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February 21, 2019 | Finally, Asset Forfeiture Is Ruled Unconstitutional — Sort Of

Among all the many things governments do that seem to violate the Constitution — not to mention common sense and basic fairness – asset forfeiture stands out. Believe it or not, states and cities now partially fund themselves by arresting people, taking their stuff and then failing to return said stuff after deciding not to […]

February 18, 2019 | Hello Old Friend…Gold Nears $1,350 Resistance That Has Repelled It Four Times In 5 Years

The past five years have been baffling for gold bugs. In an environment of massive central bank money creation, rising government deficits and a populist takeover of many countries’ political systems – all of which should be great for safe haven assets – gold has spiked to around $1,350 four times, only to be smacked […]

February 16, 2019 | Doug Noland: Central Banks Are “Hostages Of Market Bubbles”

Doug Noland’s weekly Credit Bubble Bulletin is always required reading. The latest – befitting the amazing things that have happened lately – is more necessary than usual. But at 10,000 words it’s also a lot longer than usual. So while everyone should definitely read the whole thing, here are some excerpts to get you started: […]

February 14, 2019 | Fed Tightening Is Over: Markets Now Expect Cuts In 2019

People who assumed the Fed, along with the rest of the government, would cave the minute the financial markets got a little choppy turned out to be right. A couple of bad months and the “normalization” of both interest rates and the Fed’s balance sheet have stopped cold. Now the markets expect falling rates and […]

February 9, 2019 | Ocean Shipping Rates Plunge: Just A Blip Or The End Of Globalization?

The Baltic Dry Index represents the cost of renting an ocean-going container ship to move goods from, say, Chinese factories to the Port of Los Angeles. The more stuff being made and sold, the higher the demand for such ships, and thus the higher the price to rent one. And vice versa. This is definitely […]

February 4, 2019 | What Blows Up First? Part 6: “Almost Junk” Bonds

The key insight of the Austrian School of Economics (maybe the key insight of ALL economics) is that the amount you borrow matters, but so does the use to which you put the money. A case in point is US corporate debt, which has changed structurally lately in very scary ways. The short version of […]

February 2, 2019 | No Longer The Luckiest Generation: Boomer Finances Start To Roll Over

We Baby Boomers timed it perfectly. We came of age during in an era of plentiful jobs and relatively high wages. Public pensions were generous. Stock, bond and home prices were low, and have since risen strongly, enriching anyone who managed to save regularly. College was (by current standards) insanely cheap, allowing us to upgrade […]

January 31, 2019 | Sudden Sentiment Shift: The Mainstream Rediscovers Precious Metals

It’s amazing what a few weeks of outperformance will do for an asset class. Gold and silver, after being pretty much ignored for the past few years, are now the shiny new toys of the investment world. From just the past couple of days: Highest Central Bank Buying in 50 Years Drives Growth in Gold […]

January 27, 2019 | If You Could Design A Perfect World For Gold…

Are you sick of your gold just sitting there when it was supposed to have long since made you rich? Have you been fantasizing about a world in which your gold really does make you rich? If so you’re in good – or at least numerous – company. So let’s sketch out such a world. […]

January 21, 2019 | This Is New: Governments Ramp Up Spending IN ANTICIPATION Of A Slowdown

The business cycle has its stages, and they’re usually both predictable and logical. For example, governments tend to generate a lot of tax revenue late in an expansion as more people get jobs and start paying income taxes and rising stock prices generate big capital gains. Meanwhile, less has to be spent on social safety […]

January 17, 2019 | Gold Is Up Lately. Why Does It Feel So Disappointing?

Since December gold (light blue line) has outperformed the average stock (dark blue) by a nice margin. So why does this feel like such a let-down? Because the stars were aligned for a much bigger move. The structure of the late 2018 futures market had speculators historically short – which normally portends a big price […]

January 12, 2019 | And The Verbal Part Of The Civil War Begins

With the election of Donald Trump, the US right let its id off the leash. Now pretty much everything conservatives have thought but not said is finding its way to Facebook, Twitter, and the evening news. So it’s no surprise that the left, wildly envious of conservatives’ newfound rhetorical freedom, have decided that what’s good […]

January 9, 2019 | Recession And Stocks In Free-Fall: Michael Pento’s 2019

Money manager Michael Pento has been bearish on both stocks and bonds for some time. 2019 is the year, he says, when the big crash finally arrives. Some Predictions for 2019 Bond Yields Continue to Fall in First Half of Year The bond bubble continues to build and become a dagger over the worldwide economy […]

January 1, 2019 | Three Things That Will Definitely Happen In 2019

Much about 2019 is uncertain. But a few things are pretty much guaranteed, including the following: Government debt will rise at an accelerating rate Like a life-long dieter who finally gives up and decides to eat himself to death, the US is now committed to trillion-dollar deficits for as far as the eye can see. […]

December 30, 2018 | Gold Mining Stocks Are Going Up Faster Than Gold

The past couple of years have been brutal for precious metals mining stocks. Gold and silver went down a little while the miners went down a lot – four times as much to be exact. That’s painful but not surprising. The miners, being in effect options on the underlying metals, tend to be a lot […]

December 26, 2018 | California Is In Great Financial Shape – And Headed For An Epic Crisis

California Governor Jerry Brown inherited a $27 billion deficit from Arnold Schwarzenegger eight years ago. This month he’s leaving his successor a $13.8 billion surplus and a $14.5 billion rainy day fund balance. Pretty good right? Approximately 48 other governors would kill for those numbers. Unfortunately it’s all a mirage. California, as home to Silicon […]

December 18, 2018 | Michael Pento: Finally, Corporate Stock Buybacks Blow Up

The last few years of the Everything Bubble were driven by the ultimate dumb money: corporations borrowing to buy back their stock at record high prices. A whole generation of CEOs and CFOs were able to pad both their reputations and their year-end bonuses this way while, it seemed, blatantly screwing over their employees and […]

December 16, 2018 | All (Political) Roads Lead To Massively Higher Government Spending

The past few years have seen more than the usual amount of political upheaval. But, interestingly, most regime changes have resulted in pretty much the same thing: Higher government spending and bigger deficits. Apparently the only “reforms” today’s voters will accept – which is to say the only actions that don’t get a leader kicked […]

December 14, 2018 | The Yield Curve Flattens And Bank Stocks Plunge. Here’s The Connection – And The Prediction

Despite all the ominous press being devoted to the soon-to-be-inverted yield curve, it’s not always clear why such a thing matters. In other words, how, exactly does a line on a graph slipping below zero translate into a recession and equities bear market, with all the turmoil that those things imply? The answer (which is […]

December 11, 2018 | The World’s Biggest Hedge Fund Is Getting Whacked, And Why “Moneyness” Matters

A few years ago the Swiss National Bank (SNB) – which traditionally held “monetary assets” like government bonds, cash and gold to back up the Swiss franc — decided to branch out into common stocks. This was a departure, but for a while a brilliant one. The SNB loaded up on Big Tech like Apple, […]

December 9, 2018 | Yet Another Trillion-Dollar Unfunded Liability: WHY California Is Burning

The apocalyptic fires that hit California last month have left observers scratching their heads and wondering how destruction on that scale could be possible – and how much it will cost in the future if the causes aren’t addressed immediately. This morning’s Wall Street Journal concludes that 1) the problems aren’t being addressed and 2) […]

December 7, 2018 | Why We’re Ungovernable, Part 17: In Latin America, Soaring Population + Soaring Debt = “Brutal Justice

There are two ways of looking at the intersection of debt and population. One way says that if debt is rising population should also rise to allow future workers to pay for the retirement of today’s. More people thus make debt easier to manage. The other point of view is that debt and population soaring […]

December 4, 2018 | Empty Words Are Failing. A Timeline For What Comes Next

A quick recap of the past couple of months: Stocks plunge. The politicians, bureaucrats and bankers who depend on artificially-elevated financial asset prices start to panic. The Fed announces that maybe it won’t have to raise interest rates any more, and the president announces a temporary cease-fire in the trade war with China. The markets […]

December 2, 2018 | Why We’re Ungovernable, Part 16: France On Fire

Back in 2017, when some countries were handing power to populists promising variations of “drain the swamp,” France went for continuity with Emmanuel Macron, a young, moderate-sounding technocrat from the world of finance who promised to modernize the country without threatening the elites, the welfare state or the bureaucracy. Fast forward a couple of years […]

November 28, 2018 | Home Sales Plunge, Trade Deficit Spikes, Fed Blinks

Looks like we just hit an inflection point. So far this morning: U.S. new home sales drop to more than 2-1/2-year low (Reuters) – Sales of new U.S. single-family homes tumbled to a more than 2-1/2-year low in October amid sharp declines in all four regions, further evidence that higher mortgage rates were hurting the […]

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