics, and while they have been able to for some years, it is now nearly at the breaking point.

Anybody who read the India Cash Ban Anniversary post would have seen this, but this seems appropriate right about now.

Here’s the trouble the cartel is having in keeping the prices of gold and silver held back:

How demonetisation stopped the black money market. pic.twitter.com/X46GnV7UF6

— Bollywood Gandu (@BollywoodGandu) September 11, 2017

 

In fact, this difficulty is showing in the GSR:

There appears to be an uptrend forming on the gold-to-silver ratio. if they are able to flush out the spec longs, that number will likely shoot up even higher in the short-term. Just more evidence of the box in which the cartel finds itself. If the ratio starts getting closer to the 80 side once again, there will be a flood into silver to take advantage of the imbalance.

Here’s a thought: Is it possible that platinum is being pushed lower this year in an attempt to further crush precious metal sentiment?

Platinum does look to have bottomed in the short-term, and it looks like it has room to run before open interest becomes a problem, so the outlook is otherwise good, but wouldn’t it just crush sentiment if platinum got a taste of the price smashing this week?

Palladium, the shining star of 2017, is still doing its thing:

Something interesting about palladium is just how the open interest has dropped this year. First off, palladium is a way smaller and less traded market than gold or silver, so the open interest builds and drops in a steeper, quicker fashion. Also interesting to note is that on the chart, open interest in palladium has dropped on both dips and price rallies. These are the signs of a less manipulated market, unlike gold and silver whose open interest 9 times out of 10 falls on price smashes.

However, if the cartel is going to flush out the longs in gold and silver, this is going to be a problem:

Although still low, market fear is beginning to spike. Of course, if domestic and geo-political fundamentals are part of it, and if the ESF and Fed were not, the VIX would be spiking even more.

A VIX moving higher is bullish for gold and silver because the precious metals are “safe haven assets”. They feed off of, in part, uncertainty.

The dollar is also going to be a problem if the cartel is smash price to cover their shorts:

The Japanese yen looks to have turned and looks that is is beginning to strengthen against the dollar. A strengthening yen (which is shown by the action moving down on the above chart) is good for gold, just the same as a weakening dollar is good for gold.

We highlight the yen because it is one if not the preferred carry trade to move the metals market.

For the yield on the 10-year, we’ll just have to wait and see:

Over the last 52-weeks, the yield on the ten year has been between 2% and 2.6%. With all of the fundamental news picking up steam, we’ll see how that factors in to the Fed’s supposed “balance sheet unwind”. Recall however, that if Powell is confirmed, just as in Yellen, Powell is set to slash interest rates during the next financial crisis.

So the question: Does the Fed even have one rate hike left, or will the next financial crisis come first?

Looking at commodities, crude is about to facing some resistance now that spanned two months in 2015:

If the war drums beat louder, however, or if the petro-yuan really picks up steam, the price of crude oil could get moving in a hurry. In the immediate short term, however, it would seem that the shorts and the longs would be working out their positions, especially after crude has risen 9 of the last 10 weeks.

But any middle east pop-offs, or shock global currency events, and all bets are off.

Copper is facing some minor but also major support:

Since it is not the prettiest support, we’ll call it $2.93. However, a drop below $3 would bring out all the bears with their “see, I told you so it was a fake rally” memes. However, if the price of oil is rising, which it is, then it will cost more to get copper out of the ground, so that fundamental reason in addition to the technical support levels translates into a price that will have difficulties breaking though to the downside.

Finally, looking at the stock market, this sees appropriate:

That’s the sole remaining original Dow component business. Gold is beating GE this year, and to understand the significance of this, see yesterday’s post about why gold beats the stock market, hands down.

On the calendar this week, there is a busy week with data points and a slew of Fed Head speeches.

It is a little light early on:

But come Wednesday and especially on Thursday, the data releases and events really start picking up:

Over the course of the week, several key inputs the “data dependent” Fed uses to determine interest rate policy will be on Tuesday, Wednesday, and Thursday. But it stands to reason they will pump out whatever number that supports their narrative.

And then there’s the real economy.

Stack accordingly…

– Half Dollar

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

116 Internet Shutdowns Show Why Physical Gold Is Ultimate Protection

13-Nov-2017

– Internet shutdowns (116 in two years) show physical gold is ultimate protection
– Number of internet shutdowns increased in 2017 as 30 countries hit by shutdowns
– Democratic India experienced 54 internet shutdowns in last two years; Brazil 2
– EU country Estonia, a technologically advanced nation, experienced a shutdown
– Gallup poll shows Americans more worried about cybercrime than violent crime
– Governments use terrorist threat as reason for internet kill switch powers
– Own physical coins and bars rather than digital gold on a single platform 

Editor: Mark O’Byrne

UNESCO is warning that the number of internet shutdowns is increasing worldwide. According to Statista.com when reporting data provided by digital rights platform accessnow.org, “internet access has been curbed 116 times in 30 countries since January 2016.”

“Internet shutdown: An intentional disruption of Internet or electronic communications, rendering them inaccessible or effectively unusable, for a specific population or within a location, often to exert control over the flow of information.” – Access Now.

One question that so many ask when first hearing about bitcoin is ‘what if the internet stops working?’ Bitcoin and crypto proponents scoff and point out that there is no singular ‘off button’ i.e. it would be near impossible.

According to ‘father of the internet’ Tim Berners-Lee, this is true:

“The way the internet is designed is very much as a decentralised system. At the moment, because countries connect to each other in lots of different ways, there is no one off switch, there is no central place where you can turn it off.”

Try telling that to the one billion plus people in India who have experienced over 54 internet shutdowns in the last two years.

Or those in Egypt who on January 27th 2011 could no longer get online as the government shut down the internet in response to the pre-Arab Spring protests.

Even in the EU, ten years ago technologically advanced Estonia appears to have been a victim of Kremlin-sponsored cyber warfare, when Estonians found they could no longer access their bank accounts. Individuals and companies could not use their computers for the simple daily tasks that we take for granted today – such as email.

The above three examples are not rare occurrences. In the last two years alone there have been 116 situations where governments or state sponsored hackers seem to have found the ‘off button’ for the internet across 30 countries. That’s not counting all of the incidences when there have been other cyber attacks that have ‘merely’ affected vital internal systems and disrupted key infrastructure for large sections of society.

So whilst countries might be more connected than ever, that isn’t much help to the citizens who find themselves very much disconnected whether on a mass or individual scale. Internet shutdown is definitely possible and it is happening: 

“There are several ways to shut down the Internet. One way is to make sure that when you type in a web address, such as dw.com/mediadev, your Internet service provider doesn’t allow you to find the underlying IP address. Another way is when an Internet service provider messes with the routing tables and removes key details so that packets of information traveling on the web aren’t allowed to travel to their final destination. Governments are using increasingly sophisticated methods to disrupt communications”

This isn’t just a disaster for those using bitcoin, this is a disaster for anyone who relies on an internet connection be it for communication or accessing their finances. Many in the West look at internet controls as something that is exclusive to developing nations or those more on the totalitarian-regime end of the political spectrum.

Sadly this is not the case. As you will see government-sanctioned internet shutdown and cyberterrorism are ever-present across many nations. The result? Individuals must protect their own freedom and safety of their assets as the authorities may have other priorities.

Internet shutdown increases government powers

As the examples of India, Estonia and Egypt show internet shutdown is very much possible. It was the Egyptian shutdown of 2011 that prompted many other governments to realise the powers they could attain:

Until then, many governments had assumed it was not possible to turn off internet access to their entire nation, due to the decentralized nature of the network. But soon after, governments across the globe educated themselves about AS numbers and internet routing, and started using their power to set up systems that would allow them to order network shutdowns.

What was originally only intended to be used in more extreme circumstances has quickly devolved into officials using their powers for all sorts of questionable – and often political – reasons.

Internet shutdowns can be either at the will of the domestic government or a form of financial or military warfare from an outside authority or organisation.

India is where we see the highest number of authorised internet blackouts. Here government policy states that whilst such action requires the highest-level official in charge of domestic security – the Ministry of Home Affairs for the whole country or a state’s Home Department official – to sign off on any shutdown a junior member can shutdown the internet for a full 24-hours should gaining permission be unfeasible.

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)

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