ECB Meets To Tackle Deflation While Ignoring Shrinkflation

ECB Meets in Frankfurt
As the Governing Council of the European Central Bank (ECB) convenes today in Frankfurt for its monthly policy meeting, markets are focusing on how the ECB will signal the initiation of its quantitative easing (QE) programme which is aimed at countering deflationary forces in the Eurozone.
In August, the annual inflation rate in the Eurozone hit a precariously low rate of 0.3% per annum. This is far below the ECB’s target rate of 2% and also far below the average rate of inflation in the Euro area over the period 1991-2014, which was 2.18%.
Financial markets are already pricing in an ECB round of QE after ECB president Mario Draghi signalled such a move last month at the Jackson Hole central banker conference in the US, where he stated that the ECB would use ‘all available instruments’ to counter deflation.
European sovereign bond yields have fallen since Draghi’s August comments and the Euro has weakened against the US dollar. It is assumed that European QE would be in the form of a bond buying programme, much like the US and UK versions of QE that have already been implemented.
The ECB is already providing cheap liquidity to commercial banks in Europe though long-term refinancing operations, and since this is not providing the necessary stimulus to boost the Eurozone inflation rate, markets will be hanging on every word of Draghi’s speech today in Frankfurt so as to attempt to predict the exact timing of the commencement of the ECB’s quantitative easing programme.
While there is plenty of evidence that governments aim to minimise headline inflation figures for political reasons, financial markets still tend to fixate on these headline figures. Financial markets also get very concerned about deflation.

This post was published at Gold Core on 4 September 2014.

Unions are Not Capitalism

Labor unions are a dying breed. According tothe Pew Research Center, union membership in America ‘is at its lowest level since the Great Depression.’ In 1983, there were approximately 17.7 million union workers. Today, that numberstands at 14.5 million, with every estimate showing a continued downward trajectory. Clearly, the Norma Raes of the world are going extinct.
But as Samuel Johnson quipped, one should never dismiss the triumph of hope over experience. In celebration of Labor Day, the leftie rag New Republic recently published an interview with labor strategist Rich Yeselson defending the role of unions in the U. S. As a labor organizer, Yeselson’s bias is on full display. Instead of giving an objective view of stagnating union membership, he obfuscates to boost his own profession.
When asked if unions are dead, Yeselson rightly says ‘no’ while pointing out that millions of Americans are still active members. Unions not only retain fairly hefty membership, but also own valuable real estate in big cities and pension funds worth billions of dollars. Despite declining membership, there is still plenty of capital left over from organized labor’s heyday.
Fancy buildings and promised retirement benefits aren’t enough to reverse the downward trend however. Public opinion about unions is also on the decline. Between Volkswagen plant workers voting against joining the United Auto Workers and the confectionary company Hostess declaring bankruptcy to rid itself of unionized employees, there is a growing perception of greed directed at labor organizers. There is also the uncomforting fact that state and local governments – the industry most heavily unionized in the country – areunderwater on their pension obligations.

This post was published at Mises Canada on September 2nd, 2014.

Ecuador will be the First Country to Start Digital Currency

Ecuador has announced it will begin to circulate electronic currency created by its central bank in December. This is the way of the future. They often take a country like this for the test case. Ecuador will begin the process and we will see it swing to the USA and Europe during the decline in the ECM after 2015.75. This is the way to the future.
Ecuador’s currency is effectively the US dollar. Ecuador is planning to take the first step toward abandoning the country’s existing currency, the U. S. dollar as people perceive the action. But this is a trial run for the USA since it will be a digital replacement that is going to emerge as a new electronic currency.

This post was published at Armstrong Economics on September 3, 2014.

How is Doug Casey Preparing for a Crisis Worse than 2008?

He and His Fellow Millionaires Are Getting Back to Basics
Trillions of dollars of debt, a bond bubble on the verge of bursting and economic distortions that make it difficult for investors to know what is going on behind the curtain have created what author Doug Casey calls a crisis economy. But he is not one to be beaten down. He is planning to make the most of this coming financial disaster by buying equities with real value – silver, gold, uranium, even coal. And, in this interview with The Mining Report, he shares his formula for determining which of the 1,500 “so-called mining stocks” on the TSX actually have value.
The Mining Report: This year’s Casey Research Summit is titled “Thriving in a Crisis Economy.” What is the most pressing crisis for investors today?
Doug Casey: We are exiting the eye of the giant financial hurricane that we entered in 2007, and we’re going into its trailing edge. It’s going to be much more severe, different and longer lasting than what we saw in 2008 and 2009. Investors should be preparing for some really stormy weather by the end of this year, certainly in 2015.
TMR: The 2008 stock market embodied a great deal of volatility. Now, the indexes seem to be rising steadily. Why do you think we are headed for something worse again?

This post was published at Gold-Eagle on September 3, 2014.

Gold & Silver Trading Alert: Gold’s Plunge, Dollar, and CCI

Briefly: In our opinion no speculative positions in gold, silver and mining stocks are now justified from the risk/reward perspective. However, day-traders might consider a small speculative long position in silver.
The precious metals sector moved sharply lower yesterday – in tune with its medium-term trend. The decline was to a large extent connected with the breakout in the USD Index. It seems that it is the U. S. dollar that will determine the short-term moves in PMs and miners in the coming days and in today’s alert we focus on this relationship. The CCI Index seems to be in a particularly interesting position as well and this is something that gold & silver traders should be aware of.
Let’s start with the USD Index chart (charts courtesy of

This post was published at SilverSeek on September 3rd.

WHY BURGER KING’S EXPATRIATION IS THE MORAL THING TO DO

It was announced last week that Burger King had bought a famous Canadian restaurant franchise known as Tim Horton’s to reduce the amount of taxes they “owe” to the US government. An upcry arose!
As usual the mainstream media and the people who watch it have the story totally wrong. Burger King is not giving US taxpayers a “raw deal” by looking to move abroad so as to save on profits which are not repatriated. Instead, the iconic fast food burger chain is doing the moral thing by moving its tax-base outside the war-mongering, highly socialist US federal government’s reach.
The mainstream media will never give you this side of the story. This obvious trend towards expatriation terrifies the talking heads. You have to come to alternative media sources like The Dollar Vigilante (TDV) Blog and others to get the truth. As Howard Kurtz writes at Fox News,
I feel confident in saying that most Americans are disgusted by the perfectly legal practice of US companies avoiding taxes by incorporating in another country.
If this is the case, it is because Americans love bombing other countries. They lust for blood. I can think of no other logical explanation Americans would want the machine in Washington to continue being fed. Burger King is not the first company to make the moral decision to leave the US tax farm. Many American companies are going abroad – as many as 70. These so-called “inversions”. Even the most American of investors stand behind the inversion. Iconic American billionaire, Warren Buffet, coughed up $3 billion so the hamburger chain could buy the Canadian donut outfit Tim Hortons. Buffett did this just one month after Obama denounced ‘inversion’ tactics as an ‘unpatriotic tax loophole’, ordering regulatory changes to undermine them.

This post was published at Dollar Vigilante on September 2, 2014.

The 60 Day Countdown Begins, Will This Lead To The False Flag Event? – Episode 457

The following video was published by X22Report on Sep 2, 2014
The manufacturing around the world starts to decline, meanwhile the US manufacturing is improving. Gold has been pushed down once again to give the illusion that the dollar and economy are strong. US Senator wants to take passports away from US fighters who fight in Syria. Ebola is hurting the economies of West Africa and pushing food prices higher. NATO soldiers reported fighting in Ukraine. Libya tribes have now taken over government buildings. Obama notifies congress of strikes in Armeli Iraq, this gives Obama 60 days to use military assets in the region. Afterwards he will need approval from congress, this time frame brings us to Oct-Nov. Islamic State has reportedly beheaded Sotloff in a new video. This is just another event to push the main event.

30 Million Americans On Antidepressants And 21 Other Facts About America’s Endless Pharmaceutical Nightmare

Has there ever been a nation more hooked on drugs than the United States? And I am not just talking about illegal drugs – the truth is that the number of Americans addicted to legal drugs is far greater than the number of Americans addicted to illegal drugs. As you will read about below, more than 30 million Americans are currently on antidepressants and doctors in the U. S. wrote more than 250 million prescriptions for painkillers last year. Sadly, most people got hooked on these drugs very innocently. They trusted that their doctors would never prescribe something for them that would be harmful, and they trusted that the federal government would never approve any drugs that were not safe. And once the drug companies get you hooked, they often have you for life. You see, the reality of the matter is that some of these ‘legal drugs’ are actually some of the most addictive substances on the entire planet. And when they start raising the prices on those drugs, there isn’t much that the addicts can do about it. It is a brutally efficient business model, and the pharmaceutical industry guards their territory fiercely. Very powerful people will often do some really crazy things when there are hundreds of billions of dollars at stake. The following are 22 facts about America’s endless pharmaceutical nightmare that everyone should know…

This post was published at End Of The American Dream on September 2nd, 2014.

Volatile Day: Gold, Oil, & Bonds Dump As The Dollar Jumps

Today was a significant day for many markets. For the 7th time in the last 8 months, US Treasuries opened the month with weakness (30Y up 8.5bps, 2Y 3bps from Friday). Significant JPY and GBP weakness pushed the USD Index to fresh 14-month highs ( 0.25% on the week). USD strength smacked gold (-$20 to $1265), silver, and crude oil significantly lower (WTI under $93 and Brent testing towards $100, both down over $3). US equities decoupled (lower) from VIX and JPY-carry around the European close after hitting new all-time highs in the early session (over 2,006 for S&P Futs). Volume was better (but then it was a down day). Despite oil weakness, Trannies took off leading the day (with Dow and S&P closing lower from Friday). Credit traded with stocks for most of the day but ignored the late-day VWAP ramp in the S&P, closing at its wides. The ubiquitous late-day buying panic saved S&P 2,000… because it can.

This post was published at Zero Hedge on 09/02/2014.

Market Ratio Messages

Using monthly charts I want to update more big picture views of where we stand in the financial markets. This is just a brief summary [edit; okay it’s not so brief. In fact it had to be ended abruptly or else it would have just kept on rambling] and not meant as in depth analysis with finite conclusions.
I was listening to Martin Armstrong talk about his ‘economic confidence’ model and realized that the way he views gold is similar to the way I do (and very dis-similar to the way inflationists and ‘death of the dollar’ promoters do). I don’t love the way he writes, and I usually avoid these weird interview sites, but checked it out (linked at 321Gold) anyway and found him enjoyable to listen to.
Anyway, this prompted another big picture look at gold vs. the S&P 500 and as with the shorter-term views, the picture is not pretty.
Well, it is pretty if you have patience and no need to promote gold as a casino play. Gold will be ready when gold is ready and that will not be until confidence in policy making and by extension the stock market, starts to unwind.
Gold vs. SPX has meandered out of a long Falling Wedge (blue dotted) with 2008′s Fear Gap still lower. On the big picture the risk vs. reward is with gold over the stock market. But it is a funny thing about big pictures; they move real sloooow. A fill of that gap may not feel so good to anyone vested in an immediate conclusion to gold’s bear market vs. SPX.

This post was published at GoldSeek on 2 September 2014.

US Futures Levitate To New All Time High As USDJPY Surges Above 105; Gold Slammed

Just when we thought centrally-planned markets could no longer surprise us, here comes last night’s superspike in the USDJPY which has moved nearly 100 pips higher in the past few trading days and moments ago crossed 105.000. The reason for the surprise is that while there was no economic news that would justify such a move: certainly not an improving Japanese economy, nor, for that matter, a new and improved collapse, what the move was attributed to was news that Yasuhisa Shiozaki, who has been advocating for the GPIF to reduce allocation to domestic bonds, may be appointed the Health Minister when Abe announces his new cabinet tomorrow: a reshuffle driven by the fact that the failure of Abenomics is starting to anger Japan’s voters. In other words, the GPIF continues to be the “forward guidance” gift that keeps on giving, even if the vast majority of its capital reallocation into equities has already long since taken place. As a result of the USDJPY surge, driven by a rumor of a minister appointment, the Nikkei is up 1.2%, which in turned has pushed both Europe and Asia to overnight highs and US equity futures to fresh record highs, with the S&P500 cash now just 40 points away, or about 4-8 trading sessions away from Goldman’s revised 2014 year end closing target.
Oh, for whatever reason but probably just because “banks are providing liquidity”, both gold and silver were summarily pounded to multi-month lows seconds ago.
In other Asian markets, the Hang Seng, Shanghai Composite, and the KOSPI are 0%, 1.4% and -0.8%, respectively. European stocks advance amid speculation that slower growth will prompt policy makers to accelerate stimulus. German and Italian shares outperform. The yen came close to a five-year low against the dollar, while the pound falls after a survey showed support for Scottish independence increasing. Treasuries drop ahead of reports this week that economists predict will show U. S. manufacturing and employment expanded in August. Oil and gold fall.

This post was published at Zero Hedge on 09/02/2014.

WILL THIS BE THE LAST LABOR DAY WORKERS CAN AFFORD TO ESCAPE THE US?

Ah, “Labor Day.” A government created day on which those people who work (read: producers) are supposedly celebrated by the people who don’t (government and welfare recipients). Pat yourselves on the back, entrepreneurs – the parasites love you. As I’ve written here in The Dollar Vigilante (TDV) Blog, approximately 65 million US citizens work. The rest receive welfare in various forms.

So, as you see, for about 252 million Americans, life is pretty good. The government taxes those who create vast sums of wealth, half of which is then stolen (“for the greater good”) and re-allocated to people who can’t work or won’t. A small percentage of this is allocated towards some useful things, sure, but most is squandered by the growing bureau-rat class.
So, it’s safe to say that about 252 million individuals are not interested in leaving the US. Expatriation!? They probably don’t even know what that means. They’d be absolutely insane to want to do so…. They have it pretty good. They’re born, they immediately get separated from their family and educated (read: brainwashed) in government year-round camps, torn from precious REM sleep and fed lackluster school lunches only to fail by world standards. And then, after lots of brainwashing (some of which costs hundreds of thousands of dollars), there is a job awaiting them in an exploding public sector – a militarized public sector at that.

This post was published at Dollar Vigilante on September 1st, 2014.

The morning after: What happens when a government destroys its currency

Dallas, Texas
Imagine this scene:
‘Everyone in the country was in shock. People’s net worth had devalued more than 53% overnight.’
‘The value in savings accounts dropped in half and neither merchants nor consumers knew how to react because they had never been through something like it before…’
This is how an American business executive described living through Mexico’s devaluation of the peso exactly 38 years ago on September 1, 1976.
Looking back, it was so obvious.
Mexico had a mounting debt, destructive policies, and a woefully unsustainable fixed exchange rate with the US dollar. All the writing was on the wall.
But most people ignored the warning signs and kept their money in pesos.
Mexican President Luis Echevarria even went out on the radio to reassure people that the currency was safe.
Finally, under intense fiscal pressure, the government reached its breaking point. And on August 31, 1976, they made the decision to devalue the peso.
People woke up the next morning on September 1st to a 50% decline. Subscribe to Sovereign Man

This post was published at Sovereign Man on September 1, 2014.

BIG, FAT TOLD-YA-SO: CENTRAL BANKS TRADING & MANIPULATING ALL MARKETS

The S&P, the Dow, US Treasury Bonds, CURRENCIES (WHAT THE $%^&!), Petroleum, Metals, Agricultural Products, everything. The Chicago Mercantile Exchange and CFTC have openly confirmed that CENTRAL BANKS are in the markets by posting the REDUCED FEE STRUCTURE for CENTRAL BANKS that trade the futures and options markets. That link goes to the CFTC. The Commodity. Futures. Trading. Commission. As in the Federal Government of the Iniquitous Gutter Kleptarchy, your tax dollars at work, ‘Merica. The CME has a special incentive program for Central Banks to trade. Isn’t that nice of Terry Duffy and the boys to give the Central Banks a break on fees? Aw.
Here is the write up at ZeroHedge, sourced from, yet again, Nanex.
There is no acid-trip rabbit hole deep enough to match the depths of insanity that have now been plumbed.
Are we fuzzy on what a ‘Central Bank’ is? Well, let’s go the definition just so everyone is crystal, crystal clear on this:
Central Bank: an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currency, which usually serves as the nation’s legal tender.
Um, yeah.
Sooooo do you think that it is a tiny bit problematic for entities that PRINT MONEY to trade equity, currency and commodity markets?

This post was published at Barnhardt on August 30, 2014.

Jared Bernstein Confirms That Austrians Aren’t Paranoid

For years a growing number of self-identified Austrians have been warning that the USD’s days as the world’s reserve currency are numbered. For example, I myself recently wrote:
I believe that the U. S. dollar, U. S. Treasuries, and the U. S. stock market are all overvalued – in a ‘bubble,’ as they say…
If and when the U. S. dollar bubble bursts, we will see prices rise not just because of what Bernanke (and now Yellen) have pumped in since 2008, but because of the rush of dollars flowing back to the U. S. that have accumulated from years of trade deficits. At that point, the Fed will have to decide: Does it wreck the U. S. financial sector and broader economy in order to save the dollar (comparable to what Volcker did in the late 1970s, only on a much grander scale)? Or will it go the way of several other central banks in history, and run the printing press until the game ends? Either way, it’s going to be ugly.
Often in reaction to such dire predictions we Austrians will hear critics say, ‘Oh give me a break, you guys are paranoid! Gold bugs have been warning about hyperinflation since 1971. What other currency are people going to use? The euro? The ruble? The dollar is here to stay.’

This post was published at Mises Canada on August 31st, 2014.

Inflation – Crash Course Chapter 11

Chapter 11 of the Crash Course is now publicly available and ready for watching below.
For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather’s did.
But something changed after inflation spiked yet again during World War 2. With the permanent mobilization of the military industrial complex and the start of the decades-long Cold War, combined with a related acceleration in government deficit spending, inflation did not come back down. It remained elevated, and in fact, rose further.
That is, until the “Nixon shock” in 1971, when the dollar’s remaining ties to gold were severed. Then inflation EXPLODED. And the inflationary moon-shot has continued since, up to present day.
So, we’ve become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it’s pretty much all we’ve ever known.
CLICK HERE TO WATCH

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

Palladium Breaks Multi-Year High Over $900; Russian SWIFT Payment Ban Proposed By UK

Palladium Breaks Multi-Year High Over $900; Russian SWIFT Payment Ban Proposed By UK
The palladium price made a new 13 year high today and reached $909/oz, its highest since February 2001. Markets fear that the global supply of palladium could be impacted by the threat of further sanctions against Russia.
Palladium in U. S. Dollars – 20 Years (Thomson Reuters) The Russian mining industry has not been the target of sanctions so far, but with the oil sector already affected and the gas sector possibly the target of upcoming sanctions by the EU, markets remain fearful.
Russia is the world’s largest palladium producer accounting for over 40% of global production. This is mainly through Norilsk Nickel, the world’s largest mining company which mines nickel, copper and palladium in the area of Norilsk in Siberia, the world’s most northerly city. Palladium is mined as a by-product of nickel and copper mining.

This post was published at Gold Core on 1 September 2014.

Gold Investors Weekly Review – August 29th

In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week’s strengths, weaknesses, opportunities and threats in the gold market. Gold closed the week at $1,287.62 up $7.54 per ounce (0.59%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 2.40%. The U. S. Trade-Weighted Dollar Index rose 0.44% for the week.
Gold Market Strengths Gold traders are the most bullish in seven weeks amid the escalating tensions in Ukraine. The flat out invasion by Russia this week reminded investors of how attractive and useful gold is as a haven in uncertain times. Gold, after being down early in the week, closed up roughly 0.7 percent.
As part of the continuing deregulation of the gold market in China, Shanghai has allowed 21 banks to become market makers in interbank gold wholesale market as of the first of next month. The announcement was released this week on the Shanghai Gold Exchange website and signals that gold is still very much an important asset in the world’s most populous country.

This post was published at GoldSilverWorlds on August 30, 2014.

The Paper Armageddon Portfolio, One Year Later

As some of you may recall, I published an article here at TFMR one year ago in August of 2013 titled The Paper Armageddon Portfolio. In this piece I outlined a rationale for investing in certain sectors from a ‘hard assets/tangible value’ perspective that would reflect the TFMR understanding of the ongoing Keynesian process of QE, artificially low interest rates, market manipulation, and dollar devaluation. Within those sectors, I selected multiple stocks from companies I felt would outperform the sector as a whole. The general idea was to come up with a list of companies who were poised to not only survive the current debt creation/paper ponzi economy, but would potentially offer solid returns in the coming paradigm where tangible and productive assets will be worth far more than today’s paper promises. So one year later I thought it would be worthwhile to check back in on this investing thesis to see how these picks and sectors fared and to discuss what we might learn from their performance over the last year.
The article I originally posted is here, but to summarize, I outlined four sectors oriented around hard assets and/or the real-world production of tangible goods. The four I chose were 1. Farmland, 2. Timber and grazing, 3. Energy and commodities, and 4. Railroads (which I surmised would be poised to grow in a high fuel costs/post-Petrodollar environment, and to take market share from the currently dominant but fuel inefficient trucking industry).
Let’s assume that, as I recommended in the article, Turdites looked at this list and spent a few weeks doing their own research and due diligence on these companies, then chose to invest a few weeks later. Here is a breakdown of the 1 year performance of these individual stocks I chose within these sectors in my original list. Each entry shows ticker symbol, price change over the last year, % gain, dividend yield, then what a $10,000 investment in that stock would be worth today, and finally how much dividend one would have been paid:

This post was published at TF Metals Report on August 29, 2014.