LINK HERE to get the PDF Report
06/13/2017 - Amin Rajan: The Digitization Of Asset And Wealth Management
06/13/2017 - Bill Gross: “The Real Economy Has Been Usurped By The Financial Economy”
“Investors have discovered that making money with money is a profitable enterprise and have exchanged the support of central banks for the old-time religion of productivity growth as a driver of their strategy. The real economy has been usurped by the financial economy. Long live the financed-based economy!”
06/09/2017 - It’s All About The Central Banks
“Central banks are going to toe the policy line – support growth with accommodative policy. The result for markets is the massive QE distortion of financial asset prices will continue, supporting stocks for longer than we think feasible.”
06/09/2017 - David Rosenberg: Thoughts On The Deflationary Headwinds Facing The US Economy, Federal Reserve Policy
“The big challenge is, if this [Boomers retiring] was happening 30 years ago, you could go to the government bond market and get 4, 5, 6%. You can’t do that today.”
“[Low Treasury yields] are why I don’t think the dividend theme is overdone. The equity market has become a more reliable generator of the reoccurring cash flows that the Boomers need than the government bond market has.”
06/07/2017 - Dr. Lacy Hunt: How Federal Reserve Monetary Policy Has Destabilized The Economy
Dr. Lacy Hunt’s explains how Quantitative Easing has undermined economic growth and affected financial stability while increasing downside risk in asset markets.
06/05/2017 - “Everything Bubble Chart” From Incrementum’s New Report
06/05/2017 - Gordon T Long: Global Central Banks Won’t Ever Decrease Balance Sheets?
Jason Burack of Wall St for Main St interviews Gordon T Long .. discussion on if Janet Yellen and the Federal Reserve can continue to raise interest rates? .. Gordon says that the Fed could possibly do 2 more 25 basis point interest rate increases in the near future before something in the real economy or markets breaks, but that the Federal Reserve and other major global central banks cannot ever reduce their balance sheets without collapsing markets and the real economy .. Gordon highlights how the ECB now has a balance sheet over $4 trillion and so does Japan’s central bank, the Bank of Japan. Balance sheets for the PBOC and Bank of England are also massive .. Gordon thinks the Federal Reserve will have to start rapidly expanding its balance sheet in the near future rather than reducing their balance sheet .. Gordon also discusses shorting opportunities he is positioning his clients for.
06/05/2017 - Hot Off The Press – Incrementum’s In Gold We Trust Report
Incrementum is out with their latest annual “In Gold we Trust” report. As always, they try to deliver a holistic analysis of gold and financial markets in general, of course from a very Austrian perspective ..
Key topics and takeaways of the report:
• High expectations of Trump’s growth policy dampened the gold price increase in 2016 – Still up 8.5% in 2016 and 10.2% since Jan. 2017
• The further development of the normalization of monetary policy in the US will be the litmus test for the US economy.
• Bitcoin: Digital gold or fool’s gold?
• White, Gray and Black Swans and their consequences for the gold price
• Exclusive Interview with Dr. Judy Shelton (Economic advisor to Donald Trump) about a possible remonetisation of gold
• 5 Reasons why the gold bull market will continue
06/04/2017 - Central Banks Now Own A Third Of The Entire $54 Trillion Global Bond Market
“While the point is critical, what we would like to highlight in the chart below is the staggering amount of debt instruments owned by central banks: as of the latest data, central banks own just over a third of the global tradable bond universe of $54 trillion, or roughly $18 trillion. How this amount of debt on bank balance sheets is ever unwound, i.e. sold – even with central banks’ best intentions – without crashing the bond market, we don’t know.”
06/04/2017 - Peak Prosperity’s Adam Taggart On Financial Repression: The Currency End-Game Of Too Much Debt
“The Federal Reserve .. has chosen to sacrifice the many — the savers and those dependent on a fixed income — to benefit an elite few. Rock-bottom interest rates are greatly helpful to the banks, as well as the financial assets that the bankers and their wealthy clients own .. And just to add to the outrage factor here, when your local TBTF bank stores its own money at the Fed, the Fed pays it a full 1% in interest — nearly 20 times what your bank is paying you. Your bank simply pockets the rest as pure risk-free profit .. The data clearly shows that this suppression of interest rates, combined with the central banking cartel’s Herculean efforts to flood the world with liquidity (to the tune of $1 trillion so far in 2017), accrues benefits in a grossly lopsided and unfair manner to those at the top of the wealth pyramid .. This is a situation societies have found themselves in before. In fact, it has happened so often throughout history that there’s actually a playbook (for the government) when you get to this stage. It’s called financial repression .. While financial repression extends the lifetime of an over-indebted economic system, it does not avoid the consequences of Too Much Debt. It merely serves to shift the worst of the inevitable losses from the government onto the public.
As von Mises’ guarantees:
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final or total catastrophe of the currency system involved.
~ Ludwig von Mises
Negative interest rates are a milestone down the slippery slope of the latter: currency destruction. The central banks are intentionally devaluing their currencies, but betting that they can do so at a controlled pace.
But as von Mises warns and as history has shown again and again, currency regimes burdened by too much debt eventually reach a critical failure point where a uncontrollable cascading collapse becomes inevitable.”
06/01/2017 - Danielle DiMartino Booth: The Demographic Divide: A Police State Of Mind
“It comes down to the demographic divide that’s opened up since President Ford was in office. In the 1970s, the typical public pension’s active employees outnumbered retirees by a factor of four-to-five times; today that ratio is 1.5-to-1 and continues to fall as Boomers retire in droves and Millennials fail to fill the yawning gap.
After a grisly year that ended with a tally of 4,000 homicides, Chicago has begun to coordinate with federal authorities to control a crime wave driven by gangs’ unencumbered access to firearms. The last thing the city can withstand is further cuts to public service funding. By the same token, taxpayers have already begun to vote with their feet as rising taxes and foundering pensions promise to beget more tax hikes to come.
It’s plain that the last thing any of us want to see is a Police State of any kind. But the growing risk is that the next recession and deflating asset prices could well alter the rules of engagement between federal and state authorities on more levels than any of us care to envision.”
http://dimartinobooth.com/demographic-divide-police-state-mind/
06/01/2017 - Dr. Marc Faber: We Have A Bubble In Everything
“We have global debts as a percent of global GDP that is 30 to 40 percent higher than it was in 2007 .. All of us and I also own lots of assets, we’re going to lose 50 percent. Either the government will to take it through taxation or expropriation or there’ll be a deflation in asset prices that is surprising most people on the downside.”
05/31/2017 - Thorsten Polleit: The Fiat Money System Might Be Held Up For Longer Than Some May Fear And Others Might Hope
“The still very low long-term interest rates in the US may, therefore, tell us something important: Investors expect the Fed to keep rates at fairly low levels in what lays ahead; they expect the central bank to refrain from returning yields to levels formerly considered ‘normal.’ Against this backdrop, the latest series of rates increases is merely seen as a cosmetic adjustment .. The US economy, and with it the world economy, is caught between a rock and a hard place. Maybe the Fed’s current rate hiking spree will bring about the bust. Or the Fed refrains from raising rates further and keeps the boom going a little bit longer. Ludwig von Mises put the predicament as follows:
The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances.
Given current bond and stock market valuations, investors seem to be fairly confident that the Fed will succeed in keeping the boom going, that the central bank will not overdo it in terms of raising interest rates. And yes, perhaps central bankers have learned a great deal in recent years, having become true maestros in holding up the make believe world of fiat money. The investor should be aware of the damages caused by fiat money — for instance, boom and bust. At the same time, he should not run for the exit prematurely: The fiat money system might be held up for longer than some may fear and others might hope, so that keeping inflation-resistant assets may be more rewarding than betting on an imminent system crash.”
05/31/2017 - McAlvany Commentary: U.S. GDP Growth Is Matching The 1930s Depression Decade
This week’s show:
-Normally Understated Gold Expert Jeff Christian Now Sees $1,900+ Gold Price
-Russian Ruse Being Played Politically In The U.S. To Distract From Real Issues
-U.S. GDP Growth 1.33% (10 Year Average) – Identical Match To The 1930s Depression Decade
05/31/2017 - Jim Rickards: China’s Economy Fueled By Debt & Ponzi-based Investment Instruments
“China is in the greatest financial bubble in history. Yet, calling China a bubble does not do justice to the situation. This story has been touched on periodically over the last year .. China has multiple bubbles, and they’re all getting ready to burst .. The first and most obvious bubble is credit. The combined Chinese government and corporate debt-to-equity ratio is over 300-to-1 after hidden liabilities, such as provincial guarantees and shadow banking system liabilities, are taken into account .. Paying off that debt requires growth, but the growth itself is fueled by more debt. China is now at the point where enormous new debt is required to achieve only modest new growth. This is clearly non-sustainable .. The next bubble is in investment instruments called Wealth Management Products, or WMPs .. In the past ten years, bank customers have chosen almost $12 trillion of WMPs. That might be fine if WMPs were like high-quality corporate or municipal bonds. They’re not. They’re more like the biggest Ponzi scheme in history .. Here’s how they work. Proceeds from sales of WMPs are loaned to speculative real estate developers and unprofitable state owned enterprises (SOEs) at attractive yields in the form of notes .. So, WMPs resemble collateralized debt obligations, CDOs, the same product that sank Lehman Brothers in the panic of 2008 .. The problem is that the borrowers behind the WMPs can’t pay their debts. They’re relying on further bubbles in real estate or easy credit from the government to meet their interest obligations .. Finally, there is an infrastructure bubble .. About half of China’s investment in the past ten years has been wasted on ‘ghost cities,’ white elephant transportation facilities, and prestige projects that look good superficially, but that don’t produce enough revenue or efficiencies to pay for themselves .. Much of this investment was financed with debt. If the project itself is not revenue producing then the associated debt cannot be repaid, and will go into default .. The toxic combination of government debt, corporate debt, WMPs, and unrealistic growth expectations have set up China for the greatest market crash in history.”
05/31/2017 - Mauldin Economics Patrick Watson: How To Retire On 2% Returns
“We shouldn’t assume 7% real returns will continue .. keep your expectations conservative. Better to be surprised by a windfall than a shortfall .. Specifically, you can start by tempering your retirement lifestyle plans. That could mean pushing back your planned retirement age, living in a less expensive home, or renting out part of your house to lower expenses .. You could also save more aggressively for retirement, which might require reducing your current spending plans. You’ll be glad you did later .. Finally, reconsider your investment strategy .. You‘ll notice in the BCA forecast that they expect the highest future returns to come from emerging-market (EM) equities.”
05/30/2017 - Martin Armstrong: Wealth Migration Is Intensifying The Government Pension Crisis, Causing Wealth Migration To Intensify
“Municipal Bonds are in trouble in Europe as well as the United States. The local level cannot print money, nor are they ever capable of managing their economies. The general view is when short, just raise taxes. Everything comes to an end and we are looking at the end of a Muni-Bond Bubble. The strongest possible recommendation is get out before it is too late. Sure, not every municipality or state/province is in trouble – YET! Once the muni bond bubble bursts, there will be a contagion so even the ones that are not yet insolvent .. it is the government employee pensions that are blowing everything apart at the seams .. Hedge fund managers are permanently relocating to Florida have been leaving New Jersey and Connecticut. When you count on taxing the rich, then one man can move out of and put the entire state budget at risk. Taxing the rich has its limits .. The motto of make the rich pay doesn’t work when the rich pick up and leave. You do not want to be the one still sitting. This game works opposite of the musical chairs game as a kid. This time, the one still sitting will have to pay the taxes for everyone who left. Then they will be unable to sell their house and leave because nobody wants to buy it because of the taxes.”
05/30/2017 - Government Pensions Are Consuming State & Local Budgets
“Most state and local governments in the United States offer retirement benefits to their
employees in the form of guaranteed pensions. To fund these promises, the governments
contribute taxpayer money to public systems. Even under states’ own disclosures and
optimistic assumptions about future investment returns, assets in the pension systems will
be insufficient to pay for the pensions of current public employees and retirees.”
http://www.hoover.org/sites/default/files/research/docs/rauh_debtdeficits_36pp_final_digital_v2revised4-11.pdf
05/30/2017 - Dr. Lacy Hunt: Indebtedness Cannot Be Solved By Taking On More Debt
Erik Townsend Interviews Dr. Lacy Hunt
Dr. Lacy Hunt: Dr. Hunt explains, the US debt load will continue to climb and velocity will continue to slow – unless, of couse, “we get lucky.”
Hunt points to an excellent summary was published in 2010 by McKinsey Global Institute…
“They looked at 24 advanced economies that became extremely over-indebted. The indebtedness brought on a panic year, such as 1929, 1873, 2008, and they followed the process through to completion.
It’s a very long process, and what it shows is that an indebtedness problem cannot be solved by taking on additional debt.
McKinsey says specifically that multi-year sustained rise in the savings rate, what they term austerity, is needed to solve the problem, and of course, as we all know, in modern democracies, that option doesn’t seem to exist.
So, we try to continue to use what has failed, and while we get transitory improvement in economic activity, the longer-term trend is to weaker and weaker economic performance.”
05/28/2017 - Chris Martenson: Non-U.S. Banks Are Being Paid By The U.S. Central Bank
“The Fed is now paying interest on so-called ‘excess reserves’ held at the Fed. Those ‘excess reserves’ include a huge chunk of money held there by foreign banks who are only too happy to receive 1% on their holdings from the Fed given that their own central banks are paying 0%, or even negative rates. The money that the Fed pays these foreign banks is deducted from the amount remitted to the US Treasury at the end of each fiscal year. It’s this simple: foreign banks are being paid billions .. not one single person in the US got to vote for or approve of that action. Let me repeat that: billions and billions .. are being sent to boost the profits of foreign banks. And there’s not a single thing a voting citizen can do about it .. The decision to do this has been made unilaterally by unelected people for reasons they are under no obligation to either share or even have audited by the public. I wonder if Detroit wouldn’t mind getting several billion dollars to use however it wishes, courtesy of the Federal Reserve? Or the permaculture movement? Or jobs training programs?”
