• Tag Archives Disaster
  • Puerto Rico Without Electricity, Wifi, ATMs Shows Importance of Cash, Gold and Silver

    – Puerto Rico without electricity, wifi, ATMs shows importance of cash, gold and silver
    – Most of Puerto Rico remains in the dark and without power three weeks after storm
    – With widespread power failures, Puerto Rico remains cash only with retailers only accepting cash and few consumer having cash
    – Shortages of food, fuel and medicine with infrastructure repairs delayed
    – Power could be ‘out for months’ as 85% of people remain off the grid
    – Around 75% of ATMs disconnected
    – Electronic forms of payment including bitcoin have been rendered non viable
    – Puerto Rico’s accidental ‘cashless society’ shows risks of cashless society and importance of holding cash, gold and silver out of the financial and digital systems
    ***
    Puerto Rico has been destroyed by two savage hurricanes which have plunged the island into darkness and despair. The landscape of ruined homes and entire towns resembles Hiroshima after the man made disaster of a nuclear bomb being dropped on the city.

    This post was published at Gold Core on October 14, 2017.


  • Hoisington Quarterly Review and Outlook, Third Quarter 2017

    Lacy Hunt and Van Hoisington of Hoisington Investment Management do not exactly get us off to a hopeful start in their third-quarter review, today’s Outside the Box:
    The worst economic recovery of the post-war period will continue to be restrained by a consumer sector burdened by paltry income growth, a low and falling saving rate, and an increasingly restrictive Federal Reserve policy. Additionally, with the extremely high level of U. S. government debt and deteriorating fiscal situation, the economy is unlikely to benefit from any debt-financed tax changes. Finally, from a longer-term perspective, the recent natural disasters are an additional constraint on economic growth.
    Having set the stage for this rather dark and doomy tale, our intrepid authors launch into a blow-by-blow exegesis of the role the beleaguered consumer has played in keeping the economic beast on its feet and slowly stumbling forward.
    We consumers account for two-thirds of US GDP, they remind us. And ‘Consumer spending is funded either by income growth, more debt, or some other reduction in saving. Recent trends in each of these categories, as outlined below, do not bode well for this critical sector of the U. S. economy.’ I’ll let Lacy and Van fill in all the gruesome details.
    But they bring up the point – and do it mathematically and in depth – that I made in last week’s letter: The Federal Reserve is embarked upon an extraordinarily dangerous course as it both raises rates and reduces its balance sheet.

    This post was published at Mauldin Economics on OCTOBER 11, 2017.


  • NATO Launches New Black Sea Force To Target Russia

    Robert Shiller isn’t the only Nobel Laureate who’s worried the US stock market is sleepwalking toward disaster.
    In an interview with Bloomberg’s Jeanna Smialek, Thaler, who was awarded the Nobel Memorial Prize in Economic Sciences on Monday for his pioneering work in establishing that humans are ‘predictably irrational’, said that the stock market’s complacency in the face of the North Korean nuclear threat and political uncertainty at home is disconcerting.
    ‘We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,’Thaler said, speaking by phone on Bloomberg TV. ‘I admit to not understanding it.’ Adding his voice to a growing chorus of Wall Street analysts who suspect that the Trump administration’s tax reform ambitions will be dashed by a handful of intransigent senators, Thaler said any investors who’ve been paying attention should have ‘lost confidence’ by now.
    ‘I don’t know about you, but I’m nervous, and it seems like when investors are nervous, they’re prone to being spooked,’ Thaler said, ‘Nothing seems to spook the market’ and if the gains are based on tax-reform expectations, ‘surely investors should have lost confidence that that was going to happen.’ US stocks have continued to hit a string of records since President Donald Trump’s upset victory over Hillary Clinton in November while volatility has plunged, with realized vol reaching its lowest level on record in October.

    This post was published at Zero Hedge on Oct 11, 2017.


  • Nobel Laureate Richard Thaler: “We Seem To Be Living In The Riskiest Market Of Our Lives”

    Robert Shiller isn’t the only Nobel Laureate who’s worried the US stock market is sleepwalking toward disaster.
    In an interview with Bloomberg’s Jeanna Smialek, Thaler, who was awarded the Nobel Memorial Prize in Economic Sciences on Monday for his pioneering work in establishing that humans are ‘predictably irrational’, said that the stock market’s complacency in the face of the North Korean nuclear threat and political uncertainty at home is disconcerting.
    ‘We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,’ Thaler said, speaking by phone on Bloomberg TV. ‘I admit to not understanding it.’
    Adding his voice to a growing chorus of Wall Street analysts who suspect that the Trump administration’s tax reform ambitions will be dashed by a handful of intransigent senators, Thaler said any investors who’ve been paying attention should have ‘lost confidence’ by now.
    ‘I don’t know about you, but I’m nervous, and it seems like when investors are nervous, they’re prone to being spooked,’ Thaler said, ‘Nothing seems to spook the market’ and if the gains are based on tax-reform expectations, ‘surely investors should have lost confidence that that was going to happen.’
    US stocks have continued to hit a string of records since President Donald Trump’s upset victory over Hillary Clinton in November while volatility has plunged, with realized vol reaching its lowest level on record in October.

    This post was published at Zero Hedge on Oct 11, 2017.


  • In a Cashless World, You’d Better Pray the Power Never Goes Out

    When Hurricane Maria knocked out power in Puerto Rico, residents there realized they were going to need physical cash – and a lot of it.
    Bloomberg reported yesterday that the Fed was forced to fly a planeload of cash to the Island to help avert disaster:
    William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island…
    [Business executive in Puerto Rico] described corporate clients’ urgent requests for hundreds of thousands in cash to meet payrolls, and the challenge of finding enough armored cars to satisfy endless demand at ATMs. Such were the days after Maria devastated the U. S. territory last month, killing 39 people, crushing buildings and wiping out the island’s energy grid. As early as the day after the storm, the Fed began working to get money onto the island,
    For a time, unless one had a hoard of cash stored up in one’s home, it was impossible to get cash at all. 85 percent of Puerto Rico is still without power, as of October 9. Bloomberg continues: “When some generator-powered ATMs finally opened, lines stretched hours long, with people camping out in beach chairs and holding umbrellas against the sun.”

    This post was published at Ludwig von Mises Institute on October 11, 2017.


  • Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold

    – Yahoo admits every single one of 3 billion accounts hacked in 2013 data theft
    – Equifax hacking and security breach exposes half of the U. S. population
    – Some 143 million people vulnerable to identity theft
    – Deloitte hack compromised sensitive emails and client data
    – JP Morgan hacked and New York Fed hacked and robbed
    – International hacking group steals $300 million
    – Global digital banking and financial system not secure
    ***
    Editor Mark O’Byrne
    Imagine there was a chemical disaster at a factory. The surrounding water and air supply are affected over hundreds of miles. Thousands of people, if not more, are affected.
    There would be a national response. Governments would step in to ask why this had happened, how it was going to be dealt with and how it would be prevented.
    More importantly, those affected would be notified with immediate effect. The responsible company would not set up a website inviting potential victims to log on with personal details in order to find out if and how badly they have been affected.
    And if the company did do this then people and the government wouldn’t stand for it.
    Imagine that another disaster happens a few months later, at another company. But it turns out the dangerous chemicals have been leaking into the environment for possibly the previous three months.

    This post was published at Gold Core on October 5, 2017.


  • “It Will Be A Disaster”: Puerto Rico To Run Out Of Cash On October 31

    While Puerto Rico is way beyond a simple solvency crisis, having already filed for bankruptcy earlier this summer – and courtesy of Donald Trump there is now debate whether or not the island’s $74 billion in debt will be forgiven outright – it is now also on the verge of a full-blown liquidity collapse. According to Treasury Secretary Raul Maldonado, Puerto Rico faces a government shutdown on Oct. 31, at which point it will run out of cash, resulting in a halt to its hurricane recovery, unless of course the US doesn’t provide billions in emergency funds.
    Indeed, while the muni bond market freaked out today after Trump said on Tuesday night that Puerto Rico’s debt may need to be “wiped out”, focusing attention on the commonwealth’s staggering $74 billion debt, Puerto Rico faces a more immediate crisis in the wake of the storm: it is about to run short of money for fuel, salaries of recovery workers and food aid.
    Meanwhile, only 8.6% of customers have electricity, mobile-phone service is sharply curtailed and many mountainous rural areas remain inaccessible.
    According to Bloomberg, the U. S. commonwealth’s bankrupt government is burning through the $1.6 billion it had on hand before Hurricane Maria devastated the island. Furthermore, with widespread damage to telecommunications systems and the electricity grid, the Treasurer said he be unable to begin collecting sales tax for at least another month.

    This post was published at Zero Hedge on Oct 4, 2017.


  • How Many Times Can the President Be Called ‘Unfit’ Before It Undermines Confidence in America?

    The point of having a President is that in times of crisis there is one leader who can speak quickly and directly to anxious citizens and rally their confidence and trust and optimism to push forward to create a better day for themselves and their country. Franklin Delano Roosevelt was the embodiment of such a leader. We have reprinted below his Christmas Eve message to the nation on December 24, 1941 as a much-needed reminder of how a President of these United States should conduct himself in a time of crisis.
    In the case of President Donald Trump, it took him four days to pull himself away from public bickering with NFL athletes and notice that an unprecedented humanitarian disaster was unfolding in Puerto Rico following the devastation unleashed there by a direct hit from Hurricane Maria. Then, over the next ten days, the President alternated between reminding Puerto Ricans, all of whom are U. S. citizens, that they must deal with their debt to Wall Street; get their financial house in order; and adding a final Tweeted insult that implied Puerto Ricans were lazy slackers waiting for a handout. What kind of leader talks to his own citizens like that when they don’t know where they will find food or water to survive over the next week and when 95 percent of the 3.4 million residents of Puerto Rico remain without electricity.
    Today, the New York Times has titled a column by Michelle Goldberg, ‘An Unfit President Fails Puerto Rico.’ Goldberg writes:
    ‘Reports from post-hurricane Puerto Rico tell of American citizens experiencing a level of humanitarian desperation usually seen only in the poorest of countries. As of Saturday, according to the Department of Defense, only 45 percent of customers on the island had access to drinking water. People are frantically seeking food and medical supplies, and there’s not enough diesel to deliver much of the aid that’s reached San Juan. While that city’s mayor pleaded with the world for help, the president of the United States tweeted racially inflected insults at her and her people from his golf club. He implied they are lazy and ‘want everything to be done for them’ rather than helping themselves.’

    This post was published at Wall Street On Parade on October 3, 2017.


  • “Tax Reform Is A Pipe-Dream” – Stockman Warns Market Is Heading For Massive Crash

    Having raged against President Trump’s ‘1500-word-airball’ of a tax reform plan, the Reagan administration’s director of the Office of Management and Budget, David Stockman told CNBC this week that Wall Street is “delusional” for believing it will even be passed.
    “This is a fiscal disaster that when they [Wall Street] begin to look at it, they’ll see it’s not even remotely paid for. This bill will go down for the count,” said Stockman.
    He said White House economic advisor Gary Cohn and Treasury Secretary Steve Mnuchin “totally failed to provide any detail, any leadership, any plan. Both of them ought to be fired because they let down the president in a major, major way.”
    Stockman pulled no punches about President Donald Trump…

    This post was published at Zero Hedge on Oct 1, 2017.


  • Ponzi Finance and Gold Stocks

    THE FEDERAL RESERVE met and talked.
    The unofficial statement issued after their meeting was, ‘Yada, Yada, Yada.’ Their statement was translated by an obscure web site, link unavailable, which interpreted their statement as:
    ‘The Federal Reserve along with other important central banks and G-20 nations have created a pyramid of debt. This debt is ever-increasing and will be repaid by issuing new debt. Example: Issue $2 trillion in new debt to repay $1.5 trillion in old debt plus $0.5 trillion in excess expenditures. Call it a Ponzi Scheme!
    Ponzi Schemes inevitably implode and a correction or crash is coming. Consequently the search for distractions and scapegoats has intensified. Central banks and G-20 governments are hopeful that appropriate distractions will be identified and blame for the disaster will be directed elsewhere. Every effort shall be made to enhance the power, wealth and status of the financial and political elite.’
    DISCLAIMER: This translation cannot be verified so act accordingly. Portions of the above translation may not be accurate. If in doubt about the usefulness of any statement from central banks, buy gold and silver, and avoid currency units issued by central banks unless you have done appropriate ‘due diligence’ and understand the risks of debt based fiat currencies.

    This post was published at GoldStockBull on September 28th, 2017.


  • History Illustrates Market Crashes should be embraced and not feared

    If you’re not just a little bit nervous before a match, you probably don’t have the expectations of yourself that you should have. Hale Irwin
    This is a topic that financial writers should cover in more depth, but it also needs to be covered accurately. From the very beginning individuals have been trained to view crashes as disasters, and in doing so, they miss an opportunity of a lifetime. One has to wonder why so many experts almost purposely go out of their way to proclaim the next crash will mark the end of everything. History is not on their side and the average person having failed to examine history is none the wiser. When experts start to make a lot of noise one has to understand that it is being done to redirect one’s attention; the masses always fall for this ploy. Stock market crashes are perfect examples of misdirection; the crowd is directed to fixate on the fear factor and not the opportunity factor. The dumb money always buys close to the top and sells close to the bottom, and the smart money always does the opposite.

    This post was published at GoldSeek on Thursday, 28 September 2017.


  • Hyperbitcoinization? Bitcoin Trades At 85% Premium In Zimbabwe – Priced At $7,200

    While bond notes were put forward as a panacea to diminish the flight of wealth from Zimbabwe… (as Steve Hanke noted, it was not)…
    The most recent attempt by the government to increase liquidity (the money supply, measured broadly) was the introduction of bond notes in November 2016. Incidentally, in conversations I had with Dr. Kupukile Mlambo, Deputy Governor of the RBZ, in May of 2016, I strongly opposed the introduction of bond notes, indicating that they were inconsistent with orthodox dollarization and would result in a complete disaster.
    Although bond coins existed on a small scale since December 2014, the introduction of bond notes was significant. These notes were ‘backed’ by a $200m facility from the African Import Export Bank (Afreximbank) — a bank that some allege is unusually close to the Zimbabwean government. Among other things, it has still failed to publish official documents regarding the bond note facility. The uncertainty surrounding these bond notes has resulted in a black market for dollars, where the bond notes normally trade at discounts ranging from 5-15%. Not surprisingly, banks have attempted to remove these notes from their books, with bank officials reportedly engaging in black market deals for large cash sums at over 20% discounts!

    This post was published at Zero Hedge on Sep 27, 2017.


  • German Establishment Routed: AfD Second In Former East Germany; Result “Less Market Friendly Than Expected”

    The first sellside comments on today’s German elections – which as a reminder was a disaster for the German establishment, following the worst showing for the CDU/CSU since 1949 and the worst result for the SPD since 1945 with support for both parties tumbling since the 2013 elections…
    … have started to trickle, in and according to SEB, the result is ‘less market-friendly’ than expected.
    Quoted by Bloomberg, SEB cross-asset strategist Thomas Thygesen said that the result is a victory for Angela Merkel as expected, but her mandate going into negotiations about deeper euro integration does not look quite as strong.
    “It looks like marginally less market-friendly than expected,’ Thygesen said adding that ‘I’d say this is in line with our expectation that the euro would pause around $1.20 vs dollar and then maybe retrace a couple of percent over the autumn.’
    ‘The AFD above 10% suggests that even here the stakes are high: if the European project doesn’t fly this time in a way that voters like, Germany could look less politically stable in a few years.’
    A note from Pantheon’s Claus Vistesen is similarly concerned about the election outcome and the viability of the upcoming coalition:

    This post was published at Zero Hedge on Sep 24, 2017.


  • Equifax Accidentally Directs 200,000 Customers To Fake Phishing Website

    And the hits just keep coming for Equifax, the once-trusted credit-monitoring firm that has been embroiled in one of the biggest corporate public-relations disasters in recent memory since disclosing that hackers had penetrated its cyber security defenses and absconded with sensitive personal and financial data belonging to 143 million Americans. Because of the types of data that were stolen, including drivers’ license, social security and credit-card numbers, experts have described the hack as possibly the most damaging corporate hack yet.
    As if this weren’t enough to permanently sully the firm’s reputation (amid cries of ‘you had one job!’) – the staggering irony of a credit monitoring firm inadvertently divulging the sensitive information that it was supposed to safeguard hasn’t been lost on consumers) a series of subsequent disclosures have portrayed the firm’s executives as bungling, at best, and nefarious, at worst.
    In the nearly two weeks since the story broke…

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


  • Illinois Unpaid Vendor Backlog Hits A New Record At Over $16 Billion

    Back in July, the state of Illinois narrowly avoided a junk bond rating with a last minute budget deal that included a 32% in hike in income taxes. Republican Governor Bruce Rauner vetoed the budget and called it a “disaster,” but both houses of the state legislature voted to override his veto. Meanwhile, S&P and Moody’s were apparently both convinced that the budget deal was sufficient for the state to remain an investment grade credit and all lived happily ever after, if just for a few months. Per CNN:
    Illinois narrowly avoided becoming the first U. S. state ever slapped with a “junk” credit rating from S&P Global Ratings after it passed its first budget in more than two years.
    The ratings firm removed the threat of an imminent downgrade for the fifth most populous state in the country on Wednesday, ruling that the Illinois budget deal has lowered the risk of a “liquidity crisis.” Now the state is rated one-notch above “junk” territory, and S&P said the odds of a downgrade within the next year have “substantially diminished.”

    This post was published at Zero Hedge on Sep 19, 2017.


  • Who Gets Hit by Mortgage Losses in Harvey and Irma Areas?

    ‘We need to ask for a policy change because the burden with these losses is too big.’ Somebody is going to pay for losses on mortgages of homes that were destroyed by Hurricanes Harvey and Irma. It’s a just a question of who.
    The taxpayer is on the hook, along with some investors. But then there are the servicers of mortgages guaranteed by the Government National Mortgage Association, for short Ginnie Mae. The largest of them is Wells Fargo, but they mostly include smaller non-banks such as PennyMac and Quicken Loans. The amounts could be large. And now they’re asking for a bailout of sorts.
    In total, 4.3 million properties with nearly $700 billion in outstanding mortgage balances are located in FEMA-designated disaster areas in Texas and Florida, according to a preliminary estimate by Black Knight Financial Services:
    Disaster areas of Hurricane Harvey: 1.18 million mortgaged properties with $179 billion in unpaid mortgages. Disaster areas of Hurricane Irma: 3.14 million mortgaged properties with $517 billion in unpaid mortgages. Many of these homes survived mostly unscathed. So the mortgage balances of homes that have been severely damaged or destroyed remain uncertain but are significant.

    This post was published at Wolf Street on Sep 19, 2017.


  • Trying to Save the Euro from Total Disaster

    European Commission President Jean-Claude Juncker has now come out in a very desperate move telling that those members of the EU who are non-euro countries should introduce the euro ASAP. ‘The euro is destined to be the single currency of the EU as a whole,’ Juncker declared. Juncker then proposed a ‘euro preparation instrument’ to provide technical and financial assistance to make this transition.
    The Euro is in serious trouble because of the total mismanagement of the ECB. Low to negative interest rates have totally failed to stimulate the economy after almost 10 years. Now that rates must rise to try to avoid a massive pension collapse in Europe, the ECB could suffer a major default and will need to be bailed-out itself by the government since it owns 40% of euro-zone debt.

    This post was published at Armstrong Economics on Sep 15, 2017.


  • Armstrong Logic?

    I had not planned on penning a public article today but my plans were changed by Martin Armstrong as he again is busy attempting to rewrite history. He is again trying to scare people away from their only financial hurricane insurance, gold …why? Any thinking person knows a credit disaster is coming. Heck, even he has called for a pending financial disaster himself…but gold is not a safe harbor ‘this time’?
    As a reminder of past fallacy, Mr. Armstrong wrote back in September 2015 ‘…’You are doomed if you cling to the idea that gold will rise simply because stocks decline. Gold was DEVALUED in 1934 since gold was MONEY. What it could purchase for $20.67 then cost $35. (this line has since been deleted from his original article) The government confiscated gold and moved to a TWO-TIER monetary system with gold used exclusively for international settlements, not domestic.’ … Martin Armstrong
    The fact is, gold was REVALUED 70% higher versus the dollar (and much more versus other assets) as what previously required $20.67 to purchase one ounce of gold moved to $35. I said at the time, what he wrote could not have been a typo or a mistake, his logic was in reverse and he was trying to rewrite history.
    ==============================================
    Fast forward to present, he is at it again. He recently posted ‘Am I certain about the strong dollar?’ Let’s take a look at a few glaring ‘alterations’ of history and poor logic according to Martin Armstrong.
    His article starts out with ‘You can denominate oil to peanuts in some other currency but that still will never put a dent in the dollar. Why? It is capital flows than count and trade is minimal’.

    This post was published at JSMineSet on September 14th, 2017.


  • Three Reasons Why Retail Sales Are About To Disappoint Bigly

    On Friday the Department of Commerce will report August retail sales, a material report which all else equal, may influence whether the Fed proceeds with its plans to unveil balance sheet tapering in its upcoming FOMC meeting. However, as we discussed last week, the report, together with virtually all other high frequency economic reports, will be materially distorted by the destructive aftermath of hurricane Harvey (Irma’s impact will be felt in the September retail report).
    While Goldman recently showed the historical impact of hurricanes and other natural disasters on virtually every economic data series…
    … of particular interest in the coming days will be the biggest driver behind the US economy, namely retail spending, and specifically whether the recent natural disasters led to a sharp – and potentially sustained – slump. According to internal Bank of America credit and debit card spending data released as usual just days ahead of the official government report, there does appears to be a substantial adverse impact. The question is how much of this is secular, and how much is a continuation of recent weakness in retail spending. Further complicating matters is a seasonal quirk, with the August spending report coming at the peak “back to school” spending period, coupled with the recent Amazon Prime Day which led to further distortions in retail spending patterns.

    This post was published at Zero Hedge on Sep 14, 2017.