Sunday , October 20 2019
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Acting Man

America’s Road Map to $40 Trillion National Debt by 2028

    Planning on Your Behalf  Watch out! At this very moment, professional economists of all stripes are making plans on your behalf. They are dreaming and scheming new and innovative ways to spend your money long before you have earned it. Strange and strangely persistent beliefs… [PT] While you are busy at the gristmill, grinding away for clients and customers, claims are being laid upon your life.  Your future earnings are being...

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Future Object of Speculation? Precious Metals Supply and Demand

    Spillage The price of gold dropped $16, but the price of silver was all but unchanged. Whereas last week we said: “…the consumer goods stockpile stored in Treasury bonds (to extend our half sarcastic, half tongue-in-cheek analogy) increased this week.” The 10-year note takes another peek at the wide spaces below its 50-day moving average. [PT] Last week, it was the opposite. Consumer goods spilled out of the storage tank of...

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US Money Supply Growth – Bouncing From a 12-Year Low

    True Money Supply Growth Rebounds in September In August 2019 year-on-year growth of the broad true US money supply (TMS-2) fell to a fresh 12-year low of 1.87%. The 12-month moving average of the growth rate hit a new low for the move as well. The main driver of the slowdown in money supply growth over the past year was the Fed’s decision to decrease its holdings of MBS and treasuries purchased in previous “QE” operations. This was...

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A Gain of 1,080% Annualized – One of the Strongest Seasonal Rallies is Starting Right Now

  Bitcoin – An Exceptional Asset When I first heard about Bitcoin (BTC) in May 2011, it was trading at 8 US dollars. Today, more than eight years later, BTC trades at around 8,000 dollars. A thousandfold increase! An investment of 1,000 dollars at the time would have resulted in a gain of more than a million  –  a dream result. Bitcoin went from 10,000 BTC for a pizza to around 100 BTC for a Lambo in what appeared to be an unseemly...

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Fed Chair Powell’s Inescapable Contradiction

  Under the Influence   “This feels very sustainable.”  – Federal Reserve Chairman Jerome Powell, October 8, 2019 Understandable confusion… [PT] Conflict and contradiction.  These were two of the main themes reverberating around the world of centralized monetary planning this week. On Tuesday, for instance, a novel and contradictory central banker parlance – “reserve management purposes” – was birthed into existence by Fed Chair Jay...

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Zugzwang – Precious Metals Supply and Demand

    Respectable and Not so Respectable Assets The price of gold went up 8 bucks, and the price of silver went up a penny last week. These were not among the capital assets that could be liquidated for greater quantities of consumer goods last week. Nor were equities. A respectable, mother-in-law-proof speculation: the 10-year US treasury note. [PT] However, the consumer goods stockpile stored in treasury bonds (to extend our half...

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Elizabeth Warren’s Plans to MAGA

  21st Century Hooverville There are places in Los Angeles where, although the sun always shines, they haven’t seen a ray of light in over 100-years.  There’s a half square mile of urban decay centered on the Union Rescue Mission at 545 South San Pedro Street, where depravity, chaos, addiction, insanity and archaic diseases multiply and ricochet about like metastatic cancer. One of LA’s modern-day Hoovervilles in San Pedro Street…  In...

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Repo Quake – A Primer

  Chaos in Overnight Funding Markets Most of our readers are probably aware that there were recently quite large spikes in repo rates. The events were inter alia chronicled at Zerohedge here and here. The issue is fairly complex, as there are many different drivers at play, but we will try to provide a brief explanation. There have been two spikes in the overnight general collateral rate – one at the end of 2018, which was a first...

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The System Scrapes By – Precious Metals Supply and Demand

    An Accident in Waiting The price of gold dropped $20, and silver 43 cents. For reference, $20 was once worth just about an ounce of gold. Dollar was a unit of measure, a weight of gold equal to 1/20.67 ounce of fine gold. A gold certificate from the time when the dollar still represented a fixed weight of gold [PT] Today, it is an irredeemable currency, defined not as a unit of weight but as a unit of central bank liability which...

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The Inexorable Final Collapse

    Groping in the Dark This week central planners pursued their primary mission with steadfast conviction. They planned. They prodded. They prearranged tomorrow to save us from ourselves. Some also grubbed a little graft for their trouble. Other central planners took to debasing the dollar to price fix the federal funds rate within a narrow band of tolerance.  What in the world do they think they are doing? Central planning committee...

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