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Image | Robert Mish: Front-Line Evidence That We Are Nowhere Near a Gold Bubble
Robert Mish: Front-Line Evidence That We Are Nowhere Near a Gold Bubble
by Adam Taggart

Robert Mish has been a precious metals dealer for nearly 50 years and knows what gold bubble mania looks like. We are nowhere near that stage, in his opinion.

Instead, he sees a US populace largely unappreciative of holding precious metal as a store of wealth, and engaged in a slow process of dis-hording their gold and silver to eager foreign buyers, who are more than happy to take the bullion back to their shores.

In terms of where we are on the gold mania spectrum, he sees us at a "2" out of 10.

But he foresees a very rude awakening ahead, as the populace eventually wakes up to the increasing damage that our over-debted global economy is doing to the purchasing power of world currencies. Because when the general investor finally realizes the protection the precious metals offer against currency debasement, much of the retail supply will already be out of the system, in very tight hands and largely overseas.

Moreover, when supply gets tight, there will be more challenges to obtaining physical bullion during a buying mania than there were during the last mania in 1980. There are many fewer local sources to exchange bullion these days, as much of that business is now transacted by online vendors dependent mail delivery to ship product, and they are more vulnerable to supply chain disruptions.

Be sure you're aware of how the form in which you hold your bullion will affect the price you get during a buying frenzy, when refining capacity is overwhelmed. You may find that your gold or silver sells at a hefty discount because it's not in a preferred format for trade.

 
Robert Mish: Front-Line Evidence That We Are Nowhere Near a Gold Bubble
 by Adam Taggart

Robert Mish has been a precious metals dealer for nearly 50 years and knows what gold bubble mania looks like. We are nowhere near that stage, in his opinion.

Instead, he sees a US populace largely unappreciative of holding precious metal as a store of wealth, and engaged in a slow process of dis-hording their gold and silver to eager foreign buyers, who are more than happy to take the bullion back to their shores.

In terms of where we are on the gold mania spectrum, he sees us at a "2" out of 10.

But he foresees a very rude awakening ahead, as the populace eventually wakes up to the increasing damage that our over-debted global economy is doing to the purchasing power of world currencies. Because when the general investor finally realizes the protection the precious metals offer against currency debasement, much of the retail supply will already be out of the system, in very tight hands and largely overseas.

Moreover, when supply gets tight, there will be more challenges to obtaining physical bullion during a buying mania than there were during the last mania in 1980. There are many fewer local sources to exchange bullion these days, as much of that business is now transacted by online vendors dependent mail delivery to ship product, and they are more vulnerable to supply chain disruptions.

Be sure you're aware of how the form in which you hold your bullion will affect the price you get during a buying frenzy, when refining capacity is overwhelmed. You may find that your gold or silver sells at a hefty discount because it's not in a preferred format for trade.

 
Image | Erik Townsend: Expect a US Price Shock as Black Swans Come Home to Roost
Erik Townsend: Expect a US Price Shock as Black Swans Come Home to Roost
by Adam Taggart

align=American investor (and longtime CM.com member) Erik Townsend has spent the past several years living internationally, with an eye to which countries may be good alternatives if economic crisis and/or Peak Oil start to materially impact life in the US. 

His main observation as an expat? Through its misguided policies, the US has been exporting inflation to the rest of the world, raising prices all over the globe (as an example, Erik cites a $57 chicken pot pie from the menu at a ‘working class’ restaurant in Australia). 

This inflation is affecting the rest of the world harshly, but is not yet being felt in the US due to our ability to export it as the issuer of the world’s reserve currency. Our immunity will not last forever though, and when it ends, a massive upwards spike in prices is going to hit US markets.
Erik Townsend: Expect a US Price Shock as Black Swans Come Home to Roost
 by Adam Taggart

align=American investor (and longtime CM.com member) Erik Townsend has spent the past several years living internationally, with an eye to which countries may be good alternatives if economic crisis and/or Peak Oil start to materially impact life in the US. 

His main observation as an expat? Through its misguided policies, the US has been exporting inflation to the rest of the world, raising prices all over the globe (as an example, Erik cites a $57 chicken pot pie from the menu at a ‘working class’ restaurant in Australia). 

This inflation is affecting the rest of the world harshly, but is not yet being felt in the US due to our ability to export it as the issuer of the world’s reserve currency. Our immunity will not last forever though, and when it ends, a massive upwards spike in prices is going to hit US markets.
Image | The China Syndrome: A Hard Landing Coming Soon?
The China Syndrome: A Hard Landing Coming Soon?
 PREVIEW
by Chris Martenson

style=As captivating as the drama is in Europe, and it is quite worthy of all our attention, there are more and more signs from China that its own economic troubles are mounting.

The chief concern for those in the West regards the flow, or rather recycling, of China’s reserve monies gained through their trade surplus. Those funds constitute a crucial factor that has allowed the western OECD countries to continue borrowing well beyond their means. The mechanism was simple enough: Chinese manufacturers would export their goods and receive various currencies in return. Dollars, euros, and yen would be then be exchanged for local yuan, and the People’s Bank of China would have to do something with all those foreign currencies. 

Over the past decade, what the People’s Bank of China chose to do was to use those currencies to buy foreign debt, an act which prevented the yuan from rising in value in relation to all the currencies in question. Thus the cycle could repeat and repeat again, as a low yuan encouraged higher exports and therefore higher domestic employment. Everyone was happy.

Western consumers got cheap goods. China got to keep busy. The only downside was that the West could not really afford all those goods and bought most of them on credit, resulting in debts which China now holds.

The China Syndrome: A Hard Landing Coming Soon?
 PREVIEW by Chris Martenson

style=As captivating as the drama is in Europe, and it is quite worthy of all our attention, there are more and more signs from China that its own economic troubles are mounting.

The chief concern for those in the West regards the flow, or rather recycling, of China’s reserve monies gained through their trade surplus. Those funds constitute a crucial factor that has allowed the western OECD countries to continue borrowing well beyond their means. The mechanism was simple enough: Chinese manufacturers would export their goods and receive various currencies in return. Dollars, euros, and yen would be then be exchanged for local yuan, and the People’s Bank of China would have to do something with all those foreign currencies. 

Over the past decade, what the People’s Bank of China chose to do was to use those currencies to buy foreign debt, an act which prevented the yuan from rising in value in relation to all the currencies in question. Thus the cycle could repeat and repeat again, as a low yuan encouraged higher exports and therefore higher domestic employment. Everyone was happy.

Western consumers got cheap goods. China got to keep busy. The only downside was that the West could not really afford all those goods and bought most of them on credit, resulting in debts which China now holds.

Image | Gordon Chang: The Reasons for China’s Imminent Bust
Gordon Chang: The Reasons for China’s Imminent Bust
by Adam Taggart

The global dominant narrative about China is wrong, claims Gordon Chang. Don't expect it to be the 'pocketbook of last resort' that will rescue world markets from their current malaise.

And don't expect its remarkable economic growth to continue. In fact, expect a "hard landing" for China – and soon.

Forbes.com columnist and international lawyer Gordon Chang has spent much of his time since the early 1980s working and living in China. His primary knowledge of the country and his relationships there give him a superior understanding to how its economy is actually faring than many analysts based in the West. And what he sees today doesn't inspire confidence.

We are seeing the first real signs of slowdown in China's economic growth looking at the year-over-year numbers for the past several months. Car sales have decreased nearly 5% since last year, and property values are beginning to plummet in key markets (30% in October alone in Shanghai).

 
Gordon Chang: The Reasons for China’s Imminent Bust
 by Adam Taggart

The global dominant narrative about China is wrong, claims Gordon Chang. Don't expect it to be the 'pocketbook of last resort' that will rescue world markets from their current malaise.

And don't expect its remarkable economic growth to continue. In fact, expect a "hard landing" for China – and soon.

Forbes.com columnist and international lawyer Gordon Chang has spent much of his time since the early 1980s working and living in China. His primary knowledge of the country and his relationships there give him a superior understanding to how its economy is actually faring than many analysts based in the West. And what he sees today doesn't inspire confidence.

We are seeing the first real signs of slowdown in China's economic growth looking at the year-over-year numbers for the past several months. Car sales have decreased nearly 5% since last year, and property values are beginning to plummet in key markets (30% in October alone in Shanghai).

 
Image | Warning Signs From China
Warning Signs From China
 PREVIEW
by Chris Martenson

The economic miracle of China may be about to undergo a crash landing. The potential for social unrest to spread within and across China notwithstanding, China is trying to delicately nip an inflationary surge in the bud, but risks crashing its housing market in the process.

There are signs that it may have already done so.

High inflation is a sure-fire way to ignite the poorer classes of people, with which China remains generously endowed. So China is actively talking about and targeting inflation via its monetary policies:

Warning Signs From China
 PREVIEW by Chris Martenson

The economic miracle of China may be about to undergo a crash landing. The potential for social unrest to spread within and across China notwithstanding, China is trying to delicately nip an inflationary surge in the bud, but risks crashing its housing market in the process.

There are signs that it may have already done so.

High inflation is a sure-fire way to ignite the poorer classes of people, with which China remains generously endowed. So China is actively talking about and targeting inflation via its monetary policies:

Image | Poking China, Goosing Gold
Poking China, Goosing Gold
 PREVIEW
by Chris Martenson

Well, what the Fed meeting started, the Obama administration seems intent on continuing; namely, the trashing of the dollar and the elevation of gold.  First, the Fed announced that they are ready to print more thin-air money, something that comes as no surprise to anyone here, as this has been predicted on these pages for several years.  It is just the most obvious outcome (or ending) for any fiat currency. 

Then the Obama administration, almost certainly engaging in pre-election maneuvering, poked a very sharp stick at China in a manner of which the potential impact should not be underestimated:

Poking China, Goosing Gold
 PREVIEW by Chris Martenson

Well, what the Fed meeting started, the Obama administration seems intent on continuing; namely, the trashing of the dollar and the elevation of gold.  First, the Fed announced that they are ready to print more thin-air money, something that comes as no surprise to anyone here, as this has been predicted on these pages for several years.  It is just the most obvious outcome (or ending) for any fiat currency. 

Then the Obama administration, almost certainly engaging in pre-election maneuvering, poked a very sharp stick at China in a manner of which the potential impact should not be underestimated:

Image | Guest Post: The Two Keys to Understanding China’s Housing Bubble
Guest Post: The Two Keys to Understanding China’s Housing Bubble
 PREVIEW
by charleshughsmith
by Charles Hugh Smith

This post is one in a series from respected guest commentators while Chris is on vacation with his family & working on his new book. Chris returns next week; enjoy the fresh perspective in the meantime.

The Mainstream Media in the U.S. has presented two basic approaches to understanding China’s real estate bubble:

  1. There is no bubble in Chinese real estate, as demand for housing is so vast that it will soak up all the tens of millions of flats that have been built in the past decade.
  2. It is a bubble, and it’s fueled by the same dynamic as the bubble that expanded and popped in the U.S. and elsewhere: easy credit and speculative lending encouraged by government policy.

Approach Number 1 has little to support it.  Recent on-the-ground surveys found that half of the flats in Beijing and Shanghai are empty (or the occupants prefer living in the dark, night after night), while reports based on utility accounts found that there are roughly 65 million vacant apartments in China—the bulk of which are presumably held for investment.

Approach Number 2 has some merit, but it misses the key drivers in the Chinese housing bubble, and thus it is ultimately misleading.

Guest Post: The Two Keys to Understanding China’s Housing Bubble
 PREVIEW by charleshughsmith
by Charles Hugh Smith

This post is one in a series from respected guest commentators while Chris is on vacation with his family & working on his new book. Chris returns next week; enjoy the fresh perspective in the meantime.

The Mainstream Media in the U.S. has presented two basic approaches to understanding China’s real estate bubble:

  1. There is no bubble in Chinese real estate, as demand for housing is so vast that it will soak up all the tens of millions of flats that have been built in the past decade.
  2. It is a bubble, and it’s fueled by the same dynamic as the bubble that expanded and popped in the U.S. and elsewhere: easy credit and speculative lending encouraged by government policy.

Approach Number 1 has little to support it.  Recent on-the-ground surveys found that half of the flats in Beijing and Shanghai are empty (or the occupants prefer living in the dark, night after night), while reports based on utility accounts found that there are roughly 65 million vacant apartments in China—the bulk of which are presumably held for investment.

Approach Number 2 has some merit, but it misses the key drivers in the Chinese housing bubble, and thus it is ultimately misleading.

Image | China Follow-Up, Energy, and the Future
China Follow-Up, Energy, and the Future
 PREVIEW
by Chris Martenson

In the most recent Martenson Report, I laid the foundation for understanding that China may be on an aggressive policy of resource acquisition tuned to the reality of depletion.

Here are a couple of very interesting ideas and news items that have come out.  The first is that the US government is now publicly concerned that China may be trying to “lock up” oil reserves.  I find this somewhat humorous because this message is conveyed without the slightest trace of irony.  This, of course, has been the US’s own policy for a very long time.

China Follow-Up, Energy, and the Future
 PREVIEW by Chris Martenson

In the most recent Martenson Report, I laid the foundation for understanding that China may be on an aggressive policy of resource acquisition tuned to the reality of depletion.

Here are a couple of very interesting ideas and news items that have come out.  The first is that the US government is now publicly concerned that China may be trying to “lock up” oil reserves.  I find this somewhat humorous because this message is conveyed without the slightest trace of irony.  This, of course, has been the US’s own policy for a very long time.

Image | From The Outside In – China’s Stock Slump
From The Outside In – China’s Stock Slump
 PREVIEW
by Chris Martenson

In a podcast in February of 2009 before the “big plunge,” I related a concept that I call “from the outside in.”  Basically this theory holds that when trouble starts in financial markets, it begins in the periphery with the weaker markets, before spreading to the center.

At the time, I was deeply uncomfortable with what I saw in several European markets, as well as India’s.

This time?

China has had a particularly rough August, although September has seen a modest recovery, with the first three days of the month almost covering the territory lost on the final two.

From The Outside In – China’s Stock Slump
 PREVIEW by Chris Martenson

In a podcast in February of 2009 before the “big plunge,” I related a concept that I call “from the outside in.”  Basically this theory holds that when trouble starts in financial markets, it begins in the periphery with the weaker markets, before spreading to the center.

At the time, I was deeply uncomfortable with what I saw in several European markets, as well as India’s.

This time?

China has had a particularly rough August, although September has seen a modest recovery, with the first three days of the month almost covering the territory lost on the final two.

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