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Silver Investor Community Discussion Forums - SilverSeek.com - SilverSeek.com Articles http://forums.silverseek.com/ Public comments on articles published on SilverSeek.com en Sat, 25 May 2019 22:50:49 GMT vBulletin 60 http://forums.silverseek.com/images/misc/rss.png Silver Investor Community Discussion Forums - SilverSeek.com - SilverSeek.com Articles http://forums.silverseek.com/ COT Silver Report - May 24, 2019 http://forums.silverseek.com/showthread.php?69555-COT-Silver-Report-May-24-2019&goto=newpost Sat, 25 May 2019 18:48:04 GMT *http://silverseek.com/commentary/cot-silver-report-may-24-2019-17654 For anyone not able to see the complete COT report or would prefer to see... http://silverseek.com/commentary/cot...-24-2019-17654

For anyone not able to see the complete COT report or would prefer to see the combined Gold and Silver COT reports

http://news.goldseek.com/COT/1558726690.php
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The Fed Is Caught Behind The Curve http://forums.silverseek.com/showthread.php?69554-The-Fed-Is-Caught-Behind-The-Curve&goto=newpost Fri, 24 May 2019 09:47:38 GMT *Pease note: This article was originally posted on FATRADER.com on Thursday May 22 before the breakout in bonds. I have written many times about... Pease note: This article was originally posted on FATRADER.com on Thursday May 22 before the breakout in bonds.

I have written many times about how the Fed follows the market and does not lead it. And, we are about to see yet another example of history’s lessons.

For those that followed our work over the years, you would know that we called for a top to the bond market on June 27, 2016, with the market striking its multi-year highs within a week of our call. Since that call, TLT dropped 22%, until we saw the bottoming structure develop in late 2018.

So, in November of 2018, I noted to my subscribers that I was going long TLT just as it broke below the 113 level. At the time, many were telling me that I was crazy to go long bonds, as the Fed was still raising rates. The main reason many thought I was crazy was that “you cannot fight the Fed.”

Well, in my case, I recognized that the Fed cannot fight the market. And, the market was suggesting to me it was bottoming out and about to turn up quite strongly. Since that time, TLT has moved from just below 113 when we went long to as high as 126.69.

And, now, the Fed is no longer talking about raising rates, are they?

As far as my expectations, I still think TLT will rally up to at least 131, with a strong potential to see the 135/36 region on the next rally. However, I am still uncertain if that will be in a direct break out over 126.70, or if we see a bigger pullback first. At this point in time, I am leaning towards the direct break out. And, should we see TLT move over 126.70, that would confirm this expectation.

What this means is that the Fed will not only stop talking about raising rates, but you will start hearing discussions about them lowering rates. You see, the Fed follows the market. And, right now, the market is signaling that rates still have lower to go. So, the Fed will have to follow suit.

So, my current prediction is that the Fed is caught between a rock and hard place, and they are behind the curve. Rates will likely still drop in 2019, and the Fed will have to follow the market, and lower rates before the year is out.
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<![CDATA[Bitcoin's Strong Extensions Warn The Bear May Try To Come Back]]> http://forums.silverseek.com/showthread.php?69553-Bitcoin-s-Strong-Extensions-Warn-The-Bear-May-Try-To-Come-Back&goto=newpost Fri, 24 May 2019 09:40:20 GMT *In our last update, we stated that Bitcoin was providing us the minimum price patterns to suggest that a bull market was under way. Moreover, we... In our last update, we stated that Bitcoin was providing us the minimum price patterns to suggest that a bull market was under way. Moreover, we were looking for a standard corrective pullback to solidify the bull market case.

But when the price action is too strong, it can flash warnings signals. This is clearly what we have seen over the last week or two. Price is always king, and we must not act emotionally as price barrels upward. We must continue to put price action to the test, as it is the only truth in the market.

Recently, we have seen this market overheat, barreling upward with nothing but the smallest correction. If you are familiar with Elliott Wave, you know that an impulsive move signalling the beginning of a bull market comes in the form of five waves. Unfortunately, in the most clear view of this rally off our December low, we only have three waves. So, sometimes, extending beyond standard targets may suggest something less bullish in the bigger picture.

Therefore, for us to remain bullish, we need to see a clear corrective pullback that presents as our 4th wave off the December lows, followed by a fifth wave higher in order to eliminate the risk that the bear may return for one final flush. For a bullish structure to be reliable, we now need to see a wave 4 corrective pullback that holds over support at $5330 and then rally over $10K. Conversely, if we drop through the $5330 level in an impulsive structure, the prospects of a lower low in the complex rise significantly.

Before you react to this article by selling all of your Bitcoin and running for the hills, this is not our intent. In any bull market, we sometimes see warning signs that cause us to turn “cautious.” This is part of managing risks in a dynamic market where nothing is certain. Further, just as an airline pilot requires you to buckle up upon take off, as this part of air travel is the most dangerous, you must prepare for turbulence as a market fights to form a new bullish trend.

http://news.goldseek.com/GoldSeek/1558531870.php
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Housing Collapse 2.0 Continues as Predicted Here … as does everything else! http://forums.silverseek.com/showthread.php?69552-Housing-Collapse-2-0-Continues-as-Predicted-Here-…-as-does-everything-else!&goto=newpost Fri, 24 May 2019 09:38:06 GMT *Existing home sales were down again nationally (4.4%) in April (fourteenth month in a row of declining sales year on year). That is the longest... Existing home sales were down again nationally (4.4%) in April (fourteenth month in a row of declining sales year on year). That is the longest stretch without a single positive month since the housing-market collapse that brought on the Great Recession.

So far as I am aware, I was the first to state that what we had seen by the start of July, 2018, was clear evidence that the housing market was going into another decline. I pointed to the Seattle/King County market as the bellwether at the time because it had been the strongest and last market to collapse during the last housing crisis, so trouble in that robust market is trouble, indeed.

Prices are now down 3.5% in Seattle YoY. Another hot market in Washington State has been the tri-cities area in Eastern Washington where the median price is now 12% lower than a year ago. Redmond, WA, home of Microsoft, prices down 18%. Pricy Mountain View, CA, (between Palo Alto and Santa Clara), prices down 2.2% YoY. Portland, OR, prices down 1.2%.

For several months, it was mostly just sales that were down. As I said at the time, it would take awhile for prices to follow because sellers are highly resistant to dropping the value of their number-one asset; so, the squeeze needs to be on for awhile for median prices or average prices to fall. Well, the squeeze has been on long enough, and sellers are starting to capitulate to the long drop in demand. Prices are falling.

There are other parts of the country where prices are going up, of course; but overall the trend is down for sales and starting to move down now for prices. Prices had risen in most parts of the country to the same housing-bubble heights of the last time around.

I don’t think prices will probably fall as hard this time because the Federal Reserve probably will jump in sooner if it can, but there is not a long ways the Fed can go to lower interest or ease credit terms either in order to stimulate the market. Credit terms are already pretty slack.

I also don’t think the housing market will be the primary cause of the overall economic collapse we are slowly going into this time around, as it was last time; but it will be a contributing cause to the bursting of the everything bubble, along with Carmageddon, the Retail Apocalypse, the trade war, the bursting of the bond bubble and the credit bubble and student loans, and a deeper stock-market crash, the fall of China’s economy and Europe’s — all the things that I have been saying for the last couple years will be the major forces to watch that will determine the tractory of our economy.

[You can check what is happening in home prices wherever you want at this link on Zillow.]

http://news.goldseek.com/GoldSeek/1558531750.php
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China’s Nuclear Option to Sell US Treasurys http://forums.silverseek.com/showthread.php?69551-China’s-Nuclear-Option-to-Sell-US-Treasurys&goto=newpost Fri, 24 May 2019 09:33:36 GMT *We have deviated, these past several weeks, from matters monetary. We have written a lot about a nonmonetary driver of higher prices—mandatory... We have deviated, these past several weeks, from matters monetary. We have written a lot about a nonmonetary driver of higher prices—mandatory useless ingredients. The government forces businesses to put ingredients into their products that consumers don’t know about, and don’t want. These useless ingredients, such as ADA-compliant bathrooms and supply chain tracking, add a lot to the price of every good. Of course higher prices are reflected in the Consumer Price Index. And people say it is inflation.

We have also discussed a nonmonetary driver of lower prices. Every productive business is constantly working to remove useless ingredients too. They are not allowed to remove government-mandated useless ingredients, but all other ingredients are open season. In the research for his Forbes article on falling wages, Keith discovered that dairy producers found ways to eliminate 90% of the ingredients that go into producing milk between 1965 and 2012. For example, they reduced by two thirds the labor hours that support each cow.

Big Increase in Useless Ingredients, Small Increase in Price

Today, we look at the monetary driver of lower prices. Wait, what? Monetary? Lower prices?! Doesn’t monetary policy increase the quantity of dollars? Shouldn’t that cause prices to increase?

Not necessarily. Between September 2008 and September 2014—six years—the M0 measure of money supply increased from $875 billion to $4,150 billion. This is an increase of almost five times (M1 doubled, and M2 went up 50%–all data from the St Louis Fed). During this time, the consumer price index rose from 219 to 237. 8%.

All the while, you can be sure that the US Congress, plus state legislatures from Sacramento to Albany, and thousands of City Halls, were busy creating new costs for businesses to pay, not to mention new taxes. Governments at every level were driving up prices. Despite this relentless onslaught, prices rose only about 1% a year. We do not have data to quantify it, but we know it was, and is still, going on in a big way.

Some other countervailing force must be at work, else prices would have risen much faster. Last week, we wrote of one such force—the drive to reduce what business managers call waste

http://news.goldseek.com/GoldSeek/1558445952.php
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<![CDATA[Put A Fork In Tesla - It's Done]]> http://forums.silverseek.com/showthread.php?69550-Put-A-Fork-In-Tesla-It-s-Done&goto=newpost Fri, 24 May 2019 09:31:04 GMT *Tesla has been “done” for awhile but many of the Wall Street and investor “uber” bulls are finally starting to see this reality. Amusingly,... Tesla has been “done” for awhile but many of the Wall Street and investor “uber” bulls are finally starting to see this reality. Amusingly, Wedbush’s Dan Ives issued a report in which he lowered his price target on Tesla stock from $270 to $235. He refers to Tesla’s situation as a “code red situation.” Quite frankly, a “code red situation” with regard to a company and its stock price should be regarded as, “sell your shares if you’re long and get out of the way.”

How someone with the credentials to occupy a stock analyst’s seat at a stock brokerage – even if it is just Wedbush, a retail pump and dump mill – can truly believe that Tesla stock is worth the $40 billion market cap at $230/share is truly mind-blowing. As an example, consider just a basic valuation metric. The average automotive car OEM trades at an enterprise to revenue ratio of 0.2x revenues. At the high-end Toyota trades at 0.6x revenues. That’s because Toyota sports a 7.5% operating margin. Tesla’s market cap plus debt is 2.6x revenues, or 13x greater than the industry mean.

It would be useful to use other valuation metrics but Tesla does not generate any profits beyond its highly suspicious gross profit as shown in its SEC filings. It would also be useful to know if Dan Ives owns any Tesla shares. Does he really put his money where is mouth is?

That aside, Tesla shares are going to zero. Tesla stock broke down last week, closing at its lowest price since December 21, 2016. The stock is down $44 (17.5%) since May 6th, when it closed at $255 after completing the stock/convertible deal. It’s down 43% from its $370 close after the “funding secured” incident (August 8, 2018). Today the shares traded as low as $195 before a dead-cat short-cover bounce that has lifted the shares back over $200.

Tesla has likely entered into an irreversible death spiral. The only question at this point is how long it will take for the stock to head below $10 and how long the Company can stay solvent. There are scattered reports that the latest price cuts have stimulated a brief increase in sales of the Model S and X, but nothing has been verified. To be sure, sales of the Model 3 have fallen off a cliff in Europe and China, as an increasing number of potential buyers are made aware of the poor quality and follow-up service of this vehicle

http://news.goldseek.com/GoldSeek/1558443668.php
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Not Just a Trade War, But a Shooting War With China http://forums.silverseek.com/showthread.php?69549-Not-Just-a-Trade-War-But-a-Shooting-War-With-China&goto=newpost Fri, 24 May 2019 09:28:09 GMT *The Chinese came from nothing; only 40 years ago, they had nothing but a billion impoverished peasants. No money. No technology. No power. Today,... The Chinese came from nothing; only 40 years ago, they had nothing but a billion impoverished peasants. No money. No technology. No power. Today, they’re on par with the United States. But, if this trend continues – which it will – their economy will be triple the size of the US economy in 20 years.

Not just a trade war, but a shooting war with the Chinese seems inevitable. Because when tensions build up between states they eventually fight with each other. China is the major rising power. It’s got four times the US population, it’s soon going to be more economically powerful, and it’s going to reach military parity. It’s of a different culture than the US. The US government may figure it’s best to take them out while the balance still favors them. It’s a bit like the situation was with the USSR in the ’80s. They could see they were going into decline, and some Soviet generals figured it was “now or never” for a successful war. Fortunately they collapsed first.

The Chinese don’t like seeing US aircraft carriers off their coast any more than we would like to see Chinese aircraft carriers in the Gulf of Mexico or off Santa Catalina Island.

The last thing that we need is a war with the Chinese. But if something that’s been called the Thucydides Trap is valid – and I think it is – then it’s highly likely. It refers to the Peloponnesian War between Athens and Sparta, at the end of 5th century BC. The Trap is sprung when a reigning power strikes out at the advancing power while they still have a chance of winning.

The American military thinks that a shooting war is inevitable. And it probably is. Why? Well, 5,000 years of history teaches us that it’s better to start a war when you’re more powerful than your enemy rather than wait until they’re more powerful than you. It’s always been this way. The Golden Rule of statecraft is: Do unto others – but do it first. It’s a very dangerous situation.

The US may do something stupid, like fabricate an incident, and launch a preemptive strike against China. Or perhaps things just get out of control, as they did in World War I.

It would make about as much sense as the Peloponnesian War, or World War I. But these things can take on a life of their own

http://news.goldseek.com/LewRockwell/1558358782.php
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Are You Being Tossed Around By The China News? http://forums.silverseek.com/showthread.php?69548-Are-You-Being-Tossed-Around-By-The-China-News&goto=newpost Fri, 24 May 2019 09:24:15 GMT *As I watched and traded the market action over the last several weeks, I witnessed something quite amazing. Yet, this was not the first time I have... As I watched and traded the market action over the last several weeks, I witnessed something quite amazing. Yet, this was not the first time I have seen this.
Each time the market was set up for a smaller change of directional move, a news event or a “tweet” seemed to have come out at almost the exact time we need to see the market change direction.


While many saw the news as affecting the market direction, I saw the news as fitting into the market cycle.

I guess it is a matter of perspective, right?
Well, I am quite certain that many of you are thinking to yourself – “boy, that Avi is really foolish. It was clearer than the nose on my face that the negative China news caused the market to drop, whereas seemingly good China news caused the market to then rally.” And, if one takes a very superficial view of the market, one may come to that conclusion. However, I am attempting to open your minds to a much more mature and accurate perspective on how to view markets.
As Jeff Miller, my esteemed colleague at FATrader.com, noted during the week:

http://news.goldseek.com/GoldSeek/1558333753.php
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Trump’s China Blunder http://forums.silverseek.com/showthread.php?69547-Trump’s-China-Blunder&goto=newpost Fri, 24 May 2019 09:18:53 GMT *General George Custer met his doom charging into a battle he thought he could win, against an opponent he did not understand. Based on his views... General George Custer met his doom charging into a battle he thought he could win, against an opponent he did not understand. Based on his views about the fast-emerging trade war with China, it looks to me that Donald Trump, another blonde with a very high opinion of himself, is charging into an economic version of the Little Bighorn. By mistaking the real nature of international trade, the costs of tariffs, the effects of currency movements, and the supposed ease with which the United States could quickly re-establish itself as a low-cost manufacturer, Trump risks shredding the safety nets that have undergirded the U.S. economy for decades and plunging us into a war we are ill-equipped to fight.

The prevailing view is that a trade war hurts both sides, but in a war of attrition, we can both outpunch and outlast the competition. Many argue that based on its smaller economy, the spotty performance of its stock market, and its vital need for American customers, China is in a weaker position. With our larger economy, surging stock market, strong currency, and prodigious borrowing capacity they believe that the U.S. can pressure China to capitulate, albeit with some short-term pain.

But President Trump goes much further, and asserts that a trade war itself, not just the results that may flow from it, will be a boon to America. He believes that tariffs are currently boosting growth and are restoring our manufacturing prowess. Based on his rhetoric, it's hard to imagine why we would ever want a trade war to end. CNBC's Jim Cramer went one step further, arguing that tariffs may place a small burden on U.S. consumers but Chinese manufacturers will cut prices in order to preserve U.S. market share. In other words, China will throw itself on a grenade meant for us by bearing the cost of the tariffs, and their expenditures will flow directly into U.S. coffers.

Many are also arguing that China's potentially heaviest weapon, its ability to dump more than $1 trillion in U.S. Treasury Bonds onto the open market, is unlikely ever to be used. They argue that such selling could cost China too dearly as it would reduce the value of China's own Treasury holdings and strengthen China's currency against the dollar, thereby further disadvantaging Chinese exporters looking for U.S. market share.

http://news.goldseek.com/EuroCapital/1558098722.php
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GoldSeek Radio Nugget: Louis Navellier http://forums.silverseek.com/showthread.php?69546-GoldSeek-Radio-Nugget-Louis-Navellier&goto=newpost Fri, 24 May 2019 09:14:37 GMT http://email.goldseek.com/lt.php?c=9...05.14.2019.mp3 ]]> SilverSeek.com Articles valerb http://forums.silverseek.com/showthread.php?69546-GoldSeek-Radio-Nugget-Louis-Navellier Central Banks’ Crusade Against Risk http://forums.silverseek.com/showthread.php?69545-Central-Banks’-Crusade-Against-Risk&goto=newpost Fri, 24 May 2019 09:12:19 GMT *Since the latest the crisis in 2008/2009, central banks around the world have been doing their best to expel risks from financial markets. By... Since the latest the crisis in 2008/2009, central banks around the world have been doing their best to expel risks from financial markets. By lowering interest rates, fixing them at extremely low levels, or issuing more credit and money, monetary policymakers make sure that ailing borrowers are kept afloat. In fact, central banks have put a “safety net” under the economies and the financial markets in particular. As it seems, this measure has been working quite effectively over the last ten years or so.

Investors do no longer fear that big borrowers – be it big governments or big banks and big corporates – could default, as evidenced by the low credit spread environment. Liquidity in basically all important credit market segments is high, and borrowers experience no trouble rolling over their maturing debt. What is more, stock market valuations have continued to increase, significantly propped up by central banks’ easy monetary policy. For low interest rates help drive stock prices and their valuation levels up.

Artificially suppressed interest rates lead to higher present values of firms’ discounted future profits. Furthermore, the decline in credit costs tends to increase corporate profits, thereby also boosting stock prices and their valuations. By no means less important, the low interest rate regime has caused firms’ capital costs to go down, encouraging additional investment activity, which is stoking investor optimism and feeding a buoyant stock market.

http://news.goldseek.com/LewRockwell/1558014158.php
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Trade Wars and Other Black Swan Threats to Your Investments http://forums.silverseek.com/showthread.php?69544-Trade-Wars-and-Other-Black-Swan-Threats-to-Your-Investments&goto=newpost Fri, 24 May 2019 09:10:08 GMT *An unexpected news event caused the stock market to plunge over the past week, with the Dow Jones Industrials losing several hundred points. Stocks... An unexpected news event caused the stock market to plunge over the past week, with the Dow Jones Industrials losing several hundred points. Stocks had been crawling back up toward new highs last month in low volatility trading…until suddenly, a black swan arrived.

According to Investopedia, “A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict.”

In the current era, a black swan can arrive by way of a simple tweet.

President Donald Trump took to Twitter to announce his administration would impose new tariffs on $200 billion in Chinese goods as soon as Friday while threatening an additional 25% levy on Chinese exports “shortly.”

“Trump’s tweets initially sent the market reeling,” reported CNBC. Added Bank of America, “The latest escalation of the trade war was completely unexpected... Fasten your seatbelt.”

And then, just yesterday, China retaliated with some new tariffs of its own on U.S. agricultural exports – sending the stock market down again.

In the big picture, the current stock market selloff may not amount to much. It doesn’t appear to be on par with other infamous black swan events such as the 1987 stock market crash. Then again, the current selling could just be the start of a brutal bear market that makes the 2008 financial crisis look mild by comparison.

Markets are inherently unpredictable. They can trend calmly, lull investors into complacency, then turn on a dime and become unstable for reasons nobody could have anticipated.

By their nature, black swan events are difficult to prepare for. They can come in the form of natural disasters – or technological, political, or financial disasters.

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<![CDATA[May News & Views: “Such a precarious time in history”]]> http://forums.silverseek.com/showthread.php?69543-May-News-amp-Views-“Such-a-precarious-time-in-history”&goto=newpost Fri, 24 May 2019 09:07:21 GMT *In a recent edition of Credit Bubble Bulletin, Doug Noland, the long-time critic of contemporary monetary policy, writes about the odd times in... In a recent edition of Credit Bubble Bulletin, Doug Noland, the long-time critic of contemporary monetary policy, writes about the odd times in which we live from a financial perspective. “Such a precarious time in history,” he laments. “So much crazy talk has drowned out the reasonable. Deficits don’t matter, so why not a trillion or two for infrastructure? Our federal government posted a $691 billion deficit through the first six months of the fiscal year – running 15% above the year-ago level. Yet no amount of supply will ever impact Treasury prices – period. A Federal Reserve governor nominee taking a shot at ‘growth phobiacs’ within the Fed’s ‘temple of secrecy’, while saying growth can easily reach 3 to 4% (5% might be a ‘stretch’). Larry Kudlow saying the Fed might not raise rates again during his lifetime. Little wonder highly speculative global markets have become obsessed with the plausible.”

In that essay, Noland goes on to note having been influenced by the highly regarded Dr. Kurt Richebacher (1918-2007). Although he actually worked directly with the Austrian economist/banker, my connection came only as an appreciative reader of the Richebacher Letter (in pre-internet times) and his Wall Street Journal editorials. Richebacher concerned himself regularly with the interplay between financial market credit leverage, ordinary investors and the real economy. Please see International Precious Metals & Commodities Fair – Munich, Germany Transcript of Dr. Kurt Richebächer’s Lecture (USAGOLD, November 19, 2005). In re-reading that lecture, I am struck with how much of Richebacher’s analysis at the time can be applied to the present and a very similar set of circumstances. Now that Noland has acknowledged Richebacher’s influence, it explains to a large degree why his writings – like the snippet above – strike a chord with those of us concerned with the financialization of the markets.

In this context, we reproduce at the top John Exter’s famed Inverted Pyramid of Global Liquidity. Exter, who was an economist at the Federal Reserve and highly-respected analyst, made a fortune by purchasing gold just before Richard Nixon’s devaluation of the dollar in 1971 and its rapid ascent in the ensuing decade.

“His pyramid,” explains Capital Wealth Advisor’s Lewis Johnson, “stands upon its apex of gold, which has no counter-party risk nor credit risk and is very liquid. As you work higher into the pyramid, the assets get progressively less creditworthy and less liquid. For instance, paper money here means cash, which is recognized everywhere but is ultimately dependent upon the creditworthiness of the U.S. government. Farther up the pyramid, we find longer-dated U.S. government debt, which like cash is dependent upon the full faith and credit of the U.S. government – but on a longer time horizon. The next level is debt of municipals and corporations, whose value is more safely assured than that of more junior claims, such as investments in stocks, the junior tranche of a corporation’s capital structure. A rough estimate of the global liquid financial markets would place their value close to $100 trillion. This number grows further still as less liquid assets are added, such as private businesses, real estate and ultimately bank derivatives, the largest and murkiest of all assets.”

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Did Trump Tank Trade Talks Deliberately? http://forums.silverseek.com/showthread.php?69542-Did-Trump-Tank-Trade-Talks-Deliberately&goto=newpost Fri, 24 May 2019 09:02:21 GMT *Was it President Trump’s intention all along that trade talks with China fail? That’s the contention of ‘Farmer,’ a long-time subscriber who lives... Was it President Trump’s intention all along that trade talks with China fail? That’s the contention of ‘Farmer,’ a long-time subscriber who lives in Nairobi. He posted earlier today as follows in the Coffee House, a chat room that runs alongside the Rick’s Picks Trading Room:

“Just for perspective, the average dollar volume of imports being bought from Russia is only $18 billion during the past five years. That’s just 4% of the goods imported from China. Why? Because after decades as a nuclear cold war adversary, it was seen as ill advised to be running massive deficits with a country we were threatened by. It is not that Russia could not supply goods cheaply that American consumers needed. They have always been technologically advanced. But if they had been favored over China with billions of dollars of orders in hand, they would be the most powerful nation in Eurasia today.

“The trade-deal narrative may be little more that feathers and sawdust. We should be considering that the Administration has no intention of ever writing a deal with China and that it is no longer acceptable in the strategy room to keep flooding China with dollars. There are a lot of alternatives out there. Since Mr. Xi has been so generous spreading dollars around the globe and buying new friends, then maybe it is indeed time to turn off the spigots. Half a trillion goes a long way.

From Whom Would You Buy?

“So if you are faced with being a generous trade-supporter, who would you buy from? Would it be the country that seeks to dethrone you, or would it be with a hundred other nations champing at the bit to get a piece of America’s business? Maybe it’s time to buy back some of those friends.

“The Chinese have completely underestimated Donald Trump. He walked them right into a deal he knew they would refuse, and now they doubled down and retaliated. What they should have done is signed up, pronto, but now the chance is squandered and it will be impossible to walk it back. I think that was the administration’s agenda all along. Just like with Russia. How long will it really take for Walmart to switch suppliers?

Dollar Will Strengthen

Unfortunately, two predictable things will now happen. China will face a credit crisis and the dollar will likely strengthen. Dangerous times for all of us. it’s not hard to imagine all the new risks that come with turning off the trade taps (if that is the real agenda). We can’t know for certain of course, but Trump is certainly playing from a position of strength. He picked a fight he is going to win. The charts already say the U.S. trade deficit will start falling, so it’s baked in the cake. An added strategic benefit is that Belt & Road [China’s strategy of building infrastructure to facilitate trade growth with Europe, Asia, Latin America, Africa and the Middle East] will be set back a decade or more. We will see if the Chinese are clever enough to see what just happened and start playing ball, or if pride will be their downfall (I think pride will win out). The problem I see is that China can ill afford to monetize all the debt that has been created. We may be about to enter a critical period of Asian corporate bankruptcies.

“The Chinese will never bow to Imperial America. They would rather eat locusts and grass first. But with tariffs this high already, the momentum alone could do irreparable damage medium-term. On that note, the threat from China to not buy U.S. grains is just empty words. Who would supply them instead? It’s just the ‘five eyes’ and Ukraine. So they had best play cards better because the big alternative vendors are Canada and Australia.

China Not So Smart

“Everyone will be scrambling. Last one to ink a new deal with an alternate supplier is going to be left holding the bag. Twenty five percent is more than the profit margin. Importers simply have no choice now but to seek new supply. And they must act quickly. It’s really interesting how fast this whole narrative changed when China retaliated. Such a blunder on their part. Why do we give them so much credit for brains?”
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Your Pension May Be Monetized http://forums.silverseek.com/showthread.php?69541-Your-Pension-May-Be-Monetized&goto=newpost Fri, 24 May 2019 08:59:50 GMT * Underfunded Future •Pension Fund Underfunding Is a Local Problem •Make the Children Pay
Underfunded Future


•Pension Fund Underfunding Is a Local Problem


•Make the Children Pay


•The Strategic Investment Conference and Possible Recessions


One difficulty in analyzing our economic future is the sheer number of potential crises. When so much could go wrong (and really right, when the exponential technologies I foresee get here), it’s hard to isolate, let alone navigate, the real dangers. We are tempted to ignore them all. Ignoring them is usually the right response, too. We can “Muddle Through” almost anything.

But muddling through isn’t the same as smooth sailing. It’s difficult, unpleasant, and often keeps you from looking for better opportunities. Then there are times when you can’t even muddle through. Instead, you find yourself emotionally at a dead stop or even going backwards. When surviving the storm is your focus, taking those “blood in the streets” buying opportunities is hard.

Which leads to this week’s letter. Almost every day I read scores of finance and economic newsletters, websites, articles, and books. A few articles on pensions hit my inbox this week and pursuing them led me to today’s topic.

But dear gods, I can remember writing a decade ago that public pension funds were $2 trillion underfunded and getting worse. More than one person told me that couldn’t be right. They were correct: It was actually much worse. (See, I’m an optimist!)

Two years ago I wrote that Disappearing Pensions are The Crisis We Can’t Muddle Through. Nothing since then has changed my mind. In fact, failure at all levels to even begin solving the problem is making it worse. The latest estimates, as we will see, suggest that it has gotten $2 trillion or more worse in just a few years.

Note we are talking here about a specific kind of pension: defined benefit plans, usually those sponsored by state and local governments, labor unions, and a dwindling number of private businesses. Many sponsors haven’t set aside the assets needed to pay the benefits they’ve promised to current and future retirees. They can delay the inevitable for a long time but not forever. And “forever” is just around the corner.

As we will see below, the numbers are large enough to make this a problem for everyone, even those without affected pensions. The problem is “solvable”… but the solutions will be problems in themselves.

http://news.goldseek.com/MillenniumW...1557664173.php
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