UMich Consumer Confidence Rises On Surge in “Hope”

While the government Conference Board confidence measure remains the most exuberant, University of Michigan Consumer Confidence continues to tread water. August final print rose to 82.5 from the preliminary data (79.2) driven by a surge in “hope” from 66.2 to 71.3 mid-month. Short-term inflation expectations fell on the month. Despite exuberant all-time highs in stocks, UMich has been flat for the entire year and is now at the least exuberant relative to Conference board data in almost 7 years.
A beat but flat-line all year

This post was published at Zero Hedge on 08/29/2014.

Here Come The Q3 GDP Downgrades…

Following the significantly weaker-than-expected spending data, the sell-side has begun its inglorious downgrades of the exuberant hockey-stick growth expectations they all extrapolated off Q1 lows… Goldman cut from 3.3% to 3.1% and Barclays slashed Q3 GDP expectations from 2.7% to a mere 2.2%.
Via Goldman,
BOTTOM LINE: The July personal spending numbers were softer than expected, while personal income and the PCE price index were close to expectations. We reduced our Q3 GDP tracking estimate by two-tenths to 3.1%.

This post was published at Zero Hedge on 08/29/2014.

5 reasons to buy silver & 2 reasons to sell

Today, we consider gold’s erratic little sister – the bi-polar metal that is silver.
There is no other metal on God’s earth that has so much potential to make its buyers millions. And there is no other metal that has so consistently failed to deliver.
Its proponents point to supply shortages and increased usage. Its detractors point to charts showing bear markets that go on for years.
If I could fast forward three years into the future, and I saw that silver was $200 an ounce, it wouldn’t surprise me.
But then if it was $5 an ounce, that wouldn’t surprise me either.
To reflect the numerous contradictions that accompany this metal, we give you five reasons you should buy it now – and two reasons you should sell it.
Five good reasons to buy silver Let’s start with some reasons to buy.
1. China’s supplies of silver are drying up On the Shanghai futures exchanges, physical metal – rather than paper derivatives – is traded. As a result, many declare that the action there is a truer reflection of what is going on in the real world.
Since March 2013, silver inventory has fallen by more than 90%. At the high, there was 1,143 tonnes of stock. Last week, that had fallen to just 103 tonnes. In July and August alone, there has been a 56% drop. That is some drawdown.
At this rate, China – a significant producer of silver, but also a consumer – will become a net buyer before the end of 2014, putting upward pressure on the price.
The exchange only came into being in 2012. Since then, there has been a correlation between the silver price and the exchange’s holdings. In other words, buying and selling on the exchange may be driving the price. As there is very little metal left to sell, selling pressure could dry up.

This post was published at TruthinGold on August 29, 2014.

Italy Back In Deflation With Lowest CPI Print In History; European Inflation Lowest Since 2009

Curious why European bond yields tumble to fresh new lows day after day (with the explicit backstop of the ECB of course, which makes fundamental analysis of sovereign solvency an irrelevant matter)? Then look no further than Italy, where as the chart below shows, not only has the economy “filled the gap” of its economy as tracked by its EU-Harmonized CPI, but at an August print of -0.2%, this is the lowest print in history, worse even than the brief -0.1%, flirt with deflation recorded just in the aftermath of the Lehman crash.

This post was published at Zero Hedge on 08/29/2014.

A day of reckoning has arrived to retiring Americans: 63 percent of Americans that start working by the age of 25 will be dependent on Social Security, relatives, or charity by the time they hit 65.

The notion of retirement is a fairly new one outside of wealthy circles. For most of civilized history, people worked until they died. Not a glamorous way to go but that is simply the course of human history. Only until recently with the emergence of the middle class was there a general semblance that retirement may be accessible to all. However looking at actual figures reflects a very different picture. It is hard to get a perfect balance sheet as to where older Americans stand today since there are many differing resources floating out in the market. Yet one thing is consistent and that is, older Americans are entering into a major day of reckoning with not enough. Older Americans are woefully unprepared for what lies ahead in retirement. Many are basically at the mercy of Social Security, family, or charity. Not exactly the retirement paradise Wall Street started pitching to the masses starting early in the 1980s. The reason this has gone on for so long is the political system is co-opted by big money. Over this period of time real substantive reforms could have occurred. Instead a generation has passed and many have nothing to show for it even with the stock market at record highs.
Retirement plan number 1: have no savings
Everyday roughly 6,000 Americans hit the age of 65. Too bad 36 percent of Americans have nothing saved for retirement. The typical cost of medical service for someone 65 and older and living 20 more years is $215,000. Given that many have nothing, they are simply one medical event away from the poor house. This is why programs like Social Security and Medicare are protected with such fury by older Americans. In many ways, this is their only form of wealth in retirement. Most do not participate in the Wall Street casino.
Some interesting figures regarding older Americans:

This post was published at MyBudget360 on August 29, 2014.

Japanese Household Spending Slumps 5.9%; Cries for More Monetary Stimulus

Consumer spending in Japan slumped in June because of a tax hike pushed through by Prime Minister Shinzo Abe. Economists claimed it would be temporary and spending would quickly recover thanks to inflation.
Let’s take a look at what actually happened.
Japanese Household Spending Slumps 5.9%
Yahoo!Finance reports Japan Household Spending Slumps, Output Flat as Tax Pain Persists
Japanese household spending fell much more than expected and factory output remained weak in July after plunging in June, government data showed, suggesting that soft exports and a sales tax hike in April may drag on the economy longer than expected.
Household spending fell 5.9 percent in July from a year earlier, nearly double the drop forecast in a Reuters poll, as the higher levy and bad weather kept consumers at home instead of going out shopping.

This post was published at Global Economic Analysis on Friday, August 29, 2014.

Coppock Indicator: An Intermediate Term Bottom For Gold Is In

The data wrangler, Nick Laird from Sharelynx, sent these long term technical charts of gold in US dollars with a note saying, “I like the look of it Jess. It’s a deep cyclical indicator and you can see from it’s past performance how it works for gold.” I have to admit that this is one indicator I am not given to using, probably since I rarely was a long term investor in the past, and this is a cyclical tool although certain chart functions will allow you to utilize it on shorter term charts, and probably incorrectly based on Coppock’s intent. It is an indicator that generates only buy signals by attempting to identify market bottoms after serious declines. The indicator must turn negativeinto a trough. That implies that it had previously been positive. And then it must begin an upturn and sustain it. So if I am reading these charts correctly, the last buy signal we have had was in 2001 with a big bottom buy signal forming in 1998-99. See what I mean about longer term? For a trader, that is glacial.

This post was published at Jesses Crossroads Cafe on 29 AUGUST 2014.

Personal Spending Suffers First Drop Since January As Consumer Income, Outlays Miss

Judging by the just released personal income and spending data, consumers are already forecasting a long, harsh winter. With incomes and outlays expected to rise by 0.3% and 0.2% respectively, the July data was a big dud, missing on both expectations, and while income rose by a modest 0.2%, far below the 0.5% in June, it was personal spending which in fact declined by 0.1%, a major drop from the 0.4% increase in the prior month, and the first outright decline in spending since January. As CNBC’s Steve Liesman explained the disappointing data: “weather.”

This post was published at Zero Hedge on 08/29/2014.

‘Central Banks Should Give Money Directly To The People’ – Gold Bullish CFR Proposal

Last week, a very radical proposal appeared in the pages of the influential ‘Foreign Affairs’ magazine, the publication arm of the equally influential Council on Foreign Relations (CFR) think-tank based in New York.
An article ‘Print Less but Transfer More – Why Central Banks Should Give Money Directly to the People’, that has been picked up widely in the media argues that given that monetary stimulus measures such as quantitative easing and near zero central bank interest rates have failed to boost economic growth, a new radical monetary approach is needed. That approach is to print currency and give the cash directly to consumers and households as required so as to remedy insufficient consumer spending and in order to prevent recessions.
The article is authored by Mark Blyth and Eric Lonergan. Blyth, originally from Scotland, is an economist at Brown University in Rhode Island. Lonergan, originally from Ireland, is a fund manager of global macro strategies at M&G Investments in London.
Although ‘Foreign Affairs’ publishes various sides of important debates, policy articles in ‘Foreign Affairs’ have tended to influence US economic and political policy over the years, so the ‘cash transfer proposal’ is worth watching.

This post was published at Gold Core on 29 August 2014.

The wages-fuel-demand fallacy

In recent months talking heads, disappointed with the lack of economic recovery, have turned their attention to wages. If only wages could grow, they say, there would be more demand for goods and services: without wage growth, economies will continue to stagnate.
It amounts to a non-specific call to stimulate aggregate demand by continuing with or even accelerating the expansion of money supply. The thinking is the same as that behind Bernanke’s monetary distribution by helicopter. Unfortunately for these wishful-thinkers the disciplines of the markets cannot be bypassed. If you give everyone more money without a balancing increase in the supply of goods, there is no surer way of stimulating price inflation, collapsing a currency’s purchasing power and losing all control of interest rates.
The underlying error is to fail to understand that economising individuals make things in order to be able to buy things. That is the order of events, earn it first and spend it second. No amount of monetary shenanigans can change this basic fact. Instead, expanding the quantity of money will always end up devaluing the wealth and earning-power of ordinary people, the same people that are being encouraged to spend, and destroying genuine economic activity in the process.

This post was published at GoldMoney on 29 August 2014.

Silver and the Unmentionables

The purpose of a taboo is to avoid destruction. Those who do not respect the taboos of a culture endanger the cultural identity.
Therefore, disregarding the taboos produces self-destruction and/or destruction.
Many of you read Jeff Clark’s (of Casey Research) recent piece outlining the reasons why silver prices will likely move higher. It was a great piece from an organization with great reach.
But it missed the unmentionable elephant in the room. Here is a summary in all its bullish glory.
1. Inflation-Adjusted Price Has a Long Way to Go
One hint of silver’s potential is its inflation-adjusted price. I asked John Williams of Shadow Stats to calculate the silver price in June 2014 dollars (July data is not yet available).
Shown below is the silver price adjusted for both the CPI-U, as calculated by the Bureau of Labor Statistics, and the price adjusted using ShadowStats data based on the CPI-U formula from 1980 (the formula has since been adjusted multiple times to keep the inflation number as low as possible).
The $48 peak in April 2011 was less than half the inflation-adjusted price of January 1980, based on the current CPI-U calculation. If we use the 1980 formula to measure inflation, silver would need to top $470 to beat that peak.

This post was published at Silver-Coin-Investor on Aug 28, 2014.

S&P Futures Surge Over 2000, At Record High, On Collapsing Japanese, European Economic Data, Ukraine Escalations

Following Wednesday’s laughable tape painting close where an algo, supposedly that of Citadel under the usual instructions of the NY Fed, ramped futures just over 2,000 to preserve faith in central planning, yesterday everyone was expecting a comparable rigged move… and got it, only this time milliseconds after the close, when futures moved from solidly in the red, to a fresh record high in seconds on no news – although some speculate that Obama not announcing Syrian air strikes yesterday was somehow the bullish catalyst – and purely on another bout of algo buying whose only purpose was to preserve the overnight momentum. Sure enough, this morning we find that even as bond yields around the world continue to probe 2014 lows, and with the Ruble sinking to fresh record lows as the Ukraine situation has deteriorated to unprecedented lows, so US equity futures have once, driven by the now generic USDJPY spike just after the European open, again soared overnight, well above 2000 and are now at all time highs, driven likely by the ongoing deflationary collapse in Europe where August inflation printed 0.3%, the lowest since 2009 while the unemployment remained close to record high, while the Japanese economic abemination is now fully featured for every Keynesian professor to see, with the latest Japanese data basically continuing the pattern of sheer horror as we reported yesterday.
As a result, with the Fed firmly in tapering mode for now, all hopes are once again firmly pinned on Draghi, and as Bloomberg says the European economic crash is “increasing pressure on the ECB to take action to kindle the bloc’s faltering recovery” even as Germany’s finance minister poured cold water overnight on more action out of the ECB, in line with the Reuters headline earlier this week. In short, complete confusion reigns in the Fed’s “Mutant, broken market” in which nothing really matters and where a green EOD print is now a matter of urgent national security and policy.

This post was published at Zero Hedge on 08/29/2014.

The Myth of the Unchanging Value of Gold

According to mainstream economics textbooks, one of the primary functions of money is to measure the value of goods and services exchanged on the market. A typical statement of this view is given by Frederic Mishkin in his textbook on money and banking. ‘[M]oney … is used to measure value in the economy,’ he claims. ‘We measure the value of goods and services in terms of money, just as we measure weight in terms of pounds and distance in terms of miles.’
When money is conceived as a measure of value, the policy implication is that one of the primary objectives of the central bank should be to maintain a stable price level. This supposedly will remove inflationary noise from the economy and ensure that any changes in money prices that do occur tend to reflect a change in the relative values of goods and services to consumers. Thus, for mainstream economists, stabilizing a price index based on a basket of arbitrarily selected and weighted consumer goods, e.g., the CPI, the core CPI, the Personal Consumption Expenditure (CPE), etc., is a prerequisite for rendering money a more or less fixed yardstick for measuring value.
This idea – that a series of acts involving interpersonal exchange of certain sums of money for quantities of various goods by diverse agents over a given period of time somehow yields a measure of value – is another ancient fallacy that can be traced back to John Law. Law repeatedly referred to money as ‘the measure by which goods are valued.’ This fallacy has been refuted elsewhere and rests on the assumption that the act of measurement involves the comparison of one thing to another thing that has an objective existence, and whose relevant physical dimensions and causal relationships with other physical phenomena are absolutely fixed and invariant to the passage of time, like a yardstick or a column of mercury.

This post was published at Ludwig von Mises Institute on Friday, August 29, 2014.

Wall Street Admits That A Cyberattack Could Crash Our Banking System At Any Time

Wall Street banks are getting hit by cyber attacks every single minute of every single day. It is a massive onslaught that is not highly publicized because the bankers do not want to alarm the public. But as you will see below, one big Wall Street bank is spending 250 million dollars a year just by themselves to combat this growing problem. The truth is that our financial system is not nearly as stable as most Americans think that it is. We have become more dependent on technology than ever before, and that comes with a potentially huge downside. An electromagnetic pulse weapon or an incredibly massive cyberattack could conceivably take down part or all of our banking system at any time.
This week, the mainstream news is reporting on an attack on our major banks that was so massive that the FBI and the Secret Service have decided to get involved. The following is how Forbes described what is going on…
The FBI and the Secret Service are investigating a huge wave of cyber attacks on Wall Street banks, reportedly including JP Morgan Chase, that took place in recent weeks.
The attacks may have involved the theft of multiple gigabytes of sensitive data, according to reports. Joshua Campbell, supervisory special agent at the FBI, tells Forbes: ‘We are working with the United States Secret Service to determine the scope of recently reported cyber attacks against several American financial institutions.’

This post was published at The Economic Collapse Blog on August 28th, 2014.

Foreign Custodial Holdings of US Treasuries continuing to Climb

Just a short set of comments this evening. They deal with the usual, “The world is going to move away from the Dollar any day now” chatter. If it is, it sure isn’t showing up in the Foreign Central Bank holdings of Treasuries that are in custody at the New York Federal Reserve. Here is the chart.

Look folks, I am just as concerned about the US Dollar as the next guy but when I look at the competition, I see one set of assorted problems or another. What that means is that the idea that the world is going to drop the Dollar and move to some sort of as of yet undefined currency in which to conduct the bulk of its trade simply does not carry much weight with me at this time.

This post was published at Trader Dan Norcini on Thursday, August 28, 2014.

A Bearish Sign For Treasurys?

It is no secret that throughout 2014 Bank of America has been actively urging its clients to join the most crowded short trade of the year, the 10 Year Treasury, which also happens to be one of the best performing asset classes year-to-date, and one which just hit 2014 highs. However, with the 10Y yield plunging, BofA’s chief technician, which as is widely known is another words for “momentum chaser” who has over the past year been branded as the new coming of the legendary Tom Stolper thanks to the inverse-accuracy of his calls, has changed his tune, to wit: “the trend in yield is lower.” If there was something that could make us nervous about being long TSYs, this is it.

This post was published at Zero Hedge on 08/28/2014.

Massive 60% Stock Market Correction Coming: ‘Period Of Extreme Turmoil’

The confidence game is almost up warns Prudent Bear Fund President David Tice. And when the economic recovery and stock market build-up is finally revealed for the conjecture that it really is we’ll have a sell-off of unprecedented proportions.
Markets could soon face a fall of up to 60 percent, two experts told CNBC on Wednesday.
A jolt to international confidence in central banks will lead to a 30 to 60 percent market decline, David Tice, president of Tice Capital and founder of the Prudent Bear Fund, told CNBC’s ‘Power Lunch.’ When this happens, he said, markets will face a ‘period of extreme turmoil.’
This crash will be precipitated, he said, by a disillusionment with the Federal Reserve’s ‘confidence game,’ which will then see inflation rise, and the Fed scramble to raise rates…

This post was published at shtfplan on August 28th, 2014.

6 Reasons Why ECB Will Avoid QE As Long As Possible (And Why The Fed Did It)

Yields on European sovereign debt have collapsed in recent months as investors piled into these ‘riskless’ investments following hints that the ECB will unleash QE (at some point “we promise”) and the economic situation collapses. However, Mario Draghi has made it clear that any QE would be privately-focused (because policy transmission channels were clogged) and the appointment of Blackrock to run an ABS-purchase plan confirms that those buying bonds to front-run the ECB may have done so in error. As Rabobank’s Elwin de Groot notes in six simple comments that he expects continued “procrastination” by the ECB over sovereign QE even after dismal economic data – and in doing so, exposes the entire facade behind The Fed’s QE.

This post was published at Zero Hedge on 08/28/2014.

Gold Daily and Silver Weekly Charts – A Tale of Two Metals Markets – Shout and Feel It

Nothing of particular interest was shown in the Comex reports from yesterday. Tomorrow we bid adieu to the August contract. Time to move our eyes to the September month which is active for silver but not gold. The precious metals are unfortunately very politicized in this currency war. That is both a risk, and an opportunity. There was intraday commentary on the metals here. There are obviously two metals markets, one of paper, and one of real metal delivered and taken. One is most expressed in the overnight market with trading in Asia and Europe, and another that starts after the New York opening bell.

This post was published at Jesses Crossroads Cafe on 28 AUGUST 2014.