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Image | China’s Demand for Gold Has Trapped The West’s Central Banks
China’s Demand for Gold Has Trapped The West’s Central Banks
 PREVIEW
by Chris Martenson

Every once in a while, an Off the Cuff interview is so important that we decide to make it available to the entire public. This is one of those occasions.

In this week's Off the Cuff podcast, Chris and Alasdair Macleod build on the insights laid out in Chris' recent mega-report last week on gold: The Screaming Fundamentals for Owning Gold. And specifically, they delve deeply into the poorly-understood topic of why Chinese demand has become such a game changer in recent years.

China’s Demand for Gold Has Trapped The West’s Central Banks
 PREVIEW by Chris Martenson

Every once in a while, an Off the Cuff interview is so important that we decide to make it available to the entire public. This is one of those occasions.

In this week's Off the Cuff podcast, Chris and Alasdair Macleod build on the insights laid out in Chris' recent mega-report last week on gold: The Screaming Fundamentals for Owning Gold. And specifically, they delve deeply into the poorly-understood topic of why Chinese demand has become such a game changer in recent years.

Image | Have We Reached Peak Wall Street?
Have We Reached Peak Wall Street?
by charleshughsmith

Though the mainstream financial media and the blogosphere differ radically on their forecasts—the MFM sees near-zero systemic risk while the alternative media sees a critical confluence of it—they agree on one thing: the Federal Reserve and the “too big to fail” (TBTF) Wall Street banks have their hands on the political and financial tiller of the nation, and nothing will dislodge their dominance.

But what id Wall Street’s power has peaked and is about to be challenged by forces that it has never faced before? Put another way,what if the power of Wall Street has reached a systemic extreme where a decline or reversal is inevitable?
Have We Reached Peak Wall Street?
 by charleshughsmith

Though the mainstream financial media and the blogosphere differ radically on their forecasts—the MFM sees near-zero systemic risk while the alternative media sees a critical confluence of it—they agree on one thing: the Federal Reserve and the “too big to fail” (TBTF) Wall Street banks have their hands on the political and financial tiller of the nation, and nothing will dislodge their dominance.

But what id Wall Street’s power has peaked and is about to be challenged by forces that it has never faced before? Put another way,what if the power of Wall Street has reached a systemic extreme where a decline or reversal is inevitable?
Image | Why 2014 Is Beginning to Look A Lot Like 2008
Why 2014 Is Beginning to Look A Lot Like 2008
by charleshughsmith

Does anything about 2014 remind you of 2008? 

The long lists of visible stress in the global financial system and the almost laughably hollow assurances that there are no bubbles, everything is under control, etc. etc. etc.  certainly remind me of the late-2007-early 2008 period when the subprime mortgage meltdown was already visible and officialdom from Federal Reserve chairman Alan Greenspan on down were mounting the bully pulpit at every opportunity to declare that there was no bubble in housing and the system was easily able to handle little things like default
Why 2014 Is Beginning to Look A Lot Like 2008
 by charleshughsmith

Does anything about 2014 remind you of 2008? 

The long lists of visible stress in the global financial system and the almost laughably hollow assurances that there are no bubbles, everything is under control, etc. etc. etc.  certainly remind me of the late-2007-early 2008 period when the subprime mortgage meltdown was already visible and officialdom from Federal Reserve chairman Alan Greenspan on down were mounting the bully pulpit at every opportunity to declare that there was no bubble in housing and the system was easily able to handle little things like default
Image | What Will Be Different About the Crisis of 2014/2015
What Will Be Different About the Crisis of 2014/2015
 PREVIEW
by charleshughsmith

Executive Summary

  • The Fed's inability to recognize the true dynamics of the 2008 crisis has re-inflated a market bubble and unfairly rewarded the big banks
  • More credit/liquidity cannot solve valuation/collateral crises. But that's exactly what central banks are trying to do.
  • How the Crisis of 2014/2015 will differ from 2008
  • Why this time, failure of the system will collapse under its futility

If you have not yet read Why 2014 Is Beginning to Look A Lot Like 2008, available free to all readers, please click here to read it first.

In Part 1, we noted the similarities between early 2008 and 2014, and dismantled Alan Greenspan’s claim that the global meltdown of 2008 was unforeseeable. If markets are fractal, as argued by Benoit Mandelbrot, then we can anticipate more “once in a lifetime” crises than economists expect, and that such crises will be less predictable than expected.

After reviewing some technical charts that suggest trouble ahead in 2014 (or perhaps 2015 if certain cycles hold up), I asked how asset bubbles can be considered a “social good” if the current bubble is not boosting employment or income for the vast majority of Americans. I also wondered how the presumed fundamentals of “growth” (sales, profits, creditworthiness, etc.) can continue expanding if income is stagnating.

In Part 2 of this report, the goal is to examine the policies of the states (central governments) and central banks around the world that have boosted assets such as stocks, bonds and real estate to new highs. What repercussions are they creating, why they are failing, and why they will cause a crisis that will be as damaging as 2008 — yet unfold quite differently…

What Will Be Different About the Crisis of 2014/2015
 PREVIEW by charleshughsmith

Executive Summary

  • The Fed's inability to recognize the true dynamics of the 2008 crisis has re-inflated a market bubble and unfairly rewarded the big banks
  • More credit/liquidity cannot solve valuation/collateral crises. But that's exactly what central banks are trying to do.
  • How the Crisis of 2014/2015 will differ from 2008
  • Why this time, failure of the system will collapse under its futility

If you have not yet read Why 2014 Is Beginning to Look A Lot Like 2008, available free to all readers, please click here to read it first.

In Part 1, we noted the similarities between early 2008 and 2014, and dismantled Alan Greenspan’s claim that the global meltdown of 2008 was unforeseeable. If markets are fractal, as argued by Benoit Mandelbrot, then we can anticipate more “once in a lifetime” crises than economists expect, and that such crises will be less predictable than expected.

After reviewing some technical charts that suggest trouble ahead in 2014 (or perhaps 2015 if certain cycles hold up), I asked how asset bubbles can be considered a “social good” if the current bubble is not boosting employment or income for the vast majority of Americans. I also wondered how the presumed fundamentals of “growth” (sales, profits, creditworthiness, etc.) can continue expanding if income is stagnating.

In Part 2 of this report, the goal is to examine the policies of the states (central governments) and central banks around the world that have boosted assets such as stocks, bonds and real estate to new highs. What repercussions are they creating, why they are failing, and why they will cause a crisis that will be as damaging as 2008 — yet unfold quite differently…

Image | Jim Bruce: The Siren Song of ‘Money For Nothing’
Jim Bruce: The Siren Song of ‘Money For Nothing’
by Chris Martenson

Like many concerned about the growing credit bubble, Jim Bruce did his best to warn family and friends about the looming risks leading up to the 2008 financial crisis. Not many heeded him.

Jim, though, had not only positioned his portfolio defensively for such an event, he also managed to make profits by betting against the stocks in overly leveraged financial institutions. But it's what he did with the money he made that's the interesting story here.
Jim Bruce: The Siren Song of ‘Money For Nothing’
 by Chris Martenson

Like many concerned about the growing credit bubble, Jim Bruce did his best to warn family and friends about the looming risks leading up to the 2008 financial crisis. Not many heeded him.

Jim, though, had not only positioned his portfolio defensively for such an event, he also managed to make profits by betting against the stocks in overly leveraged financial institutions. But it's what he did with the money he made that's the interesting story here.
Image | “Endless Growth” Is the Plan & There Is No Plan B
“Endless Growth” Is the Plan & There Is No Plan B
by Chris Martenson

After five years of aggressive Federal Reserve and government intervention in our monetary and financial systems, it's time to ask: Where are we? 

The "plan," such as it has been, is to let future growth sweep everything under the rug. To print some money, close their eyes, cross their fingers, and hope for the best.

On that, I give them an "A" for wishful thinking – and an "F" for actual results.
“Endless Growth” Is the Plan & There Is No Plan B
 by Chris Martenson

After five years of aggressive Federal Reserve and government intervention in our monetary and financial systems, it's time to ask: Where are we? 

The "plan," such as it has been, is to let future growth sweep everything under the rug. To print some money, close their eyes, cross their fingers, and hope for the best.

On that, I give them an "A" for wishful thinking – and an "F" for actual results.
Image | Why Your Own Plan Better Be Different
Why Your Own Plan Better Be Different
 PREVIEW
by Chris Martenson

Executive Summary

  • Why the insolvency hole the U.S. is in may be much deeper than appreciated.
  • Current 'best case' assumptions show us doubling the size of our economy TWICE over the next 75 years. Why that's just not achievable.
  • Why the above assumptions get even worse when the energy story is taken into account.
  • Why action at the individual level is your best bet now.

If you have not yet read Part I: "Endless Growth" Is the Plan & There's No Plan B available free to all readers, please click here to read it first.

A Big Hole

When the Treasury Department estimates that the U.S. has a ~$65 trillion NPV (Net Present Value) shortfall in its main accounts, it's saying that using its assumptions, the U.S. government would need to have $65 trillion – today – in an account, earning a stated rate of interest, in order to be solvent.

Since the U.S. government don't have that have that kind of scratch, it's insolvent. 

But the real picture is likely worse. The Fed calculates the NPV shortfall to be closer to $100 trillion. And if you believe Lawrence Kotlikoff's math, the figure is closer to $200 trillion. Either way – $65 trillion, $100 trillion, or $200 trillion – the sum cannot be paid.

So it won't be.

And the real trouble is that all of these numbers make the same implicit assumption: The future will more or less resemble the past. That is, some form of future growth – exponential future growth – of the economy is at the heart of every single calculation.

But we might question that, because somewhere between here and there, economic growth will have to come to an end. Or at least a pronounced deceleration. Why? Quite simply, because the earth is finite.

Now, we might comfort ourselves with the belief that our future date with hard limits is lifetimes away. But when we do, we shortchange ourselves (if we're wrong) and our progeny (if we're right). After all, the time to make an adjustment is when the resources and energy exist to make that change.

And that's now. Or, really, decades ago…

Why Your Own Plan Better Be Different
 PREVIEW by Chris Martenson

Executive Summary

  • Why the insolvency hole the U.S. is in may be much deeper than appreciated.
  • Current 'best case' assumptions show us doubling the size of our economy TWICE over the next 75 years. Why that's just not achievable.
  • Why the above assumptions get even worse when the energy story is taken into account.
  • Why action at the individual level is your best bet now.

If you have not yet read Part I: "Endless Growth" Is the Plan & There's No Plan B available free to all readers, please click here to read it first.

A Big Hole

When the Treasury Department estimates that the U.S. has a ~$65 trillion NPV (Net Present Value) shortfall in its main accounts, it's saying that using its assumptions, the U.S. government would need to have $65 trillion – today – in an account, earning a stated rate of interest, in order to be solvent.

Since the U.S. government don't have that have that kind of scratch, it's insolvent. 

But the real picture is likely worse. The Fed calculates the NPV shortfall to be closer to $100 trillion. And if you believe Lawrence Kotlikoff's math, the figure is closer to $200 trillion. Either way – $65 trillion, $100 trillion, or $200 trillion – the sum cannot be paid.

So it won't be.

And the real trouble is that all of these numbers make the same implicit assumption: The future will more or less resemble the past. That is, some form of future growth – exponential future growth – of the economy is at the heart of every single calculation.

But we might question that, because somewhere between here and there, economic growth will have to come to an end. Or at least a pronounced deceleration. Why? Quite simply, because the earth is finite.

Now, we might comfort ourselves with the belief that our future date with hard limits is lifetimes away. But when we do, we shortchange ourselves (if we're wrong) and our progeny (if we're right). After all, the time to make an adjustment is when the resources and energy exist to make that change.

And that's now. Or, really, decades ago…

Image | Brian Pretti: The World’s Capital Is Now Dangerously Boxed In
Brian Pretti: The World’s Capital Is Now Dangerously Boxed In
by Chris Martenson

This week Chris speaks with Brian Pretti, managing editor of ContraryInvestor.com, a financial commentary site published by institutional buy-side portfolio managers. In their discussion, they focus on the global movement of capital since quantitative easing (QE) became the policy of the world's major central banks.

The ensuing excellent discussion is wide ranging, but the key takeaway is that capital is being herded into fewer and fewer asset classes. With such huge volumes of money at play, very crowded trades in assets like stocks and housing have resulted — bringing us back to familiar bubble territory in record time.
Brian Pretti: The World’s Capital Is Now Dangerously Boxed In
 by Chris Martenson

This week Chris speaks with Brian Pretti, managing editor of ContraryInvestor.com, a financial commentary site published by institutional buy-side portfolio managers. In their discussion, they focus on the global movement of capital since quantitative easing (QE) became the policy of the world's major central banks.

The ensuing excellent discussion is wide ranging, but the key takeaway is that capital is being herded into fewer and fewer asset classes. With such huge volumes of money at play, very crowded trades in assets like stocks and housing have resulted — bringing us back to familiar bubble territory in record time.
Image | The Trends to Watch For in 2014
The Trends to Watch For in 2014
by charleshughsmith

At the beginning of this year (2013), I identified eight key dynamics that will play out over the next two to three years (2013-2015). Let’s see how the trends developed…

The Trends to Watch For in 2014
 by charleshughsmith

At the beginning of this year (2013), I identified eight key dynamics that will play out over the next two to three years (2013-2015). Let’s see how the trends developed…

Image | 2013 Year in Review
2013 Year in Review
by David Collum

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. Moreover, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full.

2013 Year in Review
 by David Collum

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. Moreover, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full.

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