Targeting nGDP

By Keith Weiner – Re-Blogged From Gold Eagle

Not too long ago, we wrote about the so called Modern Monetary so called Theory (MMT). It is not modern, and it is not a theory. We called it a cargo cult. You’d think that everyone would know that donning fake headphones made of coconut shells, and waving tiki torches will not summon airplanes loaded with cargo. At least the people who believe in this have the excuse of being illiterate.

You’d think that everyone would know that printing fake money and waving bogus theories around will not create new wealth. The excuse is that so called the wealth effect is so pleasant. Like drugs provide a happiness effect.

There is an old joke about a guy who talks to a psychologist about his crazy brother.
The guys says, “Doc, my brother thinks he’s a chicken.”
The psychologist says, “You should make sure he gets therapy for this delusion.”

“I would, but the eggs are good!”

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Financial System Is Rotten

By Egon von Greyerz – Re-Blogged From Silver Phoenix 

Something is rotten in the state of Denmark the world (from Shakespeare’s Hamlet).

In a world that cannot survive without incessant deficit spending, money printing and negative interest rates, there is clearly something very rotten. It is not only rotten but it stinks! Yes it stinks of lies, deceit and moral decadence.

So why doesn’t anyone stand up to tell the world where we are heading. Well, for the simple reason that no politician can tell the truth. Because if they did, they wouldn’t be elected. The principal purpose of any politician is to buy votes and to get votes you can never speak the truth.

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Money And The Theory Of Exchange

By Alasdair Macleod – Re-Blogged From Goldmoney

Evidence mounts that the global credit cycle has turned towards its perennial crisis stage. This time, the gathering forces appear to be on a scale greater than any in living memory and therefore the inflation of all major currencies to deal with it will be on an unprecedented scale. The potential collapse of the current monetary system as a consequence must be taken very seriously.

To understand the consequences of what is likely to unfold requires a proper understanding of what money is and of the purpose for its existence. It does not accord with any state theory of money. This article summarises the true economic role of money and how its use-value is derived. Only then can we apply the lessons of theory and empirical evidence to anticipate what lies ahead.

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Central Bank Folly: Blame The Boomers…

By Michael Ballanger – Re-Blogged From Gold Eagle

“Destroyers seize gold and leave to its owners a counterfeit pile of paper.” – Ayn Rand

The baby-boom generation, of which I am a less-than-proud member, blew it.

There was a time long, long ago when the mention of the word “baby-boomer” evoked a sense of pride of membership. Amidst the prosperity of the post-WWII era, birth rates in North America soared while the sons and daughters of many men and women that fought in the war became the dominant demographic force by the year 1966. When I was in Grade 10, I wrote an essay that pointed to the defining moment where the excitement and unbridled optimism of the Space Race, advances in modern medicine, and unparalleled economic growth was snuffed out forever by an assassin’s bullet in Dallas in the autumn of 1963. With the end of Camelot, the boomer generation suddenly began to question things. They threw away the Beach Boys “Surfin’ Nirvana” lifestyle to the darker messages of Bob Dylan, CSNY, the Doors, and Hendrix as they watched while the Viet Nam war claimed over 58,000 U.S. servicemen and caused massive civil unrest to permeate the inner cities and the campuses of America.

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Socialism 2020?

By Stefan Gleason – Re-Blogged From Gold Eagle

The 2020 presidential election is already shaping up to be one of the most bitterly contested in history. The outcome could have enormous ramifications for all asset markets, including precious metals.

In the meantime, a lot can happen before November 2020 – especially with the Federal Reserve apparently set to turn dovish and cut interest rates this summer.

Some historical research into presidential election cycles suggests that the stock market tends to perform well heading into an election year. The incumbent administration tends to focus on padding economic statistics.

And during election years, Fed officials (who swear up and down they aren’t motivated by politics) tend to avoid making policy moves (such as rate hikes) that could make them vulnerable to political attacks.

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Silver Price – 1993 And 2001 Repeat

By Gary Christenson – Re-Blogged From Silver Phoenix

The M2 measure of money supply has increased about 6.7% per year since 1971 when President Nixon severed the last hint of gold backing the dollar. The subsequent deluge of digital dollars levitated prices for oil, trucks, hamburgers, the S&P 500 Index, silver and almost everything else. Examine the log scale graph of M2 and smoothed silver prices. M2 rises, while silver prices increase to unsustainable levels, fall too low and then rise again.

In late 2018 silver prices are too low! They hit bottom in December 2015 and have risen since then. First slowly, then rapidly, as Hemingway said…

Analysis: Silver prices are too low.

Silver prices rise along with M2, but they are now well below trend. This graph shows that silver could rise above $30 in 2019.

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What Can Kill A Useless Currency

By Keith Weiner – Re-Blogged From Gold Eagle

There is a popular notion, at least among American libertarians and gold bugs. The idea is that people will one day “get woke”, and suddenly realize that the dollar is bad / unbacked / fiat / unsound / Ponzi / other countries don’t like it / <insert favorite bugaboo here>. When they do, they will repudiate it. That is, sell all their dollars to buy consumer goods (i.e. hyperinflation), gold, and/or whatever other currency.

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