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Off The Cuff: Repercussions Of Rising Rates

Rising interest rates are the big story right now
Thursday, December 1, 2016, 8:54 PM

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

  • A Bottom For Miners?
    • Mish thinks this may be a good purchasing window
  • Hit To Housing
    • Rising interest rates are kryptonite to home prices
  • Vanishing Jobs
    • Trump can't replace the jobs lost to automation
  • The Year Of The Iconoclast
    • Anti-establishment platforms gather steam around the world

After years and years of declining/0% interest rates, the trend may be reversing. Market interest rates have risen faster over the past month than in decades.

Chris and Mish see this as having implications that will ripple through all asset classes. As Mish warns:

I’m watching interest rates just rise and rise. And the thing here is everyone’s betting on this massive inflationary scenario under Trump. I’m not sure I get it. Now, long term, we can all look at this and say, “Yeah, he’s going to take less money in in taxes, he’s going to waste more on infrastructure, he wants to increase military spending.” Of those, the only one I agree with is lowering taxes but the analysis is negative, negative, negative from Congressional CBO and all the people who figure this stuff out.

So we’ve got this surge in interest rates and money pouring into the dollar. The dollar’s going higher. I look at all of this and I think, “Hmm, a surge in interest rates. Ah, it’s likely to affect an ugly market.” The rising US dollar impacts exports in a negative fashion. The stock market is incredibly overvalued. And we know what generally happens when interest rates rise: I’m looking at a potential deflationary bust. Especially when we factor in Trump’s trade policies that might very well cause a global trade war.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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Why The Ruling Elite Are Becoming Frightened

The public is staging a coup d'etat
Friday, November 25, 2016, 5:32 PM

Executive Summary

  • How the Deep State/"shadow government" came to be
  • A number of "quiet coups" have concentrated power over the decades
  • The moral hypocrisy of today's ruling elite and the public's growing rebellion against it
  • The key success factor the current people's coup will need in order to triumph

If you have not yet read Part 1: The Power Struggle Unfolding Before Our Eyes available free to all readers, please click here to read it first.

In Part 1, we reviewed six narratives that seek to “explain” Donald Trump’s unexpected victory in the 2016 presidential election. We then distilled these narratives down into three categories: moral claims, elite machinations and structural economic/social issues.

I propose that the most comprehensive explanatory narrative of Trump’s improbable victory is The People Staged a Coup D’Etat.

Threats to Democracy

To understand this narrative, we must first examine the structure of the American system of governance and the previous “quiet coups” that consolidated power in new elites.

In broad brush, the U.S. Republic was designed to be run by elites—hence the Electoral College and the bicameral legislature with a senate overseeing the rabble of the House of Representatives.

The founders—particularly James Monroe and his allies—were acutely aware that the greatest threats to an enduring democracy were a tyranny of the majority, a majority that undermined the civil liberties for all, or an elite whose powers could not be constrained.  This is the purpose of the balance of powers between the Executive, legislative and judicial branches of the federal government.

But these structural efforts to restrain a tyranny of the majority or an above-the-law ruling elite, the U.S. has experienced both a tyranny of the majority—the Jim Crow racial discrimination that was institutionalized in the Southern states until the mid-1960s—and a ruling elite that is above the law.

I would argue that the current ruling elite (neocon, neoliberal) personified by Hillary Clinton, is effectively a force unto itself, i.e. above the law.

The roots of this ruling elite’s expansive power can be traced to the 1940s rise of the National Security State, the catch-all term for the institutions (CIA, Department of Defense) established by... » Read more

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Off The Cuff: Roasting The Media

Now clearly one of this year's biggest turkeys
Thursday, November 24, 2016, 4:48 PM

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

  • Merchants Of Fear
    • Scare tactics abound these days
  • Paid Shills
    • There's an agenda behind the messages we receive
  • Persuasion & Propaganda
    • The "news" is attempting to trigger specific responses
  • An New Era Of Fascism?
    • If you look at the definition, it seems we're not too far off

First off, very happy Thanksgiving wishes from Chris and me to all our Peak Prosperity readers! We hope each of you is having a wonderful day of gratitude with people you care about. Despite all of the challenges and predicaments we discuss on this site, there is much in this world to be thankful for.

Now, in an entirely different tone, Chris and Charles work up some heat in this week's podcast, as both of them excoriate the degradation rampant in today's media. Rather than serving as a Fourth Estate, holding up truth to power and prioritizing truth and accuracy above all else, today have have a captive system serving the interests of political power (the State) and moneyed interests (corporations). As a populace, we are only as well-informed as our information is valid. How can we act effectively (including voting) when we can't trust the sources of the information we receive? 

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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How To Protect Yourself From Persuasion & Propaganda

Live by your own influence & yours alone
Friday, November 18, 2016, 8:20 PM

Executive Summary

  • Recognizing manipulation
  • Absorbing information on your own terms
  • Dealing with propagandized friends & family without ruining relationships
  • Healing the polarization the propaganda creates

If you have not yet read Part 1: We're Being Played available free to all readers, please click here to read it first.

Staying In Control

Personally I do not have a TV precisely because ‘they’ are so good at what they do.  I do not trust myself to resist their efforts because their methods are beyond my ability to resist 24x7x365.

I can maintain my vigilance for only so long, before I give up and give in.  What I’m trying to say here is that it is not a sign of any weakness on your part if you have been taken in by their methods, only that you are human.  There is no shame in being played, it’s a function of how you and I are wired.

If I did have a TV, I would absolutely not allow the sound to be on during commercials, and even better I would get a TiVo or its equivalent and skip past commercials. 

But we can control how much we get played by simply not exposing ourselves to too much of the junk.

Awareness is your first key to not being played. It’s your first line of defense.  Avoiding unnecessary propaganda/subliminal stimuli is your second key.

So staying in control of ‘your’ thoughts and emotions is as simple, and as hard, as being aware of the efforts to sway and/or implant ideas in your head and then avoiding those efforts as much as possible.

The benefit of doing so is a happier and more authentically connected life.  After all, it is your ideas and gifts the world needs, not your regurgitation of someone else’s.

Also, advertising is largely built upon the idea of... » Read more

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Off The Cuff: Multiplying Market Oddities

Rising rates are creating cross-currents everywhere
Thursday, November 17, 2016, 7:15 PM

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

  • Impact Of A Trump Presidency On The Markets
    • What will the most likely trends be?
  • Plummeting Bond Prices
    • Good or bad?
  • The Unbearable Lightness Of Stocks
    • Rising prices in the face of rising interest rates
  • Gold's Prospects
    • Inflation? Higher rates? What will it mean for gold?

Axel and Chris address the increasing sell-off in the bond market, which can also be described as the sudden rising of interest rates. In an over-indebted financial system as ours, rising rates will make it more expensive to service the outstanding debt, placing increasing headwinds on economic growth. Right now, the stock market is ignoring that -- instead, it's pricing for perfection. Axel warns that this "oddity" will need to correct soon, one way or the other.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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Off The Cuff: The Sell-Off In Bonds

Is the world's biggest bubble now bursting?
Friday, November 11, 2016, 3:35 PM

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

  • Deconstructing The Election Results
    • Why the upset happened
  • Insurmountable Odds?
    • Trump inherits a country in tremendous debt
  • The Sell-off In Bonds
    • Is the world's biggest bubble bursting?
  • The Age Of The Iconoclast
    • Brexit + Trump is just the start of this age of upsets

So much to talk about this week....  Chris and John deconstruct Trump's upset win as well as the tremendous challenges he faces, inheriting a grossly overleveraged economy that is grossly overdue for a market correction. They're also are extremely concerned by the sharp acceleration we've seen this week in the sell-off in the bond market. As a reminder, the size of the bond market dwarfs other financial assets (except derivatives). It is "for all the marbles", as they say.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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OK, Here's What We Think Is In Store After Last Night

All the probabilities just shifted
Wednesday, November 9, 2016, 2:08 PM

Hopefully the wake-up call has been sent to the elites on both sides of the aisle. It’s time to pay attention to everyone again, not just your cloistered circle of buddies.

An important point needs to be raised here. Whether it happened now, or later, the basic fact remains that the future was always going to come to the moment when a tiny elite could not take and more from a shrinking pie without creating a backlash.

The only open question was when that was going to occur.

Well, it just happened.

The next question is whether that will be heeded now or, as was done in 2008 by the Fed, utterly ignored for one more chance on the Merry Go Round.

While a lot depends on Trump’s eventual team and policy priorities, the trajectory of increasing economic hardship for the 95%-ers out there is going to keep trudging along as we wait for additional clarity.

Those forces of increasing disenchantment will not evaporate for no reason.  It took many years for people to finally become disillusioned with Obama.  Trump gets no such grace period. 

I’ve yet to meet anybody who likes the man, so he won’t get much in the way of good behavior credits like Obama got.

So what matters most are... » Read more

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Off The Cuff: All Things Silver

Understanding silver's moonshot potential
Friday, November 4, 2016, 1:39 PM

In this week's Off The Cuff podcast, Chris and Ted Butler discuss:

  • How Precious Metals Spot Prices Get Set In This Market
    • The big banks operating in the paper markets have oversized influence
  • Silver's Moonshot Potential
    • An "accident waiting to happen" in terms of upside
  • Likely Triggers Of A Silver Supply Squeeze
    • A number of candidates abound
  • JP Morgan Is Amassing The World's Largest Silver Horde
    • Positioning itself for higher prices ahead?

Ted Butler returns to provide an extremely in-depth explanation of how the precious metals futures markets work (very important to understand this, as that's where PM prices are determined). Yes, it's an unlevel playing field; and yes, the big banks are at the heart of the unfairness. But -- as he explains in this hour-long exposition -- Ted is confident the fundamentals of supply and demand in the silver market will one day trump all, and why silver is "an accident waiting to happen" in terms of price upside:

What I am saying is: there is such an incredibly small amount of new silver that is available from current production (I’m including recycling because that is where it basically comes from) that it can be gobbled up in a second.

How can the price be so cheap with these kinds of facts and circumstances? The answer is we go back to the managed money, technical funds and the commercial banks. The price is being set in paper trading; it's not being set by the actual acquisition or disposal of real metal. It has nothing to do with that at all. And that can’t last forever.

We've already experienced expressions of this fact. I think we started talking with each other years ago when silver was in the single digits -- $4, $5, $6 an ounce -- then it ran to close to $50 in the beginning of 2011. The reason it can have these breathtaking price advances is because there is so little of it that when anybody goes to buy it, it just has a pronounced and disproportionate impact on price.

As Bunker Hunt, the late famous silver speculator and investor from years ago said, and it is more true today than it has ever been: Silver is an accident waiting to happen. And that accident is in terms of price to the upside. 

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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My Personal Preparations For Nuclear War

Peace of mind today. Salvation tommorrow?
Friday, October 28, 2016, 8:40 PM

Executive Summary

  • The Importance Of Avoiding Contamination
  • The Steps I Took This Week
  • Resources For Estimating The Threat Level For Where You Live
  • Advice For City-Dwellers

If you have not yet read Part 1: We Risk Being Collateral Damage In The Neocon Lust For War available free to all readers, please click here to read it first.

First up, I promised you that if I ever took any actions I’d let you know about them.  I toyed with breaking that pledge (net very seriously) because I really don’t want to needlessly scare anybody.

I don’t like focusing on the negative, but I did catch myself thinking and slightly worrying about the tensions with Russia and realized that I did not have a few basic preparations.   So what do we do at Peak Prosperity when we have a gap between what we know and our actions?  We close up that gap with action.

I’ve written extensively about the possibility of war with Russia, and the possible things to protect against range from minor annoyances and shortages to a grid down event (via EMP or hacking) to a nuclear war.

Of them all, I suppose the grid down event scares me the most if it involved any protracted outage of more than a month.  Things fall apart never to be properly rebuilt if that happens. 

But a limited nuclear war, or even a more broad-based one if things really get out of hand, also worry me a lot.

And I am not the sort to sit around and worry.  I hate sitting around and worrying so last week I did what few things I could to assure that I can make the best of it if a nuclear exchange happens. 

Look, even if there’s only a 1% chance of a nuclear exchange over the next five years, I personally consider that that to be an excessive risk (given the catastrophic outcomes involved).  Given how I am built, I need to prepare as best I can so that I can relieve my anxiety and get back to living life fully.

As background, you should definitely re-read our excellent previously-issed reports on radiation and the difference between that and radioactive contamination because those are the building blocks for knowing how to survive. 

In fact, you should print them out and have them tucked into your preparations area. 

Having a grounded understanding of what radioactive isotopes are and what they do to a living system is critical knowledge to have.  But maybe you don’t need it yet.  So read the articles of background and put the whole subject away, hopefully forever, never to be revisited.

I’ll be honest; I am not all that scared by radioactivity.  My view is we evolved with background radiation and life has been dealing with it for a very long time.  Now contamination, on the other hand, which is the ingestion of a hot particle of some sort, now that scares me a lot. And it should scare you too. So much of my preparations are centered around... » Read more

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Off The Cuff: The Driverless Future

It's going to have a HUGE impact, especially on jobs
Thursday, October 27, 2016, 8:36 PM

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

  • Meaningless Metrics
    • Offical data is so 'fuzzy' as to be useless now
  • AT&T/Time Warner merger & Snapchat IPO
    • Signs of excess seen at a bubble top
  • The Driverless Future
    • It's going to have a HUGE impact, especially on jobs
  • The Demographic Time Bomb
    • Pensions will start blowing up left & right

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more