Money Flow Trading Method along with Risk Management

http://www.whatdoesitmean.com/index2316.htm

June 16, 2017
True Facts About “Russia Hysteria” Sweeping America Shocks Europe


By: Sorcha Faal, and as reported to her Western Subscribers

A new Security Council (SC) report circulating in the Kremlin today says that the European Union (EU) was shocked and stunned yesterday when the US Senatefinally revealed that the real truth behind the “Russia Hysteria” meme sweeping America was entirely due to giant United States energy companies seeking to destroy Europe’s existing energy supplies from Russia in order to capture this multi-billion business for themselves in violation of all international laws. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/klkl3.jpg

According to this report, in a brazen move labeled by both Germany and Austria as “unacceptable”, the US Senate passed by a vote of 98-2 what they called a “Russian sanction bill” that they spuriously claimed was in reaction to Russia’s never proven interference of the 2016 US presidential election—but whose real and true purpose violates international law, affects European companies and has the real aim of benefitting the US oil and gas sector, Berlin and Vienna said in an angry joint statement.


Having nothing whatsoever to do with Russia’s supposed intervention in the US election, this report continues, this US Senate “Russian sanction bill” is, instead, nothing more than “an instrument of economic warfare” designed to destroy the European Unions existing energy security with Russia in order to supplant it with those of American gas companies—and to which Germany and Austria, speaking for the entire EU, slammed by stating [English]:
“Europe's energy supply is a matter for Europe, and not the United States of America!

We cannot accept threatening European companies that contribute to the development of the European energy supply [system] with extraterritorial sanctions that violate the international law.

Sanctions as a political instrument should not be linked to economic interest that threaten German, Austrian and other European enterprises, which take part in the gas supply projects such as the Nord Stream II together with Russia or finance them, with penalties on the US market would add an absolutely new and highly negative aspect in relations between the US and Europe.
The statement went on to say that Washington’s intention to impose new sanctions against Russia is guided not by some political or humanitarian reasons but rather by economic interest.

“This issue is all about the sales of the US condensed gas [to Europe] and pressing the Russian energy supply companies from the European market. The actual goal [of such sanctions] is to provide jobs for the US gas and oil industry”.

http://www.whatdoesitmean.com/klkl4.jpg

Russia's trade representative in the United States, Aleksander Stadnik, this report says, further stated that these US Senate sanctions create obstacles for Russian, Iranian, Qatar, and other energy companies, while setting conditions for greater access to foreign markets for US companies, and who added: “This has become a blatant push for its [US] oil and gas industry with the use of non-market instruments and prohibited methods”.

Important to note about this issue, this report explains, is that due to what is called “hydraulic fracturing”, the United States has overwhelmed its domestic capacity to store the natural gas it’s now producing—and in order to sell what they are overproducing, they have begun a process to destroy Russia’s longstanding international agreements with the EU that supplies them with cheap energy supplies.

With the European Union receiving 34% of its natural gas supplies from Russia via pipelines, this report details, the American “scheme”, as evidenced by these US Senate sanctions, is to substitute cheap Russian natural gas with the more highly expensive “liquefied natural gas”(LNG) that is processed in the United States and then shipped via large tanker vessels to the European market.

http://www.whatdoesitmean.com/klkl2.png

The only American company currently creating LNG for the European market, this report says, is the Houston, Texas, energy giant Cheniere Energy—who aside from flooding the coffers of US lawmakers with “bribes” (called donations [Link and Link]), last week completed the first shipment to Europe of liquefied natural gas in American history.

With Cheniere Energy being the only company currently operating an LNG export terminal in the contiguous United States, this report explains, the US Federal Energy Regulatory Commission is now reporting that about half a dozen other LNG export terminals (which are big, billion-dollar operations) are under construction too—with Professor Eric Smith, the associate director of Tulane University's Energy Institute, stating they are needed because “we have pretty well saturated the domestic market with natural gas”.

http://www.whatdoesitmean.com/klkl5.jpg

Though some Kremlin experts believe that the US House of Representatives will never pass this US Senate “Russian sanction bill”, this report grimly states, President Putin has, nevertheless, ordered a massive drill of all Federation nuclear missile forces—with his stating that prior to his allowing the Americans to implement this law, he will label it what it actually is, “an act of war”.


And as always too, this report concludes, the American people are being kept from knowing these “facts of war” by their mainstream propaganda media; who instead of telling these people the truth about anything, continue their spreading of “fake news”—and as exampled by CNN falsely reporting that President Trump didn’t visit US Congressman Steve Scalise in the hospital where he lies gravely wounded from the George Soros “Republican Massacre” birthday gift to Trump, and, most horribly, the pro-communist Washington Post reporter Malcolm Harris shockingly Tweeting that he hoped Congressman Scalise would die.

http://www.whatdoesitmean.com/klkl1.png

June 16, 2017 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.


[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]

[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]

[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]
“Deep State” In Disarray As Trump’s “Fathomless Federation” Gains Ground

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

The Last Time Economic Data Disappointed This Much, Bernanke Unleashed Operation Twist
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 16, 2017 2:30 PM


For the 13th straight week, US economic data disappointed (already downgraded) expectations, sending Citi's US Macro Surprise Index to its weakest since August 2011 (crashing at a pace only beaten by the periods surrounding Lehman and the US ratings downgrade). The last time, Us economic data disappointed this much, Ben Bernanke immediately unleashed Operation Twist... but this time Janet Yellen is hiking rates and unwinding the balance sheet?

http://www.zerohedge.com/sites/defau...616_EOD2_0.jpg
As Citi notes, breaking down this move, we can see that the recent data
disappointments have been driven by a steady fall in the underlying
data, rather than overly exuberant expectations. In other words, economists have been adjusting expectations downwards, but the data has been falling at a faster rate.


And this week once again saw 'hard' data collapse ( for example: inflation, retail sales, housing, industrial production) as 'surveys' held steady...
http://www.zerohedge.com/sites/defau...NYFED2_1_0.jpg


For now, stocks don't care...
http://www.zerohedge.com/sites/defau...6_EOD4_1_0.jpg


And in case you are hoping for a sudden turnaround... any minute now, don't bet on it - the lagged response to China's collapsing credit impulse is just beginning to have its effect on the rest of the world...
http://www.zerohedge.com/sites/defau...616_EOD5_0.jpg

Still not convinced, look at this week's US trade data...YoY gains in import and export prices are also rolling over notably tracking the decline in China's credit impulse.
http://www.zerohedge.com/sites/defau...15_ikmp1_0.jpg

And this is the environment in which Janet Yellen is hiking interest rates?

http://traderfeed.blogspot.ca/2017/0...it-doesnt.html

SUNDAY, JUNE 18, 2017
When Discipline Works--And When It Doesn't
https://2.bp.blogspot.com/-QGP9GQ5Q4...Fortune500.jpg
Trader A has a preferred trading style. It might be a momentum style; it might be a directional style. It's a style that fits Trader A's personality and that has made money in the past, so Trader A sticks to that style. In sticking to what fits his or her personality, Trader A demonstrates discipline.

Trader B has preferred trading "setups". These are patterns in the market that make the most sense to Trader B. Those patterns might be breakout patterns; they might be patterns of mean reversion. Trader B has seen these patterns work out, so Trader B sticks to trading those setups. In sticking to what fits his or her understanding of the market, Trader B demonstrates discipline.

Trader C studies the kind of market we're currently experiencing. Trader C has used some basic dimension reduction methods to boil markets down into a few categories, such as price change and volatility. Once Trader C figures out the kind of market we're in, Trader C studies the edges present in that type of market. In trading only the edges present in the current market, Trader C demonstrates discipline.

Three traders, three forms of discipline.

Two of those traders are losing money.

Are you trading what you subjectively prefer, or are you trading what is objectively present in the market?

I submit that the answer to that question accounts for much of the success and failure we're currently seeing among traders and trading firms.

Further Reading: When Technical Analysis Works and Doesn't Work


THURSDAY, FEBRUARY 23, 2017
When Technical Analysis Works and When It Doesn't

https://3.bp.blogspot.com/-AKV6g54Pd...nce022317a.jpg

Above we see a chart of the ES futures going back to January 23rd (blue line) drawn from early this morning. A new data point is plotted every time we see 500 price changes in the contract. This means that the X axis is denominated in price movement (volatility) units, not in time units. When markets slow down (such as during overnight hours or at midday), we draw fewer "bars". When we see an upswing in movement, we draw a greater number of bars. Thus, when nothing is happening in the market, nothing is really happening in the chart.

The lookback period going to January 23rd is one that I identified as a stable market regime. In statistical terms, the distribution of prices over that period was stationary. I run simple tests in Excel to compare volume and buying/selling distributions within that lookback period to identify when we have a stable regime. Within stable regimes, we can use simple technical indicators, such as overbought/oversold measures, to help us identify candidate buy and sell areas. The overbought/oversold measure in red looks at how price deviates from its 50-bar average in standard deviation units.

As a rule, in a stable regime, I want to be a buyer of higher price lows (oversold areas where price remains higher than at the prior oversold levels) and a seller of lower price highs (overbought areas occurring at successively lower price highs). When the recent market is not stable (significant differences in participation and in the behavior of the participants), there is no a priori reason for believing that technical indicator readings drawn from the recent past will be relevant to the immediate future.

What that means in practice is that using standard preset levels on standard technical measures to derive trading signals in all markets is a very inefficient process. Much of the time, we'll be inappropriately extrapolating the past into the future. When those strategies yield (predictably) random results, traders become frustrated and then look to trading psychology to cure their woes. Clueless coaches are apt to provide those traders with less than helpful advice to "follow your process" and stay "disciplined" in trading. Slavish adherence to a random process will only yield consistently random results.

Technical analysis is like card counting in blackjack. It works if there is a constant number of decks from which cards are drawn. If the number of decks in the shoe changes randomly, knowing the number of face cards played in the recent past will not provide information about the number likely to show up in the future. If there is a relatively constant set of participants in the marketplace and their buying and selling activity falls within stable parameters, we can make a reasonable inference as to the probability of forthcoming buying or selling.

The smart trader is not looking for where to buy or sell. The smart trader is looking to see if the current market activity is stable relative to the activity of the recent past. The smart trader watches the dealer and figures out when card counting truly yields a betting edge.

Further Reading: A Dynamic Approach to Technical Analysis


SUNDAY, JUNE 15, 2014
Toward a Dynamic Approach to Technical Analysis
http://4.bp.blogspot.com/-LcXeizJRXI...00/Dynamic.jpg
In my recent post, I suggested that a dynamic technical analysis would not rely upon a fixed set of indicators and chart patterns to be interpreted in a uniform manner. Rather, fresh predictors would arise from a study of drivers impacting the most recent market regimes. Traders would follow the indicators that have demonstrated predictive accuracy; not untested ones presumed to possess universal validity.

Let's take an example from the current market. Using tests of stationarity, I have identified a stable period of market behavior embracing the recent past. That stability means that market price changes during that period can be assumed to proceed from a single process. If the time period under consideration possessed wildly different statistical properties, such as 2008 and 2014 for stocks, then there would be no assurance that price changes were resulting from a stable process. That would give us no reason to extrapolate patterns from one period to the other.

A major problem with traditional use of technical indicators is that they are employed uniformly across non-stationary periods--especially intraday.

It turns out that during the most recent stationary period (i.e., "regime") a major driver of short-term price has been correlation. How SPX is correlated with other equity instruments has been significantly predictive of short-term forward price change.

The catch is that single measures of correlation were not particularly informative in my research. Rather, aggregated correlations across a large number of stocks and sectors and over intraday horizons ended up being an excellent measure for short-term trading signals. In other words, the most valuable indicator of correlation was not a standard technical indicator, but rather a measure that required research. Moreover, I had to research it in such a way as to not overfit the data relationship.

But there it is: when the correlation measure exceeds .40, the next day's price change has averaged +.35%. When the correlation has been below .40, the next day's price change has averaged -.37%. As long as we stay in the current regime--a key assumption--I expect market strength when correlations are high and rising and weakness when they are low and falling.

That becomes a potential trading "setup" for the current regime. In a future regime, correlation may be much more modestly associated with forward price change--or it may be predictive over longer time frames. Setups become dynamic, because they adapt to changing markets.

But correlation is but one factor that sets up in the current regime. There are others, from options ratios to intraday volatility.

This is how many hours of preparation go into a single hour of trading. It takes time to create and test large correlation matrices. It also takes time to test the many other variables that are associated with the factors of sentiment and positioning that are key drivers in the current regime. Once the research is done, however, the trader knows the indicator levels that are significant and is able to automate alerts. That way, the trader can seamlessly incorporate multiple tested technical signals with his or her discretionary judgment about the market.

The challenge is not that technical analysis doesn't work. The problem is that technical analysis works the way that parenting works: powerful when dynamically adapted to situations; diluted when applied uncritically.
.Posted by Brett Steenbarger, Ph.D.at 4:42 PM

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

One of the reasons for the recent historic flattening in yield curves is not just the ongoing disappointment in inflation prints which have missed expectations for the past three months, but also the ECB's recent sharp downward revision to its inflation forecasts, which as it revealed in its latest policy meeting, were cut across the board, with HICP now expected to drop from 1.6% to 1.3% in 2018, sending Bund yields tumbling.


http://www.zerohedge.com/sites/defau...%2020017_0.jpg
That the sharp drop took place even with the ECB's balance sheet rising to record highs of €4.232 trillion as of the latest week...
http://www.zerohedge.com/sites/defau...%20sheet_0.jpg
... would suggest that Mario Draghi does not have a firm grasp on just what it is that driver inflation. However, the ECB would beg to differ, and in its latest bulletin, the central banks lays out what and how it believes inflation is created in one chart. Here's what it says:
In the short term, fluctuations in inflation are affected by both domestic and external developments. The following part discusses the main drivers of inflation on the domestic as well as on the external side. Chart 1 gives a stylised overview of the drivers of inflation in terms of the harmonised index of consumer prices (HICP). The HICP, which is the benchmark indicator for the price stability target of the ECB, is based on a broad basket of goods and services. The main components of the consumption basket used to calculate the HICP are commonly grouped into energy, food, services and non-energy industrial goods (NEIG). HICP inflation excluding energy and food, which consists of services and NEIG inflation, is one measure of underlying inflation.
And visually:
http://www.zerohedge.com/sites/defau...0drivers_0.jpg
Looks like the ECB has it all figured out, except perhaps for the elephant in the room (see chart in the middle) and, of course, money supply. And yet there continues to be a glaring disconnect between theory and practice. If only Draghi and company could take this lovely representation of their financial models and apply it to the real world, promoting healthy price inflation across the broader economy and not just asset prices, Europe would be truly "fixed."

http://www.whatdoesitmean.com/index2319.htm

June 21, 2017
President Trump Annihilates Democrats Again As “Deep State” Clinton Mole Uncovered
By: Sorcha Faal, and as reported to her Western Subscribers



An intriguing Foreign Intelligence Service (SVR) report circulating in the Kremlin today states that President Donald Trump has, once again, annihilated his leftist-communistic Democratic Party foes, while at the same time, US intelligence operatives loyal to him have uncovered another “Deep State” mole linked to Hillary Clinton—and that has led the US Department of State (DoS) to reopen the email case against Hillary Clinton and her “circle of national security criminals”. [Note:Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

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According to this report, even prior to his taking office, President Trump has been under constant assault from the “Deep State” and mainstream propaganda “fake news” media attempting a coup d’etat against him, but whose only actual victory has been the destruction of Hillary Clinton’s Democratic Party—and as evidenced by the Democratic Party shockingly reporting that it was only able to raise a paltry $4.7 million and having only $8.8 million on hand, while at the same time, Trump’s Republican Party has raised a staggering $61.9 million with their having $41.8 million on hand.



Even worse for the “Deep State” aligned Democratic Party, this report continues, is that of the millions of dollars it has been able to raise this year, it has, in essence, been “arsonated” in their attempting to win US Congressional House races they have deluded themselves into believing they could win.



Yesterday’s latest example of this Democratic Party delusion, this report notes, occurred in the State of Georgia where a leftist-communist named Jon Ossoff attempted to beat Trump’s Republican Party candidate Karen Handel—and though Ossoff was flooded by the Democratic Party with nearly seven-times the money Handle had available to her in the most expensive House race in US history, was soundly defeated by Trump supporters who thunderously chanted his name during Handle’s victory celebration, while Ossoff’s supporters, like those of Hillary Clinton before him, were left shattered and in tears.

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Driving the “Deep State” and its mainstream propaganda “fake news” media allies to the point of absolute madness, this report explains, is the American people awakening to how much they’ve been manipulated by lies and dishonest reporting—and proved no exception in the State of Georgia election with these “fake news” charlatans proclaiming that President Trump’s approval rating had plunged to 36%, when no such thing happened as the polling company Rasmussen showed his approval rating at 50%--and who was the ONLY polling organization that told the truth that Trump would become president.



And as the “Deep State” and its mainstream propaganda “fake news” media allies have been driven to madness by the American people no longer believing their lies, this report says, they have been further pushed to the “edge of insanity” over President Trump being able to go over them and talk directly to his citizens via social media, and that they can’t stop him from doing no matter how hard they try—and whose social media followers now number over 109 million—to include, 32.6 million followers on Twitter @Real Donald Trump, 18.9 million followers @POTUS, 14.7 million followers @White House, 22.4 million followers on Facebook at Donald J. Trump, 1.7 million followers on Facebook at President Donald J. Trump, 8.3 million followers on Facebook at White House, and 10.6 million followers on Instagram at @Real Donald Trump and @White House.

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At the same time that President Trump is devastating Hillary Clinton’s Democratic Party, this report further notes, his Trumpian forces moving in on the “Deep State” are making progress too—and as evidenced by Trump’s Special Prosecutor, Robert Muller, now targeting the Iranian-American businessman Bijan Rafiekian (aka Bijan R. Kian) whom the SVR has identified as being a “Clinton mole”.
Important to note about Special Prosecutor Robert Muller, this report details, is his long “hatred/disgust” with Hillary Clinton following her issuing to him (when she was the Obama regimes Secretary of State), on 16 August 2009, when he was FBI Director, a secret “action request” ordering him to hand over to the SVR a sample of highly enriched uranium (HEU) in a “secret plane-side tarmac meeting” in Moscow that violated all normal US and Russian protocols and procedures for the transfer of such deadly atomic materials.

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To the Hillary Clinton “mole” Bijan R. Kian now being targeted by Special Prosecutor Muller, this report further details, he was “inserted/placed” into a company named Flynn Intel Group founded by General Mike Flynn—who was the Obama regimes Director of the Defense Intelligence Agency.



Bijan R. Kian, this report continues, became Hillary Clinton’s “mole” in General Flynn’s company one week after President Trump announced his candidacy in July, 2015—and became that companies Vice Chairman Of The Board of Directors.



At the time Bijan R. Kian became associated with General Flynn’s Flynn Intel Group, this report explains, he was, also, the Chairman of The Board of Directors and Chief Executive Officer of a company named GreenZone Systems, Inc.—and that in August, 2015, began merger negotiations with a shadowy “Deep State” intelligence software company named SAIFE, and that was completed on 27 April 2017.



Important to note about SAIFE, this report continues, is that was, in fact, the “main/central” secret communication link between Bijan R. Kian and Hillary Clinton facilitated by that companies Vice President of Operations and Chief Legal Counsel, named Justin Freeh, who aside from being a former US Navy intelligence officer, is the son of President Bill Clinton’s FBI Director Louis Freeh.

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Justin Freeh, Vice President of Operations and Chief Legal Counsel of SAIFE

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Justin Freeh (second from left) with his father Louis Freeh (far right).

With both former FBI Director Louis Freeh and his son Justin Freeh being suspected members of the Catholic Church organization known as Opus Dei, this report explains, they were both natural “Deep State” allies with Hillary Clinton’s intention to destroy both America and President Trump—so much so, in fact, Louis Freeh, in 2009, became a citizen of Italy in case their plot to carry out their coup d’etat failed and he needed to escape the US.


To how the Clinton-Freeh-Opus Dei coup plotters utilized their “mole” Bijan R. Kian against President Trump, this report details, was to destroy Trump’s National Security Adviser General Flynn—and that they successfully accomplished by Bijan R. Kian secretly negotiating without General Flynn’s knowledge a $600,000 contract with Turkey saying that the Flynn Group would represent their interests in the US.

http://www.whatdoesitmean.com/jojo8.jpg

“Deep State” and Hillary Clinton “mole” Bijan R. Kian who was Director of the Export-Import Bank of the United States (EXIM) under both the Bush and Obama regimes

Even more insidious then Bijan R. Kian making this deal with Turkey, that General Flynn was unaware of, this report continues, Kian then hired a writer named Hank Cox to fine tune an article praising Turkey he had written—and that Kian then had published in The Hill under General Flynn’s name—and that Hank Cox was kept in the dark about with his stating “I assumed since Bijan was the one who hired me, that he had written it”, and with Cox being baffled when he learned the op-ed had appeared under Flynn’s name further said “I was only vaguely aware of General Flynn at the time but I had no idea I was working for him or his company”.



By Bijan R. Kian’s treachery, this report notes, General Flynn was, indeed, destroyed leaving President Trump no recourse but to fire him as his National Security Advisor, but at the same time still praising him as a “good guy” and asking then FBI Director James Comey to pursue Hillary Clinton for causing it all, and when Comey refused, firing him too.



Though former FBI Director Comey failed to go after Hillary Clinton and her “Deep State” allies trying to destroy President Trump, this report concludes, the same cannot be said of Trump’s State Department who is now moving against her to not only cancel her security clearance, but have, also, opened up a new investigation into her handling of classified and top secret emails for which she can still be criminally charged for abusing—and that Special Prosecutor Muller is hot the heels of too.

http://www.whatdoesitmean.com/jojo9.jpg

Other reports in this series include:
George Soros “Republican Massacre” Birthday Gift To President Trump Stuns World

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Clarity Or Confusion At The Fed
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 21, 2017 1:10 PM



Authored by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,
“Are you kidding? Are you kidding? No one knows what you’re doing.”

– Economist John Taylor in response to William Dudley’s (President Federal Reserve Bank of New York, Vice Chairman of the Federal Open Market Committee) comment that the Federal Reserve (Fed) has been very clear in their discussions about monetary policy.


For the last few years the Fed has repeatedly emphasized that they want to be as open and transparent about monetary policy actions as possible. Amid those reassurances, amateur and professional Fed watchers continue to be flummoxed by the vagaries of language used in speeches, lack of adherence to implied actions and outright contradictions between their words and deeds. As evidenced by the opening quote, one wonders whether they are being intentionally delusory or whether their hubris makes them genuinely oblivious to their own obfuscations.
http://www.zerohedge.com/sites/defau..._confuse_0.jpg
Confusion


In 2012, the Fed published a Statement on Longer-Run Goals and Monetary Policy Strategy (LINK). That statement has been updated each January since. The opening sentence of that statement contains an interesting modification to its “dual” mandate:
“The Federal Open Market Committee (FOMC) is firmly committed to fulfilling its statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates.”

While maximizing employment and engineering stable prices are the official congressionally mandated objectives, the term “moderate long-term interest rates” has never been a part of the congressional mandate. Needless to say, this is confusing and erroneous.

Ironically, with regard to its intent to explain monetary policy decisions as clearly as possible, the statement continues:
“Such clarity facilitates well-informed decision-making by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.”


So following the erroneous statement in the opening regarding their mandate, they then provide a lecture on the importance of Fed clarity to our democratic society.

Furthermore, the document is mislabeled as it contains nothing on monetary strategy. The statement only discusses goals presented in an obtuse fashion based on their congressional mandate which they confounded in the first sentence. As for monetary policy strategy (and to emphasize the point) the document conveys nothing coherent about the reaction function of the policy-setting body under scenarios where deviations from the goals emerge.


The members of the Fed have gone to great lengths in countless speeches, congressional testimonies and press conferences to portray a decision-making body that is disciplined and rigorous. Further, they incessantly attempt to set the record straight about their positive contribution to prior periods of economic and financial instability. In their view, they have never been complicit in creating economic malaise and always play the role of the good physician coming to the aid of the country in troubling economic periods. As demonstrated via the confusion mentioned above, their perspective is inconsistent and deceptive.


To offer an illustration of such inconsistencies:
At the end of 1997, the 6-month average rate of inflation as measured by the Core PCE deflator (the Fed’s preferred inflation measure) was 1.43%, the average unemployment rate was 5.2% and the average Fed Funds rate was 5.50%.

At the end of 2003, the 6-month average rate of inflation (Core PCE) was 1.87%, the average unemployment rate was 5.98% and the average Fed Funds rate was 1.0%.

While there are a variety of other considerations for the economy when analyzing the two periods, data related to the two mandated objectives of the Fed were similar and trending in the “right” direction (inflation up, unemployment down). Despite those facts, the Fed Funds interest rate differential between the two periods, 4.50%, is enormous. Contrary to the insistence of the Fed, there is substantial evidence that the long period of low interest rate policy followed by well-telegraphed quarter-point interest rate hikes preceding the financial crisis of 2008 were major factors in generating the instabilities that almost bankrupted the financial sector.

Now, consider conditions today. The average rate of inflation (Core PCE) for the last 6-months is 1.82%, the average unemployment rate is 4.50% and the Fed Funds rate was just increased to 1.00% following 7 years at essentially 0.00%. Taking into account the size of the Fed’s balance sheet ($4.4 trillion) due to quantitative easing, the level of Fed-provided accommodation remains extraordinary even when compared to the aggressively easy monetary policy of the early 2000’s.
http://realinvestmentadvice.com/wp-c...06/1-table.png
The argument for a more normal policy stance is stronger today than it was in either of the two prior instances, and yet the Fed’s stance is stubbornly and unjustifiably extreme.


In fairness, no two time periods are the same and policy responses are never identical. However, if the intent of monetary policy actions are aimed at ensuring the health of the economy, then it is also plausible and logical that policy, improperly applied may produce sick and unstable conditions. Interestingly, that fact is freely acknowledged by current Fed members with regard to monetary policy of the 1970’s and the Great Depression era. Why then, are the increasingly aggressive and interventionist policies of the last 20 years not a concern or even considered a factor in causing the recent boom-bust cycles by those very same Fed members? Even more importantly, why does the market acquiesce and encourage what are certain to be revealed as major policy errors? The good news is that a lot of money can be made by investors who properly identify central banker mistakes.



Summary
Current Fed policy is grossly inconsistent with the actions they have taken in the past and the rules they themselves have discussed in post-crisis years. Evidence of that fact abounds. There is an acute lack of clarity about the strategy for policy normalization, specifics about what dictates their decision-making and how they will go about it. In the late 1970’s and early 1980’s, Paul Volcker was so clear about his policy objectives that he rarely needed to discuss them when he made public comments. Despite the difficulties associated with extracting the country from prior bad monetary policy, everyone knew his intent was to conquer run-away inflation and restore healthy economic growth.


Given the data comparison above and their mandate, there are sound reasons for the Fed to be much more aggressive in raising the Fed Funds rate and reducing the size of their balance sheet. The truth is they are concerned that such “hawkish” actions might greatly reduce the prices of many financial assets. Despite the short-term pain, acknowledging that current eye-watering valuations of many assets are predicated on Fed policy and not fundamentals would seem to be a prudent first step toward “normalization”. Watching the Fed Chairman evade direct answers on the topics of bubbles and policy normalization leaves no doubt that confusion, not clarity, will continue to be the Fed’s tool of choice.

http://www.scmp.com/business/china-b...tures-contract

Shanghai Gold Exchange to offer yuan-back futures contract in Budapest


China seeking to expand the use of its yuan-denominated gold fix overseas, says chairman of the mainland China’s sole gold bourse
PUBLISHED : Wednesday, 21 June, 2017, 5:11pm

UPDATED : Wednesday, 21 June, 2017, 10:59pm
COMMENTS:
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Maggie Zhang



China is looking to expand the use of its yuan-denominated gold fix overseas, the chairman of the mainland China’s sole gold bourse said on Wednesday, reflecting on Beijing’s attempt to vie for a bigger say in the price-setting of the precious metal.


SCMP TODAY: HK EDITION


It is now expected that a gold futures contract based on China’s yuan-backed gold benchmark price could be listed on the Budapest Stock Exchange in Hungary as soon as the second half of this year, said Jiao Jinpu, chairman of the Shanghai Gold Exchange (SGE) at the Lujiazui Forum, which ends in Shanghai on Wednesday.


SGE is considered the world’s largest physical bullion exchange.

The yuan-backed benchmark fix, launched by the SGE in April 2016, reflects Beijing’s hopes of reducing its reliance on US-dollar based prices of the metal, he said.
https://cdn4.i-scmp.com/sites/defaul...770_171148.JPG

It also reflects Beijing’s latest step to push ahead its plan to make the yuan a global currency, analysts added.

SGE and the Dubai Gold and Commodities Exchange (DGCX) have just signed an agreement which makes the DGCX the first foreign exchange to use the SGE’s renminbi-denominated gold benchmark.

“The Shanghai pricing has now stepped out of the domestic market and is spearheading the global arena,” said Jiao.

“On top of the listing in Dubai, the upcoming launch in Budapest underlines the Shanghai pricing’s ongoing foray into overseas market.”
Jiao also told the Post many of the exchange’s member traders are also now coordinating their efforts to set up a fund to invest in the gold industries of countries and regions along China’s ambitious “Belt and Road” trade routes. That fund could be worth between 100 billion yuan (US$15 billion) and 200 billion yuan, he said.
https://cdn2.i-scmp.com/sites/defaul...00x_171148.JPG

The Belt and Road was introduced by President Xi Jinping in 2013 as an economic blueprint to improve infrastructure across 65 countries along the old Silk Road trading routes.


“China, as the world’s largest producer and consumer of gold, is growing its pricing power step by step,” added Zhang Yongtao, vice chairman of China Gold Association.


“This can’t be accomplished with the one stoke, and also needs the backup of an increasingly international yuan.”

It’s still too early to seriously challenge the dominance of pricings made in New York or London, Zhang said, but noted a fully convertible yuan in the long haul might drastically accelerate the process.

SGE is still overseen by China’s central bank. In September 2014, the exchange launched an international trading platform in Shanghai’s free-trade zone that invited foreign participants to the market. It now has 69 overseas participants with an accumulated turnover of 3 trillion yuan since the platform was launched.


This article appeared in the South China Morning Post print edition as:
Shanghai gold bourse to step up global plans
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http://usawatchdog.com/fed-trying-to...martino-booth/

Home » Market Analysis » Fed Trying to Cripple Trump Economy-Danielle DiMartino Booth


Fed Trying to Cripple Trump Economy-Danielle DiMartino Booth


By Greg Hunter On June 21, 2017 In Market Analysis
http://usawatchdog.com/wp-content/up...tino-Booth.jpgBy Greg Hunter’s USAWatchdog.com
Financial expert and former top Federal Reserve insider Danielle DiMartino Booth says the latest Fed rate hike is nothing less than an attempt to make life worse for President Trump. DiMartino Booth explains, “They are trying to do the opposite of what they did a year ago because the people who occupy the White House have changed. That’s the only feasible answer I can come up with to explain the Fed tightening into a weakening economy. Their own metrics don’t lie. Nonfarm payroll growth has slowed appreciably over the last 12 months, and their favorite inflation metric is back below 2%. These are the rules they have made up, not me. They (the Fed) are making policies against their own rules, and there has to be a reason for it.”


DiMartino Booth wrote a popular book called “Fed Up” that reveals the Fed’s manipulation of the financial markets and says flat out, “The Federal Reserve is bad for America.” DiMartino Booth says massive manipulation is the only way you can explain rising federal debt and stagnant or falling interest rates on the 10-year Treasury bond. DiMartino Booth contends, “The only way you can fabricate the surreal balance between growing debt and falling interest rates is to manipulate that. . . . These are central bankers gone wild. . . . In 2008 and 2009, the credit markets were closer to $200 trillion in size. Today the credit markets are closer to $300 trillion in size, and we still can’t say what and where the next systemic risk lies.”


On gold, DiMartino says, “I think gold is in the very late stage of a correction phase. Once we get a sniff of true market reaction to any of these geopolitical events, I think you could see gold take off like a boomerang or a hockey stick. . . . If there is any slowing in the global economy, then the safe haven will not necessarily be U.S. Treasuries. The ultimate safe haven is gold.”


DiMartino Booth says it’s unlikely the Fed can fix the economy the next time it gets into trouble. DiMartino Booth says, “If you tack on slowing auto sales . . . we’re talking about a third of manufacturing jobs in this country . . . manufacturing is still big enough at the margin to lead the economy down. . . . When you aggregate the bloodletting in brick and mortar retail, what’s coming up in restaurants, what auto dealerships are looking to do with the land under their dealerships . . . you add all this up together and there is a perfect storm in this country for commercial real estate, that is highly overvalued, and throw in a black swan or two geopolitically and you could have a confluence of factors that the Fed could not fight.”


Join Greg Hunter as he goes One-on-One with Danielle Di Martino Booth, author of the popular book “Fed Up.”

(Programing Note: There was a technical issue that could not be fixed in the recording where the video was not near as smooth as the audio.)

After the Interview:
http://usawatchdog.com/wp-content/up.../06/Fed-Up.pngDiMartino Booth is a prolific writer, and you can follow her latest work free of charge in the “Archive” section of her website DanielleDiMartinoBooth.com. A couple of her favorite articles are “Has the Fed Bankrupted the Nation?” and “The Federal Reserve and the Destruction of the American Dream.” To buy a copy of “Fed Up” go to the home page of DanielleDiMartinoBooth.com and scroll down a bit.

http://thecrux.com/dyncontent/millio...&eid=MKT334861

Reclusive Millionaire Warns: “Get Out of Cash Now”
06.19.2017 BY PATRICK BOVE, STANSBERRY RESEARCH


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Steve Sjuggerud’s latest prediction has caught many Wall Street analysts off guard.



Something strange is going on in the financial system.


And according to The Wall Street Journal, it’s causing some investors – including the biggest banks in the world – to move massive amounts of money out of the banking system.


What exactly is going on and what does it mean for your money?
I recently met up with former hedge fund manager, Dr. Steve Sjuggerud – one of the most widely-followed financial analysts in the world.


Today, he shuns the spotlight and lives on a remote island off the Florida coast. And he’s built a new life… and a substantial fortune… by sharing a series of eerie predictions. Many of which have proven correct.


• In January of 2000, he wrote: “We are at the peak of most likely the greatest financial mania that will ever be seen in our lifetimes.” Next thing you know, the NASDAQ fell more than 75%.
• On November 1, 2002, he said, “I expect a real estate bubble to take hold. We don’t know how far it will go. But it has likely just begun.” You probably remember what happened next – home prices soared.
• Then on Friday, March 20, 2009 – at the peak of the financial panic, he wrote: “You want to own stocks right now.” Stocks have nearly tripled since.


But his latest prediction has caught many Americans completely off-guard.
Dr. Sjuggerud says, “Cash in the bank used to mean something. But I’m telling you – it’s going to be a huge, huge source of regret in the months ahead.”



He told me, over the next year or two, there’s going to be a massive panic out of the traditional banking system. In fact, it’s already begun.


Some of the biggest investors in the world are pulling billions of dollars at a time out of bank deposit accounts… They’re even selling their gold bullion. And they’re putting all this cash in the last place you’d ever expect.


Dr. Sjuggerud is an intensely private man. But he was recently prodded by a friend – one of the most successful investment analysts in the world – to share the details of his stunning research with the general public.


I should warn you: What he has to say is controversial… and not at all what you’ll hear from the mainstream press. But for the time being, you can view his presentation – free of charge, right here.

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Feds Brace For Huge Change To Dollar

COMMENTS FROM BENJAMINIS: YOU HAVE BEEN WARNED !!! The END GAME IS STARTING ~

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It is widely expected that Presidents Trump and Putin will meet in person for the first time just two weeks and one day from today, on the sidelines of the July 7-8 Group of 20 summit in Hamburg. This meeting has the potential to be a world-changing event. As we have reported, Russian Senator Alexander Pushkov said on June 20 that this meeting will be the highlight of the G20 summit if it takes place. "A lot will depend on this meeting," he said, and "that is why it is so highly anticipated everywhere—from Tallin to Lisbon, from Beijing to Cairo." Yes, it's critically important—but yet no one is talking about it! It's "hiding in plain view," as Lyndon LaRouche has frequently cited a notion found in Edgar Allan Poe's story of "The Purloined Letter."


Our adversaries of the British imperial faction are saying absolutely nothing about this soon-approaching Trump-Putin summit, because they are terribly frightened of what may happen there. After all, why else have the neocons and neoliberals spent so many months lying their heads off that President Trump and his associates are somehow Russian agents? Now this fast-approaching expected summit is so important that they refuse even to mention it!


Instead, they have been moving in obvious ways to try to get the Trump-Putin meeting cancelled—or, if they can't get it cancelled, to try to insure that it is ruined, and that it becomes totally hostile, so that no positive personal relationship can develop.

It was for this reason that a crazy Russia sanctions bill was rammed through the Senate by a lopsided 98-2 majority just one week ago today—and then misreported as "Trump sanctions" by the lying British-run media—even though the Trump Administration opposes it and is trying to stop it before it can become law. It was for this reason that U.S. forces shot down a Syrian jet on June 18, forcing the Russians to again terminate the hotline through which US and Russian forces had deconflicted their operations in Syria. It was for this reason that Steve Mnuchin's U.S. Treasury Department imposed sanctions on 38 Russian and Ukrainian firms and individuals on June 20, forcing Russia to cancel a planned meeting between Deputy Foreign Minister Ryabkov and U.S. Undersecretary of State Shannon. And whose F-16 was it that buzzed the jet of Russian Defense Minister Shoigu just a few days ago?


And what worse treasonous act will these people commit tomorrow, in their hysteria about the prospect of better relations between the U.S. and Russia?


These sinister forces have refused to recognize the Constitutional election decision of the American people since day one, and they still refuse. Those of us who support the President and the Constitution must come forth to crush the forces of treason, and to support the President to achieve his objectives by joining the U.S. with Russia and China in the New Silk Road, and recreating American infrastructure through massive Federal credit, and in partnership with China, through Lyndon LaRouche's "Four New Laws" of June, 2014. And tomorrow may be too late.


Further indication of the British-loving layer's hysteria at the prospect of a linking-up of Putin with Trump, can be found in German Finance Minister Schauble's remarks of June 20 (on receiving the Henry Kissinger Prize): "I doubt whether the United States truly believes that the world order would be equally sound if China or Russia were to fill the gaps left by the U.S., and if China and Russia were simply given a free hand to dominate the spheres of influence that they have defined for themselves. That would be the end of our liberal world order."


He's lying, and he knows he's lying—but can't you feel the hysteria behind his lying?

http://www.zerohedge.com/news/2017-0...vent-coup-fars

srael Deployed 18 Fighter Jets To Saudi Arabia To "Prevent A Coup": Fars
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by Tyler Durden
Jun 22, 2017 4:11 PM



While according to the official narrative, the Saudi power transition on Wednesday, when King Salman bin Abdulaziz announced his decision to replace Crown Prince Mohammed bin Nayef bin Abdulaziz with his own son, Mohammed bin Salman, went smooth and by the numbers, what took place behind the scenes is more interesting.


Here, events were decidedly more interesting, because as Fars News reports (so take it with a grain of salt), after the decision was announced, the Israeli air force sent 18 of its fighter jets, including F16-I, F15-CD and F16-CD, along with two Gulfstream aircraft, two tanker airplanes and two C130 planes, special for electronic warfare, to Saudi Arabia at the demand of the new crown prince bin Salman to block his cousin (bin Nayef)'s possible measures.



On the surface, such close ties between the existing Saudi regime and Israel would appear a stretch, although it is far more plausible after this week's WSJ report that when it comes to the Saudi proxy war, Israel and Saudi Arabia had been alligned from the onset of the Syrian conflict, with Israel secretly supplying Syrian rebels near its border with cash as well as food, fuel and medical supplies for years, "a secret engagement in the enemy country’s civil war aimed at carving out a buffer zone populated by friendly forces."

If true, the Fars report would be rather striking because, in addition to other geopolitical implications, Israel and Saudi Arabia do not have formal diplomatic relations.


According to the Times of Israel, "a spokesperson for the IDF said the army does not comment on foreign media reports. An Israeli military insider ridiculed the report as absurd."

As a reminder, just days ago, the Saudi king stripped Nayef - who was against Saudi involvement in the Yemen civil war - of his powers overseeing criminal investigations and designated a new public prosecution office to function directly under the king’s authority. In a similar move back in 2015, the Saudi king had appointed his nephew, then deputy crown prince Mohammed bin Nayef as the heir to the throne after removing his own half-brother Prince Muqrin bin Abdulaziz Al Saud from the position. His replacement as the new Crown Prince, Mohammed bin Salman, 31, was also named deputy prime minister, and shall maintain his post as defense minister. He has been described as the real power behind his father’s throne.


The power struggle inside the House of Saud came to light earlier this year when the Saudi king began to overhaul the government and offered positions of influence to a number of family members. In two royal decrees in April, the Saudi king named two of his other sons, Prince Abdulaziz bin Salman and Prince Khaled bin Salman, as state minister for energy affairs and ambassador to the United States, respectively.


None of this is new, but where Fars provides new details is that in late April, Mohammad bin Salman "literally bribed the new US administration by paying $56m to Donald Trump." There is no official confirmation of this allegation. Fars further adds that "bin Salman was paying off the US to buy its support for finding a grip over the crown."


"Since Uncle Sam's satisfaction is the first step for the Saudi princes to get on the crown, paying off Washington seems to be a taken-for-granted fact," Rami Khalil, a reporter of Naba' news website affiliated to the Saudi dissidents wrote.

He added that since the Justice Against Sponsors of Terrorism Act (JASTA) is like a sword over the head of the al-Saud, they have no way out but to bribe the US, noting that the Yemen quagmire is also another reason for Riyadh to seek Washington's support.

Also, a prominent Yemeni analyst said earlier this month that the US has been paid several trillion dollars by Saudi Arabia to protect its crown, adding that Riyadh has recently bribed Washington's support for the Yemen war with $200bln.

"Washington has asked for more money to defend the Saudi regime and Riyadh has recently paid $200bln to the US for the costs of its support for the war in Yemen," Saleh al-Qarshi told Fars News Agency. "This is apart from the huge amounts of money that Saudi Arabia pays to the US treasury for protecting its crown," he added. According to al-Qarshi, "former Saudi Intelligence Chief Turki al-Feisal revealed last year that his country has bought US treasury bonds to help the US economy."


Meanwhile, as defense minister, Mohammed bin Salman has faced strong international criticism for the bloody military campaign he launched against neighboring Yemen in 2015 amid his rivalry with bin Nayef, the then powerful interior minister. Saudi Arabia has been striking Yemen since March 2015 to restore power to fugitive president Mansour Hadi, a close ally of Riyadh. The Saudi-led war has so far killed at least 14,000 Yemenis, including hundreds of women and children.


* * *

It was not immediately clear if, assuming the Fars report is accurate, Israeli forces are still located in Saudi Arabia, or if the fears of a coup have since dissipated.

Separately, the Times of Israel reports that in a recent television interview aired in May on Saudi TV, bin Salman delivered a strong warning to Iran and ruled out any dialogue with officials there. Framing the tensions with Iran in sectarian terms, he said it is Iran’s goal “to control the Islamic world” and to spread its Shiite doctrine.

“We know we are a main target of Iran,” the prince said, warning that he “will work so that it becomes a battle for them in Iran and not in Saudi Arabia.”

For its part, Iran’s state TV, when it isn’t claiming that bin Salman is propped up by Israel or the US, described the appointment of bin Salman this week as a “soft coup in Saudi Arabia.”

Credibility of the Fars report aside, as Petromatrix' Olivier Jakob reported yesterday, the shocking Saudi shakeup means it is "Not A Question Of If But When New Escalation With Iran Starts."

Finally keep in mind that with Saudi Arabia desperate to raise the price of oil, and with every other measure failing, there is always one dependable fall back when all else fails: war.

http://www.whatdoesitmean.com/index2321.htm

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

IceCap: Most Investors Aren't Prepared To See What Is Behind Draghi's Scheme To Delay The Inevitable
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by Tyler Durden
Jun 25, 2017 10:00 PM



From Keith Decker of IceCap Asset Management
“The Beautician”


In 1888, Martha Matilda Harper became the world’s first professional beautician. In addition to inventing the first reclining shampoo chair, Ms. Harper became famous for opening the first ever, stand alone beauty salon.

Next up to dominate the industry was Elizabeth Arden. Her success was founded upon expanding the salon concept to 1000s of stores around the world, and for the distribution of her self made products, most notably lipstick.

Today’s top beautician is breaking the mold. His product and distribution are light years ahead of anything dreamed of by both Harper and Arden, and best of all he truly believes if he applies just the right amount of foundation, concealer and lipstick (especially lipstick), then he can make anything beautiful and attractive.

Up to this point, his business has been a self-declared, resounding success. His salon is in Frankfurt, Germany. His company has gathered over $5 billion in assets, and his clients total over 340 million people.

Yet recently, more and more people are realising that all isn’t as beautiful as meant to be. Cracks are building in the foundation, mascaras are running long, and worst of all, the lipstick has been smeared.


Mario Draghi’s days as both Beautician and President of the European Central Bank are starting to show their wear. While the headline news celebrates the outcome of France’s election, Europe’s governments and banks remain burdened in a financial struggle that even the very best lipstick cannot hide.

Two things are for certain.

1. One, underneath all the financial make-up applied by Mario Draghi remains a fractured, unworkable Eurozone system.
2. Two, the majority of investors around the world are not prepared to see what is truly behind Draghi’s scheme to delay the inevitable.

* * *

Darwinism
Chart 1 below details the evolution of the global financial system since the 2008-09 credit crisis.

The good news is that after 7 years of financial oppression, those who have not benefited from extreme monetary stimulus, the playing field will once again be level for all players.

The bad news is that after 7 years of financial oppression, those who cannot recognize the risks that have accumulated, are about to be red carded right off the field.
http://www.zerohedge.com/sites/defau...ecap%201_0.jpg

Let us explain.
For a number of reasons, the vast majority of investors around the world solely look at the stock market. Everything good and everything bad always comes from and away from the stock market.

In truth – the grease that keeps the world’s mighty economy and debt eating machine chomping through the night is ladened with interest rates.

Yet, few are able to see, speak or even dream about interest rates. The big banks are especially unable to articulate their importance.

Instead, their compliance-approved, snooze-worthy market commentaries occasionally dare to mention everyone’s favourite financial axiom – valuation. And even then, the trained eye can see the rather lack of conviction in the use of the word.

To better grasp the vital importance of this discussion, just know that long-term interest rates are to the bond market as oil prices are to the energy market.

From 2003 to 2008, oil prices shot to the moon dragging along every investment with even the slightest positive linkage.

The same also occurred in 2014 – but with a negative reaction when oil prices crashed from $100 to $50.
Yes, prior to the most recent devastating oil correction, people couldn’t get enough real estate in Alberta and Texas. And they couldn’t get enough energy stocks and their high paying dividends.

In both cases, the perceived risk was non-existent. Oil prices would only go in one direction – up, and that was the end of story. Well, we all know now that it wasn’t the end of the story. In fact, it was only the beginning of another story, one in which turned into a nightmare for all of those riding the great oil express.


Today, the exact same story is playing out.
Instead of it occurring in the oil patch and affecting a smaller segment of the investment universe, the story today is occurring in a field that covers the world from east to west, north to south and every nook and cranny in between.



This field of course, is the interest rate field and the entire bond structure used by investors everywhere.


As easy as 1-2-3
Returning to Toronto – understand that when the long-term interest rate bubble pops, two things happen:

1. bond investments lose a lot of money
2. piles of jobs are lost from the many companies dependent upon interest rates which so happens to include practically every bank, insurance and financing company.

So, from a pure fundamental, aggregate income and valuation perspective; the breaking of the bond market will have a serous downward impact on salaries, bonuses and perks in Toronto. That alone creates heavy pressure on house prices.


But, the other simultaneous whammy is the surge in mortgage rates which makes the amount qualified to borrow to decline as well. In other words, there will be less money available to buy houses and the money that is available, will not be able to borrow as much as it could before.


The result: prices go down, way down.

Understanding why this is about to occur is really the key to happiness.

The happiness occurs as there are several ways to prosper significantly once the crisis begins.

The process of why it will occur is explained in 3-easy steps.

Step 1: >$14 Trillion in QE
The foundation of the current bubble in the Toronto housing market (and the bubble in bond markets) was firmly established in 2008-09. Recall, that was the year the Americans and their Wall Street financial assassins created deathly lending products which eventually went boom in the middle of the night. It was the response to this boom that sowed the seeds for the next crisis, which just so happens to be manifesting itself today in Toronto’s housing market, and even more concerning – in the world’s bond market.


The chart next page, shows collectively, central banks of USA, Japan, Eurozone, and Britain created over $14 trillion out of thin air. Top government economists swore printing money would stimulate the economy, creating new jobs, raising taxable income which would pay down debt everywhere. But, instead of actually printing money and mailing a cheque to everyday average people to actually spend, economists decided to make an easy stimulus plan a complicated stimulus plan. It became complicated when the money was instead use to buy government bonds. The thought was that by buying government bonds, interest rates everywhere would decline which would benefit everyone.


http://www.zerohedge.com/sites/defau...ecap%202_0.jpg
In effect, this entire money printing or Quantitative Easing (QE) experiment was really one arm of the government lending to the other arm of government.

The intentions were good – after all, the thought was that this $14 trillion would be swished around the global economy faster than the speed of light. Instead, it actually had the opposite reaction as seen in Chart below that shows the Velocity of Money actually declining.
http://www.zerohedge.com/sites/defau...ecap%203_0.jpg
Now, just in case this $14 trillion wasn’t enough to heal the wounds, all of the world’s central banks agreed to add an extra layer of stimulus. Which brings us to Step 2.


Step 2: 672 interest rate cuts
Simultaneous to printing $14 Trillion, government economists also announced they would cut interest rates to the bone. And when we say bone – we mean 672 interest rate cuts over 7 years.
http://www.zerohedge.com/sites/defau...ecap%204_0.jpg
The thought was that 672 interest rate cuts would stimulate the global economy by making money super cheap to borrow, which would creates jobs and create more tax revenues for governments.


But central banks still weren’t done. Just to ensure their plan would work the ultimate cherry on top was added in the form of NEGATIVE INTEREST RATES.


Step 3: Negative Interest Rates
Just in case the $14 trillion of new money + 672 interest rate cuts were not enough, 5 of the world’s central banks played the sneakiest card of them all by creating NEGATIVE interest rates across Europe and Japan.
http://www.zerohedge.com/sites/defau...ecap%205_0.jpg
Whereas the thought that $14 trillion of money printing and 672 interest rate cuts would encourage people to borrow and spend, the thought was that the use of NEGATIVE interest rates would force people to spend.


Either way – savings and savers would really going to struggle.
In the end, the combination of steps 1 + 2 + 3 didn’t provide nearly the amount of global stimulus as thought.


The Bottom Line
Instead, it lowered short term, medium term, and long term interest rates to never before seen levels, merely encouraging borrowing from 2 groups of investors:

1. Home buyers
2. Governments

Which of course squares the peg as follows:
$14 Trillion money printing
+ 672 interest rate cuts
+ Negative interest rates
= record low interest & mortgage rates


What investors must realize and understand today is that interest rates are the key cog in the global money wheel.


And over the past 7 years, this wheel has been flattened, pushed around and outright forced to look, feel and behave in a certain way.

However, where this becomes the most important foresight to hear – interest rates (and especially long-term interest rates) cannot remain in its current, forced/coerced/manipulated state forever.

Eventually it will change. The change will be abrupt. And it will definitely be the shock that breaks the housing market in Toronto and it will certainly be the shock that forces the Eurozone to restructure.

* * *

The Majority are always wrong
IceCap is a global macro manager, and like other global macro managers, we see the risks and imbalances in the world today have very clearly been created by governments and their central banks. We know this. Governments know this. And the central banks especially know this.



Yet, just about everyone else doesn’t know this. And since the risks and imbalances created have reached astronomical levels, it has become very important to the central banks to ensure those that don’t know what is happening remain in the dark and are unable to see these risks and imbalances.


This is where all kinds of make-up, mascara and lipstick is needed to make everything look pretty and beautiful.

And when it comes to lipstick, no one in the financial world is better at applying it than the President of the European Central Bank. And, no one is better at wearing it than Italy.

Let us explain.

Chart 2 next page shows the interest rate Italy had to pay to borrow money for 10 years.

Everyone ought to know that the less you pay in interest the better – it means you can borrow more, your interest payments take up less of your income, and more importantly, it means lenders view you in a favourable light. When lenders do not view you in a favourable light – bad things happen, with the worst being no one will lend you any money at all. When this happens, you are shut out of the loan market. And when you are a government and sovereign state, you cannot ever be shut out of the lending market.


Once this happens – it is game over and out. As a country, being unable to borrow, means you are unable to pay policemen, the military, nurses, doctors, teachers, and garbage collectors. You are also unable to pensioners, engineers, social workers, and snow plough operators. And of equal importance, you are unable to repay old debt that is coming due. In other words – you’re in deep doo.
And, this is exactly what happened to Italy in 2011.

http://www.zerohedge.com/sites/defau...lipstick_0.jpg
* * *

Continue reading in the slideshow below (link)

https://larouchepac.com/20170626/abj...rm=READ%20MORE

THE LEAD


World Land-Bridge
New International Economic Order
American Credit System
"Abject Poverty Is Absolutely Conquerable"
https://larouchepac.com/sites/defaul...?itok=27MyYylf
President Xi Jinping meets with representatives attending the 7th National Congress of the Chinese Young Pioneers at the Great Hall of the People in Beijing, June 1, 2015. Photo (Xinhua/Ma Zhancheng)


In a few short decades, China has accomplished economic feats that have left the world stunned in happy amazement: bringing 700 million Chinese out of poverty; increasing average life expectancy from 35 years in 1949 to 76 years today; launching world-class scientific work in the fields of space exploration and fusion energy development.

But China is not resting on its laurels. President Xi Jinping's government intends to totally eliminate poverty in China—there are still 40 million in that category—by the year 2020. Xi recently met with Party leaders in China's northern Shanxi province, and told them: "As long as we pay great attention, think correctly, take effective measures, and work in a down-to-earth way, abject poverty is absolutely conquerable."

Nor is China limiting its ambitious intention to China alone. Foreign Minister Wang Yi was at a two-day conference June 21-22 with the African Union in Addis Adaba, where he stated that "Close to 400 million people in Africa live under the poverty line, and more than 40 million Chinese need to be lifted out of poverty. China and Africa need to join hands in fighting poverty and achieving common development. This is our responsibility to the future generations, the shared objective of Chinese and African people and the inherent part of human progress."

Wang Yi went from Ethiopia to Lebanon, where he stressed that "China advocates more actions to curb the deterioration of a refugee crisis in the Middle East and find a solution as soon as possible," adding that China is willing to enhance cooperation under the framework of the Belt and Road Initiative.
As Helga Zepp-LaRouche has repeatedly emphasized in recent weeks, last month's May 14-15 Belt and Road Forum in Beijing—in which she was a prominent participant—was a turning point in modern history, to make this intention a global reality. With the important indications earlier this week of growing U.S. involvement in the Belt and Road project, we stand at the threshold of that planetary change.

Lyndon and Helga LaRouche have been at the forefront of many of these developments, way before they ever happened. It was Lyndon LaRouche who first stated that the U.S. joining the Belt and Road Initiative was the key to the strategic crisis, and he provided the programmatic basis for doing that with his Four Laws. It was Helga Zepp-LaRouche who, in a 2015 speech in Chongqing, first urged China to help resolve the crisis of wars and emigration in the Middle East and Northern Africa, by bringing the Belt and Road into that region. It has been the Schiller Institute, which has pioneered the spread of Classical music and culture as the basis for a dialogue of civilizations to bury British geopolitics once and for all.

Now we stand less than two weeks from the start of the July 7-8 G20 meeting in Germany, which will see historic summits between and among Trump, Xi, Putin, Abe and others. But regardless of the outcome of those meetings, Helga Zepp-LaRouche stressed today, the planet is now moving under the overwhelming dynamic of the Belt and Road Initiative. Its successful outcome depends, as it has from its inception, on the singular strategic and policymaking conceptual input provided by the LaRouche movement. And it is our special responsibility, Helga Zepp-LaRouche stated, to use our organizing effort to introduce beauty into the political debate.

Now is the time, as Lyndon LaRouche has been fond of saying for decades, to have fun.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Key Events In The Coming Busy Week: Yellen, Inflation, Durables And GDP
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by Tyler Durden
Jun 26, 2017 8:14 AM


It's set to be a busy week with a a jam-packed agenda for central bank watchers, with speeches due from Janet Yellen, Mario Draghi, Mark Carney, Haruhiko Kuroda and more. Economic data may also drive momentum in financial markets, with closely watched reports due on inflation, employment, manufacturing and housing from China to the U.S. We also have GDP, durable goods and consumer confidence in US, industrial production in Japan and confidence indexes in EA
Key highlights:

1. In the US, it will be a busy week with durable & capital goods orders, pending home sales, core PCE inflation, personal income & spending and multiple Fed speakers on the agenda.
2. In the Eurozone, key releases include money supply M3, CPI and confidence data. There will also be a central banking forum with ECB, BoJ, BoE and BoC speakers in the schedule.
3. In UK, we wait for final GDP, credit & lending data, house prices and money supply M4.
4. In Japan, main releases include retail sales, CPI and industrial production.
5. In Canada, beyond GDP, we will hear from BoC speakers.
6. In China, we will have current account balance and PMIs.

The focus is on inflation releases in US (PCE), EZ and Japan. The attention on these releases should remain high given recent market action: declining oil and inflation was cited as one of the main reasons that supported the recent downward move in long-end rates.
A breakdown of key events just in the US:
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A summary of all the key DM events in the coming week is below:
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In the US, Bank of America is looking for a flat reading for core PCE inflation, causing % yoy inflation to decline to 1.4% (1.411% unrounded) from 1.5% in April. In the Eurozone, the bank expects inflation to drop to 1.2% (1.15%) marking its inflation forecasts to market following the drop in oil prices: it now expects inflation at 1.5% in 2017 and 1.0% in 2018. In Japan, BofA forecast Nationwide inflation at 0.5% y/y in May. However, we think the June Tokyo CPI is key: we expect a +0.3% rise in June.

* * *

DB's Jim Reid breaks down the week's events on a day by day basis.

1. This morning in Europe were kicking off in Germany where the June IFO survey is due out. In the US the most significant release is the May durable and capital goods orders reports, while the Dallas Fed manufacturing survey will also be released later this afternoon.
2. Tuesday kicks off in China with industrial profits data. In the UK well then get the CBI retailing sales data before we then get the conference board consumer confidence, Richmond Fed manufacturing index and S&P/Case-Shiller house prices readings in the US.
3. Turning to Wednesday, the early data in Europe includes France consumer confidence and Euro area M3 money supply. Over in the US on Wednesday we are due to get the advance goods trade balance for May, wholesale inventories for May and pending home sales for May.
4. Thursday kicks off early in Japan with the latest retail trade report. In Europe well then get consumer confidence in Germany, UK money and credit aggregates and confidence indicators for the Euro area. The afternoon will then see Germany release its flash June CPI print while in the US well receive the third and final Q1 GDP report revisions and initial jobless claims data.
5. We end the week on Friday with Japan employment data and CPI along with the China PMIs for June. Its a busy end to the week in Europe too on Friday with CPI in France, unemployment in Germany, Q1 GDP in the UK (final revision) and a first look at Euro area CPI in June. A busy day concludes in the US with personal income and spending in May, core and deflator PCE readings, Chicago PMI and the final University of Michigan consumer sentiment reading for June.

Away from the data the Fedspeak this week consists of Fed Chair Yellen tomorrow evening along with Williams, Harker and Kashkari also at various stages tomorrow, and Williams again on Wednesday and Bullard on Thursday. China Premier Li Keqiang speaks early tomorrow morning. Meanwhile the ECB forum which kicks off today will see Carney, Draghi and Kuroda all speak on Wednesday. Other things to note this week is the UK PM Mays speech this afternoon,
US Supreme Court decision on Trumps travel ban today, BoE stability report on Tuesday, the result of the second part of the Feds bank stress tests on Wednesday and UK House of Commons vote on Thursday.

* * *

Finally, courtesy of RanSquawk, here is a preview of the main events in the US, where the key economic releases this week are the durable goods report on Monday, the Q1 GDP revision on Thursday, and the personal income and spending report on Friday. In addition, there are several scheduled speaking engagements by Fed officials this week, including a speech by Fed Chair Yellen on Tuesday.

MON 26 JUN 2017 1330BST: US DURABLE GOODS ORDER (MAY, PRELIM)
Forecast: -0.7% vs prev. -0.8%; ex-transport seen 0.3% vs prev. -0.5%. The headline weakness is likely to come on the back of softer orders from Boeing, which reported 13 orders in May, down from the 15 in April (note: this reading captures the pre-Paris air show data). Excluding transport, the picture should be more stable, and there is some risk of prior revisions upwards, Credit Agricole says: Durable goods production excluding vehicles was reported to have decreased 0.6%, but we think that Aprils unexpected decline was overdone and should put upward pressure on orders this month.

TUE 27 JUN 2017 1500BST: US CONSUMER CONFIDENCE (JUN)
Forecast: 116 vs prev. 117.9. Lower confidence is likely to be driven by declines in the expectations index, which are forecast to fall by around 2 points to 100.6, analysts believe. The usual drivers of confidence have all remained supportive in recent weeks, says Capital Economics, labour market conditions are still strong, gasoline prices have been trending lower and the stock market is at a record high. But the consultancy wants that the timelier Gallup and University of Michigan measures of confidence have both dropped back recently. And based on the past relationship, the Conference Board index also looks set for a fall.

THU 29 JUN 2017 1330BST: US GDP (Q1, 3RD RELEASE)
Forecast: 1.2% Q/Q annualised, unchanged vs 2nd release; consumption expected to be revised up to 0.9% from 0.6%; price index seen unchanged vs 2nd release at 2.2%. No major changes are expected to the headline, though the composition of growth will be in focus, particularly the price index.

FRI 30 JUN 2017 1330BST: US PCE, PERSONAL INCOME, PERSONAL SPENDING (MAY)
Forecast: personal income 0.3% M/M vs prev 0.4%; spending 0.1% M/M vs prev. 0.4%. Core PCE 1.4% Y/Y vs prev. 1.5%. The Fed recently downgraded its view of PCE inflation in 2017 to 1.6%m and the core measure to 1.7%. The May data is likely to highlight the challenges the Fed faces as it normalises policy, with the PCE data once again moving away from target. Meanwhile, Mays employment report saw wages grow by 0.2% M/M, and this should feed through to broad personal income growth of 0.3%, ERBS says. Spending growth is poised to come in lighter than income on the back of relatively soft retail sales on the month, and the bank notes that the retail number came with substantial back-month revisions, and accordingly, even with a flat read for May, real personal consumption is poised to clock in 3%+ for the quarter overall.

FRI 30 JUN 2017 1330BST: CANADA GDP (APR)
Forecast: exp. 0.20% M/M vs prev. 0.50%. Following a strong March print, where utilities and manufacturing supported output, though utilities output is likely to come in flat in April, RBCs analysts say. The bank also expects a 5% M/M drop in non-conventional oil extraction after fire-related shutdowns which may impact the headline. Meanwhile, RBC says solid retail and wholesale sales data should be supportive. Taking a step back, the BoCs hawkish shift is supported by an average of 3.5% annualized growth the last three quarters, with a strong April outcome incrementally adding to this trend, RBS says.

FRI 30 JUN 2017 1500BST: US: UNIVERSITY OF MICHIGAN (JUN, FINAL)
The Prelim release came in at 94.5, down from 97.1, missing expectations, and printing the softest reading since October 2016, with weakness evenly spread between the current conditions and future expectations index. All optimism generated by Trumps Presidential victory has been reversed now, which presumably relates to the lack of action on fiscal stimulus, tax reform and healthcare changes, said analysts at ING. There was also a steep fall in business expectations for next year (again back to Trump election levels) and also business conditions over the last few months. ING adds that weak wage growth was likely to have exacerbated the situation. Nonetheless, the bank says most other spending related questions saw similar responses seen in recent months (be it buying a house, car or other items). It is worth noting that the prelim data showed 1-year inflation expectations unchanged at 2.6%, but 5-year expectations rose by 0.2ppts to 2.6%.

* * *

Weekly G-10 central bank monitor

1. The abundance of Fedspeak last week did little to persuade the market to shift towards the FOMCs hiking trajectory which has pencilled in seven additional 25bps hikes through the end of 2019; Fed Funds Futures, on the other hand, see just two more hikes over that horizon.
2. An acceptance of the need to be patient was generally evident in the tone of the 2017 voters who spoke about monetary policy last week: while NY Feds William Dudley suggested that halting the tightening cycle might imperil the economy, Chicago Feds Charles Evans thought it prudent to wait and see, a sentiment echoed by the Dallas Feds Robert Kaplan as well as the usually hawkish Philadelphia Fed President Patrick Harker.
3. Evans and Kaplans concerns stem from inflation (specifically, the apparent lack of it). Kaplan was sanguine, and believes that inflationary pressures will pick-up as labour market slack is eroded which was also Dudleys core argument. Evans, however, was more scathing, arguing that low inflation was a serious policy mess, and he expressed nervousness about the recent soft inflation data and the challenges about bringing up towards the Feds 2% target.
4. There is a growing rift among Fed policymakers, write analysts at Jefferies. The bank notes that following the June FOMC rate decision there have been public grumblings from a growing number of Fed officials who are becoming uncomfortable with the behaviour of the recent inflation data, adding predictably, policymakers with dovish inclinations have been outspoken. Yellen is finding herself in a new role as a hawk. Mays PCE data, released this coming Friday, will be key for influencing the debate. The core measure is seen ticking down by 0.1ppt to 1.4%, and crucially, away from the FOMC end-2017 forecast of 1.7%.
5. Morgan Stanleys analysts point out that since the beginning of the year, US inflation expectations have fallen by the most in the G10 economies, with 10-year breakeven rates down by around 40bps, which subsequently pushed the 2s10s spread to the narrowest since end of 2007. And this curve-flattening also evident in other curve spreads has not gone unnoticed by Fed officials. Kaplan suggested that the Fed be cautious about hiking rates further with 10-year yields around these levels, arguing that it was indicative of the markets sluggish view on future growth. Dudley was having none of it, however, attributing it to low overseas inflation, once again, highlighting the divergence of opinion among 2017 voters.
6. Balance sheet normalisation, however, is one area where the Fed seems more unified in their endeavours to kick-start the process in 2017. The St Louis Fed President James Bullard said the Fed could announce the start in September, and even identified the low $2 trillion level as an appropriate for the long-term size of the balance sheet (from the current $4.5 trillion mark, and for reference, versus around $900 million in Q3 2008). But once again, the link to inflation may prove the guiding factor: Kaplan said balance sheet reduction may have a muting effect on inflation, and he was uncertain as to exactly how much. Expect more commentary around this theme in the weeks ahead.

Source: Bofa, DB, Goldman and RanSquawk

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Fed's Dudley Had Some Worrying Remarks During A Closed-To-The-Press Session
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by Tyler Durden
Jun 26, 2017 8:54 AM



Last week, Bank of America became the latest bank to wonder if the Fed, no longer even remotely data-dependent, is now hiking rates for no other reason but to burst what increasingly more are calling a risk bubble, to wit:
"Can it be the case that its hawkishness was prompted by something other than its reading of the economy? For example, is it possible that the Fed has become concerned about the recent surge in the equity market, especially tech stocks that has been feeding off low interest rates and low volatility? According to our equity strategists, the P/E of the tech sector (19x) is currently at its highest levels post-crisis while the EV/Sales ratio is at the highest since the Tech Bubble"

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Overnight, CLSA's Valentin Marinov, after reading the latest BIS report, echoed BofA's assessment, as follows:


The BIS annual report released over the weekend will likely go down in history as the first official document to focus on the changing reaction function of global central banks against the backdrop of continuing cyclical recovery but persistently low inflation. In particular, in the report the BIS has encouraged the major central banks to use every opportunity from here to cautiously normalise policy. This will give the likes of the Fed a room to manoeuvre in the event of renewed economic downturn.

In other words, the BIS report has corroborated a conclusion that we have drawn and written about recently, namely our observation that the Fed in particular will continue to normalise policy in part because it wants to amass rate hikes which can be used to fight the next recession. This conclusion is consistent with the fact that, so far, the Fed has largely taken the recent disappointing US inflation data in its stride, signalling steadfast determination to normalising monetary policy further.


And while these non-FOMC opinions were clearly troubling for risk assets, as they suggest that the Fed - without admitting it - will keep hiking until stock prices drop, a confirmation that BofA, CLSA and many others before them are right, came from none other than Bill Dudley who speaking at the Bank for International Settlements' Annual General Meeting in Basel, confirmed that the Fed is now almost entirely focused on the market's financial conditions, which have eased to two year lows despite the two rate hikes in 2017...
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... and that the recent narrowing of credit spreads, record stock prices and falling bond yields could encourage the Federal Reserve to continue tightening U.S. policy.

"Monetary policymakers need to take the evolution of financial conditions into consideration," the second most impoortant person in the Fed, former Goldman employee Bill Dudley, said on a closed-to-the-press panel on Sunday whose contents were disclosed moments ago.

"For example, when financial conditions tighten sharply, this may mean that monetary policy may need to be tightened by less or even loosened. On the other hand, when financial conditions ease—as has been the case recently—this can provide additional impetus for the decision to continue to remove monetary policy accommodation."

There was more in the full speech (link here), but the gist was clear: the Fed is no longer hiking conditions in response to the economy, but to tighten financial conditions, of which the biggest contributor by far is the stock market.

Said otherwise, the Fed now wants stocks lower and will keep hiking rates until the market reacts accordingly.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

James Rickards: The Fed Is Going To Cause Recession
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by Tyler Durden
Jun 26, 2017 5:40 PM



Authored by Valentin Schmid via The Epoch Times,
James Rickards, author of “The Road to Ruin,” has successfully predicted Federal Reserve (Fed) policy in the past. In this interview with The Epoch Times, he explains why the recent tightening could lead to a recession and why he recommends gold as a “crisis hedge.” He also explains why he thinks bitoin is in a bubble.

The Epoch Times: Why did the Federal Reserve (Fed) hike rates last week, and what will its policy look like in the future?


James Rickards: They’re trying to prepare for the next recession. They’re not predicting a recession, they never do, but they know a recession will come sooner rather than later. This expansion is 96 months old. It’s one of the longest expansions in U.S. history. It’s also the weakest expansion in U.S. history. A lot of people say, “What expansion? Feels like a depression to me.”
I think it is a depression defined as depressed growth, but we’re not in a technical recession and haven’t been since June 2009. So it’s been an eight-year expansion at this point, but it won’t fare well, and the Fed knows that. When the U.S. economy goes into recession, you have to cut interest rates about 3 percent to get the United States out of that recession.


Well, how do you cut interest rates by 3 percent when you’re only at 1 percent? The answer is, you can’t. You’ve got to get them up to 3 percent to cut them back down, maybe to zero, to get out of the next recession. So that explains why the Fed is raising interest rates. That’s the fourth rate hike getting them up to 1 percent. They would like to keep going; they would like to get them up to 3, 3.5 percent by 2019.


My estimate is that they’re not going to get there. The recession will come first. In fact, they will probably cause the recession that they’re preparing to cure. So let’s just say we get interest rates to 1 percent and now you go into recession. We can cut them back down to zero. Well, now what do you do? You do a new round of quantitative easing (QE).


The problem is that the Fed’s balance sheet is so bloated at $4.5 trillion. How much more can you do—$5 trillion, $5.5 trillion, $6 trillion—before you cause a loss of confidence in the dollar?
There are a lot of smart people who think that there’s no limit on how much money you can print. “Just print money. What’s the problem?” I disagree. I think there’s an invisible boundary. The Fed won’t talk about it. No one knows what it is. But you don’t want to find out the hard way.

The Epoch Times: What about balance sheet reduction, reversing the QE that you are talking about?
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James Rickards thinks bitcoin is a bubble, he prefers gold as a crisis hedge.
Mr. Rickards: You probably want to get from $4.5 trillion, down to $2.5 trillion. Well, you can’t sell any treasury bonds. You destroy the market. Rates would go up, putting us in recession, and the housing market would collapse. They’re not going to do that. What they’re going to do is just let them mature.

When these securities mature, they won’t buy new ones. They won’t roll it over, and they actually will reduce the balance sheet and make money disappear. They’re going to do it in tiny increments, maybe $10 billion a month or $20 billion a month.

They want to run this quantitative tightening in small increments and pretend nothing’s happening. But that’s nonsense. It’s just one more way of tightening money in a weak economy; it will probably cause a recession.

The Epoch Times: If it does, the stock market will probably correct, and you recommend people buy a small allocation in physical gold to insure themselves against this outcome.

Mr. Rickards: If the economy weakens, as I expect it will, and you see the stock market correct and inflation go down, the Fed’s going to have to flip-flop for the ninth time since May 2013.

Once they send out the signal, they are going to throw in the towel, at least temporarily. They’re not going to raise rates. You take the rate hike expectations out of the market that looks inflationary at the margin, and that’s very bullish for gold. So I look for gold to have a very strong second half.


The Epoch Times: You also talk about price manipulation and that the ultimate price potential for gold may only be realized in the long term.
Mr. Rickards: Every five, six, seven years, financial crises happen. It’s been eight years since the last one. How long do you think we’re going to go? So that is a catalyst for much higher gold prices.

But I don’t worry much about manipulation. I know it goes on, and I know why it goes on, as I spoke to the statistician’s expert witnesses in some of the pending litigation on gold manipulation.
On June 6th, for example, gold got whacked 2 percent because somebody sold $4 billion’s worth of future contracts on the COMEX. Gold was getting close to $1,300 an ounce.


The impact on the markets is like selling $4 billion in gold. But it wasn’t gold. It was paper gold.

Four billion dollars’ worth of gold is 90 tons. Do you think you could sell 90 tons of physical? You can’t source 90 tons of real gold. You are lucky if you can get a couple of tons of gold. All the mines in the world produce a little over 3,000 tons a year. Those 90 tons are close to 3 percent of all the output of all the gold in the world, with one phone call.


But the point is, all manipulations fail. Jim Fisk and Jay Gould ran a gold corner in 1869, and it failed. The London Gold Pool in the late 1960s failed.

So just get your gold allocation—I recommend 10 percent of investable assets—and put it in a safe place, keep out of the banking system, and sit tight.
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Rickards expects a crisis of confidence in the dollar at some point in the near future.

The Epoch Times: What about the electronic currency bitcoin?

Mr. Rickards: Dollars, euros, yuan, gold, and bitcoin are five different kinds of money, but they’re not investments. They’re money. If I buy stock in a company, I can look at management, I can look at earnings, I can look at a whole bunch of things to come up with an evaluation. That’s an investment.

But bitcoin is not an asset class. It’s not an investment. It’s just money. If I buy bitcoin, I’m swapping one kind of money for another.

So when you see bitcoin go from $1,000 to $2,000 or $3,000, what’s happening? If one bitcoin is my unit of measurement, then the dollar is going down. So one possibility is that people are losing confidence in the dollar.

Is there any other evidence for that? If people are losing confidence in the dollar, it would be reflected in a lot of places. Gold would be going up. Oil would be going up. Real estate would be going up.

Except that what we have is bitcoin going up and everything else not. Gold’s up a little, but you know all these things go up a little bit, not by a lot. Bitcoin’s the only one that’s going up a lot. So that tells you empirically that this is not a generalized loss of confidence in the dollar or the euro and other currencies. I think that will come, but we’re not there yet.

So if that’s not the explanation, what is? One is the greater fool theory, which is, “I’ll pay $2,000 for bitcoin because I think there’s some sucker who will pay me $3,000.” And that guy says, “Well, I’ll pay $3,000 for a bitcoin because of some sucker that will pay me $4,000.” That’s called the greater fool theory.


That works until it doesn’t. There comes a time when you’re the sucker—as the old joke goes, if you’re in a poker game and you don’t know who the sucker is, you’re the sucker.


There is no evidence that there’s a general collapse in the dollar. I expect that will happen for other reasons at a different time, but not yet. Bitcoin looks like a bubble.

http://traderfeed.blogspot.ca/2017/0...ed-trader.html

MONDAY, JUNE 26, 2017
Becoming an Evidence-Based Trader
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The recent article I wrote for Forbes is perhaps the most important one I've written. It is about a trend that is sweeping the trading world. Yes, we talk about algos and quantitative trading, factor-based investing, and passive index strategies and all of those are helping to reshape the landscape of finance. The broader revolution, however, is one in which financial decisions are evidence-based. Those who assume the responsibility for achieving returns on capital are expected to do so in a way that is objectively verifiable.

As the Forbes article points out, this mirrors developments in medicine. The clinical judgment of the wise, experienced doctor is no longer enough. Too many studies document the fallibility of such judgment. Instead, physicians are expected to follow "best practice" guidelines that follow from well-conducted outcome research. We are rapidly approaching a point at which the alternative to evidence-based medicine is not discretionary medicine, but malpractice.

If you read old texts on technical analysis, you'll encounter generalizations such as "this is a bullish pattern". No actual evidence is produced to document this. It is the "clinical judgment" of the practitioner. Similarly, a fundamental analyst might assert that the price of a stock or index will rise because of increasing consumer spending or a growing GDP. Once again, no evidence is provided for those links.

The alternative to technical analysis is not fundamental analysis. The alternative to technical and fundamental analysis is evidence-based decision-making.

Think of it this way: the emerging perspective says that if less research rigor goes into your trading and investment decisions than your decision to buy a new car, something is very wrong.

So how can discretionary traders become more evidence-based?

It starts with what Victor Niederhoffer calls "counting". When we see a pattern that we believe has some implications for non-random forward returns, we look back in time and see if that pattern indeed has led to those anticipated results. Cherry-picked examples supporting our inference does not constitute an evidence-basis. Rather, we look back over a meaningful sample and count the times when the pattern has and has not led to expected returns.

Mike Bellafiore's text The Playbook is a great example of nudging traders in an evidence-based direction. When a daytrader identifies a "setup" for an anticipated market move, that setup becomes part of a playbook and the trader tracks his or her simulated (and then actual) trading of that setup. Only setups that empirically demonstrate profitability become an enduring part of one's playbook. The professional trader is one who sticks to their playbook and tests out new plays before adding them to the playbook.

Once a trader begins to count, the development of many skills follows: data management skills with spreadsheets; statistical skills to determine when returns are truly significant; and programming skills to acquire and transform large data sets. With the advent of online education through such sites as Coursera, it is easier than ever to upgrade one's skills. At most of the firms where I consult as a trading coach, there has been a movement toward the development of team-based trading to bring those skills to discretionary traders.

If you are a developing trader, I encourage you to check out the article on the evidence-based revolution and reflect upon how you will be part of the future of finance and not one trapped in its past. There still is a role for intuition, pattern recognition, and judgment in the world of medicine, and there will be that role in trading. Those subjective hunches are the sources of hypotheses, however, not conclusions. Great things can happen when we are fertile in our generation of hypotheses and rigorous in our establishment of conclusions.

The Evidence-Based Revolution in Trading and Investing
.Posted by Brett Steenbarger, Ph.D.at 6:24 AM


JUN 25, 2017 @ 11:08 AM
The Evidence-Based Revolution In Trading And Investing
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Brett Steenbarger ,

CONTRIBUTOR

Opinions expressed by Forbes Contributors are their own.

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A revolution has been brewing in the financial world, and it is impacting everything from the day trading of individuals to the investments of large pension and sovereign wealth funds. Making money is no longer viewed simply as the result of the insightful decision making of market wizards. Rather, returns in markets are seen to follow from rigorous research. Investing and trading are becoming increasingly evidence-based. That has important implications for your market participation as an individual, and also for the investment of your retirement funds.


As a clinical professor at a medical school in Upstate New York, I've seen this movie before. When I joined the full-time faculty in 1985, there was certainly medical research, but actual medical practice was deemed to be a function of the judgment and clinical intuition of the experienced practitioner. This was especially the case in my own department of psychiatry and behavioral sciences. Fast forward to 2017 and the third edition of a brief psychotherapy textbook I am co-editing exclusively features helping approaches that have been validated by extensive outcome studies. It is routine for medical practitioners to consult the Cochrane Database of Systematic Reviews to identify the treatments found to be most effective for particular medical problems before formulating a treatment plan. The ideal of the wise, experienced country doctor has been replaced by the ideal of medicine as a science.


That story is playing out in the world of finance.

A little while back, I was researching a variable that I referred to as "pure volatility". I disaggregated volume and volatility and examined the amount of movement occurring in a market per unit of trading volume. It turned out that high levels of this pure volatility tended to precede upward movement in the stock market. This often occurred near meaningful lows in the market and also at certain points of upside breakout.


As I observed pure volatility and market movement in real time, I was struck by how peer traders--and the financial press--struggled to explain the upward market trajectory. Sometimes it was attributed to central bank expectations; other times to geopolitical events or data releases. More parsimoniously, colleagues steeped in finance referred to "value" or "momentum" factors. None of those accounts, however, truly explained what was happening: why volume was now influencing price more than usual and why that was generating superior forward returns.


What I found was that discretionary market participants constructed narratives to explain the recent and anticipated behavior of assets.

The narrative might explain how the new presidential administration would impact fiscal and monetary policy; it might opine that consumer preferences would pressure margins at certain companies, leading to unfavorable near-term returns; or the narrative might simply consist of assertions that markets were overbought or oversold, overvalued or undervalued, and therefore needed to return to more normal price levels. Evidence consisted of marshaling examples to support the narrative, not evidence linking historical incidents of the events to subsequent returns. This led to significant confirmation bias.

Narratives And Meaning-Making
An intriguing branch of psychology known as narrative psychology emphasizes the importance of storytelling in our meaning-making. As Julie Beck noted in a perceptive article, we literally fashion our life stories to organize our views of ourselves and the events of our lives.

She quotes one psychology researcher, who pointed out that life stories don't just reflect personality; they are personality. Fantasy author Terry Pratchett put it this way, "People think that stories are shaped by people. In fact, it's the other way around." We are shaped by our meaning-making--and by our need to make sense of the world around us.

Narrative approaches to psychotherapy observe that many of our emotional and behavioral problems are result of storytelling gone awry. Because of events of trauma or conflict, we may weave explanations that tell us that the world is dangerous, that we are vulnerable, or that we are unworthy. We carry those narratives to fresh life situations, where they all too often become self-fulfilling. The view that therapy creates "corrective emotional experiences" is a recognition that our meaning-making sense can bring both harm and benefit.


An excellent example of the harm that can be done through storytelling is offered in a recent TED talk by author Maria Konnikova. A young woman stranded in a foreign country communicated horrific accounts of abduction and abuse. Only after diligently researching the woman's life did investigators learn that nothing of the sort had ever happened. Having studied con artists for years, culminating in a fascinating book, Konnikova concludes that essential to the con is a narrative that victims need to buy into. We fall for the con of the stranded young woman because of our need and desire to make sense of an ambiguous world and perhaps our need to be a help to others.


Transcending The Narrative
In a world sensitive to "fake news" and propaganda, we increasingly recognize the limitations of storytelling. That awareness is fueling the revolution in finance, the same revolution we've seen in medicine and even among charities that track the outcomes of their programs and the ways in which their dollars are spent. Science is grounded in observation and evidence. Our search for meaning may attract us to narrative accounts, but we increasingly realize that the search must be grounded in re-search. Otherwise, we too often fall victim to our own con artistry.


Cognitive approaches to psychotherapy feature what is knows as "collaborative empiricism", where therapist and client engage in a clear-headed assessment of the client's beliefs. Underlying the depression and anxiety that people experience is often a set of beliefs that sustain the emotional problems. An example from my practice many years ago occurred when thunder sounded and rain began to fall during my session with a depressed woman. She looked down, shook her head, and said, "Why does my life always have to suck?" Clearly (to her!) the rainstorm was confirmation that bad things happen to her, that she was a loser.


In collaborative empiricism, the teamwork of therapist and client examines these beliefs and explores alternate explanations. "Maybe your life doesn't suck," I might suggest to that client after such exploration. "Maybe you've learned to tell yourself that your life sucks." In a very important sense, the problem is the storytelling and the lack of correspondence between the story and the real world. As a narrative modality, cognitive therapy enables people to take control of their meaning-making and become more selective and critical of what they buy into.

I believe that such collaborative empiricism will increasingly characterize the interactions between financial advisers and investors and between institutional investors and investment funds. Evidence-based finance is becoming as commonplace as evidence-based medicine. It is no coincidence that those currently winning in financial markets are operating with a higher degree of rigor and quantification than their peers. Evidence takes the con out of our investment confidence.

https://larouchepac.com/20170627/def...efeating%20the

THE LEAD


New International Economic Order
American Credit System
Stop WWIII
Defeating the "Russiagate" Coup Against the President; Crucial Events Upcoming
https://larouchepac.com/sites/defaul...?itok=SMGwBt08
President Donald J. Trump | June 21, 2017 (Whitehouse photo)


Judging from reports from the Democratic Party, the "charm" is wearing off the British game of eliminating American presidents who promote the American System of economy rather than the imperial world order. Playing "Russiagate" against President Trump — McCarthyism for donkeys — is not supported by the Democrats' working class constituencies. And it is a deadly threat to the United States, including the threat of world war.

China, with Russia's full cooperation, has put the Belt and Road Initiative of great infrastructure projects into high gear, and effectively launched a new economic order of "win-win" growth and development. The United States joining the Belt and Road would make it unstoppable, and "make America great again" as well.

The President has been the target of attempted overthrow and even potential assassination because he favors just this collaboration, and has repeatedly said so.
To put an end to this dangerous attempt at a coup, the focus of efforts should be on two sets of meetings occurring 10 days from now, which will help decide for that new order of economic, scientific and space-faring cooperation of nations.


All reports are that President Trump is looking forward to holding a full bilateral meeting with Putin on July 7 during the G20 sessions in Hamburg — not a mere "pull-aside" but effectively a summit — and to hold a second such meeting with China's Xi there as well. Such British-oriented media as the London Independent and Telegraph are quite appalled at these reports (initially by Associated Press), fearing that Trump and Putin may make decisions about cooperation, as Trump and Xi did in Mar-a-Lago.


That same day the Schiller Institute and the China Energy Fund will hold a major "Food for Peace" conference in New York thinking forward to United States participation in the Belt and Road Initiative; this conference with its focus on progress in food production. It will be a major collaboration on bringing America into the New Silk Road, to revive its own economy, technology and agriculture; it will feature agricultural experts from both countries.


The crucial importance of such events is that President Trump cannot defeat the British-instigated drive to force him out of office, alone. It is up to the American people to reject and defeat "Russiagate," stop the coup attempt, and back the President in working with Russia and China for peace and economic development of the United States and the world.


The success of the Schiller Institute conference is equally critical with that of President Trump's prospective summit meetings. Schiller Institute founder Helga LaRouche and EIR Founding Editor Lyndon LaRouche were the originators more than 30 years ago of the "Eurasian Land-Bridge" concept which now, through China's Belt and Road Initiative, is becoming the World Land-Bridge.

This involves rebuilding a new economic infrastructure for the United States; but to do it, Lyndon LaRouche's "four laws to save the nation" are essential. They encompass reinstating the Glass-Steagall Act, a new Hamiltonian national credit institution, and revived emphasis on space exploration and the fusion energy frontier.

This is the American System of economy, and the way to the common aims of mankind.

WAR MIGHT BE AT HAND - CODE RED 10

http://www.whatdoesitmean.com/index2323.htm

June 27, 2017
Putin Orders “Direct Strike” On Americans As US Troops Not Sure Who’s In Charge
By: Sorcha Faal, and as reported to her Western Subscribers
Another grim Ministry of Defense (MoD) report circulating in the Kremlin today states that President Putin has authorized a “direct strike” on a new US military base in the Tanf border crossing area between Syria and Iraq where it’s warned “a showdown is looming” between Russia and the United States that could lead to a major conflict between all warring parties, if not all out nuclear war. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]
Note: The American military presence, and actions, in Syria are in violation of the UN Charter and US Constitution.

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According to this report, this “direct strike” upon American forces in Syria authorized today by President Putin is in response to the Trump administration warning last week that they are planning for the next stage of this war the Americans describe as “a complex fight that will bring them into direct conflict with Syrian government and Iranian forces contesting control of a vast desert stretch in the eastern part of the country”.
Further necessitating this “direct strike” upon American forces in Syria, this report continues, was the US, yesterday, falsely claiming that Syria was preparing to use chemical weapons against Islamic terror forces ravaging their country, and that the United States threatened to retaliate against—with Trump’s United Nations Ambassador Nikki Haley stating: “Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia and Iran who support him killing his own people”.
The “Syria uses chemical weapons charade” being used by the Americans, this report notes, has been exposed for the total lie it is by the American Pulitzer Prize winning investigative reporter Seymour Hersh, who after being supplied with real-time intelligence documents discovered that President Trump had authorized an attack on a Syrian airfield even with his knowing that Syria had not used chemical weapons of any kind—with one US military officer even stating: “None of this makes any sense. We KNOW that there was no chemical attack... the Russians are furious. Claiming we have the real intel and know the truth... I guess it didn’t matter whether we elected Clinton or Trump.”

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Want to know more? Click HERE.

Critical to note, this report says, is that Seymour Hersh was given a real time “chat protocol” document detailing a conversation between a German security advisor and American military officer whose actual words stated:
US Military Officer: “Now Fox is saying we chose to hit the Syrian airfield because it is where the chemical attacks were launched from. Wow. Can't make this shit up.”
German Security Advisor: “They are. I mean, making it up.”
US Military Officer: “It's so fuckin evil.”
German Security Advisor: “Amen!!!”
Further shocking revelations from this “chat protocol” provided to Seymour Hersh, this report continues, show the confusion of these Western military officers in Syria in their not even knowing who is even in charge of these war moves with their saying:
US Military Officer: “We got a fuckin' problem”
German Security Advisor: “What happened? Is it the Trump ignoring the Intel and going to try to hit the Syrians? And that we're pissing on the Russians?”
US Military Officer: “This is bad...Things are spooling up.”
German Security Advisor: “You may not have seen trumps press conference yesterday. He's bought into the media story without asking to see the Intel. We are likely to get our asses kicked by the Russians. Fucking dangerous. Where are the godamn adults? The failure of the chain of command to tell the President the truth, whether he wants to hear it or not, will go down in history as one of our worst moments.”
US Military Officer: “I don't know. None of this makes any sense. We KNOW that there was no chemical attack. The Syrians struck a weapons cache (a legitimate military target) and there was collateral damage. That's it. They did not conduct any sort of a chemical attack.”

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To what is really occurring, however, this report says, these Western military officers reveal by their stating:
German Security Advisor: “There has been a hidden agenda all along. This is about trying to ultimately go after Iran. What the people around Trump do not understand is that the Russians are not a paper tiger and that they have more robust military capability than we do.”
US Military Officer: “I don't know what the Russians are going to do. They might hang back and let the Syrians defend their own borders, or they might provide some sort of tepid support, or they might blow us the fuck out of the airspace and back into Iraq. I honestly don't know what to expect right now. I feel like anything is possible. The Russian air defense system is capable of taking out our TLAMs. this is a big fucking deal...we are still all systems go...”
German Security Advisor: “You are so right. Russia is not going to take this lying down”
German Security Advisor: “Who is pushing this? Is it coming from Votel?” (General Joseph L. Votel, Commander of United States Central Command, editor's note)
US Military Officer: “I don't know. It's from someone big though. . . . This is a big fucking deal.”
US Military Officer: “It has to be POTUS.”

http://www.whatdoesitmean.com/swsw3.jpg

Want to know more? Click HERE.

To the “hidden agenda” being employed in Syria by the American’s, this report details, is their attempt to partition this independent nation by military force in violation of all international laws in order to link the northeastern part of Syria, which is controlled by the Kurds, with the southeastern part, that is controlled by US-backed al Qaeda rebel forces.
On 9 June, though, this report explains, this American “hidden agenda” was dealt a stunning blow when Russian-Syrian-Iranian forces made a lunge for the Syria-Iraq border along a line north of Tanf, effectively dividing US-supported elements from one another—and thus causing US-backed Islamic terror forces becoming trapped south of the new line established by Russia’s allies, and that they can’t break through without massive US military support.
Foreign Minister Sergey Lavrov has attempted to warn the Americans about their “war folly” in Syria (“they’re playing a very dangerous game”) this report says, but further acknowledged that “new evidence has emerged in the past few days” indicating that US-led international forces continue “to take the heat off” the former Al-Qaeda offshoot in Syria.

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Failing to heed any warnings, however, this report details, the American’s, instead, are continuing to plunge the entire region into chaos as evidenced by their shooting down a Syrian Air Force bomber targeting Islamic terrorists—and that Moscow labeled “an act of aggression” and “support for terrorists” with the MoD further warning that any aircraft, including planes and drones belonging to the US-led international coalition operating west of the River Euphrates, will be tracked by Russian anti-aircraft forces in the sky and on the ground and treated as targets.
Not just Syrian aircraft are the Americans now targeting either, this report says, but Iranian drones too—who have operated for years against Islamic terrorists with the full permission of the Syrian government—but that the US is now laughingly claiming is near their troops operating illegally in Syria.
With the Kremlin blasting the US over its latest lie about Syria preparing to use chemical weapons, calling it an “unprecedented provocation” and “unacceptable”, this report continues, the MoD, just hours ago, launched a submarine based ICBM across Eurasia as a further warning to the Americans to stop their aggression too—and that joins Iran’s ballistic missile strikes on ISIS targets in Syria showing the reach of their military forces.
Though some mainstream propaganda media outlets in the West are starting to awaken to grave danger being posed by the US in Syria (with Rolling Stone Magazine, for one, now warning that Trump “is risking a catastrophic open conflict with Russia”, this report concludes, it is only The Australian newspaper that is accurately describing the great danger now posed to everyone in the world by their writing today:
“Two world wars were fought in the 20th century in part because Germany escalated aggression believing that Britain would not respond, even though the evidence and the history books suggested that eventually it would. It is imperative that, distracted by Washington’s other crises, the West does not make the same mistake again.”

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Other reports in this series include:
Reflections On The Eve Of War: “The Gates Of Hell Are Opening”
June 27, 2017 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.
[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]
[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]
American Today: “It HAS Come To Blood” (And Why JFK REALLY Had To Die!)
“Deep State” In Disarray As Trump’s “Fathomless Federation” Gains Ground

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