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Macleod: Economic Outlook Darkens

dollarMany decades of Keynesian-inspired economic and monetary corruption have left advanced economies with a legacy of debt and low savings. In a nutshell, that is the problem which is driving us into another financial crisis. That moment could be drawing upon us, signalled by the recent collapse in bond yields.

This nearly happened in 2008. It was bought off by an open-ended central bank guarantee of infinite quantities of cash and credit, initially by the Fed, rapidly followed by all the other major central banks. Six years later, monetary medicine is still being applied globally in unprecedented quantities. And in some countries bank credit has finally begun expanding more rapidly than before. Continue reading

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Economic Collpase: Byron Dale – From Wealth to Debt

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Poorer Americans pick gold over stocks as the best investment

gold bars_feg_webYou can keep your gold and stocks because there’s no place like home for my money.

That seems to be the gist of a recent survey from Gallup, in which Americans picked real estate as the cream of the the long-term-investment crop. Their other choices were gold, stock and mutual funds; savings accounts and CDs; or bonds.

Some 30% of those polled picked real estate, versus 24% each for gold and stocks, while 14% gave savings accounts/CDs the nod and just 6% said bonds were the way to go. The bond drag is not too surprising considering how investors have been fleeing funds like the Pimco Total Return Fund. Bonds have also been a consistent nonfavored option in the Gallup poll. This marked the first year gold was included as an option in the Gallup survey of 1,026 adults aged 18 and older. Continue reading

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Americans With Lower Credit Scores Are Finding It Easier To Take Out Mortgages

Here we go again…

real_estate_foreclosureFollowing the U.S. housing bust, it got harder for households to get a mortgage.
It was especially hard for folks with lower credit scores.

However, lending standards have been loosening, and this is largely considered a good thing. But it also means it’s becoming easier for people with lower credit scores to get a mortgage.

Remember before the bust, lenders threw money at folks with poor credit, and who were at high risk of defaulting on their loans. Continue reading

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Evidence of Mainstream Financial Media Opposition to Gold and Silver

gold bars_feg_webSo now what instances of proof can we discover to support the idea that mainstream financial media is inherently biased against precious metals?

Demand for gold as a hedge against currency debasement in China is on the rise.

Well, lets examine the three largest shaper of public opinion in regard to all things financial, shall we? Continue reading

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Are You Ready For The Price Of Food To More Than Double By The End Of This Decade?

Supermarket-Photo-by-Abrahami-300x300Do you think that the price of food is high now? Just wait. If current trends continue, many of the most common food items that Americans buy will cost more than twice as much by the end of this decade. Global demand for food continues to rise steadily as crippling droughts ravage key agricultural regions all over the planet. You see, it isn’t just the multi-year California drought that is affecting food prices. Down in Brazil (one of the leading exporters of food in the world), the drought has gotten so bad that 142 cities were rationing water at one point earlier this year. And outbreaks of disease are also having a significant impact on our food supply. A devastating pig virus that has never been seen in the U.S. before has already killed up to 6 million pigs. Continue reading

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What doctors found inside an Indian businessman after he complained of having a stomach ache (12 gold bars worth $1,847.00 each)

He wouldn't have made it!

He wouldn’t have made it!

Doctors in India were shocked to find 12 gold bars inside the stomach of a businessman who was admitted after complaining of pains.

The 63-year-old man went to a hospital in Delhi earlier this month saying he had swallowed a cap from a water bottle and wanted it removed from his body.

He also complained of pain and vomiting prompting surgeons to operate, when they discovered the hoard though to be worth around $23,300.00.

Doctors discovered a total of 12 gold bars, each weighing 33g which were discovered in his stomach rather than a bottle cap, it has been reported. Continue reading

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Fekete: The Significance of the Gold Standard

This is a freely edited version of an article by the monetary economist Walter E. Spahr (1891-1970), Head, Department of Economics, New York University, that appeared in the quarterly review Modern Age, Summer, 1960

golden_rollsAn instrumentality of human freedom
Of all institutions the gold standard occupies a paramount position as an instrumentality of human freedom, private property, private enterprise, and responsible government. The nature of the gold standard should reveal something as to why it is a necessary and natural companion of human freedom.

After specifying the standard gold coin and opening the Mint to its free and un-limited coinage on private account, the government must stand aside and let the gold standard perform its functions in accordance with the desires of the people. The right to private property in gold is established and respected. The government shall not interfere with the hoarding, importing or exporting of gold, or with the redemption of non-gold currency into standard gold coin by the banks. An individual may put none, little, much, or all of his property into gold. He may convert all of his property into gold and ship it out of the country without hindrance from the government.

Checkrein on the government and banks
If a person living under a degree of freedom inherent in a gold standard is disturbed by, or disapproves of, the policies of his government or the practices of banks, he may protect his property by presenting non-gold currency for redemption. If a sufficient number of people do this, then the government and the banks are forced to respect the fears or disapproval of the citizens. The government and the banks are thus placed in a position in which they must be careful not to disturb unduly, or to incur the disapproval of, people with property to protect.

Thus do a people with a gold standard at their disposal have the power to keep a checkrein on the fiscal policies of their government. Thus do they force the banks not to pursue reckless credit practices. Thus do they obtain and maintain a responsible government and a responsible banking system.

The people may utilize that power wisely or unwisely; but it is a power they must have if they are to be able to protect themselves from improper government encroachment or tyranny, and against irresponsible banking. (Continue to original article)

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Macleod: Economic Outlook Darkens

Dust-storm-Texas-1935Many decades of Keynesian-inspired economic and monetary corruption have left advanced economies with a legacy of debt and low savings. In a nutshell, that is the problem which is driving us into another financial crisis. That moment could be drawing upon us, signalled by the recent collapse in bond yields.

This nearly happened in 2008. It was bought off by an open-ended central bank guarantee of infinite quantities of cash and credit, initially by the Fed, rapidly followed by all the other major central banks. Six years later, monetary medicine is still being applied globally in unprecedented quantities. And in some countries bank credit has finally begun expanding more rapidly than before.

The counterpart to bank credit is debt, which is fuelling economic growth wherever it can be found. Even exports are on tick, with the ultimate buyers around the world also heavily dependent on credit. Indeed, the more one looks at the current business cycle, the more its current state resembles 2007-8 and 2000-01 before that.

Credit cycles unbacked by substance start like this: print some money to inflate asset prices. Collateral values then increase, stimulating bank lending. Borrowers buy property and stocks, increasing prices and spreading the feel-good factor. Now that personal balance sheets are “repaired”, they buy new cars, new holidays and second homes, all on tick. Welcome to this point in time: the accumulation of debt has stopped us from increasing demand any further. The progression of events from here varies but the end result is easily predicted: it runs out of steam and turns into a financial crisis.

So how do we get away from this depressing and predictable cycle of events? The answer is simple: stop relying on the expansion of money and credit. We have forgotten that before Keynes told us to borrow to spend, debt was only taken on by entrepreneurs and businesses for very specific purposes as a last and not a first resort, and certainly not for everyday consumption. (Continue to original article)

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Recession Not Over for Poor: Families Stretch Food to Last

depressionAfter Jaime Grimes found out in January that her monthly food stamps would be cut again, this time by $40, the single mother of four broke down into sobs — then she took action.

The former high school teacher made a plan to stretch her family’s meager food stores even further. She used oatmeal and ground beans as filler in meatloaf and tacos. She watered down juice and low-fat milk to make it last longer. And she limited herself to one meal a day so her kids — ages 3, 4, 13, and 16 — would have enough to eat.

“I just want my kids to be fed,” said Grimes, 38, of Lincoln, Neb., who suffers from chronic back problems, arthritis and muscle pain that make it difficult for her to stand. She is applying for disability but in the meantime has $950 a month — $500 in child support and $450 in food stamps — to feed and house her family. “I just want my kids to have the basics of life that, unfortunately, I can’t give them right now,” she added.

Grimes and her children are among the estimated 49 million Americans who have limited — or uncertain — access to enough food to meet their daily needs. The numbers of people living in such hardship initially spiked during the Great Recession to around 15 percent of Americans, and has hovered there, failing to return to pre-recession figures of 11- to 12-percent though the economic slump ended nearly five years ago in June 2009, according to a new report by Feeding America, a national hunger relief charity.

“Nothing is getting better,” said Craig Gundersen, lead researcher of the report, “Map the Meal Gap 2014,” and an expert in food insecurity and food aid programs.

“Let’s stop talking about the end of the Great Recession until we can make sure that we get food insecurity rates down to a more reasonable level,” he added. “We’re still in the throes of the Great Recession, from my perspective.” (Continue to original article)

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Scalia To Student: If Taxes Go Too High ‘Perhaps You Should Revolt’

Supreme Court Justice Scalia Joins Book Discussion In WashingtonSpeaking at the University of Tennessee College of Law on Tuesday, the longest-serving justice currently on the bench was asked by a student about the constitutionality of the income tax, the Knoxville News Sentinel reports.

Scalia responded that the government has the right to implement the tax, “but if it reaches a certain point, perhaps you should revolt.” Continue reading

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In Debt We Trust America Before the Bubble Bursts

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Silver Price Forecast 2014: Silver’s Ultimate Rally When Paper Assets Collapse

silver-barsThe relationship between the Dow and silver has been very consistent over the last 100 years. After each of the major Dow peaks (real, not necessarily nominal peaks), we eventually had major bottom in silver. Below, is a 100-year inflation-adjusted Dow chart:

In September 1929, the Dow peaked in terms of US dollars as well as in terms of gold ounces (real terms). After about 1 year and 4 months, silver made a significant bottom. While the Dow continues to fall for most of the time, silver rallied until it peaked in January of 1935. At silver’s peak, the Dow was about 30% lower in real terms than what it was at silver’s bottom. Continue reading

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“We are in great danger”: Ex-banker details how mega-banks destroyed America

Lloyd Blankfein and Jamie Dimon testify before House Financial Services Committee on Capitol Hill, Feb. 11, 2009. (Credit: Reuters/Larry Downing)

Lloyd Blankfein and Jamie Dimon testify before House Financial Services Committee on Capitol Hill, Feb. 11, 2009. (Credit: Reuters/Larry Downing)

“The power has only been more consolidated,” warns Goldman Sachs veteran Nomi Prins in an interview with Salon

“It no longer matters who sits in the White House,” former Goldman Sachs managing director Nomi Prins writes in her new book “All the Presidents’ Bankers: The Hidden Alliances That Drive American Power.” “Presidents no longer even try to garner banker support for population-friendly policies, and bankers operate oblivious to the needs of national economies. There is no counterbalance to their power.” Continue reading

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Two More Victims Of The Retail Apocalypse: Family Dollar And Coldwater Creek

Family-Dollar-300x300Did you know that Family Dollar is closing 370 stores? When I learned of this, I was quite stunned. I knew that retailers that serve the middle class were really struggling right now, but I had no idea that things had gotten so bad for low end stores like Family Dollar. In the post-2008 era, dollar stores had generally been one of the few bright spots in the retail industry.

As millions of Americans fell out of the middle class, they were looking to stretch their family budgets as far as possible, and dollar stores helped them do that. It would be great if we could say that the reason why Family Dollar is doing so poorly is because average Americans have more money now and have resumed shopping at retailers that target the middle class, but that is not happening. Rather, as you will see later in this article, things just continue to get even worse for Americans at the low end of the income scale. Continue reading

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NYS Attorney General Issues Subpoenas to Least Lawyered-Up High Frequency Traders

Eric Schneiderman, New York State Attorney General

Eric Schneiderman, New York State Attorney General

Bloomberg News is reporting that New York State Attorney General, Eric Schneiderman, has issued subpoenas to six high-frequency trading firms. The article, however, names only three firms, none of which are household names.

According to the article, Schneiderman is asking the firms, which include Chopper Trading LLC, Jump Trading LLC and Tower Research Capital LLC about the “special arrangements they have with exchanges and dark pools as well as their trading strategies.”

This is a curious approach. Why not ask the three big stock exchanges, the New York Stock Exchange, Nasdaq and BATS to hand over the names of all high frequency traders to whom they have sold expensive perks that have the effect of rigging the stock market against the average investor.

On March 18 of this year, Schneiderman gave an address at New York Law School indicating his intimate knowledge of the unfair and potentially manipulative practices taking place at the stock exchanges and, somewhat demurely, calling out Securities and Exchange Commission Chair, Mary Jo White, for not doing enough to stop these abuses.

On the subject of co-location, where the high frequency traders are allowed for a high fee to locate their own computers inside the exchange’s data centers to be close to the exchange’s main computers and shave fractions of a second off their trading speed, Schneiderman said: “In that tiny sliver of time, these firms get a first look at the direct-data feeds provided by the exchanges. They see pricing, volume, trade and order information and use it with their sophisticated technology, and algorithms that make the systems automatic, to trade on it before others can possibly react.”

Schneiderman said this co-location also allows the high frequency traders to “continuously monitor all the exchanges for large incoming orders. And if they spot a large order from an institutional investor, like a pension fund, high-frequency traders can instantaneously get on the other side of the trade — driving up the prices artificially.” (Continue to original article)

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Insiders Tell All: Both the Stock Market and the SEC Are Rigged

bombSince bestselling author Michael Lewis appeared on 60 Minutes on March 30 to promote his new book, “Flash Boys,” and explained how the U.S. stock market is rigged; and Brad Katsuyama, the head of IEX, an electronic trading platform who plays a central role in the Lewis book, did the same on CNBC a few days later, the debate has gone viral.

But Lewis and Katsuyama were not the first to blow the whistle on rigged U.S. stock markets. Sal Arnuk and Joseph Saluzzi, Wall Street insiders and co-founders of Themis Trading LLC literally wrote the book on “Broken Markets” in 2012 and have been exposing details of the rigging on their blog ever since.

Wall Street Journal reporter, Scott Patterson, mapped out the exotic and corrupt order types permitted by the stock exchanges to fleece the little guy in his 2012 book, “Dark Pools,” which follows the trading career of Haim Bodek, who has set up his own web site to blow the whistle on just how badly the stock market is rigged.

Following all the media hoopla, the FBI has recently announced that it has opened an investigation into the allegations. But under the Securities Exchange Act of 1934, the FBI is not in charge of rigged stock exchanges — the Securities and Exchange Commission is. But according to insiders, the SEC has stood down in much the same fashion that it ignored warnings about Bernard Madoff from whistleblower Harry Markopolos for years. The explanation for the SEC’s inaction, many traders feel, is that the SEC itself is rigged against Main Street in favor of big Wall Street firms. That view has found support among the SEC’s own insiders.

Since 2006, four attorneys at the Securities and Exchange Commission have put their reputations and family interests on the line by blowing the whistle on corrupt cronyism that is now so ingrained at the Nation’s regulator of stock exchanges and securities markets that it’s become part of the SEC’s business model. (Continue to original article)

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