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What the Origins of Money Teaches Us About Spontaneous Order

Money has been around for most of human history. From Mesopotamia (or even earlier), all civilizations have employed some kind of medium of exchange to facilitate transactions regardless of their geographical locations, legal and economic systems, religious beliefs or political structures. Have you ever wondered why? In a brief essay entitled “On the Origins of Money,” the nineteenth-century Austrian economist Carl Menger provides an answer to this question. Menger argues that money emerged spontaneously in different times and places to overcome the disadvantages of barter and facilitate the expansion of trade. Which disadvantages? Continue reading

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Mask of Dimitrios

“For money, some men will allow the innocent to hang. They will turn traitor… they will lie, cheat, steal and they will kill. They appear brilliant, charming and generous! But they are deadly! Such are men as Dimitrios.”

Americans, living in what is called the richest nation on earth, seem always to be short of money. Wives are working in unprecedented numbers, husbands hope for overtime hours to earn more, or take part-time jobs evenings and weekends, children look for odd jobs for spending money, the family debt climbs higher, and psychologists say one of the biggest causes of family quarrels and breakups is “arguments over money.” Much of this trouble can be traced to our present “debt-money” system.

Too few Americans realize why Christian Statesmen wrote into Article I of the U.S. Constitution: Congress shall have the Power to Coin Money and Regulate the Value Thereof.

What went wrong? (Continue…)

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DEAD-line: July 17, 2018


The Trade War Is Already Having A Huge Impact On The U.S. Economy
The trade war has barely just begun, and yet significant ripple effects are already being felt all across the U.S. economy. Once thriving businesses are on the verge of failure, workers are being laid off, and some sectors of the economy are witnessing enormous price hikes… (Continue to full article)

Fed’s Powell: Best way forward is to keep raising rates
The Fed has raised its key interest rate twice this year, most recently in June. It has penciled in two more rate hikes this year and three more in 2019. For now, central bankers believe the American economy is robust enough to stay on course… (Continue to full article)

Student Debt Bubble Expands As Parents Do More Of The Borrowing
Not so long ago, student debt was mostly the responsibility of students. That is, you paid for college with loans and then paid off those loans with the proceeds of the good job you got with … (Continue to full article)

“Wee ar Federales…”

The US Now Spends $1 Billion a Year Detaining Immigrant Kids
Nearly 12,000 children ranging in age from a few months to 17 years old are now being housed in dozens of facilities across 15 states, AP said. The children are being housed while they await immigration proceedings for their parents or asylum proceedings if they arrived in the U.S. without their parents… (Continue to full article)

Is the War on Poverty Over?
The White House declared this week that the war on poverty “is largely over and a success” as it pushes for stiffer work requirements for recipients of federal aid. In a paper released Thursday… (Continue to full article)

Coins Or Bars – What’s Best For You?
Have you ever wondered why some people buy bars and others choose coins? Here’s what to consider when deciding… (Continue to full article)

Gold Is Now Star Of The Walking Dead
The AMC channel has a hit TV show called The Walking Dead. The way gold has traded for the past few weeks, it appears that the metal has now taken the starring role. Metals in general have become comatose at the lower ends of their ranges as they wait for a reason to move. This type of trading action is very common in all markets. You see markets go through different phases and right now the metals are in the dead phase. Nothing has been able to move gold or silver as they hover near the lows. There is a huge move coming and the metals will move 10% from current levels within the next few weeks… (Continue to full article)

Medicare Part D and the Opioid Crisis
Medicare Part D is a relatively new “entitlement” program that provides a subsidy to retirees for prescription drugs. It is supposedly designed to help seniors, but is the drug companies that benefit most. Started in 2006, it was expected to cover 11 million, but that figure was 24 million after… (Continue to full article)

Mass Hysteria
SMOKESCREEN of the WEEK: The mass hysteria following Trump’s meeting with Putin is likely to last for days. Most are outraged. Few see the light… (Continue to full article)

Is Gold Effective As A Portfolio Diversifier and/or As An Inflation Hedge?
While gold has traditionally been seen as a tactical way to help preserve wealth during market corrections, times of geopolitical stress or persistent dollar weakness, we think there is a case to be made for gold as a core diversifying asset with a long-term strategic role in multi-asset portfolios…as gold’s historically low or negative correlation with most other asset classes argues in its favor… (Continue to full article)

Clinton Involved in Biggest Treason in History
Former CIA Officer and whistle-blower Kevin Shipp says what Hillary Clinton did with her charity and Uranium One while she was Secretary of State was a crime for the history books… (Continue to full article)

Norway Central Bank Goes Dark on Its $276 Billion in U.S. Stocks
To an ever growing degree, the U.S. stock market is being propped up by hedge fund algorithms, corporations taking on debt to buy back their own stock, big Wall Street banks’ dark pools trading in darkness and foreign central banks and foreign sovereign wealth funds gobbling up U.S. stocks. Now it seems that the tiny window the public has… (Continue to full article)

The Five Pillars Of The Looming Debt Default
After ten years of ‘experimental monetary policy’ which drove borrowing costs in U.S dollars down to record lows, foreign companies still reeling from the after-effects of the 2008 financial crisis borrowed trillions of dollars to fund the global expansion of the past few years.

That debt pays investors in US dollars.

But, foreign companies tend to book revenue in their local currency.

A falling local currency makes dollar-denominated debt more expensive to pay off.

This leads to the next Pillar… (Continue to full article)

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Kettle Moraine, Ltd.
P.O. Box 579
Litchfield Park, AZ 85340

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DEAD-line: July 16, 2018


Prices are rising faster than they have in six years
The Consumer Price Index, which tracks most items on the average city-dwelling American’s shopping list, rose 2.9% last month — its fastest pace since 2012. When prices speed up, paychecks don’t go as far. Average hourly earnings only increased 2.7% over the year in June, which means that most workers’ paychecks actually aren’t going any further at all… (Continue to full article)

Fed is ready to keep raising rates, but faces a list of uncertainties
A rising dollar. Escalating trade tensions. And way too low unemployment. These are just a handful of factors in the Federal Reserve’s semi-annual report to Congress on the US economy that could reshape the central bank’s calculus in the coming years… (Continue to full article)

Ron Paul Warns That When The “Biggest Bubble In The History Of Mankind” Bursts It Could “Cut The Stock Market In Half”
When this bubble finally bursts, will we witness the biggest stock market crash in U.S. history? “The bigger they come, the harder they fall” is a well used phrase, but I think that it is very appropriate in this case. From a low of 6,443.27 on March 6th, 2009, we have seen the Dow nearly quadruple in value since the last financial crisis. It has been a remarkable run, and it has lasted far longer than virtually any of the experts anticipated. But what goes up must come down eventually… (Continue to full article)

US Housing Bubble Enters Stage Two: Suddenly-Motivated Sellers
Housing bubbles proceed in fairly predictable stages. Stage One is long and (initially) slow, fueled by excess central bank money creation or foreign demand or some other source of liquidity that encourages large numbers of people… (Continue to full article)

Medicaid Insurers Could Be Doing More to Catch Fraud and Abuse
Medicaid insurers could be doing more to prevent fraud, waste and abuse that cost states billions of dollars a year, according to a new report released by the Office of Inspector General of the… (Continue to full article)

“Gold, Mr. Bond.”

The Gold Standard: Generator & Protector Of Jobs
The abandonment of the gold standard in 1971 is closely tied to the massive unemployment the industrialized world has suffered in recent years; Mexico, even with a lower level of industrialization than the developed countries, has also lost jobs due to the closing of industries; in recent years, the creation of new jobs in productive activities has been anemic at best… (Continue to full article)

Big Pharma and the Rise of Gangster Capitalism
Thanks to decades of gangster films, we all know how gangster capitalism works: the cost of “protection” goes up whenever the gangster wants to increase revenues, any competition is snuffed out, and “customer demand” is jacked up by any means available– addiction, for example. $8 per vial in competing developed-world nations and $38,892 in the U.S. That says it all… (Continue to full article)

Uncle Sam’s Debt-Money System is Immoral, Tantamount to Theft
The broadest thing is no we don’t have honest price discovery, because the government teaches us their propaganda from the age of two, that gold is just a volatile commodity, and the dollar is money. But, in a narrower sense I think anybody who wants to buy physical gold… (Continue to full article)

Last Sears In Chicago Shuts Its Doors
The Six Corners store, on the edge of Chicago’s Portage Park neighborhood, will shut its doors for the last time Sunday, two months shy of its 80th anniversary. The closure is part of Sears effort to turn around its business after years of losses and declining sales, but when the store rings up its final sale, the city will lose one more link to a hometown company that used to be the world’s largest retailer… (Continue to full article)

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Kettle Moraine, Ltd.
P.O. Box 579
Litchfield Park, AZ 85340

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DEAD-line: July 14, 2018


King Solomon’s words will ring true for almost every American born today. The average American is a debt slave already at birth. And by the time he dies, his debt will have increased exponentially, thus passing on an even bigger debt and greater enslavement to the next generation … (Continue to full article)

Big Pharma & The Rise Of Gangster Capitalism
Thanks to decades of gangster films, we all know how gangster capitalism works: the cost of “protection” goes up whenever the gangster wants to increase revenues, any competition is snuffed out, and “customer demand” is jacked up by any means available– addiction, for example.

This perfectly describes the pharmaceutical industry and every other cartel in America. You might have read about the price increase in Acthar gel, a medication to treat Infantile Spasms. (via J.F., M.D., who alerted me to the repricing of this medication from $40 in 2001 to the current price of $38,892.)… (Continue to full article)

It’s Time to Break Up the Big Wall Street Banks
The FDIC shows there are 5,606 insured banks in total holding $17.531 trillion in assets. JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank are holding 40.42 percent of the assets of all the insured banks in the country. Let us put it another way. Those four banks represent 0.0007 percent of all banks in the U.S. but they have somehow managed to control 40.42 percent of the assets… (Continue to full article)

The Dollar Will Strengthen Before It Collapses Against Gold & Silver
When the dollar collapses, it won’t be against the euro, yen or yuan, but against gold & silver. Here’s why…

“These Problems Aren’t Going Away” – States Are Woefully Unprepared For The Next Recession
It’s no secret that the finances of most US states are in shambles. For many, overly generous pension benefits have led to severe under-funding that threatens to drain state coffers… (Continue to full article)

As Alaska’s famed frontier Blockbusters go dark there’s 1 store left in entire U.S. They Shoot Horses Don’t They?
The first Blockbuster video rental store in the U.S. opened in 1985, and at its peak the company had about 9,000 stores worldwide. In its heyday, Blockbuster had 15 stores in Alaska, Daymude said. Some stores in more remote, less populated parts of the state began closing in the early 2000s as most Blockbuster stores began to vanish across the U.S…. (Continue to full article)

Gold And Silver Precious Metals Price Outlook: Buy Now
Sector expert Michael Ballanger details his forecast for precious metals markets in the second half of 2018. Given the impressive reversal in gold last Monday, which appeared to occur during the Asian and European trading sessions as opposed to the Crimex pit session, it looks like the precious metals are adhering to the well-broadcasted seasonality trade that has been fraught with random, rather than dependable, trading results, especially in the last four years… (Continue to full article)

Gold: Where Are The Buyers?
The trading action has been about as ugly as it can be, basically straight down about $120 with hardly a rally. We can blame economic data, the strong dollar and about anything else, but the bottom line is the sellers are more aggressive than buyers… (Continue to full article)

Employers Will Do Anything To Find Workers–Except Pay Them
“America’s labor shortage is approaching epidemic proportions,” reported CNBC, “and it could be employers who end up paying.” Well, yes. That’s how things are supposed to work: Businesses pay more to attract workers in a tighter, more competitive market for labor… (Continue to full article)

Leveraged-Loan Risks Are Piling Up
US junk-bond issuance in June plunged 31% from a year ago to just $14.5 billion, the lowest of any June in five years, according to LCD of S&P Global Market Intelligence. During the first half of the year, junk bond issuance dropped 23% from a year ago to $110.6 billion. Is investor appetite for risky debt drying up? Have investors given up chasing yield? On the contrary! They’re chasing harder than before, but they’re chasing elsewhere in the junk-rated credit spectrum: leveraged loans… (Continue to full article)

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Kettle Moraine, Ltd.
P.O. Box 579
Litchfield Park, AZ 85340

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Dateline: July 11, 2018


Meet the Secret Wall Street Group Whose Fingerprints Are All Over the 2008 Crash
Representatives from banks like Lehman Brothers, Citigroup, Bear Stearns and Merrill Lynch sat on key committees of the Group and helped to formulate the “Guiding Principles” for Wall Street… (Continue to full article)

Bond and Stock Markets a Bomb Waiting to Go Off –
Gregory Mannarino ~ “We have proof positive that the Federal Reserve and other central banks have, yet again, gotten it wrong. How many times have you heard me say the Fed will get it wrong–again? Well, they have gotten it wrong, and the proof is everything is going in the opposite direction they said it would go.”… (Continue to full article)

The root of the debt crisis: every $1 in debt generates just 44 cents of economic output
The debt-to-GDP ratio in the United States is now 106%, meaning that the national debt is larger than the size of the entire US economy. Yet the debt keeps growing – rapidly… (Continue to full article)

Silver Bull Market Is Almost Here
If the comparison to the 1980s pattern is justified, and the current pattern continues in a similar fashion, then silver will go into a long bear market. If the current fractals diverge from the 1983 fractals by going higher than the point 5 price-level, then the bull market will resume with vigor… (Continue to full article)

There Are Two Words That Can Describe What Is Going On With Gold & Silver
What in the heck is going on with gold and silver? Two words describe it, and they have nothing to do with the cartel or the charts… (Continue to full article)

Gold Is Still The Only Real Money Among Fiat Currencies
All of the fiat currencies on the planet are constantly losing value, and gold offers a way to protect against the devaluations. Here’s the details… (Continue to full article)

Official US Inflation Rate Understates Inflation As Real Rate Is Around 10%
Inflation is officially near 3%. Alasdair MacLeod says that 3% understates inflation, and the real inflation rate is closer to 10%. Here’s why… (Continue to full article)

Rising Wages = Shrinking Corporate Profit Margins … And Falling Stock Prices?
Today’s Wall Street Journal contains a couple of charts that illustrate a relationship that’s not getting much media attention these days: The fact that tightening labor markets are forcing companies to raise wages, in the process squeezing their own profit margins. Historically this margin compression has been either a cause of or contributor to cyclical turning points — in other words it coincides with recessions and equity bear markets… (Continue to full article)

Public Pensions: The Ultimate Ponzi Scheme
They’ve promised full pensions to their workers. But they aren’t putting aside enough money — or generating high enough returns — to fulfill those future obligations. Soon, they’ll have to cannibalize current workers’ pension contributions to pay retirees. Young and middle-aged government employees will likely never receive the retirement benefits they’re counting on… (Continue to full article)

U.S. Consumers On An Unprecedented Debt Binge As Credit Card Debt Soars To An All-Time Record High
Does this mean that the economy is getting better, or does this mean that U.S. consumers are totally tapped out and are relying on borrowed money to make it from month to month? … (Continue to full article)

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Kettle Moraine, Ltd.
P.O. Box 579
Litchfield Park, AZ 85340

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Inflation: Your Role as a Milk Cow

Traditionally, inflation has been defined as “an increase in the amount of currency in circulation.” Such an increase almost always causes an increase in the cost of goods and services, since, more plentiful currency units lowers their rarity, as compared to the supply of goods and services, which remains roughly the same. Therefore, it shouldn’t be surprising if a 20% increase in the amount of currency units translates into a 20% increase in the price of goods and services.

Unfortunately, in recent decades, even dictionaries have been offering a revised definition of inflation, as “an increase in the price of goods and services.” This is a pity, as it makes an already confusing subject even more difficult to understand. Continue reading

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Dateline: July 5, 2018

The notion that the corporations are going to use their windfalls for productive expansion and higher wages for workers is utter fantasy.

They have not done so for over twenty years, and they are hardly urged to change that, and certainly not by anything in this latest change in tax policy. Its purpose is to put more money in the pockets of the powerful and fortunate, pure and simple.

Increased taxes on consumption and consumables, including imports and sales taxes, are generally regressive taxes, falling most heavily as a percentage of income on the broader public.

The promises of great growth, investment, and trickle down prosperity are the same old canards and misdirection, put forward by the moneyed interests’ flim flam men and their carnies. ~ Jesse


What Is Trump Doing About Crumbling US Infrastructure
Other than shouting about building a wall on the U.S.-Mexico border, one of Donald Trump’s most frequently proclaimed promises on the 2016 campaign trail was the launching of a half-trillion-dollar plan to repair America’s crumbling infrastructure (employing large numbers of workers in the process). Eighteen months into his administration, no credible proposal for anything near that scale has been made… (Continue to full article)

America’s Lateral Move From Monarchy To Corporate Rule
America is a corporatist oligarchy dressed in drag doing a bad impression of a bipartisan democracy. Sometimes it doesn’t even keep its wig on… (Continue to full article)

Anxiety Driven Markets Churning At Fastest Since 2008
From junk bonds to emerging-market stocks, market turnover is through the roof, reaching multi-year highs. Within the S&P 500 Index, investors traded more than $2.9 trillion worth of shares in each of the past two quarters, a feat last achieved in early 2008… (Continue to full article)

Treasury Curve Collapses To 35 bps
The US Treasury yield curve is slowly headed towards inversion (10Y-2Y slope declines below 0 basis points), It won’t be an easy ride going forward… (Continue to full article)

“Gold, Mr. Bond.”

The Fading American Dream: They Shoot Horses Don’t They?
Shrinking life chances plus lack of a social safety net may have left middle-aged Americans more vulnerable to suicide than peers in other rich nations… (Continue to full article)

Warnings Grow About Next Stock Market Crash
Here’s the thing about stock market bubbles: they can last far longer than even expert analysis suggests they should. But correctly defining a stock market as an unsustainable bubble is still a worthy exercise since it clarifies how much one stands to lose when the bubble does eventually pop… (Continue to full article)

We Are Witnessing Unusual Stock Market Behavior That Is Unlike Anything That We Have Seen Since 2008
We have not seen Wall Street this jumpy since just before the great financial crisis of 2008. As I have explained so many times before, when the waters are calm and there is low volatility, markets tend to go up. And when the waters are choppy and volatility starts to spike, markets tend to go down. That is why the behavior that we have been witnessing from investors during the first two quarters of 2018 is so alarming … (Continue to full article)

MEDICAL: Pfizer Has Raised Prices on 100 of Its Products
Weeks after President Trump said that drug makers were about to implement “voluntary massive drops in prices” — reductions that have yet to materialize — Pfizer has raised prices on 100 of its… (Continue to full article)

Gold In July: The Time To Buy
Charts don’t make fundamentals, but fundamentals do make charts. That’s because market fundamentals create liquidity flows. Those liquidity flows create technical action on the charts. This is the important daily gold chart… (Continue to full article)

Gold Buying Bounces on 18-Month Price Drop
GOLD BUYING among private investors rallied in June as prices fell hardest in over 18 months… (Continue to full article)

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Things Are Lining Up Nicely For Gold And Silver
In this market a bullish reading is when speculators are short and commercial traders are mostly long. As you can see, they’re not there yet but are moving that way fast. So we’re approaching a point where the market structure for both gold and silver point towards at least a few strong months… (Continue to full article)

Cryptos Are Dying: Over 800 Digital Coins Are No More
As bitcoin was blowing up last year, hitting an all-time high of nearly $20,000 in December, so were the initial coin offerings (ICOs), which are similar to initial public offerings (IPOs) in a sense that they let investors purchase new digital tokens like shares in order to fund the tech company behind their creation. Last week, Bitcoin reached a low of 70% off it’s high – down to $6,000… (Continue to full article)


Gold Is Better Store of Value Than Bitcoin
Since the birth of bitcoin there has been one question that has repeatedly grabbed headlines and led debates all over the world – will bitcoin replace gold? The latest to weigh in on this question is Goldman Sachs which, in a research note entitled ‘Fear and Wealth’, has concluded that gold is better than bitcoin… (Continue to full article)

The REAL ‘Estate Bubble‘ and how it came to POP!!!
From our archives of 2010. Is it “coming around again“??? (Continue to full article)

Life, Liberty & All That Jazz with Jeffrey Bennett can be heard 1:00 p.m. (Eastern Time) for TWO-HOURS, each Tuesday through Friday on The Micro Effect.

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Kettle Moraine, Ltd.
P.O. Box 579
Litchfield Park, AZ 85340

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What’s the Yield Curve?

‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

You can try to play down a trade war with China. You can brush off the impact of rising oil prices on corporate earnings.

But if you’re in the business of making economic predictions, it has become very difficult to disregard an important signal from the bond market.

The so-called yield curve is perilously close to predicting a recession — something it has done before with surprising accuracy — and it’s become a big topic on Wall Street.

Terms like “yield curve” can be mind-numbing if you’re not a bond trader, but the mechanics, practical impact and psychology of it are fairly straightforward. Here’s what the fuss is all about. Continue reading

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In less than 20 years, the U.S. dollar has lost 80% of its value vs. REAL money (gold)

Since 1913, the US Dollar has lost more than 98% of its value, while gold has retained its value.

For those among us who feel safe and secure – perhaps even a little smug – about the value of the U.S. dollar, convinced that a Venezuela-type crash of the currency could never happen in the United States, this article is sure to come as a shock. Gold Switzerland recently reported that in the two decades since 1999, the dollar has devalued against gold (real money) by over 80 percent. Continue reading

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