1. Marc Faber: Disaster Alert

Marc Faber recently forecast a 50% decline in the US Stock Market. In this interview he elaborates and discusses FED, Negative İnterest Rates, Asian Nations, War On Cash, and the China Credit Bubble.

….read more HERE

2. Sovereign Debt Crisis – Banking Crisis – Derivative Clearinghouse Risk

    by Martin Armstrong

The central banks are trapped. They can no longer even hope to sell the bonds they have bought in a vain attempt to stimulate the economy.

…..continue reading HERE

3. Sequential TD9’s in Gold Miners

   by Ross Clark 

Writing an investment news letter is the ultimate “what have you done for me lately” game. Hard Rock Advisory’s Eric Coffin has had a dream year – 11 new recommendations – 340% average return. It seems only natural we’d ask what’s now.

….more HERE

Anyone who’s conversed with Apple’s Siri or Microsoft’s Cortana has made friends with a chatbot. A chatbot is a form of artificial intelligence that responds in a conversational manner, in print or verbally, to questions or requests from people: “Where’s the nearest McDonald’s?” or “Call Doug.”…

But, for chatbot developers, that’s baby talk. Chatbots have the power to personalize a business, give customers a more intimate experience and build consumer loyalty by giving a phone menu or website store a pleasant, responsive, human personality.

….read whole article HERE

A man has free choice to the extent that he is rational.

St. Thomas Aquinas

It is possible if one takes the right actions to make money and remain relatively unscathed in such an environment. One cannot say the same for the masses because they are walking with their eyes wide shut. In other words, they do not see what’s happening; their heads are stuck in the sand. They are oblivious to what’s going around, and if you try to warn them, they are apt to strangle you. This situation is strikingly similar to “Plato’s allegory of the cave.”

Psychological Manipulation  

 It is being used ubiquitously to control the masses and their perceptions.  The goal is to alter the perception; modify the perception and you changereality. You need to start positioning yourself to be in the land of neutrality when it comes to taking a stance. Neutral does not mean running and hiding in some zone. You should be able to look at the argument from both sides of the coin and agree with either side if necessary without becoming emotionally attached to the outcome. When you commit yourself to a certain position you hamper your ability to see the full picture; you have willingly reduced your range of observation by 50% or more.   Take this principle to the stock markets; you should not forcefully try to find a camp you belong to. In other words being a perma-bull or a perma-bear is utterly silly for now you only have access to 50% of the data; you will block any bullish scenario if you are perma-bear and vice versa. Data is there to be used not to be blocked, and that is where the top players are getting the masses; they are forcing them to make permanent choices or take permanent positions that are detrimental to their welfare. The players doing the pushing though are not plagued with these handicaps; they easily navigate from one camp to another, never forming any attachment with any of these camps. 

Economic Deception via Hot Money 

Everything going forward is going to be driven by hot money. To control a beast, you need to make that beast feel helpless, once the creature feels helpless no matter how ferocious it was before, it will refuse to resist. Experiments have shown that once rats are made to feel helpless and then put into a pool of water, they give up trying to survive rather rapidly. Instead of swimming for hours and hours trying to live, they usually give up almost immediately and drown.  However, these same rats that were made to feel helpless can revert to their former selves, if they are given some encouragement, before being put into the pool.  Just the bare minimum of exposure in such an environment is enough to make these guys fight for their lives.  Central bankers are utilising the same strategy, only this time, they are working with human test subjects and not mice; the goal here is to push the majority into a state of helplessness, and if you look around we are almost there. Nobody seems to want to resist; compare today’s resistance to that of the 50’s, 60.s, 70’s, 80’s, etc. and it appears pathetic in nature.  The purpose of hammering this point in so deeply is to make you understand that hot money is not going away because the masses are not making an issue of it; they are quiet so the raid will continue. It is going to get even hotter; it is going to get so hot that we will not bother getting into the details now; you will not believe us at this point. As we get closer to these levels, we will address them in more detail. Moreover, you are right; this experiment will notend well, but even more important is that no one knows when it will end.  It will only end when the masses have had enough, but what if you can control or alter their perception of what they deem to be “enough”; then the wordtakes on a whole new meaning. 

Conclusion

Since we went off the Gold standard, the Fed’s primary function has not been to control interests rates for the benefit of the masses. Their goal has been to use interest as a weapon to trigger boom and bust cycles.  The masses still don’t understand what is going on and with the passage of each day, fewer and fewer individuals know the dangers of Fiat.  It took roughly 100 years for the debt to go from 0 to 1 trillion dollars, now we add that amount to the debt each year.  It is insane, but the masses are silent, and who knows when they will finally decide enough is enough. So far, everyone that has attempted to place a date and time on the masses snapping out of their slumber hasbeen proven wrong.  One can assume that this experiment will continue for quite awhile and with no resistance, the Feds will continue to flood this market with money.  In such an environment, one should view sharpcorrections as buying opportunities, and it would be prudent to allocate a portion of one’s fund to precious metals. 

A person usually has two reasons for doing something: a good reason and the real reason.

Thomas Carlyle

Perspective

One could not deliberately contrive the conditions behind some of the above headlines. The headline writer at the FT must have enjoyed the irony about the worst productivity number and market highs. We did and we don’t think it is an example of the stock market climbing the “Wall of Worry”.

It is another example of bureaucratic madness such as buying bonds in the late 1940s in a futile attempt to keep long-dated Treasuries from rising above 3 percent. Then stepping up the effort in the belligerent attempt in the 1960s to keep them from rising above 6 percent. At the high yield of 15 percent the price of their bond holdings was down hugely.

And then there was the central banks compulsion to sell gold right down to 253 dollars. That is per ounce.

Now senior central banks are buying corporate bonds at unprecedented low yields and stocks at extreme valuations.

Why?

Because they think it will stimulate the economy.

Beyond this, there is the possibility that, underneath it all, they are down to just trying to prove that intervention works. Well, it must work because that’s what the theory says. In 1989, most folks in Eastern Europe finally understood that command central planning was not working.

In the same year, best-selling US economics textbooks were celebrating the wonders of central planning in Communist countries. Well, they had full-on command central planning and it was assumed by American professors, such as Blinder, to work. The 1936 German version of Keynes’ masterpiece included a preface that boasted that his theories would work best in an authoritarian political system:

“The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire. This is one of the reasons that justifies the fact that I call my theory a general theory.”

Ironically, ambitious US statists have used Keynes to make America more authoritarian. Whew!

Stock Markets

Senior stock indexes are flying at 70,000 feet in an airplane designed for 30,000. There is not enough oxygen to sustain intelligent life.

We have been mentioning, the “old” Ted-Spread, which has been trying to break above the level reached with the last financial crisis in Europe. Another way of monitoring money market risk is through Libor, which is moving in a concerning direction.

A sharp increase in Libor has preceded important market peaks. A chart follows.

In 2007, the increase began on August 1st and jumped 40 bps by September 4th. The high for the S&P was on October 11.

On 2008, the increase started on March 17th and by April 21st it was up by 38 bps.

The “jump” began from a low of .315 last October and reached .60 in December, which signaled the severe hit into January-February.

A move of only 28 bps did some damage.

The most recent “jump” began in late June at .62 and now it is at .83, up 21 beeps.

Few companies offer something so popular that their name becomes a verb. But that is one of the many achievements of Uber, a company founded in 2009 which is now the world’s most valuable startup, worth around $70 billion.

Uber is not alone in this ambition. Companies big and small have recognised the transformative potential of electric, self-driving cars, summoned on demand.

But firms that pioneer new technological trends do not always manage to stay on top. Think of Nokia and BlackBerry in smartphones, Kodak in digital cameras or MySpace in social networking.

….read the entire article HERE

…related from Michael:

As The Little Girl From Poltergeist Said, “They’re Here.”