Posted at 5:06 PM (CST) by & filed under Jim's Mailbox.

Jim,

A big Gresham’s Law fan and Anti-Keynesian, Nash disses bad money and saw the writing on the wall decades ago.

If one can’t believe a mathematical genius, at least consider his reasoning.

CIGA Wolfgang Rech

Jon Nash Hated Keynesians
June 1, 2015 / Jeff Berwick

[The following post is by TDV Chief Editor, Jeff Berwick]

John Forbes Nash Jr., the Princeton University mathematician who inspired the film  “ A Beautiful Mind,” died on May 23rd in a New Jersey car crash.

While we always look at things critically, and are aware that he had said he was just days away from releasing his discovery of a replacement for Einstein’s relativity theory, we’ll leave that private detective work for the millions of truth researchers on the internet.

While researching John Nash, however, we came across numerous anti-Keynesian comments by Nash that caught our eye here at the always anti-Keynesian Dollar Vigilante.  Of course, as with most things, his anti-Keynesian stance wasn’t talked about very much and certainly not featured in the movie based on his life.

“Good money,” Nash once argued, is money that is expected to maintain its value over time. “Bad money” is expected to lose value over time, as under conditions of inflation.

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Posted at 9:25 AM (CST) by & filed under Bill Holter.

Dear CIGAs,

It is obvious to anyone with eyes to see, "power" is shifting from West to East.  China is the leader, the epicenter of the East and of course they are the ones "hoovering" up the lion’s share (along with India)of global gold production.  The following map was sent to me by a friend,

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I guess I already knew this but what a stark shock to actually see it!

More than 50% of the world’s population living in a land mass of 15% or less of the total.  What exactly does this mean other than having good odds of being able to spit on your neighbor’s house?  I believe it means much more today than it did years ago, let me explain.  Years ago, before we lived in an instant information age and before China/Asia had built up the world’s largest manufacturing capacity, "it meant less".  I say this because our world today is so interdependent in every way.  Trade and commerce rules the day, and financially everyone is "in bed with everyone else".  This is a recent development over the last 20 years or so prior, this was not the case.  I am not trying to say trade and finance were not international in the past, they were, what I am saying is instant information now makes "knowledge" (information) more available.  The "information" available has taken Asia from the backwoods and "brought them to the table" so to speak.

The simple truth is we are now facing a "new world order", not quite the NWO the neocons had envisioned at the turn of the century (or maybe this WAS the plan?)!  The seats at the table are about to change, the "head" of all tables since WWII has been occupied by the U.S..  This will certainly change.  The list of preparations by China to assume their new role is quite long and even the details now seem to be about ironed out.  For example, how do you explain this http://oilprice.com/Energy/Energy-General/China-Hopes-To-Setup-New-Oil-Futures-Contract-By-End-Of-Year.html ?  China plans to "trade" oil in yuan.  They are already conducting ALL energy commerce with Russia to the EXCLUSION of dollars!

Please understand this, with these contracts, they are not going to just "pay" for oil in yuan, they will buy it, trade it, hedge it and speculate on it …in YUAN!  Does anything about this jump out at you?  It should.  Mohamar Qaddafi and Saddam Hussein lost their lives just "talking" about accepting something other than dollars for their oil.  Now, the Chinese are openly and publicly planning to take the world OFF of the petrodollar standard!

Let’s take a quick peak at two recent pieces of Western news.  First, the EU has told 11 nations they must write into law "bail in" rules or face penalties.  Do you understand this?  The EU is demanding the savior of banks be at the expense of the people!  They are also trying to get this done quickly …can you guess why?  Another bit of news was the IMF urging the Federal Reserve NOT to tighten until next year.  Again, can you guess why?  Unsustainable debt …and interest rates of ANY consequence are not compatible.  The West is on its heels on almost every front and backing up while China/Asia prepares…

  To wrap this up and the reason for penning this piece, "he who has the gold makes the rules" will soon again be seen as the reality.  The U.S. had an intact industrial base and the largest hoard of gold in the world after WWII, we "made the rules".  Now, China has built the world’s largest industrial base AND hold the largest hoard of gold in the world …they will soon be making the rules.  This will be felt in many many areas, the most acute I believe will be in the gold and silver markets themselves!  If you cannot see their price suppression or cannot bring yourself to admit it, what comes by way of China will either shock you wake you up.

London and New York where paper contracts regularly substitute for the real thing will be relegated as jokes.  Watching the COT reports or the London "fix" will be useless (it already is).  Once China begins to price oil and gold in yuan, it will be more important to watch the cross currency rates of the yuan versus other currencies as asset prices may "re-set" and then trade in relatively stable "yuan ranges" …it will be foreign currency movements against the yuan which will cause the bulk of asset price swings in "local currencies".  If China does in fact decide to back the yuan with gold at a new and greatly marked up price, it will then be a great asset to be able to read Chinese.  I say this because it will be their "COT reports" that matter!

Please don’t get me wrong, China may very well start off on the right foot, however, it will only be a matter of time before human nature and greed take over.  Should China and the yuan ascend to a major or even THE reserve currency, I have no doubt whatsoever they will eventually abuse the privilege just as the U.S. has.  The one thing I believe most important is whatever level of gold holdings they "claim" will be far less than what they actually have.  This, the reverse of the "claims" by the West! 

Regards,  Bill Holter
Holter-Sinclair collaboration
Comments welcome!  [email protected]

Posted at 6:26 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This is a serious development about to grow.

The PetroYuan Is Born: Gazprom Now Settling All Crude Sales To China In Renminbi
Submitted by Tyler Durden on 06/09/2015 – 11:25

Two topics we’ve deemed critically important to a thorough understanding of both global finance and the shifting geopolitical landscape are the death of the petrodollar and the idea of yuan hegemony.

Last November, in “How The Petrodollar Quietly Died And No One Noticed,” we said the following about the slow motion demise of the system that has served to perpetuate decades of dollar dominance:

Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company – the end of the system that according to many has framed and facilitated the US Dollar’s reserve currency status: the Petrodollar, or the world in which oil export countries would recycle the dollars they received in exchange for their oil exports, by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one held US-denominated assets and printed US currency) loop.

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The main thrust for this shift away from the USD, if primarily in the non-mainstream media, was that with Russia and China, as well as the rest of the BRIC nations, increasingly seeking to distance themselves from the US-led, "developed world" status quo spearheaded by the IMF, global trade would increasingly take place through bilateral arrangements which bypass the (Petro)dollar entirely. And sure enough, this has certainly been taking place, as first Russia and China, together with Iran, and ever more developing nations, have transacted among each other, bypassing the USD entirely, instead engaging in bilateral trade arrangements.

Falling crude prices served to accelerate the petrodollar’s demise and in 2014, OPEC nations drained liquidity from financial markets for the first time in nearly two decades:

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Jim Sinclair’s Commentary

GE was in 2007 one of the largest dealers in OTC derivatives. Seems for some reason this sector is losing people and subsidiaries. Is there a new OTC derivative crisis out there now?

General Electric to Exit Banking Sector With $12bn Sale of Finance Business

General Electric will sell its private equity business in a deal valued at about $12bn as it refocuses on its core industrial businesses and exits a banking sector now under stricter oversight.

The US Sponsor Finance business, which includes Antares Capital, GE Capital’s lending business to private equity-backed middle market companies, will be sold to the Canada Pension Plan Investment Board, alongside a $3bn bank loan portfolio. GE is looking to sell most of the assets of GE Capital over the next 18 months, but plans to keep the financing components that relate to its industrial businesses. The Fairfield, Connecticut, company is transforming itself back into an industrial conglomerate that makes large, complicated equipment for other businesses.

Posted at 6:41 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

We live in a world of smoke and mirrors from economic statistics to phantom earnings.

Experts worry that ‘phony numbers’ are misleading investors
Experts worry about ‘smoke and mirrors’ in earnings reports as stocks hit record after record
By Bernard Condon

NEW YORK (AP) — Those record profits that companies are reporting may not be all they’re cracked up to be.

As the stock market climbs ever higher, professional investors are warning that companies are presenting misleading versions of their results that ignore a wide variety of normal costs of running a business to make it seem like they’re doing better than they really are.

What’s worse, the financial analysts who are supposed to fight corporate spin are often playing along. Instead of challenging the companies, they’re largely passing along the rosy numbers in reports recommending stocks to investors.

"Companies are tilting the results," says fund manager Tom Brown of Second Curve Capital, "and the analysts are buying it."

An analysis of results from 500 major companies by The Associated Press, based on data provided by S&P Capital IQ, a research firm, found that the gap between the "adjusted" profits that analysts cite and bottom-line earnings figures that companies are legally obliged to report, or net income, has widened dramatically over the past five years.

At one of every five companies, these "adjusted" profits were higher than net income by 50 percent or more. Many more companies are in that category now than there were five years ago. And some companies that seem profitable on an adjusted basis are actually losing money.

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Posted at 10:22 AM (CST) by & filed under Bill Holter.

Dear CIGAs,

Global markets are changing drastically and showing volatilities like we saw back in late 2008.  I am not talking about stock markets, it is the debt and currency markets that are schizophrenic.  Oddly, even after all of the various Western "QE’s", liquidity suddenly looks like it is drying up.  A great article as to why even the depth in the U.S. Treasury market has disappeared can be read here http://www.zerohedge.com/news/2015-06-04/here-reason-there-no-bond-market-liquidity .  Various credit markets (important one’s!) have cracked over the last month and the myth of "zero percent interest" rates is in the process of being shattered.  I want to visit several topics in this piece, each one with the ability to break the derivatives chain which is exactly what we are headed for!

First and foremost, I believe we are about to find out central banks are not the omnipotent powers we’ve been led to believe.  You might as well say central banks have been perceived as all powerful, all knowing and the savior of any and all things "bad".  The confidence in central bank’s abilities to fix anything and everything has grown to epic proportions and is now ingrained everywhere.  This thought process is so prevalent, we might as well say it is "imprinted" in the mass psyche from birth!

What we are seeing now are credit markets revolting against the risk of over levered sovereign treasuries and the fact of receiving zero compensation for the outsized risk.  Investors were led and cajoled by central banks into this corner of uncompensated risk.  It was easy.  Central banks led by the Fed only needed to announce their "plans" and investors stormed the credit markets in front running fashion. 

A natural problem or two is arising.  Interest rates have been zeroed out for too long.  As the three Fed stooges finally admitted last week, zero interest rates are only justified by crisis.  Continued zero interest can mean only one of two things, we are still in a crisis behind the scenes or rising interest rates cannot be tolerated by markets with no margin left.  Both of these are the reality!  Before going any further, one thing needs to be made clear.  Central banks do not, better said CANNOT set interest rates.  Yes, they can push, pull, "suggest" and even buy sectors of the credit market to affect interest rates…

…BUT ONLY in the short run.  My point is this, "the short run" is ending!  The central banks are running up against the "confidence clock" if you will.  The economic and financial lies told are now being revealed for what they are, WHOPPERS!  Think about it, do any numbers make sense?  Inflation?  GDP?  Employment?  Spending?  Housing?  Nothing reported now makes any sense at all and the lies have by necessity gotten so big, even little children know them not to be true. 

The truly HUGE problems lay in the derivatives markets.  These are multiples of all markets …with very thin margins allowed for losses.  The volatility seen in currencies and debt over the last month have surely bankrupted many.  You see, it was the use of derivatives markets in the first place to "engineer" the bubbles …which are now bursting!  It is quite simple, the leverage afforded by derivatives, funded by credit and freely printed currency blew the bubbles to begin with.  Margin calls and forced closure of many of these derivatives will be the driving force of the coming collapse.  A broken derivatives chain will break everything beneath them including the currencies themselves.

The following is how Jim Sinclair has described derivatives:

"There is no such thing as a derivative that does not have an implied or defined interest rate characteristics. This is the chain that connects them all.

That makes this problems larger than one quadrillion dollars, the true level of the notional value derivatives outstanding before the BIS got into Whoopers, changed the computer program for measurement and reduced outstanding notional value of derivative outstanding to just $700 trillion in 2007. Here is the concept you must understand. Notional value of a derivative becomes real value of the derivative in the event of derivative bankruptcy. Derivative bankruptcy is defined as the breaking of the interlocking chain, interest rates. Now, you the reader, have a feel for how big this problem is. This unwelcome change in the interest rates market, the bond market, is truly the god of Death for the world’s financial system. When the smoke clears, gold will be the only true measure of value (a definition of money) with gold’s only mechanism for price discovery being the now growing and transparent physical market, the paper market will be in tatters as will be the paper exchanges and paper public companies that own these exchanges."

In a nutshell, derivatives NEVER DIE, THEY ONLY GROW LARGER!

Before moving on, HUGE NEWS has broken today, the two CEO’s of Deutsche-Bank have stepped down!  http://www.usatoday.com/story/money/2015/06/07/deutsche-bank-ceos-step-down/28641471/ Deutsche-Bank is the largest holder of derivatives in the world, equaled ONLY by JP Morgan holding a "cool" $75 TRILLION!!!  Please view the following chart of the 10yr Bund, rates have exploded higher in a very short time span.   Huge losses have been incurred as ALL derivatives have interest rates assumptions within, no doubt your reason for the sudden resignations!

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Courtesy, thekeystonespeculator

Something has clearly BROKEN!

The next false belief is about debt itself. I had the privilege the other day to personally listen to Greg Hunter go on a tirade about this. He said "the biggest lie in the world is that debt is an asset and debt is money". He went on to say "NO IT’S NOT! Debt is ALWAYS A LIABILITY!" This is absolutely true, simple to understand, and 180 degrees counter to what the world believes …for now. Let me explain this a little because it is "core to everything" (pun intended as you will see).

Debt is the foundation to everything. "Currency" itself is created ONLY by the creation of debt. Better said, currency is created by the increase in the amount of debt outstanding. Debt stands as the foundation to all bank portfolios, all pension plans, the "value" of and "liquidity" of all real estate and equity markets. "Debt" is THE foundation to what 99% of the world calls their "net worth".

Before tying this part up for you, one other item needs mentioning. This past week, Christine Lagarde of the IMF was out publicly "stating" (could be called demanding, asking or even PLEADING) the Fed should not raise interest rates until sometime next year. (As a side note, can you remember when "raising rates" was first mentioned? 2010! It has always been "next year" since then!). The interesting thing is Janet Yellen was talking about raising rates at the same time Ms. Lagarde was speaking.

"Houston, we have a problem"! Do you see the problem? Switzerland broke the peg with the euro back in January …and forgot to give the IMF a heads up ahead of time! This affected MANY banks including central banks themselves. Did they give a heads up to the BIS? Probably. If so, was this the first sign of the "Western" IMF being isolated and in the dark? I believe it was and I also believe Ms. Lagarde is terrified the Fed may actually try to raise rates one token time for whatever reason, to save face, for legacy or whatever. (I am on the record many times before, I do not believe the markets will even function within 48 hours of an actual Fed rate hike). One other question, can the Fed or other central banks really sit idly by as market rates run interest rates away from them to the upside? A true dilemma!!!

Do you now see where I am going with this? Market rates are now clearly going higher whether central banks like it or not …with or without them! This part is important because it speaks to "confidence" or the lack of, it is however not the MOST important. What is most important of all is this, EVERYTHING financial in the world is "discounted" against current, prevailing and EXPECTED interest rates. The higher the rate and the higher the expectation of rates …the lower someone is willing to pay for a current asset! Can you say "everyone out of the water"!

There is also another aspect. Since "debt" underlies everything, as interest rates do rise, bond "prices" (values) drop. What do you think lower debt values will do to bank portfolios, pension plans, insurance programs etc.? You got it! More and more "assets" become "unfunded"! Obviously, starkly higher interest rates in a very short time also blow up ALL derivative’s interest rate assumptions. We are talking about TRILLION’s being turned on their head!

To wrap this up, the world CANNOT in any way have higher interest rates but this is exactly what is happening. Interest rates were forced to zero because that was the only rate where debt services could be made and asset prices "supported". Rates are reversing, many debts will not be paid nor able to be rolled over (at higher rather than lower rates), asset values of all sorts will plummet, financial structures and promises will be hollowed out …and even the currencies themselves will be questioned.

Once the belief that "debt is an asset …or even money" is broken, just as a spooked herd of cattle runs wild, so will investors. They will seek the safety of "no one’s liability" because no one will be trusted. This includes the central banks and sovereign treasuries themselves. Gold, (no one’s liability) will not pay you interest and will not make promises that cannot be kept, it will simply "remain". Gold will remain as the world’s purest asset and purest money. In a world where most all "assets" are finally understood to really be someone else’s liability, there is no telling what value might be placed on the purest form of asset/money? Gold will be seen as the "anti liability of last resort". I guess better said, gold is the ultimate central bank for the asset side of the balance sheet!

Regards, Bill Holter
Holter-Sinclair collaboration
Comments welcome!  [email protected]

Posted at 11:03 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Talk about shooting yourself in the foot. Russian sanctions were at best not thought out well.

US to Lose Its Ground Under BRICS Pressure

Blind adherence to US policies and the introduction of anti-Russian sanctions have turned fatal for Europe; the axis of Russia-China-BRICS is set to overturn the global economic system and to prevail over the hegemony of the US, according to the chief economist of the German Bremer Landesbank.

The real damage to the EU countries caused by the launch of anti-Russian sanctions is much more comprehensive than that estimated by the statistics, Folker Hellmeyer, chief economist of the German Bremer Landesbank told in an interview with Deutsche Wirtschafts Nachrichten.

“The slump in German export volume by 18 percent in 2014 and by 34 percent for the first two months of 2015 is just the tip of the iceberg,” he said. “There are much more of the side-effects.”

“European countries, like Finland and Austria, who have strong developing businesses in Russia, place fewer orders within Germany. Moreover, the European corporations evade sanctions and create high-efficient production facilities in Russia. We, therefore, lose this potential capital stock, which is the basis of our prosperity, and Russia wins.”

The relationship of trust between Russia and Germany and the EU is somewhat broken. And it will take years to rebuild it. As the result, such companies as Siemens and Alstom have lost major projects in Russia, he said. The potential damage not only for Germany but for the whole of the EU, therefore, is much more comprehensive than what is being shown by current figures.

Meanwhile, Moscow, Beijing and other BRICS countries are looking forward to building the largest projects of the modern history: the construction of new Eurasian infrastructure from Moscow to Vladivostok, in South China and India.

Participation of the Western countries in these mega-projects looks quite uncertain, Hellmeyer said.

More…

Posted at 9:29 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

Jim suggested a big picture topic to write about, each step forward by the Chinese to make a foothold for the yuan is one step backwards for the hold the dollar has over the globe.  This topic has several nuances to it, let’s take a look from several vantage points.  As a spoiler, any "steps back" in today’s fiat currency world are steps toward a break in confidence.  Call it deflation or hyperinflation, a break in the confidence of fiat currency will end with many currencies being replaced, this is a major part of your coming "re-set".

  The first and most obvious is we live in a world with an economic and financial pie of a given size at any point in time.  Each deal, each transaction and each "platform" that is done or created by the Chinese for using yuan instead of dollars means the size of the of the pie "slices" change.  Any increase in the usage of yuan means a smaller slice for the use of dollars.  Yes, theoretically the pie gets larger over time and we’ll get to this shortly, I am simply saying here that in a static system, more yuan usage means less dollar usage.

  The next logical step is to equate the usage of a country’s currency with "power".  As any currency becomes more popular for usage, the confidence in that country also increases and vice versa.  In today’s world (but not for long?), fiat currencies with no backing are free to create.  In the case of the dollar since 1971, more usage (via petro-dollar reinvestment) allowed for more "creation" of dollars and thus the power generated from the "privilege" to print.  This so far is simple logic and merely a description of how our monetary world works.

  China has done many things over the last several years with an eye to moving their currency, the yuan forward.  They have purchased massive amounts of gold to be held as reserves, we will very soon find out how much they have accumulated as they announce for their entrance into the SDR.  China has also set up two dozen "currency hubs" all over the world in major cities.  They have done this to aid in the conversion of local currencies into and out of yuan.  Clearly this move will aid and grease the gears for trade done with China.  It will also aid in currency movements looking to "buy" yuan if deals are contracted to settle in yuan.  In essence, China is simply "making it easy" to purchase and use their currency.  They have also set up credit facilities such as the AIIB and new exchanges for gold, the SGEI.  China is actively seeking "new customers" and trade partners along the "Old Silk Road" as they can see the writing on the wall …as well they should since they are the ones doing the writing!

  If you look at nearly everything China has done in recent years from a financial and economic standpoint, it can be seen they are preparing the yuan to become a "major" and international currency.  They have requested the yuan to become part of the IMF’s SDR which gives us an approximate time guideline.   Whatever percentage the yuan gains of the SDR pie will come at the expense of the dollar’s piece.  The flip side of the coin is the U.S., what exactly has the U.S. done in recent years to "promote" or make it easier to use dollars?  This is a simple case of losing market share!

  Now, let’s look from a different angle.  Any economic (financial) system is either increasing in size or decreasing.  It may be increasing at an increasing rate or the rate is slowing.  The system may also be decreasing at an increasing rate, or the contraction is slowing.  In a fiat system where debt is the underlying asset holding up values and ultimately the currency itself, debt outstanding (growth) by definition MUST increase in the long run and it must grow at an increasing rate.  This is an "absolute" because there does not exist the "dollars" today to pay future interest, they simply do not exist …"yet".  The only way they will ever come into creation is by creating more debt or using the electronic printing press.  In the words of Richard Russell, "it is either inflate or die!". 

  Let us now look at the "die" part.  If (when) China makes the yuan convertible and international, this will immediately take "market share" away from the dollar.  This is where it gets interesting because there is a major fork in the road, it is called the debate between the "inflationists and the deflationists".  One theory is that any decrease in dollars outstanding (and being used) will cause existing debt to default and create an unending cycle of default.  This the deflationists say will actually make "dollars" worth more.  The inflationists say this can never happen because the Fed will simply "print" more dollars and thus ruin the value of existing dollars via common hyperinflation.

  Let me say this, I disagree with both arguments!  First, as for the deflationists, let’s assume (and I do) we have hundreds of trillions in defaults.  What, if anything will be left standing of the financial markets?  With the derivatives outstanding, which banks exactly will still have their doors open for you to retrieve your now "more valuable dollars"?  Will ANY financial institution still be solvent?  And going one step further, when this collapse comes, won’t the business climate turn highly negative …which will slow tax receipts to a trickle …and make it impossible for the Treasury and other agencies to make good on their debts and other promises (unless they just conjure up more out of thin air)?  Finally, aren’t "dollars" ultimately backed by the "full faith and credit" of the United States"?  Aren’t dollars now "used" based on the "confidence" in the U.S. Treasury since they are not convertible into anything else?  Flipping to the inflationist side, they say the Fed will simply print more and create hyperinflation.  I say they have ALREADY hyperinflated the currency by allowing the system to reach, and pass the "debt saturation" level.  They have already put the seeds into the system!  

  What I believe we will see is what we have always seen as a final result of fiat currencies, a collapse of confidence.  Call it what you want, call it a deflationary collapse or call it hyperinflation, the end result will be "confidence" in the U.S. dollar will collapse.  It will be shunned in international trade and will take MANY more dollars (if at all) to conduct transactions.  What is coming is a "monetary event" triggered by a very human emotion, "fear".  Fear that the dollars you hold will not be accepted when you go to spend them!

  To finish, let’s add gold into the equation.  We have only seen true "deflation" once in the last 100 years in the U.S..  We entered deflation in the 1930′s and if you listen to Harry Dent, owning dollars was the number one place to have money.  This is simply NOT SO.  Yes, having dollars was "good", having dollars in a bank was "not so good" because many banks simply closed their doors and the dollars were lost … the insolvencies occurred BECAUSE of the deflation.  Going one step further, FDR devalued the dollar versus gold from $20.67 to $35 per ounce.  Please remember, back then dollars did not have value because they "were dollars", they had value because they were RECEIPTS FOR GOLD.  Gold was the asset, gold was "the money", dollars were the derivative of gold!

  As it was in the 1930′s, ever before and ever since, gold is money.  Any future "deflation" that occurs will be "against" or IN terms of gold!  Ask yourself this, in a financial collapse, "what will be safe"?  Will your bank, broker or insurance company be safe, or even still solvent?  Will our over indebted government be safe?  Will the pieces of paper or digital credits issued by this "safe" government and held by your "safe" institution …really be safe?  Or, will gold, which is readily accepted and even HOARDED by the rest of the world be accepted, sought after and thus both liquid AND safe?  This is THE most important question and one that will affect the rest of your entire financial life!  It’s not that hard of a question, only a little common sense and a small dose of logic will get you there!

Regards,  Bill Holter
Holter-Sinclair collaboration.
Comments welcome [email protected]

Posted at 8:37 PM (CST) by & filed under In The News.

The next great bull market: Gold $25,000
Published: June 4, 2015 11:43 a.m. ET
By Avi Gilburt

Avi Gilburt is author of ElliottWaveTrader.net, a live trading room and member forum focusing on Elliott Wave market analysis. Avi emphasizes a comprehensive reading of charts and wave counts that is free of personal bias or predisposition. A lawyer and accountant by training, he is also managing member of Gilburt Financial Services, LLC, which provides financial markets analysis and consulting. His Elliott Wave analysis appears frequently on sites such as SeekingAlpha, where he is a certified contributor, and TheTechTrader.com with Harry Boxer.

Suppose someone approached you in the year 2000, when the price of gold was around $250 an ounce and suggested that it would be worth almost eight times its current value within the next decade. I am sure most people would have thought that person to be less than credible making such an outrageous market call. Think about it. An asset being expected to multiply by eightfold within a decade? But as we all know now, gold went from $250 an ounce to just over $1,900 an ounce in just that amount of time.

What if I was to tell you that gold could make another such run over the next decade plus? Does it seem that outrageous now? Well, I think the math shows it can and will, with the price of gold futures surpassing $25,000, and more specifically for this column, the price on the Gold Bug Index HUI, -1.35%  eclipsing 15,000. But let’s take a look back before we go forward.

It’s the middle of 2011. Gold was rising parabolically — some days even advancing by $50 per day — and heading over $1,900. Breaking the $2000 mark to most was a sure thing.

Think if someone walked up to you then and stated that the price of gold would be cut in half within four years. It would be an outrageous market call. In many ways, it would be no different than the person suggesting that gold would go from $250-$1900 within a little over a decade.

Well, in August 2011, I was that person. In fact, in my first gold column on Seeking Alpha, I warned investors:

"Since we are most probably in the final stages of this parabolic fifth wave ‘blow-off-top,’ I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time."

At the time, everyone was so intoxicated with expectations of eclipsing the $2,000 mark that they failed to see the impending top. As we now know, gold topped in September of 2011, at just under $1,921, which was within $6 dollars of my target. We then began this multi-year correction within which we now find ourselves.

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Hunting for Hackers, N.S.A. Secretly Expands Internet Spying at U.S. Border
By CHARLIE SAVAGE, JULIA ANGWIN, JEFF LARSON and HENRIK MOLTKEJUNE 4, 2015

WASHINGTON — Without public notice or debate, the Obama administration has expanded the National Security Agency’s warrantless surveillance of Americans’ international Internet traffic to search for evidence of malicious computer hacking, according to classified N.S.A. documents.

In mid-2012, Justice Department lawyers wrote two secret memos permitting the spy agency to begin hunting on Internet cables, without a warrant and on American soil, for data linked to computer intrusions originating abroad — including traffic that flows to suspicious Internet addresses or contains malware, the documents show.

The Justice Department allowed the agency to monitor only addresses and “cybersignatures” — patterns associated with computer intrusions — that it could tie to foreign governments. But the documents also note that the N.S.A. sought permission to target hackers even when it could not establish any links to foreign powers.

The disclosures, based on documents provided by Edward J. Snowden, the former N.S.A. contractor, and shared with The New York Times and ProPublica, come at a time of unprecedented cyberattacks on American financial institutions, businesses and government agencies, but also of greater scrutiny of secret legal justifications for broader government surveillance.

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IMF Panics – Slashes US Growth Forecasts, Demands Fed Stay On Hold For Another Year
Tyler Durden on 06/04/2015 09:41 -0400

Anxiety over financial stability and shadow banking risks appear to have force Christine Lagarde and her fellow extrapolators to hit the panic button:

*IMF CUTS U.S. 2015 GROWTH FORECAST TO 2.5% FROM 3.1%

*FED SHOULD WAIT FOR TANGIBLE SIGNS OF WAGE, PRICE GAINS: IMF

*DOLLAR `MODERATELY OVERVALUED,’ CURBING U.S. GROWTH, JOBS: IMF

*IMF URGES FED TO DELAY FIRST RATE INCREASE UNTIL 1H 2016

Adding that they viewed the Dollar as "moderately overvalued" and any more appreciation would be "harmful," it seems global disinflationary pressures have left the IMF no choice but to say publicly what everyone has uttered under their breath.

As Bloomberg reports,

The Federal Reserve should hold off from raising interest rates until the first half of 2016, the International Monetary Fund said as it cut its U.S. growth forecast for the second time in three months.

The lender also said that the dollar was “moderately overvalued” and a further marked appreciation would be “harmful,” in a statement released in Washington on Thursday on its annual checkup of the U.S. economy.

“The FOMC should remain data dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident,” the IMF said. Based on the fund’s economic forecast, and “barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016.”

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