Commodity Trade Mantra

All posts under ‘Economy’

Financial Collapse Could be Farther and Faster Than Pundits Expect

Financial collapse isn’t “out of the blue,” any more than a heart attack is “out of the blue.” Recall that the global “recovery” 2009 – 2015 was entirely based on the expansion of debt taken on by marginal borrowers. Systemic fragility doesn’t respond to central bank jawboning or Keynesian claptrap; unlike those “policy tools,” fragility is real.

Negative Rates In The U.S. Are Next: Here's Why In One Chart

The Fed will follow the footsteps of negative rates in Sweden, Denmark, Europe, Switzerland & now Japan. Will this crush money markets as we know them & unleash even more volatility & havoc around the world? Absolutely. But at this point, when every other central bank has lost credibility “what differnce will it make” if the Fed joins the party on the central bank Titanic?

A Recession Occurred The Last 16 Times This Happened

Something has just happened that has signalled a recession every single time that it has occurred since World War I. 16 times since 1919 there have been at least 8 month-over-month declines in industrial production during the preceding 12 month period, and in each of those 16 instances the U.S. economy has plunged into recession.

Could China's Housing Bubble Bring Down the Global Economy?

China’s stated intent is to move from a fixed-investment/export dependent economy to a consumer economy. But if we consider what happens when housing slows or even grinds to a halt, we realize the impact on incomes, wealth and consumption will be extraordinarily negative, not just for China but for every nation that sells China vehicles and other consumer goods.

Betting on Deflation May Be a Huge Mistake. Here's Why

If the metals markets look forward, as markets are supposed to do, they will anticipate the Fed’s response to a strengthening dollar and economic malaise. In 2008, investors knew little about the lengths to which the Fed would be willing to go. Today they DO know. The Fed will overwhelm deflation by creating new inflation.

The End of the Bubble Finance Era

During the expansion phase of central bank enabled bubble finance, optimism reigns and bulls and speculators insist that “this time is different.” Yet the laws of sound finance and market economics never change. It often just takes an extended time for all the excesses to work their way through the system and finally reach the blow-off stage.

Government Borrowing Is Not Like Private Debt

Neither borrowing nor saving is inherently good or bad. At least in the private sector. Whether one chooses to save or borrow to finance a project depends upon a subjective assessment of the relative trade-offs. It’s another matter entirely, though, when we’re talking about the government sector, as the two are not comparable.

Silly Debt, Paper Dies, Gold Thrives

The purchasing power of our debt based fiat currency will be exponentially eroded until the catastrophic “debt withdrawal” occurs. The agony of withdrawal occurs now … or later, when it will be even worse. You can now: Protect your purchasing power with silver and gold, or Trust that purchasing power will not decrease, in spite of 100 years of history.

Currency Wars Become Much Nastier During Recession Times

All central banks have printed trillions of dollars in their respective currencies under various QE programs. They are at the point where they simply cannot print trillions more without risking the collapse of confidence in their currencies. How will central banks stop the recession when they’ve used up their dry powder fighting the currency wars?

The Fed Can’t Raise Interest Rates, But Must Pretend It Will

The Fed must succeed in continuing to postpone rate hikes into the future without breaking peoples’ expectation that rates will rise at some point. It has to send out the message that rates will be increased at, say, the forthcoming FOMC meeting. But, as the meeting approaches, the Fed would have to repeat its trickery, pushing the possible date for a rate hike still further out.

The $5 Trillion Oil Debt Bomb

Oil below US$60 is more than low enough to do an enormous amount of damage in financial markets. When many oil producers went for loans, the industry’s models showed oil prices between US$80 and US$150. So suddenly, there’s a bunch of debt out there that producers will not be able to pay back with the money they make at US$50 a barrel.

Will US Dollar Collapse Over Another Debt Ceiling Fight?

The US federal government is about to hit the debt ceiling, which stands above $18.0 trillion, and Congressional Republicans refuse to raise it. The last debt ceiling fight led to a downgrading of U.S. debt. Another blow to the credibility of the U.S. government could be devastating. Could a US dollar collapse be around the corner?

Gold Price Strengthening as Debt Ceiling Debate Heats Up … Again

Any near-term “resolution” of the debt ceiling standoff that doesn’t require the government to start living within its means won’t resolve the debt problem. It will just make the problem bigger – more spending; more borrowing; more bond buying from the Federal Reserve. It all adds up to more reasons to own gold and silver.

Peak Debt & The Need For A Reliable Store of Value: GOLD

Most investors seem unconcerned about the unsustainable levels of global debt and the inflationary potential of the trillions of dollars created by the major central banks especially the U.S Federal Reserve. I expect to see gold and silver demand increase dramatically in the coming years as more prudent investors see the truth and look for a reliable store of value.

The Mindless Stupidity Of Negative Interest Rates

Can anyone show a clear example connecting the dots to show where negative interest rates have stimulated an economy? Can anyone clearly explain how charging an institution or business to hold deposits is in any way stimulative… not net stimulative, but stimulative AT ALL? It defies common sense.

Can The Fed Raise Interest Rates In An Election Year?

While many economic and market factors may influence when and how often the Fed hikes in the upcoming months, we do not expect the timing of US elections to play any meaningful role in the Fed’s policy deliberations. Expect the Fed to gradually tighten policy in a data dependent manner during 2016 — regardless of how the political winds may blow.

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