Daily Digest

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Daily Digest 4/18 - After the Gold Rout, How Empires Fall

Thursday, April 18, 2013, 10:47 AM

Economy

Market Manipulation, News, and Leverage (Thomas C.)

I will never forget how former Fed Governor Wayne Angell remarked that 'the Fed will drive people out of their savings and money market funds and into stocks.' This on a financial network in 2004, and it worked; people piled into financial assets and a housing bubble, with Greenspan himself as cheerleader. And they got slaughtered in the 2008 market crash.

2 Reasons Gold Crash Is Scary (adam)

"Commodities are usually a sensitive indicator on whether you are in an inflationary or deflationary environment," Martenson says. "From a signaling standpoint, markets might look at that and say, 'Oops, liquidity is drying up, deflation is here.'"

Richard Russell - Gold Plunge, Billionaires & A Market Crash (Nervous Nelly)

Fellow billionaire John Paulson dumped 14 million shares of JP Morgan and dumped his entire position in Family Dollar and consumer goods maker Sara Lee. To wrap up the trio of billionaires, George Soros sold nearly all his bank stocks including JP Morgan, Citigroup and Goldman Sachs. So I don't know exactly what the billionaires are thinking, but I do see what they're doing -- they are avoiding consumer stocks and building up cash.

West Coast LNG industry gripped with gold rush fever (westcoastjan)

His quixotic plan comes after a failed bid to turn the former company town — built to support a molybdenum mine that closed in 1982 — into an eco-centre and entertainment hub. It underscores the gold rush fever that has gripped Canada’s emerging LNG export industry, which the B.C. government forecasts could generate a potential $260-billion windfall over 30 years.

How the Gold Market Was Crashed - But Most Importantly, Why? Leveraged Default? And Silver? (adam)

This could be in advance of a major announcement out of Europe with regard to the Eurozone and also their monetary policy following along the lines of Japan. Perhaps it is even something regarding US policy. Obviously one has to have an open mind about that.

But there were persistent rumours of a potential default situation at both the LBMA and the Comex. Well, one has to take those with a skeptical eye. But there are some data that point to the LBMA in particular, although the drawdown of bullion from the two exchanges could have been more general.

The Price Smash – Who, What, How and Why? (goldrunner1)

This may seem elemental, but I ask you to contemplate this anew. In the highly-charged emotional state of significant price declines, it is tempting to accept fabricated stories as to what may be the cause of the declines. Because of that, it is more important than ever to rely on the known facts and only that which can be substantiated. COT data have and will show without question that the commercials are always the big buyers and the technical funds are always the big sellers and there was no exception this time. Once you know who the big buyers and sellers are (which is the beauty of the COT), only then can you proceed to the how and why of the big price declines.

After the Gold Rout: Blame Central Bank Manipulation, Says GATA’s Powell (Dana T.)

Gold rose $25 an ounce Tuesday but only managed to recoup a small portion of a wicked two-day slide that wiped out 14% of its value. The speed and depth of gold’s decline drew comparisons to the 1987 stock market crash and prompted veteran trader Dennis Gartman to declare: “We've never… ever… ever… seen anything like what we've witnessed in the past two trading sessions.”

NPR: Congress Quietly 'Overhauls' Law Against Congressional Insider Trading (Thomas C.)

The law wouldn't just outlaw trading on nonpublic information by members of Congress, the executive branch and their staffs. It would greatly expand financial disclosures and make all of the data searchable so insider trading and conflicts of interest would be easier to detect.

But on Monday, when the president signed a bill reversing big pieces of the law, the emailed announcement was one sentence long. There was no fanfare last week either, when the Senate and then the House passed the bill in largely empty chambers using a fast-track procedure known as unanimous consent.

Orlov: Understanding Organizational Stupidity (goldrunner1)

There is no reason to think that those who failed to take corrective action up until now, but remain in control, will ever do so. But it should be perfectly obvious that this situation cannot continue ad infinitum. And, as a matter of general principle, things that can’t go on forever—don’t.

'A tide of squatters’ spreads in Spain in wake of foreclosures (westcoastjan)

“This is happening all over the country,” said Jose Maria Fraile, the town’s mayor, who estimates only 100 apartments in the block built for the council have rental contracts, and not all of those tenants are paying either. “People lost their jobs, they can’t pay mortgages or rent so they lost their homes and this has produced a tide of squatters.”

Global Gold Outlook Report (Taki T.)

When depositing funds with a bank your deposits become the bank’s assets. What the banks do is lend out the deposits to earn interest (they are only required to hold a fraction of the deposits as a reserve). A part of the interest which the banks earn is paid to the depositors. With regard to interest we should however mention that after accounting for taxes and consumer price inflation (not to mention asset price inflation), deposits have in most cases a negative return in real terms. Although the numbers on the bank statement get larger every year the amount of goods you can purchase with your money decreases year by year. So even if you are earning interest, deposits are not the best instrument to save your assets in the long run. Real depositories however concentrate on keeping your assets safe and accessible by you at all times.

How Empires Fall (goldrunner1)

Comparing the American Empire with the Roman Empire in its terminal decline is a popular intellectual parlor game. The comparison is inexact on a number of fronts, starting with the nature of empire: Rome ruled a territorial empire, while the U.S. is a hegemony that doesn't need to hold territory (other than key overseas military bases); its dominance is based on the global projection of hard and soft power, diplomacy, finance and the monetary regime of the reserve currency.

None of the world’s top industries would be profitable if they paid for the natural capital they use

None of the world’s top industries would be profitable if they paid for the natural capital they use Inbox x CM Daily Digest x Benjamin Johnson 10:01 AM (2 hours ago) to Peakprosperity The notion of “externalities” has become familiar in environmental circles. It refers to costs imposed by businesses that are not paid for by those businesses. For instance, industrial processes can put pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab. In this way, businesses privatize profits and publicize costs. While the notion is incredibly useful, especially in folding ecological concerns into economics, I’ve always had my reservations about it. Environmentalists these days love speaking in the language of economics — it makes them sound Serious — but I worry that wrapping this notion in a bloodless technical term tends to have a narcotizing effect. It brings to mind incrementalism: boost a few taxes here, tighten a regulation there, and the industrial juggernaut can keep right on chugging. However, if we take the idea seriously, not just as an accounting phenomenon but as a deep description of current human practices, its implications are positively revolutionary.

Energy

Small in size, big on power: New microbatteries the most powerful yet (Arthur Robey)

"There's a sacrifice," said James Pikul, a graduate student and first author of the paper. "If you want high energy you can't get high power; if you want high power it's very difficult to get high energy. But for very interesting applications, especially modern applications, you really need both. That's what our batteries are starting to do. We're really pushing into an area in the energy storage design space that is not currently available with technologies today."

Investors Bet On Breeding Success (westcoastjan)

Last year, a Texel ram went for £231,000, while at the Blackface Ram sale at Dalmally Auction Mart a lamb sold for £9,000, equalling the breed record.

Environment

Key ingredient in mass extinctions could boost food, biofuel production (Arthur Robey)

Dooley started off to examine the toxic effects of hydrogen sulfide on plants but mistakenly used only one-tenth the amount of the toxin he had intended. The results were so unbelievable that he repeated the experiment. Still unconvinced, he repeated it again – and again, and again. In fact, the results have been replicated so often that they are now "a near certainty," he said. "Everything else that's ever been done on plants was looking at hydrogen sulfide in high concentrations," he said.

Gold & Silver

Click to read the Gold & Silver Digest: 4/16/13

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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saxplayer00o1
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saxplayer00o1
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Raskin Says Record Fed Easing to Aid Low-Income Americans

"“Accommodative monetary policy could be increasingly potent” as the housing market recovers, Raskin said. “As house prices rise, more and more households have enough home equity to gain renewed access to mortgage credit and the ability to refinance their homes at lower rates.” "

==============================================================

Fri Sep 21, 2007 (Alan Greenspan)

""There is no doubt about the fact that low interest rates for long-term government bonds have caused the real estate bubble in the United States," he said.

"The Federal Reserve began a series of interest rate increases in 2004. We were hoping to bring the speculative excesses in the real estate sector under control. We failed. We tried it again in 2005. Failure," he said."
 

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saxplayer00o1
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U.S. Fed balance sheet grows to record again in latest week

"The Fed's balance sheet - a broad gauge of its lending to the financial system - stood at $3.252 trillion on April 17, up from $3.210 trillion on April 10.
The Fed's holdings of Treasuries totaled $1.825 trillion as of Wednesday, April 17, versus $1.814 trillion the previous week."

==========================

Silver Eagles at APMEX. The 1991 is now at $7.49 over spot.

 

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saxplayer00o1
Status: Diamond Member (Offline)
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Fed comments show growing focus on low inflation

""If inflation looked like it was going to sag further on a persistent basis, I would certainly consider stimulus for the purpose of bringing inflation up to target," Lacker told reporters, according to Bloomberg. In a separate speech, Kocherlakota said that cooling price pressures were "definitely a cause for concern." The comments echo remarks made Wednesday by St. Louis Fed President James Bullard, who said he was concerned that the Fed's preferred measure of inflation, the personal consumption expenditures price index, increased at a 1.3% rate in February, well below the Fed's 2% target. Economists said the implication of the concern is that the Fed may maintain its $85 billion-per-month asset-purchase program for longer than expected and perhaps augment it with other easing steps. "

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