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Chris Martenson

Off the Cuff with Mike “Mish” Shedlock

Nearly every week, PeakProsperity.com enrolled members enjoy a fresh podcast of "Off The Cuff," an informal discussion on the markets between Chris and Mike "Mish" Shedlock, publisher of the extremely popular economic blog Mish's Global Economic Trend Analysis.

We're making this week's Off the Cuff podcast available to the public-at-large to build awareness for an important cause that Mish is championing. Earlier this week, he shared with readers that his wife Joanne suffers from ALS, better known as Lou Gehrig's Disease.

After several years of juggling an intense publishing schedule (describing Mish as 'prolific' is a gross understatement) while caring for his wife on his own, he's created an online raffle as a means to raise funds for important ALS research, patient care, and education. We support his efforts and wish Mish and Joanne all the best.

Click here to learn more about the raffle.

In this week's Off the Cuff, Chris and Mish look at the impact of the recently-released Fed minutes and the worsening situation in Europe (no, the problems there haven't gone away).

Off the Cuff with Mike “Mish” Shedlock

Click here to learn more about the raffle.

In this week's Off the Cuff, Chris and Mish look at the impact of the recently-released Fed minutes and the worsening situation in Europe (no, the problems there haven't gone away).

Doing It Right in Canada

PREVIEW

I have just returned from a trip to Canada, where I had the chance to present the core ideas of the Crash Course to audiences in Alberta and the city of Guelph. The message was well received in both locations, and I am heartened to see the great work happening across Canada, to not only learn about but act on issues related to the intersection of the economy, energy, and other natural resources.

It was also my distinct pleasure to meet several long-time subscribers along the way, and to chat with you all (hello again!). The most typical refrain I heard from you was why don’t more people see things this way? That is something we’ll be covering in greater detail here in the future, especially once the new website is up and launched and we have a better platform and venue for offering such material. I will note that one of the more important elements of our weekend seminar offerings is on exactly this subject. Our only other seminar being offered in 2012 is on the last weekend of June at Kripalu, and it would be a pleasure to see you there.

On to the markets and other thoughts…

Doing It Right in Canada

PREVIEW

On to the markets and other thoughts…

Charles Biderman: The Problem with Rigged Markets

"Even Wile E. Coyote had to come back down to earth sooner or later", says Charles Biderman, founder of TrimTabs Investment Research. In his opinion, the prices of stocks and bonds – enabled by excessive financialization of our economy and central bank money printing – have been defying gravity for a dangerously long time.

If we continue to do all we can to preserve the status quo — to maintain "phony" asset price levels as Charles calls them — at best we will restrict overall growth and handicap the economy.

The problem isn't so much the unfairness and malinvestment evident in a rigged market. As Charles shrewdly asks: what happens when the market becomes un-rigged?

We've never experienced the unwinding of an entirely manipulated financial system, so we can't predict for sure. But at this point, a painful collapse of our markets and loss of the US dollar as the world's reserve currency seem entirely plausible.

Charles Biderman: The Problem with Rigged Markets

If we continue to do all we can to preserve the status quo — to maintain "phony" asset price levels as Charles calls them — at best we will restrict overall growth and handicap the economy.

The problem isn't so much the unfairness and malinvestment evident in a rigged market. As Charles shrewdly asks: what happens when the market becomes un-rigged?

Gold is Manipulated (But That’s Okay)

The price of gold is being actively managed by central planners and their proxies. The main culprit here appears to be the US authorities, as the manipulation is most apparent in the US open gold market. For the most part, this ‘management’ has resulted in letting the price of gold rise, but not too much, or too quickly.

The price of gold has always been an object of interest for governments and central bankers. The reason is simple enough to understand: Gold is an objective measure of the degree to which fiat money is being managed well or managed poorly.

As such, whenever paper money is being governed poorly, the price of gold becomes an important barometer. And this is why the actual price of gold is a strong candidate to be ‘managed.’ Or ‘influenced’. Or ‘manipulated’. Whichever word you prefer, they all convey the same intent.

Gold is Manipulated (But That’s Okay)

How High and When to Sell?

PREVIEW

How High and When to Sell?

by Chris Martenson

Wednesday, March 28, 2012

Executive Summary

Confiscation and/or excessive taxation of gold seem low risks at the moment
Our price projections for gold
How to know when to sell your gold
What to exchange your gold for

Part I: Gold is Manipulated (But That’s Okay)

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: How High and When to Sell?

Confiscation and/or Taxation

Here is a quick aside on the prospect of confiscation and/or additional and punitive taxation of gold (and silver) because it comes up often. I think neither is especially likely at this point.

Confiscation will become a concern for me if:

Gold is ever remonetized. Should gold become the international choice of cross-border balancing, as I expect it might some day, the chance of it being ‘nationalized’ will skyrocket. However, as was true in the 1930s in the US, I fully expect that holders of gold will be compensated for their holdings.
Gold is demanded for oil. Should a current oil-exporting nation demand that it be paid in gold instead of cash, I would expect gold to be nationalized.
Gold crosses $5,000/ounce. Once gold becomes a significant store of value compared to other sources such as money market funds or 401k plans, it might become a target of choice for revenue-strapped governments. As it is right now — on a relative basis vs. the equity or bond markets — the size of the entire gold market is a tiny, puny store of value, and therefore not really worth the government’s effort.

Should any of these things change, I believe we will have weeks, if not many months, of forewarning of confiscation or additional taxation — and my alert service will have you prepared well in advance.

There will be rumblings and discussions and other warning signs to forewarn that a change is coming, if one ever does. For now it seems rather unlikely that either confiscation or burdensome taxation is a near and present concern to hold.

How High and When to Sell?

PREVIEW

How High and When to Sell?

by Chris Martenson

Wednesday, March 28, 2012

Executive Summary

Confiscation and/or excessive taxation of gold seem low risks at the moment
Our price projections for gold
How to know when to sell your gold
What to exchange your gold for

Part I: Gold is Manipulated (But That’s Okay)

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: How High and When to Sell?

Confiscation and/or Taxation

Here is a quick aside on the prospect of confiscation and/or additional and punitive taxation of gold (and silver) because it comes up often. I think neither is especially likely at this point.

Confiscation will become a concern for me if:

Gold is ever remonetized. Should gold become the international choice of cross-border balancing, as I expect it might some day, the chance of it being ‘nationalized’ will skyrocket. However, as was true in the 1930s in the US, I fully expect that holders of gold will be compensated for their holdings.
Gold is demanded for oil. Should a current oil-exporting nation demand that it be paid in gold instead of cash, I would expect gold to be nationalized.
Gold crosses $5,000/ounce. Once gold becomes a significant store of value compared to other sources such as money market funds or 401k plans, it might become a target of choice for revenue-strapped governments. As it is right now — on a relative basis vs. the equity or bond markets — the size of the entire gold market is a tiny, puny store of value, and therefore not really worth the government’s effort.

Keep Your Eye on Treasurys

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Treasury Market Rumblings

One of the key indicators that I keep a semi-open eye on throughout every trading day is the price of US Treasurys. As you know, the US is living on the kindness of strangers, and if foreign desire for US Treasury obligations wanes, much trouble could quickly mount for the US dollar and general fiscal condition.

As prices for Treasurys rise or sink, interest rates move in exactly opposite directions..

Like any asset class, the price of Treasurys will rise if there are more buyers than sellers, and sink if there are more sellers than buyers.

A natural, normal, and healthy reason for Treasurys to sink in price would be investors leaving the “flight to safety” trade because they perceive economic conditions to be improving. Less good reasons include the fear of inflation picking up, over-issuance by the government, and foreign entities leaving the trade.

Keep Your Eye on Treasurys

PREVIEW

Treasury Market Rumblings

As prices for Treasurys rise or sink, interest rates move in exactly opposite directions..

Like any asset class, the price of Treasurys will rise if there are more buyers than sellers, and sink if there are more sellers than buyers.

Gretchen Morgenson

Chris and I finally had the chance today to record the next installment of our Q&A podcast series in which he addresses questions submitted by CM.com readers.

As with the first one, we received so many good questions that we didn’t have enough time to cover them all. But we made a pretty sizable dent.

This week’s questions covered topics ranging from an update on where Chris thinks we are on the (hyper)inflation timeline, to the risks of gold ownership, to the importance of developing a grounding sense of ‘purpose’ as we enter a new era certain to be unlike the past several decades.

Gretchen Morgenson

Chris and I finally had the chance today to record the next installment of our Q&A podcast series in which he addresses questions submitted by CM.com readers.

As with the first one, we received so many good questions that we didn’t have enough time to cover them all. But we made a pretty sizable dent.

Off the Cuff: Battling Mixed Messages

PREVIEW

In this week’s Off the Cuff with Mish & Chris podcast, Mish and Chris referee:

Bernanke vs. Gold
- How accurate is the Fed Chairman’s criticism of the gold standard?
Perception vs. Reality
- Why does the economy feel so bad when the stock market feels so good?
You vs. the Herd
- Why now is the time for having the courage of your convictions.

There are a lot of mixed messages swirling around of late. Sound money advocates champion precious metals, while our Fed Chairman derides the gold standard as an anachronistic failed experiment. A steady drumbeat of discouraging data shows that the global economy still faces serious risk, but the stock market suggests times could hardly be better. It’s times like these when a steady hand on the tiller can make all the difference.

Off the Cuff: Battling Mixed Messages

PREVIEW

In this week’s Off the Cuff with Mish & Chris podcast, Mish and Chris referee:

Bernanke vs. Gold
- How accurate is the Fed Chairman’s criticism of the gold standard?
Perception vs. Reality
- Why does the economy feel so bad when the stock market feels so good?
You vs. the Herd
- Why now is the time for having the courage of your convictions.

Chris Answers Your Questions (Part 2)

Chris and I finally had the chance today to record the next installment of our Q&A podcast series in which he addresses questions submitted by CM.com readers.

As with the first one, we received so many good questions that we didn't have enough time to cover them all. But we made a pretty sizable dent.

This week's questions covered topics ranging from an update on where Chris thinks we are on the (hyper)inflation timeline, to the risks of gold ownership, to the importance of developing a grounding sense of 'purpose' as we enter a new era certain to be unlike the past several decades.

Chris Answers Your Questions (Part 2)

Chris and I finally had the chance today to record the next installment of our Q&A podcast series in which he addresses questions submitted by CM.com readers.

As with the first one, we received so many good questions that we didn't have enough time to cover them all. But we made a pretty sizable dent.

Marc Faber: The Perils of Money Printing’s Unintended Consequences

Marc Faber does not mince words. He believes that the money printing policies of the Federal Reserve and its sister central banks around the globe have put the world's currencies on an inexorable, accelerating, inflationary down slope.

The dangers of money printing are many, in his eyes. But in particular, he worries about the unintended consequences it subjects the populace to. Beyond currency devaluation, it creates malinvestment that leads to asset bubbles that wreak havoc when they burst. And even more nefarious, money printing disproportionately punishes the lower classes, resulting in volatile social and political tensions.

It's no surprise, then, that he's feeling particularly defensive these days. While he generally advises those looking to protect their purchasing power to invest capital in precious metals and the equity markets (the rationale being that inflation should hurt equity prices less than bond prices), he warns that equities appear overbought at this time.