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The Central Banks Are Losing Control Of The System

Evidence is multiplying
Friday, June 5, 2015, 11:46 AM

Executive Summary

  • What the NACM Index and the Atlanta GDPNow are telling us about the odds of returning to recession
  • Bond market volatility is picking up
  • Are central banks are losing their control?
  • Why monitoring credit markets will be our best indicator of the next downturn

If you have not yet read Part 1: As Goes The Credit Market, So Goes The World available free to all readers, please click here to read it first.

That indicator is the current level of the National Association of Credit Managers Index.  Although not wildly well known, the National Association of Credit Managers Index is an indicator deserving of attention and monitoring immediately ahead.

As per the National Association of Credit Management (NACM), the Credit Managers Index is a monthly survey of responses from US credit and collections professionals rating factors such as sales, credit availability, new credit applications, accounts placed on collection, etc.  The NACM tells us that numeric response levels above 50 represent an economy in expansionary mode, which means readings below 50 connote economic contraction.  For now, the index rests in territory connoting economic expansion, but the index is also sitting quite near a 6 year low.  We’ve been here before in the current cycle as the economy has moved in fits and starts in terms of the character of growth:

In a prior discussion, I mentioned the slowing in the US economy in the first quarter of 2015.  I highlighted the Atlanta Fed GDPNow model that turned out to be very correct in its assessment of Q1 US GDP.  While the Atlanta Fed was predicting a 0.1% Q1 GDP growth rate number, the Blue Chip Economists were expecting 1.4% growth.  When the 0.2% number was reported, it turns out the Atlanta Fed GDPNow model was virtually right on the mark.  As of now, the Atlanta Fed GDPNow model is predicting a... » Read more

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Off the Cuff: Eventually Fundamentals Win Out

Despite the system doing everything it can to prevent it
Thursday, June 4, 2015, 6:08 PM

In this week's Off the Cuff podcast, Chris and John Rubino discuss:

  • Senseless Markets
    • Today, they only serve as a "liquidity gage"
  • Negative Data Everywhere
    • Economic growth is moribund despite the historic stimulus
  • Setting The Market Free
    • 100% in our best interest, but will be fought the entire way
  • Eventually Fundamentals Will Win Out
    • You can bend the laws of nature for a time, but you can't break free of them

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.  » Read more

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Sounding The Alarm On The Country's Vulnerability To An EMP

Establishment insiders are worried we're too vulnerable
Monday, June 1, 2015, 11:29 PM

In the past here at Peak Prosperity, we’ve written extensively on the threat posed by a sustained loss of electrical grid power. More specifically, we've warned that the most damaging threat to our grid would come from either a manmade or natural electromagnetic pulse (EMP).

Recently, we've been contacted by a well-connected group of powerful people who have formed a commission to study the matter, and have recently made a public and urgent appeal in an open letter to President Obama to take this threat seriously. » Read more

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Life Beyond The Tipping Point

How to avoid the coming painful rendezvous with reality
Friday, May 29, 2015, 10:08 AM

Executive Summary

  • There is not nearly enough net energy to meet our growth expectations in our lifetime
  • We are past the "tipping point". A hard rendezvous with limits to growth will arrive in the next 2 decades
  • What you can do to avoid that pain that the majority undoutedly will face
  • Prepare for the current "mother of all bubbles" to burst soon

If you have not yet read, In Denial: We Pursue Endless Growth At Our Peril available free to all readers, please click here to read it first.

Energy Denial

It is said that you cannot explain water to a fish and I have nearly as difficult time trying to explain energy to people today. We are surrounded by it so completely it is difficult to properly appreciate.

But it is in every particle of food you eat, every piece of furniture in your house, every item you wear, and every trip you take -- are all 100% dependent on energy that came from somewhere and subsidizes every single item and action.

Fossil fuels are the vast majority of all the energy we use and, it cannot be repeated enough, they visibly and invisibly subsidize the so-called renewables, too. By that I mean solar and wind power cannot be generated until and unless the components are first manufactured and installed. And those activities are nearly 100% driven by fossil fuels today.

To grasp this more fully, watch this time-lapse video of a wind tower being installed and, while marveling at the ingenuity and speed of the team involved, think about where all of the components came from:


How were the cranes, bulldozers and trucks built? What fuels do they run on? How did all those workers get there? Who grew their food and how did they come to eat it? How are the roads they drove on built and maintained? How is concrete made and how did it all get to the job site? What do the factories and foundries run on that built the windmill? How far did each windmill component have to travel before arriving at the site?

The answer to all of those questions is... » Read more

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Off the Cuff: The Cost of Comfort

Is perhaps too high a price to pay
Thursday, May 28, 2015, 9:04 PM

In this week's Off the Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Cost Of Comfort
    • We are ruining ourselves in the name of convenience
  • Prospering By Borrowing
    • Nearly all of our industries are unsustainable
  • Our 'Monocrop' Economy
    • It's single-track focus ignores the complexity of reality
  • Creating A New, Better Narrative
    • Join Chris, Becca & Charles Eisenstein
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It’s Time to Stop Treating Our Soil Like Dirt

We're destroying an invaluable resource
Tuesday, May 26, 2015, 11:34 AM

In the recent podcast with Paul and Elizabeth Kaiser, the owners of Singing Frogs farm, they told a tale of success that begins and in many ways ends with their soil.

It's a model we need to pay close attention, to as I think it’s safe to say that the vast majority of farming across the world right now is based on the practice of plowing up fields and is therefore based on the practice of slowly but surely ruining the very bottom of the food pyramid. » Read more

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Suicide By Pesticide

What the honey bee die-off means for humanity
Friday, May 22, 2015, 11:18 AM

As you are aware, honey bees have been suffering from something called colony collapse disorder. In practice what this means is that the bees simply vanish from their hives leaving behind their most precious worldly possessions, honey and larvae.

Killing off organisms in an ecosystem using indiscriminate biocides is quite literally a slow form of suicide for us humans. As within, so without.  You cannot poison and kill of the world around you without poisoning and killing yourself.

Simply put: We are killing ourselves. And the data is literally horrifying. » Read more

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Off the Cuff: It Takes A Pillage

How financial system fraud has worsened post-2008
Thursday, May 21, 2015, 4:21 PM

In this week's Off the Cuff podcast, Chris and Nomi Prins discuss:

  • It Takes A Pillage
    • How Wall St fraud has only worsened since 2008
  • Moral Hazard
    • Central banks are enabling the bad actors
  • The War On Cash
    • What the implications of ZIRP and NIRP are
  • Get Ready For Volatility To Return
    • Market gyrations from here are baked in the cake
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Navigating Safely In The Coming Era Of Volatility

To avoid them, you have to first understand all the risks
Wednesday, May 20, 2015, 9:42 AM

Executive Summary

  • Central planners are showing increasing signs of insecurity in their ability to maintain control
  • Credit default risk is on the rise
  • So are geo-political and economic risks
  • Manipulation continues to muddy price discovery
  • Crime & fraud have rotted the core our financial system
  • How to tread carefully in these markets

If you have not yet read Part 1: 4 Factors Signaling Volatility Will Return With A Vengeance available free to all readers, please click here to read it first.

When stock markets keep racking up records, it’s hard to imagine steep downturns.  Yet that’s precisely when caution is required, particularly when volatility is rising and risk factors are not subsiding.  What I’m about to say is not to scare, but to help prepare, you.

Recall that two years after achieving a then historic high on October 9, 2007 of 14,164.53, the Dow plunged by more than half to a March 2009 12-year low of 6,547. The value of US stocks dropped from $22 trillion to $9 trillion. Why? Because of a confluence of risk-laden events pelting people and markets. From the housing market drop, to the failure of Bear Stearns and Lehman Brothers, to the unraveling of CDOs, to the obscene amounts of leverage and fraud everywhere, volatility escalated and liquidity and confidence dove. Banks entered self-defense mode, turning to governments and central banks for lifelines.

The fix of subsidized private banking was in. It still is - seven years later. There’s nothing comforting about that. It took another five years, until March 5, 2013 for the Dow to top 2007 levels. If you’re an individual, say with a pension or college tuition to pay, you’ve got to have an iron stomach to deal with that kind of chaos. You’re going to want to protect your money from the possibility of a next time. Now is a good time to start.

Today’s markets have not bubbled on organic or sustainable growth, they have been propped up by unprecedented, globally coordinated central bank policies that flooded the financial system with cheap money and like a giant financial vacuum cleaner hoovered up debt securities from big banks through massive (QE) easing programs.

Market volatility, though low compared to 2008 days, has nonetheless been inching up. It will continue increasing due to... » Read more

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A Promising Framework For Developing Independent Income

And the time to start is now
Friday, May 15, 2015, 4:56 AM

Executive Summary

  • The most common sources of independent income in America
  • Independent wealth is concentrated in the hands of a few, but it doesn't have to be that way
  • The promise of the Mobile Creative Model for developing independent income
  • The importance of beginning to develop multiple streams of income now, before crisis hits

If you have not yet read The Self-Employed Middle Class Hardly Exists Anymore available free to all readers, please click here to read it first.

In Part 1, we looked at a variety of IRS and other data to conclude that about 15% of the workforce of 145 million earns some self-employment income, but only 15% of those earners (4 to 5 million) made enough to support a middle class life. Of these around 3 million are estimated to be self-employed professionals. Punchline: very few Americans are able to afford a middle-class lifestyle without working for corporations or the government.

In this Part 2, we examine the primary sources for developing independent income, defined as income that is not paid directly by the government or Corporate America or their pension funds (public and private). 

The Primary Sources of Independent Income

Thanks to the complexities of U.S. tax law, specifically, how the tax code treats various kinds of income, we have a reasonably precise snapshot of earned and unearned income. We can identify the primary sources of independent income as... » Read more