In Part One of this article I discussed the similarities between the Roman Empire and the American Empire at a high level. In this article I’ll delve into some specific similarities and rhymes between the fall of the Roman Empire and our modern day empire of debt, decay and decline. I’ll address our expansive level of bread and circuses and how defects in our human nature lead to people willingly sacrificing their liberty for promises of safety and security. All empires decline due to the same human failings and ours is no exception. If anything, ours will be far more spectacular and rapid due to our extreme level of hubris, arrogance, willful ignorance and warlike preference for dealing with foreign powers.
It seems there were a few visionary thinkers in the late 1950s who foresaw the dire course our former Republic was setting. Their writings were a prophecy and a warning. There was still time to change course and avoid the pitfalls that led to the Roman Empire collapse. In Brave New World Revisited, Aldous Huxley warned against allowing a few amoral men using propaganda, scientific advancements, technology, brainwashing, and economics to control and manipulate a willfully ignorant populace into a dystopian dictatorship. The Soviet and Chinese dictatorships of the late 1950s are long gone, but Huxley foresaw how modern propaganda techniques would be used by the state to drown the masses in a sea of triviality, irrelevance, and consumerism. ‘In their propaganda today’s dictators rely for the most part on repetition, suppression and rationalization – the repetition of catchwords which they wish to be accepted as true, the suppression of facts which they wish to be ignored, the arousal and rationalization of passions which may be used in the interests of the Party or the State. As the art and science of manipulation come to be better understood, the dictators of the future will doubtless learn to combine these techniques with the non-stop distractions which, in the West, are now threatening to drown in a sea of irrelevance the rational propaganda essential to the maintenance of individual liberty and the survival of democratic institutions.’
Another man of vision was President Dwight D. Eisenhower. As someone who understood the military industrial complex and the world of politics and power, he knew the danger of allowing the arms industry to dictate the foreign policy of the country. Maintaining a military empire bankrupted Rome and it is bankrupting the American empire. Eisenhower’s warning was unheeded.

This post was published at The Burning Platform on 9th November.

Where Will Risk Erupt This Time?

So where has all the risk pooled up in the system? In foreign exchange (FX) markets, that’s where.
One of the precepts of this blog is that risk cannot be disappeared, it can only be transferred or temporarily hidden from view. This runs counter to modern portfolio management, which holds that all risks can be hedged with counterparty-issued securities, i.e. options, futures contracts, derivatives, etc. This also runs counter to the Central Banking Cargo Cult, which holds that any eruption of risk can be smothered by the unlimited liquidity spewed by omnipotent central banks. There are several problems with the notion that risk can always be neutralized with counterparty securities and/or central bank liquidity. The first is fundamental. As mathematician Benoit Mandelbrot showed in his seminal book The (Mis)behavior of Markets, risk is a feature of all markets. As a result of their fractal nature, risk cannot be eliminated, and claims that risk has been eliminated will fail catastrophically.
In other words, precisely what happened in 2008-2009, when all the “low-risk” trades blew up and nearly took the global financial system down. The second reason has to do with the failure of conventional models to assess tail risk. As former Federal Reserve chairman Alan Greenspan confessed in Foreign Affairs, Why I Didn’t See the Crisis Coming, the Fed’s models failed to accurately account for tail risk (otherwise known as things that supposedly happen only rarely but when they do happen, they’re a doozy), because guess what–they happen far more often than statistical models predict.

This post was published at Charles Hugh Smith on NOVEMBER 09, 2014.

What Stocks Say About The State Of The Global Economy, In Two Charts

The following two charts cut right through the headline propaganda and show all there is to know about the state of the global economy.
The first is a chart of Global Cyclical stocks (Goldman ticker GSSBGCYC). The second shows Global Defensives (Goldman ticker GSSBGDEF). The resulting picture is worth 1000 Op-Eds welcoming you to yet another “global recovery.”

Good luck to the US as the “decoupled source” of all global growth in the coming year.

This post was published at Zero Hedge on 11/09/2014.


Is silver undervalued, widely ignored, and intriguing?
Are these price levels the opportunity that precious metals investors have been waiting for? Is the time now?
For many so-called “silverbugs” the answer is “yes.”
Predicting price movements is not a smart thing to do, because you’re probably going to be wrong. But there is a lot of data which can suggest overarching trends to help you decide your next course of action.
Silver right now is selling for less than 50% of its 2011 high of about $49. Yet, nobody is talking about silver. The devil’s metal does not get the media attention gold does. This might be a buying signal.
Prices for silver fell in the wake of the US election presumably on the assumption that Republicans would introduce more responsible fiscal policies. This assumption is flawed as Republican policies are not that much more “fiscally responsible” than Democrats. They don’t spend less. They just spend differently.
Fiat printing is the status quo for many nations, not just the US, as Japan recently announced their own QE, Europe debates their own, and generally many nation’s have embarked upon their own money printing policies.

This post was published at Dollar Vigilante on NOVEMBER 9, 2014.

China Aims For Official Gold Reserves At 8500 Tonnes

China should accumulate 8,500 tonnes in official gold reserves, more than the US, according to Song Xin, President of the China Gold Association, General Manager of the China National Gold Group Corporation and Party Secretary. He wrote this in an opinion editorial published on Sina Finance July 30, 2014. Gold is money par excellence in all circumstances and will help support the renminbi to become an international currency as ‘gold forms the very material basis for modern fiat currencies’, Song notes. In the short term the Chinese will not back the renminbi with gold (establish a fixed renminbi price for gold), but
The previous President of the China Gold Association (CGA), Sun Zhaoxue, was also the General Manager of the China National Gold Group Corporation, these jobs are apparently connected. Song took over from Sun as CGA President and Manager of China National Gold in February 2014. Remarkably, when Sun was in office he wrote equally candid articles (in Chinese) about the importance of gold for China’s economy. Sun’s most renowned article is titled ‘Building A Strong Economic And Financial Security Barrier For China’, published on August 1, 2012, in Qiushi magazine, the main academic journal of the Chinese Communist Party’s Central Committee (click here for a translated version). From Sun:
The state will need to elevate gold to an equal strategic resource as oil. Currently, there are more and more people recognizing that the ‘gold is useless’ story contains too many lies. Gold now suffers from a ‘smokescreen’ designed by the US, which stores 74% of global official gold reserves, to put down other currencies and maintain the US Dollar hegemony. Going to the source, the rise of the US dollar and British pound, and later the euro currency, from a single country currency to a global or regional currency was supported by their huge gold reserves.
Individual investment demand is an important component of China’s gold reserve system, we should encourage individual investment demand for gold. Practice shows that gold possession by citizens is an effective supplement to national reserves and is very important to national financial security.

This post was published at Zero Hedge on 11/09/2014.

Chinese Yuan Fix Drops By Most Since End Of QE1, Strongest Since March

Following Friday’s notable weakness in USDCNY (the biggest drop in the market rate since March and an abrupt change of recent trend), and trade data this weekend, the PBOC appears to have decided to try and put a stop to any weakness and smashed the USDCNY Fix lower by 0.37% – its biggest ‘stronger CNY’ adjustment since 2010 – when the Fed initially ended QE1 (and 2nd biggest shift since Lehman). Of course, we are sure it is nothing but a storm in a teacup that the largest economy in the world just re-valued its currrency fix by the most in 4 years… just days after the end of QE3 and the BoJ’s insanity… but as we warned previously, “we think that for China in particular this latest BoJ action is perceived as an aggressive provocation that must be responded to forcefully.” We note also that Japan’s Abe and China’s Xi are due to meet on Wednesday and perhaps this is a tactical move in that chess game.
Biggest strengthening shift in USDCNY fix since the end of QE1

This post was published at Zero Hedge on 11/09/2014.

And The Biggest “Source Of Equity Demand In Recent Years”, According To Goldman Sachs, Is…

Spoiler alert: it’s not the Fed, even though the portfolio rebalancing channel courtesy of a $4.5 trillion Fed balance sheet certainly assured that the artificially inflated bubble in stocks, as a result of the Fed’s own purchases of bonds, is unlike anything seen before (and to all those debating whether the bubble is in bonds or stocks, here is the answer: it is in both).
The answer, according to Goldman’s David Kostin is the following: “From a strategic perspective, buybacks have been the largest source of overall US equity demand in recent years.”
In other words, not only has the Fed made a mockery of fundamentals, the resulting ZIRP tsunami means that corporations can issue nearly-unlimited debt to yield chasing “advisors” managing other people’s money, and use it to buyback vast amounts of stock, which brings us to the latest aberation of the New Abnormal: the “Pull the S&P up by the Bootstaps” market, in which the only relevant question is which company can buyback the most of its own stock.

This post was published at Zero Hedge on 11/09/2014.

Catalanstrophe – 81% Of 2.25 Million Voters Choose Independence; Government Responds: “Useless Sham”

Prime Minister Mariano Rajoy has a problem. Despite his best legal and propoganda defenses (and harsh weather conditions) today’s symbolioc vote for Catalonia independence proceeded… and the initial results (with 88% of the vote counted) are in:
*TURNOUT IN CATALAN BALLOT WAS ABT 2.25 MLN, GOVT SAYS *81% BACK INDEPENDENCE IN CATALAN BALLOT The Spanish government is saying the “data is not valid” and is investigating the illegal ballot calling it a“useless sham.” Catalan President Mas says pro-independence parties will meet this week to put pressure on Madrid.

This post was published at Zero Hedge on 11/09/2014.

This Is What Happens When Trying To Get To The Bottom Of The UBS Gold-Rigging Scandal

As reported previously, and as had been suspected for years, the gold manipulation cartel is slowly breaking apart, and courtesy of the FT, we now know at least one individual directly implicated in Swiss gold-rigging: the former head of UBS’s gold desk in Zurich, Andr Flotron.
So as part of our diligence, because apparently no other media will touch the topic of gold rigging until and unless it is shoved in their face on a, ahem, silver platter, because after all the subject matter is just too “conspiratorial”, we decided to ask Mr. Flotron some on the record questions, and sent him the following email:
Andre, we are following up on the FT’s gold rigging story and were wondering if we could ask you a few follow up questions on the record? This is the response we got:
From: <[email protected]> Date: 9 November 2014 17:47:12 WET
Subject: Out of Office AutoReply:
Dear sender,
I am no longer responsible for your inquiry. Please refer to Roger Bhler ([email protected])
Best regards,
Andr Flotron

This post was published at Zero Hedge on 11/09/2014.

Low wage jobs dominate as waiters and bartenders will soon outnumber manufacturing jobs: Latest jobs report highlights continuing trend in low wage employment.

The trend to low wage employment continues as the latest jobs report shows that wages are being eroded by inflation. Of course, the public is told that inflation is muted but simply looking at your paycheck versus housing costs, healthcare costs, and food would tell you a different story. Americans went to vote with economic frustration in their hearts. That was the guiding energy driving the electorate. The vast majority are frustrated with the current state of the economy contrary to a record in the stock market which is largely going to a very small portion of our population. People want good jobs. Good jobs are truly at the essence of the middle class. So it should not come as a surprise that we will soon have more waiters and bartenders than actual manufacturing workers. Those that serve drinks to calm away the struggles of a tough economy are in high demand apparently.
Manufacturing and food services
The loss of the U. S. manufacturing sector can be felt deeply across the nation. In places like the Rust Belt it is directly in your face. Old factories line the landscape as if out of an apocalypse film. People once living as middle class now struggle to get by to pay basic bills. Good paying jobs with benefits are eliminated and are filled with lower paying jobs that have absolutely no benefits.
Take a look at this ominous trend. We will soon have more waiters and bartenders than actual manufacturing workers:

This post was published at MyBudget360 on November 9, 2014.

What The Swiss Gold Referendum Means For Gold Demand

The referendum for the Swiss Gold Initiative is scheduled for November 30th and the propaganda war – between the Swiss National Bank (SNB) and the Swiss Parliament on one side and the Swiss People’s Party (SVP) on the other – has begun and we expect it to escalate as the day draws ever nearer. Having alreadyquestioned the ‘location, location, location’ of Switzerland’s current gold stash, and examined the initiative in great depth here, JPMorgan notes that not only might the forthcoming Swiss gold referendum stabilize gold prices at a time when Gold ETF demand continues to decline, but warns, it also appears that markets under-appreciate this event.
As JPMorgan explains,
Gold ETF flows continued to bleed losing $4bn or 6% of AUM cumulatively since the end of August.

This post was published at Zero Hedge on 11/09/2014 –.

Republicans “Extremely Concerned” At Mel Watt’s Taxpayer-Backed Risky-Home-Loan Reforms

When we commented on Mel Watt’s Einsteinianly-insane plans to reform FHFA, allowing bad creditors to buy houses (again) with only 3% down-payments (again), we expected nothing but echoes as the”it’s everyone’s ‘right’ to own a home”-meme gets played out for all to see in this goldfish-like societal memory that has entirely lobotomized the actions (and impact) of when this idiocy was trued before. However, a funny thing happened this week… called an ‘election’. And The Republicans have been quick to take note of Obama-appointee Mel Watt’s (replacing acting director Ed Demarco – who had some less-politik plans for real reform) plans with House Financial Services Committee Chairman Jeb Hensarling exclaiming he was “extremely concerned,” about Watt’s “efforts to force taxpayers to back high-risk mortgages with ultra-low down payments,” concluding this plan “must be rejected.”
Excerpts from Mel Watt’s remarks….
Demand in today’s market is also limited by former homeowners who found themselves unable to keep up with their mortgage payments during the financial crisis, including many who lost their jobs during the recession or faced reductions in their income. Many of these individuals not only lost their homes, but also seriously damaged their credit. Many filed for bankruptcy. Although some of them may be back on their feet in terms of income, their impaired credit records constrain their ability to return to homeownership.

This post was published at Zero Hedge on 11/09/2014.


Friday gave us a rare glimpse inside one of the Bureau of Labor Statistics Jobs Centers (courtesy of CNBC)… Perhaps, as the following screengrab indicates, this is why the American unemployed’s “re-training” is not preparing them for life in the new economy?
In the new normal, the ubiquitous BSOD is officially to be renamed the BLSOD…

This post was published at Zero Hedge on 11/09/2014.

Catalan Leaders Defy Madrid, Hold Independence Referendum

On Tuesday, Spain’s highest court suspended the Catalan independence vote in response to a legal challenge filed by prime minister Mariano Rajoy’s government in Madrid.
In defiance of that constitutional ruling and vows from Madrid the vote would not take place, it did. Millions voted and the results will likely be for independence.
The Financial Times reports Catalan Leaders Hope Poll Turnout Will Send Independence Signal.
Millions of Catalans took part in a symbolic vote on the political future of the northern Spanish region on Sunday, in the biggest show of strength yet for Catalonia’s increasingly vocal independence campaign.
The poll was held in the face of fierce opposition from the Spanish government, and despite a constitutional court ruling last week to suspend the exercise. Results due to be published on Monday are expected to show an overwhelming majority in favour of independence. Most anti-independence parties were opposed to the poll.
Voter turn-out by 6pm, with voting stations set to remain open for another two hours, was thought to be high – significantly more than have attended even the largest independence rallies to date. Catalonia has a population of 7.5m, of whom 5.4m are eligible to vote.

This post was published at Global Economic Analysis on November 09, 2014.

Trick Quickly Reveals Stock Price Manipulation

It can be fascinating, yet horribly frustrating, to realize that stock prices are not a mathematical function. If stock spices behaved as a mathematical function, there would be only one outcome for a given set of conditions. For example, if a stock price fell to the 200-day simple moving average, and always moved higher immediately afterward; the bounce higher would be a function of the simple moving average.
Output is, in reality not a function of input for stock prices. Stock prices are always stochastic no matter how deterministic their appearance.
While it is true that there are times that stock prices tend to behave as a function of certain technical indicators, there are also times when those technical indicators fail miserably. No technical indicator works 100% of the time. If it did, there would be no need for human involvement in the stock market; computers could handle every trade with 100% efficiency.
In fact, it is quite possible that 100% efficiency would eventually lead to one huge stalemate, in which no computer could gain an edge over another, and all trading would cease as if in the middle of an un-winnable chess game. Thus, the fact that trading has not yet reached such a stalemate justifies the conclusion that the stock market is not yet 100% efficient. As such, human interaction still plays a role, and it will continue to play a role as long as prices remain stochastic and not deterministic.
The emotional aspect of human interaction is important; greed and fear still have a measurable and noticeable effect on stock prices. After all, the effect of human emotions is why indicators such as the S&P 500 Volatility Index (the VIX) are ubiquitous these days. The effect of emotion, as big as it is, is sometimes overshadowed by the effect of price manipulation.

This post was published at ZenTrader on November 9, 2014.

The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn't take it anymore. 
"It was like watching an old lady get mugged on the street," she says. "I thought, 'I can't sit by any longer.'" 
Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She's had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.
Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

This post was published at RollingStone

Rhode Island Man Nearly Wins Governor’s Race With $35 Campaign

Thirty-five dollars can barely buy a tank of gas in the current economic climate, but Bob Healey, a Rhode Island man who ran for governor this week during Tuesday’s midterm election, arguably got more bang for his buck than one would expect .
Healey didn’t technically win this week’s gubernatorial race in Rhode Island, but did end up garnering nearly a quarter of the total votes cast in that state’s big election on Tuesday, and with hardly much monkey, to say the least.
Despite spending only $35.31 on his campaign for governor, the Moderate Party candidate received 67,707 votes during this week’s election, or around 22 percent of all ballots combined.
It’s amazing what $35 can do,’ Healey told Eyewitness News on Wednesday. ‘As I’ve been saying, if we only spent $75, $80, we might’ve won the race.’

This post was published at The Daily Sheeple on November 9th, 2014.