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How To Oppose the Deep State

Don't volunteer for victimhood
Wednesday, April 30, 2014, 9:42 AM

Executive Summary

  • A middle ground approach is best at this stage
  • While the Deep State is threatened by its own dysfunction, a collapse will not be pretty for citizens
  • How not to volunteer for victimhood
  • Where hope lies

If you have not yet read The State of the Deep State, available free to all readers, please click here to read it first.

On general principle, the sort of odious operations represented by the Deep State, including warrantless police actions, immersive surveillance, and even assassination, ought to be opposed by Americans who care about their country and the ongoing project of remaining civilized. The Deep State’s totalitarian tendencies are self-evident. Therefore, “we the people” are obliged to dismantle it as expeditiously as possible, ideally by voting for electoral candidates who vow to work toward that end, but by resistance if that fails. Political actions might include getting rid of all the redundant “security” agencies piggybacked around the CIA since 9/11; voting the Patriot Act out of existence; and introducing legislation to re-define the “personhood” of corporations and their putative “rights” to “free speech” as defined by flinging money at elections.

However, the electoral process, being subject to the depredations and manipulations of the Deep State, may itself be too much a part of the problem at the present time. Resistance, on the other hand, can beat a fast path into the perilous realm of revolution and sedition, inviting punishment by the Deep State. For the moment then, the preferable action probably lies in the middle ground: political persuasion, speaking out against the Deep State. There is simply not enough of this now, especially among serious people in positions of authority. This, by the way, was exactly what turned the nation against the folly of the Vietnam War.

It begs the question: where are the Bobby Kennedys, Gene McCarthys, and William Fullbrights of our time? Where are the visible people of stature willing to take a stand, to put their careers on the line? Not just... » Read more

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Japan's Economy Is Shattering

Abenomics is fast proving to be a costly failure
Monday, April 28, 2014, 11:09 AM

When you are a fully-industrialized island nation that makes its living in the world by importing raw materials, fashioning them into useful exports, and collecting the difference as your profits, then you simply have to run a trade surplus for the model to work.

Which means Japan is in big trouble: » Read more

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Off the Cuff: Abnormal Times

Our institutions no longer serve our interests
Thursday, April 24, 2014, 2:47 PM

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

  • The Dimming of US Legitimacy Abroad
    • Americans have a growing fear & distrust of our own foreign policy
  • Charity Begins at Home
    • Why are we sending $ abroad that is much needed at home?
  • Abnormal Times
    • We are so far from fundamentals that a correction is guaranteed
  • This Weekend's Seminar at Rowe
    • Kunstler will be participating
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Why Demand Will Become Even More Scarce

Prospects for disinflation in 2014
Tuesday, April 22, 2014, 1:14 PM

Executive Summary

  • Anemic employment & wages growth depresses the odds of near-term interest rate hikes
  • Why energy costs increases are experiencing a lull, keeping inflation lower than many expected
  • The demographic arguments for deflation
  • Why the US is becoming more vulnerable to a repricing of natural gas -- vs oil -- in the coming decade

If you have not yet read Part I: When Every Country Wants to Sell, Who Buys?, available free to all readers, please click here to read it first.

The most recent US jobs report was once again a disappointment, despite the headline number of 192,000 jobs created. Over the past two years, the economy has reliably created about 150,000 jobs per month. This has been just enough to keep up with population growth, but alas, not enough to put the long-term unemployed back to work. The concerning data in the report came in the details of the jobs created: as usual--and this has been a trend for several years now--mostly in the lower wage sectors. A few wrap-up tweets from Dan Alpert of Westwood Capital summed up the facts rather nicely:

Other notable observations from recent trends in US jobs reports include the fact that job creation in 2013 was no higher than in 2012. Not exactly an encouraging trend for those who would be looking for inflation risk, or strong growth in 2014.

But perhaps worst of all has been the number of workers leaving the workforce. Part of this can be explained, of course, by demographic retirements. It's no secret that the US has an aging population, and there's a bulge of retiring workers that will admittedly create some gaps in the labor market over the next decade. But the large numbers of workers exiting the workforce is also explained by discouraged workers, and that unemployment benefits for many have started running out.

What many in the public do not understand, is that workers taking unemployment checks are counted as active seekers of employment. They are added to the composition of the workforce, and when they continue to take unemployment checks but do not find work, they serve to keep the unemployment rate elevated. But when unemployment benefits expire, and workers leave the workforce, the unemployment rate may... » Read more

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Off the Cuff: The Ukraine Powderkeg

We're playing for higher stakes than make sense
Thursday, April 17, 2014, 9:22 PM

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

  • The Ukraine Powderkeg
    • US policy is unrealistic & hypocritical
  • It's All About Resources
    • Expect more Ukraines as world powers increasingly compete
  • Government Overstep
    • At what point is too far "too far"?
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Anti-Gold Propaganda Reaches Fever Pitch

Take care to read through the 'framing'
Wednesday, April 16, 2014, 3:03 PM

There are times when the anti-gold propaganda in the western world, or at least the US, becomes just too much to let it pass by. I usually let it roll off but sometimes it needs to be illustrated for what it is.

A deliberate attempt to get people in the west to lose faith in the ability of gold to protect one's wealth, presumably with the side benefit of causing those same people to either not purchase gold at all, or to sell what they already have. » Read more

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Market Jitters

Is caution returning after a 3-year hiatus?
Sunday, April 13, 2014, 1:21 PM

The global stock markets have been trading as if risk has been entirely removed the equation. Fundamentals have had zero impact on the prices of equities as they have gone up on good news (hey, the economy is improving!) as well as bad (hey, there's more stimulus on the way!).

We saw this same level of rationalization in play in 2006 and 2007. It was as frustrating to those with an eye towards rational thinking then as it is today.

Only today is worse. A lot worse. » Read more

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China's Demand for Gold Has Trapped The West's Central Banks

Kill the banks or kill their currencies?
Wednesday, April 9, 2014, 6:12 PM

Every once in a while, an Off the Cuff interview is so important that we decide to make it available to the entire public. This is one of those occasions.

In this week's Off the Cuff podcast, Chris and Alasdair Macleod build on the insights laid out in Chris' recent mega-report last week on gold: The Screaming Fundamentals for Owning Gold. And specifically, they delve deeply into the poorly-understood topic of why Chinese demand has become such a game changer in recent years. » Read more

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Using Gold to Protect Yourself In Advance of the Greatest Wealth Transfer of Our Lifetime

A how-to guide
Friday, April 4, 2014, 9:44 AM

Executive Summary

  • The case for gold's manipulated price, and how that can be used to work to your advantage
  • Calculating the "floor" beneath which gold will likely not fall
  • The coming Great Wealth Transfer, which almost certainly will occur in our lifetime
  • How much to invest in gold
  • How to invest in gold
  • Exit strategies: when will it make sense to sell your holdings? And what should you exchange them for?

If you have not yet read The Screaming Fundamentals For Owning Gold, available free to all readers, please click here to read it first.

Market Manipulation

Before we can address the idea of storing some of your wealth in gold (and/or silver) we have to visit the topic of market manipulation. As many of you are aware this is an area of exceptional controversy, although I am not entirely sure why given the distressing laundry list of recently proven, and often grotesquely brazen, market manipulations performed by big banks in many other market areas.

Big banks have been proven or alleged to have manipulated energy markets, LIBOR, currency markets, the global oil market, and aluminum, among other things and all of these transgressions happened after they got caught engaging in forgery and fraud during the mortgage swindles of 2005 to 2007.

On one side of the manipulation debate, we might place the Gold Anti-Trust Action (GATA) organization alleging constant official manipulation to suppress the price of both gold and silver, and on the other we might place Jeff Christian, managing director of the metals research firm CPM, whose position is that all price movements can be explained by ordinary market forces.

I happen to be somewhere in between those views as I think both legitimate and illegitimate forces are part of the landscape. But I am heavily tilted towards market manipulation as the explanation for why gold (and silver) tend to move downwards violently from time to time and why the prices for each are not higher than they currently are.

The SEC has a clear definition of market manipulation and I’ve reproduced it here but swapped out the words ‘security’ and ‘stock’ with ‘gold’ to make it that much clearer:

Manipulation

Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for gold. Manipulation can involve a number of techniques to affect the supply of, or demand for, gold. They include: spreading false or misleading information about gold; improperly limiting [or expanding] the supply of gold; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for gold. Those who engage in manipulation are subject to various civil and criminal sanctions.

(Source)

I also added the two words "or expanding" because that condition also applies to commodities. 

How likely is it that some firms have been trading in gold in such a way as to create a false, rigged, or deceptive picture of gold (and silver) prices?  It’s all but proven in a court of law, but don't hold your breath waiting for that final proof, as the US court system has vigorously defended banks from such lawsuits for decades. 

I also happen to believe that gold is officially suppressed in price because it's what I would do if I were at the helm of the Fed and cared only for bolstering confidence in the dollar specifically, and fiat currencies generally, making the stock market a more attractive alternative, and also lending credence to political and monetary decisions (for the record, I am merely placing myself in the mind of the enemy here). Given that set of mandates, I would order up some hefty gold suppression because gold has a very bad habit of casting a bright light on rotten monetary and fiscal policy. 

Suppressing the price of gold just makes so much sense that I would consider it a form of derelict strategic weakness if the Fed et al. were not doing it.

One of the more important times to suppress the price of gold would be when... » Read more

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Off the Cuff: Welcoming the Uproar Over HFT

Finally(!) the world's awakening to this abuse of the system
Thursday, April 3, 2014, 1:25 PM

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

  • HFT Hub-bub
    • Finally(!) the world is awakening to this abuse of the system
  • Poking the Russian Bear
    • Our foreign policy is looking misguided & dangerous
  • Magical Stock Price Levitation Continues
    • You can't deny today's prices, but neither can you justify them
  • HFT Uproar As The Pin That Pricks The Bubble?
    • Market tops happen when there is sentiment shift