[KR1098] Keiser Report: Zombie Economic Woes

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

In this episode of the Keiser Report’s annual Summer Solutions series Max and Stacy talk to Steve Keen, author of Debunking Economics, about whether or not allowing for the return of the business cycle might be a solution to our zombie economic woes. In the second half Karl Denninger of Market-Ticker.org offers his solution to the ever-worsening not so affordable healthcare crisis in America.

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Silver Analysts Forecast $20 In Bloomberg Silver Price Survey

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

– Bloomberg silver price survey – Large majority bullish on silver
– Silver median “12 month-forecast” of $20
– Precious metal analysts see silver “24 percent rally from current levels”
– Investors are pouring money into silver ETFs
– Speculative funds bearish even as ETF assets rise to record
– Spec funds being bearish is bullish as frequently signals bottom
– Important to focus not just on silver price but on silver value
– “Important to note that all portfolios under all conditions actually perform better with exposure to gold and silver” – David Morgan (see video)

From Bloomberg:

In a Bloomberg survey of 13 traders and analysts, the majority were bullish. 11 people said silver prices would rise and two predicted declines.

Among the seven respondents that provided estimates, the median 12-month forecast was $20 — indicating a 24 percent rally from current levels.

Assets in exchange-trade funds backed by silver have risen 6.6 percent since April 24 to 21,211 tons, according to data compiled by Bloomberg.

In the same time, hedge funds turned negative as prices tumbled. In the week ended July 11, hedge funds were net short by 5,402 contracts, according to U.S. Commodity Futures Trading Commission data. Short positions have tripled since the week of April 25 to 60,775 contracts.

From GoldCore:

We continue to see silver as undervalued vis a vis gold but more especially vis a vis stocks, bonds and many property markets. Rather than selling the financial insurance that is gold, we would advise reducing allocations to stocks, bonds and property and allocating to silver.

If one is very overweight gold in a portfolio and has no allocation to silver than there is of course a case for selling some gold and reweighting a portfolio in order to diversify into silver.

Gold Silver Ratio – 10 Years

With the gold to silver ratio at 76 ($1235/$16.20/oz), the silver price is attractive at these levels and has the potential to be the surprise out performer in H2, 2017.

Silver’s industrial uses and coin and bar demand should see the gold/silver ratio gradually revert to the mean average in the last 100 hundred years which is close to 35:1. This was seen again in April, 2011 when the gold silver ratio fell to 32.4 with silver at $48/oz and gold at over $1,500/oz.

 

Read full story here…

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Special Offer – Gold Sovereigns at 3% Premium – London Storage

We have a very special offer on Sovereigns for London Storage today. Own one of the most popular and liquid of all bullion coins – Gold Sovereigns – at the lowest rates in the market for storage.

sovereign.png

  • Limited Gold Sovereigns (0.2354 oz) available
  • Pricing at spot + 3.0% premium
  • Allocated, segregated storage in London
  • Normally sell at spot gold plus 6.75% to 10%
  • One of most sought after bullion coins in the world
  • Mixed year, circulated bullion coins
  • Minimum order size is 20 coins

These coins are at a very low price and with limited amounts at these record low prices we expect them to sell out very fast.

Call our office today

UK +44 (0)203 086 9200
IRL +353 (0)1 632  5010
US +1 (302)635 1160

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Earth’s Economy Glorifies Waste, Exploitation, Debt, Expediency and Magical Thinking

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

How would extraterrestrial anthropologists characterize Earth’s dominant socio-economic system? It’s not difficult to imagine their dismaying report:

“Earth’s economy glorifies waste. Its economists rejoice when a product is disposed as waste and replaced with a new product. This waste is perversely labeled ‘growth.’

Aimless wandering that consumes fossil fuels is likewise rejoiced as ‘growth.’

The stripping of the planet’s oceans for a few favored species of edible fish is also considered ‘growth’ as the process of destroying the ocean ecosystem generates sales of the desired seafood.

Even more perversely, the resulting shortages are also causes of rejoicing by the planet’s elites, as their ability to purchase the now-scarce resources boosts their social status and grandiose sense of self-worth.

This glorification of waste is the same dynamic that destroyed the civilization on Zork.

Earth’s economy also glorifies exploitation, as this maximizes profits, which appears to be the planetary equivalent of a secular religion that everyone believes as a Natural Law.

Thus slavery and monopoly are highly valued as the most reliable sources of profits. If ethical concerns limit the actual ownership of humans, Earth’s economy incentivizes feudal arrangements that share characteristics of servitude and bondage. In the current era, the favored mechanisms are over-indebtedness (debt-serfdom) and taxation by the state, which extracts approximately 40% of all labor via threat of imprisonment.

Earth’s elites exhibit a pathological preference for micro-managing the commoners via criminalizing much of everyday life and imposing extremely harsh punishments for any dissent or resistance to elite domination.

This is the same dynamic that doomed planetary civilizations in the Blug system.

Earth’s economy is currently dependent on depleting fossil fuels and borrowing from the future to fund consumption in the present, i.e. debt. Rather than face the reality that this is not sustainable and pursue other arrangements, Earth’s elites have chosen expediency, responding to the inevitable crises caused by depletion and dependence on debt with expedient but ultimately destructive policies that paper over the crises but at the cost of generating greater crises in the next iteration.

Humanity appears to default to magical thinking when faced with untenable situations that demand systemic change. This is eerily parallel to the now-lost civilization of Frum.

It seems Earth’s dominant species has selected the most destructive policies and mindsets to glorify and worship. Earth’s current civilization is doomed, with near-zero prospects for the necessary transition to a more sustainable, less exploitive arrangement.

Earth’s decline is a tragi-comedy, much like the one on Ononon that entertained our home planet audiences for a time.”

In case you missed it, here’s a snapshot of total debt as a percentage of median household income: from 79% to 584%. If this strikes you as “healthy growth” because “debt doesn’t matter”– welcome to the Wonderland of Magical Thinking.

 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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“Bigger Systemic Risk” Now Than 2008 – Bank of England

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

– Bank of England warn that “bigger systemic risk” now than in 2008
– BOE, Prudential Regulation Authority (PRA) concerns re financial system
– Banks accused of “balance sheet trickery” -undermining spirit of post-08 rules
– EU & UK corporate bond markets may be bigger source of instability than ’08
– Credit card debt and car loan surge could cause another financial crisis

– PRA warn banks returning to similar practices to those that sparked 08 crisis
– ‘Conscious that corporate memories can be shed surprisingly fast’ warns PRA Chair

Bank of England sees bigger financial risks than in 2008

Editor Mark O’Byrne

Stark warnings have been issued by the Bank of England and its regulatory arm, the Prudential Regulation Authority (PRA).

In less than one week the two bodies issued papers and speeches to warn industry members that many banks are showing signs of making the same mistakes that led to the 2008 financial crisis – the outcomes of which are predicted to be worse than those seen just nine years ago.

Increased risks have been noted at different ends of the financial system, from the European corporate bond markets right through to retail lenders.

The Bank of England’s ‘Stimulating Stress Across the Financial System’ was released last week. It looks at how it will assess risk in future studies on the European corporate bond market. It concludes that the corporate bond market could create more instability during the next financial shock than it did in the crisis of 2008.

Just two days before this stark warning, the PRA’s chief-executive Sam Woods told lenders that they were on thin ice with their innovations designed to reduce their capital requirements and buoy earnings. Woods said that whilst their innovations “might meet the letter of the regulation” they must not be “designed to circumvent the spirit” of banking rules.

Bank of England’s Woods accused banks of engaging balance sheet trickery to “circumvent the spirit” of post-financial crisis rules.

Both warnings over both sets of practices is yet another reminder of the stark difference of interests between taxpayers, regulators and the banking industry.

News of institutions circumventing regulations and non-bank corporate lenders creating more risk in the system begs the question if the financial system as we know it will ever be fit for purpose in terms of looking after the needs of borrowers and savers. It also rises concerns about how safe the banks are for depositors and whether banks are ‘safe for savers?’

Balance sheet shenanigans

One of the ‘innovations’ being used by banks is the very same that was used in the run-up to and exacerbated the 2008 financial crisis. It is the use of special purpose vehicles which are used to hold riskier assets in order to free up capital.

Woods told the news conference:

“We have noticed that some institutions are now moving on-balance-sheet financing to off-balance-sheet formats using special purpose vehicles, derivatives, agency structures or collateral swaps.”

 

Read full story here….

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Special Offer – Gold Sovereigns at 3% Premium – London Storage

We have a very special offer on Sovereigns for London Storage today. Own one of the most popular and liquid of all bullion coins – Gold Sovereigns – at the lowest rates in the market for storage.

sovereign.png

  • Limited Gold Sovereigns (0.2354 oz) available
  • Pricing at spot + 3.0% premium
  • Allocated, segregated storage in London
  • Normally sell at spot gold plus 6.75% to 10%
  • One of most sought after bullion coins in the world
  • Mixed year, circulated bullion coins
  • Minimum order size is 20 coins

These coins are at a very low price and with limited amounts at these record low prices we expect them to sell out very fast.

Call our office today

UK +44 (0)203 086 9200
IRL +353 (0)1 632  5010
US +1 (302)635 1160

Link

The reward for mining Maxcoin was just cut in half

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

Maxcoin just experienced a major milestone in its lifespan. The reward for mining a block (a block = a ledger of transaction data) was just cut in half from 16 maxcoins to 8. This means that miners will get 8 maxcoins per block they mine, compared to 16 before the halving.

Don’t worry! This is all supposed to happen! Read more: The reward for mining Maxcoin was just cut in half

More:
Maxcoin FAQ
How to Mine Maxcoin?

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Estonian Startup Combines AI, Blockchain and Legal Technology

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

Agrello’s Chief Scientist, Alex Norta, has spent 16 years researching digital contracting and smart contract technology. He is pouring the information he gained from this experience into Agrello, an agent-powered interface allowing users to build smart contract-based legal agreements on blockchain technologies. “No coding or legal skills required,” the project markets.

The Agrello platform wants to create an ecosystem or marketplace where individuals can create and obtain legal templates to create their own smart contracts. As the native token in this framework, DELTA will allow users to access and purchase templates, as well as earn money from designing them. 

DELTA, which launches July 16, is compatible with the Ethereum ERC20 standard, allowing Ethereum contracts and wallets to work with the Arello protocol. “The DELTA token acts as a secure and verifiable value transfer, to secure deposits in different currencies and across different blockchain protocols,” stated Agrello on its blog. The Agrello platform is a well-thought out effort to bring blockchain to the legal industry by streamlining legal activities like rental agreements, car sales and – eventually – other types of contracts.

“With this technology, it is possible to process a lot of logistics through our technology, which gives information about contract execution and dates for resolution and dispute resolution. And it’s possible to integrate this with devices for automated execution and so on,” explains Agrello Chief Executive Officer Hando Rand. “But, when those executions happen, then the technology can go through and host the logics. In many cases it might end up in this human perception of what to decide, what would be the verdict. And then the social technical approach must be taken that there is this artificial assistance to go through, a logic of dispute. Then we also get this human side to make the final verdict. Always with contracts and private relationships on Agrello, parties can also decide who the arbitrators would be, who the parties trust.”

DELTA is designed to facilitate interactions between parties over the platform, and the protocol creates off-chain contract storage. Private keys are under sole control of contract parties. Agrello envisages the token will allow value to flow between the on-chain and off-chain aspects of the legal-tech protocol, create a network effect, and encourage a vibrant community.

“We have a community pool, which is meant for incentivizing different parts of the community to provide more value for development of this project,” said Mr. Rand in an AMA held Friday with the project. “The main focus, of course, is in template creation. But there are other economic incentives we have with the token. The token is kind of an arbitrage. It’s an internal value vehicle. It’s basically the office system. We can build other payment methods onto the external layer that can pay in euros, dollars or whatever.” Agrello, based in Estonia, is one of the first projects to bring blockchain and crypto-token technology into the legal tech sector.

“The idea behind Agrello is to take the tedious work away from users, and let users and organizations collaborate in a peer-to-peer fashion, and allow them to focus on more decision making and creative work,” said Agrello Chief Scientist Alex Norta the two hour AMA. “And really all the repetitive, annoying work is offloaded to the smart contract and agents. And thereby you take care of the information and value transfer logistics that are involved. Value transfer logistics can very quickly explode in terms of cost and time needed. So, if you lock that off into a smart contract, you are definitely saving a lot.”

This Max Keiser exclusive article was written by Justin O’Connell, a financial technology researcher focusing on blockchain. He founded the companies Gold Silver Bitcoin and Cryptographic Asset, as well as helped to launch the largest Bitcoin ATM software provider in the world. His work has appeared in Bitcoin Magazine, Coin Desk, Crypto Coins News, Hacked, Merry Jane, NASDAQ and VICE.

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[KR1097] Keiser Report | Summer Solutions: Gutting of America’s Wealth Creation Machine

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

In this episode of the Keiser Report’s annual Summer Solutions series Max and Stacy discuss the economic problems looking for solutions. In the first half they discuss how to Make America Great Again is a ‘solution’ to the problem of the gutting of America’s wealth creation machine and how this slogan as a solution caused the meltdown of the entire Democratic party. In the second half Max talks to Chris Whalen, author of Ford Men, about whether or not it is possible to make America great again for the blue collar worker.

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“Financial Crisis” Coming By End Of 2018 – Prepare Urgently

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

“Financial Crisis Of Historic Proportions” Is “Bearing Down On Us”

John Mauldin of Mauldin Economics latest research note, Prepare for Turbulence, is excellent and a must read warning about the coming financial crisis. Mind refreshed from what sounds like a wonderful honeymoon and having had the time to read some books outside his “comfort zone” he has come to the conclusion that we are on the verge of  a “major financial crisis, if not later this year, then by the end of 2018 at the latest.”

Source: Financial Times

Mauldin is a New York Times bestselling author and respected investment expert and his excellent analysis concludes with advice to prepare urgently for the financial “crisis of historic proportions” which is “once again bearing down on us”:

“You and I can’t control whether banks are ready, but we can control whether we are ready. I am working on a number of fronts to help you. My brief time away convinced me beyond any doubt that a crisis of historic proportions is once again bearing down on us. We may have little time to prepare. We definitely have no time to waste.

His financial crisis warning is important as Mauldin is no perma-bear. Indeed up until now his central thesis was that we were in the “muddle through economy” and that the U.S. economy and global economy would “muddle” along and we would avoid a financial crisis. So not only has he changed his central thesis but he has gone from being neutral and mildly positive to being very bearish and concerned about a severe financial crisis.

Mauldin is a long time advocate of owning physical gold including gold coins  as financial insurance – taking delivery and secure storage. Read full story here….

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Special Offer – Gold Sovereigns at 3% Premium – London Storage

We have a very special offer on Sovereigns for London Storage today. Own one of the most popular and liquid of all bullion coins – Gold Sovereigns – at the lowest rates in the market for storage.

sovereign.png

  • Limited Gold Sovereigns (0.2354 oz) available
  • Pricing at spot + 3.0% premium
  • Allocated, segregated storage in London
  • Normally sell at spot gold plus 6.75% to 10%
  • One of most sought after bullion coins in the world
  • Mixed year, circulated bullion coins
  • Minimum order size is 20 coins

These coins are at a very low price and with limited amounts at these record low prices we expect them to sell out very fast.

Call our office today

UK +44 (0)203 086 9200
IRL +353 (0)1 632  5010
US +1 (302)635 1160

Link

Our Financial Buffers Are Thinning

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

While buffer has a specific meaning in chemistry, I am using the word in the broad sense of a reserve resource that absorbs the initial destructive impacts of crises or system overloads. Marshland along a sea coast is a buffer against destructive storm waves, for example.

A savings account acts as a buffer against financial drawdowns or losses of income that would otherwise quickly cascade into a full-blown crisis.

Redundancy of resources can act as a buffer. If an airline maintains an aircraft in reserve, this reserve plane acts as a buffer against the disruption to the airline’s scheduled flights should one of its aircraft be unexpectedly removed from service by a mechanical failure. The reserve aircraft can replace the plane that was withdrawn from service with minimal disruption.

Stockpiles act as buffers against supply disruptions. A storage tank of oil buffers a refinery against any delay in its incoming shipments of crude oil. Supplies of food and water buffer against severe natural disasters that disrupt regional water service and food deliveries.

Credit can act as a financial buffer against unexpectedly high expenses or declines in revenue. If a tire on our vehicle goes flat during a road trip and we only have a few dollars cash, a credit card buffers the disruption by funding the replacement tire and labor.

But over-using credit can end up thinning our financial buffers. If someone starts using their credit card not as an emergency buffer but to augment their cash income–in effect, acting as if the borrowed money was a pay raise rather than a loan–their credit line diminishes to near-zero and when they actually need credit for an emergency, it’s no longer available.

A key feature of buffers is that it’s difficult for observers to tell if they’ve been thinned to the point where they can no longer stave off disruption. Outside observers can’t tell if the oil storage tank is full or empty, or if an individual’s credit card is maxed out or has a completely untapped credit line.

In terms of our economy, there are indications that our financial buffers are thinning to the point of failure. Millions of households have less than $500 savings–an essential, basic buffer against unexpected expenses.

Millions of households have borrowed money to make up for stagnating or declining income. Charting master Lance Roberts of Real Investment Advice published this chart showing how debt has been used to maintain households’ standards of living:

Central bank balance sheets acted as buffers during the 2008-09 global financial crisis. But instead of rebuilding this buffer by letting balance sheets slowly decline (i.e. as bonds owned by the central bank reach maturity), central banks have thinned the buffer by rapidly expanding balance sheets during the current slow-growth expansion:

The ability of governments to borrow and spend during recessions is a key macro-economic buffer. But instead of slowing fiscal borrowing and spending, the U.S. government has ramped up borrowing immensely, thinning the buffer available for future fiscal stimulus:

If we survey the financial landscape for fully intact buffers, we find none. Every buffer has been thinned by the past eight years of extreme monetary and fiscal policies and financial leverage, that is, debt piles ever higher on an unchanged foundation of collateral.

All the buffers that absorbed the shock waves of the 2008-09 Global Financial meltdown have been drained or thinned to the point that they no longer have the capacity to absorb the next global financial crisis. From the outside, the “tank” may appear full, but it’s almost empty.

The fragility of our financial buffers will only be revealed when they fail in the next crisis. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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[KR1096] Keiser Report: Lifetime of Financial Crises

Max Keiser and Stacy Herbert

Max Keiser and Stacy Herbert

In this episode of the Keiser Report from Mexico City Max and Stacy discuss a government bond market grinding to a halt and a lifetime of financial crises. In the second half Max continues his interview with professor and journalist, John Mill Ackerman, about neoliberalism and the future for Mexico’s economy.

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