Insider http://www.peakprosperity.com/insider/newest?title=&uid=&created= en They're Coming For Your Cash http://www.peakprosperity.com/insider/93379/theyre-coming-your-cash ]]><h1 style="font-size: 23.3999996185303px;">Executive Summary</h1> <ul> <li style="line-height: 19.5px;">The banking system runs on liquidity</li> <li style="line-height: 19.5px;">Banks will do anything to keep it flowing -- including raiding their depositors</li> <li style="line-height: 19.5px;">The risks of a global liquidity crunch are dangerously high today</li> <li style="line-height: 19.5px;">Why extracting physical cash from the system is highly advised</li> </ul> <blockquote><p><em>If you have not yet read&nbsp;<a href="http://www.peakprosperity.com/insider/93379/liquidity-game" target="_blank">Part 1: In A World Of Artificial Liquidity &ndash; Cash Is King&nbsp;</a>available free to all readers, please&nbsp;<a href="http://www.peakprosperity.com/insider/93379/liquidity-game" target="_blank"><strong>click here</strong></a>&nbsp;to read it first.</em></p> </blockquote> <h2 style="line-height: 25.2999992370605px;">It&#39;s All About Liquidity For The Banks</h2> <p>Liquidity is the buzz-word that central banks used to justify their policies of keeping short term rates at zero (give or take) percent and buying bonds from banks in return for giving them more of it. Central banks say their primary responsibility is to balance full employment with low inflation, but that&rsquo;s just code for being able to keep the largest banks solvent in times of emergency by all means possible. This current emergency has lasted nearly seven years and counting. &nbsp;</p> <p>Here are my laws of liquidity behavior:</p> <p class="rteindent1"><strong>The first law of liquidity</strong>&nbsp;&ndash; when it is most needed, it will be least available.</p> <p class="rteindent1"><strong>The second law of liquidity</strong>&nbsp;&ndash; the easier it is to get, the less value it holds for the recipient.</p> <p class="rteindent1"><strong>The third law of liquidity</strong>&nbsp;&ndash; the harder it is to find, the greater its systemic cost.</p> <p>Banks gain on multiple fronts from &ldquo;accommodative&rdquo; monetary policy with respect to their liquidity needs. First, they can borrow money at next to nothing. Second, they can hoard that extra cash under the guise of complying with capital reserve requirements and get brownie points for passing stress tests because they are holding the cash or high quality assets bought with the cash, that central banks provided them to begin with. Third, they can sell bonds they don&rsquo;t want or need at full value to central banks, and afterwards mark similar bonds at higher levels than the market would otherwise value them.</p> <p>This is all shell-game finance. It is why people should be diligent about...</p> <p><a href="http://www.peakprosperity.com/insider/93379/theyre-coming-your-cash" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93379/theyre-coming-your-cash#comments Insider banks cash liquidity http://www.peakprosperity.com/crss/node/93379 Fri, 03 Jul 2015 16:19:24 +0000 Nomi Prins 93379 at http://www.peakprosperity.com Off The Cuff: Suddenly Queasy Markets Everywhere http://www.peakprosperity.com/insider/93397/cuff-suddenly-queasy-markets-everywhere ]]><p>In this week&#39;s Off The Cuff podcast, Chris and Charles Hugh Smith discuss:</p> <ul> <li style="line-height: 19.5px;">Queasy Markets <ul> <li style="line-height: 19.5px;">Deflationary forces appear to have gained the upper hand</li> </ul> </li> <li style="line-height: 19.5px;">Big Trouble In Not-Little China <ul> <li style="line-height: 19.5px;">Suddenly, its stock and real estate markets are in violent correction</li> </ul> </li> <li style="line-height: 19.5px;">Greece And The Future Of Europe <ul> <li style="line-height: 19.5px;">Who is going to take the losses of a&nbsp;Grexit?</li> </ul> </li> <li style="line-height: 19.5px;">The Path To Collapse <ul> <li style="line-height: 19.5px;">Is Greece giving the rest of us a preview of what to expect?</li> </ul> </li> </ul> <p style="line-height: 19.5px;line-height: 19.5px;"><a href="https://s3.amazonaws.com/cm-us-standard/audio/off-the-cuff-184-sample.mp3" target="_blank">Click to listen to a sample of this Off the Cuff Podcast</a> or <a href="http://www.peakprosperity.com/enroll" target="_blank">Enroll</a> today to access the full audio and other premium content today.</p> <p><a href="http://www.peakprosperity.com/insider/93397/cuff-suddenly-queasy-markets-everywhere" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93397/cuff-suddenly-queasy-markets-everywhere#comments Insider China gold Greece stock market http://www.peakprosperity.com/crss/node/93397 Thu, 02 Jul 2015 22:28:26 +0000 Adam Taggart 93397 at http://www.peakprosperity.com ALERT: Markets Are Highly Unstable, China Is Crashing http://www.peakprosperity.com/insider/93335/alert-markets-highly-unstable-china-crashing ]]><p>The multiple global bubbles in search of a pin may have found one in Greece.&nbsp; The carnage there is clearly accelerating, and the central planners are straining mightily to get control back.</p> <p>While the odds favor them doing so, the risk is very high that they may not and that we are now in the &#39;descent&#39; phase that follows the inevitable ending of the &#39;virtuous&#39; phase (if we can call it that) of the money-printing experiment.</p> <div>&nbsp;</div> <p><a href="http://www.peakprosperity.com/insider/93335/alert-markets-highly-unstable-china-crashing" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93335/alert-markets-highly-unstable-china-crashing#comments Insider alert China Greece http://www.peakprosperity.com/crss/node/93335 Mon, 29 Jun 2015 20:41:44 +0000 cmartenson 93335 at http://www.peakprosperity.com What Awaits Us In The Future Of Higher Interest Rates http://www.peakprosperity.com/insider/93238/what-awaits-us-future-higher-interest-rates ]]><h1>Executive Summary</h1> <ul> <li style="line-height: 19.5px;">Expect a bond market bloodbath as rates rise</li> <li style="line-height: 19.5px;">Municipal, corporate and sovereign defaults will soon follow</li> <li style="line-height: 19.5px;">Liquidity suffers as necessary goods prices rise, but securities prices fall</li> <li style="line-height: 19.5px;">The new, nuclear risk of a derivatives market collapse</li> </ul> <blockquote><p><em>If you have not yet read <a href="http://www.peakprosperity.com/blog/93237/global-credit-market-now-lit-powderkeg" target="_blank">Part 1: The Global Credit Market Is Now A Lit Powderkeg </a>available free to all readers, please <a href="http://www.peakprosperity.com/blog/93237/global-credit-market-now-lit-powderkeg" target="_blank"><strong>click here</strong></a> to read it first.</em></p> </blockquote> <p>You may remember that what caused then Fed Chairman Paul Volcker to drive interest rates up in the late 1970&rsquo;s was embedded inflationary expectations on the part of investors and the public at large.&nbsp;Volcker needed to break that inflationary mindset. Once inflationary expectations take hold in any system, they are very hard to reverse.</p> <p>A huge advantage for Central Bankers being able to &ldquo;print money&rdquo; in very large magnitude in the current cycle has been that inflationary expectations have remained subdued. In fact, consumer prices as measured by government statistics (CPI) have been very low in recent years.</p> <p>When Central Bankers started to print money, many were worried this currency debasement would lead to rampant inflation. Again, that has not happened for a very specific reason. For the heightened levels of inflation to sustainably take hold, wage inflation must be present. I&#39;ve studied historical inflationary cycles and have not been surprised at outcomes in the current cycle in the least, as in the current cycle, continued labor market pressures have resulted in the lowest wage growth of any cycle in recent memory. But is this about to change at the margin?</p> <p>The chart below shows us...</p> <p><a href="http://www.peakprosperity.com/insider/93238/what-awaits-us-future-higher-interest-rates" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93238/what-awaits-us-future-higher-interest-rates#comments Insider bonds central banks derivatives inflation interest rates http://www.peakprosperity.com/crss/node/93238 Fri, 26 Jun 2015 16:53:04 +0000 Brian Pretti 93238 at http://www.peakprosperity.com Off The Cuff: When The Bond Market Fails, Everything Will Fail With It http://www.peakprosperity.com/insider/93280/cuff-when-bond-market-fails-everything-will-fail ]]><p>In this week&#39;s Off the Cuff podcast, Chris and Brian&nbsp;Pretti&nbsp;discuss:</p> <ul> <li style="line-height: 19.5px;">Bonds Are For Dough <ul> <li style="line-height: 19.5px;">The size of the risk in the credit market is staggering</li> </ul> </li> <li style="line-height: 19.5px;">The War On Cash <ul> <li style="line-height: 19.5px;">Will&nbsp;going&nbsp;cashless&nbsp;help the credit bubble live longer?</li> </ul> </li> <li style="line-height: 19.5px;">Greece &amp; Derivatives <ul> <li style="line-height: 19.5px;">How a&nbsp;Grexit&nbsp;could trigger Armageddon</li> </ul> </li> <li style="line-height: 19.5px;">The End Of Confidence <ul> <li style="line-height: 19.5px;">When it arrives, the collapse will happen swiftly</li> </ul> </li> </ul> <p><a href="http://www.peakprosperity.com/insider/93280/cuff-when-bond-market-fails-everything-will-fail" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93280/cuff-when-bond-market-fails-everything-will-fail#comments Insider Brian Pretti Credit Markets Off The Cuff http://www.peakprosperity.com/crss/node/93280 Fri, 26 Jun 2015 00:37:31 +0000 Adam Taggart 93280 at http://www.peakprosperity.com The Price of Everything & The Value of Nothing http://www.peakprosperity.com/insider/93220/price-everything-value-nothing ]]><p>My view is that the stock market is simply pegging itself to the idea that the central banks have backed themselves into a corner and that there&rsquo;s no other option but to keep the liquidity spigots open. I cannot fault that view, as it has been right for the past 6 years.</p> <p>However, it cannot be true forever. And we all know that a day of reckoning is out there somewhere.&nbsp;</p> <p><a href="http://www.peakprosperity.com/insider/93220/price-everything-value-nothing" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93220/price-everything-value-nothing#comments Insider GDP Price S&P 500 value http://www.peakprosperity.com/crss/node/93220 Tue, 23 Jun 2015 20:50:50 +0000 cmartenson 93220 at http://www.peakprosperity.com The Warning Indicators To Watch For Trouble In The Bond Market http://www.peakprosperity.com/insider/93141/warning-indicators-watch-trouble-bond-market ]]><h1>Executive Summary</h1> <ul> <li style="line-height: 19.5px;">Liquidity is drying up</li> <li style="line-height: 19.5px;">Volatility is returning</li> <li style="line-height: 19.5px;">HFT has dramatically increased crash risk</li> <li style="line-height: 19.5px;">The key takeaways for investors</li> </ul> <blockquote><p><em>If you have not yet read <a href="http://www.peakprosperity.com/blog/93140/credit-market-warning" target="_blank">Part 1: Credit Market Warning </a>available free to all readers, please <a href="http://www.peakprosperity.com/blog/93140/credit-market-warning" target="_blank"><strong>click here</strong></a> to read it first.</em></p> </blockquote> <p>Financial assets are worth what someone will pay for them.&nbsp; A corollary of this is that you&rsquo;d much rather be trying to buy or sell in markets that are deep and liquid.&nbsp; Thin markets provide bad prices at best, and no bids or offers at worst.</p> <p>Low trading volumes are worrisome because they are usually accompanied by higher volatility. And those two can easily become dance partners that whirl each other ever faster.&nbsp;</p> <p>There are numerous warning signs coming from all asset markets, but especially from the bond markets.</p> <h2>Low Liquidity</h2> <p>The issue of low liquidity really jumped out at me roughly a year ago with the news that the utterly broken Japanese government bond (JGB) market had gone an entire 36 hours without a single trade(!!).</p> <blockquote><div> <p><strong>Japan bond market liquidity dries up as BoJ holding crosses &yen;200tn</strong></p> </div> <p>Arp 15, 2015</p> <p>The Bank of Japan&rsquo;s massive purchases of government debt hit a milestone this week, sucking liquidity out of the market to such an extent that the benchmark 10-year bond went untraded for more than a day, the first time in 13 years.</p> <p>The current 10-year cash bonds saw its first trade of the week yesterday afternoon, <strong>having gone untraded for more than a day and a half.</strong></p> <p><strong>Trade volume</strong> in the benchmark cash bonds so far this month dropped to less than one trillion yen, <strong>down about 70% from the same period last year.</strong></p> <p>(<a href="http://www.gulf-times.com/eco.-bus.%20news/256/details/388487/japan-bond-market-liquidity-dries-up-as-boj-holding-crosses-%C2%A5200tn" target="_blank">Source</a>)</p> </blockquote> <p>Thus comes the law of unintended consequences.&nbsp; The main reason for buying JGB&rsquo;s by the Bank of Japan (BoJ) was to inject a lot of liquidity into &lsquo;the system&rsquo; in hopes that the Japanese economy would take off.</p> <p>While that may have happened to some (slight) extent what also happened was that ...</p> <p><a href="http://www.peakprosperity.com/insider/93141/warning-indicators-watch-trouble-bond-market" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93141/warning-indicators-watch-trouble-bond-market#comments Insider bonds HFT liquidity volatility http://www.peakprosperity.com/crss/node/93141 Fri, 19 Jun 2015 16:50:32 +0000 cmartenson 93141 at http://www.peakprosperity.com Off The Cuff: More On The War On Cash http://www.peakprosperity.com/insider/93162/cuff-more-war-cash ]]><p>In this week&#39;s Off the Cuff podcast, Chris and Charles Hugh Smith discuss:</p> <ul> <li style="line-height: 19.5px;">The War On Cash <ul> <li style="line-height: 19.5px;">Why governments are so interested in a&nbsp;cashless&nbsp;society</li> </ul> </li> <li style="line-height: 19.5px;">Grexit <ul> <li style="line-height: 19.5px;">Why the EU power structure fears it</li> </ul> </li> <li style="line-height: 19.5px;">The Bond Bomb <ul> <li style="line-height: 19.5px;">This one will be for all the marbles</li> </ul> </li> <li style="line-height: 19.5px;">Too Many Risks <ul> <li style="line-height: 19.5px;">There&#39;s little gain to remaining long in this market</li> </ul> </li> </ul> <p style="line-height: 19.5px;line-height: 19.5px;"><a href="https://s3.amazonaws.com/cm-us-standard/audio/off-the-cuff-182-sample.mp3" target="_blank">Click to listen to a sample of this Off the Cuff Podcast</a> or <a href="http://www.peakprosperity.com/enroll" target="_blank">Enroll</a> today to access the full audio and other premium content today.</p> <p><a href="http://www.peakprosperity.com/insider/93162/cuff-more-war-cash" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93162/cuff-more-war-cash#comments Insider bonds Charles Hugh Smith Greece grexit Off The Cuff war on cash http://www.peakprosperity.com/crss/node/93162 Thu, 18 Jun 2015 18:48:22 +0000 Adam Taggart 93162 at http://www.peakprosperity.com When To Be In Joy http://www.peakprosperity.com/insider/93100/when-joy ]]><p>I&#39;d like to take a break for a moment from the weakening stock market, the unfolding disaster that is Greece, etc... and share my experience from this past weekend.</p> <p>I presented at the <a href="http://www.learn.edu/events/the-new-story-festival.html" target="_blank">New Story Festival </a>in CT with my wife Becca. We discussed the importance of nature connection and community, myself covering the essential knowledge that serves to light a fire to &lsquo;do something&rsquo; and with Charles Eisenstein eloquently covering the essence of being alive in these times.</p> <p><a href="http://www.peakprosperity.com/insider/93100/when-joy" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93100/when-joy#comments Insider Chalres Eisenstein new story http://www.peakprosperity.com/crss/node/93100 Tue, 16 Jun 2015 14:11:51 +0000 cmartenson 93100 at http://www.peakprosperity.com What To Do With Your Cash Savings http://www.peakprosperity.com/insider/93051/what-do-your-cash-savings ]]><h1>Executive Summary</h1> <ul> <li style="line-height: 19.5px;">Which power groups will determine how the war on cash is waged?</li> <li style="line-height: 19.5px;">Is it better to hold cash in savings/checking accounts, or securities accounts?</li> <li style="line-height: 19.5px;">What will likely happen with retirement accounts?</li> <li style="line-height: 19.5px;">Ways to diversify your cash risk</li> </ul> <blockquote><p><em>If you have not yet read <a href="http://www.peakprosperity.com/blog/93050/war-cash-officially-sanctioned-theft" target="_blank">Part 1: The War on Cash: Officially Sanctioned Theft </a>available free to all readers, please <a href="http://www.peakprosperity.com/blog/93050/war-cash-officially-sanctioned-theft" target="_blank"><strong>click here</strong></a> to read it first.</em></p> </blockquote> <p>In Part 1, we reviewed the basic elements of the war on cash, and how it benefits banks and governments but not households that don&rsquo;t already own productive assets.</p> <p>In Part 2, we&rsquo;ll review the downside of imposing capital controls and eliminating physical cash, and discuss strategies to protect our financial assets from bail-ins and negative interest rates/fees on cash.</p> <h2>What Will The Wealthy And Politically Powerful Tolerate?</h2> <p>One of the key dynamics in this discussion is: what will the wealthy and powerful tolerate? Any policy that inhibits or harms the wealthy and politically powerful is a non-starter, and so if we align our strategies accordingly, we are less likely to suffer any negative consequences.</p> <p>The wealthy and politically powerful have little need for physical cash (President John F. Kennedy famously carried no cash), so eliminating cash will probably not generate any resistance in the financial elite.</p> <p>But other forms of capital control, such as requiring retirement accounts to hold Treasury bonds and limiting transfers to other nations&rsquo; banks might...</p> <p><a href="http://www.peakprosperity.com/insider/93051/what-do-your-cash-savings" target="_blank">read more</a></p> http://www.peakprosperity.com/insider/93051/what-do-your-cash-savings#comments Insider cash war on cash http://www.peakprosperity.com/crss/node/93051 Fri, 12 Jun 2015 16:06:44 +0000 charleshughsmith 93051 at http://www.peakprosperity.com