We know that the Fed and other Central Banks are printing money like there’s no tomorrow to stop the fragile system from imploding, but the Little Guy is not seeing any benefit from it, instead the banks and elites are making even more money out of that which is spirited into existence and then handed to them on a platter by driving asset prices higher and higher. The Little Guy instead gets stuck with the bill as he becomes a victim of the inflation that results.

There is a widespread assumption now that “nothing can go wrong”, because the Fed and other CB’s will simply print more and more money as required to keep the party going so that everything accelerates upward in a parabolic arc until the eventual and inevitable hyperinflationary burnout. This is true, that is where we are headed, but what is dangerous about the current situation is that this has become universally accepted and believed. This means that there could be some very nasty speedbumps along the way, particularly if the lurking forces of deflation temporarily gain the upper hand, as is happening right now in Europe, where the elites are using the state of crisis to consolidate power.

The cleansing forces of deflation should have been allowed to do their necessary work of purging debt from the system many years ago, but politicians didn’t want that – they wanted to keep the party going without a pause, and the result is now that these deflationary forces have built up to explosive proportions, and the only way to keep them at bay is by means of the most extreme money printing in the history of the world, which the crazy world of unbacked fiat money makes possible. They will succeed in keeping deflation at bay, but at a terrible price, with the resulting hyperinflationary depression being even worse than the deflationary implosion that they have worked so assiduously to avoid. Mike Maloney made the startling point in one of his Hidden Secrets of Money videos that more money is being created each year in the US, 1 trillion dollars, than in the entire history of the country up to the year 2007. It doesn’t take much intelligence to realize that the eventual consequences of this will be catastrophic.

So where are we now? With market players positively bursting with confidence, we are believed to be right at the point of hitting one of those nasty speed bumps, with a high probability that we will see a potentially vicious market plunge that will deliver a stunning right hook to a lot of traders that leaves them reeling, especially all the Johnny come latelies who have been vacuuming up all the recent bullish propaganda being pumped out by the mainstream media.

Let’s look at some cold hard facts now, using charts and sentiment indicators and studies from www.sentimentrader.com

The market is overbought, at a target, and looking vulnerable to a setback here, as made plain by the following charts.

On its 20-year chart we can see that the Dow Jones Industrials have arrived at a target at the top of a huge megaphone or bullhorn pattern, after a long bullmarket from the 2009 lows, and recent action has become choppy suggesting that it is topping out.

….read and view more HERE

Dr. Copper, the metal with a Ph.D. in Economics (used to describe copper as an economic leading indicator) appears to be telling us something different compared to the consensus on economic growth. Is copper wrong this time? Or is the consensus wrong?

I would probably lean towards copper as being correct here. The activity in the metal tends to be less emotional that what we see in equities and bonds. And, the copper market certainly is not plagued by political rhetoric which tends to influence what we hear from policymakers and politicians.

Perhaps the copper market is not willing to give the benefit of the doubt to China (which tends to get a lot of the benefit of the doubt from Bubblevision anchors and guests). Perhaps it is not willing to give the benefit of the doubt to fiscal and monetary authorities who have a reputation for dismal forecasting abilities, rightfully earned over the past 15 years.

Interestingly, copper, as a leading indicator, is a little at odds with the bond market. If the U.S. and global economics are more sluggish than expected, then bond yields might have some difficulty maintaining interim highs over the short-term (this would also decrease the chance of a significant Tapering of Federal Reserve Quantitative Easing).

So, if copper is right, and it does make a good case, it could be good for bonds but bad for equities where the rationale for recent highs is getting more tortured by the day. That said, this would only have ramifications for the short-term. Medium- to long-term, there are policy risks (botched exit from QE, another government shutdown, and another debt ceiling debate) that could change things yet again.

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. 

Richardson GMP Limited, Member Canadian Investor Protection Fund.

Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.

“Today there are “bio printers” that print a layer of a patient’s own cells onto a 3-D-printed “scaffold” of inert material. Once the cells are in place, they can grow into an organ, with bladders and kidneys already demonstrated in the lab. Print with stem cells, and the tissue will form its own blood vessels and internal structure.”

The Transformative Tech Of 2015-2025 & Your Chance To Invest Today.

• The Alchemist’s Dream — “indistinguishable from magic”
• Desktop factories… desktop hospitals… and more!

“Tea. Earl Grey. Hot.”

When Capital Jean-Luc Picard wants a steaming beverage in his ready room aboard the Starship Enterprise, he just utters those words. The ship’s “replicator” then assembles the necessary atoms — including those for the cup — and produces it, ready for the drinking. Picard thinks nothing of it — it’s hardly more remarkable to him than a microwave oven is to us today. Just as we now use radio waves to excite atoms and generate heat in our own kitchens (which would have been mind-blowing in the 1950s), his replicator uses some fancy energy technology that is never quite specified in Star Trek: The Next Generation to get atoms to self-assemble into food and drink.

That’s science fiction, but it’s actually not impossible. When you see an industrial 3-D printer working today, with a little poetic license you can glimpse the beginnings of something similar. A bath of liquid resin lies inert, a primordial soup. A laser begins tracing patterns in it, like lightning. Shapes form and emerge from the nutrient bath, conjured as if by magic from nothing.

Okay, poetic license revoked — we’re still a long way from molecular self-assembly, or at least in any useful way. A 3-D printer can only work with one material at a time, and if you want to combine materials you need to have multiple print heads or switch from one to another, like the different color cartridges in your desktop inkjet printer. We can only work at a resolution of about 50 micrometers (the thickness of a fine hair), while nature works at a thousand times finer detail, of a few tens of nanometers. And there’s nothing self-assembling about the way a 3-D printer works: it does all the assembling itself, with the brute force of a laser solidifying a powder or liquid resin, or melting plastic and spreading it down in a fine line.

But you get the point. We can imagine something, draw it on a computer, and a machine can make it real. We can push a button and an object will appear (eventually). As Arthur C. Clarke put it, “any sufficiently advanced technology is indistinguishable from magic.” This is getting close.

You may think of 3-D printing as bleeding-edge technology today, the stuff of high-end design workshops and geeks. But you may have encountered a 3-D printer already, in ways so prosaic you didn’t even notice.

Take custom dental fittings, such as those that change the alignment of the teeth over months with a series of slightly different mouth guards, each of which shifts the teeth imperceptibly into a new position, In that case, a dental technician scans the current position of your teeth, then software mathematically models all the intermediate positions to the desired endpoint. Finally, those positions are 3-D printed plastic as a series of mouthguards that you wear, each for two or three weeks, until your teeth are in the new position.

Likewise for the prototypes of practically every gadget you’ve ever bought, and the architectural models for the newer buildings around you. Custom prosthetics are 3-D printed, if you’re lucky enough to have a dentist who can replace a crown in a single sitting, that’s probably 3-D printed (they sprayed with enamel) in the office. Doctors have printed and replaced an entire human jaw from titanium.

Today, you can buy a custom 3-D printed action figure of your World of Warcraft character or your Xbox Live avatar. And if you go to Tokyo, you can have your head scanned and you can buy a photorealistic action figure of yourself (try not to get too creeped out).

Commercial 3-D printing only works with a few dozen types of materials, mostly metals and plastics of various sorts, but more are in the works. Researchers are experimenting with more-exotic materials, from wood pulp to carbon nanotubes, which give a sense of the scope of this technology. Some 3-D printers can print electrical circuits, making complex electronics from scratch. Yet others print icing onto cupcakes and extrude other liquid foods, including melted chocolate.

At the huge scale, there are already 3-D printers that can make a multistory building by “printing” concrete. Right now that requires a 3-D printer the size of the building, but it may someday be built into the cement truck itself with a concrete that uses positional awareness to decide where to put down concrete and how much, directly reading and following the architect’s CAD plans.

Meanwhile, researchers are working just as hard at moving in the other direction: 3-D printing at the molecular scale. Today there are “bio printers” that print a layer of a patient’s own cells onto a 3-D-printed “scaffold” of inert material. Once the cells are in place, they can grow into an organ, with bladders and kidneys already demonstrated in the lab. Print with stem cells, and the tissue will form its own blood vessels and internal structure.

Today’s vision for 3-D printing is grand in ambition. Carl Bass, the CEO of Autodesk, one of the leading companies making 3-D authoring CAD software, sees the rise of computer-controlled fabrication as a transformative change on the order of the original mass production. Not only can it change the way traditional consumer goods are made, but 3-D printing can also work on scales as small as biology and as large as houses and bridges.

In an essay he published in the Washington Post, Bass explained what’s so different about this way of making things:

The ability to produce a small number high quality items and sell them at reasonable prices is causing an enormous economic disruption. In it, you can see the future of American manufacturing.

In a computerized manufacturing process like 3-D printing, complexity and quality come at no cost… A traditional paper printer can print a circle or a copy of the Mona Lisa with equal ease. The same rule applies to a 3-D printer.

From a design perspective, this is revolutionary. It is no longer necessary for the designer to care or know about the manufacturing process, because the computer-controlled machines figure that stuff out for themselves. The same design can be fabricated in metal, plastic, cardboard, or cake icing (it might not be very useful in all those materials, but it would exist.). “We can separate the design of a product from its manufacture for the first time in history, because all of the information necessary to print that object is built into the design.” Bass explained.

Even better, as 3-D printers proliferate and become used for small-scale bespoke or custom-made manufacturing, they can provide a more sustainable way of making things. There are little or no transportation costs, because the product is made locally. There is little or no waste, because you use no more raw material than you need. And because the product is custom-made just for you, you’re more likely to value it and keep it longer. Personalized products are less disposable; you simply care about them more.

Rich Karlgaard, the publisher of Forbes magazine, thinks that 3-D printing “could be the transformative technology of the 2015-2025 period.” He writes:

This has the potential to remake the economics of manufacturing from a large scale industry back to an artisan model of small design shops with access to 3-D printers. In other words, making stuff, real stuff, could move from being a capital intensive industry into something that looks more like art and software. This should favor the American skill set of creativity.

But also remember what 3-D printing and any other digital production technique cannot do. They offer no economies of scale. it is no cheaper on a per-unit basis to make a thousand than one. Instead, they offer exactly the opposite advantage: there is no penalty for changing each individual unit or making just a few of a kind.

It is the reverse of mass production, which favors repetition and standardization. Instead, 3-D printing favors individualization and customization. The big win of the digital manufacturing age is that we can have our choice between the two without having to fall back on expensive handcrafting: both mass and custom are now viable automated manufacturing methods.

Regards,

Chris Anderson
for Tomorrow in Review

(This essay was excerpted from Chris Anderson’s book, Makers: The New Industrial Revolution.)

Ed. Note: We believe that 3-D printing not only has a chance to materially improve peoples’ day-to-day lives… but also make gobs of cash for investors who have the foresight to put their money into certain industry pioneers. If you’re curious, our in-house expert has estimated you stand to make upwards of $50,000 from this technology.

He’s listed his analysis for you, right here.

Thank you for reading Tomorrow in Review. We greatly value your questions and comments. Click here to send us feedback.

It’s starting to feel like we are part of a giant poker game against the US government, whose hand is the true condition of the American economy. The government has become so good at bluffing that most people feel compelled to watch how the biggest players in the game react to determine their own investment strategy.

Unfortunately, this past month revealed that even pros like Goldman Sachs have no idea what sort of hand Washington is really hiding.

Goldman Bets Against Gold

A week into the government shutdown, Jeffrey Currie, head of commodities research at Goldman Sachs, declared that gold would be a “slam dunk sell” if Washington resolved the budget debate and raised the debt ceiling. The call was based on an underlying narrative that the US economy is experiencing a slow, but inevitable, recovery.

Taking this recovery as a foregone conclusion, conventional Wall Street analysts saw two clear choices for Washington. On the one hand, Congress could reach an agreement, raise the debt ceiling, and allow the recovery to continue. This would allegedly have been the final nail in the coffin of the safe-haven appeal of gold.

On the other hand, if no agreement were reached, the government would have been forced to default on its debt. This would have erased any signs of recovery and sent the economy spiraling back into a terrible recession – while boosting the gold price.

Goldman reasoned that Washington would never allow the latter to unfold and suggested investors prepare to short or sell gold.

While Washington did kick the debt can down the road as predicted, gold rallied 3% on the news – the complete opposite of expectations. That is, expectations outside of Euro Pacific.

Misreading the Signals

After seeing an investment theory crushed by reality, a rational investor would take a moment to reexamine his premises. In Goldman’s case, this would mean second-guessing the conventional belief in an imminent or ongoing US economic recovery.

Yet, the day after Washington reached an agreement, Currie reaffirmed to Goldman’s clients that his US economic outlook for 2014 is positive and that he believes gold faces “significant downside risks.”

Currie must not have wanted to muddy his message by acknowledging that his original forecast was flat wrong. He did, however, hedge his statements by acknowledging that the Federal Reserve would likely hold off on tapering its stimulus until next year.

Major Wall Street investment houses have come to rely on the investing public’s short-term memory to skate by on these bad calls. When the next forecast is issued, clients and subscribers quickly forget that Goldman was blindsided by the Fed’s taper fakeout in September. [Read more about the taper fakeout in my previous Gold Letter.] That Currie accepted the government’s new taper timeline within a month of being burned by the last shows how little stomach they have for sticking to the fundamentals – and how little accountability they face for getting it wrong.

Instead, major players like Goldman Sachs are betting their books on the government’s fearless bluff. In the eyes of Wall Street, the economic indicators support this conclusion – inflation is subdued, GDP is growing!

The Bluff Exposed

I’ve been an outspoken critic of this official data for years. Over the course of my career, I have witnessed the government dramatically change the way it calculates inflation, GDP, and other statistics. While Washington’s latest figures show a year-over-year CPI increase of just 1.2%, the private service ShadowStats, which recalculates the data along the lines that the government used to, finds that real consumer inflation is closer to 9%.

My guess is the true number lies somewhere in between, but that it would be much higher were the US not able to export much of its inflation abroad. The process works as follows: the Fed prints money (inflation) and uses it to buy Treasuries and mortgages. The government and banks, in turn, pass much of that money to consumers, who spend it on imported goods. The money then flows to foreign manufacturers of those products, who then sell it to their own central banks, who print their own currencies (inflation) to buy it. This money goes out to pay wages, rents, etc., which the recipients then spend on goods & services. Finally, the foreign central banks use the dollars they buy to purchase US Treasuries and mortgages, starting the cycle again.

It’s a complicated relationship, but the end result is that inflation created in the US ultimately bids up consumer prices abroad and Treasury prices at home. In other words, our trading partners have to pay much more for goods & services while Americans get to borrow limitless money for next to nothing. The products our trading partners “sell” us increase the supply of goods available to American consumers while simultaneously decreasing the supply available to everyone else. That is what I mean by “exporting inflation,” and the important thing to remember is that its result is to mask inflation at home and transfer wealth from emerging markets to the US.

The bluff gets worse. These understated CPI numbers distort real GDP, which would be lower if the true inflation rate were applied. The GDP calculations also include items like government expenditures, which are possible only because of money printing and not a result of any real economic production. Again, compare the official figure of 1-2% GDP growth in the second quarter of 2013 to ShadowStat’s figure of negative 2%.

If investors can’t bring themselves to question official data, there’s another way to see through the government’s bluff: look to foreign central banks, which are actively preparing for the day when the dollar is no longer the world’s reserve currency.

The Bank of Italy recently affirmed that its gold reserves are essential to its economic independence, while the World Gold Council reported that this past year, European central banks held onto more of their gold reserves than ever before. China, the largest holder of US debt and the biggest consumer of gold in the world, has started openly talking about ending the dollar’s reserve status. And while we don’t know the total gold reserves of the Chinese government, there are signs that they are stockpiling.

Even US Treasury officials admit that the US will never sell its gold reserves to deal with debt obligations. One spokesperson said, “Selling gold would undercut confidence in the US both here and abroad, and would be destabilizing to the world financial system.”

Time to Cash Out

So, who should investors believe about gold? Wall Street bankers who directly benefit from asset bubbles created by the Fed’s inflationary stimulus?

No, it’s time for individual investors to leave the table and redeem their chips. Just remember – the longer you wait to cash out of the US dollar, the less you’re going to get for your winnings.

###

Peter Schiff
C.E.O. of Euro Pacific Precious Metals
email: info@europacmetals.com
website: www.europacmetals.com

Peter Schiff is CEO of Euro Pacific Precious Metals, a gold and silver dealer selling reputable, well-known bullion coins and bars at competitive prices.

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