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The Next Big Geomagnetic Storm Poses An Astronomical Risk To Modern Man

Scientists are concerned about the next significant “space weather” event, which begins at the sun in the center of the solar system. Severe space weather occurs less frequently than traditional weather on Earth but can be more destructive in nature.

The sun is now headed towards a solar minimum, forecasted to arrive in 2019 as the Sun changes over from Solar Cycle 24 to Solar Cycle 25. The Sun goes through 11-year cycles, during which solar activity increases and decreases.

Tracking sunspot activity dates back to the start of the first solar cycle in 1755. Today, simple sketching and counting of sunspot numbers have given way to land-based and space-based technologies that continuously monitor the Sun.

Scientists have discovered that intense activity such as sunspots and solar flares generally subside during a solar minimum. Dean Pesnell of NASA’s Goddard Space Flight Center in Greenbelt, Maryland, said during a solar minimum, that does not mean the sun becomes dull.

He said solar activity simply changes.

For instance, Pesnell warned, “during a solar minimum, we can see the development of long-lived coronal holes.”

Coronal holes are large regions in the sun’s atmosphere where the sun’s magnetic field opens up and allows streams of solar particles known as coronal mass ejection (CME) to escape the sun as fast solar wind.

If the coronal hole is Earth-facing, then electrically charged particles from the Sun slam into Earth’s magnetic field and cause intense electromagnetic storms around the planet. The impact of these particles on the electronic infrastructure underlying modern industrial civilization can be devastating, said the Financial Times.

CMEs disrupt GPS, satellites, and astronauts currently in space. Even airline crew and passengers get a markedly higher dose of radiation during solar storms, especially during polar-crossing, trans-oceanic flights.

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

Fixing the Silver Fix : the Corruption Continues

Fixing the Silver Fix : the Corruption Continues

My name is Tommy Flanagan, and I’m a member of Pathological Liars Anonymous. In fact…I’m the president of that organization. Yeah, that’s who I am.

I didn’t always lie. No, I used to tell the truth. Then one day I told a lie, and I got away with it. Yeah, I told my parents that I had a brother that they had never met… 

-Jon-the-Liar Lovitz, The Johnny Carson Show, March 28, 1985

As the character Jon Lovitz explained on The Johnny Carson Show, lying is habit-forming. If perpetuated, it becomes compulsive conduct. Lying is a form of deviant behavior that (in the eyes of the liar) makes problems go away. Of course such problems never disappear permanently, because a lie can never solve anything. At some point the problem resurfaces, and because it never was addressed, often the problem has grown even larger.

The response from the liar is to tell another lie. But, because the problem is now almost inevitably larger, the new lie tends to be bigger or worse than the original. The process repeats. As the lies become larger and more numerous, eventually some of the new lies begin to openly contradict the old lies.

At this point, the proverbial “jig is up” for the liar. At least that is how things are supposed to work, as illustrated by the fable The Boy Who Cried Wolf. Which brings us to the “silver fix.”

The most obvious starting point is a question: why do we need a “silver fix”? In an era of electronic, instantaneous communication, and with (supposedly) “free and open markets,” why do we need someone to tell us what the price of silver is supposed to be at a particular moment in time? Why can’t market participants simply observe for themselves the current spot-price in our “free and open markets”?

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

Comex On The Edge? Paper Gold “Dilution” Hits A Record 124 For Every Ounce Of Physical

Comex On The Edge? Paper Gold “Dilution” Hits A Record 124 For Every Ounce Of Physical

Over the weekend, we got what was merely the latest confirmation that when it comes to sliding gold prices, consumer of physical gold just can’t get enough. As the Times of India reported over the weekend, India’s gold imports shot up by about 61 per cent to 155 tonnes in the first two months of the current fiscal “due to weak prices globally and the easing of restrictions by the Reserve Bank. In April-May of the last fiscal, gold imports had aggregated about 96 tonnes, an official said.”

This follows confirmations previously that with the price of gold sliding, physical demand has been through the roof, case in point: “US Mint Sells Most Physical Gold In Two Years On Same Day Gold Price Hits Five Year Low“, “Gold Bullion Demand Surges – Perth Mint and U.S. Mint Cannot Meet Demand“, “Gold Tumbles Despite UK Mint Seeing Europeans Rush To Buy Bullion” and so on. Indicatively, as of Friday, the US Mint had sold 170,000 ounces of gold bullion in July: the fifth highest on record, and we expect today’s month-end update to push that number even higher.

But while the dislocation between demand for physical and the price of paper gold has been extensively discussed here over the years, most recently in “Gold And The Silver Stand-Off: Is The Selling Of Paper Gold And Silver Finally Ending?”, something unexpected happened at the CME on Friday afternoon which may be the most important observation yet.

Recall that in the middle of 2013, in an extensive series of articles, we covered what was then a complete collapse in Comex vaulted holding of registered (i.e., deliverable) gold.  At the time the culprit was JPM, where for some still unexplained reason, the gold held in the newest Comex’ vault plunged by nearly 2 million ounces in just six short months.

 

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

The Tenth Man: Floor Monkeys and the Decentralization of Risk

The Tenth Man: Floor Monkeys and the Decentralization of Risk

As most of you know, I used to be a clerk on the floor of the old P. Coast options exchange in San Francisco. What a place. I could tell stories about that floor for weeks. The craziest things you ever heard.

But let’s keep it professional. The funny thing about a trading floor like the PCX (or the NYMEX, or the CME) is that you have winners and losers. You have big winners and big losers. You have people who blow themselves up. You have people who blow themselves up so spectacularly, they take a chunk out of their clearing firm.

In very rare cases a clearing firm has gone down. But never, ever has a public exchange, a clearinghouse, blown up. Never happened. Probably never will happen. I feel pretty comfortable making that prediction.

It was intended that way. Let’s say you have a crowd of 100 locals in a pit, and some hedge fund calls his broker with such a toxic trade that it blows up a few guys. But the risk is verydecentralized. One trader isn’t going to take out the exchange. Even a handful of traders aren’t going to take out the exchange.

The cool thing about public exchanges and open-outcry pits is that they take big risk and turn it into small risk. Which is pretty much the opposite of how we do things today—where we take small risk and turn it into big risk.

Liquidity Providers

The whole business of providing liquidity (which is what floor locals used to do) has changed a lot in the last 20 years.

That is the understatement of the century.

It’s what’s turned the NYSE from a bustling marketplace into a glorified TV studio. It’s what turned the AMEX, the old curb exchange, into… nothing. Not much left at the CME, except for some options pits in the grains and meats.

 

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

 

Banks Rig Treasury Market

Banks Rig Treasury Market

Boston’s public sector pension fund accuses all of the biggest US banks  – the so-called “primary dealers” which transact directly with the United States Treasury Department and “have a special obligation to ensure the efficient function” of the American treasury bond market – of colluding to manipulate the $12.5 trillion U.S. Treasury market.  The complaint alleges:

Defendants employed a two-pronged scheme to manipulate the Treasury securities market. First, Defendants used electronic chatrooms, instant messaging, and other electronic and telephonic methods to exchange confidential customer information, coordinate trading strategies, and increase the bid-ask spread in the when-issued market to inflate prices of Treasury securities they sold to the Class. Second, Defendants used the same means to rig the Treasury auction bidding process to deflate prices at which they bought Treasury securities to cover their pre-auction sales. Recent reports confirm that traders at some of these primary dealers “talked with counterparts at other banks via online chatrooms” and “swapped gossip about clients’ Treasury orders.

By engaging in this unlawful conduct, Defendants maximized the spread not only for transactions in the when-issued market, but also between their buy (auction) price and sell (when-issued) price.

***

This conduct lined the pockets of Defendants while raising prices to investors trading Treasury securities in the when-issued market, investors trading Treasury security-based futures and options, and investors transacting in instruments benchmarked to the prices of Treasury securities determined at auction, including certain bonds and other asset- backed securities and interest rate swaps.

Given the tight correlation between the Treasury securities prices in the spot market and futures markets, Defendants’ manipulation of the auction prices for Treasury securities also directly and proximately caused injury to individuals and entities that traded in Treasury futures and options on U.S. exchanges, including the Chicago Mercantile Exchange.

High-frequency trading has also long been used to manipulate the treasury market.

 

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

Sounding The Alarm On The Country’s Vulnerability To An EMP

Sounding The Alarm On The Country’s Vulnerability To An EMP

Establishment insiders are worried we’re too vulnerable

In the past here at Peak Prosperity, we’ve written extensively on the threat posed by a sustained loss of electrical grid power. More specifically, we’ve warned that the most damaging threat to our grid would come from either a manmade or natural electromagnetic pulse (EMP).

A good friend of mine, Jen Bawden, is currently sitting on a committee of notable political, security and defense experts  — which includes past and present members of Congress, ambassadors, CIA directors, and others — who are equally concerned about this same threat and have recently sent a letter to Obama pleading for action to protect the US grid.

Before we get to that letter, here’s a snippet from what we wrote on the matter roughly a year ago:

We talk a lot about Peak Cheap Oil as the Achilles’ heel of the exponential monetary model, but the real threat to the quality of our daily lives, if not our lives themselves, would be a sustained loss of electrical power. Anything over a week without power for any modern nation would be a serious problem.  A month would lead to chaos and many deaths.

When the power goes out, everything just stops. For residential users, even a few hours begins to intrude heavily as melting freezers, dying cell phones, and the awkward realization that we don’t remember how to play board games nudge us out of our comfort zone.

However, those are just small inconveniences.

For industrial and other heavy users, the impact of even a relatively short outage can be expensive or even ghastly. Hospitals and people on life-assisting machinery are especially vulnerable. Without power, aluminum smelters face the prospect of the molten ore solidifying in the channels from which it must be laboriously removed before operations can be restarted.

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

 

 

Olduvai IV: Courage
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