Harvey, Irma, Jeopardy, and Knox

Harvey: Estimate $100 billion in damages from Hurricane Harvey. Insurance helps some and costs others. As a nation it still hurts by $100 billion.
Irma: Estimate $100 billion in damages from Hurricane Irma. Insurance helps some and costs others. As a nation it still hurts by $100 billion.
Jeopardy – Triple: Debt, Deficits and the Dollar. Debt up, dollar down!
Debt and Deficits: The hurricanes will cost the U. S. government and economy many $ billions and increase the national debt and deficit. There is no plan to reduce other spending to compensate. Just borrow baby! Borrow more and more. What could go wrong? Spending is out-of-control, and that was before two Hurricanes and before the U. S. ramps up military spending, more wars, and whatever comes next.
Dollar: All that spending funded by additional debt, not productive effort, will weaken the dollar further. The dollar index is down 12% since its 14 year high in early January 2017. The index measures relative strength between other declining debt-based fiat currencies and the declining debt-based fiat dollar, which is supported by nothing but debt, taxes, and the military. Measured in gold for the same period, the dollar is down 22%.
Knox (Fort): Officially Fort Knox in Kentucky holds 147 million ounces of gold. PRETEND that official story is true, the gold is physically there, unencumbered, not leased out, and not stolen. The 147 million ounces of gold are worth $200 billion dollars – about the losses from Hurricanes Harvey and Irma. That shows how low gold is valued at current prices.

This post was published at GoldSeek on 13 September 2017.

The Middle Class Is Being Destroyed: Now Only 25 Percent Of All Americans Have $10,000 Or More In Savings

We just got more evidence that the middle class is being systematically eviscerated. According to a GOBankingRates survey that was just released, more than half the country has less than $1,000 in savings. So in the event of a major economic disaster of some kind, over 50 percent of the nation is going to be completely out of cash almost immediately. For years I have been writing about the steady decline of the middle class in the United States, but I still get astounded by numbers such as these. According to this new survey, only 25 percent of all Americans have $10,000 or more in savings at this point…
$0 saved: 39 percent
Less than $1,000 saved: 18 percent
$1,000 to $4,999 saved: 12 percent
$5,000 to $9,999 saved: 6 percent
$10,000 or more saved: 25 percent
Other surveys have come up with similar results. One discovered that about two-thirds of the country is living paycheck to paycheck, and another which was conducted by the Federal Reserve found that 44 percent of all U. S. adults do not even have enough money ‘to cover an unexpected $400 expense’.
Most of us have grown accustomed to barely scraping by from month to month. But that is not what being ‘middle class’ is supposed to be about. If you are in the ‘middle class’ you should be making more than you are spending and building long-term wealth.
But just like our federal government, most of us are spending money like there is no tomorrow. If we don’t have quite enough money for what we want to do, we just borrow more. Right now, U. S. consumers are more than 12 trillion dollars in debt, and it is impossible to build any real wealth when you are constantly drowning in red ink.
We are willingly enslaving ourselves, but most people were never even taught about the dangers of going into too much debt.

This post was published at The Economic Collapse Blog on September 13th, 2017.

The Crushing of Equifax

Banks, credit card companies, and other Equifax customers squeal. Consumers (the product) squeal. Congress squeals. Investors squeal.
Equifax shares dropped another 16% during the day and after-hours on Wednesday to $97.51. They’ve now plunged 31%, or $44.82, in the four trading days since Equifax confessed that 143 million consumers had their data crown-jewels stolen when it was hacked. The stolen data is perfect for identity theft, such as getting a loan in your name, and tax fraud, such as getting a tax refund from the IRS in your name, with Kafkaesque consequences for you.
Investors, seeing what this might do to the company, have voted with their sell-button. Based on the 120.4 million shares outstanding as of June 30, the four-trading-day loss amounts to $5.4 billion.
The stink has been enormous, with Equifax having to back down from some of its most egregious solutions to this problem, including forcing consumers to give away their legal right to sue in order to sign up for its credit protection services. Equifax rescinded this requirement over the weekend, buckling under scathing criticism.

This post was published at Wolf Street on Sep 13, 2017.

SEPT 13/ANOTHER RAID WITH GOLD DOWN $4.20 AND SILVER DOWN 4 CENTS ON NEWS OF TRUMP’S SUPPOSED TAX REFORM COMING ON SEPT 25/USA THREATENS CHINA WITH REMOVAL OF THE SWIFT PAYMENT SYSTEM IF THEY DO …

GOLD: $1324.40 DOWN $4.20
Silver: $17.79 DOWN 4 CENT(S)
Closing access prices:
Gold $1323.20
silver: $17.78
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1336.44 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1332.55
PREMIUM FIRST FIX: $3.89
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SECOND SHANGHAI GOLD FIX: $1334.59
NY GOLD PRICE AT THE EXACT SAME TIME: $1331.55
Premium of Shanghai 2nd fix/NY:$3.04
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LONDON FIRST GOLD FIX: 5:30 am est $1332.25
NY PRICING AT THE EXACT SAME TIME: $1332.20
LONDON SECOND GOLD FIX 10 AM: $1327.55
NY PRICING AT THE EXACT SAME TIME. 1328.65
For comex gold:
SEPTEMBER/
NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 3 NOTICE(S) FOR 300 OZ.
TOTAL NOTICES SO FAR: 54 FOR 5400 OZ (0.1679 TONNES)
For silver:
SEPTEMBER
264 NOTICES FILED TODAY FOR
1,320,000 OZ/
Total number of notices filed so far this month: 4,898 for 24,490,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
end
Let us have a look at the data for today
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In silver, the total open interest ROSE BY A RATHER LARGE 1031 contracts from 187,176 DOWN TO 188,207 DESPITE THE DROP IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (DOWN 1 CENT(S). WE HAVE NOW HAD THREE DAYS OF TORMENT AND YET THE SILVER OPEN INTEREST HARDLY BUDGES. THE LONGS ARE REMAINING STOIC AND REFUSE TO GIVE IN TO THE ANTICS OF THE BANKERS.
RESULT: A STEADY RISE IN OI COMEX DESPITE THE 1 CENT PRICE LOSS.
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.941 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED: 264 NOTICE(S) FOR 1,320,000 OZ OF SILVER
In gold, the open interest ROSE BY A MONSTROUS 6,487 CONTRACTS DESPITE THE LOSS in price of gold ($2.95 LOSS YESTERDAY). The new OI for the gold complex rests at 580,606. NO WONDER THAT WE ANOTHER FLASH CRASH AND ANOTHER DAY OF TORMENT FROM THE BANKERS.
Result: A LARGE INCREASE IN OI DESPITE THE FALL IN PRICE IN GOLD ($2.95). THE COMMERCIALS SUPPLIED THE NECESSARY SHORT PAPER. NO DOUBT THAT ANOTHER FLASH CRASH WAS ORCHESTRATED TODAY DUE TO THE HUGE RISE IN OPEN INTEREST IN GOLD AND THE STEADY RISE IN OI IN SILVER
we had: 3 notice(s) filed upon for 300 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD:
Tonight , we had a huge change in gold inventory last night: a huge addition of 4.14 tonnes of gold.
Inventory rests tonight: 838.64 tonnes
SLV
Today: no change in inventory.
INVENTORY RESTS AT 327.088 MILLION OZ

This post was published at Harvey Organ Blog on September 13, 2017.

Think Gentrification Is Bad? The Opposite Is Worse

We’ve long been told that gentrification is the scourge of many communities, and we’ve become very familiar with the scenario: a stable middle-class community is destroyed when wealthy (usually white) people move in, drive up home prices, and force out the “diverse” population that had been there previously.
There are problems with this narrative of course. Very often, the working-class homeowners who leave the neighborhood experience a windfall from selling their property to the incoming “up and comers” who buy out the aging homeowners. There is an upside.
On the other hand, there are indeed downsides to gentrification. There are real social costs when a neighborhood disintegrates and the neighbors go their separate ways. As we’ve noted before, communities with a highly mobile population can often experience more crime, stress, and more health problems.

This post was published at Ludwig von Mises Institute on Sept 13, 2017.

Cord-Cutting Accelerates, Sends Shock Wave Across Traditional TV

According to eMarketer, digital video consumption is on the rise leading to a seismic shift in the industry. Traditional TV viewers are expected to shrink nearly 10% by 2021 with the expectation of a sharp decrease of total media ad spending upwards of -30% reduction. Even in 2017, the trend is accelerating with eMarketer expecting a slowdown in ad spending, after 2016 benefited from the Olympics and U. S. presidential election.

This post was published at Zero Hedge on Sep 13, 2017.

Bank of America Stumbles On A $51 Trillion Problem

At the end of June, the Institute of International Finance delivered a troubling verdict: in a period of so-called “coordinated growth”, total global debt (including financial) hit a new all time high of $217 trillion in 2017, over 327% of global GDP, and up $50 trillion over the past decade. Commenting then, we said “so much for Ray Dalio’s beautiful deleveraging, oh and for those economists who are still confused why r-star remains near 0%, the chart below has all the answers.”

Today, in a follow up analysis of this surge in global debt offset by stagnant economic growth, BofA’s Barnaby Martin writes that he finds “that as global debt has been mounting to more than $150 trillion (government, household and non-financials corporate debt), global GDP is just above $60 trillion.” His observation is shown in the self-explanatory chart below.

This post was published at Zero Hedge on Sep 13, 2017.

Trump Can Mold Federal Reserve in His Image

President Donald Trump will have the opportunity to mold the Federal Reserve in his own image. But what that will look like remains to be seen.
As Jim Rickards points out, Trump will appoint a higher percentage of the Fed’s board of governors than any president since Woodrow Wilson chose the original board.
Seven members make up the Federal Reserve’s board of governors. Of course, regional reserve bank presidents also have some influence. But you find the real decision making power on the board. As of last week, four of the seven Fed board seats are vacant.
Consider the power this gives the president. Four seats makes up a voting majority.
Trump will own the Fed. Meaning, whatever the president wants monetary policy to be, he’ll get. In other words, Donald Trump will be able to shape the Fed’s majority. But the tricky part is figuring out how he plans to shape it.’

This post was published at Schiffgold on SEPTEMBER 13, 2017.

Offshore Drilling Giant Seadrill Files For Bankruptcy

Seadrill Ltd., the London-based offshore driller controlled by billionaire Norwegian shipping magnate John Fredriksen, filed bankruptcy protection in the Southern District of Texas after working out a deal with most of its senior lenders to inject $1 billion of new money into the company pursuant to a pre-arranged plan of reorganization. The filing was largely expected and came just a couple of days before the company’s $843 million 5.625% Notes of 2017 came due.
According to Bloomberg, Fredriksen spent more than 18 months trying to strike an agreement with creditors to restructure the industry’s biggest debt-load after crude’s collapse curbed demand for Seadrill’s services. Daily leases for the company’s rigs, which once commanded up to $800,000, have dropped to around $200,000 as cheap oil from U. S. shale drilling continues to flood the market.
‘The deal gives us a great liquidity cushion,’ allowing Seadrill to survive the ‘mother of all downturns,’Chief Executive Officer Anton Dibowitz said by phone. The new capital is ‘underpinned’ by top shareholder Hemen Holding Ltd. and more than 40 percent of bondholders support the plan along with 97 percent of Seadrill’s secured bank lenders, he said. Dibowitz expects more bondholders to sign up to the deal.
Bondholders are currently predicting their ultimate recovery is worth about 25 cents on the dollar as of today.

This post was published at Zero Hedge on Sep 13, 2017.

On Swamp Draining in Texas, Florida … and DC

For this week’s Outside the Box we have a two-parter of short essays. They are unrelated but equally important. First, in ‘Time to Drain the Fed Swamp,’ Brian Wesbury and colleagues at First Trust make the case that it was the private sector, not the federal government or the Fed, that saved the economy after the Panic of 2008. The Fed has outgrown its britches, they argue, and it’s time to fill the Board of Governors chair and vice-chair positions with people who will hold the Fed to account for its mistakes. They conclude with this trenchant line:
We need a government that is willing to support the private sector and stop acting as if the ‘swamp’ itself creates wealth.
Then, in ‘Don’t Buy Into ‘The Broken Window Fallacy,” good friend Doug Kass shares Frederic Bastiat’s parable of a broken window to demonstrate why destruction la Harvey and Irma – is not a net positive for the economy in the longer term. I keep reading nonsense economics by people who say this is going to boost the economy; and in the seriously weird way that we measure GDP, maybe it will, however slightly; but it is a definite drain on the wealth of the country.

This post was published at Mauldin Economics on SEPTEMBER 13, 2017.

Global Stock Markets Mixed In Quieter Trading

(Kitco News) – World stock markets were mixed in quieter trading overnight. U. S. stock indexes are pointed toward weaker openings when the New York day session begins, on some mild profit taking. The U. S. stock indexes have set record highs this week.
Gold prices are higher in pre-U. S.-session trading. Gold prices are still in a near-term uptrend despite some profit-taking pressure seen this week.
In overnight news, the Euro zone reported its July industrial output rose by 0.1% from June and was up 3.2%, year-on-year.

This post was published at Wall Street Examiner on September 13, 2017.

#FedGibberish!

Recently on our Twitter feed, @michaellebowitz, we introduced the hashtag #fedgibberish.

The purpose was to tag Federal Reserve members’ comments that highlight desperate efforts to rationalize their inane monetary policy in the post-financial crisis era. This past week there were two quotes by Fed members and one by the head of the European Central Bank (ECB) which were highly deserving of the tag. We present them below, with commentary, to help you understand the predicament the Fed and other central banks face.
Lael Brainard
On September 5, 2017 Fed Governor Lael Brainard stated the following in a speech at the Economic Club of New York:
‘We should be cautious about tightening policy further until we are confident inflation is on track to achieve our target.’ – ‘There is a high premium on guiding inflation back up to target so as to retain space to buffer adverse shocks with conventional policy.’

This post was published at Zero Hedge on Sep 13, 2017.

Julian Robertson: The Stock Market Is a Bubble and It’s the Fed’s Fault (Video)

Bankers and investors around the world have started to express concern about the rapidly inflating stock market bubble, and its future impact on the world economy. You can add Tiger Management co-founder Julian Robertson to that list.
Robertson appeared on CNBC with Kelly Evans and unequivocally called the stock market a bubble. Not only that, he said it was the Federal Reserve’s fault.
Robertson said he thinks low interested rates have inflated stock market valuations. There simply isn’t anyplace else for money to flow.
Well, we’re very, very high – have very high valuations in most stocks. The market, as a whole, is quite high on a historic basis. And I think that’s due to the fact that interest rates are so low that there’s no real competition for the money other than art and real estate. And so I think that’s why the valuations are so high. I think when rates do start to go up and the bonds become more attractive to investors, it will affect the margins.’

This post was published at Schiffgold on SEPTEMBER 13, 2017.

Gold Drops, USD Pops As Mulvaney/Ryan Signals Tax Plan Coming September 25th

OMB Director Mick Mulvaney told Fox Business this morning that the target date for the release of details around a renewed tax plan is September 25th (presumably 2017) and that has triggered USD-buying and gold-selling.
REVENUE NEUTRALITY `NOT ON THE TOP OF OUR LIST’: MULVANEY CAN’T BALANCE U. S. BUDGET LONG-TERM ON CURRENT GROWTH: MULVANEY TRUMP’S FRUSTRATED WITH SLOW PACE OF WASHINGTON ON TAX:MULVANEY TRUMP `ADAMANT’ ABOUT GETTING CORPORATE RATE TO 15%: MULVANEY These remarks follow Trump’s meeting with Congressional leaders Tuesday evening on the subject. As Reuters reports:

This post was published at Zero Hedge on Sep 13, 2017.

NFIB Small Business Survey: Index Maintains Momentum in August

The latest issue of the NFIB Small Business Economic Trends came out this morning. The headline number for August came in at 105.3, up 0.1 from the previous month. The index is at the 97th percentile in this series. Today’s number came in above the Investing.com forecast of 105.0.
Here is an excerpt from the opening summary of the news release.
The NFIB Index rose 0.1 points to 105.3. Five of the components increased, while five declined. The lofty reading keeps intact a string of historically high performances extending back to last November.
The first chart below highlights the 1986 baseline level of 100 and includes some labels to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis. Compare, for example, the relative resilience of the index during the 2000-2003 collapse of the Tech Bubble with the far weaker readings following the Great Recession that ended in June 2009.

This post was published at FinancialSense on 09/13/2017.

‘You Should Take the Fed at Their Word’

Flip-flopping killed its credibility. That’s a problem for the markets.
‘They’re getting more worried about the negative consequences of QE’: Fitch Chief Economist
The markets have been brushing off the Fed and have done the opposite of what the Fed has set out to accomplish. The Fed wants to tighten financial conditions. It’s worried about asset prices. It’s worried that these inflated assets which are used as collateral by the banks, pose a danger to financial stability. It has mentioned several inflated asset classes by name, including commercial real estate, which backs $4 trillion in loans heavily concentrated at regional banks.
And yet, markets have loosened financial conditions since the Fed started its tightening cycle in earnest last December. Markets are hiding behind ‘low’ inflation, when the Fed is focused on asset prices.
So longer-term yields have been falling even as short-term yields have moved up in line with the Fed’s target rate, and thus the yield curve has flattened. The dollar has been falling. Equities have been soaring to new highs. And companies, if they’re big enough, are able to get funding for the riskiest projects at stunningly low rates.

This post was published at Wolf Street on Sep 13, 2017.