The Eurozone Is a Growing Problem for U.S. Economy

The 18-nation euro-zone is the largest economy in the world, eclipsing that of the U. S. The euro-zone is the largest trading partner of the U. S. (the largest importer of U. S. goods, the largest exporter of goods to the U. S.). The euro-zone is in an economic crisis. Its recovery from the 2008 global financial collapse has been as anemic as that of the U. S., in fact more so. The euro-zone already slid back into recession once. And its economy was barely positive in the first quarter of this year, growing only 0.2%. It slowed further to 0.0% quarter-over-quarter in the second quarter.
Worse, Germany, the euro-zone’s largest and previously strongest economy, unexpectedly saw its economy contract to negative -0.2% in the second quarter. France, the second largest euro-zone economy, saw its growth slow to 0.0% for the quarter. Italy, Europe’s fourth largest economy, slid back into recession, its GDP at negative 0.8% in the second quarter, its second straight quarterly contraction.
Reports this week indicate the problems are worsening in the third quarter.
Retail sales in Germany plunged 1.4% in July, after declining 0.4% in the second quarter.
Germany’s Ifo business confidence index fell in August for the fourth straight month, to its lowest level since July 2013. Market research group GfK reported its German consumer expectations index ‘collapsed’ in August to its most pessimistic level since 1980. Perhaps for good reason, since the overall euro-zone’s unemployment rate remained in double-digits at 11.5% in July, just 0.5% lower than its peak of 12% in 2013.

This post was published at FinancialSense on 08/29/2014.

29/8/2014: Stability… of Negative Growth: Euro Area in Historical Perspective

Washington Post has a nifty chart plotting the demise of Europe…That’s not just ‘periphery’ up there in black. It’s the entire euro area, with the stellar performer Germany, solid Austria and exports-rich Belgium and the Netherlands, competitiveness-leading world superstar Finland, the best-educated country in the solar system Ireland, and on… and on…

This post was published at True Economics on Friday, August 29, 2014.

Gold And Silver – Elite’s NWO Losing Traction. Expect [More] War

The lies and deceit coming from Western governments continue unabated, whether it is [Pollyanna] economic news that is non-reflective of existing reality or more false flag ‘war’ news that is also non-reflective of existing reality. Whether it be Obama, Cameron, or Merkel, supposed leaders of their countries but totally failing to provide leadership, each can best be described as pimps for the banking elites.
No one, not even [non-existing] Weapons-of-Mass-Destruction Bush Jr, has been more hell-bent on starting wars throughout the world than Nobel Peace Prize winner, [cough, cough], Obama. Cameron has nothing positive to contribute, coming from a country that produces nothing, just running on spent debt fumes. He just announced his idea of more sanctions against Russia by kicking them out of the SWIFT program, the elite banker’s Society for Worldwide Interbank Financial Telecommunication.
How have all of those other sanctions been working, David? There simply is no right way for doing stupid things, but he and Obama continue to try to disprove stupidity with the same proven results.
Merkel, the one who has the best opportunity to defy the elites and take Germany forward into the new world’s developing economic order, primarily China and Russia, leaders of BRICS and its fast-growing associated countries, [new members not currently allowed] Instead, Merkel keeps Germany rooted as the step-child satellite country of the federal United States.

This post was published at Edge Trader Plus on August 30, 2014.

august 29

Gold closed down $2.90 at $1285.80 (comex to comex closing time ). Silver was up 13 cents at $19.40
In the access market tonight at 5:15 pm
gold: $1287.00
silver: $19.46
Today is first day notice and also the last day for options on the OTC. GLD : a slight loss of .6 tonnes of gold (probably to pay for fees etc)
SLV : no change in silver inventory at the SLV/now 331.528 million oz
Today we have commentaries concerning the Ukraine, Russia, Japan, Germany and the EU, Italy and the terror of ISIS.
On the physical side of things, we have a great commentary from Koos Jansen on silver as this metal has volume in China exceeding that of the comex. Also the Shanghai Silver Exchange has only 3.3 million oz of inventory left having depleted over 29 million oz over one year. Once depleted where do you think China will go to, in order to feed its burgeoning demand? 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 remained the same. Again, they must have found some gold to lease..
London good delivery bars are still quite scarce.
August 29 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.088000% .1020000% .1200% .1500% .228000%
August 28.2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
08800% .104000% .12000% .1500% .224000%
end
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on August 29, 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.

German Finance Minister Tells EU Leaders: Free Money Party’s Over

Has Germany had enough? Hot on the heels of Mario Draghi’s ‘demands’ that EU leaders undertake “structural reforms” to boost competitiveness and overcome the legacy of Europe’s debt crisis, German Finance Minister Wolfgang Schaeuble unleashed perhaps the most worrisome statement tonight for all the free-money-party-goers – the music is about to stop. In an interview with Bloomberg TV, Schaeuble blasted “Europe needs to find ways to foster growth,” adding that “the ECB has reached the limit in helping the Euro Area.” In a clear shot across the bow of his ‘core’ cohort, Schaeuble said he “understood” Hollande’s demands but shot back that “monetary policy can only buy time.”
As WSJ notes, the French are seeking aid…

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

Silver Pricing Change Takes Effect, Other metals to follow

With the launch in mid-August of a new system to arrive at the price for silver, precious metals investors are dealing with the first in a series of changes in how the market prices of silver, gold, platinum and palladium are reached.
More change is coming, since the other three metals have yet to go through the process, but what’s happened so far is this: Concerns about price fixing after everything from LIBOR to currency were found to have been manipulated led to accusations about the gold and silver markets, and in January of this year Germany’s financial regulator Bafin said that the manipulation of precious metals prices was worse than that occurring with LIBOR.
Deutsche Bank was interviewed by Bafin on the matter before the end of 2013, and in January the bank announced that it would exit the commodities business and abandon its positions in the processes of fixing gold and silver prices. Since Deutsche Bank was one of only three involved in the 117-year-old process of setting the price of silver – the other two were HSBC and Bank of Nova Scotia – that meant a new method had to be found before Deutsche Bank departed the scene.
In August, that new method launched. An electronic, auction-based mechanism has taken the place of the traditional conference call among the three banks that had determined how silver would be priced since the time of Queen Victoria. Run by CME Group Inc. and Thomson Reuters Corp., the new system uses electronically entered orders proposing a starting price; if buy and sell orders don’t match up, an algorithm will determine the price to be used for the next bidding round. CME had said in a report when the system went live that each round should take 30 seconds or less, and that participants will be able to view bid and offer volumes, as well as total volumes traded once the price is set.

This post was published at TruthinGold on August 28, 2014.

Revolt of the Luddites: Berlin Moves Against Uber and Airbnb

Uber taxi service banned in Berlin on safety grounds… German capital follows Hamburg with vote to ban taxi app firm, saying it does not protect passengers from unlicensed drivers … Berlin has voted to ban Uber on safety grounds as the app-enabled taxi service continues to run up against resistance in Germany. Officials said the Californian company, which operates in 110 cities around the world, did not do enough to protect its passengers from unlicensed drivers. – UK Guardian
Dominant Social Theme: New kinds of commerce are dangerous.
Free-Market Analysis: Berlin is leading the way for neo-Luddites, confronting both Internet-based taxi services and lodging facilities.
Most of the sectors where the Internet is having the most dramatic effect are heavily regulated and thus inefficient and lacking in consumer choice. A prime example of this is “Uber” – an Internet-based transportation app. Another is Airbnb, a lodging facility.
Here’s more from the Guardian regarding Uber:
A senate statement said Uber – already banned in Hamburg – also failed to provide adequate insurance for its drivers or their passengers in accidents. The Berlin ruling states: “Uber is from now on no longer allowed to use a smartphone app or similar application, or offer services via this app which are in breach of the Public Transport Act.”
Uber said it would appeal against the ban, saying the senate’s decision was “anything but progressive”, and it was “seeking to limit consumer choice for all the wrong reasons”. Uber claims that it does not operate a taxi service, but merely offers a platform that mediates between drivers and customers.

This post was published at The Daily Bell on August 26, 2014.

Continued EU Weakness Gives Rise to Two Inflationary Trends

German economy ‘losing steam’ as business confidence plunges again … Survey of optimism among companies adds to gloom enveloping Europe’s biggest economy … Germany’s businesses are rapidly losing confidence in the prospect of a recovery in the eurozone, in a further blow to the single currency’s biggest economy. Companies’ assessment of the business climate is now at a 13-month low, having deteriorated for four successive months, according to a survey of 7,000 firms conducted by the Munich-based IFO think tank. – UK Telegraph
Dominant Social Theme: Something must be done to save Europe and the euro.
Free-Market Analysis: What does the future hold? More and more money stimulation it would seem. China – the BRICS – and the US are printing endless gouts of money, and now it appears as if the European Union is headed in the same direction.
In fact, the EU cannot simply print, as the Germans stand in the way. But according to this article and others, the German economic situation is declining, so perhaps there will be less pushback to plans to stimulate.
Certainly, without German economic vitality, the eurozone is even worse off than it’s been in the past. Here’s more:
The study is the latest blow to Angela Merkel’s hopes of Germany leading the eurozone out of its current economic malaise. Separate data for investor confidence and inflation have also shown activity slowing down. The economy contracted in the second quarter of the year, and another quarter of decline would tip it into recession.

This post was published at The Daily Bell on August 26, 2014.

French Government Dissolves in Dispute Between PM Valls and Economy Minister Montebourg

Economy minister Arnaud Montebourg stepped over the line last weekend criticizing the policies of president Francois Hollande. Some sources report that prime minister Manuel Valls gave Hollande a “him or me” ultimatum, but Valls disputes that claim.
Regardless, France Thrown Into Political Turmoil After Government Dissolved.
France has entered uncharted political waters after the prime minister, Manuel Valls, presented his government’s resignation amid a political crisis triggered by his maverick economy minister who called for an end to austerity policies imposed by Germany.
The prime minister, a social democrat who has been compared to Tony Blair, acted with characteristic swiftness in a bid to reassert his authority. His aides had let it be known on Sunday that the economy minister, Arnaud Montebourg, had crossed a “yellow line” for his dual crime of criticising both the president of France and a valued ally.
Montebourg, 51, fired his first broadside in an interview with Le Monde on Saturday and followed up with a speech to a Socialist party rally the following day. In a veiled reference to President Franois Hollande, he said that conformism was an enemy and “my enemy is governing”. “France is a free country which shouldn’t be aligning itself with the obsessions of the German right,” he said, urging a “just and sane resistance”.

This post was published at Global Economic Analysis on August 25, 2014

Glenn Beck on Germany’s [Rehypothecated] Gold

Glenn Beck reviews Germany’s early 2013 request to repatriate 300 tonnes of gold held by the Federal Reserve Bank of New York and then asks why the Fed responded with a pledge to return the gold in 7 years.  If the gold exists, it should be a simple matter of shipping logistics.  But 7 years?  Beck goes on to logically speculate that the gold doesn’t, in fact, exist.  The gold that the Fed has so far returned, is not the original bars first delivered to the US from Germany some 70 years ago. They are newly recast bars.  Could it be that the original gold was long ago rehypothecated, in order to maintain the illusion of a strong dollar?  Beck believes it’s even worse – that the Fed and other western central banks of the world have not only rehypothecated each other’s gold, but have even sold or transferred the physical gold to new owners.

One note of error: Beck says at one point in the video that the Fed reports holding about 6,700 tonnes of Germany’s gold. But this would be larger than Germany’s known gold reserves. As this chart shows, the Fed is only holding some 1,500 tonnes of Germany’s gold.

Jim Kunstler’s 2014 Forecast

Over at ZeroHedge, Jim Kunstler’s latest post on his forecast for 2014 is a MUST READ!!  Readers should greatly benefit from his astonishingly honest take on everything from the shale oil sham to last year’s gold slam.  He even gets into Obamacare, Bitcoin the Euro crisis and the middle east.

Excerpt: Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical “recovery” and the “shale gas miracle” on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations.

Read the entire article at ZeroHedge.

Then & Now – Hitler & Obama

So dictatorship didn’t happen overnight.  It took 5 years, gradually, little by little to escalate to a dictatorship,” Katie Worthman, a survivor of the Natzi regime stated about the coming to power of Adolf Hitler.  She explains how people became so desperate for change, that they elected and then turned over all control to the man who spoke so eloquently and promised a better life for those who had been oppressed.  But the state would eventually take complete control via centralization.  The political, economic, religious, education, healthcare, agricultural and communication systems became state-controlled bureaucracies.  There are so many parallels between what happened in Germany in the 1930’s and what has been happening in America over the past decade – even the purpose and installation of Germany’s Gestapo can be lined up with The U.S. Homeland Security initiatives.

Take a few steps back and look objectively at the situation!

When the people fear the government – that’s tyranny!
But when the government fears the people, that’s liberty!

140 Years of Monetary History (In 10 Minutes)

Here again is Mika Maloney from GoldSilver.com with a great (and quick) review of what’s happened to the global monetary system in the last 140 years.  Mike explains how the world’s monetary system went from the classical gold standard in the late 1800’s to the floating fiat paper being used today.  Also quite interesting is the observation that the world’s monetary system seems to change approximately every 40 years. America’s “good as gold” dollar became the world’s reserve currency after World War II and has enjoyed its status as the world’s reserve currency.  After Nixon removed the dollar’s tie to gold in 1971, it freed the Federal Reserve & US Treasury to allow money to be created without limitation.  But now, too many dollars have been printed so we may be about to see another change in the global monetary system.

Doing The Math

Grant Williams is a strategy adviser for the hedge fund, Vulpes Investment Management in Singapore, as well as the blogger behind the popular Things That Make You Go Hmmm….  In the following video, Williams reviews the disconnects between the economic realities that exist in today’s world and the rosy pictures painted by governments, central banks and the main stream media.

  • Williams’ problem #1: The disconnect between fundamentals and equity prices.
  • Williams’ problem #2: The paradox behind China’s mysterious GDP growth during a time of reduced manufacturing, shrinking demand for raw materials and declining imports/exports
  • Williams’ problem #3: How is France able to sell its sovereign bonds at such low interest rates when all indications of its own economy are performing like those of the European periphery?
  • Williams’ final problem: The difference between the “Gold Price” and “The Price of Gold”

In the end, the laws of mathematics cannot be subverted by governments or central banks.  Central banks’ zero percent interest rate policies are damaging:

  • In the short term through the confiscation of savings and the forcing into riskier investments in the search for yield
  • In the long term by suppressing market volatility, which must be reconciled at some point


Mathematics, rightly viewed, possesses not only truth, but supreme beauty – a beauty cold and austere.
– Bertrand Russell

On Germany’s Gold Repatriation

Conspiracy theories are only theories until they become conspiracy facts.  The straws are blowing in the wind as this main-stream CNBC panel discusses the reasoning behind Germany’s gold repatriation. The Bundesbank (Central Bank of Germany) recently stated they have plans to move their gold held at other central banks back to the Father Land.  This includes moving 374 tonnes from France’s Banque de France & 300 tonnes from the New York Federal Reserve Bank.  Could it be that, as Pimco’s Bill Gross opined, that the central banks of the west are starting to lose faith in one another?

Expect Currency War to Continue in 2013

Author of Currency Wars, Jim Rickards explains that the Fed’s easing programs have thus far failed to create their desired inflation, which, in their view, is required to boost US exports.  Although Japan will be allowed to weaken their currency, all the other currencies of the world will be strengthened as the US strives to further weaken the US dollar. Of course, gold is still the currency of choice to preserve wealth.




Expanding the discussion, Lauren Lyster interviews Jim Rickards, where he clarifies the Fed’s tactics:

  • The economy has failed to recover despite the Fed’s actions so far because the consumer has not been willing to spend or invest.  Hence money velocity has remained nil.
  • The Fed is trying to induce more spending by: (1) Forcing a negative interest rate as an incentive for more borrowing, and (2) Scaring the public into buying stuff through the threat of future inflation.
  • The inflation, they hope, will be the result of all the currency wars with other nations, especially China – cheapening the dollar will make imports more expensive.

It’s a race between the Fed trying to achieve their goals and the whole system imploading because of a loss of confidence in the dollar.

Greed, Fear, Bubbles and Market Madness

Grant Williams, of Vulpes Investment Management, provides us with a brilliant presentation explaining how greed and fear play into the making of economic bubbles.  After giving a few examples of historic bubbles of the past, Williams then goes on to describe two bubbles in the present.  Spoiler alert!

Williams presents the latter two bubbles happening today as one nearing a collapse and the other in a “sweet spot” ready to enter the hyper-inflating mania phase.

The End Game

We have around 6 months left of trading in Western markets to protect ourselves,” according to Raoul Pal, founder of Global Macro Investor and former Goldman Sachs hedge fund manager. “The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives.”  See entire presentation below.

It’s now more important than ever to protect your hard-earned wealth from being destroyed by inflation or even outright theft by financial and government institutions. Please see our Protect Your Assets series to learn about ways to secure your wealth in the coming economic collapse.

The End Game

JP Morgan’s $2 Billion Loss Possibly Indicative of Bigger Problems Behind the Scenes

Update May 16, 2012: In contrast with Jim Willie’s speculation below, a much more renowned Jim Rickards has a much more probable thesis on the JP Morgan loss. The trade was actually a bet on the spread between the bond index and the bonds themselves. Time ran out, resulting in the loss. Read about it at USNews.

Here’s an interview with Jim Willie (TheGoldenJackass) discussing his speculation on what’s really going on regarding JP Morgan’s $2 billion dollar ‘whale trader’ loss.  Jim speculates that JPM’s declaration that it involved European bond investments that have gone bad doesn’t make sense because in the last 6 weeks those bonds haven’t changed so much to warrant such huge losses. More likely, according to Jim, is that these losses are much larger and they reflect losses in the credit derivatives markets. Furthermore, eastern nations like China are likely causing the rout in precious metals because they’re forcing the western commercial banks to sell to cover these losses in the derivatives markets.