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Showing posts with label bonds. Show all posts
Showing posts with label bonds. Show all posts

Friday, June 9, 2017

With stocks at all time highs, now may be the last chance to take control over your retirement and use it to own gold, silver, or Bitcoin

Let me say straightaway that this article is not investment advice, but a discussion regarding one of probably several avenues now available that are dedicated towards you taking control over your 401K, IRA, and other managed retirement accounts.  And for those retirees who eight years ago saw their managed retirement portfolios lose upwards of 60% during the last stock market collapse, at least today there are alternatives in an era where stocks are once again overvalued beyond comprehension, bond yields are at rock bottom, and any collapses in the banking system could easily lead to you losing your money via a bail-in.

Thanks to companies like Perpetual Assets, who have created a legal way for individuals to take charge of their money and retirement vehicles through self-directed IRA's, one no longer has to rely upon fee based managed retirement accounts, or brokers who limit your ability to buy and own assets they refuse to put your money into.


In fact how many of you reading this article have asked your broker about directing some of your money into cryptocurrencies like Bitcoin, when they have been by far the most profitable investments in decades?  Chances are great that if you have, your broker would have attempted to dissuade you from this asset class, or told you that they don't work in cryptocurrencies.

Additionally if you are wary of digital currencies as assets then there is always physical gold and silver to own as a hedge against what the dollar and the central banks have and are doing through near zero interest rates and monetary expansion.  And again the chances are good that your broker would have tried to push you into an ETF, or paper based gold and silver investments because there is very little profit to be made, and very few fees if any for your broker to get in buying gold, silver, and Bitcoin for your retirement portfolio.

The 2008 Financial Crisis should have been the same type of wake-up call for our generations as it was for our grandfathers following the 1929 stock market crash, and subsequent Great Depression.  And you can see this how many of them in that generation lost trust in Wall Street, in managed brokers, in banks, and in anything to do with debt and credit.  And with the actions of the Fed helping to prop up stocks to ungodly levels over the past nine years since the last crash, and re-create bubbles in housing and bonds, this may be your last chance to be able to secure your profits in your managed 401K and IRA accounts, and get that money out of their hands and into yours, where you can not only have managed access and control over it, but also to invest in any type of asset class such as gold, silver, and cryptocurrencies that are not available today through your standard Wall Street money manager.

Monday, May 1, 2017

With bonds crashing speculators take Bitcoin to nearly $1500

On May 1 the U.S. Secretary of the Treasury came out at a conference and joked that Wall Street has him to thank for the rise in bank stocks since the Administration took over the Oval Office back in January.  However, this was soon followed by almost contradictory comments by President Trump when he told reporters that he was very open to breaking up these same banks Secretary Mnuchin had praised earlier.

As a consequence, the 30 year Treasury bond took a precipitous dive as yields spiked in a single move the highest they have in over nine years.


Interestingly, the winner in all of this appears to be the crypto-currencies as both Bitcoin and Ether soared during the same time bonds were crashing, and Bitcoin alone reached a new all-time close to $1500 a coin.
The price of Bitcoin accelerated its recent exponential trend higher, soaring to daily all-time highs over the past few days, rising above $1,300 on Friday, then pushing $1,400 on Monday, and even above $1,500 on the second-largest BTC exchange, and was last trading just above $1,460 on Coinbase amid a buying frenzy attributed to speculative investment across the cryptocurrency sector, coupled with liquidity problem at some exchanges which were having problems processing fiat-based transactions. - Zerohedge


Tuesday, April 11, 2017

Major bond settlement house seeks to have gold trading on the blockchain by the end of the year

On April 11 one of the world's largest bond settlement facilities announced they have completed the initial phases of a gold trading platform on the blockchain that they hope to bring fully online before the end of the year.

Euroclear is one of two primary clearing houses for securities in Europe, and has acted as a major player for the U.S. Treasury as countries began dumping their dollar denominated bonds over the past five years.  And with the advent of the blockchain and its potential as a virtual platform for a myriad of financial products, Euroclear decided to use the technology as a way to bring gold trading fully onto the digital sphere.

Image result for gold if you don't hold it you don't own it
Clearing and settlement services firm Euroclear has expanded the scope of its blockchain-based gold trading platform project, eyeing a full launch for later this year. 
The company announced today that it completed the second stage of testing for its platform, developed in partnership with blockchain startup Paxos, with a group of 16 financial institutions including Citi, Scotiabank and Société Générale. More than 100,000 bullion settlement transactions were conducted over a two-day period. 
The pilot comes months after Euroclear announced the completion of the first phase, during which about 600 transactions were conducted. Euroclear first unveiled the platform in June
According to the firm, the successful test paves the way for a full production launch sometime in late 2017. - Coindesk

Friday, April 7, 2017

Fed jawboning kills gold and silver rally one day after each crossed their 200 day moving average

Following last night's U.S. missile attack in Syria as a punitive response for the perceived use of sarin gas against civilians, gold and silver both rose more than 1% to end overnight trading above their 200 day moving averages, and above hard resistance levels that had taken five months to recover to.

Gold:



Silver:


Yet while these levels stayed above their 200 day moving averages for a few hours after U.S. markets opened, a sudden and mysterious move in the dollar and yen following some minor comments from NY Fed President Bill Dudley were enough to crush all the gains gold and silver had from last night, and end the week well below the resistance levels that could have opened up the next leg for gold and silver prices.


It was not clear what was the catalyst for the sharp move, however shortly before the move Bill Dudley spoke, discussing the future of the Fed's balance sheet: 
  • FED'S DUDLEY: RATES WILL BE PRIMARY POLICY TOOL, NOT 'GRADUAL' BALANCE SHEET REDUCTION
  • FED'S DUDLEY: PORTFOLIO RUN OFF WILL NOT BE 'ACTIVE' TOOL OF MONETARY POLICY
  • FED'S DUDLEY: ONE REASON TO SHED BONDS IS TO LEAVE OPEN OPTION TO EXPAND BALANCE SHEET IN FUTURE
  • FED'S DUDLEY: LIKELY WON'T RETURN TO PRE-CRISIS SIZE BOND PORTFOLIO
  • FED'S DUDLEY: PREFERS RETAINING CURRENT 'FLOOR' POLICY MECHANISM IN FUTURE, WITH PERHAPS $500 BLN - $1 TRLN IN EXCESS RESERVES
  • FED'S DUDLEY: REPEATS EXPECTS TO BEGIN SHEDDING BONDS LATER THIS YEAR OR NEXT YEAR
in which he pointed out that balance sheet normalization would likely lead to only a "little pause" in rate hikes to avoid concurrent policy moves. 
FED'S DUDLEY: SHEDDING BONDS MAY LEAD ONLY TO 'LITTLE PAUSE' IN RATE HIKES; PERHAPS AVOID SIMULTANEOUS POLICY MOVES - Zerohedge

Thursday, January 26, 2017

With foreigners avoiding bonds, liquidity should move strongly into gold and silver in second half of the year

With foreigners for the most part selling bonds rather than buying them, signals are flashing that the 30 years bull market in bonds is just about over.  And with foreign economies around the world running into currency problems, slowing growth, and the threat of capital flight, economic Marc Faber believes that a huge portion of foreign capital will be moving into gold and silver in the second half of the year.

Economist Marc Faber, who is known in many circles as Doctor Doom for his oft gloomy forecasts, says that stock markets are overvalued, but stops short of saying that a crash is imminent. Though valuations are high and sentiment is dangerously optimistic, Faber argues in a recent interview with Fox Business that there are huge money flows still making their way into U.S. equities. 
And over the next three to six months Faber says much of that liquidity from foreign and domestic investors may start moving into precious metals and precious metals stocks:
[There won’t be a sell off] in the near future… but if you look at the valuation of stock they’re high. If you look at the valuation of the US dollar it is high… If you look at the money flows in the last few weeks a lot of money has flown into US equities, both from domestic investors and international investors… as a contrarian this is not a particular good sign. 
However, there is a lot of liquidity in the world… the liquidity will move into precious metals and precious metals stocks… so I would be long gold shares, silver shares, platinum and the underlying physical… 
I also think that sentiment is much too optimistic about stocks and far too pessimistic about bonds… - SHTF Plan

Monday, January 2, 2017

China progressing into 2017 to dominate the Bitcoin and gold markets

On Jan. 2, Bitcoin crossed over $1000 as the Chinese continue to rush into the crypto-currency as a means of bypassing capital controls on currency leaving the country.  And in an interesting and growing trend emerging from the second largest economy in the world, a new web bot forecast has the Chinese government actually capitulating to the power of Bitcoin and promoting its use within their borders, and along the newly emerging Silk Road.

Cliff High (Web bots): The new prediction sets we have are showing us swapping over to RMB as China takes over the emotional control if you will of the Bitcoin world, and alot of their rushing into that is fear of the currencies. 
Greg Hunter (USA Watchdog): They are fearful of the U.S. dollar? 
CH: Nope, the Chinese people... the China Pop (population)... and the China Pop is going to get really freaked out about the value of their own currency, and there is going to be more of a tendency and a rush into Bitcoin. 
Now at some point this year, China's official authorities are going to just give into that, and there's going to be a change to their official approach to this whole thing. 
GH: And they're going to say go ahead and use Bitcoin. 
CH: Boy if you read out report you are going to be staggerd... it's going to be more than that.  China is going to rush out, because of the way they do things... the Chinese authorities know their existence, their very lives depend on the health, wealth, and happiness of the people below them, and so someone is going to come up with an idea to extend digital currency... Bitcoin, and we have the language there, even to people who trade goats now. 
And the idea is, China, along with their Silk Road train from Beijing to Berlin, is going to extend out fiber optics and bring in over a billion people into the internet in the shortest possible time.  And at the same time they're going to spread out the Bitcoin ethos through there. - USA Watchdog
In addition to Bitcoin expansion within their borders and all along the Silk Road, China is progressing rapidly towards becoming the world's largest gold market, that will now include jewelry in their platform.

Status as one of the world’s biggest bullion importers, participation in the gold fix at the London exchange and a plan to establish a jewelry gold investment center in Shanghai has turned China into one of the leading players in the global gold market in 2016. - Sputnik News
As currencies and bonds around the world teeter on the precipice of another crash or outright collapse, the future of finance is rushing away from these fiat forms of currency and returning to an era of sound money.  And with supplies of gold and silver being quickly gobbled up by consumers all throughout the Far East, the trends are signalling very strongly that right now is beyond the time in which individuals can get their metals and Bitcoin to be prepared for the coming paradigm shift.

Friday, November 18, 2016

Strong dollar about to trigger a massive dumping of treasuries and dollar reserves by foreign holders of U.S. debt

Few people actually connected the dots six years ago as to the real reasons behind the Arab Spring uprisings in places like Yemen, Egypt, and elsewhere in the Middle East.  Politicians and a lazy mainstream media wanted us to focus on how it was due to people wanting to rise up against tyrannical dictators, but the truth of the matter was that the civil unrest was intrinsically tied to the dollar, and in nations being unable to afford to purchase commodities such as wheat because of how strong the reserve currency was in relation to their own.

Image result for arab spring bread helmet
(Egytian protester wearing a bread helmet)

When grain prices spiked in 2007-2008, Egypt's bread prices rose 37%. With unemployment rising as well, more people depended on subsidised bread - but the government did not make any more available. Egypt's annual food price inflation continued and had hit 18.9% before the fall of President Mubarak. 
Fifty per cent of the calories consumed by Egyptians originate outside its borders. Egypt is the world's largest wheat importer, and no country in the region (except for Syria) produces more than a small fraction of the wheat it consumes. Should the global markets be unable to provide a country's need, or if there are not enough funds available to finance purchases and to offer price support, then the food of the poor will become inaccessible to them. - Guardian
Despite the fact that the entire world was involved in the Great Recession, and most of their economies did not have access to strong central banks able to implement ZIRP and QE programs, it did not take the dollar exploding over 100 on the dollar index to cause financial havoc to one or more countries, but only a move from 72 to 84 to be just enough for countries deep in recession to be unable to buy dollars so they could purchase over-inflated commodities to feed their peoples.


In the past 30 years there have been three times when the dollar was over 100 on the index, and on every occasion a financial or monetary crisis emerged someone in the world.  In the 1980's it was the Mexican Peso crisis, and in the late 1990's it was both the Argentinian and Asian financial crises.

And now in November of 2016, and immediately following the election of Donald Trump as President, the dollar has skyrockted upwards and has crossed 100 on the index for the first time in 13 years.  And in that short amount of time since Nov. 8 we have seen India experience a monetary meltdown, and China see its currency strengthen to its highest levels in a decade.

However, both India and China are not Argentina, Egypt, Mexico, and Thailand.  And unlike these second world economies who were unable to withstand the reserve currency's pressure on their own money back 20 and 30 years ago, the world's second and seventh largest economies do have a form of ammunition to respond to the dollar's move and counter the dollar with its own medicine...

That of their dollar reserves.  And China appears ready now to bring heavy pain to the U.S. bond market by dumping hundreds of billions, if not trillions of dollars worth to protect their own economy.
Asked about when the Yuan may cross the psychological barrier, a PBOC advisor told Reuters that "I don't think the breaking of 7 is imminent. We may have to wait until next year." Actually, at this rate, "breaking" of 7 may happen as soon as next week, to which he adds :"If the pace of depreciation is too fast, if it hit 7 before the end of this year, the central bank will control it." 
And that's when the liquidation of Chinese USD-denominated reserves begins in earnest, among all those other measures the PBOC implemented a year ago when the market was far less sanguine about the Chinese devaluation: 
The policy insiders said the central bank was likely to intervene in currency markets and enforce capital controls to slow the rate of decline in the yuan. 
As we expected, the intervention has already started:
traders said large Chinese state banks had offered dollars in the domestic currency market on Thursday in an apparent effort to slow down the depreciation of the yuan. 
They said there had been no sign of state dollar selling in previous sessions. 
Another way of saying "offering dollars" is selling US assets. - Zerohedge
Once China begins dumping more of their dollars in earnest, and the bond rates for Treasuries start to spike arithmetically or even exponentially, it will open the floodgates for everyone else to dump their $14 trillion in foreign held dollars where the ramifications of them returning to the U.S. will be catastrophic.  And all that inflation that has been exported for decades to the rest of the world will come back in one sudden wave to prices and consumers, and might very easily spell the end of the American century, as well as dollar hegemony as the global reserve currency.

Monday, September 19, 2016

As the Fed prepares for interest rate decision this week, recent history shows gold to climb no matter which way they go

In the past one could accurately predict what would happen to the price of gold when the Federal Reserve chose to move interest rates either higher or lower.  But with the markets now fully manipulated from the central bank's use of QE and stimulus, and both stocks and bonds in over-priced bubbles, rationality and fundamentals no longer are relevant.

In recent history, gold has more often than not risen no matter what the Fed has done because the markets are ruled in large part now by uncertainty.  When the central bank began its five year move of lowering interest rates back in 2010, and printing money to buy bonds, stocks, and any and all assets they could get their hands on, the markets had supreme trust in the Fed, and it was reflected in the drop in gold from an all-time high of $1940 to its pre-December 2015 low of $1045.

But as we have seen for the last 10 months, every time the Fed issues a formal statement to either raise rates (December 2015), or make no changes (All of 2016 to date), gold has responded in kind to the upside.

January 27 FOMC Meeting - Gold Up



March 16 FOMC Meeting - Gold Up



April 27 FOMC Meeting - Gold Up



June 15 FOMC Meeting - Gold Up



July 27 FOMC Meeting - Gold Up



September 21 FOMC Meeting - Gold ?

So when interest rates were raised in December of 2015, the gold price went up.  And subsequently after every single FOMC meeting this year, the price also went up when they did nothing.

Interest rates are still near zero, with the Fed desperately afraid to both raise them up prior to the election, or lower them down into negative territory like in Europe and Japan.  And it is in part to this schizophrenia and loss of confidence in the central bank that will very likely keep gold prices going up for the foreseeable future.

Monday, September 5, 2016

As central banks funnel fiat wealth to the 1%, gold is becoming the opposite trade to funnel wealth to the 99%

Last week, the world's 'Bond King' Bill Gross continued his message where he proclaimed that stocks and bonds were invariably crap, and that the only true wealth protection right now is in gold and silver.  And at the heart of this clarion call is the fact that he believes the central banks are now in an unavoidable abyss where they not only have to continue to print massive amounts of new money, but also buy up every possible paper asset simply to keep the system going.

But in doing this, the central banks have also had to reverse a trend they were following last year when a large portion of them were out buying physical gold on the open market.  And since the majority of them are now net sellers of the metal at the same time they are net buyers of paper assets, it is creating a unique dichotomy where instead of simply using their policies to funnel wealth to the 1%, they are also opening the opportunity to funnel wealth down to the other 99%.

Not only is gold an auspicious color, culturally, on the mainland, but the People’s Bank of China has long been a major hoarder of its bullion form. Less so, though, as central bankers from Beijing to Brasilia cut gold purchases - by 40% in the second quarter alone. 
While monetary authorities still hold almost 33,000 metric tons of the precious metal, that marks the third consecutive quarterly drop and the longest streak in five years.
And yet, the gold price is rising - up 24% so far this year - even as the biggest buyers back away. What gives? For central banks, waning demand seems partly technical in nature. Weak global exports mean China and other major nations have recorded fewer cash inflows of the kind that normally drive gold purchases. The bigger question, though, is whether G20 leaders are internalizing the three reasons why negativity about the global outlook is driving gold. 
One, of course, is genuine concern about a global financial system still working through the trauma of 2008. Bond guru Bill Gross is making the rounds to explain the second: how central banks, including the Federal Reserve, “all have mastered the art of market manipulation” at the same time the Ph.D. economists on which they rely for advice “have lost their way.” In other words, lingering fear from 2008 and too much money chasing too few investments are combining to pump up safe-haven assets, and excessively so. - Barrons
Central banks are now selling physical assets to protect the new fiat money they are printing which is then being used to buy overvalued paper assets that invariably profit the 1%.  But in doing this they have kept the price of gold down where it can be affordably purchased by the 99%, and where the masses outside the ponzi paper scheme can have a choice and option to both protect and grow their wealth as the bank's failing policies come to a climax.

Sunday, August 21, 2016

Donald Trump's economic adviser says we should return to some form of a gold standard

On Aug. 18, Dr. Judy Shelton sat down with Fortune Magazine for an interview on the state of affairs in finance and economics.  And during her interview, Dr. Shelton provided her opinion that the United States should lead the way for an international return to some form of a gold standard, and perhaps beginning it with the use of gold backed bonds.

Besides being an economist in her own right, Dr. Shelton is also on Presidential candidate Donald Trump's economic advisory board.

You’ve written before about going back to some sort of gold-based monetary system. Is that something the U.S. could do unilaterally, or would we need to convene other nations and get them on board? 
I’m not opposed to a new Bretton Woods conference, and if it takes place at Mar-a-Lago, 
I’m fine with that. But anything the U.S. does because we print the international reserve currency, unilateral action would almost instantly be accommodated by other countries. 
In terms of gold being involved, some people may think of that as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it’s universal. It’s a well-accepted monetary surrogate that transcends borders and time. If you look at the foreign reserves of the most important countries, they keep them mostly in gold. I don’t want to read too much into it, but it proves that gold is not some barbarous relic. 
Would the first step in that be issuing gold-convertible bonds? 
Don’t attribute this idea to the Trump campaign, but it has been something that I have been proposing for years now. A gold-backed bond was first proposed in 1981 by Alan Greenspan. I think the U.S. should issue them as an experimental pilot program, similar to the TIPS bond, that compensates people who are concerned about the future value of the dollar. For those who are concerned about a big financial meltdown, these bonds would give them some insurance, as gold tends to rise in price during periods of financial stress. - Fortune Magazine

Saturday, August 13, 2016

Got gold? German bank to issue a .04% charge to depositor accounts starting in September

Beginning in September, the first German bank, Raiffeisen Gmund am Tegernsee, will start charging some deposit holders a fee of .04% for monies they hold in accounts within their institution.

Back in June both the European Central Bank (ECB), and shortly after the German Bund, went into negative interest rates, meaning buyers of securities within these two entities would end up receiving less money when their securities reaches maturity.

And as negative interest rates continue to implode the European and Japanese bond markets to the tune of over $14 trillion, banks are now starting the process to charge their own retail customers for holding their money in these banks.

Earlier this week, Raiffeisen Gmund am Tegernsee, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee, with a population 5,767, finally gave in to the ECB's monetary repression, and announced it’ll start charging retail customers to hold their cash. 
Starting September, for savings in excess of €100,000 euros, the community’s Raiffeisen bank will charge a 0.4% rate. That represents the first direct pass through of the current level of the ECB’s negative deposit rate on to retail depositors. 
“With our business clients there’s been a negative rate for quite some time, so why should it be any different for private individuals with big balances?,” Josef Paul, a board member of the bank, told Bloomberg by phone on Thursday. 
The good news is that “as it looks today, charges on deposits won’t be extended to customers with lower amounts” than 100,000 euros. However, that may (and likely will) change at any moment. - Zerohedge
With nary a paper investment available to provide investors and savers a return, or even protection for their money, the only alternative remaining to keep from losing everything to central bank and government policies is to move wealth into physical gold and silver.

Thursday, July 28, 2016

Economist Marc Faber is now telling investors to put 25% of their portfolio into physical gold

Last week, famed economist Marc Faber spoke at a seminar for the Chartered Financial Analyst group out of Chicago, which brings together many of the top investment professionals in the United States.  During his time behind the podium, the Gloom, Boom, and Doom economist advocated that the global economy and financial systems have reached such a point where investors need to re-allocate much of their portfolios to physical assets such as gold, and even suggested that they replace currencies and bonds with up to 25% of their allocation going towards the precious metal.

Every year, Faber is brought on stage by an organization of elite investors, the CFA Institute, during a seminar in Chicago for highly trained investment professionals from throughout the world. And he was there Thursday. 
Why would an investing horror star be there? Because the most savvy of investment pros are taught not only to cherish the sweet delights of a soaring stock market, but also to look at what could go wrong, to test their happy thoughts and to prepare. 
Faber challenges oblivious investors in his "Gloom, Boom & Doom Report," which focuses more on doom than boom. But he also points out that even during doom there is always something that will boom. Faber said he wouldn't go as far as to suggest people buy property in Aleppo, Syria, now, but you get the idea: Money is made when investors dig through carnage, not when they buy something that's been popular a long time. 
Faber told the investment professionals gathered in Chicago that they shouldn't be prejudiced against gold. Although the typical investment pro keeps less than 1 percent of his or her portfolio in gold, Faber suggests 25 percent. He sees it as protection from a dangerous combination of tremendous government debt and massive bond-buying by central banks globally trying to fight off recession with near-zero interest rates. Besides gold, Faber has invested in Asian real estate and some stocks and bonds. - Chicago Tribune

Thursday, July 14, 2016

Even insurance companies are buying gold to protect their capital as bonds become negative

Insurance companies use the monies they acquire from policy holders to grow their capital to support needed claims, as well as expand their business.  For publicly traded insurance companies this is vitally necessary to help them comply with their fiduciary responsibility to shareholders, as well as to earn enough profits to give out dividends or be able to lower premiums for their customers.

A major investment tool that insurance companies have used for years to grow their capital has been the bond markets.  But with these markets residing in an environment of both zero and negative interest rates over the past decade, many are faced with having to find a new form of asset or security to ensure their capital is protected, and that some modicum of growth is created.

So in light of this, some insurers and re-insurers are turning to gold to supplement their investing.

How do you know when the world’s economic, financial and monetary systems are in trouble? 
Answer: When re-insurance companies, whose sole purpose is to insure other insurance companies, start to panic into gold and begin hoarding cash it’s probably a reliable signal that things aren’t going as well as our central bankers’ best laid plans imply. 
That’s exactly what’s happening right now: 
A real paradigm shift is taking place in the markets…  Even one of the world’s second largest re-insurers is now buying physical gold… They’re even adding physical cash… This is the insurance industry’s insurance company… They are the risk experts and they now are buying physical gold bullion and storing physical cash… The importance of this move is possibly the most significant flow of capital that you will see in your lifetime… - SHTF Plan
Insurance is a $1.2 trillion industry, and that does not include re-insurers or other complimentary businesses that function within this environment.  And if a critical mass of them decide to turn to gold to hedge against the loss of interest they formerly got from purchasing bonds, the gold markets would dry up in a flash, and the price would skyrocket far beyond all-time highs.

Monday, July 11, 2016

Global bonds at negative yield reach $13 trillion as the Dutch join in with the rest of the EU

We may have to rename the global bond market to ‘Fast and Furious -1.0’ because that is exactly what is happening to the expanding amount of sovereign bonds in both Europe and Japan.  Last week, bonds with a negative yield were estimated to be about $11.5 trillion, and just one week later, that amount has grown by 11.5% to now be around $13 trillion.
And the newest member to join the negative yield club are the Dutch, who’s Netherlands sovereign bonds for the first time fell to negative yields.

Friday, July 8, 2016

Japan investors fleeing from negative rate bonds and buying/storing gold in Switzerland out of fear of government confiscation

The Japanese people have gone through a great deal over the past 30 years, and trust in their government may have finally reached the low point.  That is because after years of zero and now negative interest rates, the transference of their retirement accounts to the U.S. in exchange for Treasury debt, and a money printing scheme that has completely destroyed their economy, those with money left are breaking away from the system and buying and offshoring physical gold in vast quantities.

There are three primary reasons why the Japanese populace and investors are fleeing out of Yen based assets and into physical gold.  First, because of asset deflation and negative interest rates the Japanese feel there is no investment left besides gold that will protect or grow their wealth within their economy.  Secondly, following a recent visit from former Federal Reserve Chairman Ben Bernanke to Japan, the people recognize that the only remaining option for the central bank is to expand the money supply to the point where all assets will become bubble inflated, and wealth will be evaporated from an insolvent currency.  And finally, the real threat of asset confiscation, particularly for gold, is now weighing on the minds of the Japanese and why they are choosing to store their gold offshore and in Swiss vault accounts.

Peter Boockvar – “Buy As Much Gold As You Can Now”
As Bloomberg reports, in the face of a clear lack of trust in Japanese leadership, local investors are buying gold to store in Switzerland. The reason: they are increasingly worried about confiscation which is why they are storing it half way around the globe.  The number of buyers jumped 62% in the first six months from the second half of 2015, Atsuko Sato Whitehouse, head of Japanese markets at the London-based BullionVault investment service, said this week.  
The clear action of gold buying comes only months after we reported on the increased demand for safes in Japan. This is what we said back in February: “Look no further than Japan’s hardware stores for a worrying new sign that consumers are hoarding cash--the opposite of what the Bank of Japan had hoped when it recently introduced negative interest rates,” WSJ wrote this morning. “Signs are emerging of higher demand for safes—a place where the interest rate on cash is always zero, no matter what the central bank does.” 
However, something has changed, and it is almost as if Japan is expected the ghost of FDR to arrive soon and confiscate their gold. 
“Many of our Japanese customers think it’s too risky to hold gold bars at home and they want to keep them in Switzerland because they are anxious about the future of Japan,” Whitehouse said in an interview. The country’s growth has stagnated for a decade, defying fiscal and monetary stimulus which has driven up public debt to more than double the value of annual economic output.

Wednesday, July 6, 2016

Gold nears $1400 per ounce as gold soars beyond post-Brexit high

Gold prices have recovered from recent pullbacks and consolidations to be just $30 from $1400 per ounce, and higher than its $100+ move following the UK's Brexit vote.

Prices appear to be moving up as bond yields collapse in the U.S. Treasury and go negative in many European markets.  In fact, bond yields in Switzerland are now completely negative going out to the next 50 years.

Brexit is a sideshow to the world economy, and gold remains an important asset in any portfolio, says Marc Faber, editor of the Gloom, Doom and Boom Report. 
Brexit is a sideshow to the world economy, which began weakening the end of 2014, according to Marc Faber, editor of Gloom, Doom and Boom Report. 
In an interview with CNBC on June 28, Faber cited as evidence the strong performance of Treasury bonds, saying “over the last 12 months U.S. long-term Treasuries are up 20%, and they are up 15% year to date.” 
Faber believes that the British vote to leave the EU could lead to more quantitative easing. “Brexit will give a perfect excuse to the Federal Reserve not to increase interest rates and be most likely to launch QE4,” he said, adding that such a movement could give a boost to stock markets. 
But long term, Faber believes all investors should hold some gold, calling it a “no brainer” in an environment of money printing. 
“Is gold near term overbought? Yes, it is,” Faber said. “But longer term, I think every investor should have some cash, which he would keep in yen or in dollars or in euros, and should have some of this cash in gold.” - Streetwise

Monday, July 4, 2016

What if instead of buying bonds, the Fed and other central banks monetized gold?

The only individuals who actually believe that zero percent interest rates, massive money printing (quantitative easing), and bond buying have worked since the Credit Crisis of 2008 are the mainstream stock hawkers on CNBC, and the central banks who have placed their reputations on the line in support of their monetary policies.  But for economic and financial analysts who look at the real data, and not on broken models used to support their already believed failed premises, central bank interventions have harmed the overall economy far more than it has helped in the long run.

So following the Brexit vote, the potential breakup of the EU, and financial institutions in Italy and Germany teetering on collapse, it should come as no surprise that the Fed and the ECB are rushing in the discuss the creation of new and even bigger money printing schemes, and the same bond buying that accomplished little more than siphoning the wealth of their countries into the hands of the few.

But what if the Fed and ECB did something different this time?  Back in April, an analyst with the world's largest Bond insurer proposed that instead of buying bonds this next time, the central banks chose to buy and monetize gold, and at a price so high that it would actually be beneficial to sovereign nations who own the precious metal, and of course to the smart people who have been accumulating it over the past decade.

Bassman says that the Fed should "emulate a past success by making a public offer to purchase a significantly large quantity of gold bullion at a substantially greater price than today’s free-market level, perhaps $5,000 an ounce? It would be operationally simple as holders could transact directly at regional Federal offices or via authorized precious metal assayers." 
What would the outcome of such as "QE for the goldbugs" look like? His summary assessment: 
A massive Fed gold purchase program would differ from past efforts at monetary expansion. Via QE, the transmission mechanism was wholly contained within the financial system; fiat currency was used to buy fiat assets which then settled on bank balance sheets. Since QE is arcane to most people outside of Wall Street, and NIRP seems just bizarre to most non-academics, these policies have had little impact on inflationary expectations. Global consumers are more familiar with gold than the banking system, thus this avenue of monetary expansion might finally lift the anchor on inflationary expectations and their associated spending habits. 
The USD may initially weaken versus fiat currencies, but other central banks could soon buy gold as well, similar to the paths of QE and NIRP. The impactful twist of a gold purchase program is that it increases the price of a widely recognized “store of value,” a view little diminished despite the fact the U.S. relinquished the gold standard in 1971. This is a vivid contrast to the relatively invisible inflation of financial assets with its perverse side effect of widening the income gap. - Zerohedge
Besides allowing central banks with gold to receive funds to help payoff debt obligations, it would also allow countries who got rid of their gold decades before to start accumulating it once again, perhaps in preparation for a return to the gold standard in their currencies when the Great Reset eventually happens in the global monetary system.

Either way, all signals are pointing towards ownership of gold, both in the hands of individuals and in the hands of sovereign nations and central banks.  And the only obstacle will be how likely are central bankers to be willing to admit their failures in the current credit based Keynesian system, and if they are willing to really do everything that is necessary to escape the monetary crisis that is now upon us, rather than whitewashing it with more debt as they did in 2011.

Saturday, July 2, 2016

Gold's unstoppable rise coupled with bond crashes the final warnings for a coming monetary collapse

Contrary to central banks and financial pundits, it is the bond market, rather than the stock markets, which provide the true signals for the strength of an economy and of a currency.  And this has never been so true since the world went forward with its credit based monetary system.

Yet in addition to this, the one commodity which also acts as a warning sign for monetary and financial collapse is gold.  And it has proven accurate on at least three occasions going back to the 1970's when the precious metal was removed as a backstop for all global currencies.


As we begin the second half of 2016, some interesting events are taking place that go far beyond last week's Brexit vote and possible future ending of the European Union project.  First, the number of global sovereign bonds that now have negative yields are at $11.7 trillion, and is a number that is climbing daily.  And secondly in the U.S., where the dollar remains the global reserve currency and the U.S. Treasury the most important credit vehicle, yields for treasuries have fallen to their lowest point since the 1950's.

The yield on the benchmark 10-year Treasury note sat lower at 1.004 percent, after hitting their lowest level in four years, according to Reuters. The yield on the 30-year Treasury bond was also lower at 2.241 percent after hitting a new all-time low. - CNBC
U.S. 30-year yield hits lowest in at least 60 years.  Treasuries post highest return in 17 months in June * Bond prices pare gains after ISM PMI data beats forecast * Fed monitoring Brexit's impact on U.S. - Fed's Fischer - The U.S. Treasuries market rallied on Friday, with the 30-year yield hitting its lowest since the 1950s in a worldwide scramble for bonds on expectations of weak global growth and more policy stimulus from major central banks. - Yahoo Finance
Even during the 2008 Credit Crisis did bond yields for the 10 and 30 year never get so low, which validates that the world is rushing full on out of their own financial instruments and are willing to take even a smidgeon of return in exchange for a flight to safety.

But as we have seen since January, U.S. bonds aren't the only signal of a move out of stocks and faltering currencies.  In fact, gold has been the best performing asset for the entire year, and as more and more geo-political and economic events reveal themselves to place the global financial system on the precipice of collapse, the monetary metal will not only soar past its all-time high, but ultimately be the only true safe haven when even the dollar no longer acts as a currency of strength and stability.

Wednesday, June 29, 2016

Beginning July 1 will start the trillion dollar selloff of stocks for baby boomers over the next 11 years

Besides the consequences of there being more Baby Boomer retirees than workers to fiscally deal with the insolvent social security program, a new monetary crisis is about to hit the markets in just three days time.  That is because on July 1, the oldest of the Baby Boomer generation will turn 70 1/2, and thus forced to start selling off their 401K, IRA, and mutual fund assets to fulfill their obligations to Uncle Sam and the taxman.
Currently there are between $14-15 trillion in non-pension, personal retirement accounts which are held on Wall Street in the forms of stocks, bonds, annuities, reits, and other security assets.  And by law once someone reaches the age of 70.5, they must begin selling off those securities at the rate of 3.65% each year, with a decade later it expanding to 5.35% after age 80, and 11% per annum after age 90.
Since the first of the Baby Boomers will be hitting the age of 70.5 on July 1, selloffs in the market will commence over the next 11 years as those on the lowest end of the generational scale will each move into this age requirement at an accelerated pace year by year.
boomers selloff

Monday, June 27, 2016

Gold will continue to soar because of global financial conditions that go beyond Brexit

Both investors and those people worried about protecting their wealth need to realize that the outlook for gold goes far beyond Friday's Brexit results.  In fact, the referendum for Britain to leave the European Union is more like a Bear Stearns event rather than the 'Lehman Moment' theme saturating the media since it represents the actions of a single entity rather than the overall domino effect that Lehman Brothers was to the global banking system.

And when you couple in the fact that gold had been rising since the very first days of 2016, and is the best performing asset this year in all markets, the expectation for gold to rise much greater is still there because the underlying problems within the global financial system have not gone away simply because of the Brexit.

Expectations for more rallies in gold aren’t just borne from the Brexit news. What happens in other markets, including equities and currencies, will impact gold’s outlook more directly. 
Brexit is “a global monetary event, with destructive effects in individual economies,” said Brien Lundin, editor of Gold Newsletter. 
‘If everyone is trying to depreciate their currency, including the U.S., what can they depreciate it against?’ 
“The standard central-bank prescription is to ease, to depreciate their currency,” he said. 
“But if everyone is trying to depreciate their currency, including the U.S., what can they depreciate it against?” 
“Only gold will stand tall during the turmoil. And over the long term, it won’t because it’s supposed to be a ‘safe haven’, but because it’s the only safeguard against fiat currency depreciation,” said Lundin. - Marketwatch
Prior to Friday's Brexit vote, there was more than $10 trillion in bonds worldwide that have a negative yield, and this will only continue to grow.  This means that trying to find a safe haven in bonds will leave you with less money than you started with at maturity, and opposite the effects if you instead moved your cash into gold.

No, last week's Brexit vote is simply one big warning sign on the road to the next global financial crisis, and just like from 2007-2011, the barometer for this will be the price of gold and not the stock markets, currency markets, or other asset classes.  And if you want to see what the people in the line of fire are choosing, just look at the Brits who are trying to buy gold hand over fist, but are quickly realizing that supplies are quickly becoming unavailable in their local markets.
A British gold broker says sales are at an all-time high since UK voters decided to leave the EU. 
"There has been record online sales on the GoldCore website . . . the phones are ringing off the hook," says GoldCore founder Mark O'Byrne in a news release. 
On the day Brexit results were announced spot gold popped $70 per ounce peaking at $1,330
Other gold sellers like BullionVault, CoinInvest.com and The Royal Mint all reported a surge in sales
On the same day the Brexit results were announced, "buy gold" Google searches soared 400% in the United Kingdom, according to Google Trends. - Mining.com