The Crash Course – Chapter 12 – How much is a Trillion?

The following video was published by ChrisMartensondotcom on Sep 5, 2014
So big, humans really can’t grasp it
One trillion is a big number. In this short video, we try to help you get a sense for just how big; but the reality is simply that the human brain can’t really suitably comprehend magnitudes this large.
Which is why we should be concerned that the US’ money supply has ballooned to over $12 trillion dollars over the past decade. And that its outstanding debts and liabilities are many multiples that amount.

Gold Daily and Silver Weekly Charts – No My Jobs, Man

“I don’t know if the people on Wall Street are not really getting out and seeing what’s really going on.
When you go to small towns, like I do, and talk to people – people don’t have much confidence in the numbers you hear.”
Ronnie Squires, Winner of CNBC’s Guess the Jobs Number Contest
The Non-Farm Payrolls number sucked out loud with a fairly stupendous miss. If you back out the imaginary jobs from the Birth Death report, the economy added about 40,000 real jobs, of a generally low quality. Chief Strategists and economists took delight in the tenth of a percent decrease in unemployment, a generally misleading statistic. And of course, stocks rallied. Given the need for the central banks to keep printing money, and the ECB’s endorsement of that approach, the hit on the metals this week makes quite a bit of sense from a perception management standpoint of the porcine persuasion. Here is my most probable forecast for the future. Be sure to make a note of it. The next time there is a financial crisis, which is likely to be in the not too distant future, almost to a person the economists and talking heads of the status quo will express shock and bewilderment saying, ‘who could have seen this coming?’ Unless of course there is some foreign scapegoat who can be conveniently blamed for the collapse of a house of cards. And then, from their Olympian heights of privilege, the overpaid pundits will quickly fall back into their most comfortable, ideologically blind slogans. There is too much government, or there is not enough stimulus or the unfortunate many are just lazy and stupid. And meanwhile, given the lack of reform of the financial and political system, the average American family, which they will all claim to uphold and revere, is being led down a blind alley of officially tolerated corruption, and strangled.

This post was published at Jesses Crossroads Cafe on Sept 5, 2014.

The Monetary Stimulus Obsession: It Will End In Disaster

It is now six years since the collapse of Lehman Brothers, and considering that the US economy has officially been in recovery for the past five years, that equity indexes have put in new all-time highs, and that credit markets are once again ebullient to the point of carelessness, it is worth contemplating that monetary policy remains stuck in pedal-to-the-floor stimulus mode. Granted, quantitative easing is (once again) scheduled to end in the US, and the first rate hikes are now expected for next year, but the present policy stance certainly remains highly accommodative. A full ‘exit’ by the Fed is still merely a prospect.
Expectations appear to be for the US economy to finally emerge from its long stay in monetary intensive care healthier and fit for self-sustained, if modest, growth. I think this is unlikely. The lengthy period of monetary stimulus will have saddled the economy with new dislocations. And if central bank intervention did indeed manage to arrest the forces of liquidation that the crisis had unleashed, then some old imbalances will also still hang around.
‘Easy money’ is – contrary to how it is frequently portrayed – not some tonic that simply lifts the general mood and boosts all economic activity proportionally. Monetary stimulus is always a form of market intervention.

This post was published at Zero Hedge on 09/05/2014.

sept 5/GLD remains constant/Silver loses a tiny 239,000 oz/gold and silver rise today/Poor jobs report/USA plane forced to land in Iran (could be deadly)/Argentina introduces price controls/Rebel…

Gold closed up $0.70 at $1265.80 (comex to comex closing time ). Silver was up 2 cents at $19.08
In the access market tonight at 5:15 pm
gold: $1269.00
silver: $19.20
GLD : no change in gold (inventory now at 785.72 tonnes)
SLV we lost a tiny 239,700 oz in silver inventory at the SLV:/now 333.207 million oz. The tiny loss no doubt was to pay for fees.
As far as gold and silver is concerned we had a huge increase in the comex OI for both metals. I guess some of the new speculators wish to tackle the likes of our crooked bankers. We are also witnessing an increase in the amount of metal standing for gold. In a off delivery month, the amount of gold standing is generally below one tonne for the entire month. Today we are already at 1.695 tonnes standing.
However the real story is the OI in silver. For the past year or so, the OI for silver has been close to or at record levels despite the low price of silver. Gold has a low OI and a low price, but silver has the opposite. Today the OI hit 165,237 contracts with the price of silver officially at $19.08. When you see an anomaly like this, it generally straightens itself out in weeks. However not in silver as we have two sides facing off against each other in bunkers and both not blinking. As most of you know, it is my contention that the longs (who have deep pockets and impervious to pain) is Mainland China who wish to get their loaned silver back. The fun will begin once Shanghai is out of silver and set its eyes on comex and SLV silver if there is any!
Today we have commentaries concerning the Ukraine, Russia, the ECB, the jobs report in the USA and Argentina.
We will discuss these and other stories
So without further ado………………
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically moved towards the positive needle as they must have found a few bars to lease
London good delivery bars are still quite scarce.
Sept 5 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.08000% .090000% .10400% .13400% .2340000%
Sept 4 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
07200% .086000% .102000% .13200% .226000%
end
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on September 5, 2014.

Oaktree’s Howard Marks Explains The Difference Between Volatility And Risk

Volatility is the academic’s choice for defining and measuring risk; but Oaktree Capital’s Howard Marks warns Bloomberg TV’s Stephanie Ruhle that “while volatility is quantifiable and machinable… it falls far short as ‘the’ definition of investment risk.” In fact, he berates, “I don’t think most investors fear volatility. In fact, I’ve never heard anyone say, ‘The prospective return isn’t high enough to warrant bearing all that volatility.’ What they fear is the possibility of permanent loss.” With $91 billion under management, perhaps it’s worth listening to (and reading) his perspective: “In brief, if riskier investments could be counted on to produce higher returns, they wouldn’t be riskier. Misplaced reliance on the benefits of risk bearing has led investors to some very unpleasant surprises.”

This post was published at Zero Hedge on 09/05/2014.

Why Draghi’s ABS “Stimulus” Plan Won’t Help Europe’s Economy

Europe's problem has always been a simple one: very few unencumbered assets left to lend against pic.twitter.com/rBP6g2o84t
— zerohedge (@zerohedge) September 5, 2014

Simply put, the reason why Mario Draghi’s impressively-pitched ABS ‘stimulus’ QE-lite plan won’t help can be summed up in 2 words “unencumbered assets.” There is simply a lack of the right quality collateral, that has not already been swapped with the ECB (or delevered off balance sheets), for this to make a difference. However, as Bloomberg reports, the plan will not even get that far.. because the market for these assets is incapable of supporting this size of buying. As one major ABS asset manager notes, it takes him about three months to buy 1 billion euros of these securities, “the number that’s circulating the market is 500 billion euros, but where is he going to get it from?” Add to that the report from Die Welt that The ECB lacks sufficient expertise for ABS purchases, and as another major European ABS manager concludes, “I don’t see either a capital relief for banks or the banks giving more credit to the real economy.” Still, it’s fun to believe Draghi’s promises, right?

This post was published at Zero Hedge on 09/05/2014.

Argentina Goes Full-Venezuela – Plans To Regulate Prices, Profits, & Production

Just weeks after defaulting (yet again) on its debt (whether technically or not), and shortly after raising the minimum wage by 31% (to $523 a month) amid runaway inflation, it appears Argentina has gone full-Venezuela. As WSJ reports, the great minds that ‘run’ Argentina have decided to pass legislation (dubbed “the supply law”) letting the government regulate private-sector prices, profit margins and production levels. The opposition is up in arms, “this is absolutely ridiculous. It’s part of a very primitive ideology that says government officials should decide what people should make, how much they should make and how much they should charge,” adding that “we already know exactly what it is like to suffer from these kind of interventionist economic policies,” in Venezuela.

This post was published at Zero Hedge on 09/05/2014.

THERE GOES THE JOBS RECOVERY STORYLINE

The Wall Street jackoffs all expected an increase in jobs of 200,000 to 250,000 for August. I guess being off by 30% to 40% is considered accurate for an Ivy League educated economist making over $1 million per year. The manipulated, massaged, seasonally adjusted, excel spreadsheet employment data has been released for public consumption by our keepers. They will now tell you what you are supposed to believe regarding the fake numbers. Maybe the weather was too warm for hiring. Maybe it rained or didn’t rain. Maybe ISIS and the looming threat of terrorist attack is deterring employers from hiring. It couldn’t have anything to do with Obamacare, Federal Reserve policies, government regulations and taxes, or the fact that families have 40% less net worth today than they had in 2007.
It’s actually far worse than the reported headline. One survey says 142,000 jobs were added. Of course the BLS excel spreadsheet birth/death adjustment added 102,000 jobs to the calculation, the highest adjustment for August in history. We all know small businesses are hiring like mad before full implementation of Obamacare after the elections. The broader population survey shows that only 16,000 more people were employed in August than in July. The MSM is silent about that number. The sheep must be kept sedated. And now for the best part. While reporting horrifically bad employment numbers, our beloved BLS drones also reported the unemployment rate dropping to 6.1%, the lowest rate in six years. Glory be!!! The economy must be booming and workers must be so ecstatic they are spending like there’s no tomorrow. What? Retail sales have been declining? How can this be? It sure smells like someone took a shit under the bed and won’t admit it. But let’s ignore the cognitive dissonance you are feeling and dig into the bullshit BLS numbers to get a few kernels of truth:

This post was published at The Burning Platform on Sept 5, 2014.

5 Things To Ponder: Perspicacious Observations

This past week has seen the market repeatedly attempt new “all-time” highs only to be found wanting. There has been plenty of headline data for the “bulls” to feast on from the ECB announcing a program to buy bonds, surging ISM data and improvement in productivity. However, the underlying data has kept the “bears” in the game with new orders and employment showing weakness, unit labor costs shrinking and the realization that the ECB’s plans are likely be ineffectual.
I thought one of the most interesting comments this week came from Brad Delong with reference to the exit of the Federal Reserve from its monetary campaigns:
“Meanwhile, in the US, the Federal Reserve under Janet Yellen is no longer wondering whether it is appropriate to stop purchasing long-term assets and raise interest rates until there is a significant upturn in employment. Instead, despite the absence of a significant increase in employment or a substantial increase in inflation, the Fed already is cutting its asset purchases and considering when, not whether, to raise interest rates.“
There is mounting evidence that these monetary campaigns have very little effect on stimulating economic growth, yet the ECB specifically noted yesterday that they are engaging in the same program in hopes of stimulating economic growth and inflation. What the actual outcome will be is yet to be seen, but over the last 24-hours the markets seem to less convinced of a positive outcome.
This weekend’s reading list covers a rather wide range of topics to contemplate between football games, “couch naps” and junk-food. Since my goal is to be of service to you, here is the official schedule of games this weekend via NFL:

This post was published at StreetTalkLive on 05 September 2014.

Nonfarm Payrolls 142,000; Unemployment 6.1%; Employed 16K; Labor Force -64K

Initial Reaction The payroll survey shows a net gain of 162,000 jobs vs. an expectation of 230,000 jobs. This broke a six-month string of 200,000 jobs. Digging into the details, things look far worse. The household survey shows a gain in employment of only 16,000. This is the fourth month in the last five that the household survey was substantially weaker than the headline number. The average employment gain in the past five months is 125,200 vs. an average gain in jobs over the same period of 230,800 per month. Is a trend forming? If so, it doesn’t bode well. That said, the household survey is volatile and over time the data series merge. The question now is which one is right? At turns, the household survey tends to lead.
The labor force fell by 64,000. Those not in the labor force increased by 268,000. The unemployment rate fell by 0.1% thanks to a decline in the labor force greater than the rise in employment.

This post was published at Global Economic Analysis on September 05, 2014.

WHAT COULD BE WORSE THAN THE DOLLAR COLLAPSE? THIS.

I hate to always be the bearer of bad news but while we focus a lot on The End Of The Monetary System As We Know It (TEOTMSAWKI) there is one event that could be more catastrophic and is well within the realm of distinct possibility… actually a virtual certainty.
I pointed it out years ago as being the actual number one real, factual threat to human life on Earth and still believe that to this day. And based on a few recent events I think it begets reminding.
What I am talking about is an Electro-Magnetic Pulse (EMP). An EMP, also sometimes called a transient electromagnetic disturbance, is a short burst of electromagnetic energy. Such a pulse may occur in the form of a radiated electric or magnetic field or conducted electrical current depending on the source, and may be natural or man-made.
The last natural, major EMP to affect Earth was in a solar storm in 1859, also known as the Carrington Event. It was a powerful geomagnetic solar storm that fried telegraph machines all over Europe and North America. At some point we will experience another such solar storm, and some scientists believe that we are already 50 years overdue for another one. Of course, as with ‘global warming’ we also should keep in mind that scientists are often very wrong. But the issue is that an EMP can also be manmade and that is looking like it is a possibility as we discuss below.

This post was published at Dollar Vigilante on September 5, 2014.

Big Tech Teeters, May Sack Most People since 2009

There is one thing for sure that big American tech companies, many of them severely revenue-challenged, excel at: buying other companies. They’re all doing it. And the price they pay? The higher, the better. They’re paying for these overvalued acquisitions with their overvalued stock, of which they can print an unlimited amount; and they’re paying for them with money they can borrow at nearly no cost after inflation.
When the cost of capital is near zero, thanks to the Fed’s machinations, it doesn’t really matter on what this nearly free capital gets blown. So long as it doesn’t get spent on people.
Acquisitions bestow a lot of benefits on the acquirer, including obtaining instant revenues, in-the-can technologies, and possibly top-notch people. But no benefit is more important than the liberal use of ‘acquisition accounting’ which allows the company to lump all kinds of real expenses, paid for with real dollars or real stock, into a massive ‘non-cash acquisition-related’ write-off that analysts are well trained to ignore. And it makes the resulting ‘adjusted earnings’ smell like a rose.

This post was published at Wolf Street on September 5, 2014.

5/9/2014: Investment and Foreign Exchange Reserves: Latest Data from Russia

Some recent news from the Russian economy’s front.
In recent months we have witnessed some significant slowdown in both investment in Russia and economic growth (see here for the latest signals and here for the longer range data: But we now have some interesting data on the compositional changes in investment and the numbers are puzzling. As reported by BOFIT, aggregate decline in domestic investment in H1 2014 in Russia was driven by the smaller firms and the ‘grey’ economy. This was offset, to a large extent but not fully, by a rise in investment by large and mid-size firms, households and the government which (combined) increased investment by 3%. As BOFIT noted, “the situation differs from 2012 and 2013, when investments of large firms stumbled”. On private sector side, large and mid-sized companies investments rose in energy sector, industry, manufacturing, transport and food processing.

This post was published at True Economics on September 5, 2014.

Gold slips on dollar strength, rises in euros

Gold has slipped overnight as investors weighed the impact of the European Central Bank’s more accommodative policy stance, while palladium posted its steepest gain in nearly three months on escalating tensions between Russia and Ukraine.
Gold prices spent the day meandering between slight gains and losses as investors weighed the ECB’s surprise decision to cut interest rates in addition to announcing two bond purchasing programs. The more aggressive policy move reflects that officials have grown increasingly concerned over the recent period of very low inflation and the threat it holds to the region’s economic recovery.
But for gold, the ECB’s easing efforts are widely seen as a mixed blessing. While gold can benefit from greater investment demand as traders often seek hard assets as a hedge against excessive monetary stimulus, the policy shift can also weaken the euro and strengthen the dollar, making gold more expensive for buyers who use other currencies.

This post was published at TruthinGold on September 5, 2014.

US Dollar and Yen Update…

Tonight is a good time to look at some long term charts for the US Dollar and the Japanese Yen. I’ve been waiting for this day for more than a year now when I first created this long term US dollar chart. Some of our long term members will recall this monthly fractal chart that I labeled as having a Big Base #1 and Big Base #2 which are fractals as shown by the numbers on each base. At the time I thought we were ready to breakout above the almost 14 year S&R rail but as you can see the US dollar needed one more small move lower to finish off the big base #2. The breakout doesn’t look very impressive on this bar chart but it is happening.

This post was published at GoldSeek on 5 September 2014.