Alan Greenspan is Now a Gold Bug? Say What?

Is 2017 even real? What kind of weird, fantastical twilight zone have we entered into? The world has been turned upside down and I will continue to point out the bizarre and unusual things that continue to be said and acted upon as we go forward. If past results are any future indication, then things are going to get a whole lot weirder.
Alan Greenspan , the “Maestro” of fiat money and one of the most prolific fiat money printers that the world has ever seen has entered into this bizarre alternative reality and is yes, now once again a gold bug!
To those of you who know your history, you will remember the following, wrote by Alan Greenspan in 1966:
“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.”
This common sense statement, which was just a part of Alan Greenspan’s larger work titled “Gold and Economic Freedom “, would be brought up over and over again during his tenure as the head of the Federal Reserve.

This post was published at GoldSeek on 22 February 2017.

Blow Out In German 2Y Bonds Sends Yield Crashing To Record Low As Political Fears Grow

The ongoing scramble for German safety away from French political uncertainty, has led to yet another blow out day for German 2 Year Schatz, with the yield tumbling to a fresh all time low of -0.92%, as Eurozone breakup concerns have spread from the bond market, and are now pressuring the euro sending the EURUSD below 1.05 for the first time in over a month.
The rush into German paper and out of France, means that the 10Y Greman-French spread has topped 0.8%, the widest in over four years, while the 2Y US-German spread is now well over 2%, the widest since at least 2000.
Granted, there was a brief moment of respite moments ago, when France 10Y Bonds briefly rallied after the latest OpinionWay poll found momentum for Le Pen stalling, sending French 10y bonds higher, and the yield lower as much as 5bps before paring loss to 2bps, although that burst of optimism appears to have quickly faded.
Adding to the German bid are signals that the ECB is buying German bonds, in particular those with a yield below the -0.4% deposit rate. With investors holding off selling their short-end German debt as they are used as collateral to receive cash at the ECB, fears have reignited of a collateral squeeze similar to late in 2016 which Draghi attempted, and failed, to address in the December ECB meeting.

This post was published at Zero Hedge on Feb 22, 2017.

CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry

According to Continental Resources website, it labels itself as America’s oil champion. To be a champion, one is supposed to be winner. Unfortunately for Continental, it’s taking a serious beating and is a perfect example of what is horribly wrong with the U. S. Shale Oil Industry.
During the beginning of the U. S. shale energy revolution, the industry stated it would make the United States energy independent. The mainstream media picked up this positive theme and ran with it. Americans who wanted to believe in this ‘Growth forever’ notion, had no problem going further into debt to buy as much crap as they could to fill their homes with and additional rental storage units.
For several years, the U. S. Shale Revolution seemed like it was going to defy the laws of gravity (and finance) to provide the country with limitless oil production forever. However, something started to go seriously wrong as these shale oil companies reported their financial earnings. One by one, these oil companies financial losses and debts continued to pile up.
And a perfect example, or the ‘Poster child’, of what is horribly wrong with the U. S. Shale Oil Industry is none other than Continental Resources.
Again, if you go to Continental Resources website, they proudly label themselves as ‘America’s Champion Oil Company’:
Maybe Continental was America’s oil champion at one time, however if we look at their financial results, they have been receiving some serious blows to their mid section. Looking at the company’s free cash flow since 2010, it isn’t a pretty picture:
From 2010 to 2016 YTD (year to date – Q3 2016), Continental (ticker CLR) has spent a stunning $7.6 billion more on capital expenditures (CAPEX) than they made in operating cash. Of course this had a negative impact on their balance sheet. In that same time period, Continental’s long-term debt surged seven times higher from $926 million in 2010 to $6.8 billion in 2016 YTD:
Continental’s long-term debt declined in 2016 partly due to the liquidating of their Washakie Basin leasehold properties in Wyoming. They used the sale of this asset to pay down their debt. While selling assets are a positive way to lower one’s debt, it could have a negative impact on the company’s ability to build or maintain future oil and gas production.

This post was published at SRSrocco Report on February 21, 2017.

Is the Bull Market Nearing a Blowoff?

If the stock market’s wilding spree continues for just a few more days at its recent pitch, the rally is going to start looking like a blowoff on the daily and intraday charts. Rick’s Pickssubscribers know something the bullish herd most likely does not, however, and that’s why we are able to watch the mania unfold without getting caught up in its mounting recklessness. Also, because we’ve held a very precise rally target in mind for quite some time, we’ve been able to stay comfortably on the right side of the Furies since late autumn. The target also promises to give us something to shoot at when we lay out shorts, as we so often do at swing tops. Will the next top prove to be something more than that? Or does Mr. Market perhaps have something more memorable in store to bring the thundering herd back to its senses? Time will tell, but the wait may not be so long as some Wall Street denizens might imagine. If you don’t subscribe, click here for two weeks’ free access to Rick’s Picks, including daily, actionable ‘touts’, round-the-clock updates, impromptu tech analysis sessions online, and a chat room that draws experienced traders from around the world at all hours of the day and night.

This post was published at GoldSeek on 22 February 2017.

Bank of America Clients Sell Stocks For The First Time Since The US Election

Over the weekend, Goldman warned that “cognitive dissonance exists in the US stock market” as “investors must reconcile S&P 500’s performance with negative EPS revisions from sell-side analysts.” Specifically, Kostin notes that the “S&P 500 has returned 10% since Election Day while consensus 2017E adjusted earnings have been lowered by 1%”, and predicts that “investors will soon de-rate their expectations of potential 2017 EPS growth as they face the reality that the accretive impact from tax reform will not occur until 2018.” The bank also cautioned that “we are approaching the point of maximum optimism and S&P 500 will give back recent gains as investors embrace the reality that tax reform is likely to provide a smaller, later tailwind to corporate earnings than originally expected.”
Now, according to the latest weekly BofA client data, “smart money” investors have indeed tempered their euphoric optimism, and last week during which the S&P 500 climbed to another new high, BofAML clients took advantage of the surge in “greater fools” and turned net sellers of US equities for the first time since the week prior to the US election in early November.
BofA’s Jill Carey Hall reports that net client sales of $2.1 billion were the largest since June, with net sales of single stocks eclipsing small net purchases of ETFs. Sales were broad-based across size segments and client types, and this was the first week of selling by private clients since January.
The breakdown:
Hedge funds have been net sellers of US stocks on a 4-week average basis since early Feb. 2017. Institutional clients have been net sellers on a 4-week average basis since early Feb 2016. Private clients have been net buyers of US stocks on a 4-week average since early Jan 2017. The 4-week average trend for buybacks by corporate clients suggests buyback activity picked up in 4Q, after weak trends in 3Q, but has slowed YTD

This post was published at Zero Hedge on Feb 22, 2017.

Ted Butler Quote of the Day 02-22-17

“Prices remained close to the highest levels since the December 20 lows — and the rise in gold and silver prices can hardly be called surprising given the extremely bullish COT market structure in place at the previous price lows. More surprising, however, is that while gold and silver advanced in a similar manner price wise, their respective market structures in COMEX futures positioning now differ radically. In a nutshell, since the most recent price lows, the COMEX silver market structure has deteriorated markedly, while gold’s market structure hasn’t indicated the slightest amount of managed money buying or commercial selling.”

“I can faintly recall instances in the past where the market structures in gold and silver parted ways temporarily, but none quite like now. The disparity in market structures currently is the thing I think about most. The just-released COT report underscored the disparity in spades and has to be considered the highlight for the week.

A small excerpt from Ted Butler’s subscription letter on 18 February 2017.

  More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.

Russia Gold Buying Is Back – Buys One Million Ounces In January

Russia Gold Buying Is Back – Buys One Million Ounces In January
Russia gold buying returned in January with the Russian central bank buying a very large 1 million ounces or 37 metric tonnes of gold bullion.
The increase in the gold reserves came after Russia did not buy a single ounce in December – a move seen as potentially a signal or an olive branch to the U. S. and the incoming Trump administration.
***
It also came after Russia had accelerated its gold buying in the final months of the Obama Presidency. October 2016 saw an increase of 1.3 million ounces or 48 metric tonnes and this was the largest addition of gold to the Russian monetary reserves since 1998. Indeed, it was the biggest monthly gold purchase in this millennium for the Russian central bank.

This post was published at Gold Core on February 21, 2017.

Five Reasons for Central Banks: Are They Any Good?

In a time when Federal Reserve reforms are discussed more openly than ever before, it seems appropriate to also think about the more fundamental question of whether central banks are needed in the first place. In 1936, Vera C. Smith (later Lutz) published her doctoral dissertation The Rationale of Central Banking written under Friedrich A. von Hayek at the London School of Economics. Smith reviewed the economic controversies around central banking from the nineteenth to the early twentieth century in France, Belgium, Germany, England, Scotland, and the United States.
Smith made very clear that central banks are not the result of natural developments in the banking sector, but come into existence through government favors.
So what are the justifications for central banks? Smith identified five main arguments for central banks from an economic point of view. Although Smith has written with a gold standard as the underlying monetary system in mind, it is interesting to look at these arguments with the benefit of hindsight more than 80 years later. Has any one of the arguments actually made a strong or even conclusive case for central banking?

This post was published at Ludwig von Mises Institute on February 22, 2017.

With Interest Rate Hikes Coming, Can The Dollar Go Lower?

First published Sun Feb 19 for members of ElliottWaveTrader.net: For those that have been following my analysis since I began posting it back in 2011, you know that I do not buy into the common ‘market speak.’ In fact, when so many were looking for a dollar crash back in 2011, I was calling for a multi-year rally in one of my first public articles:
‘it seems we have now completed a truncated 5th wave in a 5 wave move down in the DXY, which means we have now completed Wave 2 down. Therefore, based upon my count, the dollar will now begin a multi-year bull run.’
July 31, 2011
This meant that, back in July 2011, I was expecting a multi-year 3rd wave rally to take hold. And, since a 3rd wave often targets the 1.618 extension of waves 1 and 2, that gave me a 103.50 ideal target for the 3rd wave in the DXY in this multi-year rally I was expecting.
Now, I want to remind you again that when I made this call back in July of 2011, the DXY hit a low of 73.42. So, that meant I was expecting a 40% rally in the DXY. Moreover, I also want to remind you that I maintained this expectation when the Fed was throwing their QE bazookas at the market. For this reason, almost all market participants at the time were certain that the dollar was going to crash. So, most viewed my call for a multi-year rally in the dollar as ridiculous, and that is putting it mildly.
So, even with all that QE being thrown at the dollar, we still saw a massive rally in the DXY. Yes, this was certainly counter-intuitive to common market expectations. But, this was a clear case study in the fact that the fundamentals did not control this market, while market sentiment was the clear driver of price.

This post was published at GoldSeek on 22 February 2017.

Unleashing Wall Street

To Unleash or Not to Unleash, That is the Question… LOVINGSTON, VIRGINIA – Corporate earnings have been going down for nearly three years. They are now about 10% below the level set in the late summer of 2014. Why should stocks be so expensive?
***
Oh, yes… because the Trump Team is going to light a fire under Wall Street. But they must be wondering about that, too. Raising up stock prices – as we’ve seen over the last eight years – is not the same as restoring economic growth and family incomes.
And as each day passes, the list of odds against either seems to be getting longer and longer. As the petty fights, silly squabbles, and tweet storms increase, the less ammunition the administration has available to fight a real battle with Congress or the Deep State.
Still – ‘Goldman Stock Hits Record on Bets Trump Will Unleash Wall Street,’ reads a Bloomberg headline. Goldman Sachs is a pillar of the Establishment, with its man, Steve Mnuchin, heading the Department of the Treasury. So a win for Goldman is not necessarily a win for us.
‘Unleashing’ suggests a win-win deal, as in allowing the financial industry to get on with its business. But there are different kinds of ‘unleashings.’ Some things – like Dobermans – are kept on a leash for a good reason. Unleashing the mob… or a war… might not be a good idea, either.
Untying Wall Street from bureaucratic rules is at least heading in the right direction. But it will only benefit the Main Street economy if Wall Street is doing business honestly, facilitating win-win deals by matching real capital up with worthy projects.

This post was published at Acting-Man on February 22, 2017.

MSNBC Anchor: “Our Job” Is To “Control Exactly What People Think”

During a lively discussion centered on fears that President Trump is “trying to undermine the media,” MSNBC’s Mika Brzezinski let slip the awesome unspoken truth that the media’s “job” is to “actually control exactly what people think.”
SCARBOROUGH: “Exactly. That is exactly what I hear. What Yamiche said is what I hear from all the Trump supporters that I talk to who were Trump voters and are still Trump supporters. They go, ‘Yeah you guys are going crazy. He’s doing — what are you so surprised about? He is doing exactly what he said he is going to do.’”


This post was published at Zero Hedge on Feb 22, 2017.

Investors worldwide could become plaintiffs in class-action suit in U.K. against bullion banks

Investors in nine countries have responded to the announcement two weeks ago that a British law firm, Leon Kaye Solicitors, is contemplating bringing a class-action lawsuit in the United Kingdom under that country’s Competition Act against bullion banks suspected of manipulating the gold and silver markets.
The firm wishes to remind investors that they could become plaintiffs in such a lawsuit even if they live outside the United Kingdom.

This post was published at GATA

South Korea’s Hanjin Shipping officially sunk, declared bankrupt

A South Korean court on Friday pulled the plug on Hanjin Shipping Co., declaring it bankrupt and ordering the liquidation of a company that has led the country’s shipping industry for the past four decades.
The bankruptcy comes five months after the company, which was once one of the largest container-shipping lines in the world, filed for court receivership under heavy debt.
A court-appointed caretaker will sell any remaining ships and other assets Hanjin still owns to pay off its creditors, said Choi Ung-young, a judge on the Seoul Central District Court.
The court closed the company’s rehabilitation proceedings earlier this month, saying liquidation would bring more value to creditors, with its major assets mostly sold off.

This post was published at Market Watch

JPMorgan, HSBC among dozen banks facing fines for rigging South African rand

South Africa’s antitrust investigators urged that a dozen banks be fined for colluding and manipulating trades in the rand, potentially becoming the latest in a string of penalties handed to lenders around the world for rigging currencies.
The Competition Commission identified lenders including Bank of America Merrill Lynch, HSBC Holdings Plc, BNP Paribas SA, Credit Suisse Group AG, HSBC Holdings Plc, JPMorgan Chase & Co. and Nomura Holdings Inc. as among those that participated in price fixing and market allocation in the trading of foreign currency pairs involving the rand since at least 2007. It referred the case to an antitrust tribunal, concluding an investigation that began in 2015.
The outcome of the probe comes as President Jacob Zuma and his governing African National Congress step up pressure to break the dominance of the country’s four largest lenders and force them to lend more to black clients. Zuma and the banks are also locked in a stand-off after the lenders closed the accounts of companies tied to his friends, the Gupta family, who are accused of using their relationship with him to influence government appointments and contracts.
‘The timing for banks couldn’t be worse,’ said Adrian Saville, the chief strategist at Citadel Investment Services & Cannon Asset Managers. ‘It comes at a time when they’re trying to demonstrate impeccable behavior. It makes a case for intervention.’

This post was published at bloomberg

Russia Has the Lowest National Debt in Europe: Meanwhile, in America…

The news that Russia is set to settle up all old Soviet debts by year-end highlights – we think not unintentionally – one of the glaring differences between how Moscow and Washington operate.
Moscow can’t afford to print rubles like there’s no tomorrow, so it lives in a reality-based world where pragmatism and agreement-by-consensus guides its domestic and foreign policies.
In contrast, Washington relies on confidence in and demand for the dollar, “allowing” it to print as much money as it needs to spend on fun projects such as “rebuilding” Afghanistan, which currently costs $13 million/day, even though the war “ended” three years ago.
So it’s not particularly surprising that Russia currently has the lowest national debt in Europe.
As for Russia, its debt-to-GDP ratio accounts to 18.3 percent in 2015. And it’s expected to continue to go down. In absolute terms, Russia’s government debt is roughly $147 billion.

This post was published at Russia Insider

Europe wants Britain to pay billions into E.U. schemes up until 2023

The European Commission wants Britain to be paying into E.U. projects for four years after it has signed a Brexit deal, with final payments continuing up until the end of 2023, the Daily Telegraph has learned.
The plan is part of a European Union demand that Britain settles a 60bn ‘Brexit bill’ before being granted a deal that will govern future trade relations.
The suggestion that Britain should pay in installments up until 2023 was made at a meeting earlier this month between Michel Barnier, the European Commission’s chief Brexit negotiator, and senior officials from the 27 remaining E.U. member states.
‘The Commission wants the U.K. to pay in installments from the day of departure in 2019 up until 2023, which is when the financial demands of the E.U.’s seven-year budget cycle are at their highest,’ said an E.U. diplomatic source with knowledge of the meeting.
Theresa May promised that Britain would stop making ‘vast contributions’ to the annual E.U. budget after Brexit, but the E.U. will demand that Britain keeps making payments to honour commitments already made in the 2014-2020 budget round.

This post was published at The Telegraph

The Mother of All Financial Bubbles Will be unimaginably destructive when it bursts — Chris Martenson

We are now living through the mother of all financial bubbles. We’ve been living with it so long now that we have to take three giant steps backwards to even detect its broad outlines.
As a reminder, a bubble exists when asset prices rise beyond what incomes can sustain. Florida swampland in the 1920’s, tech stocks in the late 1990s, or Toronto real estate today — all are fine examples of this.
The U.S. government and the private banking cartel known as the Federal Reserve, in cahoots with a very compliant and complicit mainstream media, are doing everything in their vast and considerable power to convince us that we are living in an golden era of risk-free prosperity. And that tomorrow will be even better.
Now, regular readers of PeakProsperity.com‘s reports will know there’s a mountain of evidence contracting this. But it’s critical to understand that this is the same public perception management style as we’ve recently seen at Oroville: Deny, deny, deny… and then finally admit the obvious.
So let’s take those three giant steps backwards and see if we can spot the flaw in the ‘everything is awesome!’ meme that the Fed et al are trying to paint for everyone by flooding the ‘markets’ with so much thin-air liquidity (between $150-$200 billion a month) that nobody has any clue what anything is truly worth anymore.

This post was published at Peak Prosperity

Robert David Steele-Deep State Isolating Trump from We the People

The following video was published by Greg Hunter on Feb 21, 2017
If Trump can’t mount a counterattack and get rid of his White House ‘traitors,’ what happens? Intel expert Robert David Steele predicts, ‘He will not be reelected, and he will also probably be impeached in 2018. . . . Donald Trump is toast after 2018 . . . if we don’t do electoral reform. The Democrats will steal back the House and they will impeach Donald Trump. They will combine that with protests in the streets, and they will combine that with banking pressure to include a $20 billion bribe . . . and Trump will finally say I can’t handle this. I can’t do this, and he’ll leave. . . . Candidates can be bought, particularly if you apply so much pain to them that is simply not worth the hassle. I believe in Donald Trump. I want to devote my life to helping Donald Trump to restore the Constitution and restore democracy. I am deeply upset that Donald Trump is not getting the advice he needs to lay this out for America and provide a solution. The Electoral Reform Act needs to be implemented in the next 90 days or Donald Trump is not going to finish his term.’
In closing, Steele warns, ‘Even if 10,000 of us call the White House comment line, Donald Trump is not going to hear from us. Trump is in enemy hands. . . . Donald Trump is all alone in the White House, and the forces of evil are essentially isolating him from ‘We the People.’

Don’t Short This Dog – Precious Metals Supply and Demand

Fundamental Developments Last week, the prices of the metals mostly moved sideways. There was a rise on Thursday but it corrected back to basically unchanged on Friday.
This will again be a brief Report, as Monday was a holiday in the US.
Below, we will show the only true picture of the gold and silver supply and demand fundamentals. But first, the price and ratio charts.
***
Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved sideways last week.

This post was published at Acting-Man on February 21, 2017.

Dear Disaffected Hillary Protesters: Michael Moore Really Wants To Lead Your “Resistance”

Michael Moore, the ultra-liberal documentary filmmaker who infamously predicted a Trump victory well before election night last November by stunningly calling Michigan, Wisconsin, Ohio and Pennsylvania for the Republican nominee, has since had a noticeably difficult time processing the victory that he, himself, predicted long before anyone else. Meanwhile, Moore’s inability to come to terms with Trump’s presence in the White House has since resulted in his very public broadcast of multiple nervous breakdowns over various social media outlets for all to see.
In fact, his latest “episode” came just last week when Moore lit up the Twittersphere asking Trump “What part of “vacate you Russian traitor” don’t you understand?” while threatening that “We can do this the easy way (you resign), or the hard way (impeachment).”
Um, @realDonaldTrump — It's now noontime in DC & it appears you are still squatting in our Oval Office. I gave u til this morning to leave.
— Michael Moore (@MMFlint) February 14, 2017

This post was published at Zero Hedge on Feb 21, 2017.