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Image | Eric Sprott: Is the West Dishoarding Its Sovereign Treasure?
Eric Sprott: Is the West Dishoarding Its Sovereign Treasure?
by Adam Taggart

We are well into the financial crisis. Everyone’s trying to keep it together, even though it would appear from the reading of the economy things are not going well at all here. And everyone's ignoring things.

But I think, in their hearts, the Central Bankers must know what they’re doing is totally irresponsible. And the tell of that irresponsibility – which is the debasing of the currencies – is the fact that real things will go up in value. This should be reflected in the price of gold and silver.

So expresses Eric Sprott, CEO and founder of Sprott Asset Management, and one of the most experienced and vocal advocates for owning precious metals.

The past decade has validated Eric's thesis, as gold has risen considerably against all world fiat currencies. But what vexes him is that in recent years, when currency debasement has accelerated to extreme levels, precious metals prices have been clearly suppressed, particularly versus the U.S. dollar.

As the topic of price manipulation is nothing new, Eric finds his focus increasingly drawn to where the precious metals are going at these bargain prices – who is accumulating and who is dishoarding:
Eric Sprott: Is the West Dishoarding Its Sovereign Treasure?
 by Adam Taggart

We are well into the financial crisis. Everyone’s trying to keep it together, even though it would appear from the reading of the economy things are not going well at all here. And everyone's ignoring things.

But I think, in their hearts, the Central Bankers must know what they’re doing is totally irresponsible. And the tell of that irresponsibility – which is the debasing of the currencies – is the fact that real things will go up in value. This should be reflected in the price of gold and silver.

So expresses Eric Sprott, CEO and founder of Sprott Asset Management, and one of the most experienced and vocal advocates for owning precious metals.

The past decade has validated Eric's thesis, as gold has risen considerably against all world fiat currencies. But what vexes him is that in recent years, when currency debasement has accelerated to extreme levels, precious metals prices have been clearly suppressed, particularly versus the U.S. dollar.

As the topic of price manipulation is nothing new, Eric finds his focus increasingly drawn to where the precious metals are going at these bargain prices – who is accumulating and who is dishoarding:
Image | Time to Choose
Time to Choose
by Adam Taggart

Whether you’re aware of it or not, a great battle is being waged around us.

It is a war of two opposing narratives: the future of our economy and our standard of living.

The dominant story, championed by flotillas of press releases and parading talking heads, tells an inspiring tale of recovery and return to growth. 

The other side, less visible but with a full armament of high-caliber data, tells a very different story. One of growing instability, downside risk, and inequality.

As different as they are in substance, they both share one fundamental prediction – and this is why you should care: This battle is about to break. And when it does, one side will turn out to be much more ‘right’ than the other. The time for action has arrived. To position yourself in the direction of the break you think is most likely to happen.

It’s time to choose a side.
Time to Choose
 by Adam Taggart

Whether you’re aware of it or not, a great battle is being waged around us.

It is a war of two opposing narratives: the future of our economy and our standard of living.

The dominant story, championed by flotillas of press releases and parading talking heads, tells an inspiring tale of recovery and return to growth. 

The other side, less visible but with a full armament of high-caliber data, tells a very different story. One of growing instability, downside risk, and inequality.

As different as they are in substance, they both share one fundamental prediction – and this is why you should care: This battle is about to break. And when it does, one side will turn out to be much more ‘right’ than the other. The time for action has arrived. To position yourself in the direction of the break you think is most likely to happen.

It’s time to choose a side.
Image | Off the Cuff: Disturbing Data
Off the Cuff: Disturbing Data
 PREVIEW
by Adam Taggart

In this week's Off the Cuff podcast, Chris and Adam discuss:
Off the Cuff: Disturbing Data
 PREVIEW by Adam Taggart

In this week's Off the Cuff podcast, Chris and Adam discuss:
Image | Running on Fumes
Running on Fumes
 PREVIEW
by Chris Martenson

The stock market blasted higher, with the Dow crossing the 14,000 mark because the jobs report came in well under expectations.  In today's world, one follows the other.

In yesterday's world, the one where logic and reason ruled the day, that first sentence would not have been written.  Economic weakness would not have been rewarded with a big surge in stocks.

But this all makes perfect sense in today's world, once you tilt your view to the "new normal" and get with the program.

I titled this piece 'running on fumes' because, in one very real sense, that's exactly what this current market is doing.  The fumes in this case happen to be thin-air money that the Fed is injecting into the financial markets to the tune of $85 billion per month, or roughly $4 billion per working day.

When an engine finally runs out of gas and turns to fumes, the last act of that engine is to run really hot – to race for a while – before finally quitting.
Running on Fumes
 PREVIEW by Chris Martenson

The stock market blasted higher, with the Dow crossing the 14,000 mark because the jobs report came in well under expectations.  In today's world, one follows the other.

In yesterday's world, the one where logic and reason ruled the day, that first sentence would not have been written.  Economic weakness would not have been rewarded with a big surge in stocks.

But this all makes perfect sense in today's world, once you tilt your view to the "new normal" and get with the program.

I titled this piece 'running on fumes' because, in one very real sense, that's exactly what this current market is doing.  The fumes in this case happen to be thin-air money that the Fed is injecting into the financial markets to the tune of $85 billion per month, or roughly $4 billion per working day.

When an engine finally runs out of gas and turns to fumes, the last act of that engine is to run really hot – to race for a while – before finally quitting.
Image | Off the Cuff: Irrational Exuberance
Off the Cuff: Irrational Exuberance
 PREVIEW
by Adam Taggart

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

  • Market Euphoria
    • ​Stocks explode higher for irrational reasons
  • The Fiscal Cliff Fake-out
    • ​No spending cuts, no curbs on the rich
  • ​Japan: The Ticking Time Bomb
    • ​The leading candidate for currency collapse

Well, it's now 2013, and the stock market is partying like it's 1999.
Off the Cuff: Irrational Exuberance
 PREVIEW by Adam Taggart

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

  • Market Euphoria
    • ​Stocks explode higher for irrational reasons
  • The Fiscal Cliff Fake-out
    • ​No spending cuts, no curbs on the rich
  • ​Japan: The Ticking Time Bomb
    • ​The leading candidate for currency collapse

Well, it's now 2013, and the stock market is partying like it's 1999.
Image | 2012 Year in Review
2012 Year in Review
by David Collum

Background

I was just trying to figure it all out.

~ Michael Burry, hedge fund manager

Every December, I write a Year in Review that has now found a home at Chris Martenson’s website PeakProsperity.com.1,2,3 What started as a simple summary intended for a couple dozen people morphed over time into a much more detailed account that accrued over 25,000 clicks last year.4 'Year in Review' is a bit of a misnomer in that it is both a collage of what happened, plus a smattering of issues that are on my radar right now. As to why people care what an organic chemist thinks about investing, economics, monetary policy, and societal moods I can only offer a few thoughts.

For starters, in 33 years of investing with a decidedly undiversified portfolio, I had only one year in which my total wealth decreased in nominal dollars. For the 13 years beginning 01/01/00—the 13 toughest investing years of the new millennium!—I have been able to compound my personal wealth at an 11% annualized rate. This holds up well against the pros. I am also fairly good at distilling complexity down to simplicity and seem to be a congenital contrarian. I also have been a devout follower of Austrian business cycle theory—i.e., free market economics—since the late 1990s.4

Each review begins with a highly personalized analysis of my efforts to get through another year of investing followed by a more holistic overview of what is now a 33-year quest for a ramen-soup-free retirement. These details may be instructive for those interested in my approach to investing. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged with enthusiasm. Everything can be found here.5

2012 Year in Review
 by David Collum

Background

I was just trying to figure it all out.

~ Michael Burry, hedge fund manager

Every December, I write a Year in Review that has now found a home at Chris Martenson’s website PeakProsperity.com.1,2,3 What started as a simple summary intended for a couple dozen people morphed over time into a much more detailed account that accrued over 25,000 clicks last year.4 'Year in Review' is a bit of a misnomer in that it is both a collage of what happened, plus a smattering of issues that are on my radar right now. As to why people care what an organic chemist thinks about investing, economics, monetary policy, and societal moods I can only offer a few thoughts.

For starters, in 33 years of investing with a decidedly undiversified portfolio, I had only one year in which my total wealth decreased in nominal dollars. For the 13 years beginning 01/01/00—the 13 toughest investing years of the new millennium!—I have been able to compound my personal wealth at an 11% annualized rate. This holds up well against the pros. I am also fairly good at distilling complexity down to simplicity and seem to be a congenital contrarian. I also have been a devout follower of Austrian business cycle theory—i.e., free market economics—since the late 1990s.4

Each review begins with a highly personalized analysis of my efforts to get through another year of investing followed by a more holistic overview of what is now a 33-year quest for a ramen-soup-free retirement. These details may be instructive for those interested in my approach to investing. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged with enthusiasm. Everything can be found here.5

Image | Off the Cuff: Awaking with a Whopper Hangover
Off the Cuff: Awaking with a Whopper Hangover
 PREVIEW
by Adam Taggart

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

  • Post-Election Plunge
    • Why are the markets selling off so hard?
  • The Return of the EuroCrisis
    • It worsened while we ignored it.
  • The Fiscal Cliff
    • Will we drive off it? And at what speed?
  • Gold's Resurgence
    • Showing strength as investors demand safety

America awoke on Wednesday with the Presidential election finally over and talk from the re-elected incumbent of moving 'forward' again.
Off the Cuff: Awaking with a Whopper Hangover
 PREVIEW by Adam Taggart

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

  • Post-Election Plunge
    • Why are the markets selling off so hard?
  • The Return of the EuroCrisis
    • It worsened while we ignored it.
  • The Fiscal Cliff
    • Will we drive off it? And at what speed?
  • Gold's Resurgence
    • Showing strength as investors demand safety

America awoke on Wednesday with the Presidential election finally over and talk from the re-elected incumbent of moving 'forward' again.
Image | Off the Cuff: Beggar Thy Neighbor
Off the Cuff: Beggar Thy Neighbor
 PREVIEW
by Adam Taggart

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

  • Asian saber-rattling
    • How serious is it?
  • From here to QE-ternity
    • And wither the dollar from here?
  • Leading indicators lose steam
    • The economy is slowing further.
  • Intervention in oil prices?
    • Recent trades look fishy.

Where to start this week?

 
Off the Cuff: Beggar Thy Neighbor
 PREVIEW by Adam Taggart

In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

  • Asian saber-rattling
    • How serious is it?
  • From here to QE-ternity
    • And wither the dollar from here?
  • Leading indicators lose steam
    • The economy is slowing further.
  • Intervention in oil prices?
    • Recent trades look fishy.

Where to start this week?

 
Image | The Demise of the Car
The Demise of the Car
by Gregor Macdonald

India’s recent series of power blackouts, in which 600 million people lost electricity for several days, reminds us of the torrid pace at which populations in the developing world have moved onto the powergrid. Unfortunately, this great transition has been so rapid that infrastructure has mostly been unable to meet demand. India itself has failed to meets its own power capacity addition targets every year since 1951. This has left roughly one quarter of the country’s population without any (legal) access to electricity. That’s 300 million people out of a population of 1.2 billion. Indeed, it is the daily attempt of the underserved to access power that may have led to India’s recent grid crash.

But the story of India’s inadequate infrastructure is only one part of the difficult, global transition away from liquid fossil fuels. Over the past decade, the majority of new energy demand has been met not through global oil, but through growth in electrical power.

Frankly, this should be no surprise. After all, global production of oil started to flatten more than seven years ago, in 2005. And the developing world, which garners headlines for its increased demand for oil, is running mainly on coal-fired electrical power. There is no question that the non-OECD countries are leading the way as liquid-based transport – automobiles and airlines – have entered longterm decline.

Why, therefore, do policy makers in both the developing and developed world continue to invest in automobile infrastructure?

The Demise of the Car
 by Gregor Macdonald

India’s recent series of power blackouts, in which 600 million people lost electricity for several days, reminds us of the torrid pace at which populations in the developing world have moved onto the powergrid. Unfortunately, this great transition has been so rapid that infrastructure has mostly been unable to meet demand. India itself has failed to meets its own power capacity addition targets every year since 1951. This has left roughly one quarter of the country’s population without any (legal) access to electricity. That’s 300 million people out of a population of 1.2 billion. Indeed, it is the daily attempt of the underserved to access power that may have led to India’s recent grid crash.

But the story of India’s inadequate infrastructure is only one part of the difficult, global transition away from liquid fossil fuels. Over the past decade, the majority of new energy demand has been met not through global oil, but through growth in electrical power.

Frankly, this should be no surprise. After all, global production of oil started to flatten more than seven years ago, in 2005. And the developing world, which garners headlines for its increased demand for oil, is running mainly on coal-fired electrical power. There is no question that the non-OECD countries are leading the way as liquid-based transport – automobiles and airlines – have entered longterm decline.

Why, therefore, do policy makers in both the developing and developed world continue to invest in automobile infrastructure?

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.

 
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