Category: Economics & Investing

The global derivatives bubble continues to inflate. According to the BIS there are now $564 Trillion in over the counter derivatives, which includes $441 Trillion in bets on small moves in the direction of interest rates. If and when interest rates spike (and they will!), the counterparty risk will be huge, and spectacular derivatives implosion could bring down the global credit market. Vince W. wrote to mention a new vehicle that is going to be made here in the U.S. at an old GM plant in Louisiana. They claim it will get 84 mpg, and have an 8 gallon gas …

E.S. suggested this at Zero Hedge: A Historic Inversion: Gold GOFO Rates Turn Negative For The First Time Since Lehman Marc Faber: China Puts Global Markets at Risk. (Dr. Doom discusses China’s credit bubble and recommends selling stocks and buying gold, citing $1,222 as a quite reasonable buy price.) Mike T. sent us this: Here’s how much your carrier makes selling your data to the Feds. No wonder they are so consistently complicit, when implementing tyranny is a profit center… Items from The Economatrix: Too Many Workers Hate Their Jobs, And That’s Hurting The Economy Sequestration Forces Cuts To Long-Term …

Argentina Applies Law That Jails Hoarders as Bread Surges I noticed that the Gold-Eagle site has been revamped, making it easier to use, especially for those of us who have slow Internet connections. Gold And Silver – It Is Silver Sending A Message Items from The Economatrix: Has The US Lost Control On Debt Market Growth?  Unbridled debt expansion at the nucleus of rising debt inequality in the United States. US total credit market debt now over 3 times larger than annual GDP Europe’s Creeping Bank Run: Bail-In Fears Grow For Big Depositors In Euro Periphery Expected Rotation out of …

The one ounce American Redoubt silver coins are now selling even more rapidly, and Mulligan Mint is doing their best to ship orders promptly. But the current low price of silver (under $19 per ounce) has caused a huge rush of orders with all mints and dealers, so longer delays are inevitable. But rest assured that your coin order will be shipped in the order that it was received. And so it begins: Digital currency seized in alleged drug law violation in Charleston. (Thanks to J.B.G. for the link.) G.G. sent: China, Switzerland sign free trade agreement. A desperate derivatives …

B.B. sent: The Federal Reserve is Paying Banks NOT to Lend 1.8 Trillion Dollars to the American People Tom Cloud: People Want Physical Gold and Silver in Their Hands Items from The Economatrix: $1.5 Quadrillion Storm:  EU Accuses 13 Banks of Derivatives Collusion Wall Street Banks Extract Enormous Fees from the Paychecks of Millions of American Workers Silver at Less Than $19/oz?  Are You Kidding?

Once again, the American Redoubt States rank well: Pro and Anti Constitution States. (A hat tip to CDV for the link.) Why The U.S. Economy Is Facing An Inflationary Time Bomb Has the US lost control on debt market growth? Items from The Economatrix: Consumer Sentiment In US Declines Less Than Forecast US Manufacturing Resumes Expansion US Economy Looks Weaker As GDP Data Is Revised First-Time Jobless Claims Rise

Life in free fall: Horrific Retail Sales In Greece Illinois ends fiscal year $6.1 billion in red The latest from Pepperdine University law professor Paul Caron’s blog: Hedge Fund Billionaire Who Gave $9.6 Million to Obama in 2012 Skirts Tax Law to Pay 15% Tax Rate A Rise In Interest Rates Could Disrupt The Derivatives Market Items from The Economatrix: Fed’s Stein Hints at September Taper Consumer Numbers Send Confusing Signal Business Activity In US Cools More Than Forecast

Brian C. sent: The Eight Least Expensive States to Live in the U.S. Argentina Legitimizes Black-Market Currency With New Dollar-Backed CDs. (Thanks to H.L. for the link.) Preppers Beware : Our “Hoarding” Can Be Deemed Illegal Items from The Economatrix: Consumer Spending, Jobs Data Point To Lukewarm Growth Meredith Whitney:  Did The Fed Just Torpedo The Muni Bond Market? New Data On Incomes, Spending, Jobless Claims; IPO Problems

James, I think that you are off base when it comes to buying guns and precious metals. Both could go down in price. The same for ammo. And it has a shelf life. So why not buy stock in companies that that do well in both good and bad times? People always buy booze, and cigarettes and Pampers and Cheerios. So why not invest in the companies that make those? What is so [deleted] special about “tangibles”? Thanks For Your Time, – G.D.C. JWR Replies: First, I must mention that ammunition has a shelf life of at least 60 years, …

The “Cyprus Model” Is Gaining Traction. (Thanks to F.J. for the link.) G.G. suggested this piece: 76% of Americans are living paycheck-to-paycheck Not Darkest Africa, but Darkest Nigeria – 120 Million Without Electricity Reader B.C. sent: The Eight Least Expensive States to Live in the U.S. Items from The Economatrix: Consumers To Factories Point To Durable US Expansion Dr. Doom:  A Lot Of Problems Are Coming … Revolution … Social Strife Bank Bailout:  Germany Requires Compulsory Levy of 8% To Savers

California’s already high taxes on gasoline will go even higher, as of today. The combined state and Federal taxes will be a whopping 71.9 cents per gallon. (Only 18.4 cents of that is Federal.) Yet another reason to flee California! Just as I’ve been warning you for the past seven years: Multiple Government Agencies Are Keeping Records Of Your Credit Card Transactions More Negative U.S. Bitcoin Developments. Things Could Get Ugly If U.S. Treasury Bonds Keep Rising Getting Physical: Gold price falls fuel ‘record’ bullion sales Items from The Economatrix: The $441 Trillion Interest Rate Derivatives Time Bomb US Consumer …

I recently got a letter from a financial planner who derided my occasional “Buy at this dip” recommendations and suggested dollar cost averaging when investing in precious metals. I replied: “While I agree that dollar cost averaging is the right approach in most markets and for institutional investors, it is not necessarily the correct approach in the current secular bull market in silver for small investors and for those who are hedging against the dollar with small sums.  The vast majority of my readers had less than $10,000 to invest in 2005, and they work for wages.  So they haven’t …

It is very clear that we are approaching a national debt crisis. This chart from the St. Louis Fed illustrates America’s tale of woe. Once interest rates start to rise–and inevitably they must and will–then the whole charade will abruptly end. We will suffer a debt crisis far more horrendous than what we witnessed in 2008. No nation can survive a sustained debt level greater than 100% of GDP for and extended time without a crisis. Some interesting reading over at The Daily Bell: Chris Becker’s Austrian Perspective on South Africa, Gold and the Ludwig von Mises Institute Jim Rogers: …

Supply Policies Prevent Hydropower from Fulfilling its Potential Treasury Auction Bids Drop To Weakest Since 2009 As Yields Rise   Items from The Economatrix: As Demand In The Global Economy Weakens, American Multi-Nationals Feel The Pain John Galt: The End of Global Banking or Worse? Cash Is Tight:  Six More US Muni Bond Sales Postponed