The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts

Thursday, May 11, 2017

Economist Harry Dent honorably pays off bet between a Bull and Bear in the argument to predict direction of gold prices

In the gold sphere there are a ton of different analysts making predictions on where the price of gold is going in light of the Fed's half-decade long policies of quantitative easing, and near zero interest rates.  And of the more well known and popular analysts on either side of the fence, the one who stands out the most on the bearish side of gold is none other than Harry Dent.

Harry Dent is an economist who specializes in trends and demographics, and has a better than average track record of success in many areas of his analysis.  However he became the butt of many criticisms when a few years back he publicly predicted that the price of gold was going down to below $700 an ounce, and likely to reach around $250 before beginning a trend back up.

And the primary premises for his bearish outlook for gold?  That assets were going to hit a deflationary cycle and that gold is more of a commodity than it is money.

So with Dent's analysis out there for all to see in hear, it was not surprising that someone in the gold industry would take his forecasts as a challenge and seek to put Harry on the spot for his future price predictions.  And that someone was Jeff Clark from Goldsilver.com, and an associate of the site's founder Mike Maloney.

So what was the bet you might ask?  Well it was fairly straight forward... within two years time of the agreed upon bet, the price of gold itself would determine who won.  And if it crossed below $700 (or very close to that number) anytime intra-day or closing, then Harry Dent would be considered the winner.

If it did not, and of course we know that it never even dropped to three figures during that period, then Jeff Clark was determined the winner.

And the prize?  A single ounce of gold.

Two years ago I bet economist Harry Dent an ounce of gold that the price wouldn’t fall to his prediction of $750/ounce. 
He had made some noise in the gold community that year about how gold was going to crater. He advised selling your gold and buying dollars. He even stated that $750 wasn’t the stopping point, that the price would fall to as low as $250. 
I couldn’t pass it up. I wrote an open letter to him, citing why I thought he was wrong, and offered to bet him a one-ounce gold Eagle. I even raised the target to $800 and gave his prediction two full years to come to fruition. He accepted. 
My bet was a bold one at the time… if you remember early 2015, the gold price had been falling for two years, and showed little sign of stabilizing. Almost no one thought the bottom was in. Market participants had been decimated. Gold showed some life in January that year, but by the time we finalized our agreement in March the price had fallen another 12%. It dropped below $1,100 that summer, and by December hit $1,049. My wager was not looking so good. 
But gold never fell to $800—never even cracked three figures. I won. And yes, he paid up. (He kept his word and sent me a check for the proceeds, including a little extra for a purchase premium; you may not agree with his predictions, but this speaks highly of his character). - Gold Silver
In the end there is one thing to remember among all the forecasting that is and has taken place over the past several years, and that is that as we go through this current cycle of declining prices in the gold sphere, the price of gold has ended each year higher than the same time as the prior year going back to 2015.  And that trend is likely to continue as long as the economy needs to rely upon the central banks having to pump out more and more credit just to survive.

Sunday, February 26, 2017

Could millennial snowflakes be the catalyst to keep the U.S. from eliminating cash?

If there is one thing to be said about millennials it is that they are very emotional about their activism.  And all one has to do is look over the past couple of years at their push for 'safe spaces' on campuses, rabid protests over a myriad of different topics, and the rejection of many status quo policies that have been at the core of America's government over the past 20 years.

So with central banks, sovereign leaders, and elitist academics all pushing hard for the elimination of physical cash in the world's monetary systems, an interesting irony is coming to the surface where today's millennials could be the catalyst for protecting the economy from going 100% into a digital system.

Image result for psychology of cash
If millennials are supposed to be the first generation going mostly cashless, they are making the move halfheartedly.
Millennials still rely on cash — 80 percent of millennials carry greenbacks. And 42 percent still write checks, according to the Accel + Qualtrics Millennial Study 2017.
And that could be a good thing, as some advisors say a cash diet is the best way to pare down debt. 
The study corroborates other recent findings that technology is not overturning conventional ways to pay for things, even as millennials flock to mobile payment apps like Apple Pay and Venmo. 
Sophia Bera, a millennial who founded Gen Y Planning and is a member of the CNBC Digital Financial Advisor Council, said most of her friends carry some cash, but she rarely sees them using it as the first option to pay for things. It's mostly cash for emergency situations, or cash for tips.  
"When I use Venmo it feels like magical money," Bera said. "You forget that it is money, like any money, and that is bad." 
The financial advisor highly recommends cash to people trying to get out of credit card debt or for sticking to a budget. "A weekly cash amount is good," Bera said. "Take out $200 every Friday and when it is gone it is gone. ... It's a lot harder to drop six twenties on a dress than swiping a card. People don't buy flatscreen TVs with $20 bills."
Bera said switching to cash, even for just a few months, can help people reign in spending, and is especially helpful for those trying to get out of debt. - CNBC
Psychology has always played a huge role in how people see and respect money.  And all one has to do is look at a casino, which exchanges your currency for casino tokens (chips) because they know that gamblers are more than willing to spend these tokens in greater quantities than if they were playing a table game using real money.

Additionally, people became inured to accumulating high levels of debt when all they had to do is pay a paltry minimum amount which they could afford despite the fact they were actually increasing their debt levels through the interest compounding on that debt.

For a generation of Americans who suddenly had a wakeup call from the massive amounts of student loan debt they accumulated, recognizing the power of money by desiring to use cash instead of credit is a life-changing paradigm.  And even with America's youth being much more attuned towards using technology for nearly everything in today's society, their lagging in the transition to a cashless digital society because they realize that spending cash over credit is extremely beneficial to keeping oneself out of debt, could be a serious factor in hindering the establishment's agenda towards making all of finance one without physical money.

Wednesday, January 25, 2017

Gold price should be well over $20,000 per ounce today if held to historical relation of gold to global GDP

Analysts have looked at several different measures as to why the current gold price is only around $1200 per ounce, especially as global money supplies have skyrocketed since the 1980's.  And even here at The Daily Economist we have published numerous articles pointing out the willful manipulation of gold by governments, central banks, and the markets that act as the platform for this manipulation.

But looking at gold from both a fundamental and technical perspective, its significance in supporting economic growth through the backstopping of currencies cannot be denied... and why the move in 1971 by President Richard Nixon to remove that gold backstop from the dollar reserve currency was a mistake that was paralleled by the previous controller of the global reserve (Britain) back in the 1931.


Graphic courtesy of SRS Rocco Report

The most powerful banker in the early part of the 20th century stated that "Gold is money, everything else is credit."  And it is this difference that determines whether economic growth is real, or simply an artificial creation that lasts until the fuel of debt (credit) runs out.

When stock markets crashed at the end of the 1920's, their boom had been fueled by cheap money, and borrowing on margin.  And it is interesting to note that these same markets did not return to their 1929 all-time highs until the 1950's, which was about 6-7 years after the world returned to a proxy form of a gold standard following the conference at Bretton Woods.  And the markets then went on to steadily rise until the late 1960's, when the U.S. decided to artificially expand the money supply to fund the war in Vietnam.

So why are these relations important?  Because there is still one relation we have not mentioned here that involves gold when it was historically part of the world's money system.  And that relation is Gold Supply/Value to GDP.

As we can see, the value of world monetary gold stocks of $11 billion was a third (33%) of the $32 billion of global GDP.  So, for each dollar of monetary gold, the world economies produced three times the GDP. 
Now, let’s look at the situation today.  According to the World Bank, global GDP fell to $73,892 billion ($73.9 trillion) in 2015.  As I mentioned in a previous article, this was down 5.7% from $78.4 trillion in 2014:
What a difference in 86 years… aye?  Today, the value of world monetary gold stocks is only 1.7% ($1.28 trillion) compared to global GDP of $73.9 trillion.  I calculated the value of present monetary gold stocks by multiplying the current 33,250 metric tons of official gold holdings by $1,200 an ounce.  Of course, we don’t know the TRUE official gold holdings figure, but this at least provides us a guideline. - SRS Rocco Report
In 1929 the dollar price of gold was $20.42, and the total value of above ground gold was approximately $11 billion.  This meant that the gold supply supported global GDP at a rate of 3:1.

However 86 years later, with the gold price being approximately $1200 and where there is a much greater supply of the metal having been mined and owned by governments and central banks, the ratio of GDP to the gold value is now a whopping 57.59 (close to 60) :1... or nearly 20 times what it was in 1931 when gold was removed from the reserve currency by the British.

Thus taking this historic relation to today, it would mean the price of gold to support a $73 trillion global GDP should be nearly 20 times what it is, or at least $20,000 per ounce.

Saturday, October 29, 2016

Forget nuclear weapons, the new Cold War is about gold and currencies

It is perhaps ironic that the American century was built upon having the most gold reserves in the world following the destruction of two World Wars, and is ending because they gave up reliance on a gold standard for trust in credit and fiat currencies.  And with the rise of Russia and China both economically and geo-politically, the new global financial powers have risen themselves on the back of the one true money.

Gold.

With all eyes on Russia’s unveiling their latest nuclear intercontinental ballistic missile (ICBM), which NATO has dubbed the “SATAN” missile, as tensions with the U.S. increase, Moscow’s most potent “weapon” may be something drastically different. 
The rapidly evolving geopolitical “weapon” brandished by Russia is an ever increasing stockpile of gold, as well as Russia’s native currency, the ruble. 
Recently, financial guru Jim Rickards, author of the book “Currency Wars,” wrote that “Russia is poised for a major comeback in its economy. Russian bonds and stocks and the Russian currency, the ruble, will all benefit.” Rickards believes a “strong turnaround” is coming within Russia, and that this comeback will benefit the ruble. 
Rickards, in his 2011 book “Currency Wars,” theorized that Russia and China could combine their gold reserves to form a global gold-backed currency to compete against the U.S. dollar. Currently, Russian reserves stand at roughly 1,500 tonnes, with Chinese reserves totaling over 1,800 tonnes (according to China — it’s likely more), which would amount to a combined total of roughly 3,300 tonnes of gold. 
The U.S. is about to lose overarching control of policymaking within the International Monetary Fund (IMF), thus the U.S. lockup on global gold is about to vanish, according to Business Insider. 
Imagine for a moment the distinctly real possibility that Russian-Chinese alliance could exercise indirect (or even direct) control over the IMF’s gold reserve of over 2,800 tonnes. Russian, Chinese and IMF gold combined would equal roughly 6,100 tonnes, and would allow for direct competition with the U.S. gold reserves, estimated at 8,100 tonnes. 
Russia and China have realized that the petrodollar is wielded by Washington as it’s weapon of choice when opposing a well-armed state, and clearly see the writing on the wall - thus working together to create a new global financial paradigm. - The Free Thought Project
bankofrussia-e1475520013798
New Symbol of the Russian (Gold backed?) Ruble

Sunday, March 13, 2016

Yale academic believes global economic crash is just months away

According to Yale’s Vikram Mansharamani, the global economic collapse is just months away despite the fact that mainstream pundits are discounting even a slight recession, much less a financial crash.  And at the heart of his analysis is the fact that the credit bubble that has been fueled by central banks over the past several years has finally reached a peak where nearly everything is artificially inflated, and the point of no return has been already crossed.


FINANCIAL bubbles across the globe are imploding and the problem is only set to get worse... Prices are falling around the world thanks to the collapse of China’s debt fuelled economic growth and this has triggered a succession of disastrous events that are starting to be realised, according to Vikram Mansharamani, an author and, lecturer at Yale University. 
Fears are growing that the world could face a financial crash of unprecedented levels and could even be just six months away. 
Bubbles created by the mountain of cheap money made available by low interest rates since the last financial crisis are now starting to burst, said Mr Mansharamani. 
Mr Mansharamani added: “We’ve got a bubble bursting, I would argue, in Australian housing markets — that is beginning to crack; South Africa — the whole economy; Canada — housing and the economy; Brazil. We can keep going on and on.” - London Express

Monday, March 7, 2016

German banking association recommending banks stockpile cash for loans to stimulate economy

On March 4, the Bavarian Banking Association recommended to its member banks that they take out all their deposits being held with the European Central Bank (ECB) and stockpile the cash for use as loans in order to stimulate the economy.  This recommendation comes as the ECB prepares for negative interest rates, and the charging of interest to banks under their authority for sequestering cash in their facility.
Like with the Federal Reserve in the U.S., ever since the ECB began its own form of quantitative easing and zero interest rates, banks within the Eurozone have simply borrowed cheap money from the central bank and either bought government bonds or parked it with the ECB where they received a modicum of interest.  This has resulted in a sharp slowdown in the velocity of money, and a massive decrease in lending to businesses and the general economy.

Read more on this article here...

Tuesday, March 1, 2016

Stock bubble: It now takes more credit to hold up stock prices today than it did just before crashes of 2000 and 2007

Last year was the year of the buyback in the stock markets, where corporations borrowed and spent trillions just to prop up their companies because earnings and revenues were no longer growing.  And for awhile this program was able to take the Dow, S&P 500, and the Nasdaq to new all-time highs.

But in May of 2015 things began to fizzle out, and while there would be a few rally's to counter any major selling, especially during the tumultuous months of July and August, the markets had reached their apex and the trend was fully set for a bear market that began in earnest in January of this year.

Yet perhaps most importantly for those hoping that Wall Street can calm the markets as we head into the 2nd quarter of 2016, an interesting piece of data was just compiled by Bill Holter that shows that corporations and central banks have reached their limit in being able to protect stocks from selling pressures as credit (debt borrowing) is now more costly than during the market peaks of 2000 (Dot Com) and 2007 (Housing Bubble, Credit Crisis) just prior to their collapses.
Just a short comment on a VERY BIG problem! The below chart shows “margin” balance on the NYSE with an inverted chart of the S+P 500 laid over it. 
NYSE-investor-credit-SPX-since-1995-inverted
Please notice the amount of credit being used to carry stocks now is significantly larger than it was at previous market tops in 2000 and 2007. Also, the amount of credit has begun to contract, this is a classic margin call being met …so far. The danger of course is as it always has been when margin builds like this. As the equity market pulls back, margin calls are issued and in some cases “forced sales” are done. This can, has in the past and most likely will occur and morph into a virtual loop where forced sales weaken prices, creating new margin calls and more forced sales in a negative feedback loop…otherwise known as a market panic. - Silver Doctors
What this all means in layman's terms is that when the market tilts completely downward, neither the Fed, nor the banks, will be able to provide liquidity to keep the markets propped up, with margin calls on their outstanding debt they already have causing stocks to unravel even more.