Last Time We Were Here Recession Started

By David Stockman – Re-Bloged From Stockman’s Contra Corner

The US Treasury yield curve has collapsed to its flattest since Nov 2007… just before the US economy officially slumped into recession…

 “There can’t be a recession… the yield curve is not inverted…”

Perhaps US banks are starting to realize the inevitable also?

CONTINUE READING –>

The ‘Unnatural Rate of Interest’

By Joseph T. Salerno – Re-Blogged From Stockman’s Contra Corner

A few days before the last FOMC meeting The Wall Street Journal  reported on the Fed’s hand-wringing over its inability to identify the “natural rate of interest” and explain its recent movements. According to the report, the Fed uses the “mysterious natural rate” to guide its decisions in setting the target for the fed funds rate. Modern macroeconomics defines the natural rate of interest as the (real) rate of interest that maintains the economy in a Keynesian state of bliss, with stable prices (or moderate inflation) and actual real GDP equal to “potential” or full-employment GDP.

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Sovereign Debt – What Could Go Wrong?

By GE Christenson – Re-Blogged From http://www.Gold-Eagle.com

It has been reported that about $10 Trillion of sovereign debt “yields” negative interest. Assume total global sovereign debt is about $60 Trillion.

Therefore, about one-sixth of all sovereign debt has negative interest rates. This brings to mind a few questions.

  1. Do negative interest rates sound absurd, even insane?
  2. Would bankers and central bankers in 2012 have believed that interest rates could be pushed so low they actually went negative?
  3. Does anyone see a problem with negative interest rates?

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Weekly Climate and Energy News Roundup #230

The Week That Was: June 25, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

BREXIT: On June 23rd, the British voted 52% to 48% to exit the European Union. No doubt many political commentators were very surprised. It’s too early to forecast how this exit will take place and what will occur. The financial markets reacted strongly in a negative fashion, but such reaction is typical when faced with a political shock. It appears that many in Britain are dismayed by economic and political controls administrated by an autocratic bureaucracy centered in other countries. Early reports showed that the industrial areas of the Midlands and Yorkshire heavily favored the exit. It would be interesting to see a competent analysis of what influence, if any, increasing electricity prices may have had on the vote.

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Why Did Agriculture Start 13,000 Years Ago?

WUWT reader Susan Corwin writes:

Because it would work as CO2 became plentiful!

All the academic articles say: “and then agriculture happened”.

The “accepted wisdom”/consensus is:

….here was no single factor, or combination of factors, that led people to take up farming in different parts of the world.

But It is simple: it occurred because it Started Working.. 13,000 years ago.

People are clever, resourceful, adaptive, looking out for the best for their kids.

If it doesn’t work, it won’t happen.
If it will work, someone will figure it out and their kids/tribe will be successful

The Greenland Ice Chart for 9000 to 21000 years before present shows why agriculture arose:
(as presented on WUWT by Andy May)
GreenlandIceCore

So, my conclusion is that over 4,000 years or 160 generations, things improved and they tried, and tried, and tried again until it worked: people are smart.
…and animals actually could be pastured.

Starting 14,000 yag, the sparse, scraggly growth started getting thicker and slightly more abundant.  It wasn’t very good, but is was much better than 16000 yag.
=> and clever people could keep various animals alive in a herding lifestyle.

CONTINUE READING –>

The Tangled Web of Global Warming Activism

By Dr. Tim Ball – Re-Blogged From http://www.WattsUpWithThat.com

Sir Walter Scott (1771-1832) wrote,

“Oh what a tangled web we weave, when first we practice to deceive!”

There were several actions required to create the tangled web of deception relating to the claim that human-produced CO2 caused global warming. It involved creating smaller deceptions to control the narrative that instead of creating well-woven cloth became the tangled web. The weavers needed control of the political, scientific, economic inputs, as well as the final message to the politicians to turn total attention on CO2.

Their problem was the overarching need for scientific justification, because science, if practiced properly, inherently precludes control. Properly, you go where the science takes you, by disproving the hypothesis. However, before the planners could get to the science, they had to establish the political framework.

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Thank You, America!

By Christopher Monckton of Brenchley – Re-Blogged From http://www.WattsUpWithThat.com

head for the brexit

For my final broadcast to the nation on the eve of Britain’s Independence Day, the BBC asked me to imagine myself as one of the courtiers to whom Her Majesty had recently asked the question, “In one minute, give three reasons for your opinion on whether my United Kingdom should remain in or leave the European Union.”

My three reasons for departure, in strict order of precedence, were Democracy, Democracy, and Democracy. For the so-called “European Parliament” is no Parliament. It is a mere duma. It lacks even the power to bring forward a bill, and the 28 faceless, unelected, omnipotent Kommissars – the official German name for the shadowy Commissioners who exercise the supreme lawmaking power that was once vested in our elected Parliament – have the power, under the Treaty of Maastricht, to meet behind closed doors to override in secret any decision of that “Parliament” at will, and even to issue “Commission Regulations” that bypass it altogether.

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Brexit and the US

cropped-bob-shapiro.jpg   By Bob Shapiro

It’s official – UK voters have chosen to take themselves out of the European Community and to resume taking responsibility for their own economic fate.

Predictably, world markets, as well as the Pound and Euro, have reacted with irrational fear. I expect that it won’t be long before all these markets’ participants realize that the world hasn’t ended. At least a major part of today’s panic likely will be reversed, possibly as early as Monday.

The actual exit of the UK from the EC will take upwards of two years to become final. A lot can happen in that time. A lot of the UK’s potential benefit from Brexit can be negotiated away or legislated away.

The big benefit that I see is the hundreds of thousands of pages of EC regulations no longer applying – no longer impoverishing – the people of the UK. However, it is far from unlikely that some UK legislators are petrified at the prospects of the Freedom – they may try to legislatively protect their Economy from “suffering the full benefits.”

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Climate and Human Civilization for the Past 4,000 Years

By Andy May – Re-Blogged From http://www.WattsUpWithThat.com

The Holocene Thermal Optimum ended at different times in different parts of the world, but it had ended everywhere by 4,000 BP (BP here means the number of years before 2000) and the world began to cool. The timeline shown in Figure 1 shows the GISP2 Central Greenland ice core temperature proxies in blue and the HadCRUT 4.4 surface temperature estimates for the same area in red.

climate-civilization-gisp-chart

Figure 1 (click on the figure to download in full resolution)

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Environmentalists Manage to Kill the Last Nuclear Power Station in California

From Forbes – Re-Blogged From http://www.WattsUpWithThat.com

 More details Diablo Canyon Power Plant, 2009 photo from offshore. The light beige domes are the containment structures for Unit 1 and 2 reactors. The brown building is the turbine building where electricity is generated and sent to the grid. In the foreground is the Administration Building (black and white stripes). Picture:  "Mike" Michael L. Baird via Wikimedia

Diablo Canyon Power Plant, 2009 photo from offshore. The light beige domes are the containment structures for Unit 1 and 2 reactors. The brown building is the turbine building where electricity is generated and sent to the grid. In the foreground is the Administration Building (black and white stripes). Picture: “Mike” Michael L. Baird via Wikimedia

The Natural Resources Defense Council (NRDC) issued a press release today stating that they have signed a deal with PG&E PCG +0.10%, IBEW local 1245, the Coalition of California Utility Employees, Friends of the Earth, Environment California, and the Alliance for Nuclear Responsibility.

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Negative Interest Rates Aren’t Working Because They Haven’t Been Tried

By David Haggith – Re-Blogged From Great Recession Blog

The economics world is all a-chatter about how central banks and their member banks have moved interest rates beyond the zero bound to charging negative interest rates. There is just as much brainless talk about why this is accomplishing nothing. No one seems to notice that negative interest rates never actually happened!

Sounds preposterous? Think about it:

Think about it in terms of the central banks’ stated objective, which is lowering the rate at which banks loan out money. As the recession went on, central banks tried to drive interest on loans like mortgages lower and lower in order to entice people to buy things with loans in order to stimulate the economy. Because that didn’t stimulate the economy enough, central banks started saying they might have to go from lowering interest (for banks) to the zero bound (zero interest rate policy — ZIRP) to taking interest all the way negative (negative interest rate policy  — NIRP). Nope. Never happened anywhere.

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MUST SEE! (For Americans Too) Brexit – The Movie

By Bob Shapiro

The UK referendum vote on whether they stay in or leave the EU is this Thursday, the 23rd. This movie lays out the issues from a leave point of view.

Virtually every point is just as relevant to the US. Is continued socialism going to make us richer, even though past socialism has made us poorer? Is more regulation the answer to the problem that previous regulation has caused? Is the rule of law, and our ability to throw out the abusers in the halls of power, more important than the priviledges of an elite which thinks we’re too stupid to run our own lives?

Words Still Mean Things – BREXIT

By Andy Sutton & Graham Mehl – Re-Blogged From http://www.Gold-Eagle.com

Last time our article focused on what has come to be known as ‘escape velocity’ — and how an aeronautical term has come to be used to provide some boost to the perception of the US Economy, when in fact it actually has no velocity whatsoever. This week we’re going to take a look at another term, and even though it is an amalgam of two words, it still has profound meaning.

According to the media, it would appear that few in England actually know much about the idea of Brexit and what it means for them, their families, their country and their way of life. We surmise that even fewer Americans understand the ramifications it might have for the US.

Brexit, in short, stands for ‘Britain Exit’. Exit from what? Exit from the European Union. Britain is kind of an anomaly in many ways regarding its membership in the EU. For one, Britain still has its own currency, the Pound.  Britain also has some geographic separation from the EU as well — and is still a very strong banking hub, rivaling that of New York, Brussels and the BRICS Bank.

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Weekly Climate and Energy News Roundup #229

The Week That Was: June 18, 2016  Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Fear of CO2: Those promoting the fear of carbon dioxide (CO2), and other greenhouse gases, primarily use three possible threats: one, dangerous increased temperatures; two, change in ocean chemistry (called ocean acidification); and three, drastic sea level rise. John Christy’s February 2 testimony to the U.S. House Committee on Science, Space & Technology empirically demolishes the argument that increasing CO2 is causing significant global warming –major warming is simply not happening in the atmosphere, where the greenhouse effect takes place. The current increase in atmospheric temperatures is influenced by the El Niño warming the tropical Pacific Ocean, a natural occurrence, but the effect is short-lived. The question remains: what will happen to atmospheric temperatures as the influence of the El Niño diminishes and is possibly replaced by a La Niña? Will global temperatures return to a higher level, the same level, or a lower level?

By contrast, surface temperatures used by the UN Intergovernmental Panel on Climate Change (IPCC), and its followers, are influenced by many other natural and human actions, particularly land use change. Unfortunately, the IPCC does not highlight the severe limitations of its reports, particularly in its summaries for policymakers, allowing many to incorrectly believe that weather and climate change stems from increasing the concentration of CO2 in the atmosphere from 3 parts per 10,000 to 4 parts per 10,000. Ascribing unusual weather events to increasing CO2 is similar to the beliefs in the 1950s of blaming unusual weather events, such as tornadoes in New England, on nuclear testing.

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Waste Heat is a Major Source of National Warming

By Anthony Watts – Re-Blogged From http://www.WattsUpWithThat.com

I covered a similar study back in 2008 which you can read about here. This study takes it to a national level, suggesting once again that surface temperature records are not really measuring a “climate change” signal in entirety. The author of the study says that “correlation of temperature above background levels and national energy consumption is very high”. Seems like a no-brainer to me. This has far reaching consequences for the validity of the surface temperature record and its ability to discern a real CO2 induced climatic signal. – Anthony

Larry O’Hanlon writes on the AGU blog

The greenhouse effect isn’t the only thing warming things up. There is also the waste heat released when we generate and use energy – even clean energy. Yet the regional impact of that heat – which moves from warm buildings, engines and power plants into the world around us – has not been well accounted for. A new study now shows waste heat may explain some temperature variations at a national scale better than do global climate change models.

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Stock Market Crash Of 2016

By Michael Snyder – Re-Blogged From Economic Collapse Blog

Over the past 12 months, stock market investors around the planet have lost trillions of dollars.  Since this time last June, stocks have crashed in 6 of the world’s 8 largest economies, and stocks in the other two are down as well.  The charts that you are about to see are absolutely stunning, and they are clear evidence that a new global financial crisis has already begun.  Of course it is true that we are still in the early chapters of this new crisis and that there is much, much more damage to be done, but let us not minimize the carnage that we have already witnessed.

In general, there have been three major waves of financial panic over the past 12 months.  Late last August we saw the biggest financial shaking since the financial crisis of 2008, then in January and February there was an even bigger shaking, and now a third “wave” has begun in June.  Not all areas around the globe have been affected equally by each wave, but without a doubt this new financial crisis is a global phenomenon.

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Will Brexit Give The US Negative Interest Rates?

By John Rubino – Re-Blogged From http://www.Silver-Phoenix500.com

One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but here. Why, when the dollar is generally seen as the premier safe haven currency, would Japan and much of Europe have government bonds — and some corporate bonds — trading with negative yields while arguably-safer US Treasuries are positive across the entire yield curve?

One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. So the supply of Treasury paper dwarfs that of German or Japanese sovereign debt. Greater supply equals lower price, and lower price equals higher yield.

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Overthrow the Establishment to Fix the Economy

By Larry Kudlow – Re-Blogged From http://www.NewsMax.com

Famed investor Wilbur Ross recently told CNBC that “Trump represents a more radical new approach to government that the nation’s economy desperately needs.” He’s right.

Trump seeks an overthrow of the establishment. He’s a disrupter. Just what we need to fix the economy.

The situation is that desperate.

The last 15 years of economic policy, especially the last eight years, represent a relapse that harks back to the 1970s. Now like then, we have a high-tax, high-spend, high-regulation, Fed-pump-priming, standard-less dollar-manipulation policy mix. In general, it’s a government-planning approach in the U.S. and around the world.

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U.K.’s Immigration Unease Animates ‘Brexit’ Vote

By Jenny Gross and Jason Douglas – Re-logged From Wall Street Journal

Surge of new arrivals fuels support for leaving the European Union, as seen in one town that’s been transformed

Andrew Fraser says increasing immigration to Boston, England, where he has lived for most of his life, has radically transformed the town’s character.
Andrew Fraser says increasing immigration to Boston, England, where he has lived for most of his life, has radically transformed the town’s character. Photo: Mark Salmon for The Wall Street Journal

New Respect Is Growing

By Guy Christopher – Re-Blogged From http://www.Gold-Eagle.com

You didn’t come here today for bad news. There’s plenty of that everywhere you look…and even where you don’t look.

So here’s the good news. A new rush to gold has begun. To see where we’re headed, let’s first see where we’ve been.

Gold and silver owners in the first ten years of this new century were in for quite a ride, watching gold soar to $1,895 and silver to $49 by 2011. Even those who jumped in midway saw their paper money values zoom.

Gold had bottomed at $255.95, April 2, 2001. Note the gold bull began months before the attacks of 9/11. Silver bottomed nine weeks after the attacks at $4.06, alongside crashing stock markets.

The national debt in 2001 was $5.8 trillion, on its way to today’s $20 trillion. Savers and retirees could depend on CD and bond returns well north of 5%. US bonds were still Triple-A rated. You could take your cash from your bank without federal snooping.

“War on cash” was an unknown socio-economic term. No one predicted massive, taxpayer funded bail-outs, threats of bail-ins, or the terrible twins, ZIRP and NIRP – zero and negative interest rates.

Gold Rides an Escalator, while Silver Rides a Roller Coaster

While the DOW and S&P500 indices languished in the agony of three crashes from March of 2000 through 2009, gold and silver got no respect from Wall Street or financial media. That’s despite gold doubling in paper money terms 2.8 times from 2001 to 2011. Silver had 3.5 doubles. Both metals had short-lived drops along the way.

Thanks in part to the top-down manipulation of bullion bank price suppression, gold steadily fell -55% and silver -72% from 2011 through 2015. Supply and demand played no role. Governments and banks did a superb job protecting the illusion paper money still has value.

But no market goes up or down forever. After years of massive money printing, destructive interest rates, and a planet swamped in uncounted trillions of debt, the pendulum is swinging back to gold and silver’s bull.

The gold price at $1280 is up 200 bucks (21%) since mid-December, with silver gaining 25% in the same period. Mining stock shares, more speculative than bullion, are up well over 100% since the first of the year. Higher risk means higher reward.

Beltway insider Jim Rickards, among others, says gold could hit $10,000 per ounce, and higher. Silver specialist Ted Butler believes bullion banks are quietly reversing course, positioning for the inevitable resumption of the precious metals bull.

If the money masters truly mean to steal all the world’s wealth, it’s reflected in the rush to gold. They are the ones rushing the fastest.

Reports everywhere say the mega-wealthy – individuals, investment firms, corporations and governments – are piling into gold. True, those buying paper gold instead of physical are traveling bad roads using old maps, but at least they’ve found the right continent.

Mega Wealthy and Central Banks Are Quietly Hoarding Gold

No less than former Bank of England chief Mervyn King has joined Alan Greenspan in praising gold, effectively criticizing their own obvious failures to rule the world with massive paper printing.

Central banksters haven’t worked in tandem since they nervously flipped from selling gold to buying gold on the heels of the 2008 meltdown. The cartel’s pricing command is crumbling, as have all past schemes that ignored market fundamentals.

Deutsche Bank has pleaded guilty to high crimes and treason against sound money, and is turning on other cartel members. Every major bank in the world has paid civil fines for rigging every economic market, though no one has yet gone to jail.

China, once cheered as the world’s supplier of cheap junk, is now better known for gobbling up every ounce of gold it can find.

Canada’s Bank of Montreal has opened a physical gold trust for savers and investors – specifying no paper gold allowed. The London Royal Mint has created a gold-based pension fund. The University of Texas Retirement System has held physical gold for years.

Utah and Texas have embraced gold and silver as legal, everyday currency. Other states are watching. Texas is building a gold depository, shouting loudly it doesn’t trust The Fed. National mints across the globe are reporting record sales of bullion coins.

Dominating the headlines, the presidential campaigns of both ‘anti-establishment’ candidates, Donald Trump and Bernie Sanders, are described as “revolutions.” Not exactly Bunker Hill and Yorktown, but remember, American Independence came long after the 1773 Boston Harbor tea party.

Open talk of revolution is telling you things are about to change. Listen closely. All of us will live in an entirely new world…for better or worse…in just five months.

That may explain why the guy who pulls Europe’s purse strings, Jean-Claude Juncker, showed up drunk for a public relations photo-op, providing us a glimpse into the murky world of secret, imperial economic rule.

The lesson we should have learned by now is to value precious metal as stand alone, private wealth, not dependent on paper money games played during drunken plots of money masters.

Rising gold and silver simply means the dollar’s influence is falling. Paper dollars may not disappear in your lifetime, but the value of that paper is vanishing every minute of your life through government-planned inflation.

Does good news for gold signal bad news everywhere else? Hyperinflation? Worldwide chaos? Maybe. But if so, then it’s seriously bad news for those who have no gold or silver, or not enough.

With or without gold, each and every one of us is in for a quite another ride.

CONTINUE READING –>

Flooding Picture Says a Thousand Words

By Anthony Watts – Re-Blogged From http://www.WattsUpWithThat.com

From the “they should put this picture in the Louvre” department:

Recent over-the-top wailings from the usual suspects have been blaming current climate change for the flooding in Paris. We already demonstrated how one statue and high watermarks tell the story, but this one from Kristine Mitchell and Julien Knez  is even better.

Credit Julian Knez

Credit Julien Knez

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Aerosols Strengthen Storm Clouds

From the UNIVERSITY OF TEXAS AT AUSTIN – Re-Blogged From http://www.WattsUpWithThat.com

An abundance of aerosol particles in the atmosphere can increase the lifespans of large storm clouds by delaying rainfall, making the clouds grow larger and live longer, and producing more extreme storms when the rain finally does come, according to new research from The University of Texas at Austin.

storm-cloud

New research from the University of Texas at Austin shows that aerosols create larger storm clouds capable of producing more rain. CREDIT Brian Khoury

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Big Brother and the Breast

By Chris Edwards – Re-Blogged From Cato Downsizing

That is the title of a chapter in a new book by Jennifer Grayson, Unlatched: The Evolution of Breastfeeding and the Making of a Controversy. Grayson is a Los Angeles writer, and her book includes endorsements from film stars Anne Hathaway and Alyssa Milano.

Jennifer is a breastfeeding advocate, and she explores the science, history, and cultural practices surrounding breastfeeding. While breastfeeding is now known to be superior for child development than infant formula, apparently too few moms follow through with it for the recommended period of time. Jennifer is a champion of “Breast is Best.”

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Brexit: Does the UK Green Leader Fear the Return of British Democracy?

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

British Green Party Leader Caroline Lucas has urged members to vote on 23rd June to remain part of the European Union. Her concern appears to be that if Britain leaves the EU, democratically elected British politicians might be emboldened to dismantle EU inspired environmental regulations.

Caroline Lucas has today called on Green voters to back remaining in the EU on June 23rd, declaring the imminent vote a “climate referendum”.

Lucas, who is a board member of Britain Stronger in Europe and Another Europe is Possible, as well as the Green Party’s only MP, warned a vote for Brexit would undermine efforts to tackle climate change and build a greener economy.

“June 23rd is a climate referendum,” she said. “Leaving the EU could wreck our chances of playing a part in the fight against this existential threat – and hand the country to people who don’t even believe climate change is happening. But by staying as a member of the EU we can build on the progress already made in Paris earlier this year and continue making strides towards a fossil-free future.”

She reiterated her view the EU is in need of sweeping reform, but insisted it remained the “best hope we have when it comes to tackling climate change and protecting our environment”.

The latest intervention came as the Green Party launched a new online video urging its supporters to back a Remain vote.

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One Case for Pessimism

By Doug Casey – Re-Blogged From International Man

I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can’t think of something better to do with your time.

But I’ll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you’d like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today’s world and will wind up savaging billions in the years to come.

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Marc Faber: Brexit Will Be ‘Bullish’ for Global Economic Growth

By Frank McGuire – Re-Blogged From NewsMax

Marc Faber, editor of “The Gloom, Boom & Doom Report,” predicts that Britain’s potential withdrawal from the European Union, also known as “Brexit,” would be bullish for global growth.

“I happen to think that a Brexit would be bullish for global economic growth,” Faber told CNBC. “It would give other countries incentive to leave the badly organized EU.”

With growth looking shaky, worries that the Brexit vote could tip Europe back into recession have moved to the head of a list of concerns for investors which includes banks’ problems with negative interest rates and dangerous imbalances in China.

 Image: Marc Faber: Brexit Will Be 'Bullish' for Global Economic Growth

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How To Grow Your Gold And Silver Bullion

By Larry LaBorde – Re-Blogged From http://www.Gold-Eagle.com

With the zirp, (zero interest rate policy) savings and bonds are not paying any significant interest. In Germany some bunds are paying negative interest rates. Few stocks are paying big dividends and most pay none at all. Everyone is trying to find a decent return on investment without taking on too much risk. The old 5 ¼% savings account interest rates that never seemed that interesting in the past now look mouth-watering.

One of the problems with precious metals has been the fact that they do not pay any interest or dividends. In today’s ZIRP market that is becoming less of a problem. However, some people have done quite well trading the gold to silver ratio. Simply trading their gold for silver when the ratio is high and trading their silver for gold when the ratio is low has proven to be quite profitable in terms of more metal at the end of the trade.

When trading gold and silver back and forth you always have a position in either one or the other. The object is not to worry about the price of either metal but to simply accumulate more metal at the end of your trades. In a long-term bull market in metals you will end up on top if you have more metal at the end of the decade.

The chart of the gold:silver ration shows a long term ratio over the last 30 years. For the past 20 years or so if you traded your gold for silver when the ratio was 75:1 and then traded your silver for gold when the ratio was 50:1 you would have made the following trades:

December 1996                trade 10 oz gold for 750 oz of silver

December 1997 trade 750 oz of silver for 15 oz of gold

February 2003    trade 15 oz of gold for 1,125 oz of silver

March 2006                         trade 1,125 oz of silver for 22.5 oz of gold

October 2008     trade 22.5 oz of gold for 1,687 oz of silver

November 2010                trade 1,687 oz of silver for 33.7 oz of gold

December 2014 trade 33.7 oz of gold for 2,527 oz of silver

Unknown date  trade 2,527 oz of silver for 50.5 oz of gold

Of course there would be premiums to pay depending on what form of silver or gold you purchased as well as sales commissions. These fees would make the trades less profitable than shown in our illustration but you get the general idea.

If you would have been careful enough to trade when the ratio was a little above 75:1 and a little below 50:1 you would have done even better. But why get greedy when these ratios are so easy to remember and execute? Just write them on the wall in big numbers and watch for them on the chart every few years.

At all times you would be holding a position in either silver or gold so you would still have a precious metals position throughout the entire time frame in either one or the other.

Also note that I did not pick the average tops of 80:1 or the average bottoms of 47:1. Tops and bottoms are hard to pick so I just chose a pretty conservative 75:1 for the top and 50:1 for the bottom.

If you have not swapped gold for silver in this current cycle you may still want to jump in and give it a try. Currently the ratio is around 73.3:1 and falling. So now you might want to hurry and trade some gold for silver. It is a pretty boring trade where you only swap every 1 to 6 years but with patience it can pay off pretty well for an asset that doesn’t pay any interest of dividends.

CONTINUE READING –>

Two Unexpected Reasons to Phase Out Social Security

cropped-bob-shapiro.jpg   By Bob Shapiro

There are numerous valid arguments for phasing out the Social Security System.

These include the obvious, such as, since Social Security is a pay-as-you-go system, meaning that it depends on revenue from current workers to pay for current retirees, it is a Ponzi Scheme which eventually must fail.

I’d like to talk today about a couple of arguments that may surprise you: 1. Social Security, by it’s very design, is racially discriminatory, and 2. Social Security laws trying to foreclose “double-dipping” are keeping American children from getting the best possible education.

Racially discriminatory? A study from the Centers for Disease Control shows that there is a huge gap between life expectancies for black versus white Americans – age 75 for blacks versus 80 for whites (79 overall).

cdc life expectancy

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The Hyping of Anthropogenic Global Warming (AGW) Required Weather Myths

By Dr. Tim Ball – Re-Blogged From http://www.WattsUpWithThat.com

Some claim the entire notion that human addition of CO2 to the atmosphere is causing global warming is a deliberately created myth, that it was produced to isolate CO2 as a serious environmental problem that required curtailing the economies of developed countries. To enhance the threat required endangerment to plants, animals, and humans. The list of threats is endless because proponents of AGW can take everyday natural events and say they are not ‘normal.’ They know that most don’t know what is normal, as I discussed in a previous article, and that what is a ‘normal’ climate, changes with time. Many people use these interchangeably with natural and unnatural. The list of myths attributed to global warming is endless, but one started a few years ago titled, “A complete list of things caused by global warming keeps expanding.

There is added confusion in the climate debates because proponents continually interchange ‘natural’ and ‘normal.’ It is a reflection of the philosophical and intellectual confusions and contradictions that result from the deception. It probably also reflects the underlying anti-humanity of many extreme environmentalists. For example, in Global Warming: The Greenpeace Report (1990), edited by Jeremy Leggett, says CO2 is added to the atmosphere naturally and unnaturally. By unnatural they mean the portion comes from humans. Is it reasonable to assume that if what we do as animals is unnatural, then we are unnatural? Goethe confronted the dilemma when he said,

“The unnatural – that too is natural.”

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An Open Letter to the #ExxonKnew #RICO20 Attorneys General about Climate Change

Re-Blogged From http://www.WattsUpWithThat.com

From the Cornwall Alliance for the Stewardship of Creation:

Dear Attorneys General,

You’re not stupid. Stupid people don’t graduate from law school.

Neither are you generally ignorant. You know lots of law.

So, U.S. Attorney General Loretta Lynch and members of Attorneys General United for Clean Power, take no offense when I tell you that your intent to investigate and potentially prosecute, civilly or criminally, corporations, think tanks, and individuals for fraud, under RICO (Racketeer Influenced and Corrupt Organizations Act) or otherwise, because they question the causes, magnitude, risks, and benefits of global warming, and best responses to it, is a dead giveaway that you’re ignorant about climate science and related climate and energy policy.But the day of the “Renaissance man,” vastly learned across all fields of knowledge, is long gone. All intelligent and learned people are ignorant about some things.

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Brexit, The Animated Movie

By Astute Angle – Re-Blogged From https://astuteangle.wordpress.com/

It is surely not irrelevant that for many left-wing Britons, ‘Europe’ exercises a grip on the imagination similar to that of the Soviet Union on the Philby generation at Cambridge in the 1930’s.  Nor is it illegitimate to seek a parallel between the apologias for the Soviet Union issued by the British intelligentsia in the 1920’s and 1930’s, and today’s wilful closing of intellectual eyes to the realities of ‘Europe’.  The left-wing fellow travellers of the 1930’s constantly made unfavourable comparisons between Britain and the supposed paradise to the east.  Today, the same is true of the British Euroenthusiasts.  The head of the Commission’s representative office in Britain, for instance, seems to view ceaseless denigration of his own country as the most effective way of selling ‘Europe’ to his fellow Britons.

Bernard Connolly, from The Rotten Heart of Europe  (1995), Introduction, p xvii

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Unintended Consequences, Part 3: “How Do I Get Away From Negative Yields?”

By John Rubino – Re-Blogged From Dollar Collapse

The theory was pretty straightforward: push interest rates down far enough — in some cases to negative territory, where borrowers actually turn a profit on their debts. Subsequently, people will borrow money, spend it and growth will ensue.

But the theory’s designers apparently missed some crucial concepts — like the fact that people would be free to interpret their self-interest in ways that conflict with the needs of government and Wall Street.

Let’s start with the recent negative rate milestone:

Negative-Yielding Debt Tops $10 Trillion

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Brexit Fears are Deliberately Overblown

By John Browne – Re-Blogged From Euro Pacific Capital

As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly dire economic consequences that would follow a YES vote by the British people to leave. Voices from London, Brussels, and Washington have all put immense pressure on British voters to bend to the will of the elites. To listen to their commentary, one would think that apocalypse was just around the corner. But is there any substance to their warnings?

The Pro-EU membership camp is led by Prime Minister David Cameron, supported by most of his cabinet, the Bank of England, the BBC and the massive support from the UK and EU governments that have funded enormous advertising campaigns against separation. Given this weight of their power, it is amazing how strong the support for a British exit (BREXIT) has remained.

When Britain first joined the European Economic Community (the precursor to the EU) in 1973, the primary motivation was the hopes of increasing British trade through participation in the world’s largest free-trade zone. However, the hope that the union would simply be a free-trading zone of sovereign countries has morphed into a drive for an EU superstate that has relentlessly pushed for greater regulations on businesses and people and greater control of local laws that have nothing to do with trade.

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Modern Scientific Controversies Part 1: The Salt Wars

By Kip Hansen – Re-Blogged From http://www.WattsUpWithThat.com

Prologue:  This is the first in a series of several essays that will discuss ongoing scientific controversies, a specific type of which are often referred to in the science press and elsewhere as “Wars” – for instance, this essay covers the Salt Wars1.  The purpose of the series to illuminate the similarities and differences involved in each.

Warning:  This is not a short essay.  Dig in when you have time to read a longer piece.

From the New York Times, Wednesday, June 1 2016,   “F.D.A. Proposes Guidelines for Salt Added to Food”:

The Food and Drug Administration proposed voluntary guidelines for the food industry to reduce salt on Wednesday [1 June 2016], a move long sought by consumer and public health advocates who said the standards could eventually help save thousands of American lives.”

….

“Americans eat almost 50 percent more sodium than what most experts recommend. High-sodium diets have been linked to high blood pressure, which is a major risk factor for heart disease and stroke.”

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The Pensions Mess

By Alasdair Macleod – Re-Blogged From GoldMoney

The British have recently seen two unpleasant examples of the cost of pension fund deficits. A deficit at British Steel, estimated to be about £485m, was followed by a deficit at British Home Stores of £571m. In both cases, pension fund deficits have scuppered corporate rescue plans, because understandably no buyer will take on these liabilities.

These two cases are the small tips of a very large iceberg, and reflect problems not just in Britain, but anywhere where pension schemes exist. They have been brewing for some considerable time, but have escalated as a direct consequence of central banking’s monetary policies. They are a crisis whose cause is concealed not only from the pensioners, but from trustees and investment managers as well.

This article lays out the problem and its scale, so far as it is known, and notes that a pension fund that has a holding in gold is a very rare animal. Indeed, one of the best known examples, the Teacher Retirement System of Texas, holds less than 1% of its $130bn assets in gold.

A short recap of the industry’s post-war development will give the pension issue its context, before commenting on the role gold can play. Pensions have existed for some time, but they really took off after the Second World War, driven by tax policy. Corporations were encouraged to set up pension funds for their workers, with employer and employee contributions being tax deductible.

From a government’s point of view, the tax relief granted cost little in terms of current expenditure, because it replaced the tax income forgone from corporations and employees, with deficit funding through bond markets. Furthermore, the demand for government bonds from accumulating pensions meant that there would always be demand for government debt, and interest paid would be less than otherwise. While governments have generally increased taxes on savings, pension schemes have been encouraged. They have become a material component in the financial system, and the only savings channel encouraged by governments.

In setting up a pension fund, the advising actuaries would have taken all variables into account. Of the many variables, the principal ones are the period of employment required for a full pension, the life expectancies of the scheme members, and the expected return on investments.

We are all aware that pensioners live longer, and that life expectancies have generally been underestimated. This has certainly been a problem. Some countries have responded by raising the retirement age. It is also obvious that rising or falling bond and stock markets have a direct impact on portfolio valuations. However, investment returns in the early days were relatively simple to calculate: they would be the average gross yield to redemption of the bonds that comprised the whole fund. These were mostly government and municipal bonds, and therefore unlikely to default. Bond prices didn’t matter, because they were nearly always held to final redemption at par.

That was fine, until portfolio managers began to explore other investment possibilities in the 1960s. Portfolio allocations started to migrate from low-risk government debt and high-quality corporate bonds, into blue-chip equities. This was the era of the nifty-fifty, and diversification was rewarded with enhanced capital returns over the redemption yield on government bonds. The seventies were somewhat different, with portfolio losses mounting on equities in the savage 1972-74 bear market, but compensation was found in the compounding effect of higher bond yields, which still comprised the dominant portfolio allocation. And we still haven’t mentioned on the most significant factor.

Increasing bond yields over the seventies decade benefited pensions because they allowed actuaries to sign off on lower amounts of capital required to cover pension obligations. This is because the capital required to fund a given income stream is lower when interest and dividends accrue at a high rate of interest, compared with when it accrues a lower rate. For example, an annual commitment to pay pensioners $100m from a portfolio yielding 10% requires it to have a minimum invested value of $1,000m. But a portfolio yielding only 5% has to be worth at least $2,000m to cover the same payment obligation. This is why the assessment of future returns is the most volatile component, leading to unexpected surpluses and deficits as reality unfolds.

Obviously, pension funds which are invested in high quality bonds produce a reasonably certain return, because they are held to maturity, so gross redemption yields are what matter. Equities used to be valued on dividend payments, originally yielding more than government bonds, reflecting their credit risk. That changed in the late 1950s, when portfolio managers began to take a different view, attracted by the potential that equities offered for capital gain. And over time, the potential for returns on equity investments even came to be defined as total returns, de-emphasising the dividend element.

Consequently, actuaries were progressively forced to move from the certain world of gross redemption yields into the uncertain world of guessing future returns on equities. By the 1990s many pension funds, faced with declining bond yields, were increasing their allocations in equities, property and even alternative investments such as art, to the point where bonds were often a minor component of pension portfolios. Inherently speculative capital gains on investments were generating valuation surpluses large enough to allow companies to take contribution holidays.

The outperformance of equities drove the shift from bonds to equities. This is illustrated in the chart below, which clearly shows why over the long term, allocations in favour of bonds have decreased, while allocations in favour of equities have increased.

However, the 2000-02 bear market created the first significant set of difficulties for pension funds. Not only did equity markets roughly halve, but bond yields continued their decline as well, when the Fed lowered the Fed funds rate from 6 ½% in December 2000 to only 1% eighteen months later. This created a double problem for the pension fund industry, because the sharp decline in equity markets was accompanied by a record low in interest rates. Unlike the seventies, falling equities were not compensated by rising bond yields.

Faced with triggering a wave of insolvencies of large labour-intensive businesses, pension actuaries in the US came under considerable pressure not to show large valuation deficits. The solution was to endorse incautious long-term estimates of total returns in equities. This at least got corporate America off the hook, and actuarial practice elsewhere followed this example. Fortunately, the stock market performed well, doubling between September 2002 and October 2007.

The Lehman crisis that followed hit the pensions industry hard a second time. In the fifteen months to February 2009 the S&P500 Index more than halved, as did the yield on the long bond. Following this sharp sell-off, valuation problems were partially covered by a stock market recovery, and there was the prospect of higher bond yields when monetary stimulus normalised economic activity. The latter never materialised, and the prop of rising equity markets, after an impressive run, now appears to be stalling. The big problem now, the elephant in the room, is realistic assessments of total return on the amount of capital required to pay existing and future pensioners.

In summary, since the dot-com bubble, we have seen a ratchet effect of declining bond yields, a doubling and then halving of equity markets, leading to alternate periods of deficit reductions followed by deficit increases. This problem has been totally ignored by central banks when setting monetary policy. You could describe the current situation as one of a massive wealth transfer from pension funds to debtors, storing up yet another savings crisis. The idea that monetary policy assists and encourages businesses to grow, ignores the detrimental off-balance sheet effects on the pension liabilities that the same companies now face.

The result is pension fund deficits today stand at record levels, even after a doubling of equity markets over the last five years. A Financial Times article (10 April) reported the deficit on US public pensions at the end of 2015 was $3.4 trillion, and in the UK, the aggregate deficit of some 5,000 pension schemes is estimated at £805bn (FT 27 May). Bear in mind that these numbers are based on total return estimates that are likely to turn out to be far too optimistic, because of the valuation effect described in this article.

Goodness knows how bad it must be for pension funds in countries where negative interest rates have been imposed. The cost in Japan will be reflected in $1.2 trillion of pension assets, and in the Eurozone a further $2.33 trillion. Of particular concern must be the liabilities faced by the banks in these regions, bringing in a direct systemic element into the equation.

Can gold help?

We can see that pension funds have an enormous and accumulating problem of capital shortfalls, which through over-optimistic assessments of future total returns are likely to be understated. The cost will be swallowed by pensioners in all the advanced nations, who have been promised a certain income in their retirement. It amounts to the impoverishment of the elderly, and the prospective insolvency of companies unable to cover their pension deficits. The question we now need to ask ourselves is whether or not an allocation of gold and related investments can help ameliorate the situation.

Essentially, we are now moving our analysis from considering nominal returns to real returns adjusted for price inflation. At the moment, roughly a third of all sovereign debt carries negative interest rates, but adjusted by consumer price indices, this increases to almost half. Furthermore, if we take into account the simple fact that standardised CPI estimates understate true price inflation, negative real yields probably apply to over three quarters of all sovereign debt.

The only salvation for pension funds is for global equities to continue to rise at significant rates, yet this seems unlikely given that equities on an historical basis are already extremely expensive. The Grim Reaper is knocking more insistently on the pension fund door.

In the medium to long term, gold has a track record of enhancing investment returns. The reason is very basic: the economic costs of production tend to be considerably more stable measured in gold than in fiat currencies. Given monetary policies are explicitly designed to reduce the purchasing power fiat currencies over time, the price of gold measured in these depreciating currencies is set to rise. With bonds reflecting negative real yields and stock markets wildly overvalued, gold, along with other tangible non-depreciating assets, is therefore the only game in town.

The explanation why gold performs well in deflation is equally simple. With falling prices, the purchasing power of gold tends to rise. Whether or not this is reflected to the same extent in a fiat currency is mainly a function of the rate of monetary expansion in the currency relative to the expansion of the quantity of gold available for monetary use. No prizes for guessing which can be expected to expand fastest.

Therefore, gold has a place in portfolios irrespective of inflationary or deflationary expectations. There is, however, a problem. Global pension fund assets are estimated to have been valued collectively at over $26 trillion at the end of 2014, and a one per cent increase in allocation into physical gold is the equivalent of 64,000 tonnes at today’s prices, about 40% the estimated above-ground stocks. Investing in gold mines is similarly constrained.

For an investment in gold, a balanced pension fund portfolio would have to consider an allocation closer to 10%, which on an industry-wide basis is impossible at anything like current prices. Furthermore, the average investment manager has difficulty categorising gold as an investment, unsure if it is a commodity, money, or a hedge against future uncertainty. Ironically, the oldest asset class is now being described as the newest asset class by the few managers showing an interest in gold. There is a considerable educational challenge involved.

Nothing educates more rapidly than experience. If bond yields remain low, and equity markets spend some time just consolidating the rises of the last five years by moving sideways, pension fund deficits will continue to increase to new record levels of deficits. That is probably best-case. Anything else is likely to accelerate the crisis, encouraging investment demand for gold, particularly if, as has been the case so far this year, it continues to outperform both equities and bonds.

The best solution for any pension fund will be to get in early, ahead of its peers.

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Weather Observers Misread Wind Speeds, Skewing a Major Hazards Database

By Anthony Watts – Re-Blogged From http://www.WattsUpWithThat.com

Weather spotters who report storm measurements and observations to a U.S. national compendium of storm data often exaggerate winds speeds—by about one third, on average.

beaufort-wind-scale

By   EOS.org

People may think they know how hard the wind is blowing, but science shows that they usually get it wrong. Researchers have known this for years, but a recent study seeks to quantify just how bad humans are at figuring out the speed of wind gusts without the aid of meteorological instruments.
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Lather. Rinse. Repeat.

By Peter Schiff – Re-Blogged From Euro Pacific Capital

Stop me if you’ve heard this one before: A Fed official walks into a bar and says the economy is improving and rate hikes are appropriate. The patrons order another round to celebrate. Then disappointing data comes out, the high fives stop, and the Fed official ducks out the back…only to come back the next day saying the same thing. Anyone who pays even the smallest attention to the financial media has experienced versions of this joke dozens of times. Yet every time the gag gets underway, we raise our glasses and expect the punch line to be different. But it never is. Last week was just the latest re-telling.

For nearly a month the Fed’s bullish statements stoked optimism on the economy and raised expectations, based particularly on the most recent FOMC minutes, for a summer rate hike. But these hopes were dashed by the May non-farm payroll report, which reported the creation of only 38,000 jobs in May, the worst monthly performance in six years, based on data from the Bureau of Labor Statistics (BLS). The number missed Wall Street’s estimate by a staggering 120,000 jobs. If not for the 37,000 downward revision reported for April (160,000 jobs down to 123,000), May could have shown a contraction. This would have constituted a major black eye to the Obama Administration’s favorite talking point that its policies have led to 75 months of continuous job gains. (6/3/16, Democratic Policy & Communications Center).

To make the report even stranger, the plunge in hiring was accompanied by a drop in the unemployment rate to just 4.7%. Of course the fall in the unemployment rate was a function of another major drop in the labor force participation rate to just 62.6%, matching the June 2015 rate, which was the lowest level since the late 1970s (BLS). So the unemployment rate did not fall because the unemployed found jobs, but because they stopped looking. The market reaction was swift and sharp, as it always has been when a fresh shot of cold water has been thrown in the face of market boosters. The dollar fell hard and gold rose sharply.

But we can rest assured that despite any embarrassment that the Fed may be experiencing for having so gloriously misdiagnosed the current economic health, it will be right back at it in a few days, telling us about all the positive economic signs that are emerging and how it is ready and willing to start raising interest rates at the earliest opportune moment. Boston Fed president Eric Rosengren waited exactly 48 hours to start that campaign as he sounded bullish notes in a Monday speech in Finland. (6/6/16, Greg Robb, MarketWatch)

Given how many times this scenario has unfolded, leading to the point where even reliable Fed apologists like CNBC’s Steve Liesman have begun questioning the Fed’s credibility, one wonders what the Fed hopes to achieve by continuously walking into the bar with a new smile. But this performance is the only policy tool it has left. The Fed appears to believe that perception makes reality, so it will never stop trying to create the rosiest perception possible. It may view its own credibility as expendable.

There is also the possibility, however unlikely, that the Fed officials are not just trying to create growth through open-mouth operations, but that they actually believe that their policies are working, or are about to work. This would be as dogged a commitment to policy as medieval doctors had for bloodletting, which they thought was a useful therapy for a variety of ailments. Doctors at that time had all kinds of seemingly plausible reasons why the technique was effective. If the patient did improve after draining blood, it was taken as a sign of validation. But they would continue to apply the leeches even if the patient did not improve. Failure was simply a sign that that more blood needed to be drained. Similarly, central bankers consider ultra-low, and even negative, interest rates as an ambiguous stimulant that will create growth when applied in large enough doses.

But what if modern central bankers, much like medieval doctors, are operating on a wrong set of assumptions? We know now that draining blood creates conditions that actually decrease a patient’s ability to fight infection and recover. Perhaps, one day, bankers will come to a similarly delayed conclusion about how zero and negative interest rates have prevented a real recovery that would otherwise have naturally taken place.

That’s because artificially low interest rates send false signals to the economy, prevent savings and investment, and encourage reckless borrowing and needless spending. They prevent the type of business and capital investment that is needed to create real and lasting economic growth. But don’t expect bankers, or their cheerleaders on Wall Street, the financial media, government, or academia, to ever make this admission. They do not believe in the power of free markets. They believe in government. Such a leap is simply beyond their powers of comprehension.

But there is another cycle here that is much more influential on the current market dynamic and should be much easier to spot. When the Fed talks up the economy and promises rate increases, the dollar usually rallies. When the dollar rallies, U.S. multi-national corporate profits take a hit, and the market falls. When the market falls, economic confidence falls and puts pressure on the Fed to maintain easy policy. This is a loop that the Fed does not have the stomach to break.

Because the Fed waited more than seven years to lift rates from zero, the cyclical “recovery” is already nearing its historical limit, if it’s not already over. This could put the Fed into a position of raising rates into a weakening economy. Normally it does so when the economy is accelerating. Some identify this delay as the Fed’s only policy error. But had it moved earlier, the recession would have simply arrived that much sooner. The Fed’s actual policy error was thinking it could build a “recovery” on the twin supports of zero percent interest rates and QE, and then remove those props without toppling the “recovery.”

But despite all this, there are those who still believe that the Fed will deliver two more rate hikes this year. Given the anemic growth over the past two quarters, the recent plunges in both the manufacturing and service sectors, average monthly non-farm payroll gains of only 116,000 over the past three months (most low-wage, and part-time) and the stakes contained in the election that is just six months away, such a conclusion is hard to reach. Instead, I expect we will get the same bar gag we have been getting for the past year. Many of those who now concede that a June hike is off the table still believe July to be a possibility. I believe the Fed will go along with that hype until it can no longer get away with it…then it will start bluffing about September, or perhaps December.

The Fed has to keep talking about rate hikes so it can pretend that its policies actually worked. But the truth is that the Fed policies have not only failed, they have made the problems they were trying to solve worse, and raising interest rates will prove it. So the Fed resorts to talking about rate hikes, to maintain the pretense that its policies worked, without actually raising them and proving the reverse. This can only continue as long as the markets let the Fed get away with it or until the numbers get so bad that the Fed has to admit that we have returned to recession. That is the point where the Fed’s real problems begin.

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Fed’s Rate Normalization Will Be Far From Normal

By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com

The Fed traditionally embarks on an interest rate tightening cycle when inflation has started to run hot. This decline in the purchasing power of the dollar will nearly always manifest itself in: above trend nominal GDP, rising long-term interest rates and a positively sloping yield curve.  These prevailing conditions are all indications of a market that is battling inflation; and thus prompts the Fed to start playing catch up with the inflation curve.

For example, the last time the Fed began a rate tightening cycle was back on June 30, 2004, when the Fed moved the Overnight Funds rate from 1% to 1 ¼%. At the time, the Ten-year Note yield was 4.62%, and the Two-year Note was 2.7%, creating a 1.92% spread between the Two and the Ten-year Note. To illustrate the fact that the long end of the yield curve was pricing in future inflation, the Ten-year yield climbed to 5.14% two years into the Fed’s rate hiking cycle. And perhaps more importantly, real GDP was 3% and rising, while nominal GDP posted an impressive 6.6% in the second quarter of June 2004.

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Weekly Climate and Energy News Roundup #228

The Week That Was: June 4, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

The Sun & Clouds: The UN Intergovernmental Panel for Climate Change (IPCC), and its followers such as the US Global Change Research Program (USGCRP) largely ignore Svensmark’s hypothesis that incoming high-energy cosmic rays, modulated by the sun, influence global climate by changing cloudiness. When the sun is active, the envelope of high-energy charged particles making up the solar wind (the heliosphere) expands in the solar system, reducing the high-energy cosmic rays hitting the atmosphere. Cloudiness decreases, resulting in warmer weather. When the sun is dormant, the heliosphere contracts, increasing the high-energy cosmic rays hitting the atmosphere. Cloudiness increases, resulting in cooler weather. According to reports, the major rationale for the IPCC, and others, for ignoring Svensmark’s hypothesis was that the forming of cloud droplets, thus clouds, required sulfur dioxide produced by human emissions and by volcanoes. Thus, according to the IPCC, until the industrial revolution, Svensmark’s hypothesis did not apply to climate change; but, in its recent analysis, the IPCC does not consider climate change until after the industrial revolution.

The rationale is strange for several reasons. One, contemporary 16th and 17th European records and paintings (such as those by Pieter Brueghel) show the Little Ice Age was cold and cloudy. Earlier, using tricks such as Mr. Mann’s hockey-stick in 2001, the IPCC has tried to dismiss the Little Ice Age as a local phenomenon, but evidence is compiling that it was global. Two, the reports of the IPCC asserting the dominant influence of carbon dioxide (CO2) focus on the period after the industrial revolution, particularly, the period after 1950. During this period there were significant human emissions of sulfur dioxide. The global climate models used by the IPCC consider that sulfur dioxide has a significant cooling effect (independent of cloudiness), partially off-setting the calculated warming effect of CO2 (and other greenhouse gases).

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Is India The New China?

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

A “slow-growth trap.” That’s how the Organization for Economic Cooperation and Development (OECD) described the global economy last week in its latest Global Economic Outlook. The group sees world GDP advancing only 3 percent in 2016, the same as last year with a slight bump up to 3.3 percent in 2017.

Catherine Mann, the OECD’s chief economist, urged policymakers around the world to prioritize structural reforms that “enhance market competition, innovation and dynamism,” as monetary policy has been used alone as the main tool for far too long. The longer the global economy remains in this “slow-growth trap,” Mann said, the harder it will become to revive market forces.

This is precisely in-line with what I, and many of my colleagues, have stressed for months now.

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10 Year Major Hurricane Drought for U.S. Continues

By Anthony Watts – Re-Blogged From http://www.WattsUpWithThat.com

Hurricane season started June 1st, and with it an unprecedented 10 year long drought of U.S. landfalling hurricanes that are Category 3 or higher.

Bonnie, the second tropical storm of the 2016 season, drenched parts of the Atlantic coast from Georgia to Rhode Island with up to 8 inches this past Memorial Day weekend. What’s ahead for the hurricane season of 2016? It has been a decade since the last major hurricane, Category 3 or higher, has made landfall in the United States. This is the longest period of time for the United States to avoid a major hurricane since reliable records began in 1850. According to a NASA study, a 10-year gap comes along only every 270 years.

The National Hurricane Center calls any Category 3 or more intense hurricane a “major” storm. It should be noted that hurricanes making landfall as less than Category 3 can still cause extreme damage, with heavy rains and coastal storm surges. Such was the case with Hurricane Sandy in 2012.

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The Keynesians Stole The Jobs

By Ron Paul – Re-Blogged From http://ronpaulinstitute.org

Late last week the markets were shocked by a surprisingly bad May jobs report – the worst monthly report in nearly six years. The experts expected the US economy to add 160,000 jobs in May, but it turns out only 38,000 jobs were added. And to make matters worse, 13,000 of those 38,000 were government jobs! Adding more government employees is a drain on the economy, not a measure of economic growth. Incredibly, there are more than 102 million people who are either unemployed or are no longer looking for work.

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Impacts of Climate Change Policy in The Real World

By Dr. Tim Ball – Re-Blogged From http://www.WattsUpWithThat.com

Every man wishes to pursue his occupation and to enjoy the fruits of his labors and the produce of his property in peace and safety, and with the least possible expense. When these things are accomplished, all the objects for which government ought to be established are answered. -Thomas Jefferson

This week I experienced first hand another example of how the anthropogenic global warming (AGW) deception and the policies it engenders is negatively impacting people’s lives. A small group of private land wood-lot operators were facing challenges to their survival created by false climate science and unnecessary and misguided government reactions. I say “another example” because much of the last 40 years involved helping people understand and cope not only with the weather, climate and climate change, but the draconian, unnecessary policies, rules, and regulations created by ignorant politicians who put on the cloak of green. It is supposedly the green of environmentalism, but that is a cover up because it is the green of tax money and the political control it provides.

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Primary Trend Indicator Generates A Long-Term Stock Market Sell Signal

By Robert McHugh – Re-Blogged From http://www.Gold-Eagle.com

For the first time in six years, our Primary Trend Indicator, a long-term trend stock market forecaster, generated a new signal, a Sell Signal on May 31st, 2016. The last signal change was a Buy in May 2010. These long-term Buy and Sell signals are rare, but have been very accurate at identifying the start of new long-term trends. This is a warning that stocks are about to enter a long-term Bear market, one that will likely be lengthy and deep based upon the market’s behavior after previous Buy and Sell signals from this indicator.

The most recent previous signal came on May 31st, 2010 when the PTI generated a Buy signal, and it remained on a Buy signal until May 31st, 2016. After that Buy signal six  years ago, the Industrials rose 8,152 points (an 80% gain).

The last time it generated a new long-term trend “Sell” signal was almost eight years ago, on September 30th, 2008, just as the autumn stock market crash started, when the DJIA closed at 10850. We saw a 4,400 point drop (i.e. 41 percent decline) after this sell signal was triggered.

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In Praise of Usury

Re-Blogged From The Economist (from 2007)

In DANTE’S “Divine Comedy”, usurers are consigned to a flaming desert of sand within the seventh circle of hell. Attitudes have since softened a bit. Microcreditors, who offer small loans to self-employed poor people, enjoy hallowed reputations. One has even ascended to the rank of a Nobel laureate. But lending to the poor is still considered distasteful whenever it is pricey, short-term and profitable. In America, for example, many activists are quick to damn “payday” lenders, who may charge high fees for offering cash advances on a worker’s next pay cheque.

Why this hostility? To profit from lending to the poor, critics say, is to prey on the most vulnerable, at their most vulnerable moment. Faced with desperate customers, loan sharks can charge well over the odds, even when the risk of default is slight. The money they proffer is often squandered on spurious consumption, critics say, rather than productive investments that would help the borrower repay his debts. Easy credit thus tempts people into a damaging spiral of indebtedness.

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Gold – A Reasonable Correction?

By Alasdair Macleod  ReBlogged From Gold Money

Gold weakened during May by about $100…from a high point of $1300 to a low of $1200. For technical analysts this is entirely within the normal correction zone of a third to two-thirds of the previous rise, which would be 84 to 167 dollars.

So the price decline is technically reasonable…and therefore doesn’t in itself signify any underlying challenge to the merits of a long position in gold. However, when looking at short-term considerations, we should look at motivations as well. And those clearly are the profit to be made by banks dealing in the paper bullion market, which they can simply overwhelm by issuing short contracts out of thin air. This card has been played successfully yet again, with the bullion banks first creating and then destroying nearly 100,000 contracts, lifting the profits from hapless bulls in the COMEX market.

The banks get the money, the punters get the experience…and the evidence disappears. The futures market is demonstrably little more than a financial casino, where the house, comprising the establishment banks, always wins. Financial markets are not about free markets and purposeful pricing, which is why the vast majority of outsiders, including hedge funds, those Masters of the Universe of yore, usually lose. This leads us to an important conclusion: the fall in prices has less to do with a change in outlook for the gold price, and more with the way a casino-like exchange stays in business.

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Falling Down the Energy Ladder

By Viv Forbes with help from volunteer reviewers, and Steve Hunter, Cartoonist.

Re-Blogged From http://www.WattsUpWithThat.com

When man first appeared on Earth he had no implements, no clothes, no farms, no mineral fuels, no machines and no electricity – his only tools were his brains, hands and muscles.

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Everything that enables humans to live comfortably in a world where nature is indifferent to our survival has been discovered, invented, mined or manufactured over thousands of years by our inquisitive and innovative ancestors.

The history of civilisation is essentially the story of man’s progressive access to more efficient, more abundant and more reliable energy sources – from ancestral human muscles to modern nuclear power. It is also the story of how to store that energy and deliver it with minimal losses to where it is most needed.

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Euro Breaks Above $1.13 After Staggeringly Weak Jobs Report

By Joseph Adinolphi – Re-Blogged From http://www.MarketWatch.com

Report likely takes June rate hike off the table, analysts say

Bloomberg
Friday’s abysmal jobs data drove the dollar lower.

The euro traded above $1.13 on Friday for the first time in more than two weeks after official U.S. data showed the rate of jobs growth decelerated last month to its slowest level since late 2010.

Labor Department data showed the U.S. economy added just 38,000 jobs last month, the slowest pace of growth since September 2010. The number was far short of the 155,000 jobs economists polled by MarketWatch had expected.

The Biggest Bubble In History Will Lead To An Even Bigger Collapse

By Egon von Greyerz – Re-Blogged From http://www.Gold-Eagle.com

In a world full of bubbles that will all burst, it is of course impossible to forecast which will be the first ones to cause havoc for the world economy. One of the biggest bubbles that would clearly bring down the financial system is the bond market. Here we have a $100 trillion market which has grown exponentially in the last 25 years and which has virtually gone vertical since the 2006-9 crisis.

Desperate governments are raising money as if there was no tomorrow in the hope that they can keep the world afloat for another few years. But as I have stressed so many times, you can create neither economic stability nor wealth by printing money or increasing the debt burden.

Governments cannot afford interest rates above zero.

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