The Truth About Inflation

(Kitco News) – World bond markets are seeing keener selling interest to start the trading week, led by U. K. gilts, which in turn have been pressured by a weakening British pound. There are growing concerns about the world’s major central banks starting to tighten their monetary policies, which in turn should stoke inflationary price pressures. That’s bearish for bond markets.
The weaker global bond market prices led to price weakness in global equity markets Monday. A feature in Asian stock market trading was casino-related shares dropping sharply after Chinese authorities arrested 18 people from Crown Resorts and charged them with illegal gambling. U. S. stock indexes are pointed toward weaker openings when the New York day session begins.
In overnight news, the Euro zone September consumer price index was up 0.4%, month-on-month and up 0.4%, year-on-year, too. The readings were right in line with market expectations.

This post was published at Wall Street Examiner on October 17, 2016.

Why 100 Business Leaders Support Trump, Fear Clinton “Building On Obama’s Failed Economic Legacy”

After seven years of anemic economic growth, Americans are facing limited job opportunities, stagnant wages, a diminishing middle class and dismal economic prospects for our youth. A recent Pew Research study found young adults more likely to be living in their parents’ homes than at any time since 1940 – Hillary Clinton refers to them as Bernie Sanders basement dwellers.
According to the Congressional Budget Office, nearly one in six young men is either jobless or incarcerated, up from about one in 10 in 1980, when the economy was in recession. Gross Domestic Product should be averaging an annual growth rate of 3 percent to 4 percent, particularly coming out of a deep recession. It hasn’t happened.
In 2010, the White House projected that GDP growth would “accelerate in 2011 to 3.8 percent” and “exceed 4 percent per year in 2012-2014.” However, GDP has averaged about 2 percent since the recession ended, producing the worst economic recovery since World War II.
So far this year, the situation is even worse, with GDP averaging about 1 percent. The Federal Reserve is projecting GDP growth going forward at a mere 2 percent annually. In fact, the economy is so weak that the Fed is afraid to raise interest rates even one quarter of one percent (0.25 percent). Despite all the hyperbole about the supposed economic recovery, this reticence speaks volumes as to the actual state of the economy.

This post was published at Zero Hedge on Oct 17, 2016.

Is this Why US Industrial Companies Don’t Invest?

Production lower than 2 years ago, with ugly capacity utilization.
Total industrial production in the US fell 1.0% in September compared to September 2015, according to the Fed’s Board of Governors today. The index, at 104.2, is now 2.3% off its all-time peak in November 2014, and also 1.3% below where it had been two years ago (105.6). So two years in a row of year-over-year declines.
The first time the industrial production index had reached this level was in March 2007!

Of the major market groups:

This post was published at Wolf Street by Wolf Richter ‘ October 17, 2016.

Ignorance Is More Costly in Politics than in Markets

For months, I have seen articles about the massive economic ignorance infesting candidates’ views and how they would ‘fix’ what they think are the nation’s problems. They essentially say that neither candidate knows enough to pass an economics principles course, much less enough to advance Americans’ general welfare. I cannot disagree.
The candidates sometimes say things with some sense (recognizing burdens from regulation). But, they have failed in their understanding of opportunity cost (free college and paid leave) and comparative advantage (protectionism); that market incomes are earned by benefiting others (making ‘the rich’ pay more); property rights and the role of profits (suggestions for mandatory profit sharing); the market for labor (proposals to hike minimum wages and opposition to right-to-work laws); and capital (wanting greater taxation of owners of capital but calling taking your resources for others an investment).
The Difference between Markets and Politics
But why have the candidates marketing such economic snake oil successfully made it to the general election? Thomas Sowell, in Knowledge and Decisions, considered why people’s pervasive ignorance, as well as ‘knowing so much that isn’t so’ leads to more societal damage via politics than market arrangements.
In market competition:

This post was published at Ludwig von Mises Institute on Oct 16, 2016.

Explain How This Is Not Domestic Terrorism Please..

Here you go folks….
“I mean honestly, it’s not hard to get some of these *******s to pop off. It’s a matter of showing up, to want to get into the rally, in a Planned Parenthood t-shirt. Or, Trump is a Nazi, you know. You can message to draw them out, and draw them to punch you.“
On video, from the people involved.
Hillary’s supporters and, if their own words are to be believed, explicitly linked to Hillary and her campaign.


This post was published at Market-Ticker on 2016-10-17.

US Industrial Production Drops -1.03% YoY For September, Capacity Utilization Continues Below 80%

Although Bob Dylan won a Nobel Prize (for singing off key), his song ‘Don’t Think Twice, It’s Alright’ is appropriate for this economy.
That is, don’t think about why the US is really slow to recover from The Great Recession (or why we suffered a massive credit bubble and home price burst that began in 1995).
But back to industrial production. Industrial production YoY fell -1.03% in September. And has been declining since last summer. That is 13 straight months of contraction!

This post was published at Wall Street Examiner on October 17, 2016.

SP 500 and NDX Futures Daily Charts – Pigs, With Lipstick

Stocks were weak today on the worse than expected macro-economic news from the US. See the economic calendar below.
They recovered a bit in the afternoon and closed almost unchanged.
Tech was helped by Netflix, which reported ‘better than expected’ earnings per share and more importantly subscriber growth.
What I find interesting is that the discussion on the financial infomercial channel had been centered around who might purchase Netflix? You know, the same sort of talk that had been swirling around Twitter, that died off fairly quickly.
If Netflix is doing so well, why are they being shopped out for acquisition? Could it be that they are at peak valuation, especially with their after hours surge for being ‘better than expected?’

This post was published at Jesses Crossroads Cafe on 17 OCTOBER 2016.

Central Banker Insiders Have Indicated That Major Inflation Is Headed Our Way – Episode 1103a

The following video was published by X22Report on Oct 17, 2016
The Restaurant Performance index has declined, traffic and sales are now in decline. Industrial production contracts for the 13th month in a row. Empire Fed declines signalling the dead cat bounce is over and the economy is in free fall. Central banker insiders just reported that we can now expect inflation and maybe hyper inflation. The petro-dollar days are numbered and all those dollars are ready to hit American shores

Gold Daily and Silver Weekly Charts – The Status Is Quo

“We are The United States of Amnesia, which is encouraged by a media that has no desire to tell us the truth about anything, serving their corporate masters who have other plans to dominate us.”
Gore Vidal
Gold and silver were marking time today, bouncing along the support line at 1250 for gold and the 17 handles for silver.
There were some deliveries on the Comex for gold on Friday as Macquarie unloaded a chunk of its ‘house account’ gold. Silver was a snooze again for October.
I am disallowing the possibility that Trump is either knowingly or unwittingly a cat’s paw for Wall Street and the Clintons. He is certainly making her way easier by taking all the focus away from their many unfolding scandals and abuses of power.

This post was published at Jesses Crossroads Cafe on October 17, 2016.

The Odor of Desperation

It must be obvious even to nine-year-old casual observers of the scene that the US national election is hacking itself. It doesn’t require hacking assistance from any other entity. The two major parties could not have found worse candidates for president, and the struggle between them has turned into the most sordid public spectacle in US electoral history.
Of course, the Russian hacking blame-game story emanates from the security apparatus controlled by a Democratic Party executive establishment desperate to preserve its perks and privileges . (I write as a still-registered-but-disaffected Democrat). The reams of released emails from Clinton campaign chairman John Podesta, and other figures in HRC’s employ, depict a record of tactical mendacity, a gleeful eagerness to lie to the public, and a disregard for the world’s opinion that are plenty bad enough on their own. And Trump’s own fantastic gift for blunder could hardly be improved on by a meddling foreign power. The US political system is blowing itself to pieces.

This post was published at Wall Street Examiner by James Howard Kunstler ‘ October 17, 2016.

Market Myth Shattered: Ned Davis Warns “There’s No More Cash On The Sidelines”

While the “cash on the sidelines” myth has infuriated many, it remains a staple excuse for why there’s always a buying opportunity in stocks when the market dips. However, as Ned Davis Research warns “we can’t find much cash on the sidelines… and when we do it seems mostly offset by debt/liabilities,” crushing yet another pillar of strength for stocks.
Ned Davis notes there is a lot of talk about all the cash on the sidelines from pessimistic investors that could power the market higher. There is some public caution and overall savings have risen somewhat, but I am having a hard time finding evidence that cash (potential demand) is anywhere near the market value of stocks (potential supply).

This post was published at Zero Hedge on Oct 17, 2016.

Why They Keep Trade Deals Secret

Thousands of people recently demonstrated in Brussels against free trade deals negotiated by the EU. This happened just days before a meeting of EU trade ministers in Bratislava last month, which was considered the last push to salvage the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the United States. Not only is Europe divided on the deal, but the talks have been extremely secretive.
Many protestors were especially opposed to the secrecy surrounding the trade deals.
It appears that the two partners wanted the negotiations process to remain well under the public’s radar, counting on people being distracted by other matters, such as ‘Brexit,’ terrorism, the refugee crisis, and the ongoing economic slump.
It proved impossible, though, to keep voters and taxpayers on both sides of the Atlantic completely in the dark about the terms of a deal that has the potential to affect their lives, jobs, and businesses directly and decisively.
What is the story behind this secret agreement that Obama and Merkel have been pushing for so strongly? Why is there no transparency? Why has information that is of crucial public interest been withheld throughout the process?

This post was published at Ludwig von Mises Institute on Oct 17, 2016.

Gold Market in Crisis, Risks Collapse: LBMA

There, that got your attention. But is anyone really listening…?
Gold markets need gold, and that can only ever come out of a mine in the first place or come from a refinery when recycled, writes Adrian Ash of BullionVault, currently in Singapore attending the London Bullion Market Association’s 2016 conference.
So a huge and critical business works to lend cash as well as gold bullion so that miners and refiners can finance production and source metal to sell.
That business – bullion banking – underpins the supply chain providing manufacturers, dealers and ultimately consumers with the gold they want to buy. And once again, this time in Singapore, that supply chain of bullion bankers, refiners and the other massed members of the LBMA find themselves at a truly ‘decisive turning point‘, aka in crisis.
Last year when the LBMA met for a conference in Vienna, the existential crisis had become plain and painful as sinking prices and a growing burden of regulation and regulatory costs drove key players to quit the gold market entirely.

This post was published at FinancialSense on 10/17/2016.

The “Evil Russia” Meme’s Odor Of Desperation

It must be obvious even to nine-year-old casual observers of the scene that the US national election is hacking itself. It doesn’t require hacking assistance from any other entity. The two major parties could not have found worse candidates for president, and the struggle between them has turned into the most sordid public spectacle in US electoral history.
Of course, the Russian hacking blame-game story emanates from the security apparatus controlled by a Democratic Party executive establishment desperate to preserve its perks and privileges . (I write as a still-registered-but-disaffected Democrat). The reams of released emails from Clinton campaign chairman John Podesta, and other figures in HRC’s employ, depict a record of tactical mendacity, a gleeful eagerness to lie to the public, and a disregard for the world’s opinion that are plenty bad enough on their own. And Trump’s own fantastic gift for blunder could hardly be improved on by a meddling foreign power. The US political system is blowing itself to pieces.
I say this with the understanding that political systems are emergent phenomena with the primary goal of maintaining their control on the agencies of power at all costs. That is, it’s natural for a polity to fight for its own survival. But the fact that the US polity now so desperately has to fight for survival shows how frail its legitimacy is. It wouldn’t take much to shove it off a precipice into a new kind of civil war much more confusing and irresolvable than the one we went through in the 1860s.

This post was published at Zero Hedge on Oct 17, 2016.

Industrial Production Contracts For 13th Straight Month – Longest Non-Recessionary Streak In US History

For the 13th straight month US Industrial Production contracted year-over-year. The 1.00% annual drop extends the weakness to the longest non-recessionary streak in US history. Aerospace and Home Electronics saw the biggest drops in production with motor vehicles managing a modest increase as manufacturing beat expectations MoM.

This post was published at Zero Hedge on Oct 17, 2016.

Gold and Silver Market Morning: Oct-17-2016 — Gold and silver still waiting to run either way!

Gold Today -New York closed at $1,251.40 on Friday after the previous close of $1,258.10. London opened at $1,255.00.
– The $: was stronger at $1.0097: 1 from $1.1016: 1 Friday.
– The Dollar index was stronger at 97.94 from 97.86 Friday.
– The Yen was stronger at 104.10: $1 from 104.26: $1 Friday against the dollar.
– The Yuan was weaker at 6.7388: $1 from 6.7246: $1 Friday.
– The Pound Sterling was weaker at $1.2179: 1 from Friday’s $1.2210:1.
Yuan Gold Fix
Shanghai is holding the gold price higher than both London and New York. After New York’s close on Friday Shanghai lifted it $8.5 as the Yuan weakened. It remains in a very narrow trading band around $1,260. This morning London pulled it back in the morning to $1,252 before turning it higher. We continue on the brink of a strong move either way.
LBMA price setting: The LBMA gold price setting was at $1,252.70against Friday’s $1,256.15. The gold price in the euro was set higher at1,139.85 against Friday’s 1,144.04.
Ahead of the opening of New York the gold price was trading at $1,254.30 and in the euro at 1,140.69. At the same time, the silver price was trading again at $17.47.

This post was published at GoldSeek on 17 October 2016.

Ganging Up on Gold

So Far a Normal Correction
In last week’s update on the gold sector, we mentioned that there was a lot of negative sentiment detectable on an anecdotal basis. From a positioning perspective only the commitments of traders still appeared a bit stretched though, while from a technical perspective we felt that a pullback to the 200-day moving average in both gold and gold stocks shouldn’t be regarded as anything but a normal – and in this case actually long overdue – event.
Between May and August, gold stocks became quite ‘overbought’. They had clearly risen too far too fast and a correction shouldn’t have been a surprise. The pullback was quite sharp, adequately mirroring the relentlessness of the preceding rally. This is nothing unusual in this sector:

This post was published at Acting-Man on October 17, 2016.