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Hultberg: Keynesianism’s Ugly Secret

crash_prediction_of_27_webIt is now five years since the crash of 2008. Today’s media and much of our academic crowd, of course, believe that the crisis has been handled, and that we can settle back to “business as usual.”

But such pundits are so immersed in the Keynesian paradigm that they are viewing only the trees, not the forest. They are viewing only the specific recessionary cycles and not connecting such cycles to the big picture of the overall boom/bust nature of 20th century economics. Since they have accepted Keynesianism as valid, they see in today’s economy normal activity and business cycles. They see correct Federal Reserve policy and legitimate fiscal policy on the part of the Federal Government. But this view comes from a false concept of economics and from a major failing of humans – their use of “euphemism” to evade the fact they are trying to circumvent natural law so as to get something for nothing. Continue reading

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Macleod: Gold and bail-ins

piles_o_gold_02I am often asked whether or not western governments are likely to confiscate gold, and my answer has invariably been on the lines of “unlikely at the moment, because so few people own gold”. However given low stock levels in western vaults and that bail-ins are on the agenda the answer to the question should be reconsidered.

I first wrote about the new bail-in provisions after the Cyprus debacle last year. What it means for depositors is succinctly summarized in a current UK Government consultative document on the subject: Continue reading

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The Crash of 1929 & The Great Depression: Part 4

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Economic Collpase: Byron Dale – From Wealth to Debt

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Poorer Americans pick gold over stocks as the best investment

gold bars_feg_webYou can keep your gold and stocks because there’s no place like home for my money.

That seems to be the gist of a recent survey from Gallup, in which Americans picked real estate as the cream of the the long-term-investment crop. Their other choices were gold, stock and mutual funds; savings accounts and CDs; or bonds.

Some 30% of those polled picked real estate, versus 24% each for gold and stocks, while 14% gave savings accounts/CDs the nod and just 6% said bonds were the way to go. The bond drag is not too surprising considering how investors have been fleeing funds like the Pimco Total Return Fund. Bonds have also been a consistent nonfavored option in the Gallup poll. This marked the first year gold was included as an option in the Gallup survey of 1,026 adults aged 18 and older. Continue reading

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Americans With Lower Credit Scores Are Finding It Easier To Take Out Mortgages

Here we go again…

real_estate_foreclosureFollowing the U.S. housing bust, it got harder for households to get a mortgage.
It was especially hard for folks with lower credit scores.

However, lending standards have been loosening, and this is largely considered a good thing. But it also means it’s becoming easier for people with lower credit scores to get a mortgage.

Remember before the bust, lenders threw money at folks with poor credit, and who were at high risk of defaulting on their loans. Continue reading

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Evidence of Mainstream Financial Media Opposition to Gold and Silver

gold bars_feg_webSo now what instances of proof can we discover to support the idea that mainstream financial media is inherently biased against precious metals?

Demand for gold as a hedge against currency debasement in China is on the rise.

Well, lets examine the three largest shaper of public opinion in regard to all things financial, shall we? Continue reading

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Are You Ready For The Price Of Food To More Than Double By The End Of This Decade?

Supermarket-Photo-by-Abrahami-300x300Do you think that the price of food is high now? Just wait. If current trends continue, many of the most common food items that Americans buy will cost more than twice as much by the end of this decade. Global demand for food continues to rise steadily as crippling droughts ravage key agricultural regions all over the planet. You see, it isn’t just the multi-year California drought that is affecting food prices. Down in Brazil (one of the leading exporters of food in the world), the drought has gotten so bad that 142 cities were rationing water at one point earlier this year. And outbreaks of disease are also having a significant impact on our food supply. A devastating pig virus that has never been seen in the U.S. before has already killed up to 6 million pigs. Continue reading

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What doctors found inside an Indian businessman after he complained of having a stomach ache (12 gold bars worth $1,847.00 each)

He wouldn't have made it!

He wouldn’t have made it!

Doctors in India were shocked to find 12 gold bars inside the stomach of a businessman who was admitted after complaining of pains.

The 63-year-old man went to a hospital in Delhi earlier this month saying he had swallowed a cap from a water bottle and wanted it removed from his body.

He also complained of pain and vomiting prompting surgeons to operate, when they discovered the hoard though to be worth around $23,300.00.

Doctors discovered a total of 12 gold bars, each weighing 33g which were discovered in his stomach rather than a bottle cap, it has been reported. Continue reading

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Fekete: The Significance of the Gold Standard

This is a freely edited version of an article by the monetary economist Walter E. Spahr (1891-1970), Head, Department of Economics, New York University, that appeared in the quarterly review Modern Age, Summer, 1960

golden_rollsAn instrumentality of human freedom
Of all institutions the gold standard occupies a paramount position as an instrumentality of human freedom, private property, private enterprise, and responsible government. The nature of the gold standard should reveal something as to why it is a necessary and natural companion of human freedom.

After specifying the standard gold coin and opening the Mint to its free and un-limited coinage on private account, the government must stand aside and let the gold standard perform its functions in accordance with the desires of the people. The right to private property in gold is established and respected. The government shall not interfere with the hoarding, importing or exporting of gold, or with the redemption of non-gold currency into standard gold coin by the banks. An individual may put none, little, much, or all of his property into gold. He may convert all of his property into gold and ship it out of the country without hindrance from the government.

Checkrein on the government and banks
If a person living under a degree of freedom inherent in a gold standard is disturbed by, or disapproves of, the policies of his government or the practices of banks, he may protect his property by presenting non-gold currency for redemption. If a sufficient number of people do this, then the government and the banks are forced to respect the fears or disapproval of the citizens. The government and the banks are thus placed in a position in which they must be careful not to disturb unduly, or to incur the disapproval of, people with property to protect.

Thus do a people with a gold standard at their disposal have the power to keep a checkrein on the fiscal policies of their government. Thus do they force the banks not to pursue reckless credit practices. Thus do they obtain and maintain a responsible government and a responsible banking system.

The people may utilize that power wisely or unwisely; but it is a power they must have if they are to be able to protect themselves from improper government encroachment or tyranny, and against irresponsible banking. (Continue to original article)

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Macleod: Economic Outlook Darkens

Dust-storm-Texas-1935Many decades of Keynesian-inspired economic and monetary corruption have left advanced economies with a legacy of debt and low savings. In a nutshell, that is the problem which is driving us into another financial crisis. That moment could be drawing upon us, signalled by the recent collapse in bond yields.

This nearly happened in 2008. It was bought off by an open-ended central bank guarantee of infinite quantities of cash and credit, initially by the Fed, rapidly followed by all the other major central banks. Six years later, monetary medicine is still being applied globally in unprecedented quantities. And in some countries bank credit has finally begun expanding more rapidly than before.

The counterpart to bank credit is debt, which is fuelling economic growth wherever it can be found. Even exports are on tick, with the ultimate buyers around the world also heavily dependent on credit. Indeed, the more one looks at the current business cycle, the more its current state resembles 2007-8 and 2000-01 before that.

Credit cycles unbacked by substance start like this: print some money to inflate asset prices. Collateral values then increase, stimulating bank lending. Borrowers buy property and stocks, increasing prices and spreading the feel-good factor. Now that personal balance sheets are “repaired”, they buy new cars, new holidays and second homes, all on tick. Welcome to this point in time: the accumulation of debt has stopped us from increasing demand any further. The progression of events from here varies but the end result is easily predicted: it runs out of steam and turns into a financial crisis.

So how do we get away from this depressing and predictable cycle of events? The answer is simple: stop relying on the expansion of money and credit. We have forgotten that before Keynes told us to borrow to spend, debt was only taken on by entrepreneurs and businesses for very specific purposes as a last and not a first resort, and certainly not for everyday consumption. (Continue to original article)

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Recession Not Over for Poor: Families Stretch Food to Last

depressionAfter Jaime Grimes found out in January that her monthly food stamps would be cut again, this time by $40, the single mother of four broke down into sobs — then she took action.

The former high school teacher made a plan to stretch her family’s meager food stores even further. She used oatmeal and ground beans as filler in meatloaf and tacos. She watered down juice and low-fat milk to make it last longer. And she limited herself to one meal a day so her kids — ages 3, 4, 13, and 16 — would have enough to eat.

“I just want my kids to be fed,” said Grimes, 38, of Lincoln, Neb., who suffers from chronic back problems, arthritis and muscle pain that make it difficult for her to stand. She is applying for disability but in the meantime has $950 a month — $500 in child support and $450 in food stamps — to feed and house her family. “I just want my kids to have the basics of life that, unfortunately, I can’t give them right now,” she added.

Grimes and her children are among the estimated 49 million Americans who have limited — or uncertain — access to enough food to meet their daily needs. The numbers of people living in such hardship initially spiked during the Great Recession to around 15 percent of Americans, and has hovered there, failing to return to pre-recession figures of 11- to 12-percent though the economic slump ended nearly five years ago in June 2009, according to a new report by Feeding America, a national hunger relief charity.

“Nothing is getting better,” said Craig Gundersen, lead researcher of the report, “Map the Meal Gap 2014,” and an expert in food insecurity and food aid programs.

“Let’s stop talking about the end of the Great Recession until we can make sure that we get food insecurity rates down to a more reasonable level,” he added. “We’re still in the throes of the Great Recession, from my perspective.” (Continue to original article)

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Scalia To Student: If Taxes Go Too High ‘Perhaps You Should Revolt’

Supreme Court Justice Scalia Joins Book Discussion In WashingtonSpeaking at the University of Tennessee College of Law on Tuesday, the longest-serving justice currently on the bench was asked by a student about the constitutionality of the income tax, the Knoxville News Sentinel reports.

Scalia responded that the government has the right to implement the tax, “but if it reaches a certain point, perhaps you should revolt.” Continue reading

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In Debt We Trust America Before the Bubble Bursts

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Silver Price Forecast 2014: Silver’s Ultimate Rally When Paper Assets Collapse

silver-barsThe relationship between the Dow and silver has been very consistent over the last 100 years. After each of the major Dow peaks (real, not necessarily nominal peaks), we eventually had major bottom in silver. Below, is a 100-year inflation-adjusted Dow chart:

In September 1929, the Dow peaked in terms of US dollars as well as in terms of gold ounces (real terms). After about 1 year and 4 months, silver made a significant bottom. While the Dow continues to fall for most of the time, silver rallied until it peaked in January of 1935. At silver’s peak, the Dow was about 30% lower in real terms than what it was at silver’s bottom. Continue reading

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