The Death of Money by Jim Rickards – Giveaway

Updated by

thedeathofmoneyIn his newest book, The Death of Money: The Coming Collapse of the International Monetary System, Jim Rickards tells us that “only nations and individuals who make provision today will survive the maelstrom to come.”

In his best selling prior release, Currency Wars: The Making of the Next Global Crisis, Rickards details a full-blown currency crisis that occurs inside war games held by the Defense Department, where his team won. Rickards was playing the part of China. In that book, Rickards argues that the collapse of the U.S. Dollar is greater than any other economic threat and that a crisis is inevitable.

Rickards continues where he left off with The Death of Money. In this newest book, Rickards prepares readers by encouraging the conversion of fiat currency into real, tangible assets that can better serve as stores of value. These assets include gold, land and even fine art. Continue Reading …

The Bernanke Bullard Bluff: The Return of Taper Talk

Updated by 1 Comment

Image of Rising PriceIs Bullard bluffing? Gold and silver markets reversed Wednesday’s No-Taper rally today after St. Louis Federal Reserve Bank President James Bullard threw cold water on the dollar dumping party.

In an interview with Bloomberg News this morning, Bullard reignited talk of taper when he said that October might still see a reduction in QE and that the vote this week to continue the $85 Billion in monthly bond purchases was a close one.

A week before the Surprise FOMC Decision on Wednesday, PMBull observed that all the talk of taper was missing an important fact. The economy was in no condition to justify an end to QE. We hinted that the Fed may be boxed into a corner, unable to stop the flood of easy money (didn’t Bernake also tell Congress that very thing?). Louis Cammarosano at the Smaulgld Economics and Real Estate blog provided a nice, concise background on current economic conditions, going into the Federal Reserve Open Market Committee meeting.

The Bernanke Bullard Bluff?

In a follow-up piece today, Louis says that Bullard is Bluffing with regards to October QE talk, in general agreement with our assessment that the Fed is trapped. In that Bloomberg interview that rocked the markets backwards again today, Bullard suggested that the vote was close with respect to the September FOMC statement, and we are now to be on the lookout for Taper in October. Louis observes that the vote was 11-1 in favor of leaving things as they are. Real close Mr. Bullard. 

No Taper: QE Extended, Fed to Continue $85 Billion Monthly Bond Buying

Updated by Leave a Comment

Image of Rising PriceThe verdict is no taper – Gold and Silver prices shot higher on the heels of the FOMC Statement release at 2:00 PM EST. The Fed announced it would continue purchasing bonds at a monthly rate of $85 Billion, extending its Quantitative Easing (QE) program.

Gold and Silver prices were languishing prior to the announcement, following a 3-week pullback that started near the end of August. Many market participants were anticipating a tapering of Fed bond buying in September, since Fed Chairman Bernanke had indicated that the Fed would do so back in May. What market participants failed to recognize though was that tapering was conditional. That is, economic conditions would have to have improved enough for the Fed to justify scaling QE back.

Poor economic prospects (or no real clear signs that economic improvements are sustainable) means that the flood of free and easy money will continue. In this release, the Fed indicated that it would like to see signs that improvements in the economy would sustain, before reducing ongoing bond purchases.

Both stocks and precious metals rallied on the surprise realization that QE would continue. We imagine a lot of short-covering in Gold took place. As an interesting aside, ZeroHedge noted that gold started its rally early, prior to the actual release:

The rally in gold and silver continued, as the press conference began at 2:30, contributing to Gold’s single largest gain since January of 2009. gold finished New York trading at a hair over $1365 per ounce, up approximately $65 off the day’s lows. silver finished New York trading at just under $23.00 per ounce, up well over 7% from pre-Fed Statement lows.

What Will be the Economic Impact of Tapering?

Updated by Leave a Comment

smaulgld-logoFive years after the 2008 Financial Crisis, the U.S. economy has continued to barely muddle along, despite massive doses of ongoing QE (Quantitative Easing) by the Federal Reserve. Has QE been effective at restoring the nation’s economic health? The verdict ranges from disaster to somewhat effective, depending on whom you speak with. What everybody knows for certain, including The Fed, is that at some point, a healthy economy must stand on its own and that at some point, QE has to stop.

Louis Cammarosano, with the Smaulgld blog, has published a concise summary of the economy since 2008. This article should serve as a primer for those that haven’t kept themselves abreast of all the economic news and debate since the popping of the real estate bubble in 2006 and the collapse of Lehman in 2008.

The Recovery Has Reversed Course, Welcome to the Revocery

Louis outlines the current state of the economy and the failed attempts to fix it. He suggests that “As the economy enters the fall, in a weakened state, it faces major challenges that could bring down an even stronger economy.” He then addresses multiple items that could stop the economy in its tracks:

  • Higher interest Rates
  • War in Syria
  • Oil Prices
  • Millennial Unemployment
  • Crushing Student Loan Debt
  • Inflation
  • Debt Ceiling
  • ObamaCare

We are now treated daily to talk of “tapering,” that is, an end to the Fed’s purchases of Treasury Bonds and Mortgage Backed Securities (MBS). How much, will the Fed scale back? When does tapering begin? What impact will it have on the tepid, if perhaps non-existent, economic recovery? Is taper-talk just talk? Can the Fed truly stop QE or is it boxed into a corner? Perhaps with all the focus on Taper, we have lost site of the forest for the trees?

Gold and Silver Dip on FOMC Pre-Release: Just Another Head Fake?

Updated by 1 Comment

Financial bloggers are abuzz this morning after it was revealed that the FOMC “accidentally” emailed the FOMC Minutes to about 100 bank employees and others yesterday at 2:00 PM. The release was actually scheduled for today at 2:00 PM. After admitting the “error” the minutes were officially released early this morning so that the rest of us can catch up.

What did the minutes say? Not much that can tell us anything about direction, but there was “debate” around ending the $85 Billion per month purchase of Treasury bonds early, with several members seeing QE tapering or ending by year end. These hawkish thoughts were an excuse to push gold and silver prices lower today. It appears that HFT and trading algos read the early release as hawkish too. ZeroHedge shows how yesterday’s S&P 500 Ramp was faded late in the day, right after the early release email was sent out. Continue Reading …