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Tag Archives: Federal Reserve

  • Insider

    (Another Bonus!) Off The Cuff: Why Negative Rates Won’t Work

    The logic supporting them is just plain wrong
    by Adam Taggart

    Wednesday, August 28, 2019, 10:46 AM

    19

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

    • Why Negative Rates Won’t Work
    • Why We Won’t Bounce Out Of The Next Recession
    • The Rich & Poor Alike Will Suffer In The Next Downturn
    • The Only Official ‘Plan’ B Is Panic At This Point

    Recorded two weeks ago, we’ve only just now had the space to run this podcast. In it, John Rubino does a masterful job breaking down why negative rates are unnatural for a reason — they simply don’t do anything positive for the economy.

    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

    Off The Cuff: The Structural Supply Shortage Of Silver

    It's still too low to be profitable for many producers
    by Adam Taggart

    Wednesday, August 21, 2019, 4:27 PM

    20

    In this week’s Off The Cuff podcast, Chris and Jeff Clark discuss:

    • Why The Recent Gold Breakout Is For Real
    • Why Lower Interest Rates Will Boost Gold Demand
    • Why Silver’s Price Will Need To Go Much Higher
    • Why Investors May Find PMs Hard To Obtain During The Next Crash

    We delayed this podcast a week in order to rush the one with Axel Merk out right after the latest Fed announcement. But it’s no less important.

    Precious metals analyst Jeff Clark explains why the new bull market in precious metals is ‘for real’, and why higher prices and scarcer supply in store — especially in the case of silver.

    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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  • Blog

    Why Common Knowledge Changes The World

    The private understanding that we're in trouble is suddenly becoming realized by the public
    by Adam Taggart

    Friday, August 16, 2019, 4:03 PM

    46

    For those paying attention, there have been plenty of signs indicating that financial asset prices are dangerously overvalued and that the decade-long economic expansion is reversing towards recession.

    But the mainstream — until just recently — has refused to see this.

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  • Podcast

    Steve Keen: Could A Debt Jubilee Really Work?

    One way or another, we're going to have to address the $trillions of outstanding bad debts
    by Adam Taggart

    Wednesday, August 7, 2019, 10:58 AM

    22

    Over the past decade, the world’s central banks have distorted the price of money by bringing interest rates to record lows.

    With credit so cheap, asset prices have risen dramatically as companies and governments have borrowed to the hilt.

    And now with the “Everything Bubble” threatening to burst (perhaps in mid-bursting already?), we’re suddenly realizing that the phantom asset price gains were ephemeral, while the debts are permanent.

    How will the economy cope with dangerously overleveraged nations, industries and households? Not well.

    To discuss this massive problem and propose some potential solutions is Steve Keen, professor of economics at Kingston University in London and author of Debunking Economics.

    Click the play button below to listen to Chris’ interview with Steve Keen (59m:55s).

    Other Ways To Listen: iTunes | Google Play | SoundCloud | Stitcher | YouTube | Download |

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  • Insider
    BBC

    Off The Cuff: Rate Cut!

    What implications should we expect from the recent Fed interest rate cut?
    by Adam Taggart

    Thursday, August 1, 2019, 3:25 PM

    6

    In this week’s Off The Cuff podcast, Chris and Axel Merk discuss the recent Fed cut and Jerome Powell’s subsequent press conference. Markets have rocked both high and low in the 24 hours since.

    We’re working on providing a transcript for this excellent podcast. But we’re bringing you the audio now — given this conversation’s extreme timeliness and importance — so that you can start listening asap.

    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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  • Blog

    Overdosing On Crazy Pills

    If you think everything's OK, you're nuts
    by Chris Martenson

    Friday, July 26, 2019, 3:49 PM

    82

    If you prefer to listen to this article, read by its author Chris Martenson, click the player here below: ___________________________________________________________________________________ Sometimes an otherwise-forgettable movie will be lifted up out of obscurity by the internet and made into a useful meme. In the movie Zoolander Will Ferrell’s character, ‘Jacobim Mugatu,’ screams the line “I feel like…

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  • Blog

    Upcoming Webinar: End Of The Road

    The false prosperity of the past 10 years is finally revealing itself to be a dead end
    by Adam Taggart

    Friday, July 12, 2019, 11:01 AM

    3

    Register for the upcoming free webinar “End Of The Road”, airing on Thursday July 18th at 7pm ET/4pm PT, a joint production by Peak Prosperity, Jefferson Financial and Benchmark Financial Services.

    The false prosperity of the past 10 years is finally revealing itself to be a dead end.

    Which fallout implications we should we most likely expect from here? And what prudent steps should you consider taking now, to prepare before crisis arrives?

    Featured faculty for this webinar include Ted Siedle, national pension expert and recipient of the two largest-ever whistleblower settlements from the SEC and CFTC, Chris Martenson PhD, economic analyst and co-founder of PeakProsperity.com, and Brien Lundin, publisher of GoldNewsletter.com and producer of the world’s longest-running investment conference.

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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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  • Blog

    ‘Somebody’ Finally Cares About Gold

    And now that $1,400/oz has been breached, there's plenty of room to run
    by Adam Taggart

    Friday, June 21, 2019, 1:34 PM

    14

    On Tuesday, Mario Draghi apparently went rogue on his fellow policymakers and launched into a swan song version of his all-time hit “Whatever it takes”. The next day, Jerome Powell at the Fed confirmed his willingness to ease and let the market know he stands ready to cut rates multiple times over the next year.

    That — plus a downed US drone patrolling the Iran border — poured gasoline on gold, which spiked as high as $1,410/oz, finally breaking free of the $1,350 ceiling that had blocked its advance for years.

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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.

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