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Radio host Dr. Dave Janda says everybody in Washington knows the next big crash is right around the corner. It’s been 10 years since the Fed reflated the last meltdown, and Dr. Janda says President Trump is already blaming the Federal Reserve for killing the economy that his policies revived. Dr. Janda explains, “President Trump has been pointing the finger at the Fed. He’s been pointing the finger at the Fed, and that is exactly where he should be pointing. The globalist syndicate’s tentacle is the central banking system, and, in particular, in the United States, the Federal Reserve. The Federal Reserve is one of the entities that is directly responsible for this financial mess our country is currently in. You would never see Obama or the Bushes, or Bill Clinton, point at the Fed and say what Trump has said. Trump said, ‘I think the Fed has gone crazy. I think the Fed is making a mistake. They’re so tight with interest rates. I think the Fed has gone crazy.’ Just the other day, Trump said, ‘My biggest threat is the Fed. . . . The Fed is raising rates too fast, and it’s too independent.’ Now, wait a minute, listen to that. It’s too independent. When was the last time a president of the United States said the Fed was too independent? . . . . Banking groups, that is their priority. So, when the President says the Fed is raising rates too fast, and it’s my biggest enemy, and too independent, what he is saying is they are looking out for their own interests. They are not looking out for the interests of our country or for you or for me or for any American, and he’s right. I don’t know of any other president that has had the guts to say this.”

…click on the above link to read the rest of the article…

Trump vs. The Fed: When Markets Crash, Who Is To Blame?

October 17, 2018

Trump vs. The Fed: When Markets Crash, Who Is To Blame?

After a certain length of time examining history in-depth, anyone who is honest and relatively objective comes to understand that most of what we are told about our past in the mainstream is completely fabricated. We learn that much of “history” is not about posterity or heritage and more about a continuous set of false narratives peppered with half-truths. That is to say, what we thought we knew is actually lies.

Unfortunately, these lies can be complex, to the point that even many alternative researchers get caught up in their own biases to the point that they lose track of reality. Of course, this is what propaganda and 4^th generation warfare is meant to accomplish; it creates a series of filters that thin out the crowd of truth seekers a little at a time. Those few who make it through to the other side might discover the bigger picture, but when they turn around to explain what they have seen there’s hardly anyone left to listen.

Intricate propaganda narratives are actually rooted in simple archetypal memes that resonate with the average person’s sense of story. Think of mainstream historical events as more of a screenplay with a well-practiced set of beats, and the people who draft this screenplay intend we the public to act as an audience with limited participation. Our jobs are merely to continue providing fuel for the machine with our labor until the machine no longer needs us, and to continue perpetuating the fantasies that the machine conjures up as news feed fodder.

There are many actors that read lines from the historic screenplay and act out elaborate scenes meant to emotionally manipulate the masses. These actors play the roles of politicians and leaders of state.

…click on the above link to read the rest of the article…

Market crash? Another red card for the economy

October 13, 2018

Market crash? Another red card for the economy

A few months ago I wrote this article at the World Economic Forum called “A Yellow Card For The Global Economy“. It tried to serve as a warning on the rising imbalances of the emerging and leading economies. Unfortunately, since then, those imbalances have continued to rise and market complacency reached new highs.

This week, financial markets have been dyed red and the stock market reaction adds to concerns about a possible impending recession.

The first thing we must understand is that we are not facing a panic created by a black swan, that is, an unexpected event, but by three factors that few could deny were evident:

Excessive valuations after $20 trillion of monetary expansion inflated most financial assets.
Bond yields rising as the US 10-year reaches 3.2%
The evidence of the Yuan devaluation, which is on its way to surpass 7 Yuan per US dollar.
Global growth estimates trimmed for the sixth time in as many months.

Therefore, the US rate hikes – announced repeatedly and incessantly for years – are not the cause, nor the alleged trade war. These are just symptoms, excuses to disguise a much more worrying illness.

What we are experiencing is the evidence of the saturation of excesses built around central banks’ loose policies and the famous “bubble of everything”. And therein lies the problem. After twenty trillion dollars of reckless monetary expansion, risk assets, from the safest to the most volatile, from the most liquid to the unquoted, have skyrocketed with disproportionate valuations.

(courtesy Incrementum AG)

Therefore, a dose of reality was needed. Monetary policy not only disguises the real risk of sovereign assets, but it also pushes the most cautious and prudent investor to take more risk for lower returns. It is no coincidence that this policy is called “financial repression“. Because that is what it does. It forces savers and investors to chase beta and some yield in the riskiest assets.

…click on the above link to read the rest of the article…

The crash is coming

October 8, 2018

The crash is coming

Fred Hickey, editor of the influential investment newsletter «The High-Tech Strategist», compares today’s state of the stock market with the peak of the dotcom bubble in the year 2000 and spots bright opportunities in the gold sector.

(Bild: Charlotte Wilson/Getty Images)

Few investors have a deeper understanding of the tech sector than Fred Hickey. All the more concerning is his warning when it comes to the outlook for US equities. The renowned editor of the popular investment newsletter «The High-Tech Strategist» draws alarming parallels to the bursting of the dotcom bubble in the year 2000 and spots high risks in stock market darlings like Amazon (AMZN 1864.42 -1.34%) and Apple (AAPL 223.77 -0.23%). For the industry veteran, one important reason to be concerned are rich valuations. He also sees troubles ahead with respect to the rise in interest rates and the growing mountain of debt around the world. Against this background, the outspoken contrarian sees bright opportunities in gold and in attractively priced mining stocks.

About Fred Hickey

For many investors around the world, Fred Hickey’s monthly newsletter is a must read. It’s a unique treasure of deep knowledge that goes way beyond the tech sector. Having grown up in Lowell, Massachusetts, in the heartland of the computing cluster around Route 128, Mr. Hickey has been fascinated by technology since his youth. After graduating from the University of Notre Dame, he started working for the former telecom giant General Telephone & Electronics. In 1987, he began writing his newsletter for his friends and family. After just five years it went so well that he could make a living out of his investing tips. Today, Mr. Hickey who likes to take long walks in his rare spare time, lives far away from Wall Street in Nashua, New Hampshire, and in sunny Costa Rica.

…click on the above link to read the rest of the article…

Think You’re Prepared For The Next Crisis? Think Again.

October 6, 2018

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Think You’re Prepared For The Next Crisis? Think Again.

Even the best-laid preparations have failure points

No plan of operations extends with any certainty beyond the first contact with the main hostile force.

~ Helmuth von Moltke the Elder

Everybody has a plan until they get punched in the mouth.

~ Mike Tyson

Scottish poet Robert Burns aptly penned the famous phrase: “The best laid schemes o’ mice an’ men/Gang aft a-gley.” (commonly adapted as “The best laid plans of mice and men often go awry.”)

How right he was.

History has shown time and time again that the only 100% predictable outcome to any given strategy is that, when implemented, things will not go 100% according to plan.

The Titanic’s maiden voyage. Napolean’s invasion of Russia. The Soviet’s 1980 Olympic hockey dream team. The list of unexpected outcomes is legion.

Dwight D. Eisenhower, the Supreme Commander of the Allied Expeditionary Forces in Europe during WW2, went as far as to say: “In preparing for battle, I’ve always found that plans are useless but planning is indispensable.”

This wisdom very much applies to anyone seeking safety from disaster. Whether preparing for a natural calamity, a financial market crash, an unexpected job loss, or the “long emergency” of resource depletion — you need to take prudent planful steps now, in advance of crisis; BUT you also need to be mentally prepared for some elements of your preparation to unexpectedly fail when you need them most.

Here are two recent events that drive that point home.

Lessons From Hurricane Florence

A family member of mine lives in Wilmington, NC, which received a direct hit last month from Hurricane Florence.

…click on the above link to read the rest of the article…

Greece Planning Bad Debt Bailout For Its Banks After Market Crash

October 4, 2018

Greece Planning Bad Debt Bailout For Its Banks After Market Crash

It seems like it was just yesterday that Greek banks, which carry some €89BN of bad loans on their balance sheets, passed the ECB’s latest confidence building exercise, known as the “stress test.”

In retrospect that may have been premature, because as Bloomberg reports, over 8 years after its first bailout Greece is finally considering a plan to help its banks become viable, and speed up their bad-loan disposals in a bid to restore confidence in the crushed sector.

At its core, the Greek plan is the now familiar “bad bank” structure, in which banks get to spin off their NPLs into a separate, government-guaranteed SPV (although in the case of Greece, it is not clear if a government guarantee is all that valuable). The SPV would then be funded by selling bonds to the market.

While the details are still being worked out, an asset protection plan would see lenders unload some bad loans into special purpose vehicles, taking them off banks’ balance sheets. The SPVs would issue bonds, some guaranteed by the state, and sell them to investors, the people said, asking not to be named as the information isn’t public.

The move came after a furious selloff in Greek stocks, and especially banks, which was the culmination of a YTD plunge which has seen Greek banks lose more than 40% this year amid doubts they can clean up their balance sheets fast enough. The banks, which amusingly all cleared the ECB’s stress test earlier this year despite being saddled with tens of billions of NPLs, have been under mounting pressure from supervisors to cut their bad-debt holdings.

According to Bloomberg, the plan appears to have been borrowed from Italy, which conducted a similar exercise to stabilize its own banking sector.

…click on the above link to read the rest of the article…

Fed Chair Powell Hints He May Soon Crash The Market

October 3, 2018

Fed Chair Powell Hints He May Soon Crash The Market

Speaking at an event at the Atlantic Festival in Washington, Jerome Powell’s second public appearance of the week, the Fed chair took the opportunity to underscore just why he remains so complacent about the US economy, saying “it’s a remarkably positive set of economic circumstances,” and “there’s no reason to think it can’t continue for quite some time.”

Powell also praised the recent wage increases, saying some gains are welcome and noting that “the Phillips curve is not dead, just resting.”

The surprisingly confident Powell then put on the hawkish afterburners, and repeated what he said after the last week’s FOMC announcement, saying that “interest rates are still accommodative” because “rates have just now, in real terms, moved above zero.”

And here is the reason why the dollar is surging after hours: Powell said that not only are rates far away from the neutral rate of interest – or the interest rate that neither stimulates nor holds back the economy – but the Fed may go past neutral as the tightening process continues:

“interest rates are still accommodative, but we’re gradually moving to a place where they’ll be neutral – – not that they’ll be restraining the economy. We may go past neutral. But we’re a long way from neutral at this point, probably.”

Why is this important?

Because as Stifel analyst Barry Bannister – who correctly predicted the February correction – wrote three weeks ago, contrary to Powell’s assessment, just two more rate hikes would put the central bank above the neutral rate. The Fed’s long-term projection of its policy rate has risen from 2.8% at the end of 2017 to 2.9% in June. The September rate hike followed Bannister’s note, so as of this moment just one more hike would be sufficient to push the fed funds rate beyond neutral.

What Bannister said next was ominous:

…click on the above link to read the rest of the article…

By the Time the Fed Hits Its Goals, the Markets Will Be Crashing

September 20, 2018

By the Time the Fed Hits Its Goals, the Markets Will Be Crashing

The Powell Fed has set one goal and one goal only for its policy…

Hitting the “neutral rate of interest.”

The neutral rate of interest is when the Fed has rates equal to the pace of inflation. While this is technicallywhat the Fed is SUPPOSED to be doing, NO Fed (or any other Central Bank for that matter) has done it in over 30 years: the Greenspan, Bernanke, and Yellen Feds were all notorious for running “accommodative” policy in which rates were kept well BELOW the rate of inflation.

Indeed, if you had to summate Fed policy from 1987 to 2018, the best word would be “accommodative.” It is not coincidental that this time period coincided with serial bubbles in the financial markets. This was done intentionally by Alan Greenspan, Ben Bernanke, and Janet Yellen.

Not Jerome Powell. During his July Q&A session with Congress in July, Fed Chair Powell emphasized that the most important focus for the Fed under his leadership would be “a neutral rate of interest.”

In answering a question [concerning the yield curve flattening] from Senator Pat Toomey of Pennsylvania, Powell said that, in his view, “What really matters is what the neutral rate of interest is.” And perhaps longer-term Treasury yields send a message about that rate.

Source: Bloomberg

I initially thought this was Powell playing to Congress (for 30+ years Fed Chairs have simply told Congress what it wanted to hear during their testimony). However, since that time, the Powell Fed has made it 100% clear that it did in fact WANT neutral rates.

Last month, Dallas Fed President Robert Kaplan outlined this in no uncertain terms.

…click on the above link to read the rest of the article…

When The U.S. Stock Market Crashes, Buy Gold – David Brady

September 15, 2018

When The U.S. Stock Market Crashes, Buy Gold – David Brady

While we wait for news on the 25% tariffs on $200bln or 40% of Chinese exports to the U.S.—and with the threat of the same on the remaining ~$300bln to follow—I want to outline the endgame for the dollar and the likely beginning of the explosive rally for Gold.

Simply put: When the U.S. stock market crashes, buy Gold.

To be more specific: when the S&P 500 has fallen 20-30%, buy Gold, in my opinion, because the ‘Fed Put’ will soon be exercised at that point. The Fed will reverse policy to stimulus on steroids. The dollar rallied from April 2008 and peaked in March 2009, when stocks bottomed out—the same time the Fed announced QE, or QE1 as we now know it. Then the dollar fell. It is not unreasonable to expect the same to happen this time around. Gold bottomed out in October 2008, as stocks plummeted and then soared 280% to greater than 1900 over the next three years, as QE1 and QE2 were underway.

The coming crash in the U.S. stock market is the catalyst for the Fed’s reversal in policy, so why do I expect a crash?

Quantitative Tightening and Budget Deficits

Lee Adler pointed out several weeks ago that as the budget deficit soars, Treasury bond issuance is increasing by around $100bln per month. At the same time, the Fed is increasing its balance sheet reduction, or “QT” program, to $50bln a month in October, a run-rate of $600bln per year. That means $150bln of additional demand for U.S. Treasuries is required every month.

…click on the above link to read the rest of the article…

David Stockman: The World Economy Is At An Epochal Pivot

August 14, 2018

Shutterstock

David Stockman: The World Economy Is At An Epochal Pivot

A ‘Great Reset’ approaches

David Stockman warns that the global economy has reached an “epochal pivot”, a moment when the false prosperity created from $trillions in printed money by the world’s central banks lurches violently into reverse.

There are few people alive who understand the global economy and its (mis)management better than David Stockman — former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier — which is why his perspective is not to be dismissed lightly. He knows intimately how how our political and financial systems work, as well as what their vulnerabilities are.

And Stockman thinks the top for the current asset price bubble era is in — specificially, he thinks it hit its apex in January 2018. As this “Everything Bubble” prepares to burst, Stockman estimates the risk of economic crisis is as great, if not greater than, the 2008 Great Financial Crisis because of the radical and unsustainable monetary policy expansion the central banks have pursued over the past decade.

This has caused the prices of stocks, bonds, real estate and most other assets to appreciate at rates that have no basis in the ongoing income/cash flow of the global economy. In short, they are wildly overvalued.

A key condition that Stockman has been waiting to see, that serves as a signal the bubble’s bursting is nigh, is the concentration of speculative capital into fewer and fewer stocks as the “good” options for investors shrink. We now clearly see this in the FAANG complex (a topic covered in detail in our recent report The FAANG-nary In The Coal Mine)

Stockman’s main warning is that there’s no bid underneath this market — that when perception shifts from greed to fear, the bottom is much farther down than most investors realize. In his words, it’s “rigged for implosion”.

…click on the above link to read the rest of the article…

The Rigged Stock Market Is Guaranteed to Crash Again, But When?

May 23, 2018

The Rigged Stock Market Is Guaranteed to Crash Again, But When?

In this podcast, I talk about monetary policy as a whole – why I think its insane and why our current policy ensures that we are going to have another financial crisis much larger than the one we had in 2008. I talk about how the Fed is making problems worse by selectively bailing out companies and I give examples of actual free markets. If the stock market is just guaranteed to always go up and guys like Warren Buffett predict the Dow is just going to keep going to 1,000,000, is that really a market – or is it one of the biggest long cons in history? Hint: it’s the latter.

Why Gold & Silver Won’t Crash Along With The Stock Markets

April 30, 2018

Why Gold & Silver Won’t Crash Along With The Stock Markets

When it comes to what happens during the next major market correction-crash, we can count on that “this time will be different” for the gold and silver prices. While many precious metals investors believe that gold and silver will crash along with the broader markets, the charts and data suggest the opposite.

In my newest video, Why Gold & Silver Won’t Crash Along With The Stock Markets, I provide charts and updated information on the break-even analysis of the primary gold and silver mining industry. According to my research, the gold market price has not fallen below the production cost of the top gold miners in the past two decades.

Some analysts, such as Harry Dent, believe the gold price will fall to $700 this year. Dent reconfirmed his forecast in the following article, Why We Are Heading Toward $700 Gold In 2018:

Investors are fleeing to gold in a desperate attempt to weather the recent market volatility… but is this long time “safe-haven” actually poised to collapse wiping out trillions of dollars of wealth in the process?

While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise. I’ve never been more certain of anything in over 30 years of economic forecasting.

Market volatility, worries over the Europe Central Bank, negative interest rates, and China are among a laundry list of events that are driving panicked masses to buy the yellow metal. But this is only inflating the gold bubble that is poised to pop at any moment.

Mr. Dent states the due to the current market volatility, worries over Central banks, negative interest rates, and fears about China’s massive credit bubble are driving investors into gold. BUT, according to Dent, this gold bubble is about to POP.

…click on the above link to read the rest of the article…

Risk-Aversion Meets a Hypervalued Market

April 11, 2018

Risk-Aversion Meets a Hypervalued Market

Sooner or later a crash is coming, and it may be terrific.
– Roger Babson, September 5, 1929

Roger Babson’s first rule of investing was “keep speculation and investments separate.” He is remembered not only for founding Babson College in Massachusetts, but also for his speech at the National Business Conference, warning of an impending crash just two days after the 1929 peak, at the very beginning of a decline that would wipe out 89% of the value of the Dow Jones Industrial Average.

As I’ve observed before, the back-story is that Babson’s presentation began as follows: “I’m about to repeat what I said at this time last year, and the year before…” The fact is that Babson had been “proven wrong” by an advance that had taken stocks relentlessly higher, doubling during those two preceding years. Over the next 10 weeks, all of those market gains would be erased. If Babson was “too early,” it certainly didn’t matter. From the low of the 1929 plunge, the stock market would then lose an additional 79% of its value by its eventual bottom in 1932 because of add-on policy errors that resulted in the Great Depression.

To slightly paraphrase Ben Hunt, how does something go down 90%? First it goes down 50%, then it goes down 80% more.

This lesson has been repeated, to varying degrees, at every market extreme across history. For example, the 1973-1974 decline wiped out the entire excess total return of the S&P 500 Index (market returns over and above T-bill returns) all the way back to October 1958. The 2000-2002 market decline wiped out the entire excess total return of the S&P 500 Index all the way back to May 1996. The 2007-2009 market decline wiped out the entire excess total return of the S&P 500 Index all the way back to June 1995. I expect that the completion of the current market cycle will wipe out the entire excess total return of the S&P 500 Index all the way back to about October 1997.

…click on the above link to read the rest of the article…

Stocks Post WORST April Start Since The Great Depression

April 4, 2018

Stocks Post WORST April Start Since The Great Depression

The S&P 500 closed down more than 2.4% Monday and the broad market index posted its worst April start since 1929. This slide in the markets caused the worst start since the Great Depression, sparking fears we are on the same path.

The Dow Jones industrial average fell 1.9 percent (or 458 points) as China’s retaliatory tariffs against United States agricultural goods stoked fears of a global trade war. Dow stocks with large international markets now exposed to global tariffs such as Boeing and 3M, led the decliners.

Many market analysts have predicted we will live through another Great Depression,and Peter Schiff says this next one will be far worse than one our ancestors lived through. “The bad news is, we are going to live through another Great Depression and it’s going to be very different. This will be in many ways, much much worse, than what people had to endure during the Great Depression,” Schiff says. “This is going to be a dollar crisis.”

“The Fed thinks they create economic growth…by [saying] ‘let’s jack up the stock market and then the economy’s going to grow and people are going to go out and spend more money.,’” says Schiff. “It’s actually doing damage. If you create a bunch of phony wealth, and people end up spending money that they otherwise would have saved, you are undermining economic growth.”

And Schiff, who accurately predicted the 2008 recession, has now predicted the dollar crisis. The dollar is now in a downward spiral thanks to China’s petro-Yuan.

Bespoke Investments Co-Founder Justin Walters, who also noted the historic nature of the close, said in an email that equity fears aren’t likely to abate until earnings arrive. “Based on recent market action, the bears clearly have control right now,” Walters wrote. “The path of least resistance is lower until something comes along to reverse that trend.”

…click on the above link to read the rest of the article…

What Kind of Hyper-Enthusiastic Market is this that Blindly Keeps Pursuing Scams to Make a Fortune Overnight, even if They Already Crashed the First Time?

April 3, 2018

What Kind of Hyper-Enthusiastic Market is this that Blindly Keeps Pursuing Scams to Make a Fortune Overnight, even if They Already Crashed the First Time?

It’ll take many more sell-offs and the collapse of many more iffy stocks before this hyper-enthusiasm, after nine years of central bank nurturing, is finally wrung out of the market.

Shares of “blockchain” company LongFin (LFIN) plunged 17% today to $14.31, the sixth trading day in a row of plunges. Intraday on Friday, March 23, shares still traded at $73. The astonishing thing isn’t that they’ve plunged 81% over those six trading days, but that they had more than doubled over the prior two weeks, and that they’re still trading above penny-stock status to begin with.

LFIN started trading on December 13, following their IPO. On December 15, LongFin announced – with what I called it “a mix of gobbledygook, hype, and silliness” – that it had acquired a “Blockchain-empowered solutions provider,” namely a website that belonged to a Singapore corporation that is 95% owned by Longfin’s CEO and chairman.

Though neither the announcement nor the transaction passed the smell-test, shares skyrocketed 2,700% to an intraday high of $142.55 on December 18, giving it a market cap of $7 billion and making it the role model for a bevy of other “blockchain” companies. Then, as stock jockeys grappled with reality, shares plunged. As did the shares of other “blockchain” companies.

But then on March 12, it started all over again, when index provide FTSE Russell announced that LongFin would be added to some of its indices, including the widely-tracked Russell 2000, effective March 16:

Then all kinds of things happened.

On March 26, short-seller Citron Research tweeted: “If you are fortunate enough to get a borrow, indeed $LFIN is a pure stock scheme. @sec_enforcement should not be far behind. Filings and press releases are riddled with inaccuracies and fraud.”

…click on the above link to read the rest of the article…

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