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Image | Harvey Organ: Get Physical Gold & Silver!
Harvey Organ: Get Physical Gold & Silver!
by Adam Taggart

Harvey Organ has been analyzing the bullion markets closely for decades. The quality and accuracy of his work is respected enough to have earned him an invitation to testify before the CFTC on position limits for precious metals back in 2010.

And he minces no words: Gold and silver prices are suppressed. With extreme prejudice.

In this detailed interview, Harvey explains to Chris the mechanics of how he sees this manipulation occurring, why he predicts this fraudulent pricing scheme will collapse soon, and why it's critical to be holding physical (vs. paper) bullion when it does.

 
Harvey Organ: Get Physical Gold & Silver!
 by Adam Taggart

Harvey Organ has been analyzing the bullion markets closely for decades. The quality and accuracy of his work is respected enough to have earned him an invitation to testify before the CFTC on position limits for precious metals back in 2010.

And he minces no words: Gold and silver prices are suppressed. With extreme prejudice.

In this detailed interview, Harvey explains to Chris the mechanics of how he sees this manipulation occurring, why he predicts this fraudulent pricing scheme will collapse soon, and why it's critical to be holding physical (vs. paper) bullion when it does.

 
Image | The Triggers That Will Spark ‘Hot’ Inflation
The Triggers That Will Spark ‘Hot’ Inflation
 PREVIEW
by Gregor Macdonald

The Triggers That Will Spark ‘Hot’ Inflation

by Gregor Macdonald, contributing editor
Thursday, April 19, 2012

Executive Summary

  • Rising wages in the developing world create upward price pressure everywhere globally
  • The paradox of safety: Many traditional “safe” assets (e.g., bonds) are horrible places to store capital during ‘hot’ inflation
  • Money velocity drives inflation — and it has only one direction to go these days: up
  • Winning and losing assets if ‘hot’ inflation does indeed break out

Part I: Get Ready for ‘Hot’ Inflation

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

Part II: The Triggers That Will Spark ‘Hot’ Inflation

Arthur Lewis was an economist from the small, Caribbean island of St. Lucia who went on to win a Nobel Prize in 1979. His work identified the process by which very cheap labor is brought from the countryside to urban areas during phases of industrialization in developing countries. At a certain point, this supply of cheap labor went into decline and wage pressures began to mount.

Now referred to as the Lewis Turning Point, such a phase marks the end of a kind of deflationary boom, in which input costs fall during a phase of hyper-strong growth, and the beginning of inflationary restraints, in which profit margins stop growing. This is exactly what’s happening in China today.

The Triggers That Will Spark ‘Hot’ Inflation
 PREVIEW by Gregor Macdonald

The Triggers That Will Spark ‘Hot’ Inflation

by Gregor Macdonald, contributing editor
Thursday, April 19, 2012

Executive Summary

  • Rising wages in the developing world create upward price pressure everywhere globally
  • The paradox of safety: Many traditional “safe” assets (e.g., bonds) are horrible places to store capital during ‘hot’ inflation
  • Money velocity drives inflation — and it has only one direction to go these days: up
  • Winning and losing assets if ‘hot’ inflation does indeed break out

Part I: Get Ready for ‘Hot’ Inflation

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

Part II: The Triggers That Will Spark ‘Hot’ Inflation

Arthur Lewis was an economist from the small, Caribbean island of St. Lucia who went on to win a Nobel Prize in 1979. His work identified the process by which very cheap labor is brought from the countryside to urban areas during phases of industrialization in developing countries. At a certain point, this supply of cheap labor went into decline and wage pressures began to mount.

Now referred to as the Lewis Turning Point, such a phase marks the end of a kind of deflationary boom, in which input costs fall during a phase of hyper-strong growth, and the beginning of inflationary restraints, in which profit margins stop growing. This is exactly what’s happening in China today.

Image | Get Ready for ‘Hot’ Inflation
Get Ready for ‘Hot’ Inflation
by Gregor Macdonald

Ideological deflationists and inflationists alike find themselves both facing the same problem. The former still carry the torch for a vicious deflationary juggernaut sure to overpower the actions of the mightiest central banks on the planet. The latter keep expecting not merely a strong inflation but a breakout of hyperinflation.

Neither has occurred, and the question is, why not?

The answer is a 'cold' inflation, marked by a steady loss of purchasing power that has progressed through Western economies, not merely over the past few years but over the past decade. Moreover, perhaps it’s also the case that complacency in the face of empirical data (heavily-manipulated, many would argue), support has grown up around ongoing “benign” inflation.

If so, Western economies face an unpriced risk now, not from spiraling deflation, nor hyperinflation, but rather from the breakout of a (merely) strong inflation.

Surely, this is an outcome that sovereign bond markets and stock markets are completely unprepared for. Indeed, by continually framing the inflation vs. deflation debate in extreme terms, market participants have created a blind spot: the risk of a conventional, but 'hot,' inflation.

 
Get Ready for ‘Hot’ Inflation
 by Gregor Macdonald

Ideological deflationists and inflationists alike find themselves both facing the same problem. The former still carry the torch for a vicious deflationary juggernaut sure to overpower the actions of the mightiest central banks on the planet. The latter keep expecting not merely a strong inflation but a breakout of hyperinflation.

Neither has occurred, and the question is, why not?

The answer is a 'cold' inflation, marked by a steady loss of purchasing power that has progressed through Western economies, not merely over the past few years but over the past decade. Moreover, perhaps it’s also the case that complacency in the face of empirical data (heavily-manipulated, many would argue), support has grown up around ongoing “benign” inflation.

If so, Western economies face an unpriced risk now, not from spiraling deflation, nor hyperinflation, but rather from the breakout of a (merely) strong inflation.

Surely, this is an outcome that sovereign bond markets and stock markets are completely unprepared for. Indeed, by continually framing the inflation vs. deflation debate in extreme terms, market participants have created a blind spot: the risk of a conventional, but 'hot,' inflation.

 
Image | Off the Cuff: Inflation, aka the ‘Sinister Tax’
Off the Cuff: Inflation, aka the ‘Sinister Tax’
 PREVIEW
by Adam Taggart

The most sinister of all taxes is the inflation tax and it is the most regressive. It hits the poor and the middle class. ~ Ron Paul

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In this week’s Off the Cuff with Mish & Chris podcast, Mish has the week off, so Chris takes the mic and delivers an in-depth look at consumer price inflation. He cites a plethora of data that validates what anyone who eats, drives, or visits the doctor already knows: The “official” CPI (Consumer Price Index) numbers released by our government and others around the world are completely bogus.

Money expansion is a cornerstone of modern central banking strategy. With so much outstanding total debt, increasing the money supply (i.e., inflation) becomes increasingly essential for perpetuating the system.

Today, Chris focuses on the question, What is going to happen when that strategy no longer works?

Off the Cuff: Inflation, aka the ‘Sinister Tax’
 PREVIEW by Adam Taggart

The most sinister of all taxes is the inflation tax and it is the most regressive. It hits the poor and the middle class. ~ Ron Paul

width=

In this week’s Off the Cuff with Mish & Chris podcast, Mish has the week off, so Chris takes the mic and delivers an in-depth look at consumer price inflation. He cites a plethora of data that validates what anyone who eats, drives, or visits the doctor already knows: The “official” CPI (Consumer Price Index) numbers released by our government and others around the world are completely bogus.

Money expansion is a cornerstone of modern central banking strategy. With so much outstanding total debt, increasing the money supply (i.e., inflation) becomes increasingly essential for perpetuating the system.

Today, Chris focuses on the question, What is going to happen when that strategy no longer works?

Image | The Trouble with Money
The Trouble with Money
by Chris Martenson
A Broken Narrative

Recently I was asked by a high school teacher if I had any ideas about why students today seem so apathetic when it comes to engaging with the world around them. I waggishly responded, "Probably because they're smart."

In my opinion, we're asking our young adults to step into a story that doesn't make any sense.

Sure, we can grow the earth's population to 9 billion (and probably will), and sure, we can extract our natural gas and oil resources as fast as possible, and sure, we can continue to pile on official debts at a staggering pace — but why are we doing all this? Even more troubling, what do we say to our youth when they ask what role they should play in this story — a story with a plot line they didn't get to write?

So far, the narrative we're asking them to step into sounds a lot like this: Study hard, go to college, maybe graduate school. And when you get out, not only will you be indebted to your education loans and your mortgage, but you'll be asked to help pay back trillions and trillions of debt to cover the decisions of those who came before you. All while operating within a crumbling, substandard infrastructure. Oh, and by the way, the government and corporate sector appear to have no real interest in your long-term future; you're on your own there.

 
The Trouble with Money
 by Chris Martenson
A Broken Narrative

Recently I was asked by a high school teacher if I had any ideas about why students today seem so apathetic when it comes to engaging with the world around them. I waggishly responded, "Probably because they're smart."

In my opinion, we're asking our young adults to step into a story that doesn't make any sense.

Sure, we can grow the earth's population to 9 billion (and probably will), and sure, we can extract our natural gas and oil resources as fast as possible, and sure, we can continue to pile on official debts at a staggering pace — but why are we doing all this? Even more troubling, what do we say to our youth when they ask what role they should play in this story — a story with a plot line they didn't get to write?

So far, the narrative we're asking them to step into sounds a lot like this: Study hard, go to college, maybe graduate school. And when you get out, not only will you be indebted to your education loans and your mortgage, but you'll be asked to help pay back trillions and trillions of debt to cover the decisions of those who came before you. All while operating within a crumbling, substandard infrastructure. Oh, and by the way, the government and corporate sector appear to have no real interest in your long-term future; you're on your own there.

 
Image | Paul Tustain: Be Wary of Balance Sheet Risk
Paul Tustain: Be Wary of Balance Sheet Risk
by Adam Taggart

"I always tell people when they look at their bank account, they think they have got maybe $50,000 in the bank. It says $50,000 CR. Credit.

You are a creditor. It is the bank’s property, that $50,000. And they recognize in that document that they owe it to you.

So, you have to watch out for that word 'creditor'. When you see CR, you are on the balance sheet. You are at risk."

So says Paul Tustain, founder of BullionVault and advocate for minimizing counterparty risk in a world of rehypothecation and 100-to-1 leveraged paper markets.

 

Paul Tustain: Be Wary of Balance Sheet Risk
 by Adam Taggart

"I always tell people when they look at their bank account, they think they have got maybe $50,000 in the bank. It says $50,000 CR. Credit.

You are a creditor. It is the bank’s property, that $50,000. And they recognize in that document that they owe it to you.

So, you have to watch out for that word 'creditor'. When you see CR, you are on the balance sheet. You are at risk."

So says Paul Tustain, founder of BullionVault and advocate for minimizing counterparty risk in a world of rehypothecation and 100-to-1 leveraged paper markets.

 

Image | Central Follies
Central Follies
 PREVIEW
by Chris Martenson

Note: Mish was unavailable for our podcast today, so I am writing up the topics I had hoped to cover for my portion.

src=Perhaps not enough has been said about the folly of central planning, with ‘folly’ being a relatively neutral word along the spectrum of possible nouns that might describe what the central banks have been doing. Others might be ‘insanity’ or ‘absurdity.’

For many it is axiomatic that when the government tries to direct an economy by favoring this company over that one, or trying to pick a technology over another, it stands a better than even chance of doing it inefficiently.

But nothing can be more ruinous than attempting to steer the entire economy by fooling around with the price of money itself, as the Fed has been doing.
Central Follies
 PREVIEW by Chris Martenson

Note: Mish was unavailable for our podcast today, so I am writing up the topics I had hoped to cover for my portion.

src=Perhaps not enough has been said about the folly of central planning, with ‘folly’ being a relatively neutral word along the spectrum of possible nouns that might describe what the central banks have been doing. Others might be ‘insanity’ or ‘absurdity.’

For many it is axiomatic that when the government tries to direct an economy by favoring this company over that one, or trying to pick a technology over another, it stands a better than even chance of doing it inefficiently.

But nothing can be more ruinous than attempting to steer the entire economy by fooling around with the price of money itself, as the Fed has been doing.
Image | Are We Heading for Another 2008?
Are We Heading for Another 2008?
by charleshughsmith

We all know that central banks and governments have been actively intervening in markets since the 2007 subprime mortgage meltdown destabilized the leveraged-debt-dependent global economy. We also know that unprecedented intervention is now the de facto institutionalized policy of central banks and governments. In some cases, the financial authorities have explicitly stated their intention to “stabilize markets” (translation: reinflate credit-driven speculative bubbles) by whatever means are necessary, while in others the interventions are performed by proxies so the policy remains implicit. 

All through the waning months of 2007 and the first two quarters of 2008, the market gyrated as the Federal Reserve and other central banks issued reassurances that the subprime mortgage meltdown was “contained” and posed no threat to the global economy. The equity market turned to its standard-issue reassurance: “Don’t fight the Fed,” a maxim that elevated the Federal Reserve’s power to goose markets to godlike status.

But alas, the global financial meltdown of late 2008 showed that hubris should not be confused with godlike power. Despite the “impossibility” of the market disobeying the Fed’s commands (“Away with thee, oh tides, for we are the Federal Reserve!”) and the “sure-fire” cycle of stocks always rising in an election year, global markets imploded as the usual bag of central bank and Sovereign State tricks failed in spectacular fashion.
Are We Heading for Another 2008?
 by charleshughsmith

We all know that central banks and governments have been actively intervening in markets since the 2007 subprime mortgage meltdown destabilized the leveraged-debt-dependent global economy. We also know that unprecedented intervention is now the de facto institutionalized policy of central banks and governments. In some cases, the financial authorities have explicitly stated their intention to “stabilize markets” (translation: reinflate credit-driven speculative bubbles) by whatever means are necessary, while in others the interventions are performed by proxies so the policy remains implicit. 

All through the waning months of 2007 and the first two quarters of 2008, the market gyrated as the Federal Reserve and other central banks issued reassurances that the subprime mortgage meltdown was “contained” and posed no threat to the global economy. The equity market turned to its standard-issue reassurance: “Don’t fight the Fed,” a maxim that elevated the Federal Reserve’s power to goose markets to godlike status.

But alas, the global financial meltdown of late 2008 showed that hubris should not be confused with godlike power. Despite the “impossibility” of the market disobeying the Fed’s commands (“Away with thee, oh tides, for we are the Federal Reserve!”) and the “sure-fire” cycle of stocks always rising in an election year, global markets imploded as the usual bag of central bank and Sovereign State tricks failed in spectacular fashion.
Image | Why A Near-Term Market Rollover is Probable
Why A Near-Term Market Rollover is Probable
 PREVIEW
by charleshughsmith

Why a Near-Term Market Rollover is Probable

by Charles Hugh Smith, contributing editor
Wednesday, April 11, 2012

Executive Summary

  • A plethora of technical indicators show a breakdown is in progress
  • The key charts you need to be aware of
  • Time to place your bets: higher equity prices or higher interest rates?
  • Why a defense strategy in the near term is critical for those holding stocks and bonds

Part I: Are We Heading for Another 2008?

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

Part II: Why a Near-Term Market Rollover is Probable

In Part I, we summarized the global financial meltdown of 2008 as recognition that the collateral beneath an enormous inverted pyramid of leveraged debt had vanished, while all the monetary and fiscal tricks of central banks and governments failed to sustain the illusion of sufficient collateral.

Once again we find that massive, sustained intervention in global financial markets is being touted as successful – everything has been “fixed,” markets have been “stabilized,” and a global “recovery” is well underway,

If we believe this, we might be exposed to a dramatic downside should 2012 turn out to be another 2008, when markets realized that intervention did not create collateral, but instead a temporary illusion of sufficient collateral. 

Why A Near-Term Market Rollover is Probable
 PREVIEW by charleshughsmith

Why a Near-Term Market Rollover is Probable

by Charles Hugh Smith, contributing editor
Wednesday, April 11, 2012

Executive Summary

  • A plethora of technical indicators show a breakdown is in progress
  • The key charts you need to be aware of
  • Time to place your bets: higher equity prices or higher interest rates?
  • Why a defense strategy in the near term is critical for those holding stocks and bonds

Part I: Are We Heading for Another 2008?

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

Part II: Why a Near-Term Market Rollover is Probable

In Part I, we summarized the global financial meltdown of 2008 as recognition that the collateral beneath an enormous inverted pyramid of leveraged debt had vanished, while all the monetary and fiscal tricks of central banks and governments failed to sustain the illusion of sufficient collateral.

Once again we find that massive, sustained intervention in global financial markets is being touted as successful – everything has been “fixed,” markets have been “stabilized,” and a global “recovery” is well underway,

If we believe this, we might be exposed to a dramatic downside should 2012 turn out to be another 2008, when markets realized that intervention did not create collateral, but instead a temporary illusion of sufficient collateral. 

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