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I have a neat little app on my smartphone that I like to look at when I’m feeling bored. It won’t change anything in my life, but it makes me think as I see the numbers clocking up, and then suddenly stopping for a few seconds. It’s the app that tells me the how much the National Debt of each country stands at in real-time. As I sit down at my computer screen the USA National Debt amounts to $17 041 241 xxx xxx. Forgive the x’s…they’re not kisses…I tried to get the last six digits, but, there’s no point, they’re moving too fast! Speedie Gonzalez has got into that app! It works out to $54 087 per person. That’s the same value as 3 408 248 816 XXX Big Mac Meals.
Inflation is hot property today, hyperinflation is even hotter! We think we are modern, contemporary, smart and ready to deal with anything. We’ve got that seen-it-all-before, been-there-done-it attitude. But, we are not a patch on what some countries have been through in the worst cases of hyperinflation in history. Here’s the top 10 list of worst cases in history. We’ll start with the worst first…let’s think positive!
1. Hungary 1946
Inflation at its peak reached a staggering figure of 13.6 quadrillion % per month! That’s 13, 600, 000, 000, 000, 000%. The largest denomination bill was a 100 Quintillion note. Prices ended up doubling every 15 hours at the time.
2. Zimbabwe 2008
Prices doubled here every 24.7 hours in November 2008 and inflation reached levels of 79 billion-odd %. They eventually stopped using the official currency and switched to the South African Rand or the $US. A loaf of bread ended up costing $35 million. This is the most recent case. It was Mugabe’s land-redistribution program that caused this.
3. Yugoslavia 1994
In just the one month of January 1994 inflation rose by 313 million %. Prices doubled every 34 hours (which is nothing compared to Hungary). The currency ended up getting revalued 5 times in all between 1993 and 1995, all to no avail. The cause? A recession triggered by overseas borrowing and an on-going political struggle in the 1980s and the following decade.
4. Germany 1923
Adolf Hitler rose to power as a consequence of hyperinflationary pressure (at least one of the reasons). Prices doubled every 3.7 days and inflation stood at 29, 500%. Germany was crippled with the reparation payments after the Treaty of Versailles and the end of World War I.
Diamond prices will rise by an average of six percent annually through to 2020 due to constrained supply not being able to meet rising demand from China and India, according to BMO Capital Markets analyst Edward Sterck.
“The primary constraint on supply growth is the lack of new discoveries that match the scale of existing operations in Botswana and Russia,” Sterck wrote. “Given expanding demand and constrained supply, diamond prices are likely to increase as consumers compete for an increasingly scarce commodity.”
Rough diamond prices have increased by close to 10 percent this year and will remain at those levels this year before starting to climb again next year, according to the report.
China overtook Japan in 2011 as the world's second-largest diamond buyer, and together with India the countries account for around 20 percent of global demand which is seen rising to 28 percent in 2016, according to estimates from Anglo American Plc which owns 85 percent of De Beers.
Al Arabiya and Reuters -
The United States is to rigorously enforce a ban on gold sales to Iran from July 1, in a further tightening of sanctions over Tehran's disputed nuclear activities.
David S. Cohen, the U.S. Treasury Department's undersecretary for terrorism and financial intelligence, told lawmakers in testimony there had been an increase in gold sales to Iran in response to the sharp depreciation in Iran's currency, the rial.
The U.S. will enforce "without fear or fail" sanctions starting on July 1 that ban governments or private companies from selling gold to Iran, Cohen said on Wednesday.
The rial has lost two-thirds of its dollar value since late 2011 as a result of Western sanctions targeting the banking system and oil exports over Tehran's disputed nuclear activities, putting many Iranians under financial pressure.
In a 13-F release issued by the SEC after market close yesterday, it was reported that Soros Fund Management LLC, founded and chaired by billionaire financier George Soros, significantly increased its gold related holdings, most notably, through the purchase of over $25 million dollars worth of call options on the GDXJ Junior Gold Miners index.
This stunning move by one of the world’s top performing hedge funds, suggests a powerful surge ahead for gold equities. It should be noted, that in the forty years prior to 2010, the Soros Fund averaged a 20% annual rate of return.
Bottom Line: While debate continues as to how far gold and gold equities will continue to drop, the Soros Fund is lightening up on physical gold in exchange for gold mining equities and call options on the extremely volatile junior mining stocks.
There couldn’t be any stronger indication by the fund as to its beliefs about the timing of this bottom (outside of selling everything and going all-in on call options of course).
It remains to be seen whether these positions will end up in the green or not, but with a forty year track record of 20% annual returns, I’ll be betting on the Soros Fund.
Regular readers will know I am in the inflation, possibly hyperinflation camp; but there are those that think the future is more likely to be deflationary. In the main this is the view of neoclassical economists, Keynesians and monetarists, who generally foresee a 1930s-style slump unless the economy is stimulated out of it.
Rather than repeatedly go into the errors of their ways, we must accept that they are in charge. They have decided that prices must not fall, and they see moderate price inflation as a necessary stimulant to business: this is the reasoning behind Helicopter Ben Bernanke’s defining statement, when he made it clear that central banks could spray the economy with endless fiat money if need be.
Given this determination to stop prices falling, worries that the outlook is deflationary are unlikely to be realised. But there is a second group of commentators which believes that in a slump there will be an unstoppable credit contraction as banks are forced to foreclose on failing businesses. This, they say, will lead to a mad dash for cash to pay off debt, leading to fire-sales of assets as credit contraction spreads to otherwise sound businesses. The imperative to pay down debt will overwhelm central banks’ attempts to replace it with cash.
The French public had long turned against her by the time Marie Antoinette faced the guillotine in 1793. Public sentiment smoldered over her lavish spending. Pamphleteers falsely smeared her character. And she didn't stand a chance at her sham trial.
The young French queen had indeed been a spendthrift early in her reign, but curtailed that habit when she learned what the public thought. Even so, Antoinette had already been nicknamed "Madame Deficit."
French debt had ballooned before she and King Louis XVI took the throne. But they received the blame for France's financial straits.
The leaders in power at the time … always appear inept, because they take actions designed to "help the economy," which fail, or they decline to take actions and are blamed for fiddling while Rome burns.
Conquer the Crash, second edition, p. 238
Now fast forward to the U.S. economy today.
The federal government logged a $1.1 trillion deficit in fiscal year 2012 -- marking the fourth straight year of trillion-dollar shortfalls.
CNNMoney, Oct. 5, 2012
The federal debt is nearly $17 trillion.
The steady increase in annual interest costs is a surprisingly big reason why the Congressional Budget Office sees deficits rising in the second half of the coming decade.
Accumulated interest payments from 2014 through 2018 are $1.76 trillion ... . Interest payments for the second five years are more than double that or about $3.64 trillion.
Politico, Feb. 5, 2013
The article also reports that interest payment on the debt is projected to surpass defense spending by 2020.
Great Britain has struggled to regain its economic footing since the 2007-2009 financial crisis. The public psychology has turned against those in finance.
An April 26 Financial Times article says:
Bankers who behave recklessly would be jailed under a new law being considered by MPs and peers on the banking commission.
Several members of the commission ... argue for a new law which would hold bankers personally liable for catastrophic losses.
Will something similar be proposed in the U.S.?
Consider this from the second edition of Conquer the Crash (pp. 231-232):
The main social influence of a bear market is to cause society to polarize in countless ways. That polarity shows up in every imaginable context -- social, religious, political, racial, corporate and by class. ...
One reason that conflicts gain such scope in depressions is that much of the middle class gets wiped out by the financial debacle, increasing the number of people with little or nothing to lose and anger to spare.
Not many investors know that in the middle of the gold bull market in 70's when gold went from 50$ to 850$, there was a similar panic in 1976 when gold dropped from 200$ to 100$. It really took "balls" to overcome that situation and be ready for a ride to 800$ and beyond.
Are we in a similar situation today? In the following KWN Interview Egon von Greyerz gives his fresh view on what is happening.
This incisive article by the late Bob Chapman was first published by Global Research in March 2012. It is of particular relevance to current developments in the Gold market.
We have been in and around the gold markets for 53 years and conditions have certainly changed, driven mainly by market manipulation of all markets as a result of the Executive Order, which created the “President’s Working Group on Financial Markets.” Those who doubt that are either on the government payroll one way or the other, or you are just too dumb to understand what is really going on. In spite of these machinations and ignorant naysayers the bull markets in gold and silver are still alive and well. What you are seeing are paper markets and the use of derivatives to effect short-term pricing, especially when negative events are about to occur.
Those events are aided by naked shorting and illegal concentration in both gold and silver and the shares. Mind you, this is being done in a market to control it and in addition government and central banks relish stomping gold and silver into the ground. For years they hid what they were doing. Today their manipulations are in your face. These dramatic forced price falls are fortunately accompanied by heavy buying by China, Russia, India and others.
On the heels of a cascade of selling in gold and silver, today whistleblower Andrew Maguire spoke with King World News about the extraordinary intervention which took place in both of these markets. Maguire also told KWN about the staggering amount of physical gold tonnage that Eastern central banks were attempting to buy today alone, in a market that, remarkably, is not seeing any supply. Below is what Maguire had to say in part II of his remarkable and exclusive interview.
Société Générale (“SocGen”) recently published a special report entitled “The end of the gold era” that garnered far more attention than we think it deserved. The majority of the report focused on SocGen’s “crash scenario” for gold wherein they suggest that gold could fall well below their 2013 target of US$1,375/oz. It also included a classic criticism that we’ve heard so many times before: that the gold price is in “bubble territory”. We have problems with both suggestions.
To begin, the report’s authors appear to view gold as a commodity, rather than as a currency. This is a common misconception that continues to plague most gold market analysis. Gold doesn’t really work as a commodity because it doesn’t get consumed like one. The vast majority of gold mined throughout history remains in existence today, and the total global gold stockpile grows in small increments every year through additional mine supply. This is also precisely why gold works so well as a currency. Total gold supply can only grow marginally, while fiat money supply can grow exponentially through printing programs. This is why gold’s monetary value is so important – it’s the only “currency” in play that is immune to government devaluation.
The chaos that is Cyprus has mesmerised markets, including for gold and silver. At the time of writing there are signs that markets were beginning to emerge from their hypnotic trance. Bond yields for Greece, Spain and Italy began to rise as it dawned on markets that both large and small depositors were beginning to understand the implications of governments raiding bank deposits to keep the banks afloat.
The Brussels-IMF-ECB axis has been desperate to find a way of not guaranteeing the banks’ solvency, and they have tried to do this in Cyprus’s case by raiding deposits over €100,000. It is expediency over legal rights. In a normal bankruptcy there is a defined pecking order, and in the case of banks, depositors are first to be paid. In the eurozone they are the first to be sacrificed if they are deemed to be “rich”.
This is rich with unintended consequences. Depositors in all other eurozone states have suddenly realised that their deposits are not safe. Why risk hanging around on the basis that your sub-€100,000 deposit is guaranteed? And if you have more than that in the bank you are a fool.
Directors of companies and trustees are now probably guilty of negligence if they leave money on deposit in the eurozone. It is no exaggeration to say that the mishandling of Cyprus could potentially destroy unconnected banks and the euro itself by undermining confidence that the euro is worth more than its cost of production (N.B. this is zero).
Almost certainly prices for goods in Cyprus will rise as a result of its banking crisis, because the imposition of capital controls will restrict imports, leading to supply bottlenecks. In addition residents will no longer be complacent about keeping money on deposit, but seek other alternatives. Large depositors may be trapped, but smaller local depositors will draw them down for cash to stock up on things needed tomorrow while they are available.
Cypriots will therefore change their preferences from money in the bank in favour of goods. And the lessons from Cyprus are not being lost on ordinary folk across the eurozone, so bank depositors elsewhere are likely to alter their preferences away from bank deposits as well, depending on how they view the soundness of their own banks.
The purpose of this article is to draw attention to the price effect of the likely change in preferences between bank deposits and goods. Prices change either as a result of monetary inflation, which is a gradual process, or as a result of changes in money-preference, which is often substantial and sudden in its effect.
Slovenia appears the inevitable next player set to experience the non-template of uninsured depositor bail-ins and the good-bank-bad-bank solution that was uniquely applied to Cyprus. However, global investors should rest assured as this miracle of modern financial engineering will not be a detriment to the nations as the Slovenian banks will be internally recapitalized (in the latest proposal) by a government guarantee. Simply put, in the world of European accounting idiocy, Reuters reports "this would not result in an immediate spike in the government's debt level, because the authorities would initially provide banks with guarantees rather than newly issued securities." Which leaves us asking, just how much is a one-week-old Slovenian government's guarantee worth in real money? And why didn't the Cypriot government just 'promise' to do 'whatever it takes' to support their banks' bad assets? Of course the chance of the bailout happening just surged:
*SLOVENIA WON'T NEED BAILOUT, ECB'S KRANJEC SAYS
Continue reading from Zerohedge ...
The following is a guest post by George Schultze, founder of Schultze Asset Management LLC, an alternative investments firm founded in 1998 that manages approximately $230 million in assets and specializes in distressed securities.
I’ve been following the derivatives markets for almost two decades – going back to before I attended law school and business school at Columbia University. Since I generally avoid investments in derivatives, my main interest in this market now is to monitor systemic risk since it’s the primary reason we suffered a near-fatal collapse in the global economy a few years ago. Derivatives can be useful tools for managing risk, but they’ve often had hugely negative, albeit unintended, consequences and now I’m concerned we may see some more.
Several of the largest U.S. banks are still chock-full of derivatives.
Most readers know that the derivatives markets exploded in size over the last two decades, with all sorts of high margin derivative products popping up around the world. What’s amazing is the shear breadth of global derivatives usage – to wit, derivatives have been sold to individuals, corporations, governments and municipalities worldwide. These products have caused unbelievably terrific blowups for many speculators and unsophisticated investors who thought they were buying something other than what was sold.
I remember one of the first major derivatives-related collapses in 1991 – when Orange County, California’s treasurer borrowed some $14 billion and invested the proceeds in derivatives Merrill Lynch sold him. When the Fed began raising interest rates in 1994, Orange County was bankrupt. A similar problem unfolded more recently in Jefferson County, Alabama, where we witnessed the biggest municipal bankruptcy in U.S. history in a little over one year ago. In Jefferson County’s case, the derivatives JPMorgan sold them were meant to simply hedge interest rates – by converting floating to fixed – and thereby reduce risk. Unfortunately, the derivatives products didn’t work as expected for Jefferson County either.
DURBAN: In a major achievement for India in its campaign for reforming the international financial architecture, BRICS nations on Wednesday decided to establish a new development bank to finance infrastructure and to create a USD 100 billion Contingency Reserve Arrangement to tackle any financial crisis in the emerging economies.
The decision was taken at the BRICS Summit here which also launched a Business Council to encourage investment and trade in member countries and to expand business cooperation. Leaders of the inter-continental grouping including Prime Minister Manmohan Singh, met here this morning for an extended session and accepted the report of their finance ministers saying "we are satisfied that the establishment of a New Development Bank is feasible and viable".
Cyprus’ sudden acquiescence to demands by international lenders to confiscate 40 percent or more of bank deposits over 100,000 euros ($130,000) and limit withdrawals, while keeping the banks shut, has turned much of the country overnight into a fright-filled society with many people unable to get their hands on enough cash to pay for anything except food.
The government gave in to the harsh demands from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to secure release of a 10 billion euros ($13 billion) bailout but the terms were harsh for ordinary citizens.
“Cyprus is a momentous event. Losses could be in the tens of billions of dollars. But like all major crises there is always a catalyst, and whether it was a shot in Sarajevo (assassination of Archduke Ferdinand which started World War I), or the fall of the Credit-Anstalt in Austria in 1931, there is always an event in history which people look back on as the start of tremendous global turmoil. Cyprus could very well be that event.
There will be some kind of solution eventually to the Cyprus problem, but it will be seen as unsatisfactory in the fullness of time. It is unlikely to come from Russia because I don’t think Europe would like to see Cyprus become an entirely Russian state, which would of course be the case if Russians were to give their support in a major way.
“But whether the bailout comes from the ECB or the IMF, of course they have no money....
"In time Cyprus will go down in history as did the murder of Arch Duke Ferdinand. Ms. LeGarde does not know it, but she is going to be a modern Marie Antoinette. She said and is repeating herself today, "Cypriots and you backwater of Europe Ruskies, Eat Cake."- Jim Sinclair
The deposit-confiscation "bailout" of Cyprus reveals much about the Eurozone's fundamental neocolonial, neofeudal structure.
At long last, Europe's flimsy facades of State sovereignty, democracy and free-market capitalism have collapsed, and we see the real machinery laid bare: the Eurozone's political-financial Aristocracy will stripmine every nation's citizenry to preserve their power and protect the banks and bondholders from absorbing losses.
The deposit-confiscation "bailout" of Cyprus confirms the Eurozone's fundamental neocolonial, neofeudal structure and the region's political surrender to financialization.
The Cyprus event may later, in the history books, be seen as the catalyst of the fall of a century long Ponzi scheme. This could rank in line with the shot in Sarajevo as the start of WW1 or the collapse of Kreditanstalt in 1931 as the start of the Great Depression.
Isn’t it ironic that exactly 100 years after the creation of the Fed (a private bank created for the benefit of bankers) that the fragile and bankrupt financial system is likely to fall due to the insolvency of a couple of Cypriot banks.
But what is happening in Cyprus will not be the reason for a collapse but just the trigger for what has always been inevitable.
March 16, 2013, at 5:43 pmby Eric King in the category King World News
Courtesy of KingWorldNews.com
Today legendary trader Jim Sinclair told King World News we have just witnessed one of the most important events in history and it will have a major impact on the gold market. Below Sinclair, who’s father was business partners with legendary trader Jesse Livermore, had to say in this extraordinary and exclusive KWN interview:
“The wire reports on the Cyprus situation are working overtime to try to make the case that 80% of the deposits belong to the people of Cyprus, and only 20% of the deposits belong to the Russians. That’s absolutely false. After 1985, when the ‘Robber Barrons’ of Russia took over the general economics of Russia, that was the transformation from the KGB to private business. The primary place for exported Russian funds was Cyprus.
Now, there is one leader in the world that would be very dangerous to challenge, and that is Putin of Russia….
“What’s just happened is the IMF has backed up, lauded, supported, and publicized, as if it were a victory, the taking of 10% of what really turns out to be 80% of Russian ‘black money.’ Russian ‘black money’ is KGB money, now in business. The leader of Russia (Putin) was a former KGB official. Who’s money do you think they have taken? This is the biggest mistake the IMF could possibly have ever made.”
Eric King: “Jim, it’s unimaginable to me, but, incredibly, just ten days ago you warned that you don’t want to anger Russian leader Putin because he and Russia will punish the West in the gold market. Can you talk about how this is going to impact the gold market beginning on Monday?”
London's financial sector was last night bracing itself for another official investigation into alleged price-fixing following reports that a US regulator is considering launching an inquiry into the City's gold and silver markets.
The Commodity Futures Trading Commission is discussing whether the daily setting of gold and silver prices in London is open to manipulation, according to the Wall Street Journal, which stated that the CFTC is examining whether prices are derived sufficiently transparently.
The system of setting gold prices in London is unusual and involves a twice-daily teleconference involving five banks – Barclays, Deutsche Bank, HSBC, Bank of Nova Scotia and Société Générale – while silver is set by the latter three. The price fixings are then used to determine prices worldwide.
(Reuters) – The head of the Bank of England warned on Monday that too many countries were trying to weaken their currencies to offset the impact of the slow global economy and the trend could grow next year.
“You can see, month by month, the addition to the number of countries who feel that active exchange rate management, always to push their exchange rate down, is growing,” Mervyn King said in a speech.
“My concern is that in 2013, what we will see is the growth of actively managed exchange rates as an alternative to the use of domestic monetary policy,” he told the Economic Club of New York. King did not identify any countries.
He also criticized what he said was backtracking by the Group of 20 leading economies to fix the imbalance between countries with trade surpluses and those with deficits, despite vows by the group to make rebalancing the world economy a priority after the financial crisis erupted.
Central banks, including the Bank of England, have kept interest rates very low and used unprecedented policies such as massive asset purchases to try to stir growth.
Pumping so much money into developed economies, however, can put upward pressure on currencies of emerging economies, hurting those countries’ exports.
Brazil and China, as well as more economically developed Japan and Switzerland, have taken steps to push down the value of their respective currencies in recent years.
The BoE has so far bought 375 billion pounds ($603 billion) mostly in government bonds to help lift the British economy out of the doldrums.
Countries with trade surpluses are often reluctant to boost domestic spending that would allow deficit countries to rebalance by exporting more.
“This is a problem which has to be tackled,” King said, citing a divide between some surplus and deficit countries within the euro zone.
The warnings by King, who is set to step down in July, echo those made in October by U.S. Federal Reserve Chairman Ben Bernanke, who delivered a blunt call for certain emerging economies to allow their currencies to rise.
The back and forth of monetary stimulus and foreign-exchange intervention has complicated any coordinated efforts to recover from the Great Recession.
“It is fair to say a recovery of a durable kind is proving elusive,” King said in his speech.
Fielding questions later, he said he had “great confidence” that the United States will avoid the worst-case effects of the so-called fiscal cliff of automatic tax hikes and spending cuts due to come into force in January.
It “will find a way, if not avoiding going over the cliff, then hanging on by the finger tips” on the other side, he said.
Some political analysts predict the Republicans and Democrats will fail to agree on raising income taxes and cutting spending before January 1 but might do so soon afterwards.
According to Korea's central bank, the Bank of Korea (BOK), country's gold reserves value hit $4.79 billion out of the total value of $320 billion.
Asia's fourth largest economy, South Korea added 20 tons of gold last month, the fifth purchase since July 2011, to raise country's gold holdings to 104.4 tons.
When markets are manipulated (especially markets for physical goods), imbalances are created. The longer the manipulation continues and/or the more extreme the degree of manipulation, the larger the resultant imbalance.
The Corporate Media continues to attempt to describe the large gold-deficit which exists in India as a “current account deficit” – i.e. a currency deficit. Gold is a currency. It is and always has been regarded as such by our governments and the international cabal of private banks (the “central banks”) who are allowed to control/operate our monetary systems.
As a matter of the most elementary logic, it is impossible for one to create a “currency deficit” when you are simply swapping one currency for another. If we were to trade McIntosh apples for Delicious apples, we could not end up with “an apple shortage.” So all these media reports of a “current account deficit” for India are a clumsy sham. India has a large gold-deficit. Period.
Why does India have a large gold-deficit? Why does this worry the Financial Oligarchs to such a great degree that they not only continue to obsess about it in their own, media propaganda-machine; but they also feel compelled to lie about the situation? Most importantly, why do these same Oligarchs believe they can fix/solve this gold deficit through selling “paper gold”?
Read on the recent commentary by Jeff Nielson
A recent Financial Times article has highlighted the fact that a new 'Scramble for Africa' is in motion, as investors searching for growth amongst otherwise moribund 'developed' markets recognise Africa as the next great investment story. FTSE managing director, Jonathan Cooper, has commented that 'Estimates for growth across Africa are very handsome compared to richer countries'.
These views are backed up by statistics as well. In the last month of 2012, the flow of funds into dedicated Africa funds reached $872m and this has prompted index providers including FTSE and MSCI to create new indices. At Alquity, we believe that the fact that FTSE has now launched a pan Africa ex South Africa index, supports our view that there is value to be gained across the region, and relying on one country e.g South Africa, or a specific sector for that growth will mean investors may lose some opportunities to be found in different industries and parts of the region.
This is why we invest across the region, from the Cape to Cairo and have a dedicated team of fund managers who search for great companies to invest in, wherever their location or sector.
The trillion-dollar coin actually represents one of the most important principles of popular prosperity ever conceived: the creation of money by sovereign governments, debt-free.
Last week on The Daily Show, Jon Stewart characterized the proposal that the White House circumvent the debt ceiling by minting a trillion-dollar coin as an attempt to "just make shit up."
Economist and New York Times columnist Paul Krugman responded with a critical blog post accusing Stuart of a "lack of professionalism" for not taking the trillion-dollar coin seriously. However, Krugman himself had called the idea "silly." He thought it was just less silly -- and less dangerous -- than playing with the debt ceiling, which was itself an unconstitutional shackle on the Treasury's ability to pay debts already incurred by Congress.
Read on a commentary by Ellen Brown ...
Attempting to decipher the global picture regarding food prices, food inventories, and food production is not akin to navigating a labyrinth. A deluge of misleading propaganda and short-term ‘noise’ from the mainstream media means anyone attempting to decipher these parameters is likely to encounter a plethora of “dead-ends” and “wrong turns.”
Those following agricultural markets and agricultural prices have seen two, general trends emerging over the past decade: rapidly rising (nominal) prices and steadily falling inventories. This flies directly in the face of the most basic of all supply/demand fundamentals.
Read on the recent article by Jeff Nielson ...
Rather than attempt to predict the unpredictable – that is, specific events and price levels – let’s look instead for key dynamics that will play out over the next two to three years. Though the specific timelines of crises are inherently unpredictable, it is still useful to understand the eventual consequences of influential trends.
In other words: policies that appear to have been successful for the past four years may continue to appear successful for a year or two longer. But that very success comes at a steep, and as yet unpaid, price in suppressed systemic risk, cost, and consequence.
Trend #1: Central Planning intervention in stock and bond markets will continue, despite diminishing returns on Central State/Bank intervention
Intervention in the stock market may successfully keep the markets in an uptrend or a narrow trading range for 2013, but this would only increase the odds of a dislocation/crash in 2014 or 2015. Temporary success does not imply permanent success or even continued success of intervention. Why is this so?
Read on ...
You may want to hold off on cracking open that nice bottle of fine wine you've been saving for a special occasion. According to the Wine Investment Fund, the prices of fine wines could rise in 2013.
The Wine Investment Fund is eyeing the Liv-ex Fine Wine 100 – the world's main index for tracking fine wines – as a marker for the uptick in value. The Liv-ex tracks the 100 most popular fine wines, where merchants, brokers, and retailers can buy and sell.
The index settled down 9.6% at the end of 2012. But it had started to gain at the end of the year, showing signs that investors were turning to physical assets.
And that trend will likely continue through 2013 as physical assets gain even more popularity among investors.
Continue reading from Wealth Wire ...
Taken from GATA:
Becoming today the first British monarch to attend a Cabinet meeting since George III in 1781, Queen Elizabeth remarked on her visit last week to the Bank of England’s gold vault, which was greatly publicized in the United Kingdom.
In a receiving line at 10 Downing St., addressing the chancellor of the exchequer, the UK treasury secretary, George Osborne, the queen said, “I saw all the gold bars. Regrettably not all of them belong to us.”
Osborne replied that Britain still has some gold left, and apparently that was that — nothing about swaps and leases and the purposes thereof, particularly secret currency market intervention to sustain the Anglo-American financial establishment that is bankrupting much of the Western world.
If any of our British friends happen to run into the queen — and she does get around, being the most conscientious and selfless public servant in Britain — they might let her know that GATA would be delighted to make a presentation to her about what her chancellor apparently won’t tell her about her kingdom’s gold and its former gold.
Of course under one of the basic U.K. laws — is it the Act of Irrelevance? — the sovereign and her immediate family are forbidden to do much more than serve as fodder for celebrity programs on television and the celebrity columns in the newspapers. But since there are no serious financial journalists anymore, one has to start somewhere, and if the queen could just keep talking about gold, maybe the issue eventually could break into “Inside Edition,” “Entertainment Tonight,” and People magazine if not “60 Minutes,” “Panorama,” and The Wall Street Journal.
CHRIS POWELL, Secretary/TreasurerGold Anti-Trust Action Committee Inc.