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Mauldin: We Are On The Brink Of The Second “Great Depression.”
Mauldin: We Are On The Brink Of The Second “Great Depression.”
You really need to watch this video of a recent conversation between Ray Dalio and Paul Tudor Jones. Their part is about the first 40 minutes.
In this video, Ray highlights some problematic similarities between our times and the 1930s. Both feature:
- a large wealth gap
- the absence of effective monetary policy
- a change in the world order, in this case the rise of China and the potential for trade wars/technology wars/capital wars.
He threw in a few quick comments as their time was running out, alluding to the potential for the end of the world reserve system and the collapse of fiat monetary regimes.
Maybe it was in his rush to finish as their time is drawing to a close, but it certainly sounded a more challenging tone than I have seen in his writings.
Currency Wars
It brought to mind an essay I read last week from my favorite central banker, former BIS Chief Economist William White.
He was warning about potential currency wars, aiming particularly at the US Treasury’s seeming desire for a weaker dollar. Ditto for other governments around the world. He believes this is a prescription for disaster.
One possibility is that it might lead to a disorderly end to the current dollar based regime, which is already under strain for a variety of both economic and geopolitical reasons. To destroy an old, admittedly suboptimal, regime without having prepared a replacement could prove very costly to trade and economic growth.
Perhaps even worse, conducting a currency war implies directing monetary policy to something other than domestic price stability. There ceases to be a domestic anchor to constrain the expansion of central bank balance sheets.
…click on the above link to read the rest of the article…
New COMEX Pledged Gold – Shrinking the Pool of Registered Inventory
New COMEX Pledged Gold – Shrinking the Pool of Registered Inventory
For those who have at times struggled to understand the difference between COMEX inventory categories ‘registered gold’ and ‘eligible gold’, now your head can spin even more, since the CME’s COMEX has just introduced a new category – ‘pledged gold’.
This pledged category was first noticed on the infamous COMEX warehouse gold stocks report late last week by Nick Laird of GoldChartsRUsfame, with the pledged gold column intriguingly populated with an entry next to the New York vault of bullion bank, HSBC. What did this pledged column entry mean, we wondered, and where did it come from?

After some digging on the CME website, the answer was revealed. Pledged is a new gold inventory category representing COMEX gold warrants which have been deposited with CME Clearing as performance bond collateral, in other words margin collateral. CME defines performance bonds as follows:
“Performance Bonds, also known as margins, are deposits held at CME Clearing to ensure that clearing members can meet their obligations to their customers and to CME Clearing.”
Before looking at how this relates to COMEX gold, a quick recap and some definitions are in order. Although COMEX gold futures rarely settle physically in gold, they are physically deliverable contracts which are capable of being settled in real gold. believe it or not. However in 2018, for example, COMEX gold deliveries totalled just 1.6 million ounces (51 tonnes), meaning that 99.98% of COMEX gold futures did not result in physical delivery, a Ponzi scheme if ever there was one.
But since 0.02% of COMEX gold futures do physically settle, at least by some shuffling of warrants between bullion banks, the CME has therefore approved the vaulting facilities operated by nine vault providers in and around New York City and Delaware, which it refers to as depositories or approved warehouses, which can store gold that can be used for contract settlement.
…click on the above link to read the rest of the article…
Central Bank Hints at a “Big Reset” and Reveals a Possible Solution

Central Bank Hints at a “Big Reset” and Reveals a Possible Solution
It’s not every day you hear a major financial institution hint at the possibility of the entire economic system collapsing.
The reason major financial institutions (and the mainstream financial media) shy away from a negative outlook on the economy is out of fear of triggering a kind of “self-fulfilling prophecy.” People stampeding to sell stocks and pull money out of banks could cause a vicious cycle of declines and losses.
And so these institutions tend to be positive, no matter what is really happening. But if a hungry bear is standing behind you in the woods, do you want to be “optimistic” and hope it isn’t there?
Maybe reality has finally started to sink in. Zero Hedge captured the stark state of the “system” by quoting an article from the Dutch Central Bank:
An article published by the De Nederlandsche Bank (DNB), or Dutch Central Bank, has shocked many with its claim that “if the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.”
After a part of the international banking system states the words “if the system collapses”, the obvious question to ask is:
Do they think the system will actually collapse?
Of course, it’s hard to tell exactly what will happen, and when.
That said, the DNB is moving about 31% of their gold to a military facility. They stated, “The Dutch central bank is moving part of the national gold reserves to a temporary home in Haarlem ahead of a permanent move to the new DNB Cash Centre at military premises in Zeist.”
…click on the above link to read the rest of the article…
Start thinking about silver before it becomes popular again

Start thinking about silver before it becomes popular again
In 663 BC, King Ashurbanipal of the Assyrian Empire invaded Egypt and sacked the city of Waset (located in modern day Luxor on the Nile River).
Ashurbanipal vanquished the city, purportedly seizing more than 75 metric tons of silver for his personal collection.
At the time in the ancient world, the prevailing ratio between gold and silver was 1:2. In other words, 75 metric tons (= 75,000 kilograms) of silver was worth 37,500 kilograms of gold, equal to $1.76 billion in today’s money.
That 1:2 gold/silver ratio had held for thousands of years across Persia, Mesopotamia, and Ancient Egypt, possibly since as early as 3,000 BC.
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But over time it has changed periodically.
By the time of Alexander the Great in the 300s BC, the Gold/Silver ratio had shifted to 1:13. Mining techniques had advanced at that point, so the ancients were able to produce higher volumes of silver than ever before.
Under Julius Caesar in Ancient Rome, one ounce of gold was worth 12 ounces of silver. In the time of Mohammed and the early days of the Islamic Caliphate in the 600s, the ratio was 1:16.
Even in the early history of the United States, the Mint and Coinage Act of 1792 established a gold/silver ratio 1:15.
(According to the law, one US dollar is defined as 1.604 grams of pure gold, or 24.1 grams of pure silver. So those pieces of paper in your wallet are not technically US dollars, but ‘Federal Reserve Notes’.)
In our modern times, the ratio average is around 55 ounces of silver per ounce of gold.
…click on the above link to read the rest of the article…
Central Bank Issues Stunning Warning: “If The Entire System Collapses, Gold Will Be Needed To Start Over”
Central Bank Issues Stunning Warning: “If The Entire System Collapses, Gold Will Be Needed To Start Over”
It’s not just “tinfoil blogs” who (for the past 11 years) have been warning that a monetary reset is inevitable and the only viable fallback option once trust and faith in fiat is lost, is a gold standard (something which even Mark Carney hinted at recently): central banks are joining the doom parade now too.
An article published by the De Nederlandsche Bank (DNB), or Dutch Central Bank, has shocked many with its claim that “if the entire system collapses, the gold stock provides a collateral to start over.”

Wow
Dutch National Bank goes ‘Big Reset’:
‘Aandelen, obligaties en ander waardepapier: aan alles zit een risico [..] Als het hele systeem instort, biedt de goudvoorraad een onderpand om opnieuw te beginnen. Goud geeft vertrouwen in de kracht van de balans van de centrale bank’.
While gloomy predictions of a monetary reset are hardly new, they have traditionally been relegated to the fringe of mainstream financial thought – after all, as Mario Draghi stated on several occasions in recent years, the mere contemplation of a “doomsday scenario” is enough to create the self-fulfilling prophecy which materializes it. As such, it is stunning to see a mainstream financial institution open up about the superior value of limited supply, non-fiat, sound money assets. It is also hypocritical given the diametrically opposed Keynesian practices regularly engaged in by central banks and official institutions worldwide: after all, just a few months back, the IMF published a paper bashing Germany’s adoption of the gold standard in the 1870s as the catalyst for instability in the global monetary system.
Fast forward to today, when the Dutch Central Bank is admitting not only did gold not destabilize the monetary system, but it will be its only savior when everything crashes.
…click on the above link to read the rest of the article…
China De-Dollarization Pushes Into Hyperdrive, Adds 100 Tons Of Gold Amid Trade War Chaos
China De-Dollarization Pushes Into Hyperdrive, Adds 100 Tons Of Gold Amid Trade War Chaos
As the trade war continues to escalate, China’s rapid move towards de-dollarization continues. China added more than 100 tons of gold to its reserves since December 2018 and has also been divesting US Treasuries.
Bloomberg reported the People’s Bank of China acquired 188,800 ounces, or about 5.9 tons of gold in Sept., raising total holdings to 62.64 million ounces in September from 62.45 million in August. Over the last nine months, China added a whopping 100 tons of gold to its reserves as a hedge to a deepening trade war.

Gold jumped to a six-year high in September as economic turmoil across the world is pointing to a global trade recession in 2020. Central banks have been leading buyers of the precious metal, especially ones based in emerging markets. Gold purchases by China and central banks will continue through 2020, Bloomberg notes, as protectionist policies spurred by the Trump administration have blown up global supply chains and will continue to produce volatility in global equity markets for the foreseeable future.
“Given strained relations with the US, China needs a hedge against its large holdings of the dollar, and gold serves that function,” said Howie Lee, an economist at Singapore-based Oversea-Chinese Banking Corp.
“As China becomes a superpower in its own right, I expect more gold-buying.”
Last month’s purchases boosted the People’s Bank of China’s gold reserves to 62.64 million ounces. As shown below, Comex Gold futures tend to rise when China is adding.

The Chinese continue to add gold to their reserves to reduce their exposure to the dollar. As one analyst told Bloomberg in August, “It is important for the country to diversify away from the US dollar. Over the long run, even relatively small-scale gold purchases add up and help to meet this objective.”
…click on the above link to read the rest of the article…
U.S. Constitutional Crisis? Not According to Gold Bullion
U.S. Constitutional Crisis? Not According to Gold Bullion

The system is collapsing, the markets are crashing, and gold and silver bullion are soaring higher, attempting to protect their investors from the impending doom about to befall us.
Or not.
The Mainstream Media is at it again, beating the war drum and attempting to rile up the people of the United States, the markets, and anyone else that will listen. After all, you’ve got to get those clicks.
The hubbub that I am referring to regards the ongoing “constitutional crisis” taking place in the United States even as I write this article.
A “whistleblower” in the Intelligence Community has stepped forward with damning information that he / she heard from a guy who knows a guy who knows for a fact that President Trump is attempting to circumvent the election process, big league.
Straying from tradition and in record-breaking fashion, the Trump administration released the transcripts of the supposed incident, which took place via phone call with the President of Ukraine. The “whistleblower” believes the President attempted to garner foreign interference in the upcoming 2020 elections by having Ukraine investigate Joe Biden and his son Hunter Biden.
This, of course, would be very concerning if true, even if there was undoubtedly some funny business that took place regarding Hunter’s “incident” while Vice-President Biden was in office.
To read more about the background surrounding this past event, I suggest Karl Rove’s recent Op-Ed that appeared in the WSJ this morning.
If all of these allegations were true, then you would expect that President Trump and his administration would go into immediate “lock down” mode, making it as difficult as possible for the opposition to investigate his “wrongdoings”. Which is what I believe both the Democratic Party and the MSM thought would happen.
…click on the above link to read the rest of the article…
The Silver Series: The Start of A New Gold-Silver Cycle (Part 1 of 3)
The Silver Series: The Start of A New Gold-Silver Cycle (Part 1 of 3)
The world has experienced a decade of growth fueled by record-low interest rates, a burgeoning money supply, and historic debt levels – but the good times only last so long.
As the global economy slows and eventually begins to retract, can precious metals offer a useful store of value to investors?
Part 1: The Start of a New Cycle
Today’s infographic comes to us from Endeavour Silver, and it outlines some key indicators that precede a coming gold-silver cycle in which exposure to hard assets may help to protect wealth.

Bankers Blowing Bubbles
Since 2008, central bankers around the world launched a historic market intervention by printing money and bailing out major banks. With cheap and abundant money, this strategy worked so well that it created a bull market in every sector — except for precious metals.
Stock markets, consumer lending, and property values surged. Meanwhile, the U.S. Federal Reserve’s assets ballooned, and so did corporate, government, and household debt. By 2018, total debt reached almost $250 trillion worldwide.
Currency vs. Precious Metals
The world awash in unprecedented amounts of currency, and these dollars chase a limited supply of goods. Historically speaking, it’s only a matter of time before the price of goods increases or inflates – eroding the purchasing power of every dollar.
Gold and silver are some of the only assets unaffected by inflation, retaining their value.
Gold and silver are money… everything else is credit.
– J.P. Morgan
The Perfect Story for a Gold-Silver Cycle?
Investors can use several indicators to gauge the beginning of the gold-silver cycle:
- Gold/Silver Futures
Most traders do not trade physical gold and silver, but paper contracts with the promise to buy at a future price. Every week, U.S. commodity exchanges publish the Commitment of Traders “COT” report. This report summarizes the positions (long/short) of traders for a particular commodity.
…click on the above link to read the rest of the article…