Daily Digest 1/19 - The January Effect, An Early Wake-Up Call
Today, the US Dollar is the reserve currency of the world. You need it, for instance, to buy oil, a vital component of any economy. Since other countries like China cannot print US dollars at their leisure, they have to get it from somewhere. They get it from trade with the US. The US buys products in Asia and the rest of the world with US dollars, and in turn these same dollar surpluses are used to buy oil and US bonds, creating a much needed artificial demand for US dollars.
Gold Price – The January Effect (Taki T.)
This chart shows the ‘real rate’ of interest. It is derived at by deducting price inflation as expressed by the CPI, from current Treasury Yield. This ‘real rate’ is presently -1.75%. This means money that is held in Treasuries is losing out by more than 1.75% per year (paying taxes on the yield adds insult to injury). In view of the fact that the official CPI rate is regularly understating the actual rate of price inflation, the ‘real rate of inflation’ is even worse than this chart portrays. In any event, this negative trend provides energy for gold and silver to rise in price.
Welcome to the global currency war (Nervous Nelly)
Mark your calendars. Today is the day the global currency war broke out into the open. This after the Bank of Japan announced it would ramp up its monetary policy stimulus efforts — on an unlimited basis — until it achieves a 2% inflation target.
An Early Wake-Up Call (Arthur Robey)
First, we hear about the effects of centralization and discuss suggestions for both broad policy changes and wise alterations of behavior for businesses and individuals. Our economy is in a “slow burn.” People are terrified because of a lack of transparency, privacy has declined extraordinarily, and everything is politicized. The pie has shrunk and the world is dangerous, and people are feeling it, despite their desire for things to be going well. As a result, the role of investment has changed. There is opportunity in decentralization, but it takes local organization and forethought, as well as discernment, to implement it. What are the most prudent choices for each of us in the year ahead? Who can we trust?
While the news of nuclear reactors potentially dotting the oilsands landscape is already raising concerns among some environmentalists, the technology could actually prove greener than current methods. Oilsands producers typically use natural gas to power bitumen extraction, which contributes significantly to Canada’s carbon emissions.
"Given what we know about the fossil fuel industry and their apparent desire to cook the planet, it's immoral to have investments in these companies," Daniel Kessler of 350.org, an organization that's started a fossil fuel divestment campaign, said Thursday.
"We look forward to Sen. Kerry as secretary of state given his commitment to climate issues, but he has to divest of these investments."
With little opportunity to increase industrial capacity along the prohibitively expensive Burrard Inlet waterfront, Port Metro Vancouver—which is the name of both Canada’s largest and busiest port and a federally established corporation—is set to quadruple its container import-export capacity at Deltaport in the coming years. After all, China beckons. Politicians genuflect before the god of perpetual economic growth. Unions see jobs. Developers see real-estate possibilities. Tsawwassen Natives see dollar signs. Profits—despite sanctimonious statements otherwise—trump environmental policy. Farms are expendable; ditto snow geese.
Gold & Silver
Provided daily by the Peak Prosperity Gold & Silver Group
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