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Russian Roulette, Central Banks, and Gold

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Posted by Gary Christenson - The Deviant Investor Deviant Investor

on Friday, 24 March 2017 09:44

Screen Shot 2017-03-24 at 9.22.08 AMGrab your ultra-reliable 357 magnum revolver and load the cylinder with six, not one, rounds of ammunition. Point the gun at your head if you are a member of the struggling middle-class. Imagine pulling the trigger and hoping …
 
Do You Feel Lucky?

The Six Loads of Ammunition for your 357 revolver are:

#1: Central banks and commercial banks exert a huge influence over all aspects of our financial lives. Paper currencies issued by central banks, digital currency units, credit card debt, pension funds, retirement accounts, checking accounts, Quantitative Easing, bond monetization, congress, regulators, Presidents, and the list goes on. Their game, their rules, your losses, and more of the same.

#2: Derivatives are used to “manage” markets, exercise control via futures markets over prices for physical and paper assets, increase leverage and enhance profits for the banks. Each derivative includes a commission – it is not a “zero-sum” game. Banks and CEO bonuses win.

#3: Debt, debt, and much more debt. Deficit spending increases debt, and governments run deficits. Interest is paid by individuals, corporations, and governments. Global debt of $200 trillion will require inflation, hyper-inflation or default. How long can government expenditures increase much more rapidly than revenues? Answer: As long as our current “Ponzi” finance can continue. How long can a Ponzi scheme last? Answer: Not forever. A default or hyper-inflation will occur, sooner rather than later. Fiat currencies will devalue.

#4: Near zero interest rates, negative interest rates, and financial repression. If central banks lower the interest paid on bonds and investments, pension plans and savers are penalized. Debtors, including governments, banks, and large corporations benefit. Your government plan and corporate pension plan are increasingly insolvent. Interest earnings are nearly zero. “High yield” checking accounts pay 0.01% interest. Your savings are depleted, and you may outlive your retirement assets. Welcome to the world of NIRP, ZIRP and financial repression that transfers assets and revenue from you to the banks, courtesy of central bank policies.

#5: High Frequency Trading or HFT is legalized skimming. Ultra-fast computers, PhD mathematics and software have replaced human traders. The result is consistent and profitable trading for the big financial institutions. Per zerohedgeJP Morgan’s in-house trading group has been unprofitable on only two days in the past four years. Average trading revenues were $80 million per day for 2016. Someone contributed heavily to the JP Morgan casino winnings.

#6: Too Big To Fail, Too Big To Jail. If central banks and the five largest commercial banks contribute to congressional elections, and Presidents fill their key positions with executives from the financial industries, and regulators work for them, what is the likely result? If a few large commercial banks are too big to fail, the government and taxpayers must … and you know the drill. More debt, more influence, more derivatives, and a successful business model that benefits the wealthy far more than the middle class.

Review:



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Asset protection

Frightening Shifts in European Politics Keeps Disaster in Focus

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Posted by The Edelson Wave

on Thursday, 23 March 2017 06:44

Headlines are a buzz with this week’s French presidential debate where candidate Emmanuel Macron came out on top. 

Market sentiment improved, evidenced by gains in the Euro currency and a narrowing yield differential between French and German government bonds.

This also follows last week’s election in the Netherlands where voters denied far-right populist candidate Geert Wilders in favor of liberal conservative Prime Minister Mark Rutte.

Because of these events, current European leadership hopes to avoid another Brexit or U.S. election outcome. 

But, the European train wreck is not over by any stretch. Take a look …

F-Britian-Investor-1UKHow’d we get here?

Years of aggressive financial risk-taking, overspending and burgeoning debts led to financial panic, bailouts and rising social unrest.

Between 2014 and 2016, the euro sank fast, taking much of Europe down with it. The trillion-dollar bailouts and money-printing operations engineered by Europe’s strongest economies only made the situation worse.

And volatile political conditions are fueling extreme right-wing movements that pushed the political landscape further to the right.

Consider recent headlines …

  • Energized populist movement fueling fascism, with some going as far as “embracing World War II era policies.”

  • Neo-fascists winning regional offices in Slovakia.

  • Turkish President Erdogan referring to European leaders as Nazi’s.

With several political elections across Europe in the coming months, many strongmen choose to ramp up nationalist rhetoric.



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Asset protection

Here’s how to tell when the Trump rally is over

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Posted by Martin D. Weiss PH.D & Tony Sagami

on Tuesday, 21 March 2017 16:02

An investment timing genius with an amazing stock track record is returning to the Weiss Research team of experts!

His name is Tony Sagami, and with the market still climbing a wall of worry, the timing couldn’t be better.

I first met Tony in the 1990s, and we’ve been very good friends ever since. Here’s a transcript of our latest conversation …

Martin Weiss: Welcome back, Tony! I suspect many of the people reading this already know who you are; we started working together so many years ago …

Tony Sagami: More than 20, actually! When we both had black hair and black beards.

Martin: Haha. That’s what you remember. What I remember best is the day the Nasdaq Composite Index was trading below 1,000, you told me it could double or triple from there, and I said you were nuts.

Tony: was nuts, I agree. But the Nasdaq was nuttier. It didn’t double. It didn’t triple. It surged by over five times — to 5,132. And by that time, I was turning so bearish I couldn’t see straight.

Martin: You told our subscribers to dump all their tech stocks. Every single one. That was gutsy. But then you took it one step further. You told them to buy put options on the Nasdaq index to directly profit from the decline. So while nearly all other investors were losing their shirts in the biggest tech stock disaster of all time, our subscribers were making some of the biggest profits of all time. It was one of the boldest and most accurate market calls I’ve seen in my life.

Of course, it’s easy today to look back and say the signs of the dot-com bubble were obvious. But for the thousands of so-called “pros” caught up in the frenzy, it wasn’t so obvious, was it?

Tony: No. But it was crystal clear to us in early 2000. The Wall Street crowd, the mainstream media, individual investors. They all had collectively lost their minds. They had driven stock prices — including pieces of pie-in-the-sky companies with scant sales and no profits — to ridiculously high prices. The risk hugely outweighed the reward. It wasn’t a sandbox I was willing to play in anymore.

Martin: You nailed it that time. Then you did it again. After riding the market up from 2003, you took your profits and ran, avoiding the excruciating pain of the worst Debt Crisis of modern times.

Tony: Thanks, but investors don’t need a history lesson right now. What they need now is solid, reasoned, no-nonsense direction for the future, which is what I’m here for.

Martin: A perfect segue to my main question: Is the stock market now poised for another tumble?

Tony: A tumble? Yes. A crash like the dot-com bust or the Debt Crisis? No. Sure, this current bull market is getting old in the tooth. Through last Thursday, the S&P 500 went 102 straight days without a 1% downward move. Just since Trump’s election, the S&P 500 has added $3 trillion of market value. 

And sure, that type of enthusiasm is unsustainable. But unlike in 2000, the stock market is NOT grossly overvalued. It’s at 18.4 times forward earnings. That’s not cheap by any means, but we’re not talking about nosebleed territory either.

Here’s the key. This is a very timely conversation because I’m starting to see some cracks in the stock market’s armor.

Martin: What cracks?

Tony: Here are three that worry me.

Crack number one is the default rate on sub-prime auto loans. It hit 9.1% in January (the most recent data available). That was the highest level since the Debt Crisis, a first warning sign of consumer distress.

Crack number two is in the junk bond market. Last week’s decline alone was enough to wipe out all the interest investors could have made in the last year. The junk bond market has historically been a reliable risk-on/risk-off indicator. I watch it like a hawk.

031717 2009 MarketTimin2



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Asset protection

Fanaticism, Stock Market Crash 2017 or Continuation of Bull Market

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Posted by Sol Palha - Tactical Investor

on Wednesday, 15 March 2017 12:00

"A fanatic is a man that does what he thinks the Lord would do if He knew the facts of the case." ~ Finley Peter Dunne

Not too long ago this bull market was one of the most hated in history; that no longer appears to be the case. Throughout the unpopular phase of this bull market, we consistently and much to the dismay of many penguins, oops we mean experts, stated that every pullback should have been treated as a buying opportunity. There were two reasons for this; market sentiment was consistently negative, and the trend was up.

We even penned an article before Trump won stating that a Trump win like Brexit would prove to be a buying opportunity. As expected after the initial panic of having to deal with A Trump Presidency, the markets recouped their losses and never looked back. We were so bullish that on De 15, 2016 we provided our subscribers with the Path we expected the Dow to take in 2017.

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Asset protection

Fossil Fuels Are Toast – But Real Assets Are Still The Place To Be

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Posted by John Rubino - DollarCollapse.com

on Friday, 10 March 2017 08:20

With all the oil-related headlines we’re exposed to each day, you might assume that “black gold,” along with other fossil fuels like coal and natural gas, matter to humanity’s future. You’d be wrong. Like Keynesian economics and fiat currencies, fossil fuels are near the end of their run. From here on out, solar is the story. 

The following chart shows the decline in the cost of solar power and the resulting surge in solar installations through 2015. The relationship is clear: as prices plunge demand surges — in both cases exponentially. 

Solar-cost-and-installations-2015

 

Pretty impressive, right? But nothing compared to what happened in 2016: 



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