Tag Archives: FOMC

Paper Gold And Silver – A Tragic Reflection Of The U.S. Financial System

Dave, just a moment for some feed back on your Short Seller’s Journal. I just placed an order for 1oz gold eagles thx to my profits off Tesla and BBBY, thx as always. – subscriber email received today – Short Seller’s Journal information

Wow.  The hedge funds are almost net short silver contracts again, having had their algos steered into that predicament by the bullion bank market manipulation.  The fraudulent paper short position in both gold and silver – but especially silver – is many multiples larger than the available supply of physical metal that is supposed to legally back commodity derivatives.  This is evident from the Comex disclosures.

We have no idea what the total net short position would be including LBMA forward contracts and OTC derivatives.  That the entities who are paid by the public to prevent this continue to allow and enable this massive fraud is a tragic  commentary on the current U.S. economic, financial and political systems.

Craig “Turd Ferguson” Hemke invited me onto his weekly subscriber podcast show to discuss the trading action in gold and silver, the catastrophe otherwise known as the Federal Reserve and the slow-motion train wreck occurring in the stock market:

TO LEARN MORE ABOUT THE MINING STOCK JOURNAL OR SHORT SELLER’S JOURNAL – CLICK IN IMAGE:

Has The Fed Actually Raised Rates This Year?

The answer is debatable but it depends on, exactly, to which rates you are referring.  The Fed has “raised,” more like “nudged,” the Fed Funds target rate about 50 basis points (one-half of one percent) this year.  That is, the Fed’s “target rate” for the Fed Funds rate was raised slightly at the end of two of the four FOMC meetings this year from 50 to 75 basis points up to 1 – 1.25%.  Wow.

But this is just one out of many interest rate benchmarks in the financial system.  The 10-yr Treasury yield – which is a key funding benchmark for a wide range of credit instruments including mortgages, municipal and corporate bonds, has declined 30 basis points this year.  Thus, for certain borrowers, the Fed has effectively lowered the cost of borrowing (I’m ignoring the “credit spread” effect, which is issuer-specific).

Moreover, the spread between the 1-month Treasury Bill and the 10-yr Treasury has declined this year from 193 basis points to 125 basis points – a 68 basis point drop in the cost funding for borrowers who have access to the highly “engineered” derivative products that enable these borrowers to take advantage the shape of the yield curve in order to lower their cost of borrowing:

In the graph above, the top blue line is the yield on the 10-yr Treasury bond and the bottom line is the rate on the 1-month T-bill.  As you can see the spread between the two has narrowed considerably.

Thus, I would place the news reports that the Fed has “raised in rates” in the category of “Propaganda,” if not outright “Fake News.”

One has to wonder if the Fed’s motives in orchestrating that graph above are intentional. On the one hand it can make the superficial claim that it is raising rates for all the reasons stated in the vomit that is mistaken for words coming from Janet Yellen’s mouth;  but on the other hand, effectively, the Fed has managed to lower interest rates for a widespread cohort of longer term borrowers.

Furthermore, this illusion of “tighter” monetary policy serves the purpose of supporting the idea of a strong dollar and enabling a highly orchestrated – albeit temporary – manipulated hit on the gold price using paper gold derivatives.

To borrow a term from Jim Sinclair, the idea that the Fed has “raised rates” is nothing more than propaganda for the primary purpose of “MOPE” – Management Of Perception Economics.  On that count, I give the Fed an A+.

Key Economic Data Continue To Show A Recession

Goldman Sachs’ net income declined 42% from 2009 to 2016.   How many of  you reading this were aware of that fact?  Yet GS’ stock price closed today 36% above its 2009 year-end closing price.  See below for details.

Auto sales in April declined again, with the Big Three domestic OEMs (GM, F and Chrysler) missing Wall St estimates by a country mile.  The manipulated SAAR (seasonally adjusted annualize rate) metric put a thin layer of lipstick on the pig by showing a small gain in sales from March to April.  But this is statistical sleight of hand.  The year over year actuals for April don’t lie:   GM -5.7%, F -7% and Chrysler -7.1%.  What is unknown is to what extent the numbers reported as “sales” were nothing more than cars being shipped from OEM factory floors to dealer inventory, where it will sit waiting for an end-user to take down a big subprime loan in order to use the car until it gets repossessed.

The growth in loan origination to the key areas of the economy – real estate, general commercial business and the consumer – is plunging. This is due to lack of demand for new loans, not banks tightening credit. If anything, credit is getting “looser,” especially for mortgages. Since the Fed’s quantitative easing and near-zero interest rate policy took hold of yields, bank interest income – the spread on loans earned by banks (net interest margin) – has been historically low. Loan origination fees have been one of the primary drivers of bank cash flow and income generation. Those four graphs above show that the loan origination “punch bowl” is becoming empty.

HOWEVER, the Fed’s tiny interest rate hikes are not the culprit. Loan origination growth is dropping like rock off a cliff because consumers largely are “tapped out” of their capacity to assume more debt and, with corporate debt at all-time highs, business demand for loans is falling off quickly. The latter issue is being driven by a lack of new business expansion opportunities caused by a fall-off in consumer spending. If loan origination continues to fall off like this, and it likely will, bank earnings will plunge.

But it gets worse. As the economy falls further into a recession, banks will get hit with a double-whammy. Their interest and lending fee income will decline and, as businesses and consumers increasingly default on their loans, they will be forced to write-down the loans they hold on their balance sheet. 2008 all over again.

Because of this, I think Goldman Sachs (GS) makes a great short idea, although I don’t want to suggest timing strategies. It’s an idea that, in my view, you need to short a little at a time and add to it if the stock moves against you. I could also be a good “crash put” idea.

Goldman will be hit by a fall-off in loan demand and by a big drop in the fees from securitizing the loans it underwrites into asset-backed securities (ABS). In addition, GS facea an even bigger drop in the fees from structuring and selling OTC “hedge” derivatives to the buyers of Goldman-underwritten loans and ABS.

Goldman’s net interest income has declined over the last three years from $4.1 billion in 2014 to $2.6 billion in 2016. This is a 36.5% drop. To give you an idea of the degree to which bank net interest income has dropped since the “great financial crisis,” in its Fiscal Year 2009, Goldman’s net interest income was $7.4 billion. That’s a 64% drop over the time period.  In FY 2009, Goldman’s net income was $12.2 billion. In 2016, GS’ net income was $7.1 billion, as 42% decline.

To give you an idea of how overvalued GS stock is right now, consider this: At the end of GS’ FY 2007, 6 months before the “great financial crisis” (i.e. the de facto banking system collapse), Goldman’s p/e ratio was 9.5x. At the end of its FY 2009, its p/e ratio was 6.9x. It’s current p/e ratio 13.5x. And the factors driving Goldman’s business model, other than Federal Reserve and Government support, are declining precipitously.

As for derivatives…On its 2016 10-K, Goldman is showing a “notional” amount of $41 trillion in derivatives in the footnotes to its financials. This represents the sum of the gross long and short derivative contracts for which Goldman has underwritten. Out of this amount, after netting longs, shorts and alleged hedges, Goldman includes the $53 billion in “net” derivatives exposure as part of its “financial instruments” on the asset side of its balance sheet. Goldman’s book value is $86 billion.

If Goldman and its accountants are wrong by just 1% on Goldman’s “net” derivatives exposure, Goldman’s net derivatives exposure would increase to $94 billion – enough to wipe out Goldman’s book value in a downside market accident (like 2008). If Goldman and its “quants” have mis-judged the risk exposure Goldman faces on the $41 trillion in gross notional amount of derivatives to which Goldman is involved by a factor of 10%, which is still below the degree to which GS underestimated its derivatives exposure in 2008, it’s lights out for Goldman and its shareholders.

Think about that for a moment. We saw how wrong hedge accounting was in 2008 when Goldman’s derivative exposure to just AIG was enough to wipe Goldman off the Wall Street map had the Government not bailed out the banks. I would bet any amount of money that Goldman’s internal risk managers and its accountants are off by significantly more than 1%. That 1% doesn’t even account for the “fudge” factor of each individual trading desk hiding positions or misrepresenting the value of hedges – BOTH crimes of which I witnessed personally when I was a bond trader in the 1990’s.

As you can see in the 1-yr daily graph above, GS stock hit an all-time high on March 1st and has dropped 12.5% since then. I marked what appears to be a possible “double top” formation. The graph just looks bearish and it appears Goldman’s stock is headed for its 200 dma (red line,$202 as of Friday). To save space, I didn’t show the RSI or MACD, both of which indicate that GS stock is technically oversold.

The analysis above is from the April 16th issue of IRD’s Short Seller’s Journal. I discussed shorting strategies using the stock plus I suggested a “crash put” play. To find out more about the Short Seller’s Journal, use this link: SSJ Subscription information. There’s no minimum subscription period commitment. Try it for a month and if you don’t think it’s worth it, you can cancel. Subscribers to the SSJ can subscribe to the Mining Stock Journal at half-price.

Gold Continues To Defy Fed’s Attempt To Control The Price

Bloomberg News admitted that it is aware of the Fed’s “hidden” mandate to control the price of gold when it published an article last Sunday titled, “Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – Bloomberg/Yellen/Gold.

That title, combined with the content of the article, implied that the journalists and editors at Bloomberg are aware that the Fed actively manipulates the price of gold.  It’s hard to know if this admission was put forth intentionally or unwittingly. But the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The Fed’s current tool for this purpose is the “good cop/bad cop” routine played out on a daily basis between the Fed Governors who purport the need for more interest rate hikes and the Fed Heads who advocate waiting until the economy improves.

Lost in the smoke of Orwellian propaganda is the absurd notion that the two “rate hikes” were a mere quarter of a percentage point in magnitude.  This can hardly be described as “raising interest rates.”  It certainly is not even remotely close to the concept of “interest rate normalization,” whatever that is supposed to mean.   In mid-2007, about a year before the financial system nearly collapsed, the Fed Funds rate was 5.25%.   A little more than a year later it had been dropped to near zero.

If the financial analyst “Einsteins” define “rate normalization” as the 5.25% level in 2007, it will take about about 20 years using the speed of rate hikes by the Fed over the last two years.   On the other hand, going back to 1954, which is as far back as the Fed’s database takes us for the Fed funds rate, the median level for the Fed Funds rate is somewhere around 7%.   Is THAT level how one would define “normalized rates?”  You can do the math on how long it would take thereby to achieve “normalized interest rates” if 7% is the goal.

Since mid-December 2016, when gold appears to have bottomed out from the manipulated price “correction” that began in August, gold has been trading in defiance of the Fed’s attempts at price control.  Yesterday’s (Wednesday, Feb 22nd) trading action is point in case.  Gold was slammed for about $9 right after the paper trading market on the Comex floored commenced.  This is standard operating procedure.  But about 5 1/2 hours later, when the Fed released the minutes from its last meeting, gold spiked up and reclaimed the full $9 price take-down.    Today gold has soared another $16.

At the Shadow of Truth, we suspect both Yellen and the editorial staff at Bloomberg News are mumbling to themselves.  In today’s episode, we discuss the trading action in gold and the potential more interest rate hikes this year:

Bloomberg News Admits The Fed Manipulates Gold

“Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – That was the headline in a Bloomberg news report that was released on Sunday afternoon. There’s a lot going on in that headline – none of it accurate except for the fact that gold is moving higher despite the efforts of western Central Banks to cap the price.

The basic premise of the report is that gold is moving higher in defiance of the Fed’s apparent move to raise interest rates. Reading through the report reveals even more misleading and completely false information than is conveyed by the headline. Here’s a link if you want to read the article:  Bloomberg/Yellen/Gold.

The headline itself and the article content are both highly problematic, riddled with disinformation and completely inaccurate assertions.  Anyone actually who might have read the article and trusted the content has been taken down to “ground zero” intellectually.  Propaganda for the ignorant.  I will be reviewing several ways in which the article content is inaccurate, if not intentionally fraudulent, in the upcoming issue of the Mining Stock Journal.

That said, the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The idea that Yellen “can’t halt” the rising price of gold implies that such intervention is part of the Fed’s mandate.  It’s the first time I can recall in 16 years of researching, trading and investing in the precious metals market that the mainstream financial media, unwittingly or not,  has acknowledged that the Federal Reserve attempts to intervene in the gold market.

If the implied message of the headline was inadvertent, it means that conversations with respect to the Fed and its role in preventing the price of gold from rising are actively occurring in meeting rooms and reporter “bullpens” at several financial media organizations, with orders from “above” to never publish the truth.   Imagine if the Washington Post had withheld the news about Watergate…

Today’s action in gold exemplifies the tenor of the Bloomberg report.  Almost as if “on cue,” in deference to Yellen’s attempt to “halt” the gold rally from yesterday, gold was slammed for $9 this morning.  The reason generally attributed is “March rate hike hopes” LINK.   I guess that’s all it takes.  Yellen or some Fed clown exhales “rate hike on the table in March” and gold gets slammed by the trading computers.

Allegedly Germany has repatriated a large portion of its gold ahead of schedule (why it was supposed to take 7 years no one can explain).  Notwithstanding whether or not the gold is actually sitting physically in a Bundesbank vault, the announcement of the early repatriation conveys a sense of urgency to do so.  Furthermore, the eastern hemisphere countries are hoovering gold like there’s no tomorrow for fiat currency.

The Feds and the western Central Banks are exuding fear with respect to gold. The escalation in anti-gold propaganda reflects this sense of desperation, as do the shallow sell-offs followed by a move higher in paper gold that are initiated by LBMA and Comex paper traders after the Asian markets close for the day.  The conclusion remains that all sell-offs in the gold market, like today’s, should be capitalized upon by adding to positions in physical gold and silver and in mining stocks.

U.S. Political Crisis Foments While China & India Devour Gold

The demand for gold in India and China so far this year has soared, a fact which is completely ignored by the western financial media. The ex-duty Indian gold import premiums (approximately $10 earlier this week) are quite remarkable, “as the need to import kilo bars only arises if Indian demand is not satisfied by Dore imports (which had a duty advantage of $15.52/oz this afternoon) and smuggled gold. Reports of apprehensions at Indian airports are continuing to appear, indicating that smuggling has in fact revived” – John Brimelow’s Gold Jottings, brimelowgoldjottings@gmail.com).

Brimelow also reported that 162 tonnes of gold were delivered into into Shanghai Gold Exchange on Monday this week, preceded by 79 tonnes on Friday. The Friday delivery is the largest by far that I’ve observed in watching this statistic over the last several years.

While the eastern hemisphere is busy converting fiat currency into physically delivered gold, the United States political system is becoming increasingly unstable and unpredictable, as the Trump White House, in an effort to repair the frayed relations with Russia, is under systematic attack from the Deep State.  Trump’s erratic leadership combined with the Deep State’s political terrorism will likely spark political and social chaos in the U.S.

The relentless buying strength of physical gold in the east along with the incipient instability of the U.S. are fundamental catalysts to drive the price of gold and silver a lot higher.  Furthermore, the emergence of accelerating price inflation thrown into the mix has the potential to create the “perfect storm” for higher precious metals prices.

In an earlier post I explain why now is the time to use the manipulated paper gold price take-downs as buying opportunities.  This viewpoint was vindicated during the two-day Fed Chairman staged Congressional propaganda event, which historically is a period  in which the banks slam the gold market with tonnes of paper gold in order to prevent the price of gold from signaling a message that conflicts with the economic and financial fairytale artfully spun by the Fed-head (or not so artfully, as it were, in Yellen’s case).

Gold was slammed nearly $20 just prior to and during Yellen’s hot air exhalation sessions on Capitol Hill on Tuesday and Wednesday.  The catalyst was a series of paper gold volume surges on the Comex in which the NY Fed and its agent bullion banks drop a payload of gold futures on both the Comex floor and into the CME Globex trading system, targeting the stop-losses set by hedge funds that are long gold contracts.  This detonates an avalanche of selling by momentum-chasing hedge fund algos.

Subsequent Yellen’s freak show on Capitol Hill, gold promptly defied the paper market deviance and shot up $21 to a new year-to-date high.  If the deteriorating economic fundamentals manage to chew through the safety-net that has been placed beneath the stock market, a real rush into gold – physical and derivative – will be triggered.   In the meantime, the nature of the precious metals trading has shifted from shorting rallies and covering those shorts on sell-offs to buying dips and selling rallies.   Eventually the hedge fund algos will be programmed to buy dips and aggressively buy rallies.  That’s when the real fun begins, especially in the junior mining stocks…

IRD On Kennedy Financial: Janet Yellen Is A Complete Embarrassment

Predictably, the FOMC once again fell flat on its face with regard to its continuous threats over the last month to hike rates. Despite the politically motivated rhetoric about the strengthening economy and tight labor market flowing from Yellen’s pie-hole, the fact that the Fed is afraid to raise rates just one-quarter of one percent tells us all we need to know about the true condition of the economy.

If I didn’t despise the fact that Yellen has been an incompetent political hack originally inserted into the Federal Reserve system as a political tool since her first tenure as an economist at the Fed in 1978, I would almost feel sorry for her. But the fact that she can stand in front of the public and read off of a sheet of paper scripted with lies about the state of the economy forces me to despise her as much as I despise the entirety of Washington, DC

This analysis of Yellen underscores my view that Yellen is either tragically corrupt or catastrophically stupid:  How Yellen Rationalizes Financial Bubbles

Phil and John Kennedy invited onto their podcast show to discuss the FOMC, Yellen, Gold, Deutsche Bank and some other timely topics:

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Fed Intervention Has Completely Destroyed The Markets

Federal Reserve intervention has killed natural market processes.  The Fed is also starting to lose control of its ability to manipulate the markets.  Today is a good example.  The S&P and Dow are negative as I write this (2:30 EST) after staging a big early day rally.  Most sub-indices, like retail and housing, are also red. BUT, the infamous “FANG” (Facebook, Amazon, Netflix, Google) stocks + Apple are up anywhere from .2% (AMZN) to over 3% (AAPL). These stocks are the largest stocks in the SPX by market-cap and are part of the “tool kit” the Fed has been using to keep the S&P 500 and Dow from spiraling lower.

Since late 2012, the Fed has been able to orchestrate the markets with heavy doses of direct and indirect interventionary tactics.   It’s used a combination of money printing, plunge protection and propaganda to keep the stock market propped up, interest rates near zero and the price of gold suppressed.

But, if the action over the last four trading days are any indication, the Fed is increasingly losing its ability to control the markets.  This is most evident in the apparent break-down in market sector correlations.

From roughly late 2012 through early 2016, the Fed has been the US$/yen as a “lever” with which to push the S&P 500 up and the price of gold down.  If you study these three graphs, you can see the correlations from 2012 to 2016 and the breakdown of the correlations in 2016:          Weekly $/Yen           Weekly SPX           Weekly Gold

I happened to notice on Friday and yesterday (Tues, Sept 13) that, despite a move higher in the $/yen (the yen falling hard vs. the dollar), which is the level the Fed had been using to manipulate stocks, the stock market experienced steep sell-offs.  Typically the $/yen and the U.S. stock market move in near-perfect correlation. Today they are inversely correlated.

Even more interesting, the bond market, even at the short end, also sold off (yields rose).   This is unusual  because typically when stocks get bombed, the money coming out of stocks floods into very short maturity T-bills and the dollar rises.  Yesterday EVERYTHING was down except a few agricultural commodities and the dollar index.  I have no idea where the money that came of stocks was parked.

Regardless, it was clear that hedge funds were selling everything that was not nailed down yesterday  and Friday.  At some point, as volatility increases, a significant portion of the money coming of stocks and bonds will be flowing into the precious metals sector.   If you review the trading patterns in 2008 before and after the October, you’ll see that initially the metals/miners were correlated with the S&P 500.  Subsequent to the end of October, the precious metals sectors dislocated from the stock market and moved higher while stocks continued to decline.

I believe all of this activity, especially the dislocation in correlations among the sectors as discussed above reflects the Fed’s increasing inability to manipulate the financial system. There are just too many factors for which they can not account.   One perfect example is the disintegration of energy exploration and production sector assets.  Debt recoveries in E&P bankruptcy  restructurings have been averaging 21% – LINK.  This means that lenders are getting back, in general 21 cents on every dollar lent to these companies. Some tranches received close to zero.   Part of this “recovery value” no doubt includes some partially random value attributed to stock distributed to bagholders.

This is a problem because the big Too Big To Fail Banks were stuck holding a lot of this debt.   In other words, the melt-down in the energy sector has the potential to blow big holes in bank balance sheets (this among many other deteriorating assets).  If the Fed hikes rates, it will likely force recovery rates even lower.  In fact, it will lower the value of collateral securitizing most bank debt deals, especially mortgages.

It’s a common notion that the Fed has “backed itself into a corner” with interest rates and its monetary policy.  But there are several ways in which Fed has backed itself into a corner. These factors are beginning to emerge and they are removing the ability of the Fed to treat the financial system like its puppet.

Expect a lot more volatility in all market sectors going forward.  The economy is clearly headed into a recession, if not already in one.  An interest rate hike next week has the potential to trigger a plethora of unforeseeable chaos in the markets and I believe the Fed will once again defer on its threat to hike rates.

The Economy Is Tanking

The FOMC can raise interest rates any time it desires, without prior approval from anyone outside the Fed. Accordingly, the ncreased hype primarily has to be aimed at manipulating the various markets, such as propping the U.S. dollar. Separately, it remains highly unusual, and it is not politic, for the FederalReserve to change monetary policy immediately before a presidential election. – John Williams, Shadowstats.com

The March non-farm employment report originally reported that 215,000 jobs were created (ignore the number of workers who left the labor force).  But five months later the BLS released “benchmark” revisions which took that original number down by 150,000.  However, the BLS reports a 74,000 upward revision to Government payrolls, which means that non-Government payrolls were down 240,000 in March.  So much for the strong jobs recovery…

A report out on August 19th that received no attention in the financial media showed that Class 8 (heavy duty) truck orders fell 20% from June and 58% year over year. This is after hitting a four-year low in June. The big drop was blamed on a high rate of cancellations. This is consistent with regional Fed manufacturing reports out two weeks ago that showed big drops in new orders. Again, the economy is starting contract – in some areas rather quickly.   Heavy trucking is one of the “heart monitors” of economic activity.

Another datapoint that you might not have seen because it was not reported in the mainstream financial media: the delinquency rate for CMBS – commercial mortgage-backed securities – rose for the 5th month in a row in July. The rise attributed to “another slew of balloon defaults.” Balloon defaults occur when the mortgagee is unable to make payments on mortgages that are designed with low up-front payments that reset to higher payments at a certain point in the life of the mortgage. This reflects an increasing inability of tenants in office, retail and multi-family real estate to make their monthly payments.

Again, I believe that evidence supporting the view that housing and autos are starting to tank is overwhelming. Last week Zerohedge featured an article with data that showed that prices in NYC’s lower price tiers are starting to fall, following the same path as the high-end market there LINK. I want to reiterate that I’m seeing the exact same occurrence in Denver in the mid/upper-mid price segment. Furthermore, I’m seeing “for sale” and “for rent” signs pile up all over Denver proper and I’m seeing “for sale” signs in suburban areas where, up until July, homes were sold as soon as a broker got the listing. NYC, Denver and some other hot areas in the last bubble began to fall ahead of the rest of the country.  I don’t care what the National Association of Realtors claims about the level of existing home inventory, their numbers are highly flawed and the inventory of homes on the market is ballooning – quickly.

I like to describe housing as “chunky,” low liquidity assets. It takes a lot of “energy” to get directional momentum started. Once it starts, it eventually turns into a “runaway freight train.” We saw the upside of this dynamic culminate over the last 6-9 months. But now that freight train is slowly cresting and will soon be headed “downhill.” I don’t think this dynamic can be reversed without extraordinary interventionary measures, even larger than 2008, from the Fed and the Government.

As for autos, I detailed the case that auto sales are heading south in previous blog posts. However, Ford disclosed in its 10-Q filing that charges for credit losses on its loan portfolio increased 34% in the first half of 2016 vs. 2015. GM’s credit loss allowances increased 14% vs. 2015. As credit losses pile up in auto-lender portfolios and in auto loan-backed securities, lenders will begin to constrict their auto sales lending activities. It will be an ugly downward spiral that will send negative shock-waves throughout the entire economy.

I find it highly improbable that the stock market will not continue lower unless the Fed steps in to prevent it.  The Fed is playing “good cop/bad cap” with its rate hike theatrics.  As John Williams points out, it does not require a formal FOMC meeting for the Fed to raise or lower interest rates.  In fact, there’s precedence for inter-FOMC pow wow interest rate changes.   This entire Kabuki theater is designed to support the dollar ahead of yet another meeting in which Fed stands still on rates.   Honestly, even a quarter point hike could act like dynamite on the financial weapons of mass destruction hidden on and off bank balance sheets.  The fraud at Wells Fargo is just the tip of the ice-berg.

The short-sell ideas I present in IRD’s Short Seller’s Journal have worked out of the gate four weeks in a row.  The last time SSJ had a streak like this was during the early 2016 sell-off.  Although my ideas are meant to be long-term fundamental shorts based on flawed business models and deteriorating business conditions, a couple of those ideas are down over 10% in less than a month.  I’m also sharing my strategies with the homebuilders, all of which will be trading under $10 within the next 18-24 months (except maybe NVR.

You can access the Short Seller’s Journal here:   SSJ Subscription.  This is a weekly report in which I present my view of the markets, supported with economic data and analysis you might not find readily in the alternative media and never in the mainstream media.  It’s a monthly recurring subscription you can cancel anytime.   Subscribers can access IRD’s Mining Stock Journal for half-price.

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Why Do Central Banks Need To Exist?

The short answer is, they  don’t.   Central Banks function as “legititmized” price control mechanisms.  They control the price of money in order to help the elitists confiscate your wealth.  That’s it.   But price controls never last very long and neither do Central Banks.   The U.S. is on its third CB in less than 300 years of existence and there’s been in a movement in place to get rid of the Fed for at least the last 8 years.

The Daily Coin featured a useful analysis – LINK – of the latest attempt by the western Central Banks to build a “currency sandbox” for everyone to play in because they know the U.S. dollar’s role as the reserve currency is coming to an end.  The Utility Settlement  Coin” is an act of desperation to head off the move by eastern hemisphere emerging economic powers, led by China and Russia, to create a level playing field.

Almost every year the precious metals sector experiences a price correction late in the summer.   And almost every year the anti-gold propaganda floods the internet and media. This year is no exception.  But the current pullback in the sector has about run its course.   This was a healthy pullback after the huge run up in the sector.   The next leg higher should be even more exciting.

Finally, the U.S. economy is starting to collapse.  Blow away the propaganda smoke being blown by the likes of Janet Yellen, Stanley Fisher and Hillary Clinton and a clear view of the real economic data will show a nasty downturn emerging in housing, autos, general manufacturing and discretionary consumption.   In the latest episode of the Shadow of Truth, we discuss these issues and infuse some humor to make it easier to digest – enjoy the podcast and enjoy your  long holiday weekend – it could get ugly in Q4:

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