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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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Say WHAT? Social Security Has Not Been ‘Looted

The newly released Social Security Trustees Report describes serious fiscal issues with the program and stresses that it should be reformed soon, or the situation will become much worse. However, public support for reform is impeded by a common fiction that inflames debate and distracts from the roots of the problem.

What the Report Says
The June 2018 Social Security Trustees Report states that “under the Trustees’ intermediate assumptions,” the program’s “total cost is projected to exceed its total income in 2018,” and trust fund reserves” will be “depleted in 2034.” Continue reading

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The Slow-Motion Financial Suicide of the Roman Empire

Are we the Reincarnation of Rome?

“If you wanted to understand a politician you mustn’t pay too much attention to his speeches, but find out who were his paymasters. A politician couldn’t rise in public life, in France Rome any more than in America, unless he had the backing of big money, and it was in times of crisis like this that he paid his debts.

The great corporation which employed you lied to you, and lied to the whole country – from top to bottom it was nothing but one gigantic lie.” ~ Upton Sinclair

More than 2,000 years before America’s bailouts and entitlement programs, the ancient Romans experimented with similar schemes. The Roman government rescued failing institutions, canceled personal debts, and spent huge sums on welfare programs. The result wasn’t pretty. Continue reading

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The Social Security Debacle: 2018 and beyond???

POINT: Social Security Deterioration
We have been writing about capital destruction. This week let’s look at an event which is currently making news. Social Security will begin tapping into its trust fund this year. This happens, as the Social Security Board of Trustees states antiseptica… (Continue to full article)

COUNTER-POINT: Why the Social Security Disability Fund Is Looking Healthier
The Social Security trustees’ report released earlier this month estimated that the Federal Disability Insurance Trust Funds will run out of reserves in 2032, four years later than expected. The improved solvency of the trust funds reverses a long process of fiscal decline for the program, which saw a doubling of the disability rolls in the last 25 years… (Continue to full article)

COUNTER-POINT to the COUNTER-POINT: Social Security benefits buy 34 percent less than in 2000
Housing and medical outlays top the list of fastest-growing expenses that retirees face. For example, average Medicare Part B premiums have risen 195 percent to $134 from $45.50 in 2000. “It’s not a pretty picture… (Continue to full article)

Life, Liberty & All That Jazz airs 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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