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  • Insider
    Richard Heinberg

    Off The Cuff: Why Drilling US Oil Isn’t Profitable

    Oil field service costs always escalate faster than oil's price
    by Adam Taggart

    Thursday, July 18, 2019, 9:47 AM

    0

    In this week’s Off The Cuff podcast, Chris and Art Berman discuss:

    • Shale Oil’s Chronic Profit Drought
      • Nearly all companies are cash-flow negative
    • Why Drilling US Oil Isn’t Profitable
      • Oil service costs eat your lunch
    • Why Drillers Can’t Stop Drilling
      • They need cash to service their debts
    • Shale Oil Is A Business Model With No Future
      • When credit tightens, the whole industry will implode

    Right now, the US is still producing a record amount of oil, due mostly to shale fields developed within the past decade. But that bonanza won’t last — it can’t last — explains petroleum geologist Art Berman. Nearly every shale driller has been and will remain to be unprofitable. The nature of shale wells and the nature of oil service costs will ensure that.

    Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com’s other premium content.

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  • Insider

    The Choice Facing Us: Greatness or Oblivion?

    Either option is still within our grasp. Will we pursue the right one?
    by Chris Martenson

    Friday, July 12, 2019, 5:20 PM

    9

    Executive Summary

    • The Earth will be fine. But humans?
    • We can break free from our biological programming. But it will take conscious effort.
    • How to shift your personal destiny
    • Want to work with a dedicated group on shifting yours? Stay tuned…

    If you have not yet read Part 1: Do You Truly Have Free Will?, available free to all readers, please click here to read it first.

    I don’t need to pull any punches here among Peak Prosperity’s paid subscribers; as you all know this well: humans are at a very dangerous juncture of history.

    We might decide to be smart and create a brilliant future for ourselves. But the current odds favor our species defaulting into oblivion.

    The Earth won’t care. It’s got an entire museum warehouse filled with failed species, all for one reason or another.  Evolution is busy solving the most complex of problems, and failure is one of its most commonly employed tools.

    But even if the Earth won’t miss us, as a resident of it with the capacity to operate consciously, I happen to care a lot about the human experiment and that it carries on. I trust you do as well.

    In the end, the Earth will be fine.  I am certain of that.  Humans?  Maybe not so much.

    If we’re going to shift our collective destiny, we first have to shift our own personal destiny, and that means being aware of the true complexity of the (brain) systems involved and then using the best and most powerful tools and techniques we can bring to bear.

    The good news is that we now have…(enroll to keep reading)

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  • Insider

    Off The Cuff: Cartel-driven Politics

    How the recent debates reveal the agendas of the deep-pocket donors
    by Adam Taggart

    Tuesday, July 2, 2019, 10:17 AM

    50

    In this week’s Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

    • Cartel-driven Politics
      • The debates reveal the agenda of the deep-pocket donors
    • Our Broken Health Care & Education Systems
      • They serve the cartels at the expense of their customers
    • ‘Burnout’ Is Becoming An Epidemic
      • And this is during the “good times”?
    • We Need A Movement Focused On “Meaning”
      • Isn’t that (and happiness) what really matters in life?

    This week Chris and Charles take a close look at the platforms being promoted by the bevy of presidential hopefuls, and lament the lock-step commitment to the same “business as usual” that is destroying the prospects and well-being of everyday Americans.

    Rather than looking critically at the “borrow and spend” addiction that is drowning us under an unserviceable mountain of debt and liabilities, the candidates are hustling to out-compete each other in spending $trillions more. All, of course, in service to the corporate cartels donating to their campaigns:

    Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com’s other premium content.

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  • Insider

    Live Frugally, Retire Comfortably

    The fast-track to financial independence & greater happiness
    by Chris Martenson

    Friday, June 28, 2019, 3:41 PM

    20

    Executive Summary

    • Best practices in cost-accounting from the FIRE movement
    • The appeal of the 4% annual expense strategy
    • Life hacks in extreme frugality
    • The Peak Prosperity community shares its collective wisdom

    If you have not yet read Part 1: Extreme Frugality, available free to all readers, please click here to read it first.

    What if it were possible to uncouple from the ‘rat race’ and thereby regain a big portion of your time to use as you please?

    I assume everyone would find that desirable.  Time would open up for one to volunteer, travel, get in shape, meditate, sleep or do whatever you desire.

    There’s a well-established movement underway the goes by the acronym FIRE, which stands for Financial Independence Retire Early.  It’s not for everybody, and has a ton of pros and cons, and I’m not advocating that anybody blindly adopt FIRE as their framework, although some of you may already pursue it and that’s fine.

    I am saying that the movement has put a lot of thoughtful time into managing the income and expense parts of life and it has a lot of very practical advice to follow if one wishes.

    My role is to set the stage. I’ve spent a huge amount of time reading blogs, finding resources, and condensing the learnings to save you time.

    And what I’ve learned is…

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  • Insider
    Black Swan Flapping

    Iran Mocking US Sanctions

    Somewhere a black swan is stretching and flapping
    by Chris Martenson

    Wednesday, June 26, 2019, 6:40 AM

    10

    It’s an odd feature of life in the west how major news events just seem to slip off into the distance so quickly and are forgotten by most.  Somehow, already, the situation with Iran is not even close to the top of my news and social media feeds.  It has regressed to a back burner.

    Despite the US news cycle being replaced by other fleeting amusements, relations with Iran are even further off the rails this week than last week.

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  • Insider
    Federal Reserve

    Off The Cuff: Decoding This Week’s Fed Minutes

    Could the US really eventually see negative interest rates?
    by Adam Taggart

    Friday, June 21, 2019, 2:24 PM

    0

    In this week’s Off The Cuff podcast, Chris and Axel Merk discuss:

    • Decoding The Fed’s Latest Commentary
      • Cuts are coming = expect more bad news on the economy
    • The Uncertainty Principle
      • By reacting, the Fed may be creating the conditions it wants to avoid
    • Gold Looking Good
      • Lower real rates will push the gold price higher
    • How Low Will Interest Rates Go?
      • Could the US really go negative?

    This week  both the ECB and the Federal Reserve gave the market the soothing words it wanted to hear: any weakness will be met with rate cuts. And perhaps revived asset purchase programs.

    Is this really wise with interest rates already so low and a global recession unfolding? And how low, really, is the Fed prepared to go with US interest rates? Axel, who maintains a dialog with Fed insiders, does his best in this week’s podcast to decode what Mario Draghi and Jerome Powell are planning.

    Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com’s other premium content.

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  • Insider
    Drone Iran US War

    Drone Shot Down, Gold And Oil Shoot Up

    How will the US react?
    by Chris Martenson

    Thursday, June 20, 2019, 5:45 PM

    22

    Maybe with all the monetary stimulus and other catalysts, oil and gold were just itching for a reason to go higher, but on Thursday morning oil convincingly launched higher on news that Iran shot down a US drone.

    Gold, which had rather mysteriously spiked earlier on Wednesday night stayed elevated, even as copper, platinum and palladium all tumbled back lower throughout the day.

    The drone shot down was a very advanced, and large version equipped presumably with the latest and most advanced spying and detection hardware. This action moves us a few notches closer to an actual shooting war with Iran.

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  • Insider
    Black Swans

    What Happens When War Meets Recession?

    We're currently on track to find out
    by Chris Martenson

    Friday, June 14, 2019, 2:40 PM

    25

    Executive Summary

    • The recent tanker attacks in the Gulf of Oman are both odd and murky
    • Assessing what happens next in and around the Strait of Hormuz
    • Recession watch!  Many more signs of weakening with which to contend
    • When the black swan(s) arrive the bubble(s) will burst
    • Getting the timing right is going to be tricky, of course

    If you have not yet read Part 1: Waiting For The Black Swan, available free to all readers, please click here to read it first.

    There are a huge number of warning signs that a recession is imminent, if not already here, and the price of oil is one of them (more on the others later).

    Right now, with oil inventories climbing despite relatively low global oil output, oil is saying “economic weakness is here.”

    Perhaps the biggest “sour note” in the ongoing stock bull parade is the dramatic inversion of the yield curve, which means shorter maturity government paper is yielding more than longer maturity paper.

    For example, you can get a higher yield on 3-month paper than 5-year paper.    This key indicator has now been inverted for a full quarter, an historically accurate indicator of recession.

    Another is the difference between 6-month and 3-month T-bills.  Again, outside of a recession, we’ve never seen a reading as low as it is right now.

    The reason I track the possibility of a recession so closely is because I don’t think that the vast majority of people will be ready to consider alternatives to the status quo as long as everything ‘seems fine.’  Despite a worsening trade war, despite weakening global trade, despite the many geopolitical risks, US and other equity markets continue to rise and seem impervious to any and all bad news.

    Which is why I don’t think this bubble ends with mom and pop retail investors catching on and ducking out.  It will ends when…

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  • Insider

    Off The Cuff: Into The Abyss

    The Fed's actions are quickly becoming the trigger that will blow up the system
    by Adam Taggart

    Thursday, June 13, 2019, 6:56 PM

    8

    In this week’s Off The Cuff podcast, Chris and John Rubino discuss:

    • The Fed’s Desperation
      • It’s just playing for time at this point
    • Why Lower Rates Will Blow Up The System
      • ZIRP/Negative rates create all sort of perversities
    • Italy Threatens To Revert To The Lira
      • Is the Eurozone about to break up?
    • Bad Corporate Debt Is The Ticking Time Bomb
      • There’s simply way too much of it now

    In this excellent analysis, John does an exceptional job clarifying the unique point in economic history in which we live. The Federal Reserve is truly out of ideas at this point; it is simply playing for time until the system breaks:

    The point in the cycle where we are now is a really unusual time to talk about lowering interest rates. Normally when the labor markets are this tight, and wage inflation is running around 3% which it is right now, the Fed is usually tightening. Wage inflation is a kind of inflation they understand. This is as opposed to stock prices going up, bond prices, or house prices going up. That is inflation, but they do not count it as inflation. When wages go up, they usually start raising interest rates. It is really telling that they are seeing things that lead them to maybe start easing again even with the economy, in theory at least, still growing ten years into the beginning of an expansion.

    I think they are recognizing the fact that the world – not just the US, but the whole global financial system – is so highly leveraged that any kind of downturn becomes systemically risky. In other words, a 20% drop in stock prices which is the definition of a bear market is something that happens all the time at least historically. This time around, it might knock down other dominos in a way that is uncontrollable. This is just because there is so much bad debt out there.

    When you take on huge amounts of debt, by definition a lot of it has to be bad debt. Usually the good credits have already done their borrowing. If you are going to expand that beyond that point, you are going to have to work your way down into the barrel to the bottom of the barrel. That is where we are now. A lot of people who have borrowed money cannot pay it back. They are only hanging on because the economy is growing and because their paychecks are there. If you take that away, then Boom!. The system starts to fall apart.

    These guys know that at the Fed. They are trying to delay the inevitable easing because they know that interest rates are already so low. The European Central Bank and the Bank of Japan never did get to raise interest rates. The Fed only got to raise interest rates a little bit, which means they have no ammo going into the next recession. Normally the Fed will cut interest rates by about 5 percentage points from peak to trough. This is as a way of reinvigorating the economy during a recession. If they were going to do that now, we would be at negative 2 or 3% on the Fed funds rate. It would be more deeply negative for Europe and Japan. That is uncharted territory.

    What the Fed is doing now is using words. They are trying to talk the market up. It works (for now). Whenever they announce the possibility of easing or the cessation of tightening, you get a nice pop in the stock market. They are hoping that they can elevate asset prices until the China trade deal gets signed and until the turmoil in the Middle East has settled. That will also give the markets a pop, and that will keep the economy growing for a while. It will allow them to raise interest rates another couple of percentage points at the short end of the spectrum to give them ammo for the next recession.

    They really do not want to start cutting right now. From here, they really do not have much room to cut. I think it is highly unlikely that they are going to get what they want. In other words, it is an economy that grows for the next three years and allows them to raise the Fed funds rate to 5 or 6%. That is really, really unlikely in the scheme of things. They are going to be forced in the recession that is probably imminent just because the expansion has been going on for way longer than a normal expansion. It is going to run out of steam pretty soon. They are going to be forced to cut interest rates to zero and beyond.

    That is why Powell was talking about that. Now he is talking about the effective lower bound of interest rates which is below 0%, we found out in this last cycle. We do not know how far below zero it is. That is what we are going to find out this time around. In other words, how negative can you make interest rates before it becomes the problem rather than the solution? From an economic theory standpoint, that is fascinating. That is the kind of experiment you never expect to see in the real world. We are going to do it this time.

    We are going to find out what the absolute lowest level interest rates can go to before it blows up the system. I do not use the words “blow up” lightly. That is what could really happen when interest rates get down to that point, and it turns out they do not work. Then it is game over.

    Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com’s other premium content.

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  • Insider

    Important Consequences Of Expatriation

    Critical details you need to be aware of
    by Adam Taggart

    Friday, June 7, 2019, 5:15 PM

    2

    Executive Summary

    • The nuts and bolts of expatriation, including the legal process of expatriation
    • The tax consequences of expatriation
    • The immigration consequences of expatriation
    • The pros and cons of U.S. investments once you expatriate
    • The tax consequences should you choose to spend more than a few months each year in the United States after expatriation

    If you have not yet read Part 1: A Primer For Those Considering Expatriation, available free to all readers, please click here to read it first.

    Expatriation: The Basics

    Once you’ve obtained a second passport and qualified for residence in another country, you can begin the legal process of expatriation.

    To do so, you must make an appointment with a U.S. consulate. You generally cannot expatriate within the territorial boundaries of the United States. The consular officer will explain the consequences of expatriation and have you sign some forms.

    Two or more appointments may be necessary to complete the process. At the end of whatever sequence of visits applies at the consulate you choose, you’ll then hand in your U.S. passport. Anywhere from several weeks to several months later, you’ll receive an official document called a “Certificate of Loss of Nationality” (CLN). With the receipt of this document, you will have officially relinquished your U.S. nationality.

    Income Tax Consequences of Expatriation

    Once you give up your U.S. citizenship and passport, you have no further obligation to pay U.S. tax on your worldwide income. However, U.S. law imposes an…

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