Daily Digest

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Daily Digest 5/26 - OPEC Head Calls For $65 Oil, The World’s Biggest Paper Gold Market

Thursday, May 26, 2016, 12:47 PM

Economy

What It Takes To Be President Of The American Police State (reflector)

As much as the Republicans and Democrats like to act as if there’s a huge difference between them and their policies, they are part of the same big, brawling, noisy, semi-incestuous clan. Watch them interact at social events—hugging and kissing and nudging and joking and hobnobbing with each other—and it quickly becomes clear that they are not sworn enemies but partners in crime, united in a common goal, which is to maintain the status quo.

The powers-that-be will not allow anyone to be elected to the White House who does not answer to them.

Rickards: The Fed isn’t hiking because the US economy is too weak (Herman J.)

Jim Rickards is a lawyer, investment banker and economist with over thirty years’ experience in capital markets. He is currently Senior Managing Director at Tangent Capital Partners LLC. He advises the Department of Defense, the U.S. intelligence community, and major hedge funds on global finance, and served as a facilitator of the first ever financial war games conducted by the Pentagon.

An Inside Look at the World’s Biggest Paper Gold Market (reflector)

While the high-level details of the market are visible, the individual mechanisms behind the London gold trade are less clear. There is very little detailed information provided on physical shipments, outstanding gold deposits or loans, allocated or unallocated gold, or clientele types. Trade reporting also breaks down at a more granular level, and datasets on the GOFO (Gold Forward Offered Rate) were also discontinued in January, 2015.

Even The Fed Can't Keep Gold (Tiffany D.)

It’s the same at government and private mints all over the world. So far this year, Australia’s Perth Mint has seen coin sales rise by more than 50% compared to year-ago levels. And, with the Royal Canadian Mint and the Austrian Mint both recently reporting strong coin sales for 2015 (while prices were in a funk), Maple Leafs and Philharmonics likely sold in huge quantities as well, with buyers catching gold fever.

Add It Up...And It Doesn't Add Up (Chris H.)

The chart below gathers the annual combined 15-64yr/old population growth of the OECD, China, Brazil, and Russia against the Federal Reserve set Fed Funds Rate (%), global debt, and global GDP. To be honest, it's a very good fit showing very bad things to come based on the current modus operandi.

Will The Swiss Guarantee 75,000 CHF For Every Family? (Taki T.)

The main argument of the supporters of this initiative is that it would support the people that will, or already do, lose their jobs to automation and technological progress; a defensive move against “the rise of the robots” as they put it. They also claim that such a measure will give people the opportunity to grow, to learn and to pursue skills or professional goals that are now rendered prohibitive by their current meaningless and mundane jobs, that they are forced into for simply paying the bills. “What would you do if your income were taken care of?” asked the pro-UBI campaign in Geneva, with a poster that officially made it to the Guinness Book of Records as the world’s largest.

The Neocon-Liberal Hawk Convergence is Worse Than I Thought (Ivo M.)

The report, entitled “Extending American Power: Strategies to Expand U.S. Engagement in a Competitive World Order,” is based on the deliberations of a bipartisan task force of 10 senior members of the foreign policy establishment augmented by six dinner discussions with invited issue and regional “experts.” The task force was co-chaired by former Assistant Secretary of State (under Madeleine Albright) Jamie Rubin and Brookings Institution Senior Fellow Bob Kagan, who also apparently doubled as the principal co-authors.

S&P Significant Low has Occurred – Not Likely! (GE Christenson)

A similar pattern is visible after the 2007 top. Using weekly data, the S&P made a high in October 2007, fell to an initial low in November, rose, and fell to a second low in January 2008. It rallied and fell steeply below the second low in September 2008 – never to look back. From high to final low took 511 calendar days and price fell about 58%.

White, Middle-Age Suicide In America Skyrockets (Arthur Robey)

While money woes definitely contribute to stress and poor mental health, it can be devastating to those already prone to depression -- and depression is indeed still the number one risk factor for suicide. A person with no hope and nowhere to go, can now easily turn to their prescription painkiller and overdose, bringing the pain, stress and worry to an end. In fact, prescription painkillers were the third leading cause of suicide (and rising rapidly) for middle aged Americans in 2010 (guns are still number 1).

OPEC Head Calls for $65 Oil (Josh O.)

Iran has also said it would not participate in proposed freezes as it builds its capacity to pre-sanctions levels over the course of 2016.

The oil market’s recovery has been “slow and steady,” al-Sada said, adding that the “fundamentals” of the sector indicate that it is “heading in the right direction.”

Gold & Silver

Click to read the PM Daily Market Commentary: 5/25/16

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."

8 Comments

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1627
WaPo hit piece "Primed To Fight The Government"

As we move ever closer to our 3E's crisis, and the resultant social chaos and violence in the US and Europe, the Washington Post ran a clever piece recently which was linked here at PP.com two times.  Unlike the WaPo's usual in-your-face demands for Soviet-style gun control and registration, this piece subtly hit at those "right wing extremists" who see the US.gov as their enemy and are arming and training themselves for the inevitable kinetic clash.

Here's the WaPo hit piece: http://www.washingtonpost.com/sf/national/2016/05/21/armed-with-guns-and-constitutions-the-patriot-movement-sees-america-under-threat/

David Codrea does a great job of highlighting the subtle values and motivations behind the article, and demolishes them.  Lest anyone read the WaPo piece and fell for it hook-line-and-sinker, here's Codrea's rebuttal:  https://www.oathkeepers.org/intent-behind-wapo-patriots-piece-masked-but-still-discernible/

Here are some of Codrea's highlights:

For something appearing in The Washington Post, it’s not as overtly hostile as we may have expected. That’s a reaction I’ve seen expressed by colleagues discussing “Primed to Fight the Government,” a profile on the Oregon patriot movement “demanding that the federal government adhere to the Constitution and stop what they see as systematic abuse of land rights, gun rights, freedom of speech and other liberties.”

Who would have a problem with that? And it’s the embedded abusive “officials” who are attacking the government, not citizens insisting that delegated powers not be exceeded, and that authority not be usurped.

“Law enforcement officials call them dangerous, delusional and sometimes violent, and say that their numbers are growing amid a wave of anger at the government that has been gaining strength since 2008, a surge that coincided with the election of the first black U.S. president and a crippling economic recession,” the write-up offers, steering readers to several misdirected conclusions.

First, it’s not all LE officials, but essentially those dependent on political favor for their positions of power and privilege.  Left unacknowledged is the Constitutional Sheriffs and Peace Officers Association, which sides with the patriots. And the bit about “the first black president” is just another way of implying those who object to the fundamental collectivist transformation of the Republic are racists.

But it figures with that bigotry insinuation that they’d bring in the Southern Poverty Law Center on cue. Adding a bit of Alinsky Rule 5 ridicule by referencing pejoratives like “Y’all Qaeda” and “Vanilla ISIS” helps cement the “redneck” meme, so “progressives” can feel superior. It also bolsters another demonizing talking point currently being pushed by totalitarian lobby apologists, that white male “domestic extremists” are a bigger threat than radical Islamists.

Then there were the embedded video with law professor Louis Michael Seidman. What’s interesting is the “legal scholar” makes a totally unsupported assertion that thinking the words mean what they say is not a “natural” interpretation. Curiously, he concedes “it’s not obvious the federal government should own as much land as it does currently,” but turns around and resorts to the familiar stand-by deflection that we just have no way of knowing “what words written 250 years ago” mean, which is refutable, by the way.

It would seem the citizen has a better handle on things than the academic professional. Perhaps it would have been relevant to let the readers know Seidman brings his own biases to the table, having penned an op-ed for The New York Times where he urges “Let’s give up on the Constitution,” and where he makes his contempt for “a group of white propertied men who have been dead for two centuries [and] knew nothing of our present situation” clear.

Funny, we don’t see anyone referring to that subversive proposal as “anti-government,” and we don’t see Seidman presented as an “extremist.” With Opposite Day “progressives,” such labels are reserved for citizens with the temerity to think they can understand what their rights are without establishment-approved academic specialists telling them why black really means white and why up is down.

Appearances of fairness and balance notwithstanding, the WaPo piece created the desired effect among those inclined to look to it for talking points, and for confirmation of their biases.

“The A-10’s will make corned beef hash of these domestic terrorists,” the comment currently at the top of the pile asserts.

Who thinks this sentiment isn’t shared by the real “anti-government extremists,” those intent on removing the last Constitutional impediments to totalitarianism while they represent themselves as “progressives”?

 

 

 

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2247
How Will America Trade With WORTHLESS $ & NO GOLD? — Bill Holter

From SGTreport, "How Will America Trade With WORTHLESS DOLLARS & NO GOLD? — Bill Holter", @

http://sgtreport.com/2016/05/how-will-america-trade-with-worthless-dollars-no-gold-bill-holter/

Bill Holter from JS Mineset.com is back to help us document the collapse for the fourth week of May, 2016. And as physical gold and silver moves East and into the strong hands of more than a billion Chinese, and as foreign banks publicly settle global trade in the Yuan, Bill reminds us that “Every step forward by China, is one or two steps backward for the US and the Dollar, that’s what’s happening. For instance, if the Yuan is backed by gold, then why would someone accept the Dollar in lieu of the Yuan if the Dollar’s not backed by anything?

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 847
Pinecar, the answer is found in the small print

... just after the words "nuclear tipped". On the world market, plutonium exceeds gold as a PM.

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2247
You have a point, Michael

Sigh!! :/

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5455
The "gold-backed RMB" fantasy

How does Bill Holter explain all those Chinese millionaires fleeing China, swapping their "soon to be gold-backed RMB" for dollars as fast as they can?

In the real world, it turns out China has a massive private debt problem, and the way they're (most likely) going to fix it is by a massive shot of money printing.  Chinese millionaires and their money are fleeing China in advance of this event.  They know the situation on the ground better than you, me, and Bill Holter.  If China was about to gold-back its currency, money would not be leaving China, its as simple as that.

Unless of course you think all those rich (and well-connected) Chinese are idiots, and Bill Holter somehow has the real story.

The last thing China would do, given their huge debt overhang, would be to gold-back the RMB.  They *want* the ability to debase their currency.  The real Chinese government isn't the hard money champion the goldbug writers imagine them to be.  These guys are central planners from way back.  They even have Five Year Plans!  The very last thing a central planner wants to give up is control over the currency.

Maybe once the debt thing is under control this will change.  But certainly not now.

And how much gold would it take to gold-back the RMB?  China's M1 is 41.2 trillion RMB.  Let's see.

41.2 trillion / ($1220/oz x 6.58 RMB/$ x 32151oz/ton) = ... any guesses?  I guarantee you, the goldbug writers certainly haven't done this calculation.

Right.  That's 159,468 tons of gold.  Not much less than all the gold in existence.  Do we think this is about to happen?

Again - follow the money.  It is fleeing China.  There's gotta be a reason.

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2839
Fantasy

US / Saudi relationship deteriorating. US / China relationship deteriorating. US / Russia relationship deteriorating. US political parties imploding (albeit at different rates). EROEI decreasing. Weather increasingly erratic with increasing event amplitudes.

The status quo is the fantasy.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5455
status quo a fantasy

TTH-

I agree, status quo is the fantasy.  Gold is good anti-fantasy protection.  But do NOT buy because of the inane reasons advanced by the number-challenged goldbug writers.  Idiocy triggers me; telling someone to do the right thing for ass-backward reasons gets me upset.  It debases the solid logic behind gold, and makes the rest of us who can actually count all look like nutjobs for advocating holding a gold position.

Your goldbug writer/geniuses have no idea what the numbers look like, or else they wouldn't say stuff like this.

Gold-backed RMB?  Not gonna happen.  Not until their debt problem gets fixed.  And God Himself only knows when that will happen.

https://research.stlouisfed.org/fred2/series/MYAGM1CNM189N

https://research.stlouisfed.org/fred2/series/M1

ejhr's picture
ejhr
Status: Bronze Member (Offline)
Joined: Jun 28 2014
Posts: 34
Swiss guarantee.

Most of the blogging here about the Swiss guarantee anything else related to free money is just ridiculously wrong. The platitudes about free money are absolutely ignorant, worthless trash.

1] The Central bank [in monetary sovereign nations] can indeed create currency out of thin air and as well can never go bankrupt except by deliberate design.  However they can NOT create money FOR nothing. They create money to pay government debts. So there has to be real goods or services in train and due to be paid to get Treasury to instruct the CB to pay. There is NO borrowing or paying back, not even 1 cent.

For pensions etc, payment is made to meet obligations to recipients, another debt due. It happens now. There is nothing unique about it. The economy will not be awash with money. But if no money gets through to the population there can be no spending and the economy will tank through demand destruction. So which is worse?; money in peoples pockets or an economy in free fall?

There is NO fractional reserve banking in operation today. It has been superceded by the Credit Creation Theory. This says that the bank can create loans entirely from thin air. It needs to have reserves to allow it but the reserves etc are not debited, not even by 1%. In some[?] countries the banks are not permitted to touch deposits, so tricks like bailing in would be illegal.

 

 

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