Weekend Show – Sat 1 Mar, 2014

The situation in The Ukraine, manipulation and disinformation in the markets, and Keynesian Economics

Hour 1:

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Hour 2:

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This week on the political side, we discuss the situation in The Ukraine.  On the business and economics side, we discuss manipulation in the markets, disinformation in the markets, and Keynesian Economics.

Hour 1:

Hour 2:

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Al KorelinCory FleckPeter GrandichAlan ButlerChris TempleRichard Postma
Bob MoriartyGlen DownsJeff Deist

  1. On March 1, 2014 at 1:27 am,
    hO says:

    On any given day…and for almost any given reason, the Chinese could “end the game”. I am sure that I will receive angry comments telling me that the Chinese would never do anything to “end the game” because they would only be harming themselves. I will hear “who would ever do harm to themselves or upset the apple cart in a good situation?”. I have recently written several times that China has “played the game” and basically carried us as a boxer would who had been instructed not to knock their opponent out until a certain round. I also believe that they have improved their “physical” (both monetarily and through infrastructure) position while doing this.
    So just “how” could China deliver a knockout punch? The “potentials” are many and as I said “for almost any given reason”. China could simply dump their Treasury securities and “make” interest rates rise, this might be the easiest way. Were they to do this, derivatives of all sorts would be ignited into an implosion scenario all over the world. This would also upset uncomplicated and ordinary “carry trades”. It would directly effect the U.S. through higher mortgage and auto loan rates. Higher rates would also directly affect the balance sheets of any and all financial institutions.
    China could also “go hot” in their disputes with Japan and South Korea. They could initiate or provoke some sort of military action…which would of course also include the sale of Treasuries. How better to injure your opponent than to hit him where it hurts the most…the pocketbook. The outright sale of dollars on the open market is also an option but selling dollars “from” Treasury sales would give them a “two fer”. Or, how about the outright purchase of dollars and devaluing their own currency? How would that work out for us?
    They might also choose to “court our friends” and allies into business relationships. Personally speaking I saw this with my own two eyes. For what reason would the Chinese build roads, bridges and even the national soccer stadium in Costa Rica? Costa Rica is a country geographically close to the U.S. with banking ties and they even officially use dollars along with their own currency…so why would China even bother? Umm, maybe for a part of CR’s agricultural exports? Or because they are a neighboring nation to the Chinese controlled Panama canal? Or maybe to just get their foot in the door and become another thorn in Uncle Sam’s side? Who knows but it has become a rather cozy relationship. You must hand it to the Chinese, they have been at least one step ahead of the Americans when it came to locking up raw material deals in resource rich Africa and they have quite large trade deals with both Canada and Australia.
    China could, when the time comes, unilaterally blow the price of gold to nearly any price that they wanted. Should they be on the “non” receiving end of a failed delivery this might be exactly what they do. If (mathematically “when”) they do not receive metal, all they have to do is make an announcement that will echo and reverberate all over the world. They could easily say “we will pay $4,000 per ounce for any and all gold that anyone wishes to sell us”. Why would they “overpay” at such a high rate you ask? Because at the current “made up market prices” they are not getting their fill. A marked up price would be like a final “street sweeping” to part “fools from their real money”. You don’t think so? Please remember that once their supply IS shut off, they can bid whatever price that they’d like…which immediately becomes the new “market price”…which means whatever they already owned just became worth many multiples of what they paid.
    China will absolutely do economically, financially and militarily…whatever is best for China. Did they “fool” the U.S. into thinking that they were “team players” by soaking up much of the debt that our Treasury issued? Yes, they probably sat at a table with Robert Rubin and Larry Summers and just nodded their heads in agreement while seeming financially ignorant. I would also guess that our “delegation” left the dealings laughing at how gullible the Chinese were. While you may not see it yet, the joke is on us because China, whether we like it or not…is our BANKER.
    Finally, China has just begun weakening their currency versus the dollar. Can you say “currency wars”? A weaker Yuan means they are trying to protect their manufacturing base. This is good for who? Well China of course which means less U.S. exports to and more imports from China. Does a “less vibrant” U.S. economy make it easier or harder for the U.S. to service its debt to their bankers (the Chinese)? A little more burdensome maybe? And at a time that the U.S. economy looks like it’s slowing already? Gee, what a coincidence. Before I finish, for how many years now has the U.S. been “demanding” that China “revalue” their currency higher? At least 10? …And now all of a sudden China does an about face and begins to devalue? Because it’s in China’s best interest…and not ours? I guess the old saying “he who has the gold makes the rules” will unfortunately (for us) ring true again!

  2. On March 1, 2014 at 1:54 am,
    SD Marc says:

    Ok, OK….I will be first to post. Good morning from beautiful San DIego. It is raining like the dickins and the wind is howling like it is nobody’s business. GREAT! Just what we needed. Now, if can just have a “Noah’s Ark” downpour….we might…just might get out of this drought we are in. I havent seen this much rain in a long time. OK, I take that back…..only when I shower……….:)!

    • On March 1, 2014 at 11:17 am,
      hO says:

      It’s raining buckets in Napa Valley too. We even had a power outage for 3-4 hours.

      • On March 1, 2014 at 12:37 pm,
        The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

        Clear and sunny and 75 in South Florida.

        • On March 1, 2014 at 12:38 pm,
          The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

          and not a cloud in the sky…………..I got out of the Midwest before the snow

          • On March 1, 2014 at 2:00 pm,
            SD Marc says:

            Smart guy Jerry….just like my Uncle Richard……

    • On March 1, 2014 at 12:47 pm,
      bill says:

      Dang, I saw you post first but Ho out did you. How did that happen?

      • On March 1, 2014 at 1:04 pm,
        hO says:

        Moderation for several hours.

  3. On March 1, 2014 at 4:30 am,
    Andrew de Berry (Rev) says:

    Bob Moriarty I could sit at your feet for hours on end! Thank you and thanks guys for another very informative show.

    • On March 1, 2014 at 8:32 am,
      Ann says:

      Lol-Andrew… I could also!!

      • On March 1, 2014 at 9:51 am,
        Dai Uy says:


        I also concur. I predict that your area of expertise will continue to become more and more in demand given human fraility and limitations to understand the big picture.

        • On March 1, 2014 at 12:34 pm,
          Andrew de Berry (Rev) says:

          Thanks Dai Uy – Sadly I find hardly a kindred spirit within either the church or the UK that I can exchange ideas and thoughts with – hence the value of this site. Really difficult to try and march out of step against the crowds walking blissfully towards economic Armageddon.

          • On March 1, 2014 at 4:04 pm,
            irishtony says:

            Andrew…..You can always speak to me………Mad Irish Tony……..X

          • On March 2, 2014 at 1:24 am,
            Andrew de Berry (Rev) says:

            I’d value that mad Irish, mad rev!

          • On March 2, 2014 at 1:40 pm,
            The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

            don’t speak to him REV…he is trouble……….he,he………..

          • On March 2, 2014 at 3:47 pm,
            Bentnail says:

            …or worse yet, spiritual deception via the ecumenical push (the wide path).

          • On March 3, 2014 at 12:26 am,
            Andrew de Berry (Rev) says:

            Oh Bentnail welcome back!

      • On March 1, 2014 at 10:44 am,
        bill says:

        Bob’s a legend. Fighting with Pappy Boyington in the Pacific, flying his plane under the Eifel Tower shooting Nazis…the guy’s done it all.

        • On March 1, 2014 at 11:40 am,
          hO says:

          Bob is not old enough to have been flying and shooting Nazis, but he is a legend.

        • On March 1, 2014 at 12:22 pm,
          Irwin says:
          • On March 1, 2014 at 12:36 pm,
            Andrew de Berry (Rev) says:

            That’s Bob, no question Irwin!

          • On March 1, 2014 at 12:58 pm,
            bill says:

            “That’s Bob, no question Irwin!”

            Nah, that was just some thrill seeking kid.

            Now picture that with a sky filled with anti-aircraft fire while chasing a German Me-109 in a running dogfight at a much faster speed and THAT was Bob!

          • On March 1, 2014 at 1:18 pm,
            Irwin says:

            I dunno, Andrew;
            have no idea who it is, but in the youtube comments, someone says it’s Bob.

        • On March 1, 2014 at 4:56 pm,
          bill says:

          Dang, you boys see this?

          Maybe Obammie is gonna put some petrol in Bob’s Corsair and send him on one last mission….but I can’t believe our rulers would be stupid enough to get us into a war with the rooskies over ukraine….can you?

          Obama Draws Red Lines As World Lurches Toward War

      • On March 1, 2014 at 10:59 am,
        bill says:

        Imagine what this country would be like if you had Bob as President and 435 Bobs in Congress.

  4. On March 1, 2014 at 4:50 am,
    Andrew de Berry (Rev) says:
  5. On March 1, 2014 at 4:59 am,
    Andrew de Berry (Rev) says:

    The case for bitcoin (maxcoin maybe). Biggest threat as I see is the one mentioned of rapacious governments creating new laws to regulate all crypto-currencies


  6. On March 1, 2014 at 5:17 am,
    Steven says:

    Anyone who worships real estate, labor, rigged stock and commodity markets needs to flush out their yamulkas and find their moral compass. Grossly deflated wages, grossly inflated real estate prices and the destruction of peoples life savings has real consequences for the lives of real people. This month if I am to survive and thrive I will have to invoice a Canadian Bank the average house price per ounce for my primary silver reserve of 5000 troy ounces which is silver bullion for 35,000 people. I find it supremely ironic, disgusting and tragic that some one with such wealth should wind up homeless and destitute because of rigged markets,unemployment, an eviction notice and extreme real estate prices.
    I am not imagining things or joking.
    The invoice awaits printing.

    • On March 1, 2014 at 6:40 am,
      SD Marc says:

      Huh? Who is the worshiping that stuff here? Worshiping and preparation for survival in the real world are FAR two different things. I am not the sharpest tool in the shed, but I really dont understand your post – at all? Please explain yourself – if you can.

      • On March 1, 2014 at 8:19 am,
        Steven says:

        I am talking about people in general and every now and then I do hear talk show hosts extolling the virtues of the market. Manipulated markets have no virtue if it destroys the life savings of investors or blocks them from having any say over the price of their assets.

  7. On March 1, 2014 at 5:18 am,
    Andrew de Berry (Rev) says:

    Ref Seg 8: Super growth stock Amazon has accumulative net income of under $2 billion (just about enough with which to buy their new trophy HQ) whilst its PE of over 500 means 500 years before investors would get their money back. Don’t agree with the post below. A blow-off has to come.


  8. On March 1, 2014 at 7:03 am,
    Fred says:

    Bob M. must work for Putin with the KGB/FSB propaganda machine running 24/7.

    Cory and Doc made correct comments on infrastucture – Gov’t fills in where private enterprise will not. Where would we be without our National Highway system? Hey Bob , do you only walk or take a train when you need to go somewhere and never use a car????? LOL

    Putin is on the wrong side by invading Ukraine in every way possible…….Putin has a military and oil/gas economy as he never created a diversified economy, still has a mafia controlled economy, the Russian people are still kept down under his tenure, protesters in Russia are put in jail….same ole KGB dark ages mentality……

    The big economic players in this world are going to make Putin pay bigtime for occupying Ukraine…….they are going to bleed his economy dry thru several economic/financial measures……the Russian people are going to see their economy go into the toilet now so bad that they might revolt against their little dictator boy RasPUTIN………..so stick it where the sun don’t shine Putty….

    • On March 1, 2014 at 8:34 am,
      bj says:

      Fred: “The big economic players in this world are going to make Putin pay bigtime for occupying Ukraine……” is wishful thinking because the big economic players are the Communist China, India, Indonesia, Japan and Germany, and not a peep from any of them on this.

      Thus, the different between a leader and a fool out taking a hike, is that when the fool looks over his shoulder there is no one there! Someone needs to explain this to Sen Maddog McCain (R-AZ, who just got censured by his own stay GOP).

      ….And while Russia : “still has a mafia controlled economy” is very true. Name one major economy that isn’t a pupet of organized crime at all levels. In fact, name any economy that isn’t!

      Even in America is hard to tell the different between organized crime, organized government, the Fed and their cronies on Wall Street. Different packaging in different country, but lairs and thieves on and all–where none go to jail and everyone gets bailed!

      When you at the world in terms of money power, there’s not much room left for honest government and responsible spending–probably because there’s little profit in such a thing..

    • On March 1, 2014 at 2:26 pm,
      bill says:

      Come on Fred, don’t sugare coat it. Tell us how you really feel. 🙂

    • On March 2, 2014 at 3:36 am,
      Joe says:

      Sorry, that you some how believe the Federal Government has been given Powers from the constitution to build infrastructure . That is absolutely wrong ! Only National Defense and Commerace between the states ( so states would not use tariffs against each other ) That’s it period . The States can involve them selves with infrastructure because there close to the people . You remember that old American ideal . That the rights were given to the States (or people ) Some Americans have been conned into believing that the Federal Government has been magically given all these powers. Bob M is correct in his thinking . No way can we assume the Fed has this power just because they have taken it because of some who feel that that the Fedias the answer to all there problems !

  9. On March 1, 2014 at 7:26 am,
    hO says:

    Cory, Your youth is showing on spending. Government turns out incompetent and corrupt; all ways, always.
    Minimization of government is always best. It’s function should be reduced to defense of country, policing and regulation of trade

  10. On March 1, 2014 at 7:38 am,
    Andrew de Berry (Rev) says:

    C’mon Fred, Bob M uses hyperbole to make his points., which he does highly effectively. I wish to goodness our government here in the UK tried running a few of our national institutions instead of neglecting and/or selling them off. Our roads are becoming a national disgrace – full of potholes, with their many ‘white’ markings all but disappearing, whilst our hospitals and NHS are rapidly going under while being privatised. As for our one-time national rail service it’s has been split into a whole mesh of chaotic and mind-numbing private franchises.
    If I were going to qualify Bob’s remark ‘all government spending is bad,’ I’d only prefix it with ‘pretty much all government spending….’

    • On March 1, 2014 at 11:26 am,
      hO says:

      Reverend Berry, Is that not how most bankrupt entities end up?
      One can borrow to make things look good for a while, but ultimately the piper has to be paid. Should the UK fill the potholes and staff the hospitals with other than cheap labor from the ex-colonies and then default on its obligations (bonds and treasuries) and thereby kill all pension funds, destroying all hope for the elderly.

      • On March 1, 2014 at 12:45 pm,
        Andrew de Berry (Rev) says:

        hO – B of E chief Mark Carney’s killing off ‘all help for the elderly’ all by himself, by endorsing the continuation of five years of zero interest rates on savings and pension funds. We’ve now got nine times GDP in debt liabilities, and just like in the States our middle classes are becoming the new poor.

        • On March 1, 2014 at 2:54 pm,
          hO says:

          I understand and agree, Reverend, but I hope you enjoyed the last few decades, because I fear it will get a lot worse before it gets better.

  11. On March 1, 2014 at 7:39 am,
    Andrew de Berry (Rev) says:

    By the way I liked your pun on Putin.

  12. On March 1, 2014 at 7:51 am,
    b says:

    Bob is saying the americans “blew it” in a few countries.
    I have to disagree, as I see the whole point was war and profit from it.
    Seen that way there was only success.
    The American interest in the Ukraine is the same interests as there always was and still is, simply to profit from war.

  13. On March 1, 2014 at 7:52 am,
    Catfish says:

    Sounds like Cory’s starting to get it (vis-a-vis Bitcoin). Al, why don’t you just open your first Bitcoin wallet and give it a try; put in $5 — what has anyone got to lose? 🙂

  14. On March 1, 2014 at 7:53 am,
    Doug Dog says:

    When are you going to fire Cory? He is the worst

    • On March 1, 2014 at 9:48 am,
      Andrew de Berry (Rev) says:

      Hallo, since when? I think the guy’s one switched on dude.

    • On March 1, 2014 at 10:04 am,
      Dai Uy says:

      I wish that I had been as overall wise in my mere youth as Cory.

      • On March 1, 2014 at 12:46 pm,
        Andrew de Berry (Rev) says:

        Me too Dai Uy.

        • On March 1, 2014 at 4:58 pm,
          Bobby says:

          He’s got a lot Of life to live.

  15. On March 1, 2014 at 8:09 am,
    b says:

    I see bitcoin as a currency, had a person been tech savy enough obviously there were dollars to make.
    Young people seem to like it so maybe that’s the way were going, eventually I can see all transactions being done with “eye scans” or “dna scans” etc.
    At this point tho, I still have no use for it, using plastic costs me nothing, nothing to purchases,(I am actualy paid) and nothing to transfer.
    So bitcoin has a ways to go before it is more than just something interesting to me.
    BIRD, how valueable or useful is bitcoin in east Africa?
    Today, I have no problem using Canadian currency, so, no need for a crypto.
    Just my opinion, but I think for these cryptos to become accepted by society as a whole, we have to be able to pay taxes with them.
    At that point, I may have a use for them.

  16. On March 1, 2014 at 8:26 am,
    b says:

    About crypto currencys.
    If I knew how to create them I would, give myself a number of them then let other people “mine” them, and then sell mine. I think Keiser just create his own.

    Its been said many times, the people that make the money on a goldrush are the guys that sell the shovels.

    • On March 1, 2014 at 9:26 am,
      SD Marc says:

      b and all:
      True…but for the guys that SAW THE MAIN TREND EARLY,(i.e. got to the gold mine early; dug and then get out when everybody and their mother are “digging’…..then YOU MAKE MONEY and get out…or you stay…get greedy and somebody robs to get the gold that they “dug for” and couldnt get….so the moral of the story is…. hold for the BIG MOVE – have the competence to SELL and get out and move on to other hard assets!

  17. On March 1, 2014 at 9:38 am,
    SD Marc says:

    Hey b,
    Just reread your post…my post not really related to the bitcoin BS going on -sorry…if somebody got caught in the bitcoin stuff….a virtual currency…that person deserves to get burned…..hopefully, they will learn….

    • On March 1, 2014 at 11:22 am,
      b says:

      My point was sorta anyone that knows how can make and sell them.
      No problem, that’s capitalism.
      My other point was that there is as yet no NEED, other than ideology.

  18. On March 1, 2014 at 10:33 am,
    SILVERMAN says:


    • On March 1, 2014 at 11:41 am,
      b says:

      Silverman. Was enslaving,raping,torture,pedoilia and genocide the way of the god of the founding fathers?
      Personaly I see them talking about liberty as hypocracy, and if those are the traits of that god, might I suggest finding another one to worship?

      No offence, I just get tired of people saying how good the god worshiped by these founding fathers was. As far as I can tell the only people that god was for were white protestant males.

      There is a few things about that, like dictatreship being the government of preference in those books and not democracy for example.
      A lot of contradictions, no offence, its just I really find it an insult to a persons intelligence. Faith is one thing, logic and reason is another.
      I probly shouldn’t say anything, to each his own. Liberty.(for real, not the “founding father” meaning)

    • On March 2, 2014 at 8:22 am,
      Paul L says:

      If he were a god he would have saved himself and still be alive.

      • On March 2, 2014 at 1:42 pm,
        The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

        U DO NOT UNDERSTAND ….WHY………,,,therefore you shall remain in the DARK..

        • On March 2, 2014 at 2:21 pm,
          The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

          the years between……..1623 and 1776……are a few years………….Some of the founding FATHERS………were not all GODLY…………….

  19. On March 1, 2014 at 10:36 am,
    scott hamilton says:

    Friends : there is nothing to stop Pres. Obama from getting a bill thru congress allowing him to ban imports of vodka from Russia. this would be a minor prick in the Rus economy. USA can still import, vodka from Finland , Poland , Sweden, and even Ukraine. We personally can boycott Russian goods , altho except for a few diamonds, and vodka we buy little from them. pray for peace S

    • On March 1, 2014 at 11:31 am,
      hO says:

      Then the Russians pass a bill banning imports of Marlboroughs and all US exports….
      Which country do you think ends up winning?
      It’s lose-lose, if you ask me.

    • On March 1, 2014 at 12:08 pm,
      bj says:

      OH NO, not my vodka! I choking up, what’s left to wash down my kippers. Maybe some one will build a distillery in Idaho, and then they’ll be a run on potatoes on the CME. Think I’ll go buy some potato futures right now.

      Regardless, it’s not what’s reported in the mainstream media that matters so much as what goes unreported:


      • On March 1, 2014 at 1:05 pm,
        Andrew de Berry (Rev) says:

        Very interesting insights by Swann about Obama bj. about 13 mins into interview.

        • On March 1, 2014 at 1:47 pm,
          bj says:

          Agree, it’s a very objective analysis with a focus on what’s happening to our 1st Amendment as it applies to the media, and how the definition of a journalist is being massaged by the power elite. I remember back when I posted out here during Obama’s first run for pres. that there would be no “change”.

  20. On March 1, 2014 at 11:13 am,
    hO says:

    With regard to Government spending, may I suggest a reading of John Rubino’s recent set of four monologues on Who Blows up First. Which discuss government apending in Europe, Japan and China. showing how borrow to spend blows up eventually, even if spent on infra-structure.

  21. On March 1, 2014 at 12:56 pm,
    Mike says:

    Am all with the Reverend again!

  22. On March 1, 2014 at 1:00 pm,
    hO says:
    • On March 1, 2014 at 1:34 pm,
      Andrew de Berry (Rev) says:

      hO First time I’ve heard Governor Jesse Ventura. What a breath of fresh air – would like to hear him interview Bob Moriarty!!

    • On March 2, 2014 at 1:37 am,
      Andrew de Berry (Rev) says:

      Just how effective is ACLU hO?

  23. On March 1, 2014 at 2:59 pm,
    Birdman says:

    Probably the only really important thing we need to know right now to navigate the future is that we are near the termination of a very long period of credit growth and near the bottom of our savings pool. How close we are to the end cannot be known for certain but you can readily see our present situation in any one of the many credit or savings graphs available from FRED.

    The charts do not yet show that we have actually started to roll over on borrowing though. Indeed, signs are that credit card debt is again expanding but it is not certain if that is just a sign of how people are making ends meet or that the consumption is genuine demand. Perhaps the conclusion of mass easy credit will therefore come abruptly and end with a bang and not a whimper.

    We all wish we knew the answer to that question.

    Whether whimper or bang the point here is that consumers are nearly exhausted and what lies ahead are slowly rising rates and more demanding credit conditions. Collateral matters again. Despite signs of modestly rising savings rates the household balance sheet is very far from being repaired and debt remains excessive on many fronts even as tax burdens are rising.

    What cannot go on will probably not go on. We should expect a disturbance in credit and debt therefore before equilibrium is reached once again some years off in the future. Interestingly enough, the Treasury rate was near its historical bottom around the time of the great crash in 1929 much as it is today.

    What followed was that savings rates as expressed as a percentage of disposable income actually crashed to below zero in the four traumatic years that followed the stock market blow out. Few people were prepared for that economic shock. What that means in other words was that the bulk of income that might otherwise have been devoted to savings during those years was actually consumed by the debt hangover of the boom times that preceded it thus leaving little cushion for the majority of people to restart their lives.

    Nothing even close to that has been seen since.

    At the present in 2014, the same low levels of savings rates that were seen in 1929 are again manifest today which is a sign of excess debt in the system and wide abuse of credit facilities. Surely if people had more readily available money they would pay cash in full for more of their purchases. They do not of course, and the reasons have already been widely acknowledged.

    Cash savings are chronically in short supply in most households and we know that up to 60% of the population is living paycheck to paycheck with less than 2000 dollars set aside for a rainy day. Dismal is the best description for that predicament. Any economic trauma that occurs now is certain to come as a serious shock to the majority of citizens.

    But here is the really fascinating part….in the decade between 1933 and 1943 following the low point of the Depression, households slowly battled their way back to solvency. Savings rates (on average) rocketed ahead reaching a historical high of 27% of disposable income before falling back sharply to a more normal range.

    The public had learned their lesson the hard way. They had learned not to be caught short when trouble arrived and they were not going to get caught twice. In a fairly dramatic response they shunned credit for many of those hard years while delaying all but the most necessary of purchases.

    That wreaked havoc on those parts of the economy dependent on lending (housing and some consumption) but by the time 1944 rolled around the cycle was ready to begin again. The war was near its conclusion and people were finally feeling a little more flush once again.

    The even more interesting part of that period though was that savings reached their peak almost exactly as interest rates were at their lowest point. Almost seems counter intuitive does it not? That savings period was incidentally an essential component for the commencement of the credit expansion that was to follow and so bank money grew and the repair slowly evolved.

    Now look at what we are seeing today though. What are most investors doing? They are chasing yield and risk at exactly the time they should probably be parking cash and getting ready for the next wave of investments that will follow a period of asset declines.

    We can assume for starters that the markets are highly valued already and that there is a greater probability of a downside in the future than more upside even if none of us can know when the moment of truth will arrive. If credit is going to be winding down (and I think most here will agree it has almost run its course) then it begs to reason that asset prices are set to suffer again as tightening increases. We should therefore be positioning by saving or going more to cash while preparing for a time when collateral suddenly becomes an issue again and perhaps not gambling so heavily on risky yield.

    The majority of investors are now going in the opposite direction of what history tells us we should be doing though. They are chasing stocks markets up and taking on unprecedented levels of leverage in the process. If history offers a guide though what they should instead be doing is bolstering household reserves to fend off the period in time when this credit cycle terminates and assets mean-revert. They should, in short, be stocking for a time when cash is thinner, credit is tighter and the inevitable good opportunities arise again.

    A few folks are already on that track. Is it any wonder that some of the most famous investors are sitting on cash and telling any audience that will listen that there are few good opportunities being presented in today’s markets? It should not take a genius to read these tea leaves. Just overlay the essential component graphs and the answers are obvious.

    Long trend credit growth versus savings rates are a fair starting point that should tip us off that now is the time to back off risk and start storing up nuts for winter. Even squirrels with their tiny brains are smart enough to get that!

    The thing is that those who predict hyperinflation and an end to the dollar have got this completely backwards. Odds are much stronger that the dollar will strengthen as assets decline and liquidity becomes more acute. Borrowing will become more difficult and those with ready access to funds will be in the most enviable of positions.

    So the worst advice according to the speculative class may actually be the best for our long run health. That is to shun debt, pay off credit cards, sock away cash and avoid all leverage if at all possible. We don’t know the future but we do know the past and the charts tell us a near bottom in savings combined with a peak in credit (and/or debt) is not a recipe for the currency to implode but rather for there to be rising, even urgent demand for the coin of the realm.

    The dollar doomers will deny it all of course. Most of them have a gold centric point of view that metals will rule the day and dollars will whither into oblivion. Won’t they be surprised when rates rise and gold prices fall instead of blossoming into roses. But then again, most of those guys have no damn clue how the system actually works.

    • On March 1, 2014 at 5:17 pm,
      Matthew says:

      I explained to you last year that gold and interest rates will rise together. Speaking of “guys with no damn clue,” here’s what the Bird had to say just before gold rallied another $100+ and GDXJ rallied another 20%+…..
      On January 30, 2014 at 11:25 am,
      Birdman says:

      Sorry guys. The dollar is going to strengthen due to tapering and EM capital fows. Euro is heading back down. Gold will feel the pressure and in fact it must continue to decline at this critical juncture or sentiments will shift decidedly bearish on both the economy and stock markets. There is no doubt in my mind that this recent brief rally period since the start of the year is ending. Nobody is suggesting the economy is all roses or anything but the wind is still to the back where equity markets are concerned and most of us pretty much prefer it stays that way for the time being. If gold is going to properly function as a fear/risk trade then it is destined to fall under the current circumstances. I continue to hold to my predictions for a decline below 1000 this current year.

      • On March 1, 2014 at 5:18 pm,
        Matthew says:

        Btw, do you expect the dollar to go up for 2014?

        • On March 1, 2014 at 6:32 pm,
          b says:

          Mathew, you sure like to throw a persons error at them. In this particular case it might only be timing that’s off.
          In any case, why not repost when people are right?

          • On March 1, 2014 at 8:35 pm,
            Bird Man says:

            Excellent question B. I have actually left many posts where not a single word is uttered by Matthew….not one in agreement nor any in disagreement. I have also asked him to comment on ideas in an attempt to engage something akin to a conversation. He is mute where he has nothing to offer and typically he has nothing to offer but negative remarks or quotes from himself which I find rather bizarre……I mean, who quotes themself at lenght????

          • On March 1, 2014 at 9:20 pm,
            Dick Tracy says:

            Matthew is right, Big Winds Blow From Empty Caves. DT

          • On March 2, 2014 at 1:31 am,
            Andrew de Berry (Rev) says:

            Al you should get Matthew on your panel.

          • On March 2, 2014 at 1:41 am,
            Matthew says:

            B, Bird can do no wrong in his own mind and routinely tells others that they are wrong without supporting his position. When he spews BS and then claims “those guys have no damn clue how the system actually works” he should expect a response.
            I think it’s useful to highlight just how certain he has been about calls that are instantly proven dead wrong. Maybe you should re-read his Jan. 30 post while looking at a price chart.
            He contradicts himself, too. On January 30 he said “the dollar is going to strengthen” but on December 31 he said “a falling dollar will manifest.”

          • On March 2, 2014 at 1:57 am,
            Bird Man says:

            The comment of mine that you quoted specifically refers to an opinion of what will happen during the period of the coming year. It cannot be wrong because it is a prediction for a future event that has not yet happened. When the year is over you can criticize it. What you have done is try to make my comment apply to a single trading week. I don’t want to characterize your intellect but I will suggest you have a reading comprehension problem. In the meantime, the topic here is debt which was the essence of the roundtable. Bob said that we cannot borrow our way to prosperity and I have added to his thoughts by discussing the end of the credit cycle. Perhaps you will try addressing the subject instead of wasting all your time getting personal. This is not about me, after all. Al’s website is meant to draw a conversation about resources and the economy. You knew that right?

          • On March 2, 2014 at 10:54 am,
            b says:

            Everyone has opinions, lots of people make “calls”.
            But as they say predictions are tuff when they are about the future.
            For myself, sometimes Im close to reality and others Im “out to lunch”.
            By throwing an error in a persons face you show to everyone that should they make an error you will advertise the fact.
            This might have the effect of reducing comments.
            People that invest, generaly think for themselves (or they wont be investing long)
            I just don’t see a need for exposeing.Ive seen you do it to more than 1 person.

            I enjoy your comments and Birds and everyone elses, wether I agree or not
            Truly I enjoy the heated discussions

            Ultimatly we are all on the same side.
            . .

          • On March 2, 2014 at 12:04 pm,
            Matthew says:

            B, Bird is special, but something tells me you don’t know what I mean. His certainty and attitude make an assessment of his record entirely justified in my opinion.

      • On March 2, 2014 at 6:16 am,
        NYC says:

        Hey Bird, Agree i think Gold and the miners are a short at least for next week and possibly longer? the run up since 1/1/14 needs to correct.
        What about Ukraine? Does it matter to Gold? i think yes but only like in 2008 the USD gets a big bid up…
        if gold goes under 1000, i think so also well then back up the truck and house and go long

        • On March 2, 2014 at 10:12 am,
          Birdman says:

          Honestly NYC, I cannot call gold here so its wait and see for me. There seems to be a consensus growing that prices will fall but that sometimes suggests everyone will be wrong. Ukraine has everyone’s attention but as usual that will just be a cover for a bigger story that can’t get page one airtime. I think this conflict will blow over quickly. The US and Russia are not really going to tangle over this. Why would they? They have actually been cooperating on too many other issues lately for me to believe there is a genuine threat of confrontation. Nobody wants it anyway, least of all Ukrainians. I would call this a show event. I don’t lose sleep over it that’s for sure. Maybe I am getting complacent!

    • On March 1, 2014 at 5:19 pm,
      Eric says:

      You make many good points in this post, especially with regard to the private sector debt. I think the jury is still out, however, as to whether the 3-standard-deviation event is heavy deflation or inflation or perhaps even a sling-shot from one to the other.

      Time will tell and it won’t be dull.

      • On March 2, 2014 at 1:44 am,
        Bird Man says:

        Thanks for the reply Eric. Seems it is a long process working through the variables and trying to arrive at a reasonable conclusion about how the future might play out. We have all heard about the massive amount of money sitting on the books of the Fed that lies in wait to start an inflationary inferno. Nobody yet knows how or why it will suddenly come out and stoke the fires of a devaluation in our currency though.

        And we also know that the banks have not been willing to lend out that money as risk remains elevated. What we hear about much less is that consumer demand for credit remains weak and that collateral on offer is often poor or impaired. Savings amongst the middle class are sorely lacking.

        So the question we need to answer regarding the freeing up of those stored reserves relates to what might be the impetus to get banks lending and consumers borrowing again. This becomes an even more important question as two distinct threats slowly emerge.

        First, the business cycle for this (very modest) expansion is now quite extended and a recession is virtually guaranteed by 2015. Nobody educated argues against that point. Secondly, the stock markets look to be overvalued and will eventually be subject to a correction that will likely coincide with a period of slow growth or even negative growth in the US.

        That means asset prices will be pressured down simultaneously for both the consumer and the investor as unemployment begins to rise and it thus tells us credit growth will remain weak if not stall altogether.

        Third, if assets do indeed falter as is likely during a decline in stock markets then collateral itself becomes further impaired and this cannot be beneficial for banks or consumers seeking to loan or borrow. We note that housing is currently showing signs of stress and even auto sales have tapered off as inventories rose.

        These are the broad domestic conditions I am looking at:

        Consumer/ private credit has peaked or is approaching a cyclical peak.
        Current savings rates remain low by historical standards. Past savings are being consumed.
        A recession approaches as the business cycle winds down. Very predictable.
        Asset (stocks & housing) are currently inflated and growing increasingly unstable.
        Consumers are tapped out and displaying an unwillingness to borrow.
        Lenders are reluctant to lend under current economic circumstances.
        Collateral is impaired for many but this will worsen as a recession emerges.
        Listed companies are more focused on share buy backs and mergers than expansion.
        In other words, we should anticipate rising unemployment espcially as the business cycle concludes.
        Interest rates will begin to rise even as a new recession gets underway in 2015.
        Employment is already weak and will deteriorate further as the economy slows.

        OK….so the above factors relate primarily to the US economy. Lets pretend we are making a cake. We might throw all the ingredients above into the mix and see what comes out after the cooking is finished.

        And what will we get? Well after reading through my ingredients list I don’t see any yeast. In other words there is no agent to create the reaction necessary to stimulate much growth, never mind full blown inflation. I wonder where the idea comes from that the currency will fail or suffer a sharp devaluation under such circumstances? It is implausible in my opinion as slowdowns of this kind during a credit retrenchment lead to strengthening currencies as money is demanded but not forthcoming.

        You offered that the jury is still out on deflation or inflation. If you can suggest the conditions that might materialize to make this cake rise I would be interested in hearing them. Anyone else who reads this site and is interested in the topic is also welcome to add to what we know.

        In my view there are substantial deflationary headwinds facing us. It is why the G20 seeks to grow the global economy by two trillion dollars over five years as a policy prescription. If they thought growth would happen organically then no such remedy would ever be suggested so it is therefore also the view of the G20 that deflation remains the primary threat.

    • On March 1, 2014 at 6:09 pm,
      franky says:
  24. On March 1, 2014 at 3:01 pm,
    hO says:

    Jesse Ventura was Governor ,I believe, of Minnesota, the then Capital of the welfare system in America together with Wisconsin, but that was a generation ago. (He did turn the state around) Now New York and California get the booby prizes. But they’ll soon be bankrupt asking Obama to bail them out, which I predict he will.

  25. On March 1, 2014 at 3:28 pm,
    Robski says:

    Interesting article here, I’d like to hear feedback from all you technical analyst on this.

    • On March 1, 2014 at 10:16 pm,
      hO says:

      Backwardation (negative rates) implies shortage of metal as Murphy has often said.

  26. On March 1, 2014 at 5:13 pm,
    Eric says:

    Interesting to hear our government tell Putin to stay out of the Ukraine and the warm weather port in the Crimea. Meanwhile, we maintain a strategic naval base in Cuba — a country we have had absolutely no relations with for decades.

    Not only the base there, but we house terrorists there, for goodness sake. And if someone told us to stop tampering with Guantanamo, we’d tell them to jump off a bridge.

    So this is the problem — we have one standard for ourselves and another standard for the rest of the world. The rest of the world is getting increasingly tired of it, and we are getting increasingly unable to finance it.

    If you look at the way the Obama administration handled the situation in Syria recently; then the news about the cut-backs in the military; and now this. I think it’s becoming increasingly evident just how broke the country is.

    • On March 2, 2014 at 6:21 am,
      NYC says:

      yea i agree…..the Russians if they just protect Crimea and don’t go elsewhere in eastern Ukraine are they really doing anything wrong? i say no let them deal w Crimea themselves…this is not really a crisis

      • On March 2, 2014 at 9:00 am,
        Eric says:

        yes, I am inclined to agree. Of course, I must acknowledge that it is easy for me to say that, since I am not a Ukrainian. If the Russians decide that they want to start re-building the Soviet Union, that is obviously going to be an entirely different thing. But are we supposed to start World War III over it?

  27. On March 1, 2014 at 8:55 pm,
    tim says:

    i wonder how much the NSA is paying Facebook to purchase WhatsApp. I’m not kidding either.

  28. On March 1, 2014 at 11:20 pm,
    Mike says:

    Eric has figured it all out!

  29. On March 2, 2014 at 2:05 am,
    Bird Man says:

    The odds of a hyperinflation are negligable to zero. Even inflation is muted. The currency cannot be at risk as it stands. Someone explain to me how a huge devaluation in the dollar will erupt under these circumstances….especially as all the arguments given so far have produced no substantive results and gold remains stuck in the mud. I am beginning to wonder if gold will in fact not remain rather depressed right up until the point at which interest rates begin to rise. That time is just a year off, potentially beginning in the first quarter 2015. If that is the case then gold and silver may never regain the highs they have already seen but will instead just retrace some of its rise. And all those who bought high will be left hanging until another gold cycle asserts itself. Tough break.

    • On March 2, 2014 at 8:55 am,
      Eric says:

      My thinking is that inflation is not as muted as the headline CPI would indicate. From my own personal life, for example… one of my daughters graduated from a State University last year. Over the 4 year period, her in-state tuition increased by about 70%.

      I look at the way certain other expenses have accelerated over time, such as insurance premiums I am paying. My guess is that the inflation rate is higher than advertised. Not sure if it is running as strong as John Williams (of Shadowstats.com) would argue, but higher than the headline number.

      You have been laying out an argument for an upcoming recession in the US — FWIW, I think so too. Typically, that would be an environment for lower interest rates, more stimulus, and a weaker US Dollar.

      If I am reading you right, you are looking for higher rates, even in the midst of a weaker economy. That reminds me of the 70s — more a period of stagflation — where maybe you get a pick-up in food and energy prices even though the broad economy is weak?

      I’d be the first one to say, that there are so many moving parts now, that it almost defies prediction. We are so far removed now from the classic economic cycles in which you had the manufacturing booms and busts.

      There are any number of potential left field events that could cause something entirely outside our frame of reference, or investment experience. For instance, if we were to go into a recession now, with so much stimulus already in the system… does the FED respond with the ‘mother of all QE’ (Japanese style)? Does the government wind up with deficits that are once again trillion+?

      Can we get to a place where the international trading partners are finally ready to turn away from the dollar? I don’t know. But that’s the thing about all this debt. In the end, it leaves you much less flexible and more prone to ‘3 standard deviation events.’

      So while I acknowledge that hyper-inflation is always a low probability event, I don’t reject the possibility out of hand. Although as I have argued in the past, I don’t think you really need a classic hyper-inflation to propel gold vs. the dollar. A garden variety devaluation would do it.

      A pick up in the cost of food and energy to the tune of 100%, without a commensurate increase in wages — that would be more than enough.

      Anyway, however it works out, it is not likely to be dull.

      • On March 2, 2014 at 9:57 am,
        Birdman says:

        Funny you mention inflation, Eric. I can’t find anybody who believes the inflation numbers anymore. I mean NOBODY. It has become the biggest ongoing joke of them all because everyone agrees the numbers are all just massaged hogwash. It is stupefying we even discuss it with a serious face!

        Not sure by the way what exactly you are referring to by a 3 standard deviation event. Can you explain?

        • On March 2, 2014 at 1:00 pm,
          Eric says:

          as you know, you usually get a bell curve distribution on outcomes. Most times, outcomes are in the ‘meat’ of the bell curve. As you move away from the center, you have the so-called tail risk.

          And it is these outcomes which the markets (societies, etc.) are not prepared for.

          Fukushima is a good example — though you could argue that it was even more than 3 standard deviations from the norm. Certainly, a hyper-inflation in the developed world or the collapse of the dollar as a reserve currency would be way out there, in terms of the tail risk.

          The further out on the tail, the more earth-shaking they are, and the less prepared we typically find ourselves to deal with them. I am arguing that we are living in an age where we might be more prone to severe tail risk in our investment markets than our frame of reference can account for.

          Here is a link to an article in Wikipedia, which does a good job of providing some background regarding the distribution of outcomes within a bell curve:


  30. On March 2, 2014 at 2:22 am,
    Bird Man says:

    “Big Winds Blow From Empty Caves” DT

    To DT……perhaps you can offer a better thought out argument that opposes my remarks on the credit cycle, inflation and savings rates. Thousands of people come to Al’s site. I am sure others are interested in a better debate than what you wrote above as it has no content of value to the conversation.

    • On March 2, 2014 at 2:37 am,
      Birdman says:

      Matthew and Reverend…..nobody here cares what your opinion of me is. You both like coming to the site though. Why not make more of an effort to make it better for everyone else. You two might want to discuss the subjects being brought up for a change of pace. I assume you are normal people not bitten day and night by bitterness and petty resentments.

      • On March 2, 2014 at 4:31 am,
        Andrew de Berry (Rev) says:

        Calm down Birdman. HEAVYHITTER (of blessed memory) seemed to have seen you in a far more critical light. As for me I can’t be bothered tangling with your insults given that you’re only pleasant towards those who massage your ego..

        • On March 2, 2014 at 5:12 am,
          Birdman says:

          As I noted, nobody cares what your opinion of me is. How about addressing the topic for a change?

          • On March 2, 2014 at 6:23 am,
            NYC says:

            right on…..this is a great site ex HH unless he comes back as a normal person 🙂 whatever that is

          • On March 2, 2014 at 9:49 am,
            Birdman says:

            Funny, I was betting HH’s comments were actually coming from Matty’s IP address!

          • On March 2, 2014 at 1:45 pm,
            Andrew de Berry (Rev) says:

            The topic of your rudeness BM….?

        • On March 2, 2014 at 10:42 am,
          Matthew says:

          Say what you want, but HH was appropriately bullish AT THE LOWS in December while Bird and his groupies were wrong.

    • On March 2, 2014 at 7:12 am,
      hO says:

      You at least recognize your hot air, birdman. I have not seen the Reverend other than polite and making points relevant to the situation in the UK. Since the UK is where whatever gold is left in GLD, his comments have been appropriate quite often with regard to attitudes towards that metal in England. There is no need to attack people in this blog who have different opinions. We do not k now what the future will bring. We can make extrapolations from past observations or we can suggest that this time it will be different, based on other factors.
      With regards to the US dollar, its value relative to other currencies will obviously depend on whether other nationalities favor it more than their own or not, and how much it is used in trade. Indisputably I would suggest that the largest trading nation in the world, which I think is now China, is currently trying to use the US dollar less and less. Indisputably, the US dollar has purchased less and less with the passage of time. Thus a logical conclusion might be that in future there will be cost inflation for real goods. Whether this will rise to the level of hyperinflation is probably in the realm of speculation. There are examples from which to draw parallels, such as Argentina currently and Germany post first world war. No country in history is an exact parallel, because we have never had a dominant world currency go into hyperinflation. (Perhaps Rome might count, but in two thousand years the world has changed sufficiently to negate the validity of making an exact parallel between Rome and the US currency-wise.) Regardless of what exactly happens in the future I believe the world trading currency will be based on a non-national currency, but will probably be based on a basket of currencies and called special drawing rights from the BIS. Whether on not the SDRs will be correlated with gold, I do not know. As much as I might hope they would be, because they would be limited, I suspect they will not be correlated to gold.
      As regards China purchasing gold: I would simply ask, “where else is a good storage place for wealth?” Sure, the Chinese recognize the US dollar is not a good place. (Certainly, if they have plans to attack the dollar in future it would be foolish to increase their holdings,) Further, neither the Euro nor the Yen look particularly stable long term. That pretty much leaves gold as a viable, sensible storage place for wealth. The Chinese have displayed great skill in choosing the rate at which they have accumulated the precious metal, whereas central bankers have displayed incredible stupidity in allowing so much to head to Asia.
      I see no reason why China should stop buying more gold, however, I do believe they will control their pace of purchases such that they do not drive the price up quickly. That’s my opinion, based on past observations.

    • On March 2, 2014 at 10:44 am,
      Matthew says:

      Here’s the kind of “valuable” content BM is looking for:

      On December 30, 2013 at 9:29 am,
      Birdman says:

      What do I think Al? …………..Gary is a moron. That is what I think, Al.

      • On March 2, 2014 at 11:28 am,
        b says:

        Mat, that is too funny.
        Except I remember that.
        Al speciicaly asked “what do you think?”
        Bird is telling the truth. That’s his opinion, moron has a diferant meaning than idiot or stupid.
        People use those words interchangeably which is incorrect.
        I have a feeling Bird uses “moron” correctly.
        But, language does evolve.
        In any case, you might be out of context.
        Which I believe I have noted with re posts previously.

        Just to show I am not “stroking” Birds ego,
        I disagree, I think Garys work has more value than others might think.
        I also disagreed with Bird and sided with Mat on a money discussion recently.

        It doesn’t really matter who was right or accurate, it was good discussion.
        An enjoyable read.

        • On March 2, 2014 at 11:55 am,
          Matthew says:

          B, the above is not out of context. Gary did not show Bird any disrespect or call him names.
          Bird is a vacuous, bombastic hypocrite that offers little or no evidence to support most of his views.

          • On March 2, 2014 at 1:38 pm,
            b says:

            Im just saying Bird is entitled to his opinion. He answered Als question with an honust opinion.
            Just as you and I are entitled.

            I do hope to read you guys discussing these opinions in the future.

  31. On March 2, 2014 at 8:54 am,
    James (the lesser) says:

    Just read all these interesting comments.

    Boy…all I could say is things are really heating up.

    I could be wrong, and so far gold has frustrated me but…

    I don’t think it is a given that if interest rates rise this will be gold negative.
    If real interest rates are still not rising fast enough gold could also rise.

    Plus won’t the government do everything in its power to prevent interest rates from rising?
    Hasn’t that been game plan?

    Also just because inflation or hyperinflation hasn’t played out the way some people expected doesn’t mean it can’t in the future? Things could unravel quickly.

    Bottom line for me after what I’ve seen these last 14 years…who knows anymore

    • On March 2, 2014 at 9:40 am,
      Birdman says:

      Exactly James….who the hell knows anymore. Once you get past three or four variables the conclusions can become almost anything that is in our imaginations. Maybe gold could rise with interest rates. It has happened before. I would probably be stepping out on a limb by saying that if the government hates gold as much as the conspiracy people think then they would raise rates just to kill it!

      Have you heard this one?

      Two economists are walking down the road together. They see a pile of dog sh*t.
      The first say to his friend “If you eat it I will give you 5000 bucks”.
      His friend calculates the odds of sickness, then agrees. So he eats it and his buddy pays up.
      An hour later they see a big pile of horseshit on the roadside.
      Economist #2 says to buddy “I will pay you 5000 bucks if you eat that whole thing”.
      The first guy thinks “OK, I will get my money back”. So he eats it and his friend pays him.
      Feeling a very ill he remarks to his buddy “That was pretty stupid of us, you know”
      “We both ate crap off the road and now we have our cash back but neither one of us is better off except both of us ate sh*t and now we are both sick!”
      “That’s wrong” his pal shouts as he is puking in the lane. “Did you forget Econ 101?’……we are both better off because we just transacted 10,000 dollars in trade!”

      • On March 2, 2014 at 11:32 am,
        b says:


  32. On March 2, 2014 at 10:06 am,
    hO says:

    While US attention is focused on Ukraine it probably just lost the Africa continent to China. China has just received permission to build a full military base in Zimbabwe:
    Not only that, but Zimbabwe, whose own currency collapsed a few years ago to be replaced by the US dollar, now appears to be about to replace the US dollar with the Yuan and possibly other ex-British colonial country’s currencies.
    I view this as a major step towards the reduction of US influence in the whole continent.

    Obama is sleeping, dis-engaged.

    • On March 2, 2014 at 11:33 am,
      b says:

      Not sleeping, being outplayed.

  33. On March 2, 2014 at 10:14 am,
    hO says:

    The location of the new Chinese military base in Zimbabwe is also interesting.
    Having cornered much of the free world’s gold and much more probably hard to get, I wonder if China is going to pick up quantities of diamonds?!

  34. On March 2, 2014 at 10:21 am,
    hO says:

    Apparently Zimbabwe started using the Yuan last Wednesday:

    We were clearly too busy looking at Ukraine. This Chinese action is far more important with regard to mineral resources.

  35. On March 2, 2014 at 11:38 am,
    b says:

    I find so much very interesting.
    Chinas influence will continue to grow.
    But my thinking is the world is going to move to SDRs.
    The world maybe has had enough of “reserve” currencies for awhile.
    My guess is we begin to move toward SDRs (if we havnt already begun)when it is decided China has enough gold.

  36. On March 2, 2014 at 11:52 am,
    hO says:

    SDRs will be the settlement currency between countries. I don’t see anyway it could become the currency of regular people. Most major countries would never allow it.
    It is interesting to see Chinese currency become everyday currency for Zimbabweans. I wonder how long it might be before the Yuan supplants the dollar in Panama and other countries that currently actually physically use US dollars as money for purchases.

  37. On March 2, 2014 at 1:02 pm,
    b says:

    ho,yup,the currencies,comodities etc should be valued to the SDR the same way they are valued to the American dollar now.

    Like a Bretton woods, we will go to “a” gold standard, lets hope it gets valued well.

  38. On March 2, 2014 at 1:10 pm,
    b says:

    Nothing saying the managed price of gold wont be contolled to 8k?.
    Slowly,quickly…who knows?
    Would not surprise me to one day find out that price has already been determined.
    But we should go to SDRs when it gets to the appropriate price level.
    Obviously just my guess

  39. On March 2, 2014 at 1:12 pm,
    b says:

    Ill hang my tin foil hat up for now.

  40. On March 2, 2014 at 2:31 pm,
    Silverbug Dave says:

    I agree 100% with Bob on Segment 4 and especially Segment 5. It’s a great critique of government spending and waste.

    There is I guess a feedback loop for government but is not the same as a business that can see through its revenues if it is making good decisions. The feedback for governments is through the elections. However, of course the interest groups then vote for the government to malinvest money on their particular group of people. Then the politicians can whore themselves to whatever interest group(s) will vote for them or give the political contributions.

    Interesting point from Cory about Vancouver and the Olympics. We just had the London Olympics, great success, nice for the moralle of the nations, did maybe regenerate a part of Lonon but basically spent a whole load of public money on something that probably will never be used again! Greece had the Olympics in 2004 and how much good did it do them? They might have some fairly nice but preoably fairly useless new infrastructure but they are completely broke and about to lose their sovereignty!

    One might question whether attracting more people to Vanvouver through new infrastructure was a good idea/Perhaps it has distorted the real estate market so much there that no-one can afford a house any more without indebting themselves for the rest of their lives. That is the flip side of the coin!

  41. On March 2, 2014 at 2:46 pm,
    hO says:


    It is incredible that China can become so entrenched already.
    I thought Jimmy Carter was a bad President, But Barry Obama rates much worse. Absolutely has destroyed the US Empire. But, then, I suspect that was his plan from the outset. And now he’s on his way to destroying the country itself, since when he leaves office, it will be so deep in debt, it will be able to do nothing.

  42. On March 2, 2014 at 2:54 pm,
    hO says:

    Meanwhile Obama is reducing the size of American forces to the least they have been in 74 years. What is he thinking?

  43. On March 2, 2014 at 3:14 pm,
    Irwin says:

    Costs and profit/loss of Olympic games since 1976

  44. On March 2, 2014 at 3:31 pm,
    Bobby says:
  45. On March 2, 2014 at 4:11 pm,
    hO says:

    Here we go:
    Not long now is my guess.
    Watch for China to slowly sell it’s US treasuries.
    The real question is how soon will China make the Renminbi fully convertible?

  46. On March 2, 2014 at 4:28 pm,
    hO says:

    Obama is giving asylum to tens of thousands of muslim Syrian refugees, but refusing a similar status to Christian refugees from Syria. Seems to me that is probably direct import of terror. Is he nuts? But then he won’t defend the Southern border, so it does not make much difference!

  47. On March 2, 2014 at 4:37 pm,
    hO says:
  48. On March 2, 2014 at 4:41 pm,
    bill says:

    Now look what our rulers are saying, “All options are on the table.”

    (CNN) – Secretary of State John Kerry on Sunday sharply denounced Russian President Vladimir Putin’s “stunning, willful” actions in Crimea, characterizing the move as an “invasion” and saying “all options are on the table” as far as a U.S. response.

    Does that mean nuclear?

    Well, if I get nuked in my jammies and get vaporized while I sleep I guess that wouldn’t be a bad way to go. Prolly a helluva lot better than what the future has instore for me so…..

  49. On March 2, 2014 at 4:41 pm,
    bill says:

    ….so let’s have a war….it looks like

  50. On March 2, 2014 at 4:42 pm,
    bill says:
  51. On March 2, 2014 at 5:37 pm,
    hO says:

    You just don’t in the 21st century behave in 19th-century fashion, by invading another country on completely trumped up pretext,” Kerry said, appearing on CBS’s “Face the Nation.”

    Now, let me see, The US invade Iraq, just Why?

    Kerry is such an idiot! Open mouth, spout away, and then think!
    Tis better to have people think you’re an idiot, than to open your mouth and prove it. Mr. Kerry.

    • On March 2, 2014 at 6:36 pm,
      bill says:

      Don’t worry….turns out Kerry is headed to Kiev…I’m sure he will fix the situation right up in no time at all.

  52. On March 2, 2014 at 5:40 pm,
    hO says:

    The rest of the world is concerned, as demonstrated by gold being up $15 on a Sunday evening.

  53. On March 2, 2014 at 5:46 pm,
    hO says:

    As Einstein said“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.”
    Please think about that John Kerry, Barack Obama.

  54. On March 2, 2014 at 5:50 pm,
    Paul L says:

    Gold shorts will be rushing to cover on Monday as gold heads toward 1360.

  55. On March 2, 2014 at 6:22 pm,
    bill says:

    Dang, CNN headline

    Ukraine mobilizes troops after Russia’s ‘declaration of war’

    This is sounding more and more like the start of WW1 but in the 21st century.

    Well boys I reckon this is it….toe to toe nuclear combat with the rooskies…


  56. On March 2, 2014 at 6:22 pm,
    bill says:


    See y’all on the other side.

    • On March 2, 2014 at 7:07 pm,
      bill says:

      Excellent article, Mr. Ho. I just hope all the boys (or anyone for that matter) will still be around to read it!

  57. On March 2, 2014 at 7:05 pm,
    hO says:

    Remember when Obama was running for office 6 years ago, he promised to “reset US-Russia relations”. Well he just succeeded!

  58. On March 2, 2014 at 8:07 pm,
    Zero Aggression says:

    Let’s make a distinction between legitimate forms of “government” and what ought properly by labeled “The State” — that institution of ‘legal’ violence and aggression… Then maybe we can have a clear-minded conversation!


  59. On March 2, 2014 at 8:59 pm,
    hO says:

    The BBC just reported the EU has called an emergency meeting for Monday to talk about freezing all Russian assets within the EU.

  60. On March 3, 2014 at 12:30 am,
    Andrew de Berry (Rev) says:

    Gold up to 1347; Russian rouble down 9%

  61. On March 3, 2014 at 3:07 am,
    hO says:

    It will be interesting as New York opens up……about now.

  62. On March 3, 2014 at 3:15 am,
    hO says:

    Oil is up $1.50, but I don’t see how the EU will freeze Russian assets. They will lose 30% of their gas supply if they try. (Mis-read the time, NY does not open for a couple of hours yet) I need a cup of Jo to wake up!

  63. On March 3, 2014 at 4:26 am,
    Bobby says:

    Interesting garbage posted today! How anyone can mico-manage in a “manipulated” world is beyond me. Have fun guys, beat yourselves up.

  64. On March 3, 2014 at 4:56 am,
    hO says:
  65. On March 3, 2014 at 10:23 am,
    The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

    SCORE……….nuts, about 8 years…….

    • On March 3, 2014 at 10:26 am,
      The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

      Maybe,,,,OBama will find his birth certificate………….

      • On March 3, 2014 at 10:28 am,
        The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

        SILVER IS GOING HIGHER………..the ratio of gold to silver will revert back to 16 to 1

  66. On March 3, 2014 at 10:36 am,
    The" OWL COINLAND" REPORT.......O^OTB...WOOT says:

    Alan Butler is a great listen to………appreciate his comments…..

  67. On March 3, 2014 at 10:38 am,
    Phil says:

    I’m late listening here:
    Bob is exactly right. Canada brought in the temporary measure IN 2008 called The Action Plan. Its STILL going bloody full tilt and this pisses me off big time. Spending money like drunken sailors and declaring they are the ones keeping the economy going here. My god they have commercials telling you how great this is and they are and they are handing out money to Musicians!! You might as well hand money out to bums or buy them houses. This is my tax dollar and a Pizza in my town cost you $40 and a beer is $6. They are the worst idiots going and when they have a hand in business its toast. BC Ferry’s BC Hydro ICBC are all on the margin because these idiot government have been stealing from them and Hydro in particular. Google Auditor General sounds the alarm on Hydro. Why are the prices going up constantly!? Why is BC ferries cutting routes? GOVERNMENT here is out of money period. Deficit spending to hold the ship together. If I ran my business like these ass holes do Id be broke or even in jail for not paying taxes!
    If you think its expensive in the US come out to where I live…