Just a temporary blip or for real this time?
Click download link to listen on this device: Download Show
Somewhat of a surprise when I woke up this morning and saw gold up twenty five bucks. The question now is: “is this the beginning of a long term trend. Remember what Doc said and listen to what Gary is saying today.
+1
I agreed with Al when he said that.
I agree with Al and bought a wad of TGD@.213 last week. Now it is .27 but may fall to .15 now that I’m in.
Thanks Dave, Matthew and Bonzo.
My point is simply that, so you miss the bottom maybe a hundred points? In the total scheme of things, so what!
The low 1100’s definitely felt like a bottom to me primarily it has not closed for any meaningful length of time below that.
I got my shorts on! Fall S&P! FALL darn it!!
Gary’s forecast is for a “mini-panic” so you should have a chance to take profits over the next few days or the beginning of next week.
Cory …is in Germany, trying to get his JETTA FIXED…. 🙂
Fat takings for the rest of us when the lawyers get going. Sad.
So true, Reverend!
Actually, they have a Ford Escape!
Cory is just going with the trend and immigrating to Europe while the gettin’ is good 🙂
Yes, that way he can be one the RUSSIAN FRONT……..
on….not one
Gary said miners bottomed back in March of this year. So I’m expecting a stealth rally past those levels in April.
Your right about the miners Gary.
Tuff for them to move up. You could cherry pick but overall they have a hard time moving up, people are leery of them still.
I have noticed a couple mentions on msm about buying gold so people might start thinking about gold soon.
bb, its a tuff haul when equities in general are being sold off, liquidation is key for some many hedgies so I think todays miner move is impressive.
Good point JJ, Listener mentioned gold not getting “hit” hard the other day was a sign of strength as well.
I have just noticed shares having a hard time moving up for awhile.
I was thinking people are leery of them, who could blame them?
But s I mentioned, I have seen 2 msm mention gold, as people are sheepish they may begin to move into shares.
I thought it was a pretty big deal that the majors (GDX) moved up more than GDXJ today. It means there is serious buying taking place as opposed to just the usual spec stuff. For example, if pension funds were to start buying gold stock it would show up in GDX not the juniors and that is something that should give us cheer.
Gold looks pretty strong here btw. There are not many holders remaining to sell the rips so on a day like today this kind of action will attract buyers making this more than just a covering rally.
I am a little more positive that Gary in this regard and feel we will get a solid follow through in the next few days.
Sorta hope your right Listener, I still figure Doc is correct that some excellent buying opportunities are coming.
Which makes a decision on when to sell this rally.
Not that there hasnt been some incredible opporunities already, Ialso notice, with some shares they are getting more difficult dropping in price, slowly running out of sellers I guess.
bb, gold has just blasted through overhead chart resistance from back in March this year and November of 2014. That is a very solid move and at the minimum I am looking for a test at the recent August peak with the potential to make a new high. I would not be a seller here.
thx Listener, I am holding for now, lets see how far it goes.
I actually only have 1 Im looking to change up on.
Golds gotta go up quite a bit to make any differance to it, which is why Im looking to change it. lol
Live and learn I guess.
This move is all $yen related just as every decent move up or down in gold is, as a currency trade, Yellen’s speech this eve will I’m sure mention at some point a rate hike is coming.
Gary the BOJ meeting early Oct could be the event that puts in a top for gold as it did last year off the BOJ action
Yen is boosting gold, the key resistance level for yen is 118.60/84.32 that’s been a ceiling for awhile. Gold has a chance of breaking above the resistance trend off the Jan highs if it can close above $1150 today as first resistance at $1141 has been left behind so far, imagine $yen moving gold, lol
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=9&dy=0&id=p55542232944&listNum=1&a=425261688
The miners are doing good today. Does that qualify as a confirmation of an extended rally?
What’s Cory doing in Germany? Taking his VW back?
Cory has gone to Germany to get on welfare before they close the borders, or to buy a Beetle diesel while they are cheap.
Armstrong remarks on gold today, the chart below does not show $1188 as a key level but certainly mid $1200’s does
Right now OJJ, gold at $1156.10 is well above the downward sloping resistance line and the first horizontal resistance at 1140 on your linked chart.
the close is very key silverbug and this weeks weekly close
Ricks call is for gold to hit 1186 if it closes above 1141 today. Right now that looks like its in the bag so we should expect another nice day in gold tomorrow. Big short squeeze in play.
I thought he said gold is heading to 810. He changed again?
Looks like a bit of a pop here Lawrence, but Rick could be right yet. or close anyway.
Gary was looking for a po above 1200 Doc looking for a pop then decline, suggesting best purchasing opportunities coming.
Course we know more in a week or two. lol
Sorry Doc
Do appreciate the work and all.
His long term call is his worst case scenario, Lawrence. For the near term he was calling for a rally to 1186 before this runs out of steam based on his pivot system. I don’t doubt Rick for a second. He is an excellent technician (which is why I bought this trade…..Thanks Rick!).
Yes, I agree Listener, Rick is excellent.
Just saying Rick could be right and Doc sees a drop/decline coming .
The question becomes how high does it get and when to sell the rally, for those interested anyway.
The most important thing about listening to the guys is we have to be discerning about the time frames they are discussing. Rick trades off the one minute charts most days and so his calls have immediacy whereas Doc is using technicals to read a couple weeks to months in the future. Both are good but the trading style is entirely different. If you have never checked out Ricks trading room you should drop in and read for awhile. It is an entirely different world than we experience here and the action is live most of the day. Those guys never seem to sleep.
Excellent point Listener, I dont trade like that so have never been to Ricks room, do get his emails tho and they are excellent.
Lots of ways to “skin a cat” and lots of ways to play the market.
Im a lousy trader so patiently wait for the raging bull,
at which time I will look like a genius to my friends again. lol
The trick for myself and others like me, is to be positioned as best as can be.
Of course with the bull it might not matter anyway.
Couldnt hurt tho.
Armstrong has been all over the map on gold. One day it’s going up the next day the rally is over.
I’ve been clear all along that we would see at least a strong rally into the second daily cycle. Now it’s up to the miners to convince me this isn’t just another bear market rally. GDX needs to scream higher and get above $16 very quickly. If it does then I’ll start to lean towards this being more than just a bear market rally. But until that happens I’m assuming this is counter trend, but still riding it higher for now.
Not that I know anything but I think its pretty kodiak lookin.
Gary did you buy his metals report? obviously not, if anyone has been flip flopping around with golds trend its YOU
You are not being fair jj. Gary has made some awesome calls well in advance of the facts. The guy reads the future better than most and he is not afraid to say what he thinks and stick his neck out (unlike you).
Not trying to pick a fight but I don’t care to hear about 20/20 hindsight charts. Who gives a shit. You can’t trade on the past.
I’m going to ask Al if I can make all of my calls the day after they happen. It seems like a great way to trade. It certainly works wonderfully for JJ 😉
You are much too smart for that, my friend!
All the dollar bull cockroaches and Gary naysayers have crawled back under their rocks today. Go figure.
spanky, as recently as with yesterday’s post on his blog, Gary was distancing from his own post. I suspect he will now be bullish on gold with multiple qualifiers that it should go up but may go down anytime, proving even if wrong you can be right.
Yes gold should waffle around till month end and before a swan dive for seasonally weak period thru October. Look to year end rally to have some potential.
Harry,
I’ve been clear all along that we would see at least a strong rally into the second daily cycle. Now it’s up to the miners to convince me this isn’t just another bear market rally. GDX needs to scream higher and get above $16 very quickly. If it does then I’ll start to lean towards this being more than just a bear market rally. But until that happens I’m assuming this is counter trend, but still riding it higher for now.
Heck I even told you exactly how gold would test the 10 DMA before moving up again.
http://blog.smartmoneytrackerpremium.com/2015/09/chart-of-the-day-141.html
Gary, your analysis was just fine. I thought it was excellent actually (except the part about this being the final bottom). Right now you have to read the tea leaves with one major consideration; and that is that stocks are falling hard and the indices look like they will retest the recent correction lows. So that is going to be a headwind for all stocks and it will naturally reflect on some of the miners who are all responding to their own market forces. The fact that both GDX and GDXJ showed such positive days DESPITE the fact general equities went into the gutter is very positive in my view.
Gold is $1154+ right now on Kitco. It is up in all the 14 currencies quoted on Kitco.com by more than 1 percent.
That is quite unusual for the last couple of years. I don’t think we have seen this at least since January 2015. The minimum move is in Swiss Francs at +1.11% and the maximum in South African Rand at +3.44%. It’s across the board. The average move is about +2%.
Almost always the recent gold rally days have been let’s say up in 12 currencies and down in 2 as quoted on Kitco. There is almost always at least one outperforming currency but not today.
HUI is up about 6%
That’s 3:1 leverage to the upside, for today that is!
NUGT was up 18% last I checked. Very nice.
Somebody get them to put nugt and dust on the cdn market please.
You should have no problem buying them from Canada bb. I do it all the time.
I dont do anything on the American markets.
I want nothing to do with American taxes.
Take a win in Vegas and give 50% to them, a “sportspool” win anywhere pay 50%.
I just dont need the money so I dont see the hassle as worth it, also everything I make in Canada is tax free.
Sad part is in canada shorting is really unfavorable risk/reward.
However, silver is showing only about 1.2 to 1 or 1.1 to 1 leverage over gold with about +2 to 2.5% move in most currencies. Fresnillo silver producer that I own a little of is up 3.4% but it is coming off the dead lows. Thankfully from my point of view it is my only PM stock!
GNX weekly:
http://schrts.co/zW5pUh
Hangin’ on…
Where Yen stops, gold stops
http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&yr=0&mn=9&dy=0&id=p62099586199&listNum=1&a=425273354
JJ, I think if you can give your underlining reasons why there is a tight relationship between Yen and gold, people will follow you.
Simple carry trade.
Lawrence I learned a very long time ago and it cost me a lot of $$$ in the process, stop trying to find a reason that makes sense to YOU, follow the trend and make money. How often has economic data or fundamentals suggested a long position in oil or whatever only to watch the trend head much lower, machines are moving the markets and all I do is ride their trend and make money, the why is way down the list for me because at the end of the year I could careless how I made my profits, the most important fact is I did
What is your call on the Yen jj? Where do you see it going technically in the next couple days. I ask because you follow it a lot more closely than anyone else here.
its not my opinion Lawrence its what the chart history has created and that’s key resistance at 84.30-53 yen/gold will need a close above that level if gold is to head above $1200 if yen fails to break that resistance then it will rollover and come back towards 82.25 as gold tests $1100, last Oct the BOJ added more QE which sent gold down from $1255 to its Nov low at $1130 as Yen fell from 95 to 82 sending GDX down from 21.79 to $16.34, this Oct repeats, who knows!
Thanks for clarifying your position. Since you are a trader, it is fine. I am a fundamental investor so short term trend does matter. I tried to catch trend a few times but they did not work since I am always late to short term trend. When you find the trend and place a bet, it reverses.
sorry its not my opinion A Listener
I mean short term trend does not matter for me.
My question to you jj was where do you see the Yen going.
A.L. this is a key question. 🙂
A Listener, its not my opinion its what the chart history has created and that’s key resistance at 84.30-53 yen/gold will need a close above that level if gold is to head above $1200 if yen fails to break that resistance then it will rollover and come back towards 82.25 as gold tests $1100, last Oct the BOJ added more QE which sent gold down from $1255 to its Nov low at $1130 as Yen fell from 95 to 82 sending GDX down from 21.79 to $16.34, this Oct repeats, who knows!
http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&yr=0&mn=9&dy=0&id=p62099586199&listNum=1&a=425273354
I am asking for your prediction. I do it all the time and you will find I am often correct in the assessment when it is something that interests me or that I follow closely such as sugar, USD, gold, silver, CAD or what have you. Check my posts on copper that I left this morning for an idea of what I am talking about. Those are all predictions. Mostly I don’t care what anyone else thinks. Right or wrong we put a bet out there and its just for our enjoyment. Maybe you are worried if you make a call and it is wrong (happens to all of us) that someone like Matthew will pillory you forever and never let you forget it. But don’t worry about that…..you are after all anonymous.
So whats the call big guy!
See that’s the difference between a trader and somebody looking for new subscribers willing to pay for target calls or opinions, they all mean nothing to me A.L. as a trader you position off the support resistance zones and if YEN can’t take out that key overhead resistance gold will roll over and I will take profit in my long positions. I said early in the week the first economic data that could stir things up was the Japan inflation read and I was right it has, it could have been the opposite, so a move in gold based off yen moving is not a pat on the back moment its basic trading knowing whats coming and how it might effect your positions.
I’m not long miners again based on my outlook, Armstrongs or anyone here it based off the chart action and until it rolls over I stay long, that’s what traders do so I don’t make predictions I react off trends that’s how $$$$ money is made instead of trading off targets and ego’s
Its why I’ve said many time Rick A is a traders trader as he outlines support for gold and resistance, that’s it real simple and if resistance is taken out its on to the next level, layer by layer that’s how one trades successfully not on where YOU think its going, that’s for those who look for.. wow great call your the man….high school crap!
I understand you jj. What you say makes perfect sense. But pure technical trading does not always work. Just ask anyone who has tried that and been beaten by the variables if you need to know. Every single time you put your coin on a trade there is an element of risk, luck and intuition in the mix. The unpredictable happens. It is why we see market crashes both up and down. It is why that guaranteed trade also goes South inexplicably. If your method of technical trading was perfect you would be the richest man on earth. But you are not. So why is that? Anyway, all I asked for was your prediction but if you are too nervous to stick your neck out and make a call its OK with me.
A.L. it has nothing to do with being nervous, really! The line in the sand has been created by the chart, when I took the short miner position trading DUST in late May as the chart suggested I had no idea it was going to go parabolic the next 2 months creating a big % win, nobody does, so you ride the trend until the chart tells you to get out. Today could be the start of a decent move or not? Many who are super rich have made big leveraged bets, trading a 300% ETF is as risky as I want to trade as I use no margin and never carry a position larger than a 100gs that’s my risk limitations, so I’ll be happy debt free and financially independent, thanks!
You get on my nerves because you cannot make a call that is not 20/20 hindsight in the rear view mirror and that makes you just one more of the bullshitters.
I will add that everything you are saying about the Yen correlations is already well known and being discussed on other sites so its not like it is original. Just repeating the same thing in every post does not impress me jj.
You have got to do better than that. Tell me something I DON’T KNOW!
OFF TOPIC.
Hello my name is D. Cammeroon, OINK OINK.
There is a story circulation on the web, OINK , that there is an alleged photo in existence which appears to show ME putting my thingy into a pigs (a dead one ) mouth.This story came about because someone I allegedly did the dirty on , ( the same way the OINKING bankers do to all you nice people everyday )wrote this to get back at me, OINK. Now come-on people you all know me I am a respected POLIOINKER there is NO WAY that OINKERS like me would take part in such lewd practices like that…YUM YUM OINK.
So I would just like to state here & now for the OINK record….
I did NOT have sexual encounters with that PIG….OINK OINK….AAAAHHHHHH.
BTW…I would just like to thank all my mates at the BBC & the rest of my mates in the MSM for keeping a lid on this story….A GREAT BIG OINK TO YOU ALL.
THE jig is up………..
I bet pork bellies go up tomorrow…………
JERRY…Go long pigs heads….you know what the sheep are like they normally copy what the elite & celebrity’s do…..Im going to make a fortune selling blow up pigs heads on EBAY.
IF, they put Hillery’s head on top, along with Bill’s, then it will be a sell out……. lol
You two are cracking me up with your swine humor.
Pork scratchings all round….
Inverse head and shoulders on gold daily chart broke the neckline today. Very bullish.
Is that like buying a PIG IN A POKE…………….
No JERRY…..Its a poke in a pig……
Irish……..do you only come out when SILVER IS UP…….is that a sign , when things are UP.
No jerry…..only when the doctors & matron are not looking…..You see one flew over the cuckoo’s nest…..or was that a drone…………………
NUURRSSEEE…MORE MEDS
Good to hear , you are doing well………… 🙂
Pig in a Poke – National Lampoons
Silver also lagging gold. If tomorrow is a nice follow through day, the weekly charts are going to start looking very bullish.
COME ON ..SILVER KEEP UP.
We have bullish & bearish….& now we also have Pigish
AUY has a little inverse head and shoulders forming as well. Need a nice day tomorrow to break the neckline. Again, very bullish action and formation. The AUY chart looks beautiful actually.
Thanks..spanky.
Gold has a little bullish H&S pattern in play (green neckline; chart will show today’s action this evening):
http://schrts.co/ekM80h
The bigger inv h&s pattern goes back to May. That neckline was broken today. Need a good close and tomorrow follow through would be nice.
That one should take gold over 1200 no problem.
Personally I would be thrilled if that happened Mathew. Doing well so far but I don’t know if I want to hold that long for the pullbacks along the way unless the move continues with strength. The miners look to be forming a bottom right now so my optimism is fairly high. Your charts confirming that?
Silver first resistance is at $14.95 that’s a key close it must overtake before the next level is in its sights at $15.55+ the major resistance area for 2015 comes in way up at $16.80
http://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=9&dy=0&id=p74395998355&listNum=1&a=425266377
GDXJ reversed where it was supposed to:
http://schrts.co/sBXPLc
…at fork-n-moving average resistance:
http://schrts.co/B1TGGs
There Are Indications That A Major Financial Event In Germany Could Be Imminent DeutscheBank Revelation
http://theeconomiccollapseblog.com/archives/there-are-indications-that-a-major-financial-event-in-germany-could-be-imminent …
Deutsch Bank not looking good………..
Maybe this is where Cory is going for an interview ….
I did not know he was looking for a NEW JOB……
FFM…I had a Forex account at Deutsch Bank…received an email that they were closing all Forex accounts and cancelling all chart subscriptions..everything went blank the next day..I also received word that they closed all Forex trading desks,,,doesn’t look good….
Thanks Gator…….hope everything is ok, ……thanks again for the info., very interesting the BIG GERMAN BANK is having so much trouble. There is a lot of buzz, concerning Deutsch Bank, the Germans should be very nervous.
Wow! Did that just happen this week Gator? Curious to hear more if you don’t mind.
A.L. this took place some time ago..I was dealing with Deutsch Bank in New York when it all evaporated…they had one of the best currency charting programs around included with the account..the day it went blank there was no communication period..no e-mail or phone..no contact period…it took several calls to different D.B. to get a “we have no comment at the current time” answer to my question of what caused the closing of the Forex accounts…pretty obvious they are in trouble and if they go down it will be a big problem for the E.U. The amount of derivatives held by D.B. is staggering….
Very big black swan, Gator!
Thanks for getting back to me Gator. I don’t use them so would not be directly affected but what a dog’s breakfast it is becoming. This has been going on for a couple years already. Guess it won’t be a surprise if they eventually need to be bailed and we cannot say we were not warned. All the signs were there.
OWL…..should pick this story up…..and do a follow through……DERIVATIVES ARE GOING TO EXPLODE…….
Talked about it at length, and I mean at great length, in the past with Bob M.
Thanks Gator.
Time for the Nuclear Option: Raining Money on Main Street
Posted on September 22, 2015 by Ellen Brown
Predictions are that we will soon be seeing the “nuclear option” — central bank-created money injected directly into the real economy. All other options having failed, governments will be reduced to issuing money outright to cover budget deficits. So warns a September 18 article on ZeroHedge titled “It Begins: Australia’s Largest Investment Bank Just Said ‘Helicopter Money’ Is 12-18 Months Away.”
Money reformers will say it’s about time. Virtually all money today is created as bank debt, but people can no longer take on more debt. The money supply has shrunk along with people’s ability to borrow new money into existence. Quantitative easing (QE) attempts to re-inflate the money supply by giving money to banks to create more debt, but that policy has failed. It’s time to try dropping some debt-free money on Main Street.
The Zerohedge prediction is based on a release from Macqurie, Australia’s largest investment bank. It notes that GDP is contracting, deflationary pressures are accelerating, public and private sectors are not driving the velocity of money higher, and central bank injections of liquidity are losing their effectiveness. Current policies are not working. As a result:
There are several policies that could be and probably would be considered over the next 12-18 months. If private sector lacks confidence and visibility to raise velocity of money, then (arguably) public sector could. In other words, instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’? Whilst it might or might not be called QE, it would have a much stronger impact and unlike the last seven years, the recovery could actually mimic a conventional business cycle and investors would soon start discussing multiplier effects and positioning in areas of greatest investment.
Willem Buiter, chief global economist at Citigroup, is also recommending “helicopter money drops” to avoid an imminent global recession, stating:
A global recession starting in 2016 led by China is now our Global Economics team’s main scenario. Uncertainty remains, but the likelihood of a timely and effective policy response seems to be diminishing. . . .
Helicopter money drops in China, the euro area, the UK, and the U.S. and debt restructuring . . . can mitigate and, if implemented immediately, prevent a recession during the next two years without raising the risk of a deeper and longer recession later.
Corbyn’s PQE
In the UK, something akin to a helicopter money drop was just put on the table by Jeremy Corbyn, the newly-elected Labor leader. He proposes to give the Bank of England a new mandate to upgrade the economy to invest in new large scale housing, energy, transport and digital projects. He calls it “quantitative easing for people instead of banks” (PQE). The investments would be made through a National Investment Bank set up to invest in new infrastructure and in the hi-tech innovative industries of the future.
Australian blogger Prof. Bill Mitchell agrees that PQE is economically sound. But he says it should not be called “quantitative easing.” QE is just an asset swap – cash for federal securities or mortgage-backed securities on bank balance sheets. What Corbyn is proposing is actually Overt Money Financing (OMF) – injecting money directly into the economy.
Mitchell acknowledges that OMF is a taboo concept in mainstream economics. Allegedly, this is because it would lead to hyperinflation. But the real reasons, he says, are that:
It cuts out the private sector bond traders from their dose of corporate welfare which unlike other forms of welfare like sickness and unemployment benefits etc. has made the recipients rich in the extreme. . . .
It takes away the ‘debt monkey’ that is used to clobber governments that seek to run larger fiscal deficits.
OMF as a Solution to the EU Crisis
Mitchell observes that OMF has actually been put on the table by the European Parliament. According to a Draft Report by the Committee on Economic and Monetary Affairs on the European Central Bank Annual report for 2012, the European Parliament:
Considers that the monetary policy tools that the ECB has used since the beginning of the crisis, while providing a welcome relief in distressed financial markets, have revealed their limits as regards stimulating growth and improving the situation on the labour market; considers, therefore, that the ECB could investigate the possibilities of implementing new unconventional measures aimed at participating in a large, EU-wide pro-growth programme, including the use of the Emergency Liquidity Assistance facility to undertake an ‘overt money financing’ of government debt in order to finance tax cuts targeted on low-income households and/or new spending programmes focused on the Europe 2020 objectives;
Considers it necessary to review the Treaties and the ECB’s statutes in order to establish price stability together with full employment as the two objectives, on an equal footing, of monetary policy in the eurozone;
These provisions were amended out of the report, says Prof. Mitchell, largely due to German hyperinflation paranoia. But he maintains that Overt Money Financing is the most effective way to solve the Eurozone crisis without tearing down the monetary union:
It amounts to the ECB telling member states that they will provide the Euros to permit sufficient deficit spending aimed at increasing employment and production.
No public debt is issued.
No taxes are raised.
Interest rates would not rise.
A Job Guarantee could be introduced immediately.
The Troika can retire – no more bailouts.
As growth returns, structural changes – better public services, better schools, better health care etc. can be implemented. Growth allows structural changes to occur more quickly because people are happy to move between jobs if there are jobs to move between.
The Bogus Inflation Objection
Tim Worstall, writing in the UK Register, objects to Corbyn’s PQE (or OMF) on the ground that it cannot be “sterilized” the way QE can. When inflation hits, the process cannot be reversed. If the money is spent on infrastructure, it will be out there circulating in the economy and will not be retrievable. Worstall writes:
QE is designed to be temporary, . . . because once people’s spending rates recover we need a way of taking all that extra money out of the economy. So we do it by using printed money to buy bonds, which injects the money into the economy, and then sell those bonds back once we need to withdraw the money from the economy, and simply destroy the money we’ve raised. . . .
If we don’t have any bonds to sell, it’s not clear how we can reduce [the money supply] if large-scale inflation hits.
The problem today, however, is not inflation but deflation of the money supply. Some consumer prices may be up, but this can happen although the money supply is shrinking. Food prices, for example, are up; but it’s because of increased costs, including drought in California, climate change, and mergers and acquisitions by big corporations that eliminate competition.
Adding money to the economy will not drive up prices until demand is saturated and production has hit full capacity; and we’re a long way from full capacity now. Before that, increasing “demand” will increase “supply.” Producers will create more goods and services. Supply and demand will rise together and prices will remain stable. In the US, the output gap – the difference between actual output and potential output – is estimated at about $1 trillion annually. That means the money supply could be increased by at least $1 trillion annually without driving up prices.
Don’t Sterilize – Tax!
If PQE does go beyond full productive capacity, the government does not need to rely on the central bank to pull the money back. It can do this with taxes. Just as loans increase the money supply and repaying them shrinks it again, so taxes and other payments to the government will shrink a money supply augmented with money issued by the government.
Using 2012 figures (drawing from an earlier article by this author), the velocity of M1 (the coins, dollar bills and demand deposits spent by ordinary consumers) was then 7. That means M1 changed hands seven times during 2012 – from housewife to grocer to farmer, etc. Since each recipient owed taxes on this money, increasing M1 by one dollar increased the tax base by seven dollars.
Total tax revenue as a percentage of GDP in 2012 was 24.3%. Extrapolating from those figures, $1.00 changing hands seven times could increase tax revenue by $7.00 x 24.3% = $1.70. That means the government could, in theory, get more back in taxes than it paid out. Even with some leakage in those figures and deductions for costs, all or most of the new money spent into the economy might be taxed back to the government. New money could be pumped out every year and the money supply would increase little if at all.
Besides taxes, other ways to get money back into the Treasury include closing tax loopholes, taxing the $21 trillion or more hidden in offshore tax havens, and setting up a system of public banks that would return the interest on loans to the government. Net interest collected by U.S. banks in 2014 was $423 billion. At its high in 2007, it was $725 billion.
Thus there are many ways to recycle an issue of new money back to the government. The same money could be spent and collected back year after year, without creating price inflation or hyperinflating the money supply.
This not only could be done; it needs to be done. Conventional monetary policy has failed. Central banks have exhausted their existing toolboxes and need to explore some innovative alternatives.
_______________________
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com. Listen to “It’s Our Money with Ellen Brown” on PRN.FM.
This lady is a sick person. I listened to her a couple of time and I feel she is a communist.
come on Lawrence…she is not that bad……..
must be the attorney in her………….
You must be thinking of HELEN GIRLY BROWN……..
Lawrence is correct.
I skip everything Ellen writes.
BROWN THE COMMIE QUEEN………… 🙂
Haha, I think it was her that peter Schiff interviewed and teared apart by peter. It strikes me she is young communist full of unrelialistic dreams. I skip anyone with name Ellen brown eve since. Her words hurt me since they reminded me how bad it went in china following same line of thought.
She’s not young but socialists tend to be childlike.
Then……We shall call her Pimples, Princess of Pop
funny!
Ellen is always a good listen to, or read………..thanks………
well, then I must reconsider my comments…….. 🙂
Instead of a helicopter drop………..JUST CLOSE DOWN THE GOVT.
No need for TAX collection and redistribution to those greedy politicians and attornies, and without tax loop holes, who needs a CPA..
How come you guys never talk about the XAU?
It’s up 5.3%, as I’m typing.
I pay attention to it. Since it used to include hedgers so people rather talk about HUI. Gold/XAU went from 3.3 to 25 during the 10 years I was watching it. Very ugly.
XAU on the TSX Venture ???
Ask Bob M. please. ..
XAU has a lot of hard work to do before getting back into that 62-83 trading channel, a lot!!
Silver first resistance is at $14.95 that’s a key close it must overtake before the next level is in its sights at $15.55+ the major resistance area for 2015 comes in way up at $16.80
http://stockcharts.com/h-sc/ui?s=$XAU&p=D&yr=1&mn=3&dy=0&id=p17073332699&a=425277360&listNum=1
$XAU Index
I was joking JJ.
I know I’m a complete idiot but I do see a joke when tossed, my post should have started with $XAU not XAU was my point, remember if I spell anything wrong like I madd 130% shorting gold miners this summer I get taken to task, lol
I prefer GDM (up 5.6% right now):
http://schrts.co/t89C69
Bye Bye Dollar……just a matter of time
Man, were they ever buying gold and silver in London today!
The pig roast has started……………
From your guru … DeutscheBank !!!
That would send the US$ much,much,much higher 120 would be a done deal if DB brings down the E$ that bank is full of off sheet derivative positions, not shocked Marty is on it, lol
I think the correct spelling is Douche bank but I could be wrong 🙂
hey lawrence is citibank a communist
I don’t think so, it might be a crony capitalist. The central idea of the communism is to use state power to equalize rich and poor. I lived under one so I know. Anything else is just talk.
That’s right; like Wall Street, Citi is more communist than capitalist. Cronies hate free/fair markets and use the power of the government to deal themselves great favors —like bailouts and competition-crushing regulations and taxes.
The masses have a five-year-old’s perception of what capitalism is, that’s why capitalism is blamed for virtually the problems caused by the various collectivists. Of course it also makes perfect sense that the Marxist power elite would use their media to make sure that capitalism is blamed. More often than not, the exact opposite of the establishment/MSM view is the correct view.
Matt, the difference of communism over crony capitalism is it is the socialism for the poor so everyone is poor. Socialism for the rich is called fascism. It leads to abuse of state power to widen the gap between rich and poor. There is no -ism which can make very one rich unfortunately.
There is really little difference, Lawrence. Both use violence (theft is violence) to enrich a special few at the expense of society in general. People should disregard the little definitions that the thought controllers would like them to use and just focus on the fact that each is totalitarian in nature and the opposite of civilized.
Good comment Lawrence! I never thought of it like that before.
Good points Lawrence, but my thinking of Fascism is that corporations run the place, you could have a fascist capitalism,communism etc democracy republic monarchy etc
Sure, details could be argued but overall, I figured Fascism is corporations in control.
Yes, you do have to have corporate in control to have fascist, which are also the rich in the society. Since poor are majority so they have to use force to maintain it. Communism is more stable since people compare with others around them and find they are equally poor. Then they are fine with it until they compare with other countries. However, to get rid of rich, they still tend to use force. I remember in late 60s, my parent bought a very nice dining table with nearly no money. They said it was confiscated from the rich. So the rich was forced to live in poor houses and lost all they had.
Sorry Lawrence,
I don’t understand the first part of your comment.
If you ever find the time Lawrence I would really like to hear more about those days in China. Very serious with that request. I find it fascinating even if it was a surreal time of discord. It would be fantastic if one day Al could get you on the show to talk about it even if that sounds crazy to you. The world is changing. The West is changing. There will be another leveling of wealth between rich and poor. We just don’t know exactly how it will happen the next time but I do not doubt that it will repeat.
Lawrence, happy to have you join us anytime you are free.
A.L. I will be happy to answer questions you post. As for the show, I am not that type people who is interested in the publicity. Thanks.
The thing about Communism, Marxism and hard Socialism systems is that at their heart the systems are enforced by mobs of the uneducated who are are mostly angry and resentful about their place in life. Bright people may lead from the top but the real actors are the least skilled who seek revenge against privilege and the wealthy for the sake of revenge alone. All of those systems seem to be most effective at destroying the business class and entrepreneurs and breaking down the political system. They do not respect property rights that have been acquired nor do they promote free markets and in the end everyone ends up poorer. Maybe that was your experience in China in the 50’s. These cycles repeat. That is why I am interested. One day the mobs will again seek to balance the wealth of their nation and I suspect it will be just as messy as it always is.
I whole hardheartedly agree with you on that one. I believe that it is a combination of laziness and jealousy.
Those people make me sick as they are ruining the world.
You are right. REVENGE of the poor and proletarian dictatorship was the exact words we used. Overthrow of crony capitalism, feudalism and imperialism were the goals. 🙂
The solution is free cable TV, lots of sugar drinks and more dancing shows.
Or was that last years solution!
Thanks AL, I will let you know when I am ready. I feel that I am learning here.
Well rolled through my many gold charts and gold indexes….95% of them in down trends. I sold what I had on the rally.
My Fav Hedge Fund Manager has written in depth and makes the most practical sense to me on the global markets..His fund now up 55% in 2 years and at all time highs today. Bearish gold and bullish on the dollar and the same as a year ago..I personally pooh poohed the people that were negative on the US a long time ago…Here’s a piece of what he wrote….GO USA!! Everything else looks like crap….
“What bifurcation we have seen around the world. Interest rates are going lower in many countries (including Canada) but the U.S. should increase their rates this year (at least that’s what we believe). A lot of people seem to think that the U.S. won’t increase rates. Considering that auto sales are close to an all-time high, housing construction is rising at double digit growth rates (and probably will continue to rise at double digits for a few years), unemployment is low (and continues to fall) and the economy is doing just fine, we believe it makes sense to increase rates at this stage.
With that, we believe the U.S. dollar will continue to outperform.”
Always interesting to read the U.S. economy is improving, as opposed to shadow stats etc.
Yes, you can always rely on MSN………….
Always do Frank, only place to find out whats really happening.
Or, what they want you to think , is really happening……. 🙂
That Shadow Stats guy sure gets on my nerves. You will go broke listening to him or taking his advice.
Truth in general gets on your nerves.
Come on Matthew. That guy would have you positioned for hyperinflation in the Us and that makes him an outlier if not a complete economic retard. That is not facts buddy….it is wild speculation and none of it is supported by history.
His info is good even if his conclusions are off. Does he even make investment recommendations?
I do like his point of discouraged workers not being counted as unemployed.
And Lawrence made a good suggestion about removing butter from the index.
that was funny actually.
Lawrence is my kind of dictator. And I can say I knew him when he was just a poster on an an anonymous blog so maybe that will save me from being sent to the Gulags once he gets those up and running.
Friends forever Lawrence!
Thank you for your endorsement.
And a reminder of what I said to many a long time ago…..
http://stockcharts.com/h-sc/ui?s=PLG.TO&p=D&yr=0&mn=9&dy=0&id=p34248856743&a=420907867&listNum=1
Tyler Durden’s picture
Inflation Watch – Butter Prices Hit All-Time Record High
Submitted by Tyler Durden on 09/24/2015 – 12:33
Butter prices hit $3.10 per lb today in Chicago trading – a record high – as it appears the expectations of production increases after the EU milk quota system expired in March have proved “wildly optimistic.” Of course, no one should complain at the rising cost of staples like butter (or toilet paper), just ask Jamie Dimon… “let them eat iPhones.”
Thanks Agatha. First I heard of it.
Hmm.. let’s take butter out of index
Ha Ha Ha Ha Ha!!!!!! Lawrence, i swear you would make a great dictator! We will leave it to you to adjust the CPI and GDP numbers too. While you are at it be sure to make employment look good. 🙂
So far, weekly gold has easily exceeded its prior week’s high. The metal is on the north side of its 10 week moving average and the weekly +DMI has crossed above the -DMI. HUI has not yet been able to get above last week’s high, it’s finding its 10 week moving average to be strong resistance, and its weekly DMI’s are still indicating a downtrend. Either the metal or the stocks are wrong – time will tell.
Nikkei, Eurostox, DOW, Nasdaq, S&P all down today. Stock markets are getting squashed from Bombay to Japan and back to New York again. That’s why some miners are not responding and that means gold is correct…..the gold miners will play catch up once this general equity murder has ended.
WOW – 113 comments already.
That’s what happens when gold bugs get excited after prolonged annihilation.
It seems like the time is coming for gold. The miners are hedging less and even Avi Gilburt sounds a little bullish. Everyone should own a little bullion.
hibernation …………not annihilation……..
bear bottom bouncing…………………THE CLAW
Nothing to see here….micro blips that’s all. What amazes me is how long people talk about a bear market!?
http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&yr=14&mn=6&dy=0&id=p34366076274&a=326305368&listNum=1
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=1&mn=8&dy=0&id=p07800763285&a=364990870&listNum=1
Friends, Romans, countrymen, lend me your ears.
get your own
cheapskate!
GDXJ priced in GLD:
http://schrts.co/JbmgDj
Today’s close is important.
Weekly:
http://schrts.co/oWymIg
This week’s close is important.
The fault lies not in our stars, but in ourselves.
Wow! JDST just took a Bruce Lee kick to the ETF groin! Dropped from $10 to just shy of $8 even over the past day and a half. I am watching the chart for a buy signal.
sounds painful.
Here is the chart of what I’m watching.
http://blog.smartmoneytrackerpremium.com/2015/09/chart-of-the-day-146.html
Thanks Gary – Good chart & info.
Sep 25 Gold & Silver: Rounding Bottoms In Play Morris Hubbartt 321gold
Just a comment on shaddow stats. HILARIOUS. And dead wrong.
I follow a couple managers with 20 year no loss performance.
Pretty dam tough this last decade.
They went bullish the US 4 years ago and that my friends is a home run.
Franky from mosscow CFF. If you think other wise your reading Baloney. Despite the crushed gold bugs and their doom on it…it is by far and wide the best place to be right now. Numbers dont lie but you have to get the real ones. Hyperinflation is a joke. Collapse of America and the dollar hahahaha. Gold bugs are the most clueless of all whennit comes to markets.
Just listened to Harley Schlanger at sgt.
He says there are 50 million people collecting food stamps.
Was quite some time ago the number was reported to be 46 million.
So it really hasnt increased, maybe even stabilized, kinda indicates the economy might have stopped tanking.
The dow/s&p does look overvalued in relation to earnings, but there was alot of money printed………. the bugs will have their day and after such a long bear, (and bear it is, not a bubble pop) it has the potential to be a long day.
On September 25, 2015 at 8:47 am,
bb says:
Because then can. Big deal? Do you know how many people with all their faculties are getting cheques from the Canadian government? Huge! Ill look it up. My wife works at the bank and is disgusted…
USA has just become a little more socialistic..Gov likes it that way. There is a ton of wealth there and jobs are returning from China….Things are pretty dam good and I wished I lived there!
Al, I have to hand it to you. You have been consistently sticking to your guns as of late when interviewing your technical analyst guests.
saying “I don’t know but it seems to me gold has bottomed”. Al, you have said this
for 2 weeks straight.
All of the technicians are missing your bottom call.
“Now is a good time to begin to accumulate, if you are so inclined to do that.
Whether it happens here in late Septemer or in December, If you are an accumulator it really
doesn’t matter” Al Korelin