The three main countries where capital has been hiding not for taxes, but for sheer safety are Switzerland, Singapore, and Dubai. Yes, the Arab Spring has turned up political unrest and uncertainty in the Middle East. Turmoil has hit Egypt, Libya, and Syria just to mention a few. Throughout the region people are looking for a safe spot to just park their money. This has fueled a building boom in Dubai that is not likely to peak until 2015.75 as is the case in Switzerland and Singapore all where real estate prices have been booming.

Collector’s Market & Gov’t Aggressiveness

QUESTION: In regards to your recent collector’s market comments, are you saying that the collector’s  markets that have international backing will perform or outperform other sectors on a return on capital basis? Whereas the domestic collector’s market , like Morgan dollars, will under-perform,  if not be crushed by the contracting disposable income (deflation) in the future, as seen in the Italian collector’s market. Also, is it only going to be the high end collectibles that gain value while the common items languish?

ANSWER: The international markets may out-perform domestic markets. But that is by no means a solid forecast. We are trying to put together a pricing model on ancients. We are awaiting catalogs for the last 10 years of price data from auctions.

The Italian market has been devastated – this is true. Not that the coins have fallen in price, but that government is hunting money so aggressively capital has been forced into hibernation. The value of the coins will survive, but the market has collapsed for people cannot conduct business. The Italian government has gone as far as to place tax agents in front of Jewelry stores to monitor who is going in.

Tax audits in Italy are an extortion. It may take even 6 months and during this period they harass you so much, there is no hope of getting out without them demanding something be paid even if nothing is owed. You often cannot even work during an Italian tax audit and business is seriously harmed by the tax authorities. It has degenerated into just nasty socialists working for the government out to cause as much harm as possible to get even that makes them feel better. This is driving unemployment higher and it will be

We are in such a state of complete economic meltdown that is becoming really scary between currency controls preventing personal wires and shrinking global trade. This is why we are making every possible effort to be that lone voice in the wilderness and can use all the help we can get. The collapse of Rome was swift and the majority took place just in 8.6 years for the complete decline.

The international markets are perhaps safer than domestic for the prices will be supported on a broader scale. The Italian market has been destroyed as is the case in France. When tangible assets must go into hiding because the government is out to grab whatever it can, now we are into the mode of Maximinus I who simply declared that ALL wealth in Rome belonged to the state.

We need to spread the word as much as possible that it is government who is NOT the nation and is always opposed to the freedom of the people. Just read Tomas Paine and his Common Sense.

Also from Martin:

NSA Needs to be Closed ENTIRELY NOW!! THEY ARE DESTROYING THE WORLD ECONOMY ELIMINATING PRIVACY!

The Baltic Dry Index is an indicator of demand in the global economy. If the Baltic Dry Index is declining, it means the global demand for goods is softening. When you look at the chart, you’ll see the devastated Baltic Dry Index—the index is saying demand never came back after the credit crisis of 2008.

Central banks need to ‘keep up’ with markets says Mark Carney … The Bank of England, Mark Carney said on Thursday night, is open for business. The governor’s message to the City was clear. The days when the Old Lady preached the perils of “moral hazard” without due regard to financial pressures are well and truly over. – Financial Times

Dominant Social Theme: Mark Carney … dynamic, competitive, empathetic – a new breed of central banker.

Free-Market Analysis: This article is truly scary. Like a bullet across the bow, or the crack of a whip, it announces with certainty that the world’s top bankers intend to blanket the world with faux currency.

….read the article HERE

It’s all decided. Play now. Pay later. 

Let’s see, stocks moved up again yesterday. The Dow rose 111 points. Gold fell $6 an ounce. As usual, Bloomberg had a reporter in the playground:

Well… there’s the good news. Where’s the bad news that causes this good news? Bloomberg continues:

Hmmm… yes… bad. Janet Yellen does not like to hear about falling prices. She thinks her job is to make them go up. She wants more inflation, not less. So, there will be no tapering anytime soon. You can count on it.

But everyone knows that the Fed’s $85 billion-a-month bond buying spree can’t last forever. And everyone knows that there will be hell to pay when it stops. 

Why? 

Because government finances, stock market prices, the bond market and the housing market depend on the Fed’s EZ money. And nobody wants to find out what happens when the Fed stops. Apocalypse Now? No, the feds prefer an Apocalypse Later situation…

The press referred to the recent threat of a government shutdown as Apocalypse Now. But it didn’t happen. The feds decided to go for Apocalypse Later. They kicked the can down the road to January. 

There will be no fiscal apocalypse either. Not as long as Congress still has a foot to boot the can with. The apocalypse will be delayed… postponed… and held off for as long as possible.

In the meantime, corporate America is enjoying higher corporate earnings (although top-line revenues remain challenged). 

Where do these higher earnings come from? Believe it or not, much of it comes courtesy of Fed policy. As Bonner & Partners editor-in-chief Chris Hunter has reported, since the March 2009 low, 60% of the expansion of corporate America’s operating earnings has been due to a reduction in interest expenses on debt.

And US corporations haven’t been shy about taking on new debt either. As Chris reported yesterday, corporate America (excluding the financial sector) has taken on $1 trillion in new debt over the last three years. This has brought the total debt load to $14 trillion – about twice the level it was at when Alan Greenspan issued his infamous “irrational exuberance” warning in 1996. 

The cost of credit is so low that even the most reckless and least creditworthy corporations can still get loans… and stay in business. Junk bond defaults are running at only 1.6% – one-third the average level of the last 30 years. 

Meanwhile, the first 282 companies reporting earnings this season showed earnings up 5.7% on revenue increases of only 3.5%. How can you increase profits 60% faster than sales? 

Easy: You borrow cheap money and lower your debt-service costs. Everyone knows that can’t last. Corporations can’t continue to borrow so much money at such low rates. But everyone is perfectly happy to postpone that apocalypse too. 

Stock market investors are no dopes either. They know this Fed-driven bull market must come to an end sometime. By many different measures – P/Es… swollen margin accounts… enterprise-value-to-revenue ratios… investor sentiment – the stock market is already in the danger zone.

What will happen?

Either the Fed will begin to taper – probably causing a crash. Or investors will get tired of investing real money in a phony trend.

Either way, when the apocalypse comes… it will be later.

Regards,

Bill