Daily Digest

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Daily Digest 2/13 - Studying The Spread Of Ignorance, Canada Sells Off Most Gold Reserves

Saturday, February 13, 2016, 10:55 AM


The man who studies the spread of ignorance (westcoastjan)

In one of the paper’s most revealing sections, it looks at how to market cigarettes to the mass public: “Doubt is our product since it is the best means of competing with the ‘body of fact’ that exists in the mind of the general public. It is also the means of establishing a controversy.”

Something Very Disturbing Spotted In A Morgan Stanley Presentation (PBD)

And while in recent days we have seen op-eds by both Bloomberg and FT urging the banning of cash, the most disturbing development we have seen yet in the push for a cashless society has come from the following slide in a Morgan Stanley presentation, one in which the bank's head of EMEA equity research Huw van Steenis, pointed out the following...

Tank’s Topped, Refiners’ Dumping Crude, 3mth WTI in Super-Contango (Aaron M.)

U.S. Energy Information Administration data on Wednesday showed inventories at the Cushing, Oklahoma delivery hub hit a record 64.7 million barrels last week – just 8 million barrels shy of its theoretical limit – stoking concerns that tanks may overflow in coming weeks.

Silver, Gold, the Argentina Peso & Exponentially Increasing Price (Taki T.)

The compounded average rate of increase in the number of pesos per dollar from 1945 to 2015 was about 55% per year, every year. The devaluation was worse than average between 1975 and 1995. Gold in 1945 pesos increased at a compounded average rate of 63% per year since 1945. (Store of value!)

Euro PIIGS Starting To Squeal Again (Aaron M.)

We have posted before a composite that we constructed consisting of equally-weighted portions of each of the PIIGS’ stock markets. We call it…the PIIGS Composite. The composite starts in 2006 and hit an all-time low in June 2012, amid the Europe/PIIGS near-meltdown. Following Mr. Draghi’s “whatever it takes” moment, the PIIGS Composite shot up off the mat, rallying nearly 75% in 3 years before peaking in May of last year. Since then, the composite has gradually leaked lower. Around the start of the year, the leak turned into a gusher. As of this week, the PIIGS Composite is at near 3-year lows, approaching levels last seen in 2012.

Canada sells off most of its gold reserves (Uncletommy, PBD)

The figures don't say which coins Ottawa has been selling. The Royal Canadian Mint has produced pure Maple Leaf gold coins in a variety of denominations for more than 40 years. They've proven to be popular around the world, with more than 25 million troy ounces of coins sold since 1979. It also produces gold coins for collectors, along with gold bars and wafers.

An Interview with Legendary Investor Jim Rogers (Nate)

Erik Townsend welcomes legendary investor Jim Rogers as MacroVoices’ first feature interview.

The Hidden Agenda Behind Saudi Arabia’s Market Share Strategy (Josh O.)

Conventional wisdom has it that the Saudis are focused primarily on crushing the U.S. shale industry. In this view, the Saudis blame the U.S. for the supply-demand imbalance that began to make itself felt in 2014. U.S. production data seems to support this. Between 2009 and 2014, U.S. crude and NGLs output increased nearly 4 million barrels per day, while Saudi Arabia’s increased only 1.64 million barrels per day, Canada’s 1.06 million, Iraq’s 0.9 million, and Russia’s 0.7 million (Saudi data doesn’t include NGLs).

Shadow CIA Warns Russian Air Power Would Stop Any Foreign Invasion of Syria (PBD)

However, "a week after the downing, Russian Su-34 fighter-bombers in Syria were spotted carrying R-27 air-to-air missiles. Russia also rushed advanced surface-to-air missile systems to Syria, including Buk systems and the long-range and highly capable S-400 system. The S-400 launch vehicles can be seen in a well-protected portion of the Bassel al-Assad air base [Hmeymim] near Latakia."

Too Many Boats, Too Little Cargo: The Monumental Glut In Global Shipping (Aaron M.)

Just a few years ago, as the global economy improved and oil prices rose, many companies ordered more fuel-efficient ships. There were more than 1,200 orders for bulk carriers that transport iron ore, coal, and grain in 2013, compared with just 250 last year, according to Clarksons. Many of the ships ordered are now in operation, says Tim Huxley, chief executive officer of Wah Kwong Maritime Transport Holdings, a Hong Kong-based owner of bulk carriers and tankers. “You have a massive oversupply,” he says.

Markets Hand Verdict to Central Banks: Stay Out Of Sub-Zero Rates (Aaron M.)

Fueling the turmoil is fear that negative rates will slam the world’s banks. In theory, they could be the panacea to cure sluggish global growth: by charging lenders fees for parking money at central banks, policy makers hope banks will use that cash to make loans, jump-starting their economies. In practice, investors worry it may squeeze bank profits and rattle money markets.

Global Stocks Continue To Crash As Oil Plummets And Gold Skyrockets (Aaron M.)

Meanwhile, the price of oil continues to drop to stunning new depths. On Thursday U.S. oil dropped as low as $26.21, which was the lowest price in 13 years. Not even during the worst parts of the last financial crisis did oil ever go this low.

And remember, the price of oil was sitting at about $108 a barrel back in June 2014. Since that time it has fallen about 75 percent.

5 Easy Ways To Make Your Fire Burn Longer (And More Efficiently) (Aaron M.)

Tip One: Know How to Really Build a Fire: While it may seem elementary — toss in some logs, some paper and a match – burning an efficient fire isn’t so simple. The key to a successful fire is to start small and add on. Don’t be in a rush to put too many logs on the fire at one time. Gradually adding logs will help build up a strong and steady heat. Don’t go overboard and build a huge fire at the beginning; it is actually much less efficient, contrary to how it may seem. Always use softwood kindling to start a fire; it makes for easy starting.

Warming World Spreads a Wider Welcome Mat for Zika-Carrying Mosquitoes (PBD)

As world health officials scramble to combat the spreading virus, which could infect as many as 4 million people this year, scientists and public health officials see the outbreak as an omen in a world steadily warming under the effects of climate change.

"[Zika] is the virus of the moment but can be taken as an indicator of a future where changes in temperature provide a more hospitable environment for viruses to replicate and be transmitted," said Colin Parrish, a professor of virology at Cornell University.

Gold & Silver

Click to read the PM Daily Market Commentary: 2/12/16

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."


Mark Cochrane's picture
Mark Cochrane
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The march to war......

There is an article by Paul Craig Roberts over at Zerohedge that lays out the road to hell that is currently being paved to a bigger and better war with Russia (link).

Ever since Clinton’s second term the US has been consistently acting internationally and domestically as a criminal, disregarding its own laws, international laws, the sovereignty of other countries, and the US Constitution. A worse criminal government has never existed. Yet, Americans remain subservient to the criminals that they have placed in power over themselves.


Superpower America required a more dangerous enemy than a few lightly armed jihadists, so the “Russian threat” was created. To drive home the threat, Russia and her president are constantly demonized. The conclusion is unavoidable that the insouciant American people are being prepared for war.

To my mind, this is the one conspiracy/manipulation to rule them all. This is the play for global domination. Economic catastrophe is just a precursor for the main event. Much as WWII was considered the cure for the Great Depression and the rise of US, WWIII will be seen as transformative to the next stage of someone's hoped for global dominance. The one flaw in MAD (mutual assured destruction) that guided us through the last Cold War was always that if someone in control truly was 'mad' that it wouldn't work. If one side thinks they can actually 'win', damn the costs, then the game is up. Conversely, if one side feels that they will 'lose' for sure unless they role the dice on war, then the world depends on that group being sane enough to concede. When the Soviet Union collapsed, Gorbachev and the Russians did just that. Who believes that the sociopaths now running the US will do the same?

Maybe it is just high stakes poker but I doubt it. The US seems to be trying to pull off the Blazing Saddles strategy...



westcoastjan's picture
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re the march to war

Hi Mark,

In addition to what you posted, I read this rather good article yesterday. It gives a different but similar take on what is unfolding in the geopolitical arena. I have no doubt that we are heading for war. The big question is will it start and be confined to the Middle East, or will it escalate beyond that region?


Philosophy of Metrics is another well put together site that offers terrific insights. It is well worth checking on a regular basis I think for regular PP readers.


Time2help's picture
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I wonder when the nukes are gonna fly.

Arthur Robey's picture
Arthur Robey
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For the Record

If it is to be, can we please correctly identify the culprits this time? 

Let it be on the record that I and my kin were innocent of this crime. 

Except that it wasn't Voltaire. It was Strom.  White nationalist,  neo NAZI etc, etc who was jailed because his computer was found with child pornography on it.

You have been warned.

Mark Cochrane's picture
Mark Cochrane
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So it begins?

Erdogan blinks?

Turkey Shells Aleppo, Says "Massive Escalation" In Syria Imminent As Saudis Ready Airstrikes

In short: somehow, Turkey and Saudi Arabia need to figure out how to spin an attack on the YPG and an effort to rescue the opposition at Aleppo as an anti-ISIS operation even though ISIS doesn’t have a large presence in the area.


Well, here is the official cover story for shelling the YPG (Kurdish opposition) and Syrian military in Aleppo. Got to love those unnamed, anonymous, and unconfirmed sources. They are all the rage these days in what passes for mainstream media...

Here's what happened according to pro-AKP (i.e. take it with a grain, or maybe a whole shaker full of salt) Anadolu Agency:

The Turkish military responded to an artillery attack on an army base close to the Syrian border on Saturday, a military source said. According to the unnamed source, who spoke on condition of anonymity due to restrictions on speaking to the media, the Akcabaglar base in Kilis province was shelled by the forces of the “PYD/PKK” -- referring to a Syrian Kurdish group and its affiliate PKK, which has waged war on Turkey since 1984.

The shelling came from Azaz in Aleppo province, which has been the scene of recent heavy fighting. Turkish forces reacted within rules of engagement that provide for an immediate response to any border threat, the source said. There was no further description of the form of response or detail on when the incident occurred.

In a separate incident, the army also responded to mortar fire from Syrian government troops on a Turkish police station in Calibogazi, Hatay province, at 2.55 p.m. local time (1255GMT). Again, there was no information on the type of response.

From Al Jazeera

Turkey shells Kurdish-held airbase in Syria's Aleppo

US State Department spokesman John Kirby urged Turkey on Saturday to halt military strikes on Kurdish and Syrian regime targets in the northern province of Aleppo.


The shelling came after Davutoglu said on Saturday that Ankara would, if necessary, take military action against fighters from the Syrian Kurdish Democratic Union Party (PYD).

"We can if necessary take the same measures in Syria as we took in Iraq and Qandil," Davutoglu said in a televised speech in the eastern city of Erzincan, referring to the bombing campaign last year against Kurdistan Workers Party (PKK) targets in northern Iraq on their Qandil mountain stronghold.

"We would expect our friends and allies to stand by us," he added.


However, despite all of the drama, just think about how these tensions might boost the price of oil and fortuitously save the banker's collective asses...


Mark Cochrane's picture
Mark Cochrane
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What are the chances that this will end well?


Saudi Arabia sends troops and fighter jets to military base in Turkey ahead of intervention against Isis in Syria

Saudi Arabia is sending troops and fighter jets to Turkey's Incirlik military base ahead of a possible ground invasion of Syria.

The Turkish foreign minister, Mevlut Cavusoglu, confirmed the deployment


He confirmed that planes and military personnel were being sent to Incirlik, in Adana near the Syrian border, but said numbers had not been confirmed.

Adel al-Jubeir, the Saudi foreign minister, said Russia's intervention would not help Assad stay in power in an interview published today.

There will be no Bashar al-Assad in the future,” he told a German newspaper.


Does this sound like they are doing this to fight ISIS? That is the official cover story after all.

In the wake of Saudi Arabia’s proposal to send in ground troops on Thursday, the Russian Prime Minister claimed the move could spark a new world war.

“A ground operation draws everyone taking part in it into a war,“ he told the Handelsblatt newspaper.

“The Americans and our Arab partners must consider whether or not they want a permanent war.”

Don't you love all of the subtle diplomatic speeches? It is all just hyperbole until the bullets fly. How long until mainstream media picks this up to distract us from Yellen's gloomy economy?


KugsCheese's picture
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re: What Are The Chances That This Will End Well?

Well, maybe this will be the event to light the WW3 Fuse.

Time2help's picture
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Time2help's picture
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I look forward to the day when the current collective Left Brain model is shattered into 7 billion pieces.

Arthur Robey's picture
Arthur Robey
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Lets do This

Somebody nuke something.

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Scalia and the Constitution

HughK's picture
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thc0655 wrote: Scalia and the Constitution

Scalia's activism has been long established, for anyone who cares to look.  Here is one article of many demonstrating that. 

Psst ... Justice Scalia ... You Know, You're an Activist Judge, too.

[Scalia] is dismissive when inmates invoke the Eighth Amendment ban on cruel and unusual punishment to challenge prison conditions. But he is supportive when wealthy people try to expand the "takings clause" to block the government from regulating their property.

Just as, during the lead up to the Civil War, when the slave states violated states' rights whenever it suited their ends, such as when they foisted the Fugitive Slave Act upon the local and state police forces of the free states, Scalia had a record of abandoning his supposed dedication to strict constructionism whenever it suited his political goals, and some examples of this are listed in the article above.

Here's a 2013 article from The Economist - hardly a liberal source - with another example:

Antonin Scalia's Uber-Activism

Of course it's sad that Mr. Scalia passed away, but no need for myth-making.

HughK's picture
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Gregor MacDonald interviewed by Nelder

More on topic with the three E's is a great podcast where Chris Nelder and Gregor MacDonald have a conversation on oil supply & price, the economy, and their evolving views on how limits to growth will pan out.

Macro outlook for 2016 - The Energy Transition Show - Chris Nelder interviews Gregor MacDonald


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China's Bad Loans Rise to Highest in a Decade as Economy Slows

Emerging Stocks Rebound on Stimulus Bets as Currencies Advance

Bloomberg-9 hours ago
China's 10-year sovereign debt rose, pushing the yield down five basis points to 2.85 percent. The rate on India's notes advanced two basis points to 7.75 ...

Korea Rate-Cut Bets Revived as Market Rout Spurs Global Easing

Bloomberg-22 hours ago
The yield on three-year sovereign debt dropped below the Bank of Korea's record-low policy rate of 1.5 percent and interest-rate forwards fell after a report ...

Indonesia export, import slump deepens; central bank may cut rates

Reuters-8 hours ago

Exports plunged 20.72 percent in January to $10.50 billion, the weakest shipment ... A Reuters p

Economists Raise Brazil Inflation Outlook 2016, Cut GDP View, Survey Shows

Nasdaq - ‎3 hours ago‎
SÃO PAULO--Economists raised their inflation outlook for Brazil for this year, despite the continued expected deterioration of country's economy, as the monetary authority is expected to keep its benchmark interest rate unchanged. Brazil's official ...

China's Bad Loans Rise to Highest in a Decade as Economy Slows

Bloomberg - ‎42 minutes ago‎
Concern over borrowers' ability to service debt has weighed on Chinese lenders, with shares of the nation's four largest banks trading at valuations at least 35 percent below a gauge of their emerging-nation peers. China's ... Should the Chinese ...

Japan's economy contracts in fourth quarter

BBC News-7 hours ago
Japan's economy contracted in the final three months of 2015, adding to a string of setbacks for the government's economic reform policy. Between October and ...

Chinese premier says economy faces great challenges, new ...

Reuters UK-46 minutes ago
BEIJING China's economy faces great challenges and new uncertainties brought about by the global economic environment and various countries' ailing stock ...

Singapore New Home Sales Post Worst Start to Year Since 2009

Bloomberg-9 hours ago
They have included a cap on debt repayment costs at 60 percent of a borrower's ... Valuations in the $5.3 trillion market, already inflated by a record-breaking ...

Storm clouds gather on Italy's budget horizon

Reuters-1 hour ago
Having delayed promised debt reductions for four years now, Rome would have to ... he will have to find cuts of more than 15 billion euros ($17 billion) in 2017.

Louisiana governor says state's finances in dire situation

Reuters - ‎Feb 11, 2016‎
Edwards on Thursday juxtaposed Louisiana's finances when Jindal took office in 2008 - when the state enjoyed a $1 billion surplus - to today, when the state is facing a looming $2 billion projected deficit. The budget problems in Louisiana, a big oil ...

Louisiana Faces Worst Fiscal Crisis in 30 Years

EdCentral - ‎8 hours ago‎
Edwards does want to increase income taxes in order to plug the nearly $2 billion deficit the state must plug for next year. As of now, the Edwards administration hopes to achieve many or all of these changes in the next three weeks. However, the ...

Only the Fed can save stocks now: Deutsche Bank

CNBC-1 hour ago
A "full default cycle" in the U.S. would trigger a further 20 percent downside European ... He believes that this rising cost of debt for corporates would reduce their ...


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