Deutsche Bank Just Released A 104-Page Report On What May Be The World's Last Mega-Bubble

"Deutsche Bank strategist Jim Reid and his team just released a huge 104-page study that is focused on answering one question: Are bonds in a bubble?

The answer: well, probably. 

Reid writes:

It has long been our view that over the last couple of decades the global economy has rolled from bubble to bubble with excesses never fully being allowed to unravel. Instead aggressive policy responses have encouraged them to roll into new bubbles. This has arguably kept the modern financial system as we know it a going concern. Clearly there have always been bubbles formed through history but has there been a period like the last 20 years where the bursting of one bubble has consistently led directly to the formation of the next?

It's an amazing statement — that the modern financial system doesn't just experience bubbles, but in fact needs them. You could say this makes bubbles a feature, not a bug, of the financial system (which is something many people say already).

And the latest bubble appears to have rolled into bonds, with yields tumbling around the world and government debt in Europe currently at half-millennia lows.

What we found was that bonds are where the bubble has migrated to. This is not to say that the bond market bubble is about the burst — far from it — but that it is a necessary condition for maintaining the debt ladened financial system that has been the by-product of major crisis management over the last two decades. The worry is that there is nowhere left for this bubble to go given that it is now in the hands of the lenders of last resort (governments and central banks with regulators ensuring other large captive buyers). Although we think this bubble needs to be maintained to ensure the solvency of the current financial system, the best case scenario is that it slowly pops over time via negative real returns for bondholders. The worst case scenario being future restructuring..."

at http://www.businessinsider.com/deutsche-bank-on-the-bond-bubble-2014-9#ixzz3D2H8hP2o

Manipulation of Gold and Silver Definitely Ends This Year-Harvey Organ

"Harvey Organ has been on a personal mission to expose the “fraudulent manipulation” of the gold and silver markets since the late 1990’s.  Organ, who studies these markets daily, contends, “It’s definitely going to happen this year.”  Why does Organ think this?  Let’s start with the gold market.  Organ says, “You are seeing a huge amount of obligations per one ounce of gold that’s available, and as the gold moves from West to East, and the bubble of paper obligations that’s left are going to blow up.  So, that is what we are basically seeing in gold.  There is a massive movement basically towards three countries . . . Russia . . . China . . . and India.  So, if you figure the world produces no more than 2,200 tons of gold per year, excluding China and Russia, more than 100% of that gold is going to those countries.”  Organ goes on to say, “I doubt very much if the United States has one ounce of gold left.”

The price suppression game has been going on for a long time.  Why does Organ think it will finally end this year?  Organ says, “There is a deficit of gold of 1,800 to 2,000 tons per year.  The leasing game started in 1988, and it starts going much higher in 1993.  So, over the last 20 or 30 years, all that gold has been leased out.  Gold that’s been leased never comes back.  Now, this is why there are huge derivatives outstanding. . . . Gold at the central banks is gone.”  Organ explains, “You can always paper over a paper problem, but you cannot paper over a physical default.  I don’t think there is any left, and this is the year they run out of gold to deliver at GLD, Comex and the LBMA (London Bullion Market Association).  How do we know it is officially over?  Organ says, “Probably, China announces to the world how much gold it has.”

Organ says when China and Russia disclose the true amount of gold they hold, there will be a price spike never before seen in the history of the world.  Organ says, “You will see that you will go to sleep at night, and you will wake up the next morning and see gold bidding at $3,000 per ounce, and there will be no offer, and it will rise by $500 a day.  It will come in 2014.  They are running out, they don’t have it.”

at http://usawatchdog.com/manipulation-of-gold-and-silver-definitely-ends-this-year-harvey-organ/

Despite Recent Weakness In Gold, Revaluation Spike Is Coming

"Turk: “I think the following chart puts several key markets in their proper perspective, Eric.  It shows the correlation between the Fed's balance sheet, S&P 500, gold and crude oil.  This is a base-100 chart that plots the relative movement in these assets at the close of each week from March 2009, which is when the Fed announced its first QE program (see chart below).



There are several points to make about this chart....

1) When central banks print money by growing the size of their balance sheet, the currency they are printing gets debased.  Another way of saying that is that asset prices rise, which happened for gold until January 2013 and oil later in the year, but the S&P 500 kept rising.

2) The S&P 500 closed at a record high Friday for the same reason the Fed’s balance sheet is at a record high at just under $4.5 trillion - money printing.  The S&P is not rising because of good economic conditions.  Regardless of what the government central planners are saying, the economy stinks because the labor force is shrinking and is still well below the 2007 peak.

3) On a relative basis, gold and oil look very undervalued.  Both should be rising along with the S&P 500, as they did up until 2013.  But oil is weak because demand is falling because of the weak economy.  And gold is weak because its price is being manipulated by central banks.

4) Finally, look at the green line carefully on the chart above.  This line shows the growth in the Fed’s balance sheet, and growth is coming to a halt as the Fed winds down QE. 

Point #4 is particularly important.  It suggests to me one of two things will happen:  Either the stock market will tank as it did in 2011, or the Fed will renew its QE program.  The Fed will do this to foolishly keep printing in the hope that infinite money creation will jumpstart a sick, debt-laden economy that government central planners have turned into one of borrowing and spending, instead of saving and producing..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/10_Despite_Recent_Weakness_In_Gold,_Revaluation_Spike_Is_Coming.html

Rule - Takedowns In Gold, Silver & Oil To End Badly For Bears

"Today one of the wealthiest people in the financial world told King World News that the takedowns in the gold, silver, oil, and uranium markets will end badly for the bears.  Rick Rule, who is business partners with Eric Sprott, also discussed why he is so incredibly bullish on the metals and energy.

Rule:  “In the near-term gold and silver have been moving down.  There is strength in the U.S. dollar. (Laughter).  Strength that, frankly, perplexes me.  There would seem to be a global belief that what you do in times of crisis is buy U.S. Treasury securities, and there is certainly a lot of crisis in the world...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/10_Rule_-_Takedowns_In_Gold,_Silver_%26_Oil_To_End_Badly_For_Bears.html

Quote Of The Week & A Chart That Will Shock KWN Readers

"“Why haven't we seen a double-digit correction since April - June of 2012?  In fact, we have not gotten anything more than a 6% pullback since November 2012.  My clients are asking, ‘Why no pullback?’  It seems unnatural.” 

-- A Raymond James advisor....

Continue reading the KWN piece below...

The spread between the bulls and bears increased and held in danger territory at 43.5%. It was 42.8% a week ago and has remained above 30% since February. Differences over 30% are a worry and they become dangerous at 40%+. The spread peak this year so far was 45.4% to start June. The last favorable spread occurred in August 2013 at 13.4%, close to the 10% (or less) reading that allows for broad buying. Bears haven't outnumbered bulls (a negative spread) since October 2011.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/10_Quote_Of_The_Week_%26_A_Chart_That_Will_Shock_KWN_Readers.html

Sentiment Chart

Art Cashin Warns Of Another Disastrous Global Lehman Event

"Today 50-year veteran Art Cashin warned King World News that the world is going to see another disastrous Lehman moment.  Cashin, who is Director of Floor Operations at UBS ($650 billion under management), also discussed the gold market and the world stumbling headlong into a global currency war.  Below is what Cashin had to say in this powerful interview.

Eric King:  “You’ve been warning for some time that the global markets discount everything geopolitical and that may come back to bite us.”

Cashin:  “I absolutely still feel that way.  And I am concerned that there is inbred opinion that geopolitical events tend to be short-lived and therefore, in many cases, buying opportunities when you get them.  I fear mightily that somewhere people might miscalculate and one of these things could turn into the equivalent of a Lehman moment in which everyone assuming that the worst will not happen discovers that the worst has happened and are ill-prepared for it.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/5_Art_Cashin_Warns_Of_Another_Disastrous_Global_Lehman_Event.html

Legend Warns World Headed For Financial Chaos & Contagion

"Today a legend in the gold world warned King World News that the world is headed for financial chaos and contagion.  John Ing, who has been in the business for 43 years,  also discussed the role that gold will play as the global chaos unfolds and the contagion spreads.

The Money Printers vs Gold

China has pushed for a bigger role in the international theatre and even pariah Russia has attempted to use alternatives to the dollar calling for the usage of other currencies in exchange for oil. Russia last defaulted in 1998 and sanctions are not soon forgotten. Ironically, the US will need the cooperation of its allies and financial partners to execute its foreign policy and the politicization of the world’s financial infrastructure simply undermines that role. Without this system of partners and cooperation, the financial world will descend into chaos...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/8_Legend_Warns_World_Headed_For_Financial_Chaos_%26_Contagion.html

New Study Confirms Staggering $1 Trillion Mineral Deposits In Afghanistan

"Despite being one of the poorest nations in the world, Afghanistan may be sitting on one of the richest troves of minerals in the world, valued at nearly $1 trillion, according to U.S. scientists.

Afghanistan, a country nearly the size of Texas, is loaded with minerals deposited by the violent collision of the Indian subcontinent with Asia. The U.S. Geological Survey (USGS) began inspecting what mineral resources Afghanistan had after U.S.-led forces drove the Taliban from power in the country in 2004. As it turns out, the Afghanistan Geological Survey staff had kept Soviet geological maps and reports up to 50 years old or more that hinted at a geological gold mine.

In 2006, U.S. researchers flew airborne missions to conduct magnetic, gravity and hyperspectral surveys over Afghanistan. The magnetic surveys probed for iron-bearing minerals up to 6 miles (10 kilometers) below the surface, while the gravity surveys tried to identify sediment-filled basins potentially rich in oil and gas. The hyperspectral survey looked at the spectrum of light reflected off rocks to identify the light signatures unique to each mineral. More than 70 percent of the country was mapped in just two months. [Facts About Rare Earth Minerals (Infographic)]

The surveys verified all the major Soviet finds. Afghanistan may hold 60 million tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earth elements such as lanthanum, cerium and neodymium, and lodes of aluminum, gold, silver, zinc, mercury and lithium. For instance, the Khanneshin carbonatite deposit in Afghanistan's Helmand province is valued at $89 billion, full as it is with rare earth elements.

"Afghanistan is a country that is very, very rich in mineral resources," Jack Medlin, a geologist and program manager of the U.S. Geological Survey's Afghanistan project, told Live Science. "We've identified the potential for at least 24 world-class mineral deposits." The scientists' work was detailed in the Aug. 15 issue of the journal Science..."

at http://www.livescience.com/47682-rare-earth-minerals-found-under-afghanistan.html#ixzz3CT6LFr4I

Most People Don’t Believe It, But We Are Right On Schedule For The Next Financial Crash

"People have such short memories.  Even though we are repeating so many of the same patterns that we witnessed in 2000-2001 and 2007-2008, most people do not think that another financial crash is coming.  In fact, with the stock market setting record high after record high lately, I have been taking quite a bit of criticism for my relentless warnings about the coming financial storm.  Many of the comments go something like this: "Snyder you are a moron!  Nothing you say ever comes true.  The stock market is going to keep on rocking and Obama is going to lead this country back to greatness.  I hope that you choke on all of your doom and gloom."  Of course these critics never offer any hard evidence that I have been wrong about anything.  They just assume that since the stock market has soared to unprecedented heights that all of us "bears" must have been wrong..."

at http://theeconomiccollapseblog.com/archives/most-people-dont-believe-it-but-we-are-right-on-schedule-for-the-next-financial-crash

Marc Faber : We have a gradual lessening importance of the US Dollar

"Marc Faber : I think it’s a symptom of the new world order I was referring to where the balance of economic power has shifted to Asia and emerging economies. This becomes very clear if you look at European companies. Where do they grow? Not in Europe. Asia has become and will remain the growth market..."

at http://www.marcfabernews.com/2014/09/marc-faber-we-have-gradual-lessening.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VAn8k_na6m4

Embry - Gold & Silver Takedown & Why Banks Will Collapse

"Embry:  “As you know, there has been a vicious takedown in gold this week.  But I can honestly say that I’m not surprised because September has traditionally been the strongest month for gold.  So the central planners, who run the Western banks, had to defuse this potential enthusiasm, and that’s what they have done with yet another high-frequency driven, algorithm attack....

“I’m sure that inspired the more than $20 takedown we saw in a single day earlier in the week, and it’s why this takedown has continued through today.  Silver, as usual, accompanied gold lower.

But it was also instructive that the gold open interest on Comex rose by 6,400 contracts.  So what we have seen up to now hasn’t necessarily been long liquidation, but rather a bear raid by the usual suspects.  Essentially the open interest rose by more than 3-times the amount of gold which is dug out of the ground each day.  So, again, this has just been the paper guys operating as they always do.

The question is, why are the central planners being this overt?  I strongly believe it’s because if gold and silver were allowed to freely trade and truly reflect what is really going on with monetary policy and the latent inflation and possibly hyperinflation which is bubbling under the surface, interest rates would rise precipitously -- long rates in particular.  In that event the banking system would totally implode because of the banks’ massive interest rate sensitive derivatives exposure.

So this is basically a battle to the finish for the central planners, who are desperately trying to hold off normal market forces, but they are going to lose this battle in the long-run.  Also, right as the gold and silver smash was taking place earlier this week I saw the Globe and Mail published a blistering attack on gold.  They utilized dubious statistics regarding demand and cherry-picked anything that was remotely negative on gold.

Their argument made no sense at all.  The Globe and Mail claimed an ounce of gold still ‘costs far too much.’  What?  There aren’t many gold companies in existence today who, when accurately accounting for the true cost of producing an ounce of gold, are not losing money at the current prices.  So the idea that gold still costs ‘far too much’ is absolutely preposterous.

Well, I was so fascinated by the Globe and Mail article that I looked into the author of this piece of drivel.  His name was Ian Campbell.  At one stage of his career he was actually Chief Economist for emerging markets at none other than ABN ARMO Bank.  Now ABN AMRO is the very same bank which just last year stiffed their own clients with respect to their allocated gold by saying they couldn’t have it and instead it would have to be settled for cash.

So the mainstream media is in the hip pocket of the central banks and the financial establishment, and together they are orchestrating one of the greatest Ponzi schemes in the gold and silver markets.  But when it ends, you better be long and you better make sure you own physical gold and silver outside of the banking system because when gold and silver prices really skyrocket it will expose the fact that the entire banking system is insolvent and it will simply collapse.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/4_Embry_-_Gold_%26_Silver_Takedown_%26_Why_Banks_Will_Collapse.html

Jim Rogers: The world needs all the raw material they can get

"James West:           So for example I’m a shareholder in a phosphate company that’s going into production in Brazil very soon – DuSolo Fertilizers – is that the kind of thing where an investor could benefit by exposure to the fertilizer business in Brazil, where consumption is growing?

Jim Rogers:             Yes, yes. That’s exactly what I’m talking about. Now I have no idea whether your company is competent, if they know what they’re doing or anything else. But if they do, and if they do have a good deposit, and they are low-cost producers, yes! They’ll do extremely well, there’s no question about that.

There are people who will tell you that some of the basic supplies for fertilizer are in decline, and so the world needs all the raw material they can get..."

at http://jimrogers1.blogspot.com.tr/2014/09/jim-rogers-world-needs-all-raw-material.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+blogspot/WOHK+(Jim+Rogers+Blog)

The Remarkable Chart The Big Money Is Watching Right Now

"...The spread between the bulls and bears jumped into danger territory at 42.8%. It was 37.4% a week ago and has remained above 30% since February. Differences over 30% are a worry and they become dangerous at 40%+. The spread peak this year so far was 45.4% to start June. The last favorable spread occurred in August 2013 at 13.4%, close to the 10% (or less) reading that allows for broad buying. Bears haven't outnumbered bulls (a negative spread) since October 2011."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/3_The_Remarkable_Chart_The_Big_Money_Is_Watching_Right_Now.html

Sentiment Chart

 

China May Become A Shareholder In One Of Russia's Biggest New Oil And Gas Fields

"Russian President Vladimir Putin said his government may offer China an opportunity to hold a share in one of the biggest energy projects in Siberia, the Vankor oil and gas field.

Putin made the tentative offer on Sept. 1 as he and China's vice premier, Zhang Gaoli, presided over the launch of construction of the oil pipeline that will carry nearly 40 trillion cubic meters of gas to China over 30 years, earning Russia $400 billion during the period..."

at http://www.fool.com/investing/general/2014/09/03/putin-suggests-beijing-may-share-in-rich-oil-and-g.aspx#ixzz3CHT44JFO

Message from Top Managers: “Prepare for Turmoil”

"...More and more of the world’s top (hedge) fund managers are joining in. It will probably not be a surprise to you that the most critical investors, like Marc Faber, have been underlining this for a while already. It is much more interesting, however, to look at investors who felt positive until recently, among which is Jeffrey Gundlach. The ‘Bond King’ has clearly changed his mind about the markets and he is also one of the best market timers in the financial world. Gundlach has become increasingly cautious about stocks in particular and he feels that the stock market is generously valued in this economic climate. He foresees profits declining in the near future, which does not bode well for share prices. Gundlach also noticed that the masses are increasingly invested in the stock market; never before have investors taken on so much debt in order to buy stocks on the NYSE.

Source chart: Dshort.com

This is also an indicator that seems to have hit its ceiling. When ‘margin debt’ declines, you can expect a strong correction; another great point from Gundlach. However, talking the talk does not equate to walking the walk. That is something we do not see yet in his case. Especially not with regards to stocks. He is taking up a position indirectly by doubling down on a further increase in bond prices, however, which is obviously the area where the Bond King feels best..."

at http://www.zerohedge.com/news/2014-09-03/message-top-managers-%E2%80%9Cprepare-turmoil%E2%80%9D

What Germany, Russia & China Are Doing As Gold Plunges

"...So this is a golden opportunity to buy and I would take advantage of it.  Could gold get just a little bit cheaper?  Maybe, but I don’t think there is much downside because I maintain that there is a bid underneath the gold market from the Chinese.  I think the recent Russian purchase of gold is yet another indication that the Chinese are willing to support the price because the Russians and the Chinese are working together right now.  So for those who are long-term planners, like the Chinese, and you see the price of gold has dropped, you have to accumulate more gold on these dips because that’s what China is doing.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/2_What_Germany,_Russia_%26_China_Are_Doing_As_Gold_Plunges.html

Marc Faber on the ongoing power shift from the West to the East

"Marc Faber :  Well, basically, everything is connected and interrelated. We had a colonial system until the end of the Second World War, followed by the rise of

individual countries. And over the last twenty-five to thirty years what we had was the rise of China with 1.3 billion people. Because of China’s rapid growth and resource dependence (iron ore, copper from Australia, Brazil and Africa, and oil principally from the Middle East), the Chinese have obviously become a very important economic force..."

at http://www.marcfabernews.com/2014/08/marc-faber-on-ongoing-power-shift-from.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VASyn_na6m4

Marc Faber on The Chinese-Russian Gas deal and the Decline of the USD

"Marc Faber :   I think it’s a symptom of the new world order I was referring to where the balance of economic power has shifted to Asia and emerging economies. This becomes very clear if you look at European companies. Where do they grow? Not in Europe.

  

Asia has become and will remain the growth market. The gas deal is a big deal in the sense that, it proves how incompetent US foreign policy is..."

at http://www.marcfabernews.com/2014/09/marc-faber-on-chinese-russian-gas-deal.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VASyi_na6m4

$280 Trillion Debt, $1.5 Quadrillion Derivs. & A Gold Squeeze

"“With $280 trillion of world debt and $1.5 quadrillion of derivatives, this will lead to a collapse that will take the world back at least 50 years and maybe even further.  Governments and central banks are totally aware of the deflationary risks.  That’s why they have printed and created tens of trillions of dollars, and lowered interest rates to zero..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/8/29_$280_Trillion_Debt,_$1.5_Quadrillion_Derivs._%26_A_Gold_Squeeze.html

Stockman - Unprecedented Global Financial Wipeout Is Coming

"Stockman:  “There is going to be a massive repricing in the financial markets.  As I’ve indicated, everything is overvalued, from stocks, to real estate, to big-cap companies, to speculative small-cap companies, and derivatives of every kind.  They are all correlated in the bubble expansion and they are all going to be correlated in the big repricing that’s coming...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/8/30_Stockman_-_Unprecedented_Global_Financial_Wipeout_Is_Coming.html