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Image | The Real Reason the Economy Is Broken (and Will Stay That Way)
The Real Reason the Economy Is Broken (and Will Stay That Way)
by Chris Martenson

We are far enough and deep enough into the most heroic monetary and fiscal efforts ever undertaken to finally ask, why aren't these measures working?

Or at least we should be.  Oddly, many in DC, on Wall Street, and the Federal Reserve continue to steadfastly refuse to include anything in their approaches and frameworks other than "more of the same."

So we are treated to an endless parade of news items that seek to convince us that a bottom is in and that we've 'turned the corner' – often on the flimsy basis that in the past things have always gotten better by now.
The Real Reason the Economy Is Broken (and Will Stay That Way)
 by Chris Martenson

We are far enough and deep enough into the most heroic monetary and fiscal efforts ever undertaken to finally ask, why aren't these measures working?

Or at least we should be.  Oddly, many in DC, on Wall Street, and the Federal Reserve continue to steadfastly refuse to include anything in their approaches and frameworks other than "more of the same."

So we are treated to an endless parade of news items that seek to convince us that a bottom is in and that we've 'turned the corner' – often on the flimsy basis that in the past things have always gotten better by now.
Image | Don’t Worry; Be Resilient
Don’t Worry; Be Resilient
by charleshughsmith

At some point, absorbing more information about the unsustainability of the Status Quo yields diminishing returns; it becomes emotionally draining and thus counterproductive.  Part of this exhaustion results from recognizing our powerlessness within the Status Quo, where independent thinking and structural innovation are winnowed out as threats to existing institutions and industries.
Don’t Worry; Be Resilient
 by charleshughsmith

At some point, absorbing more information about the unsustainability of the Status Quo yields diminishing returns; it becomes emotionally draining and thus counterproductive.  Part of this exhaustion results from recognizing our powerlessness within the Status Quo, where independent thinking and structural innovation are winnowed out as threats to existing institutions and industries.
Image | QE for Dummies
QE for Dummies
by Chris Martenson

A PeakProsperity.com reader recently lamented:

I have been trying to get my head around the mechanism of QE. Not being an economist or experienced investor I don't really understand a lot of the jargon. The usual simple definition of QE as "thin air money printing" does not satisfy my need for understanding either. Have hunted for a description of QE for dummies that leaves me feeling like I get it, but with no luck. My difficulty is in understanding how thin air money gets into circulation.

So I'm going to do my best to answer this plea in as intuitive and straightforward a manner as I can. I, too, share the need to understand the mechanism of a process in order to feel like I have a grasp of it.  And I think it's critically important to understand QE (also known by its full name, "quantitative easing") and what it really represents. Because it is, without a doubt, one of the largest market-shaping forces of our times.
QE for Dummies
 by Chris Martenson

A PeakProsperity.com reader recently lamented:

I have been trying to get my head around the mechanism of QE. Not being an economist or experienced investor I don't really understand a lot of the jargon. The usual simple definition of QE as "thin air money printing" does not satisfy my need for understanding either. Have hunted for a description of QE for dummies that leaves me feeling like I get it, but with no luck. My difficulty is in understanding how thin air money gets into circulation.

So I'm going to do my best to answer this plea in as intuitive and straightforward a manner as I can. I, too, share the need to understand the mechanism of a process in order to feel like I have a grasp of it.  And I think it's critically important to understand QE (also known by its full name, "quantitative easing") and what it really represents. Because it is, without a doubt, one of the largest market-shaping forces of our times.
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 | James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices
James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices
by Adam Taggart

My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.

So predicts James Turk, founder and Chairman of GoldMoney.com.

From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.

But money, like investments, can be overvalued or undervalued. And what we’re witnessing on the world stage is a gross mispricing of money as central banks engage in depreciation of their fiat currencies via inflation (i.e., money printing).

The process causes a transfer of wealth from those holding overvalued money to those who hold undervalued money. That’s what’s been going on for the past decade as the price of gold has steadily marched upwards versus fiat currencies.

But this process is not efficient. Mass awareness of this wealth transfer is low, so confidence in paper currencies is still high, supporting their perceived value. Market intervention by central banks and other parties conspires to keep the prices of precious metals artificially low and suspect.

This maintains an arbitrage for individuals to buy gold and silver at a discount to true value, which James believes will be slowly realized in full over the next several years as the bull market in precious metals approaches its third and final phase.

A factor in this rise will be the increasing fragmentation of coordination among the central banks. Increasingly, central banks outside the influence of the U.S. Federal Reserve are treating the precious metals as true money, and becoming net buyers of bullion for their reserves.

Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz and that we'll see even higher price appreciation in silver.
James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices
 by Adam Taggart

My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.

So predicts James Turk, founder and Chairman of GoldMoney.com.

From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.

But money, like investments, can be overvalued or undervalued. And what we’re witnessing on the world stage is a gross mispricing of money as central banks engage in depreciation of their fiat currencies via inflation (i.e., money printing).

The process causes a transfer of wealth from those holding overvalued money to those who hold undervalued money. That’s what’s been going on for the past decade as the price of gold has steadily marched upwards versus fiat currencies.

But this process is not efficient. Mass awareness of this wealth transfer is low, so confidence in paper currencies is still high, supporting their perceived value. Market intervention by central banks and other parties conspires to keep the prices of precious metals artificially low and suspect.

This maintains an arbitrage for individuals to buy gold and silver at a discount to true value, which James believes will be slowly realized in full over the next several years as the bull market in precious metals approaches its third and final phase.

A factor in this rise will be the increasing fragmentation of coordination among the central banks. Increasingly, central banks outside the influence of the U.S. Federal Reserve are treating the precious metals as true money, and becoming net buyers of bullion for their reserves.

Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz and that we'll see even higher price appreciation in silver.
Image | The Tangled Relationship Between Wealth & Money
The Tangled Relationship Between Wealth & Money
by John Michael Greer

One of the most dangerous mistakes possible to make in trying to understand the shape of the economic future is to think of the fundamental concepts of economics as simple and uncontroversial.  They aren’t. 

In economics, as in all other fields, the fundamentals are where disguised ideologies and unexamined presuppositions are most likely to hide out, precisely because nobody questions them.
The Tangled Relationship Between Wealth & Money
 by John Michael Greer

One of the most dangerous mistakes possible to make in trying to understand the shape of the economic future is to think of the fundamental concepts of economics as simple and uncontroversial.  They aren’t. 

In economics, as in all other fields, the fundamentals are where disguised ideologies and unexamined presuppositions are most likely to hide out, precisely because nobody questions them.
Image | They’re Not Even Trying to Hide It Anymore
They’re Not Even Trying to Hide It Anymore
 PREVIEW
by Chris Martenson

When asked why I think that the price of gold is manipulated to keep its price within an acceptable band to central planners, I will respond with the quip 'because they can.'

It's really very simple.  If we know that the Fed is extremely concerned about the health of the financial markets and maintaining confidence in them and the major institutions, and it has already stepped way over the line by targeting the price of money, bonds, and equities, it's pretty much a guarantee that the Fed has got its eyes on and hands in everything.
They’re Not Even Trying to Hide It Anymore
 PREVIEW by Chris Martenson

When asked why I think that the price of gold is manipulated to keep its price within an acceptable band to central planners, I will respond with the quip 'because they can.'

It's really very simple.  If we know that the Fed is extremely concerned about the health of the financial markets and maintaining confidence in them and the major institutions, and it has already stepped way over the line by targeting the price of money, bonds, and equities, it's pretty much a guarantee that the Fed has got its eyes on and hands in everything.
Image | Ask the Adviser: Risk-Managed Investing
Ask the Adviser: Risk-Managed Investing
by Adam Taggart

If you have money in the financial system (stocks, bonds, retirement funds, etc.) and you share the same skepticism most of our readers have about the markets' future stability, how should you invest those funds?

Most of the folks who inquire about our endorsed financial advisers are far more interested in preserving the purchasing power of their wealth vs. aggressively trying to beat the market average each year. But how exactly does one do that?

In this week's podcast, Chris sits down again with Mike Preston and John Llodra to discuss risk-managed investing.

Ask the Adviser: Risk-Managed Investing
 by Adam Taggart

If you have money in the financial system (stocks, bonds, retirement funds, etc.) and you share the same skepticism most of our readers have about the markets' future stability, how should you invest those funds?

Most of the folks who inquire about our endorsed financial advisers are far more interested in preserving the purchasing power of their wealth vs. aggressively trying to beat the market average each year. But how exactly does one do that?

In this week's podcast, Chris sits down again with Mike Preston and John Llodra to discuss risk-managed investing.

Image | The Price of Everything and the Value of Nothing
The Price of Everything and the Value of Nothing
 PREVIEW
by Chris Martenson

The title of this piece is The Price of Everything and the Value of Nothing.  The subtitle is Why Your Bread Is Going to Cost More.  I connect these two in reflecting on my recent podcast with David Collum, in which he stated that our money has no value and that this fact is distorting everything.

What he meant was, if you take your money to the bank to deposit it, the bank offers no interest on that money, implying that money has no value to them.  If they valued it or had a legitimate use for it, they would offer you something for its use.  Obviously, money doesn't have zero value to the banks; they can place it on deposit with the Fed for 0.25% yearly interest.  But by any historical measure, money has no value right now.

That's just what happens when any commodity – which money happens to be – becomes too abundant.  It drops in price.  What 0% rates on money tell us is that there's just an enormous amount of it sloshing around – and that, my dear friends, distorts everything else.

As I have said many times, when you misprice money itself, everything else becomes mispriced, too. 

The Price of Everything and the Value of Nothing
 PREVIEW by Chris Martenson

The title of this piece is The Price of Everything and the Value of Nothing.  The subtitle is Why Your Bread Is Going to Cost More.  I connect these two in reflecting on my recent podcast with David Collum, in which he stated that our money has no value and that this fact is distorting everything.

What he meant was, if you take your money to the bank to deposit it, the bank offers no interest on that money, implying that money has no value to them.  If they valued it or had a legitimate use for it, they would offer you something for its use.  Obviously, money doesn't have zero value to the banks; they can place it on deposit with the Fed for 0.25% yearly interest.  But by any historical measure, money has no value right now.

That's just what happens when any commodity – which money happens to be – becomes too abundant.  It drops in price.  What 0% rates on money tell us is that there's just an enormous amount of it sloshing around – and that, my dear friends, distorts everything else.

As I have said many times, when you misprice money itself, everything else becomes mispriced, too. 

Image | QE 4: Folks, This Ain’t Normal
QE 4: Folks, This Ain’t Normal
by Chris Martenson

Okay, the Fed's recent decision to boost its monetary stimulus (a.k.a. "money printing," "quantitative easing," or simply "QE") by another $45 billion a month to a combined $85 billion per month demonstrates an almost complete departure from what a normal person might consider sensible.

To borrow a phrase from Joel Salatin: Folks, this ain't normal.  To this I will add …and it will end badly.
QE 4: Folks, This Ain’t Normal
 by Chris Martenson

Okay, the Fed's recent decision to boost its monetary stimulus (a.k.a. "money printing," "quantitative easing," or simply "QE") by another $45 billion a month to a combined $85 billion per month demonstrates an almost complete departure from what a normal person might consider sensible.

To borrow a phrase from Joel Salatin: Folks, this ain't normal.  To this I will add …and it will end badly.
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