The COMEX vs. Private Gold & Silver Eagle Stocks

Investors need to realize that at some point, the highly leveraged Comex gold and silver paper trading exchange will no longer matter. Why, because future physical demand will totally overwhelm the paltry Comex precious metal inventories. This is not a question of ‘IF’, it’s only a question of ‘WHEN’.
Right now, most mainstream investors still have their eyes glued to CNBC hoping and praying that their and retirement accounts and paper investments don’t get flushed down the toilet. Unfortunately for these investors, man must still abide by the fundamental laws of nature, even though we can cheat the system for many years.
And… we are already seeing plenty of signs that the real fundamentals are finally kicking into high gear. According to the Zerohedge article, 400,000 Americans In Jeopardy As Giant Pension Fund Plans 50% Benefit Cuts:
After working 33 years, he’s facing a 55% cut to his pension benefits, a blow which he says will ‘cripple’ his family and imperil the livelihood of his two children, one of whom is in the fourth grade and one of whom is just entering high school.
Dorsey attended a town hall meeting in Kansas City on Tuesday where retirees turned out for a discussion on ‘massive’ pension cuts proposed by the Central States Pension Fund, which covers 400,000 participants, and which will almost certainly go broke within the next decade.
While this is only one small part of the United States, there are many pension plans across the country that are seriously underfunded. Regrettably, it will only get much worse going forward.

This post was published at SRSrocco Report on March 1, 2016.

The Helicopter Wolf at the Door

From Crazy to Crazier
Considering how often ‘helicopter money’ has been mentioned in the mainstream financial press of late, it is probably going to be on the agenda fairly soon. The always dependable Martin Wolf at the FT – who has never seen a printing press he didn’t think could solve all our economic problems – has come out forcefully in favor of the idea. See for instance his recent screed ‘The case for helicopter money’, followed by the promise – or rather, the threat – that ‘Helicopter drops might not be far away’.
What is truly funny is that Wolf actually argues that the money supply hasn’t grown enough! He is pointing to an esoteric money supply measure, so-called ‘divisia money’ – apparently he found the one and only ‘money supply’ measure that is coming to this absurd conclusion. However, money can be clearly defined and identified, and the true US money supply has increased by more than 120% since 2008 (this is to say, more money has been printed in the past 7 years than in the entire previous history of the modern fiat dollar). Here is Wolf:

This post was published at Acting-Man on March 2, 2016.

Moody’s Downgrades China’s Credit Outlook From Stable To Negative – Full Text

It is likely just a coincidence that just a month after we reported that China’s real consolidated debt/GDP was far greater than the 280% or so accepted conventionally, and was really up to 350% if not higher after the recent record loan issuance surge, moments ago Moody’s officially downgraded its outlook of China’s credit rating from stable to negative, citing three key risks:
The ongoing and prospective weakening of fiscal metrics, as reflected in rising government debt and in large and rising contingent liabilities on the government balance sheet; A continuing fall in reserve buffers due to capital outflows, which highlight policy, currency and growth risks; Uncertainty about the authorities’ capacity to implement reforms – given the scale of reform challenges – to address imbalances in the economy. While these were topical about a year ago for the financial media, and about 6 months ago for everyone else, we can’t help but notice that as expected Moody’s has said nothing at all about China’s biggest current risk factor – its collapsing labor market and surging unemployment. That’s ok, we are confident even the rating agencies will be up to speed with what we have been reporting since last November before the year is done.
Below is the full report:

This post was published at Zero Hedge on 03/01/2016.

Japan’s Negative Interest Rates Are Even Crazier Than They Sound

Yesterday Japan’s government borrowed money on terms that require the lenders to pay rather than receive interest for ten years. And not only was that bond issue snapped up, it was vastly oversubscribed. This raises a lot of questions, the chief being ‘why would anyone voluntarily commit to something that’s guaranteed to lose money for a decade?’
The short, obvious answer is that the world’s central banks are creating so much excess cash that there seems to be nowhere else for it to go. The longer, but way more interesting and scary explanation is that capitalism as it used to function is over, and the result will be catastrophic.
Here’s an overview of those Japanese bonds:

This post was published at DollarCollapse on March 1, 2016.

Prelude to a Bailout

Mexico’s biggest company, state-owned oil giant Pemex, notched up 13 consecutive quarters of rising losses and now faces the toughest test of its 78-year existence: staying alive.
Pemex just published its annual results for 2015. Even with expectations already at the bottom of the barrel, so to speak, Pemex somehow managed to both shock and disappoint in equal measure with the sheer scale of its total annual loss: 522 billion pesos ($30 billion), almost double its loss in 2014.
Operating costs increased 19% to $81 billion, sales plunged by $25 billion, and daily oil production fell by 6.7%. The company also ended 2015 owing suppliers $8.2 billion.
Its total debt is expected to surpass $100 billion this year. Luckily, Pemex’s new director Jos Antonio Gonzlez Anaya was on hand to calm investor nerves by reiterating that Pemex is not insolvent – it just has liquidity issues. The Financial Times begs to differ, arguing that if Pemex were privately owned, it would already be bankrupt.
The government’s decision last week to slash the company’s operating budget for 2016 by $5.6 billion is unlikely to help matters. According to Gonzlez Anaya, most of the cuts will be felt in the firm’s loss-leading refining operations (35%) as well as its exploration and production activities (46%), its biggest source of profits. Assets will be sold off left, right, and center. Investments will be curtailed. And strategic partnerships will be sought. In other words, as the company’s debt grows, its output will continue to shrink.

This post was published at Wolf Street by Don Quijones ‘ March 1, 2016.

MARCH 1/A MAMMOTH 14.87 TONNES OF GOLD BOUGHT BY GLD AND YET THE PRICE OF GOLD FALLS/PMI’S AROUND THE GLOBE PLUMMET AND BOURSES RISE??/CHINA’S WMP OR OFF BALANCE SHEET WEALTH FUNDS IS A 15 TRILLI…

Gold: $1,230.30 down $3.60 (comex closing time)
Silver 14.73 down 16 cents
In the access market 5:15 pm
Gold $1232.50
silver: $14.83
Today can be outlined simply with two headlines from the same story issued by Reuters;
from zero hedge
‘At precisely 10:00am this morning, Reuters’ journalist Abhiram Nandakumar issued a report which tried to ‘explain’ what is going on and why stocks are soaring. This is what he came up with (link):

This post was published at Harvey Organ Blog on March 1, 2016.

U.S. Economy Is Collapsing Underneath Flood Of New Debt

Debt creation behaves like printed money until the time at which the creditor demands to be repaid in full rather than extended through refinancing. The continuous expansion of debt is therefore no different than continuous money printing up to the point at which the credit markets will no longer tolerate more debt.
The U. S. economic system is riddled with more debt now than in 2008 when a de facto financial collapse the Great Financial Crisis occurred. Debt behaves like printed money until the time at which the debt has to be repaid. The Federal Government never repays the debt is issues. It rolls over maturities while at the same time it issues more debt. This happens every two weeks. There’s now $19 trillion in Treasury debt outstanding. That number was about $10 trillion when Obama took office in 2008.
Perpetual debt refunding and increased issuance is NO DIFFERENT THAN OUTRIGHT MONEY PRINTING. Until of course, the creditors will no longer tolerate the refinancing of existing debt. That’s what happened in 2008. The market forced the issue and the financial system was collapsing until the Treasury facilitated an eventual $4.4 trillion in outright money printing.
The difference between then and now is that the amount of debt issued is significantly greater today than it was in 2008. While everyone was watching the Fed’s printing press to monitor the creation of money, no one was keeping track of the spending ‘power’ being created by the fractional banking system’s credit market funding mechanism.

This post was published at Investment Research Dynamics on March 1, 2016.

Trump, Clinton Sweep Super Tuesday, On Collision Course For White House

Update: Clinton wins Virginia, Georgia, Alabama, Tennessee; Sanders wins Vermont (obvioulsy), and Trump wins Alabama, Tennessee, Georgia, Massachusetts.
* * *
The polls are closing on Super Tuesday with Donald Trump and Hilllary Clinton expected to lock up the GOP and Democratic nominations, respectively. Here’s the up-to-date delegate breakdown:

This post was published at Zero Hedge on 03/01/2016.

Negative Rates… Negative Outcomes

There has been much head-scratching of late as to why, with interest rates lower than they have been since the Universe first exploded out of the Void, businesses are not undertaking any where near as much investment as that hoped for beforehand by the academic cabal whose ‘effective demand’ and ‘transmission channel’ fixations have helped drive rates to today’s mind-boggling levels.
This is obviously a complex topic in which there are many different factors at work – not the least of which is that the prevalence of overly-low interest rates for much of the recent past has meant that all too much of such investment as is now desired has not only already been done, but done in what has turned out to be so misguided a fashion, that there is less appetite – as well as fewer means, in many cases – to undertake much more of it today.

This post was published at Zero Hedge on 03/01/2016.

It Gets Ugly in the Startup Bust

Debris from the collapse hits investors left and right.
Some startups succeed beyond anyone’s wildest dreams. This is the lure used to get investors from around the world to pour money into VC funds and mutual funds that invest in these miracles at ever higher ‘valuations’ beforethey become miracles, before they have profits, or even revenues. The idea is to get in on the ground floor of a miracle. No price is too high. But now the miracles are deflating, reality is resurfacing, and a brutal drawn-out process has set in.
Yahoo investors are now coming to grips with this, because it’s their money that went down the drain when it bought Tumblr for $1.1 billion in 2013. At the time it recognized $750 million of that investment as ‘goodwill,’ anintangible asset on which Yahoo blew tangible money. In January, it disclosed that it wrote down that investment by $230 million. And on Monday, it disclosed in its annual 10-K filing that it might write off ‘some portion or all’ of the remaining goodwill.
But Tumblr is still out there, people are still using it, and revenues are creeping up. It’s just that after all these boom years when everything soared, the rout back to reality has set in, and its valuation is now being viewed with a more realistic eye, even at Yahoo.

This post was published at Wolf Street by Wolf Richter ‘ March 1, 2016.

“We’re In Trouble”: Alan Greenspan Delivers Stark Warning

Were you wondering what Alan Greenspan thinks about the outlook for monetary policy across the globe?
Neither were we, but Bloomberg was and Tom Keene and Mike McKee got the ‘privilege’ of sitting down with the ‘maestro’ on Monday afternoon to discuss a variety of topics including NIRP, which Greenspan says ‘warps investment behavior.’
While he isn’t willing to go so far as to condemn negative rates as ‘dangerous,’ he does say the global race to the proverbial Keynesian bottom is ‘counterproductive.’
As far as the US economy is concerned, Greenspan isn’t optimistic. ‘We’re in trouble basically because productivity is dead in the water… Real capital investment is way below average. Why? Because business people are very uncertain about the future.’

This post was published at Zero Hedge on 03/01/2016.

Downside Risk Escalates As “New Highs” Falter

We have had a nice little bounce in the equity market over the past two and half weeks. Since making a multi-year low on 2/11, our GKCI United States Index has rallied by nearly 7%. From the May 2015 peak to the February trough, the index fell by almost 16%. So has the latest rally kicked the equity market correction to curb and have equity markets entered into a new bull phase? Unfortunately, one of the more reliable market internal data points is indicating to us that there is probably further downside ahead in the short-term for investors.
When at least 55% of US stocks are making new 20-day highs, this is a sign that the overall asset class is in demand and that stocks are being widely bought. In other words, this is a sign that equities are in a bull market and investors should be participating. In the chart below, we plot new 20-day highs against the GKCI United States Price Index and we have added a line at 55% to mark when new highs hit this threshold. Granted, this indicator missed the 06-07 rally (perhaps a sign of the narrowness of that bull market), but otherwise it has generally been correct in identifying when stocks are in a bull market.

This post was published at Zero Hedge on 03/01/2016.

Financial Bubbles Begin To Pop All Over The World – Episode 907a

The following video was published by X22Report on Mar 1, 2016
Greek factory activity falls and the country pushes forward to a major collapse. The EU is collapsing. Australian housing bubble is popping, the US housing bubble is popping, the entire system is imploding. Manufacturing is collapsing at a fast rate which will then spread to the rest of the economy. Watchdog says government financials are a complete mess and should be thrown out. Russia becomes the worlds largest purchaser of gold. Obama care co-ops are failing and collapsing, which have cost the American people billions of dollars.

Three Weeks After Buying Stocks, Gundlach Is Cashing Out Again: “I’m Bearish”

it was just last Friday, when roughly at the same time that Dennis Gartman flipflopped to bullish (just as the rally stalled, and just before turning bearish again ahead of today’s torrid rally) we reported that in what came as a surprise to us, that just as Jeff Gundlach was warning about the impending failure of central banks, the lack of a “bullish case for oil”, about a bear market for stocks, and about an imminent surge in gold in early February, the DoubleLine manager was buying stocks.
As Reuters first reported, Jeffrey Gundlach “said on Friday that his firm purchased some U. S. stocks two weeks ago after their rocky start in January.”
His reasoning was simple: buy the bear market rally.

This post was published at Zero Hedge on 03/01/2016.

Worst Global Economic Data In 4 Years Sparks Stocks Best Day In 6 Months

Dudley’s “Downside Risks” and Draghi’s “No Limits” were all it took to trump the worst global macro data since 2012 (JPM Global PMI) and send stocks soaring… Some quick thoughts from (ironically) 1930…
Worst global economy since 2012…

Best day for Nasdaq in six months…(and best first day of a month since 2013)

This post was published at Zero Hedge on 03/01/2016.

SP 500 and NDX Futures Daily Charts – Beautiful Rally On the Outside, But Ugly to the Bone

“Woe to you, hypocrites! You are like whitewashed tombs, which look beautiful on the outside, but on the inside are full of every form of foulness and decay, and dead men’s bones.”
US equities rallied today on the ‘better than expected’ economic news this morning. As if.
There was quite a bit of ‘hedging’ behind the scenes for this advance today, led higher by financials and tech.
Let’s see how we end the week.

This post was published at Jesses Crossroads Cafe on 01 MARCH 2016.

Gold Daily and Silver Weekly Charts – Though the Darkness Hide Thee

“The wealth of another region excites their greed; and if it is weak, their lust for power as well. Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich.
Robbery, rape, and slaughter they falsely call empire; and where they make a desert, they call it peace.”
Tacitus, Agricola
Gold and silver held their own reasonably well in the face of a powerful technical rally in US equities, a ‘risk on’ moment wherein there was a rush to paper assets, led by gains in big financials and tech unicorns.
There was minimal delivery activity in The Bucket Shop yesterday, not even worth reporting. There was a little shuffling of bullion in the warehouses; silver continues leaking out. And it bears watching, because the central banks do not have any.

This post was published at Jesses Crossroads Cafe on 01 MARCH 2016.