Southern Secession Was One Thing – and the War to Prevent It Was Another

There’s an old saying that “he who distinguishes well teaches well.” In other words, if one’s going to talk about an important subject, one should be able to define his terms and tell the difference between two things that are not the same.
This wisdom, unfortunately, is rarely embraced by modern pundits arguing about the causes of the American Civil War. A typical example can be found in this article at the Huffington Post in which the author opines: “This discussion [over the causes of the war] has led some people to question if the Confederacy, and therefore the Civil War, was truly motivated by slavery.”
Did you notice the huge logical mistake the author makes? It’s right here: “…the Confederacy, and therefore the Civil War….”
The author acts as if the mere existence of the Confederacy inexorably caused the war that the North initiated in response to it. That is, the author merely assumes that if a state secedes from the United States, then war is an inevitable result. Moreover, she also wrongly assumes that the motivations behind secession were necessarily the same as the motivations behind the war.
But this does not follow logically at all. If California, for example, were to secede, is war therefore a certainty? Obviously not. The US government could elect to simply not invade California in response.
Moreover, were war to break out, the motivations behind a Californian secession are likely to be quite different from the motivations of the US government in launching a war. For the sake of argument, let’s say the Californians secede because they couldn’t stand the idea of being in the same country with a bunch of people they perceive to be intolerant rubes. But, what is a likely reason for the US to respond to secession with invasion? A US invasion of California is likely to be motivated by a desire to extract tax revenue from Californians, and to maintain control of military bases along the coast.

This post was published at Ludwig von Mises Institute on August 24, 2017.

A Look At US Government Shutdowns Since 1976

Investors and politicians are getting increasingly worried about a potential US government shutdown.
Earlier we showed that following a report by Axios which quoted a republican who put the chance of a shutdown “as high as 75%”, the T-Bill market got spooked, and pushed the Oct.12 Bill – the one considered closest to the Treasury’s X-date – to the widest spread on record from the nearest “safe” Bill, maturing on Sept. 28.

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

This September Oil Price Forecast Will Burn the Shorts

You’re likely to catch plenty of oil doom and gloom on cable news right now, but West Texas Intermediate is up nearly $1 a barrel over the past 30 days.
I can’t think of a better object lesson in why you shouldn’t believe the players and short artists who make money whenever you believe crude prices are headed lower.
Instead, I’m going to show you exactly where I think oil prices will go in September – the truth – so you can get into position to make money.
Let’s take a look…

This post was published at Wall Street Examiner on August 24, 2017.

US Existing Home Sales Decline 1.3% In July To Lowest Level in 11 Months (High Prices And Low Inventory)

According to the National Association of Realtors, existing home sales fell 1.3% in July. This is the lowest sales figure in 11 months.
But what is noticeable is the rise in median existing home prices (zooming upwards) relative to inventory (low). Sprinkle in The Fed’s zero interest rate policy and we have a party!

This post was published at Wall Street Examiner on August 24, 2017.

Walmart Tumbles After Amazon Says It Will Cut Whole Foods Prices Monday

Here comes even more of that deflation the Fed hates so much.
Walmart stock is getting whacked, as is the broader grocer sector, after Amazon announced moments ago that the acquisition of Whole Foods will close on Monday, and that in keeping with the company’s tradition of stealing market by underpricing its competition, it will cut prices at Whole Foods once the deal closes.
In its press release, Amazon announced that its acquisition of Whole Foods Market will close on Monday August 28, 2017, and the two companies “will together pursue the vision of making Whole Foods Market’s high-quality, natural and organic food affordable for everyone. As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday on a selection of best-selling grocery staples across its stores, with more to come.”
Just in case it was not clear, it then added that “starting Monday, Whole Foods Market will offer lower prices on a selection of best-selling staples across its stores, with much more to come. Customers will enjoy lower prices on products like Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter, and much more.”

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


GOLD: $1286.85 DOW $2.15
Silver: $16.98 DOWN 9 CENTS
Closing access prices:
Gold $1290.40
silver: $17.08
Premium of Shanghai 2nd fix/NY:$3.61
LONDON FIRST GOLD FIX: 5:30 am est $1285.90
For comex gold:
TOTAL NOTICES SO FAR: 4584 FOR 458,400 OZ (14.258 TONNES)
For silver:
140,000 OZ/
Total number of notices filed so far this month: 1132 for 5,600,000 oz

This post was published at Harvey Organ Blog on August 24, 2017.

MAULDIN: These 2 Charts Reinforce My Belief That We’ll Face A Recession In 12 – 18 Months

Stock valuations are the discounted values of future earnings. Future earnings depend on future revenue, which may diminish whenever the future includes a recession. So, broad economic conditions are a big factor to watch in stock valuation.
Broad economic conditions depend ultimately on the consumer’s ability and willingness to spend money. And July’s retail sales report gave us a peek at that.
Why Consumer Spending Is Still Low Compared to Previous Recoveries
Core retail sales rose 0.6% from June. The uptick was more than analysts expected, and most categories were up, too. The exceptions were clothing and electronics sales.
The latter may have to do with potential smartphone buyers waiting to see new iPhone models expected to debut this fall.
Peter Boockvar summed up the bigger picture:

This post was published at Mauldin Economics on AUGUST 23, 2017.

NEW EASTERN ENERGY CARTEL: Replacement to the Dead Petro-Dollar

The Petro-Dollar is dead. It had served so well for over 40 years in maintaining the USDollar as global currency reserve, while keeping tight the controls on geopolitical power. The link between crude oil and the USDollar has been broken, painfully evident since 2016 with a harsh price decline that cannot rise about the $50 level. It remains stuck below that level despite heavy collusion in a demonstration that OPEC is dead defunct also. A void has been created in the energy sector, a most important sector. Enter Russia & China to fill the void. Both the crude oil market and the natural gas market have new alliances which feature nations acting in a cooperative manner. The common element is Russia on the production side, complete with pipeline arrays. The common other element is China on the demand side with large customer needs and financial influence. This article describes the two emerging organizations, which the Jackass calls the Oil Consortium and the NatGas Cartel. It will serve the Eurasian Trade Zone. It will function outside the USD payment system. It is ripe for Gold payment structure in the near future. In no way do these qualify as coffin nails for the Petro-Dollar. The funeral for the corrupted abused hegemon USDollar might have taken place with the Trump charade in Saudi Arabia a month ago. The emerging energy organizations signal the new dawn after the funeral without eulogy.
The USDollar is integrally related to the global dominance that the United States has fostered for global benefit, then later distorted into a credit abuse dynamic but hardly for benefit, then finally abused beyond legitimate basis for global aggression and financial extortion. The dominance is unraveling within the Global Paradigm Shift. It is indeed late in the game for the shift, whereby no reversal to repair the USDollar is possible. The Eastern energy cartel has a firm foundation, leaving the West with no possible response. The consequences are vast, extending to the USMilitary. Its reliance upon free oil is ending. The over-stretched military presence will repeat the end of the road that the British Military faced several decades ago. Both the British and the Americans have lost their cherished global reserve currency, and along with it, lost power and prestige. In recent months, the US has proved it has very few friends even among its list of allies.

This post was published at GoldSeek on 24 August 2017.

Jackson Hole: Inflation, Phillips Curve, Income Inequality, Housing and The Taylor Rule

Janet Yellen, ‘Super’ Mario Draghi and other Central Bankers are meeting at the 2017 Economic Policy Symposium on ‘Fostering a Dynamic Global Economy’ at Jackson Hole for the next three days.
Topics will include the persistent low inflation in advanced economies, like the US 1.5% growth rate on Personal Consumption Expenditures Core Prices YoY despite the staggering fiscal and monetary stimulus thrown at it.

This post was published at Wall Street Examiner by Anthony B Sanders ‘ August 24, 2017.

The Cost Of Market Crash Insurance Just Hit A Record High

With the VIX surging, and then quickly getting pummeled on two occasions in the past three weeks, dizzy traders could be forgiven to assume that any latent “risk off” threat, whether from North Korea or the US political front, has been taken off the table. However, a deeper look inside the vol surface reveals something very different: with increasingly more analysts and traders warning that volatility is set for a sharp return this fall, equities have already been adjusting to the increased probability of a “tail event.” However, instead of buying VIX futures, call or ETPs, they have been doing so by bidding up the price of OTM equity put options, or equivalently, by steepening the S&P 500 put skew and.
As a reminder, a put skew shows how much more expensive it is to buy deep OTM puts vs puts that are in the money or in other words, a levered bet on (or hedge against) a market crash.
And as the following chart from Bank of America shows, the S&P put skew is now at the highest level on record, making the relative price of tail hedges the highest in 13 years as traders are quietly bracing for a sharp market crash.

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

More Noise Than Signal

A number of people have forwarded this Bloomberg article – Wall Street Banks Warn Downturn Is Coming – to me over the last couple of days. That fact alone is probably a good argument to ignore it but I can’t help but read articles like this if for no other reason than to know what the crowd is thinking.
The gist of the article is that a bunch of sell side analysts think we are nearing the end of the current business cycle and that has them worried about stocks and credit. If that is true – that we are nearing the end of the cycle – then it is certainly reason for concern. The biggest stock market losses are generally associated with the onset of recession, although not always. For instance, in the last recession the onset of recession was December of 2007 and the stock market peaked in November. The previous recession started, officially, in March of 2001 but anyone who waited that long took a pretty big hit on his stock portfolio. The S&P 500 peaked in March of 2000, a full year before the recession, and was down 25% by March of 2001. So, maybe we need to look at what these sell side analysts are saying and see if it makes any sense.
The first thing to realize is that the dating of recessions is somewhat arbitrary. When we see those gray areas on the FRED charts indicating recession, those dates are ones chosen by the NBER Business Cycle Dating Committee. Here’s how they define recession:

This post was published at Wall Street Examiner on August 24, 2017.

One Trader Says “Don’t Fight The Fed…Or SWFs, Or SNB, Or Buybacks”

There is no end to the list of ‘real world’ problems underlying cuirrent equity market price levels and velocities(slumping ‘hard’ economic data, record high valuations, global thermonuclear war, Washington uncertainty, Fed balance sheet normalization to name a few). However, as former fund manager Richard Breslow points out, “equities continue to have friends in high places.” In other words, there’s a lot more to fight than just ‘The Fed’.

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

Jim Rickards: Nobody Talks About It, But Our Whole System Is Based on Gold

Earlier this week, US Treasury Secretary Steven Mnuchin paid a rare official visit to Fort Knox to check out the nation’s gold stash. He made headlines when he quipped about the possibility of the gold not being there. Later, the secretary assured the world the US gold is safe and sound.
But why exactly does the US hold more than 8,000 tons of gold?
As we’ve explained, gold is money and there is economic power in owning gold. But nuts and bolts reasons also exist that help explain why the US holds so much gold, and most people aren’t aware of them. Jim Rickards did a good job of explaining it in a recent article on the Daily Reckoning. He argues that the whole American system is still based on gold.
So who actually owns America’s gold?
That question is a little more complicated than you might think.
Physically, the US Treasury owns the gold. But the Federal Reserve also has a claim on it. And at the end of the day, the US military controls it.

This post was published at Schiffgold on AUGUST 24, 2017.

Has The Fed Completely Lost Control?

An interesting thing happened on the way to World Domination, uhh, I mean ‘Stability’ – the data quit cooperating with the Federal Reserve’s carefully devised planned.
Just recently the Federal Reserve quit updating their carefully constructed ‘Labor Market Conditions Index’ which failed to support their ongoing claims of improving employment conditions. The chart below is the last iteration before it was discontinued which showed a clear deterioration in underlying strength.
But to add insult to injury, inflationary pressures have not resurfaced as anticipated despite years of ultra-low interest rates and a flood of liquidity into the financial system. This has now led the Fed to start considering whether their cornerstone inflation model still works. As Bloomberg noted recently:
‘Federal Reserve officials are looking under the hood of their most basic inflation models and starting to ask if something is wrong.
Minutes from the July 25-26 Federal Open Market Committee meeting showed a revealing debate over why the economy isn’t producing more inflation in a time of easy financial conditions, tight labor markets and solid economic growth.

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

San Francisco Bay Area Pending Home Sales Plunge

Ludicrously high home prices hit end of the employment boom?
Real estate agents listed three reasons for the debacle of pending home sales in the state of California in July:
Lack of inventory for sale. This was the top reason for 30% of brokers. The math is starting to bite: more people are stuck in their homes as prices have soared all around, and as mortgage payments needed to finance an equivalent or nicer home have moved out of reach.
Declining housing affordability and ‘high interest rates’ – which are near historic lows! – was cited by 28% of brokers.
‘Inflated home prices’ and ‘housing bubble’ were cited by 25% of brokers.
Slowdown in economic growth, lending and financing, and policy and regulations were other ‘biggest concerns.’

This post was published at Wolf Street on Aug 24, 2017.

Germany & The US Strangely Broadcast Messages About Gold Holdings – Episode 1363a

The following video was published by X22Report on Aug 24, 2017
UK retail sales decline at the fastest pace since 2016. Sears is in trouble they are closing more stores as sales decline. First it was new home sales, now its existing home sales, the real estate market is imploding. Germany has been repatriating their gold and the US visited Fort Knox to assure the American people that the gold is there. Why now, are countries preparing the collapse of the system . Looking at the gold Germany has received something does not look right.

Russia Deploys Nuclear-Capable Bombers Near Korea

With the U. S. periodically sending the occasional sortie of B1 bombers, accompanied by South Korean fighters, over the Korean peninsula to simulate what a (very fast) war with Pyongyang would look like, the airspace over the biggest geopolitical hotspot in the world today just got a little hotter after Russia deployed nuclear-capable strategic bombers over the Pacific Ocean, the Sea of Japan, the Yellow Sea and the East China Sea, prompting Japan and South Korea to scramble jets to escort them, Reuters reported.
Russia’s Defense Ministry said in a statement the Tupolev-95MS “Bear” bombers, flew over neutral waters and were accompanied by Russian Sukhoi-35S fighter jets and A-50 early warning and control aircraft. The Russians gave no details about the overall number of aircraft that had taken part in what it called “scheduled flights over neutral waters” and did not say when or why the mission took place.

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

Gold Market Morning: August-24-2017: Gold and silver prices still marking time!

Gold Today – New York closed yesterday at $1,290.20. Londonopened at $1,287.10 today.
Overall the dollar was slightly weaker against global currencies before London’s opening:
– The $: was slightly weaker at $1.1794 after the yesterday’s$1.1784: 1.
– The Dollar index was slightly weaker at 93.31 after yesterday’s93.39.
– The Yen was slightly stronger at 109.29 after yesterday’s 109.36:$1.
– The Yuan was slightly stronger at 6.6621 after yesterday’s6.6624: $1.
– The Pound Sterling was slightly weaker at $1.2807 afteryesterday’s $1.2811: 1
New York closed at $2.40 higher than Shanghai’s yesterday’s close. Today, sees Shanghai holding almost the same level as it did yesterday, which was $2.27 higher than London’s opening. The global gold markets remain pretty much in line with each other.

This post was published at GoldSeek on 24 August 2017.