Rob Arnott - We Are Now In A Very Dangerous Environment

"Today King World News interviewed the man who oversees more than $130 billion, and who has won an unprecedented six Graham & Dodd Awards. Rob Arnott, Chairman of Research Affiliates, spoke with KWN about what is fueling the global markets, and also warned investors we are in a, “... very dangerous environment.” Here is what Arnott had to say: “The main thing that is pushing the market higher is liquidity. You’ve got the Fed monetizing the nation’s debt, buying practically all of the new bond issuance by the federal government.”

 

Rob Arnott continues:

“With the Fed monetizing the debt they run a risk of debasing the currency, but meanwhile that money has to go somewhere. People don’t want to put the money to work in start-ups and developing new enterprises. So what we have is the effort to prop things up is really just propping up the stock market, not the macro economy.

It’s wonderful when you see this kind of thing happening to just say, ‘Well, I’m going to be along for the ride and then I will get out of harms way before things unravel.’ But how do you do that?...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/14_Rob_Arnott_-_We_Are_Now_In_A_Very_Dangerous_Environment.html

Risky Repercussions from Cyprus

"Nicolas Véron says the discussion about forcing losses on Cyprus bank depositors could spread fears of bank runs elsewhere in Europe..."

at http://www.piie.com/publications/interviews/interview.cfm?ResearchID=2345&utm_source=feedburner&utm_medium=%24%7Bfeed%7D&utm_campaign=Feed%3A+%24%7Bupdate%7D+%28%24%7BPIIE+Update%7D%29

Mark-To-Market Manipulation Hides $90 Billion Losses For UK Banks

"Some have attributed the resurrection of the financial markets (or more appropriately the banks) from the March 2009 lows to the IASB/FASB changes to factual to fantasy accounting. The Telegraph reports today that from PIRC's and the Bank of England's Financial Policy Committee that while banker bonuses continue to rise (for now), 'hidden' losses among UK banks could total GBP60 Billion (USD 90 Billion). HSBC topped the list with GBP10.4 Billion in bad debts that have yet to be written off and while the 'accounting' bodies are suggesting they will address criticism of this farce, as one analyst notes, they "can still make unprofitable lending appear profitable." Regulators expect to hear plans from lenders on how they intend to fill these holes before the end of the month to coincide either with the FPC’s meeting on March 19 or a statement scheduled for March 27. While outright recaps are unlikely, banks are expected to
restructure and set out plans to raise their capital levels over the next
couple of years. More fantasy..."

at http://www.zerohedge.com/news/2013-03-12/mark-market-manipulation-hides-90-billion-losses-uk-banks

Marc Faber Worried about a Deflationary Collapse

"The March 2013 Monthly Market Commentary (MMC) was published on the MMC subscribers only section and emailed on 1-Mar-2013.

"I do not believe in a deflationary Collapse but I am afraid of it"

I worry about the time when the current asset inflation will give way to a serious asset deflation, which will inevitably happen sometime in the future. As an observer of markets I am, therefore, concerned that the decline in gold prices could be telling us that we are about to enter a period of asset deflation.

I should like to make two points very clear. I am not sure when the asset deflation will start. Most likely, different asset classes will deflate at different times and with different intensity. The second point I wanted to make is the following. In a deflationary environment (whenever it will happen), financial assets (stocks, government and corporate bonds especially high yield bonds) would likely be the most vulnerable assets. In fact, in a deflationary collapse, I would envision money to flow into a sound currency and move out of “funny” paper monies. Therefore, I continue recommending the gradual accumulation of physical gold.

Similarly, most societies die because of their ill-conceived fiscal and monetary policies, and not because of their economic problems...."

at  http://marcfaberchannel.blogspot.com/2013/03/marc-faber-worried-about-deflationary_12.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28Marc+Faber+Blog%29

Housing Market-It’s all Manipulation-Fabian Calvo

"Real Estate investor Fabian Calvo says, “Trust me; there are enough troubled assets for the Fed to be buying much more than $40 billion a month. . . It’s all about manipulation.” Calvo says, “In essence, they are creating another bubble. I believe in 24 to 48 months, they are going to pull the rug out again, and we’ll see prices go down when rates go up.” Calvo predicts, “The Fed balance sheet will likely be $5 trillion in toxic assets by the end of 2014.” Calvo thinks what is going on behind the scenes will one day come to light, and it won’t be pretty. Calvo thinks the mortgage rate forecast will eventually go up, but the Fed will suppress rates as long as it can. Calvo says, “It’s kind of like Enron. When it falls apart, then you realize what level of corruption and deceit was really taking place. . . . It’s a trillion times worse than Enron.” Join Greg Hunter as he goes One-on-One with Fabian Calvo of TheNoteHouse.us..."

at http://usawatchdog.com/housing-market-its-all-manipulation-fabian-calvo/

Silver To Eclipse $100 On Skyrocketing Chinese Demand

"With gold and silver rebounding today, acclaimed money manager Stephen Leeb told King World News that silver is now setting up to eclipse $100. “Silver under $30 is a joke,” Leeb said. Leeb believes that China, which has been the primary driver in the gold market, is now going to push silver over $100 as their consumption of silver is poised to skyrocket. Here is what Leeb had to say in this powerful, exclusive interview: “Yesterday headlines were saying there is massive demand for photovoltaics in Japan and China. There is also massive demand for silver in the Middle-East for this type of energy infrastructure.”

 

Stephen Leeb continues:

“King World News was way ahead of the curve on this because I have been discussing photovoltaics here for quite some time and this is just now starting to hit the mainstream media a little bit. But another circumstance that is of great concern in the Middle-East is the water tables have really crashed. They can’t effectively drill for water anymore.

So in the Middle-East they are going to have to go for desalinization of the ocean and guess what that takes? That takes a lot of silver for photovoltaics energy infrastructure...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/12_Silver_To_Eclipse_$100_On_Skyrocketing_Chinese_Demand.html

Presenting The Currence Crises, Devaluations And Regime Changes Since The Collapse Of The Gold Standard

"One of the often repeated "truisms" of modern economics, is that the advent of central banking, and the end of the gold standard ushered in a far more stable, safe and secure financial system. Facts notwithstanding (because hard as we try, we can't find a historic episode where the entire developed world had to coordinate to fund, guarantee and backstop a $30+ trillion global bail out - using even more money created out of thin air, i.e., debt - to prevent the nearly $1 quadrillion derivative complex from collapsing, not to mention the failure of every single modern financial institution, during the gold standard), the reality is just slightly different. As the following table from Bloomberg's Joseph Brusuelas shows, modern "stabilty" is certainly in the eye of the beholder, in this case manifesting itself in countless periods of uni- and multi-lateral currency devaluation, beggar thy neighbor, and currency, trade, and various other types of war.

Here is Brusuelas' personal take on the past 80 years of "stable" central banking and floating exchange rate history:

Tensions between policymakers due to volatility in foreign-exchange markets pale in comparison to those induced by the policies of the Great Depression. That period saw tariff and non-tariff barriers imposed by countries attempting to arrest the economic slide that characterized the global economy in 1929-1939. The coordination between the large global central banks that are engaging in competitive QE has avoided the outbreak of protectionism that was observed during the 1930s. In Thucydides’ History of the Peloponnesian War, he stated: “The strong do what they can and the weak suffer what they must.” As the large central banks attempt to boost their economies via QE, small and developing countries will likely have to adjust by accepting faster inflation or accommodate to these policy changes by accepting currency appreciation.

Currency warfare summary table:



Keep an eye on the 2007-??? line item. If history is any indication, what follows next will hardly be pleasant for anyone involved.

Source: Bloomberg Brief"

at http://www.zerohedge.com/news/2013-03-11/presenting-currence-crises-devaluations-and-regime-changes-collapse-gold-standard

Embry - I Believe Global Silver Stockpiles Are Now Exhausted

"...Embry had this to say regarding silver: “It’s astounding that the price of silver has fallen from $35 to $28 with the nature of the tight physical market. I think silver is in enormously short supply.

The combination of the industrial and medical uses, in combination with silver’s monetary attributes, is going to lead to the demand overwhelming available mine supply. We also have the massive short positions in silver and there is very little inventory available. The JP Morgan silver short position is the primary reason why the silver price continues to be held at levels that are unrealistically low..."

 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/11_Embry_-_I_Believe_Global_Silver_Stockpiles_Are_Now_Exhausted.html

Nouriel Roubini : We Risk QE Wars and Stagnation

"Most observers regard unconventional monetary policies such as quantitative easing (QE) as necessary to jump-start growth in today's anemic economies. But questions about the effectiveness and risks of QE have begun to multiply as well. In particular, 10 potential costs associated with such policies merit attention.
First, while a purely "Austrian" response (that is, austerity) to bursting asset and credit bubbles may lead to a depression, QE policies that postpone the necessary private- and public-sector deleveraging for too long may create an army of zombies: zombie financial institutions, zombie households and firms, and, in the end, zombie governments. So, somewhere between the Austrian and Keynesian extremes, QE needs to be phased out over time. - excerpt from an article in The Guardia..."

at http://nourielroubini.blogspot.com/2013/03/nouriel-roubini-we-risk-qe-wars-and.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NourielRoubiniBlog+%28Nouriel+Roubini+Blog%29

Gold & Silver Keys To Currency Depreciation & Economic Chaos

"Today Michael Pento writes for King World News to explain exactly why “Investors need to own precious metals now more than ever as a means of protecting their portfolios during times of currency depreciation and economic chaos.” Below is Pento’s tremendous piece:

“When central bankers dedicate their existence to re-inflating asset bubbles, it shouldn’t at all be a surprise to investors that they eventually achieve success. Ben Bernanke has aggressively attempted to prop up the real estate and equity markets since 2008. His efforts to increase the broader money supply and create inflation have finally supported home prices, sent the Dow Jones Industrial average to a record nominal high and propelled the bond bubble to dizzying heights...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/9_Gold_%26_Silver_Keys_To_Currency_Depreciation_%26_Economic_Chaos.html

Nouriel Roubini: Italy a Tsunami Risk

""In Italy there's the beginning of a political storm. The result of the Italian elections signal that the majority of people are against austerity and not just in Italy also in Lisbon half a million people were in the streets and 25 percent unemployment in Greece and Spain, 50 percent amongst young people and there is restlessness," Roubini told CNBC in an interview today..."

at  http://nourielroubini.blogspot.com/2013/03/nouriel-roubini-italy-tsunami-risk.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NourielRoubiniBlog+%28Nouriel+Roubini+Blog%29

China Preparing To Impose Bretton Woods II Gold Standard

"With continued volatility in the gold and silver markets, today acclaimed money manager Stephen Leeb told King World News the Chinese accumulated a remarkable 1,500 tons of gold last year, and they are preparing to demand a second Bretton Woods type meeting. This is a stunning interview because it lays out how the bulls will win the gold war, and how China will force that victory. Here is what Leeb had to say in this exclusive interview, which is his most powerful ever: “The flow of power and gold is going from West to East. China may have accumulated a staggering 1,500 tons of gold last year alone. China’s growth is now picking up steam as well. What is really stunning is how much the yuan has increased in terms of international transactions.”

Stephen Leeb continues:

“The usage of the yuan in international transactions has been increasing at an unbelievable 170% per year. That’s how fast the yuan has been increasing in terms of international transactions. So goes the gold, so goes the power, and you can see it in the prominence the yuan is gaining.

The Chinese definitely have a plan here and that is to get control of gold....

“We are headed for another Bretton Woods. It is unsustainable for currencies to continue to lose their purchasing power while median incomes, especially in the US, continue to go down in the West.

At a certain point the Chinese will say, ‘It’s time to have another equivalent of Bretton Woods.’ That will challenge the BIS, and quite possibly lead to some sort of gold standard. What Bretton Woods did was reestablish the gold standard as the Second World War was coming to an end..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/7_China_Preparing_To_Impose_Bretton_Woods_II_Gold_Standard.html

Biggest Wealth On Planet Now Entering Gold & Silver Markets

"Today one of the wealthiest people in the financial world spoke with King World News about the shocking things that he witnessed at PDAC, and how the biggest money on the planet is now looking to get into the gold and silver sector. Regarding PDAC he stated, “What was of interest to me was the level of panic present at the place.” Rule also let KWN readers know invest to make fortunes right now in the gold and silver markets..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/7_Biggest_Wealth_On_Planet_Now_Entering_Gold_%26_Silver_Markets.html

Silver & Gold To Spike As Oil To Surge A Stunning 63% - 82%

"Despite the recent wild trading action in gold, silver, and oil, today top Citi analyst Tom Fitzpatrick issued a bullish call for these three key markets and put together several fantastic charts illustrating the reasons for his bullish call. Fitzpatrick believes that the price of oil is set to surge a stunning 63% to 82%, while gold is set to advance $270, and silver back to its all-time highs..."

at   http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/6_Silver_%26_Gold_To_Spike_As_Oil_To_Surge_A_Stunning_63_-_82.html

Embry - Massive Silver Short Positions To Force COMEX Default

"Today John Embry told King World News that in the silver market there will be a force majeure on the COMEX because of the massive short positions held by JP Morgan. But first, here is what Embry, who is chief investment strategist at Sprott Asset Management, had to say regarding gold: “I’ve been following the gold scene for 30 years, and I believe it’s been subject to a suppression scheme for probably the last 25 years. But I have never seen anything quite like what’s gone on lately.”

John Embry continues:

“The question I ask myself is, ‘What is going on?’ The very same factors that have driven the Dow to all-time highs, which is basically just excess liquidity in the system, should, in a real world, have driven gold and silver to record highs. 

Instead they are both under enormous downside pressure in the paper markets, despite the fact that the physical markets remain very firm....

“Then the question I ask myself is, ‘What is bothering the powers that be to the extent that they would do this, and become so blatant that anybody with an IQ over (that of) a geranium can see what’s going on?”

Eric King: “John, what do you think that reason is?”

Embry: “I think there are one of two reasons really. The pat reason is that the system is in such tough shape, and they are trying to sell the public on the fact that it isn’t. Therefore, the canary’s in the coal mine, gold and silver, which basically tip the public off that things are bad if they are rising, they have to be kept under control.

But I think there is another factor: I do believe the powers that be are clever enough to know what’s coming and that is going to be a massive explosion in the gold and silver prices before this is over. And probably sooner rather than later.

So the people that have been front and center in the suppression, the bullion banks, I think are trying to position themselves differently so they are not going to be terribly vulnerable when the price explodes. And it’s working. You see the amazing shift in the Commitment of Traders Report, where more and more of the speculators are going short, and the commercials are getting the opportunity to cover. So I think that might be a motivation too.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/6_Embry_-_Massive_Silver_Short_Positions_To_Force_COMEX_Default.html

China Can Now Buy World’s Gold Reserves Twice Over

"For many years King World News has been reporting on China’s insatiable appetite for gold. Well, amazingly China’s foreign currency reserves can now buy the entire world’s gold supply twice over. The stunning graphic below depicts this truly astonishing fact.

 

The graph also depicts the combined gold reserves of India, Russia and Brazil. What is fascinating about this 10-year chart is not only the fact that China can buy the entire world’s gold reserves twice over, but also to see the explosion in China’s reserves. According to Bloomberg, China’s foreign currency reserves have surged more than 700% in just the last 9 years alone. This chart illustrates a key point and a very frightening one for the gold bears, that China’s demand for gold will remain insatiable for many, many years to come:

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/4_China_Can_Now_Buy_Worlds_Gold_Reserves_Twice_Over.html

12 Things That Just Happened That Show The Next Wave Of The Economic Collapse Is Almost Here

"The following are 12 things that just happened that show the next wave of the economic collapse is almost here...
#1 According to TrimTab's CEO Charles Biderman, corporate insider purchases of stock have hit an all-time low, and the ratio of corporate insider selling to corporate insider buying has now reached an astounding 50 to 1....

While retail is being told to buy-buy-buy, Biderman exclaims that "insiders at U.S. companies have bought the least amount of shares in any one month," and that the ratio of insider selling to buying is now 50-to-1 - a monthly record.

#2 On Friday we learned that personal income in the United States experienced its largest one month decline in 20 years...

Personal income decreased by $505.5 billion in January, or 3.6%, compared to December (on a seasonally adjusted and annualized basis). That's the most dramatic decline since January 1993, according to the Commerce Department.

#3 In a stunning move, Michigan Governor Rick Snyder says that he will appoint an emergency financial manager to take care of Detroit's financial affairs...

Snyder, 54, took a step he avoided a year ago, empowering an emergency financial manager who can sweep aside union contracts, sell municipal assets, restructure services and reorder finances. He announced the move yesterday at a public meeting in Detroit.

If this does not work, Detroit will almost certainly have to declare bankruptcy. If that happens, it will be the largest municipal bankruptcy in U.S. history.
#4 On Friday it was announced that the unemployment rate in Italy had risen to 11.7 percent. That was a huge jump from 11.3 percent the previous month, and Italy now has the highest unemployment rate that it has experienced in 21 years.
#5 The youth unemployment rate in Italy has risen to a new all-time record high of 38.7 percent.
#6 On Friday it was announced that the unemployment rate in the eurozone as a whole had just hit a brand new record high of 11.9 percent.
#7 On Friday it was announced that the unemployment rate in Greece has now reached 27 percent, and it is being projected that it will reach 30 percent by the end of the year.
#8 The youth unemployment rate in Greece is now an almost unbelievable 59.4 percent.
#9 On Saturday, hundreds of thousands of protesters filled the streets of Lisbon and other Portuguese cities to protest the austerity measures that are being imposed upon them. It was reportedly the largest protest in the history of Portugal.
#10 According to Goldman Sachs, bank deposits declined all over Europe during the month of January.
#11 Over the weekend, the deputy governor of China's central bank declared that China is prepared for a "currency war"..."

at http://theeconomiccollapseblog.com/archives/12-things-that-just-happened-that-show-the-next-wave-of-the-economic-collapse-is-almost-here

China "Fully Prepared for Currency War" Says China's Central Bank Deputy Governor

"Given the world's central bankers are already in a currency war, a policy statement made by a deputy-governor of China's central bank should not come as a surprise (except for the fact it was publicly and bluntly stated).

Please consider China well-prepared for currency war: official.

China is fully prepared for a looming currency war should it, though "avoidable," really happen, said China's central bank deputy governor Yi Gang late Friday.

A currency war could be avoided, Yi said, if policymakers in major countries observed the consensus, reached at the recent G20 meeting, that monetary policy should primarily serve as a tool for domestic economy.

"China is fully prepared," Yi said. "In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries."

at http://globaleconomicanalysis.blogspot.com/2013/03/fully-prepared-for-currency-war-says.html#Bj5WT1rkm3YObqty.99

The 10 Minute Gold Standard

"Far too many people believe that gold serves no useful purpose. I am therefore publishing this response to The 10 Minute Gold Standard: It’s Much Easier than You Think by Nathan Lewis. Mr. Lewis, a professed advocate of the gold standard, argues that even if we have a “gold standard”, we don’t need actual gold. Indeed, according to David Ricardo (quoted in the article), gold’s only job is to regulate the quantity of paper.

Mr. Lewis notes that when the Fed buys bonds it increases the quantity of dollars and when it sells bonds it decreases the quantity. This is true enough, but it’s not the quantity of dollars per se that is causing our ongoing capital crisis, or if you prefer, our solvency crisis. But I get ahead of myself.

The 10-Minute proposal is simple: the Fed should tweak its central planning. Instead of buying bonds to control the interest rate, it should buy bonds to control the gold price. However the unstated assumption, that the price of gold is based on the quantity of dollars, is false.

Gold is money, and paper (the dollar) is credit. The ratio of credit to money is not constant. Nor is the price of credit, which depends on its quality. Trying to control the gold price by this indirect proxy would be like trying to steer a car by opening and closing the windows.

The fatal flaw in the proposal is that paper cannot perform certain functions that can only be performed by gold. One is to extinguish debt. Paper currency is itself a credit instrument. The dollar is the liability of the Fed. Paying in paper transfers a debt, but the debt itself does not go out of existence. Since interest is constantly accruing, total debt rises exponentially..."

at http://www.zerohedge.com/contributed/2013-03-03/10-minute-gold-standard

Jim Sinclair - We Are Witnessing A Historic Low In Gold

"Today legendary trader Jim Sinclair spoke with King World News about the gold and silver smash. Below is what Sinclair, who has been actively trading the markets for over half a century and whose father was business partners with legendary trader Jesse Livermore, had to say about what has taken place in the gold market.

 

Jim Sinclair: “Historically we are at an extreme low. But more so than that, when you are short you have a price objective. If you are a government you have a price objective. That price objective being reached might change the pattern of your trading.

The pattern of what’s taking place in this down market is absolutely clear: At periods every day like clockwork, when the lowest volume of trading historically takes place, the largest amount of offerings have come into the marketplace (for gold), creating a drubbing, a down (move). 

Every time there is a major move in a market there will be hangers on, and they are the ones that tend to lose on both sides...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/1_Jim_Sinclair_-_We_Are_Witnessing_A_Historic_Low_In_Gold.html