Silver Versus Debt, Delusions And Devaluation

By GE Christenson – Re-Blogged From Silver Phoenix

Part One: THE ECONOMY – AND DEBT, DELUSIONS AND DEVALUATION

  • Global retail sales are weak. “Redbook Retail Index confirms Commerce Department December Retail Collapse.”
  • Falling Imports into the U.S.
  • Industrial Production dives lower
  • Housing sales are weak.
  • Auto (U.S. and China) sales are down and auto loan defaults are rising.
  • Tariff war with China. Does a tariff war benefit anyone?
  • From Charles Hugh Smith: “Credit Exhaustion Is global.”

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New Inflation Indicator

By Keith Weiner – Re-Blogged From Gold Eagle

Last week, we wrote that regulations, taxes, environmental compliance, and fear of lawsuits forces companies to put useless ingredients into their products. We said:

“For example, milk comes from the ingredients of: land, cows, ranch labor, dairy labor, dairy capital equipment, distribution labor, distribution capital, and consumable containers.”

There are eight necessary ingredients, without which milk cannot be produced.

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Memories…And A Warning

By Gary Savage – Re-Blogged From Gold Eagle

This week my second son Joey turns 30 and my granddaughter Addie turns 3- just a day apart. The reason I bring this up is that we took a few days and visited Disney World in Florida.

As I walked into Disney’s Main Street I was reminded of a simpler and happier time here in America that many today cannot remember. America was a place where budding entrepreneurs could hang out a shingle without much government interference and chase their dreams. Mom and pop stores could make a living and provide services that made life easier for everyone. With few regulations and few barriers to entry many could earn a living and make their lives better. This Main Street is a reminder of this. Low taxes, low interference, high growth and stable money. Life was good for most.

Those with great ideas were rewarded with great fortunes.

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Straws In The Wind

By Alasdair Macleod – Re-Blogged From Gold Eagle

Life is full of mysteries. Each mystery is like a straw in the wind, which individually means little, but tempting us to speculate there’s a greater meaning behind it all. Yes, there is a far greater game in play, taking Kipling’s aphorism to a higher level.

One of those straws is Russia’s continuing accumulation of gold reserves. Financial pundits tell us that this is to avoid being beholden to the US dollar, and undoubtedly there is truth in it. But why gold? Here, the pundits are silent. There is an answer, and that is Russia understands in principal the virtues of sound money relative to possession of another country’s paper promises. Hence, they sell dollars and buy gold.

But Russia is now going a step further. Izvestia reported the Russian Finance Ministry is considering abolition of VAT on private purchases of gold bullion. We read that this could generate private Russian annual demand of between fifty and a hundred tonnes. More importantly, it paves the way for gold to circulate in Russia as money.

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Sprout-less Gold Now Tier 1 Capital

By Rick Mills – Re-Blogged From Gold Eagle

Gold Is Often Criticized By Wall Street As Being Kind Of A Useless Investment.

Institutional investors tend to prefer investments that are thought to contain the potential for growth, growth = sprouts. An investment has to produce a growing revenue stream – if it doesn’t grow it doesn’t compound. Gold is rejected as an investment because it doesn’t produce sprouts, meaning the steady income and systematic growth so sought after by institutional investors just isn’t there.

But gold performs two jobs that fiat currencies, or any other financial innovation, cannot do; gold acts as a safe haven in times of turmoil. Indeed, gold’s status as store of value, as money, the only currency available when yours is worthless, has come into play with respect to the drama that has been unfolding in Venezuela over the last couple of years. Hyperinflation and shortages of basic foods and medicine have led to a political crisis.

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What Ballooning Corporate Debt Means for Investors

By Frank Holmes – Re-Blogged From Gold Eagle

Few people know the risks in today’s economy and marketplace as much as David Rosenberg, chief economist and strategist at Canadian wealth management firm Gluskin Sheff & Associates. For years he’s educated investors with his popular “Breakfast with Dave” newsletter, which you can subscribe to here. He’s also a regular contributor to the Globe and Mail and the Financial Post.

Considered by many to be a Wall Street permabear, Rosenberg successfully predicted the 2007-2008 financial crisis.

Now he’s predicting another recession to make landfall as soon as the second half of this year. Why? In short, the Fed has been too aggressive tightening liquidity at a time when corporate debt is at an all-time high. What’s more, the Trump administration has already enacted fiscal stimulus in the form of tax reform, which has historically been reserved for times of economic turmoil, not expansion.

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What Causes Loss Of Purchasing Power

By Keith Weiner – Re-Blogged From Gold Eagle

We have written much about the notion of inflation. We don’t want to rehash our many previous points, but to look at the idea of purchasing power from a new angle. Purchasing power is assumed to be intrinsic to the currency. We have said that the problem with the word inflation is that it treats two different phenomena as if they are the same. One is the presumed effect of rising quantity of dollars. The other is the effect of rising regulatory and tax burdens.

Let’s use milk as an example. Suppose milk was $1 per gallon. Many would say that a dollar is worth one gallon of milk. Or, alternatively, a dollar’s purchasing power is one gallon of milk. Suppose that later, the price of milk goes up to $2. Then, people say that the dollar’s purchasing power falls by 50%, to half a gallon of milk. Regardless of what you call it, everyone would agree that the dollar buys less than it did.

Until now. Let us explain.

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