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Asset protection

Mile Markers on the Road to Ruin


Posted by Gary Christenson - The Deviant Investor

on Thursday, 25 May 2017 06:18

We know much is currently wrong with our financial world, as discussed in the James Rickards book “The Road to Ruin” and elsewhere.

 

  • The official U.S. government debt is nearly $20 trillion. Unfunded liabilities are 5 – 10 times larger. Debt has doubled every 8 – 9 years for decades – since the Federal Reserve was put in charge of devaluing the dollar. Debt will continue to grow, obviously out of control.
  • Millions of Americans are out of work, regardless of the official statistics.
  • Prices increase, some rapidly, regardless of the official statistics on consumer price inflation.
  • More government spending and debt are looming on the horizon. New and escalating wars are likely. Expect more deficits, debt, and inflation.
  • The U.S. stock market is selling at all-time highs, levitated by “easy money” and unsupported by fundamentals or breadth.

 

Option A: 

Trust the professionals who manage our digital and paper wealth which is backed only by debt, promises, fantasy, and confidence in the Federal Reserve and government. Believe official statistics and mainstream media that tell us things are peachy and not to worry.

Option B: 

Use gold and silver bullion (not the paper stuff) as financial insurance to protect the buying power of some or most of our net worth. Based on a century of experience, we can depend upon central banks and global governments to devalue currencies, create more debt, and propel gold and silver prices far higher.

Really? Those options seem extreme. Why? Read on!

STOCK MARKETS:

Consider John P. Hussman’s Exhaustion Gaps and the Fear of Missing Out.

w-deviant-investor-website-aa-current-work-in-pro

Read David Stockman: Market Crash to Occur

 

“Our country needs a good shutdown in September to fix mess!”

“There will be no bid for the stock once the panic sets in.”

BUBBLES:



Read more...

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Economic Outlook

How Long Can The Great Global Reflation Continue?


Posted by Charles Hugh Smith - Of Two Minds

on Wednesday, 24 May 2017 08:32

balloon-sunset-169676768.jpg

And what will happen when it ends?

Every now and again, it’s good to take stock of the Great Global Reflation that has been marching higher (with a few stumbles and scares) since early 2009, over eight years ago.  

Is this Great Reflation running out of steam, or is it poised for yet another leg higher? Which is more likely?

Keynesianism Vs The Real World

Let’s start by reviewing the systemic contexts of the economy.

This Great Reflation is embedded in two basic contexts:

  1. The dominant socio-economic structures since around 1500 AD are profit-maximizing capital (“the market”) and nation-states (“the government”).
     
  2. The dominant economic theory for the past 80 years is Keynesianism, i.e. the notion that the state and central bank must aggressively manage private-sector consumption (demand) and lending via centrally planned and funded fiscal and monetary stimulus during downturns (recessions/depressions).

Simply put, the conventional view holds that there are two (and only two) solutions for whatever ails the economy: the market (profit-maximizing capital) or the government (nation-states and their central banks). Proponents of each blame all economic and social ills on the other one.

In the real world, the vast majority of Earth’s inhabitants operate in economies with both market and state-controlled dynamics in varying degrees.

The Keynesian world-view is doggedly simplistic.  The economy is based on aggregate demand for more goods and services.  People want more stuff and services, and as long as they have the means to buy more stuff and services, they will avidly do so (this urge is known as animal spirits).

The greatest single invention of all time in the Keynesian universe is credit, because credit enables people to borrow from their future earnings to consume more in the present. Credit thus expands aggregate demand for more goods and services, which is the whole purpose of existence in this world-view: buy more stuff.

But credit, aggregate demand for more stuff and animal spirits make for a volatile cocktail.  The euphoria of those making scads of profit lending money to those euphorically buying more stuff with credit leads to standards of financial prudence being loosened.  In effect, lenders and borrowers start seeing opportunities for profit and more consumption through the distorted lens of vodka goggles.

Lenders reckon that even marginal borrowers will earn more in the future and therefore are good credit risks, and borrowers reckon they’ll make more in the future (i.e. the house they just bought to flip will greatly increase their wealth), and so borrowing enormous sums is really an excellent idea—why not make more money/enjoy life more now?

But the real world isn’t actually changed by vodka goggles, and so marginal borrowers default on the loans they should never have been issued, and lenders start losing scads of money as the value of the collateral supporting the defaulted loans (used cars, swampland, McMansions, etc.) falls.

....continue reading HERE



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Asset protection

For The First Time Ever, European Equities Yield More Than Junk Bonds


Posted by ZeroHedge

on Wednesday, 24 May 2017 07:55

Last week, when looking at the the distortion and absurdity unleashed by the ECB's asset purchase program upon European capital markets, we showed the unprecedented collapse in European junk bond yields as captured by the effective yield of the BofA/ML Euro High Yield Index, which is now trading just shy of all time lows, having dropped below 3% at the end of April, and printed at 2.79% on May 23, within bps of record lows...

high yield europe

... roughly 50 bps wider than where the the US 10Y is trading at this moment, and inside the 30Y US Treasury. Assuming a 1.9% European CPI (as of April), this means that the real rate of return on Europe's junk yields is now 0.89%.  But we digress.

....continue reading HERE



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Stocks & Equities

Today's Market - The Waiting Game


Posted by Seeking Alpha

on Wednesday, 24 May 2017 07:38

Summary

Stocks were frozen in place in premarket trade.

The U.S. dollar was likewise little changed.

We are playing a waiting game today until the 2:00 PM release of the Fed meeting minutes.

The Federal Open Market Committee (FOMC) meeting minutes will be published at 2:00 PM EDT. If the minutes show a Fed worried about the outlook for inflation and/or talking about possibly raising the trajectory of monetary policy tightening, well then stocks should take a hit. I think this is more likely than not given what we know already, though we may not learn of it until we see the Fed's updated economic projections in mid-June.

....continue reading HERE

also: 

48181402-14954793953869407Volatility is at generational lows, and a new crop of products has made it easy to sell.

Time To Buy Volatility?



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Timing & trends

Boring Summer For Stocks


Posted by Gary Savage - Smartmoneytracker

on Wednesday, 24 May 2017 07:26

I predict it’s going to be a boring summer for stocks. Price will just churn sideways for the next 2-3 months and allow the long term averages time to “catch up”.

cotd-182

....also from Gary: A Tale of Two Markets

The next big trending move will occur in the energy markets. All the technical and cyclical signs are in place to suggest a major bottom is forming. In the precious metals market we have the exact opposite setup. Watch video HERE

https://blog.smartmoneytrackerpremium.com/



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