Money Flow Trading Method along with Risk Management

Hi Mr. Bruce, congrats for your achievement. I’ve made my account doubled ($100,000+ ) with your guidance
And teaching/strategy. That was my 1st goal., and you know sky is the limit. I wish we could see your LIVE
Account Screen Shots, at least once

http://charleshughsmith.blogspot.com...hattering.html

SUNDAY, AUGUST 25, 2019
The Benefits of a Profoundly Shattering Recession

Does anyone really think The Everything Bubble can just keep inflating forever?


What do I mean by a profoundly shattering recession? I mean, a systemic, crushing recession that can't be reversed with central bank magic, a recession that only deepens with time. The last real recession was roughly two generations ago in 1981; younger generations have no experience of a profound recession, and perhaps older folks have forgotten the shock, angst and bitterness.


A profoundly shattering recession leaves tremendous damage and pain in its wake. Millions of people who reckoned their position was secure get laid off, businesses that looked solid melt into air, large corporations flip from hiring thousands to firing thousands, and everyone on the edge of insolvency gets a hard push over the cliff.


Profoundly shattering recessions feed on themselves in a self-reinforcing dynamic: the first domino could be a supply-shock, or a decline in demand due to credit exhaustion. Since businesses have cut everything to the bone in the past decade, there are no buffers left: layoffs begin immediately, and those layoffs further reduce demand as households have to tighten their belts to survive as even those who escape the first round of layoffs find bonuses and overtime have been slashed.


Since the problem isn't high interest rates, central banks reducing rates or pushing them into negative territory only reveals their impotence. If negative interest rates boosted the real economy, Europe and Japan would be experiencing rapid expansion instead of stagnation.


Layoffs, the failure of central banks and soaring fiscal deficits trigger a drop in consumer and investor sentiment which feeds back into declining sales and profits, which then trigger more layoffs as businesses must cut expenses as revenues crater.


Clearly, there is no benefit to households or enterprises to this self-reinforcing recession. The benefits are structural: financialization, the parasite that has eaten our economy from the inside, will collapse along with the mountains of debt that fueled it.


Zombie corporations and local governments that have been insolvent in all but name will finally go bankrupt, clearing the system of their dead weight.

Economies supporting zombie entities are sacrificing their capital to keep insiders afloat, which leaves less capital to invest in increasing productivity, which is the only way to increase broad-based wealth.


The Everything Bubble will finally pop, stripping the system of phantom speculative wealth and fictitious capital. Price discovery will once again be possible, as all the central bank-inflated bubbles will deflate and real demand and supply will set the price of assets.


Once central banks have been revealed as powerless, the quasi-religious belief in their omnipotence will dissipate, and people will finally start dealing with the Gilded Age excesses of the past 20 years. Common sense limits on financial predation and trickery will gather support, and tricks like corporate buybacks will be outlawed or restricted.


If capital can't earn a low-risk return, then it can't flow to productive uses.Once central bank manipulation fails, capital might demand a yield, and in doing so, it will start a beneficial cycle in which speculation will no longer be enabled and rewarded by zero-interest rates or negative rates.

Only those enterprises and households with productive uses for borrowed capital will reckon the interest costs are worth the risk of taking on debt. The bloated, parasitic banking sector will implode, and what's left of it will return to its proper role, a thin, regulated sector of the economy stripped of political power.

All the cartels and monopolies that depend on debt will implode: banking, higher education, and ultimately national defense and sickcare, which depend on federal borrowing to fund their predatory pricing.


The U.S. economy needs a re-set if it is to lift all boats, and the sooner the re-set occurs, the sooner we can dispense with all the cronyist intervention, self-serving manipulation and exploitive distortion that's turned our economy and society into a speculative casino that only benefits a few insiders and those who know how to rig the game in their favor.


A profoundly shattering recession requires patience, fortitude and an awareness that the sacrifices demanded will be worth the pain if we rid our society of at least the top layer of financial and political parasites and predators that have corrupted our economy, our governance and our society.


Does anyone really think The Everything Bubble can just keep inflating forever? Surely nobody's that deluded.
https://www.oftwominds.com/photos201...bubble4-19.png


The global economy is destabilizing, and we're about to discover there is no way to halt a profoundly shattering recession. We have a once in 80 years opportunity to right the ship before it sinks into oblivion.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

At the start of August, we explained how - by scapegoating the global economy for the Fed's July 31 rate cut - the central bank had now trapped itself, having certified before the world that any further escalations in Trump's trade war are effectively a justification for more rate cuts. Whether this was Powell's intention is unclear, although as we said at the time, "it certainly means that Trump is now de facto in charge of the Fed's monetary policy by way of US foreign policy, and it also means that as BofA wrote, "the Fed is unintentionally underwriting the trade war."


As we noted at the time, this meant that "the Fed may very well be intentionally underwriting Trump's trade war." In either case, as Bank of America's chief economist Michelle Meyer said, such a circular framework is a problem for many reasons, and as the bank admitted, there is a risk of an adverse feedback loop where the trade war hinders economic growth, therefore prompting additional Fed easing, which in turn allows for greater trade war escalation. This is shown in the chart below.

https://zh-prod-1cc738ca-7d3b-4a72-b...ack%20loop.jpg


There was another side-effect left unmentioned: furious op-eds by former NY Fed presidents.

Fast forward to today, when what, in retrospect, may be seen as a watershed moment in exposing just how "political" the Federal Reserve always has been despite repeated lies by various officials claiming otherwise, none other than former Goldman chief economist and the former head of the NY Fed, Bill Dudley, after looking at the chart above and having realized that the Fed is underwriting Trump's trade war, made a "modest proposal" in a Bloomberg op-ed in which he advised Powell to take a political stand against enabling Trump's trade war, and even go so far as to push the economy into a recession to prevent Trump from getting reelected!


Echoing what Powell said in his Jackson Hole speech, where he dedicated a section to Trump's ongoing trade wars, and blaming them for the Fed's rising inability to interfere in the US economy, Dudley begins with what is a clear political statement, arguing that "Donald Trump’s trade war with China keeps undermining the confidence of businesses and consumers, worsening the economic outlook."

Dudley, who was among those globalists who enabled China's tremendous ascent over the past three decades and ensured that Beijing will surpass the US economically and militarily at some point by 2032 if the status quo is left unchanged...

https://zh-prod-1cc738ca-7d3b-4a72-b...%20%281%29.jpg


... ignores the consequences of his own actions, and instead slams Trump for being the one president willing to challenge China's hegemonic ascent and upcoming Thucydides Trap (which as we noted before, effectively assures war with China if nothing changes), saying that "this manufactured disaster-in-the-making presents the Federal Reserve with a dilemma: Should it mitigate the damage by providing offsetting stimulus, or refuse to play along?"

Dudley's advice: "If the ultimate goal is a healthy economy, the Fed should seriously consider the latter approach", i.e., defy the president.
While Dudley spends the bulks of his op-ed explaining the diagram shown at the top, a relationship which our readers are already familiar with, what is of particular importance is Dudley's discussion of why the Fed should 'refuse to play along' and refuse to underwrite, as BofA said, Trump's trade war.

One thing Dudley recommends is that "the Fed could go much further" beyond merely warning, as Powell did, that the Fed's tools are not suited to mitigating the damage from trade war, but "could state explicitly that the central bank won’t bail out an administration that keeps making bad choices on trade policy, making it abundantly clear that Trump will own the consequences of his actions." The irony, of course, is that it was Powell's own justification for easing that enabled Trump to immediate escalate the trade war.

https://zh-prod-1cc738ca-7d3b-4a72-b...c%20threat.jpg


Economic threat.
What stands out in the oped is that it is only Bill Dudley's subjective opinion that Trump is making "bad choices" on trade policy as he calls them, an argument that immediately becomes political when one considers that Trump was elected on a platform of, among other things, reducing the US-China trade deficit and, by extension, limiting China's economic growth which if left unchecked, would assure war between the two superpowers.


Instead, to Dudley, what a myopic Trump should focus on is today and tomorrow, and leave the long-term to someone else. In other words, do precisely what the Fed has been doing for decades, even though as Mark Carney hinted at Jackson Hole, it was the Fed's monetary policy that has been responsible for much of the world's crises and wars. You won't find a discussion of that in Dudley's brief op-ed, however.


Going back to Dudley's argument, the former Goldman banker claims that "such a harder line could benefit the Fed and the economy in three ways".

1. First, it would discourage further escalation of the trade war, by increasing the costs to the Trump administration.
2. Second, it would reassert the Fed’s independence by distancing it from the administration’s policies.
3. Third, it would conserve much-needed ammunition, allowing the Fed to avoid further interest-rate cuts at a time when rates are already very low by historical standards.

Here the narrative gets downright absurd, because while Dudley refers to the Fed as apolitical, underscoring that further in the next paragraph where he says that "I understand and support Fed officials’ desire to remain apolitical", he immediately refutes himself by admitting that the Fed has never been apolitical and in fact, it is the US central bank that, through its actions chooses who the US president is, to wit:
Central bank officials face a choice: enable the Trump administration to continue down a disastrous path of trade war escalation, or send a clear signal that if the administration does so, the president, not the Fed, will bear the risks — including the risk of losing the next election.

And the punchline: "There’s even an argument that the election itself falls within the Fed’s purview."

Translation: "there is even an argument", Dudley says tongue-in-cheek, that the Fed should crush the economy (arguably by hiking or not cutting rates) and start the next recession, thereby preventing Trump from getting re-elected.


And while we appreciate Dudley's de facto confirmation of what we have said for years, namely that the Fed is not only a political entity, one which picks the US president as the former NY Fed president admitted, but that the Fed is an even more powerful entity than the top US executive (an entity which as Bernanke's former advisor once said: "people would be stunned to know the extent to which the Fed is privately owned"). One hopes that finally a discussion can take place, whether in Congress or elsewhere, if such an entity should exist.

As for Dudley's "modest proposal", we look forward to Trump's response, because if there is one thing the US president needed in writing, it was just such an op-ed, one written from a former Fed member to the current Fed chair, recommending what amounts to mutiny against Trump should Trump proceed with his current course of action. Because if things don't work out, well Trump now has documentary evidence that, by extension, the Fed also had the ability to ensure his re-election, and if things seem like they are headed off course on the way to November 2020, we will sit back and enjoy as the war between Trump and the Fed goes nuclear.



Zero Hedge Reads

1. Acting Man
2. Alt-Market
3. Ask Brokers
4. Benzinga
5. Boom Bust Blog
6. Capitalist Exploits
7. China Financial Markets
8. Chris Martenson's Blog
9. Contrary Investor
10. Daneric's Elliott Waves
11. Dr. Housing Bubble
12. ETF Daily News
13. Financial Revolutionist
14. First Rebuttal
15. ForexLive
16. Fundist
17. Gains Pains & Capital
18. Gefira
19. Gold Core
20. Guerrilla Capitalism
21. Hedge Accordingly
22. Implode-Explode
23. Investing Contrarian
24. Jesse's Cafe Americain
25. Liberty Blitzkrieg
26. Maalamalama
27. Market Montage
28. Max Keiser
29. Mises Institute
30. Mish Talk
31. Naked Capitalism
32. Newsbud
33. Of Two Minds
34. Oil Price
35. Peter Schiff
36. Quoth The Raven Rsrch
37. Rebooting Capitalism
38. Safehaven
39. Shanky's Tech Blog
40. Slope of Hope
41. TF Metals Report
42. The Automatic Earth
43. The Burning Platform
44. The Economic Populist
45. The Hammerstone Group
46. The Vineyard Of The Saker
47. Themis Trading
48. True Sinews
49. Value Walk
50. Wolf Street

This was a fatal error by the FED.

PLEASE WATCH THIS VIDEO.

My PREDICTION is that the FED will either lose all it's Power and Independence by December 31, 2020 or be closed down.

December 23, 1913 TO December 31, 2020 - DO NOT REST IN PEACE !!!


Benjamin

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by Eta Onrish via The Organic Prepper blog,
I see quite frequently, people warning that the US is becoming an ‘Orwellian nightmare,’ or that we’re living in a country that’s fast becoming a new 1984. I think they’re wrong. It’s worse.

https://zh-prod-1cc738ca-7d3b-4a72-b...ig-brother.jpg

We here in the US look at what China’s doing as if they’re on a reality TV show. Seeing what they’re doing with surveillance and their social credit system as if we’re watching some kind of dystopian entertainment series fashioned after the George Orwell book, 1984. Our burgeoning dystopia isn’t as overtly dystopian as Orwell warned against, and that’s the problem.

If you haven’t read 1984, you really should. I’m not really a fan of the storyline since it’s pretty crappy but the message still comes through, and it’ll give you an idea of why people reference it so much when talking about governments gone awry. Then, get yourself a copy of Aldous Huxley’s Brave New World and you’ll start to see the problem. The story’s a little better, but not much. The message is more apropos, however.

1984 was about a government that would ban information and rule with a leather boot on your throat, whereas Brave New World was about a system that would slowly seep into our life like a drug. In other words, Orwell warned us about a dystopia that we wouldn’t be able to stop, Huxley warned us about a dystopia that we would beg not to stop.

The US isn’t becoming Orwellian, it’s becoming Huxleyan.

Social credit systems are coming.
In 2013, China started its social credit system, coordinated by the Central Comprehensively Deepening Reforms Commission. What they’re planning to do by next year is to have a comprehensive credit system under one roof that will cover pretty much everything in the lives of its citizens. It’s already well on its way.

In that system, your life is measured based on how well your actions align with the Party’s vision of what you should be doing, and how often. It’s a little like the credit score your mortgage broker pulls up when you buy a home but instead of deciding if you’re allowed to borrow money, this system increasingly decides if you can do anything.

Good social credit? You’ll be able to travel freely around the country and get into jobs that you want and live in better neighborhoods, and your kids will attend better schools. Bad social credit? You’ll be increasingly limited in where you can go and how comfortable your life is until you finally get yourself back in line with everyone else.

Sounds like a good plan, right?


So what? We don’t have social credit here in the US and we wouldn’t allow such a thing, right?

Wrong. China’s system of government allows them to pull from the 1984 rule book but our system is worse. In this case, it isn’t directly the government that’s the problem, it’s Big Tech.

The Brave New World of Big Tech
Our lives are now steeped in social media and corporations that leverage user-created content to make money. Instead of getting our news from trusted news agencies, we now get it from our echo chambers on Facebook. If we do want to explore past that, we get on Google and “fact-check.”

Now part of the problem here is that mass media news stations long ago stopped being news, and threw out their ethics in exchange for advertising revenue. It’s big business. However, it gets worse.

Both Facebook and Google have been caught censoring information that they deem not to their liking. Now, they’re both private companies and we don’t HAVE to use them, but they’re essentially monopolies that are allowed to exist. By dropping certain viewpoints lower down in the algorithm or even outright blocking them altogether, you now no longer get any sort of balanced view of the world. You start seeing things the way they want you to.

Our Growing Social Credit System
For quite a while now, we’ve gotten used to user-created credit systems such as Yelp and Amazon reviews. They’re very helpful with deciding what product to buy or service to use. They’re also very unreliable and easily faked.

This idea of reviews is being expanded to other systems. Uber allows you to review your driver so others can have a better ride experience or avoid someone who’s smelly or annoying. Airbnb lets you read about locations and owners to give you a better idea about what the stay will be like. Did you know that you’re also being evaluated when you use these services?

Uber allows drivers to rate their passengers. If your score drops to a certain point, Uber will ban you from using their system. Airbnb is even worse, stating with regard to banned accounts:
“This decision is irreversible and will affect any duplicated or future accounts. Please understand that we are not obligated to provide an explanation for the action taken against your account.”

They can ban you for life, with no explanation, and you have no recourse. So what? Read on.

Earlier this year, New York’s Department of Financial Services stated in its guidelines that it will allow insurance companies to use non-traditional (which could potentially, and may even already include both social media posts and information from such places as Uber or Airbnb) to determine your risk and cost and the only stipulation is that they can’t use it specifically to target protected classes:
An insurer should not use an external data source, algorithm or predictive model for underwriting or rating purposes unless the insurer can establish that the data source does not use and is not based in any way on race, color, creed, national origin, status as a victim of domestic violence, past lawful travel, or sexual orientation in any manner, or any other protected class.

They added to that in a press release, stating:
…insurers’ use of external data sources has the potential to benefit insurers and consumers alike by simplifying and expediting life insurance sales and underwriting processes. External data sources also have the potential to result in more accurate underwriting and pricing of life insurance.

The Coming Future
As these rating systems continue to be more pervasive, and as companies, agencies, and governments increasingly refer to these scores, they will continue to erode your freedoms and those freedoms could easily be constrained by someone with an agenda, purposely manipulating your score.

Because these systems aren’t regulated with any sort of effective oversight, they’re ripe for misuse and manipulation. No longer will you have protections against punishment for living the life you currently live or speaking out. Our laws that protect you against such invasions do not apply to this new de facto system of government that we’re allowing.

As we become more accustomed to this increasingly-aggregate score being allowed to affect our lives and our freedoms, we will be more willing to follow whatever guidelines are put in place to achieve higher scores, whether that be buying the right things, saying the right things, or even worse – not saying the wrong things. As we see more value in these systems, we’ll not only stop fighting against them affecting our lives, we’ll soon beg for them.
We may not be living in 1984 but have no doubt, a Brave New World is on the horizon.


We here in the US look at what China’s doing as if they’re on a reality TV show. Seeing what they’re doing with surveillance and their social credit system as if we’re watching some kind of dystopian entertainment series fashioned after the George Orwell book, 1984. Our burgeoning dystopia isn’t as overtly dystopian as Orwell warned against, and that’s the problem.


If you haven’t read 1984, you really should. I’m not really a fan of the storyline since it’s pretty crappy but the message still comes through, and it’ll give you an idea of why people reference it so much when talking about governments gone awry. Then, get yourself a copy of Aldous Huxley’s Brave New World and you’ll start to see the problem. The story’s a little better, but not much. The message is more apropos, however.


1984 was about a government that would ban information and rule with a leather boot on your throat, whereas Brave New World was about a system that would slowly seep into our life like a drug. In other words, Orwell warned us about a dystopia that we wouldn’t be able to stop, Huxley warned us about a dystopia that we would beg not to stop.

https://goldswitzerland.com/the-deca...talist-system/

The world is now standing before a seminal moment and virtually nobody can see it. There has not been a more critical moment in the last 50 years than what we are now facing. In 1971, the world faced a similar situation. At that time, only the Chinese understood the consequences of Nixon’s decision to close the gold window.
The People’s Daily in China said in August 1971:
“These unpopular measures reflect the seriousness of the US economic crisis and the decay and decline of the entire capitalist system.”

The paper went on:
“mark the collapse of capitalist monetary system with the US dollar as its prop”…. “Nixon’s new economic policy cannot extricate the US from financial and economic crisis.”

“The policy is meant to fleece the American working people and to shift the worsening of the US financial and monetary economic crisis onto other countries.”


THE DECAY AND DECLINE OF THE WHOLE CAPITALIST SYSTEM
So almost 50 years ago, China predicted “the decay and decline of the entire capitalist system.”

How right the Chinese were. Half a century later, the dollar has lost 98% in real terms, which of course is against gold. And against most paper currencies the dollar has also collapsed. Against the Swiss Franc for example, the dollar has lost 80% since 1971.

US debt back in 1971 was $400 billion against $22 trillion today, a “mere” 55x increase. US GDP was $1.2 trillion in 1971 against $20 trillion today. So a 55x increase in US debt in the last 48 years has only produced a 17x increase in GDP.

The US economy is running on empty which is no wonder since massive money printing of worthless paper money cannot create any real wealth whatsoever but only inflated paper wealth.

But it is not just the US which is in this position. Because taking away the gold backing of the dollar in 1971, gave all countries a free for all right to print money and expand credit.


I HAVE PERSONALLY WITNESSED THE DESTRUCTION OF MONEY
My business life coincides pretty well with this period, working in a Geneva bank from 1969. So I do remember the start of the destruction of money. Moving later to the UK, I saw the pound collapse against the Swiss Franc from CHF 10 in 1972 to Swiss Franc or CHF 1.20 today, an 88% fall of the pound. And against gold, the pound has lost 99% since 1971.

A period of economic mismanagement and political upheaval in the UK in the 1970s started it all. Annual inflation was 15-17% for a 7 year period and interest rates reached over 20%.

The financial system was minutes from collapsing in 2008 during the Great Financial Crisis. Eleven years later, global debt has doubled and risk has increased exponentially.

Central bankers are aware that the world economy is now standing at a crossroads. The big problem is that they don’t have a choice of what path to take. The path was laid by them many decades back and now there is no way back. The Chinese understood already then where the path would lead.

August 2019 is in many ways similar to August 1971. America was back then in a corner. The country was under pressure after the costly Vietnam war and the gold standard stopped the US from cheating the system by printing money. The rest of the world saw the US’ precarious situation and started selling dollars. To salvage their position, Nixon saw no other way than to take the dollar off the gold standard and this was the start of half a century of global money printing and credit expansion on a humongous scale.


Nixon’s August 1971 decision has led to a crisis of unprecedented proportions. Still, very few people can see that we are now at the point of “a final and total catastrophe of the currency system involved” as von Mises said.

This August is not one single event like in 1971 but a number of very clear indications that all central banks are panicking. Every major central bank is now showing a degree of concern which is unprecedented. They are all telling us that there will be unlimited money printing combined with zero or negative interest rates. This will obviously not clear up 50 years of irresponsible monetary mismanagement.

So what Nixon started will now be finished off by current governments and central bankers in a most spectacular money printing bonanza leading to hyperinflation and a collapse of the financial system.

So far, over 40% of global bonds now yield less than 1% and over $16 trillion worth of bonds have negative interest.

DANISH MORTGAGE WITH BANK PAYING BORROWER
Negative interest rates are of course a total absurdity. They totally destroy the incentive to save and also pensions. In Denmark you can now get a 10 year mortgage with Jyske Bank at MINUS 0.5%. Imagine, you buy a house and the bank charges nothing for the loan but instead lets you pay back less than you borrowed. It will become even more interesting when mortgage rates go to minus 25% so after a few years the debt has been paid by the bank!


US RATES TO DECLINE SUBSTANTIALLY
95% of global bonds are now below the Federal Funds rate. But since that rate is 2.5%, this is a temporary situation. US rates are likely to decline dramatically during the autumn to zero or negative. That will lead to a lower dollar and higher gold. US stocks will also decline from their current dizzy levels, in spite of lower rates.

Lower rates are no longer seen by stock market investors as beneficial for markets but as a sign of economic trouble ahead.

Fed Chief Powell just declared that the “Economy is in a favourable place”. You wonder where that place is since there is nothing favourable about the US economy currently. And it seems that Powell doesn’t believe his own words since in the same breath he says that there are “significant risks”.

Trump takes every opportunity to attack Powell and asks “who is the bigger enemy Powell or Xi” and then announces sharply thereafter another round of tariffs.

So the Tit for Tat game between the US and China continues and what is certain is that everyone is a loser in a trade war. Trump won’t give in and nor will China. As they play their games, world trade will suffer and so will a fragile world economy. Global trade is already down and we will soon see the fall accelerate dramatically.

Trump is clearly going to win this game over Powell. Trump has declared that rates should be reduced by 1% now. Thus we are guaranteed to see much lower US rates and a rapidly falling dollar during the autumn.


BOTH BOJ AND ECB WILL ACCELERATE STIMULUS
Kuroda the Governor of the Bank of Japan also made it clear three weeks ago that they will not hesitate to expand stimulus if a global slowdown jeopardises the country’s recovery. And PBOC, the Chinese central bank is also indicating that it will lower rates for companies.

The ECB is the central bank in real trouble. The German and the whole Eurozone economy is weakening dramatically and the banking system is on the verge of collapse with ailing banks not just in Germany but in Italy, France, Greece etc.

EU growth has slowed down rapidly since the ECB July 25th meeting and Draghi has virtually promised more stimulus in September. The ECB minutes indicated that we should expect a combination of rate cuts and asset purchases.


CENTRAL BANKS ARE IN PANIC MODE
Although all the central banks are staying calm on the surface, the real situation is panic mode. What we are seeing is not isolated planned actions but a coordinated programme in an attempt to protect the global economy and financial system from collapse.

The central bank chiefs no longer have a choice. They don’t have the luxury that Brutus talked about in Shakespeare’s Julius Caesar to take the tide that “leads to fortune”. Instead the only option they now have is the tide which “Is bound in shallows and miseries”.

So in August 2019, central banks have by their actions told us that that the world is now facing the final phase of the destruction of the world economy that Nixon started in August 1971.


The autumn of 2019 will see global trade decline rapidly and also economic activity. Stock markets around the world will crash and currencies will continue their race to the bottom.


INDICATOR SIGNALS RISK GREATER THAN 2000 AND 2007
Most bond rates are already below the zero bottom and we will see that trend accelerate. At some not too distant point, the bond bubble will stop expanding with long rates going up and eventually also drag the short rates up. At that point, central banks will have lost control of interest rates and the world will see a debt collapse of massive proportions. Rates will go to the teens initially and later to infinity as bonds become worthless.

The very interesting chart below from SignalsMatter.com tells the above scenario in a beautiful way.

The chart shows the S&P Index divided by the 2/10 year Treasury spread.
The green area shows that the risk of a turn is extremely high. This indicator predicted the 2000 crash and also the 2007-9 crash. The Green area since 2017 shows much higher risk than the previous two crises. We are now at the Tipping Point which in simple terms means that we will first see stocks fall rapidly and a bit later interest rates rise. The size of the bubble and the extent of the risk will this time lead to a fall much greater than in 2000 and 2007.


A CRASH IS IMMINENT
http://goldswitzerland.com/wp-conten...08/history.jpg


The message from the chart above is very clear. The position of stocks at an extreme overbought situation combined with bond rates at an extreme low, indicates that we are now at the tipping point and thus not far from a major market crash.


DOW/GOLD AT THE BEGINNING OF A 95% FALL
Since 1999, the Dow is down 63% against gold. Just since April this year the Dow has fallen 20% against gold. But this is just the beginning. This ratio will go below the zero line, where it was in 1980. This size of such a fall in the Dow/Gold ratio means that if you hold gold instead of stocks, you will avoid a relative loss of at least 95% in the next few years.


Gold is up 44x since 1971 in dollars. But as I have explained many times, it is not really gold going up but paper money collapsing. This is what Nixon started almost half a century ago. Central banks around the world have now been handed the batten and they will finish the job in the next 3-6 years. Finishing the race means currencies going to ZERO and massive wealth destruction in the form of collapsing asset markets including stocks, bonds and property.
Physical gold and silver will, as they always have, reflect these moves and move to unimaginable levels which will be far beyond the 44x that we have seen since 1971 for gold. Since fiat money will be worthless, it is clearly not right to make a forecast in paper money as it would be infinity. Suffice it to say that gold and silver will maintain purchasing power as they always have and also be the most important wealth preservation asset to hold.

http://goldswitzerland.com/wp-conten...8/dow_gold.jpg


99% OF INVESTORS WILL SEE THEIR WEALTH WIPED OUT
Sadly 99% of investors will not realise that they should be out of stocks and into gold until their wealth has been wiped out. All stock investors will believe that central banks will save them again. But as I have outlined above, this time it will fail as we start a secular bear market in stocks and the world economy which will last a very long time and lead to a massive wealth destruction.


Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management
Zurich, Switzerland
Phone: +41 44 213 62 45

Matterhorn Asset Management’s global client base strategically stores an important part of their wealth in Switzerland in physical gold and silver outside the banking system. Matterhorn Asset Management is pleased to deliver a unique and exceptional service to our highly esteemed wealth preservation clientele in over 60 countries.

GoldSwitzerland.com

Contact Us

Articles may be republished if full credits are given with a link to GoldSwitzerland.com.

https://www.cnbc.com/2019/08/20/kyle...is-insane.html

Kyle Bass says US interest rates will follow the rest of the world to zero — 'This is insane'


MARKETS
Kyle Bass says US interest rates will follow the rest of the world to zero — ‘This is insane’

PUBLISHED TUE, AUG 20 2019 10:26 AM EDT UPDATED TUE, AUG 20 2019 2:08 PM EDT
Fred Imbert@FOIMBERT
KEY POINTS

1. “We’re the only country that has an integer in front of our bond yields,” Bass says. “All the money is going to come here.”
2. Bass’ comments come as several central banks around the world have implemented stimulative policies to the point where around $15 trillion of global debt trades with a negative rate.

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Why this fund manager says a China trade deal is long way off
Central banks are just getting started with monetary easing, hedge fund manager Kyle Bass said, predicting U.S. interest rates will keep falling and follow global interest rates all the way down to zero.

“We’re the only country that has an integer in front of our bond yields. We have 90% of the world’s investment-grade debt. We actually have rule of law and we have a decent economy. All the money is going to come here,” Bass, founder and chief investment officer of Hayman Capital Management, told CNBC’s David Faber on Tuesday.

Bass’ comments come as several central banks around the world have implemented stimulative policies to the point where around $15 trillion of global debt trades with a negative rate. Germany and France’s respective 10-year yields are in negative territory along with Japan’s benchmark rate. China has also implemented stimulative measures to mitigate slowing economic growth.

“This is insane. The Japanese are going to keep going. The Chinese print money like it’s a national pastime today. Europe is going to restart QE,” Bass said. “QE” refers to quantitative easing, a monetary stimulus tool used by central banks.

In the U.S., the Federal Reserve cut interest rates by 25 basis points last month, citing “global developments” and “muted inflation.” Market expectations for lower rates in September are also at 100%, according to the CME Group’s FedWatch tool.

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Cramer: Fed may find difficulty in rationalizing another rate cut

Bass noted U.S. rates will fall to zero as politicians disregard budget deficits while economic activity in Europe and China slows. However, these measures could have dire consequences.

“The unintended consequences of central bank printing are that it makes the rich even richer, it makes the middle class stay where they are and it makes the poor stay poor,” Bass said.

Central banks are implementing easier monetary policies around the globe while China and the U.S. are engaged in a trade war. The two countries have slapped tariffs on billions of dollars worth of their goods, sparking uncertainty over future profit and economic growth.
China and the U.S. agreed to restart trade talks in late June but President Donald Trump tweeted Aug. 1 that the U.S. will i

https://moneymaven.io/mishtalk/econo...EemLfFuLVzEZw/

"Financial Vandalism" of Low and Negative-Yield Bonds Wreck Pension Plans
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by Mish


Unnaturally Low and negative yield bond yields are wrecking pension plans.

Pension World Reeling
Most US pension plans assume returns of six to seven percent. They have shied away from government bonds because yields have been too low.

Bloomberg reports Pension World Reels From 'Financial Vandalism' of Falling Yields

A once-unthinkable collapse in global bond yields is forcing pension funds to buy bonds that offer negative returns -- putting the financial security of future retirees in jeopardy.

U.S. institutions managing trillions of dollars in retirement savings -- including the California Public Employees’ Retirement System -- have been ratcheting down return expectations. Japan’s Government Pension Investment Fund, the world’s largest, has warned that money managers risk losses across asset classes. In Europe, pension funds may be forced to cut benefits in part thanks to the decline in rates.

“The true madness is pension funds being forced to invest in assets which will be guaranteed to lose, such as in the case of long dated inflation-linked gilts at real yields of -3%,” said Mark Dowding, chief investment officer at BlueBay Asset Management, which has pension-fund mandates. “It is financial vandalism and the government and central banks need to wake up to this.”

Vandalism or Fraud?
I commented on this previously.
Pick the term that suits you.
Five Choice Terms

1. Fraud
2. Theft
3. Counterfeiting
4. Robbery
5. Vandalism

The first four are the most accurate but it is good to see someone else thinking about the situation along the right lines.

I discussed this setup in detail in Negative Yield Curves to Infinity and a Reader Question Regarding Fraud

Please read the above link if you don't understand why negative yields constitute fraud, theft, or counterfeiting, and why negative yields can never occur in the absence of manipulation.

Mike "Mish" Shedlock

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by Michael Snyder via The Economic Collapse blog,
A new study has discovered that we are far more dependent on America’s great debt creation machine than most of us would have ever dared to imagine. Today, debt is involved in most of our major transactions. In order to purchase a home, most of us go into debt. The same thing is true when most of us buy a vehicle. Total credit card debt is well over a trillion dollars, and total student loan debt is now over a trillion and a half dollars. Corporate debt has more than doubled since the last financial crisis, state and local governments are absolutely drowning in debt and unfunded pension liabilities, and the federal government is more than 22 trillion dollars in debt. The Federal Reserve and the “too big to fail” banks are at the core of this insidious debt-based system, and it has been systematically destroying the bright future that our children and our grandchildren were supposed to have. But if we suddenly turned off America’s great debt creation machine at this point, our entire economic system would totally collapse because we have become so dependent on it.


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In fact, a study that was just conducted by Bloomberg discovered that “gross domestic product per capita would plunge into negative territory” if the ability to borrow was suddenly removed…

The nation’s health as measured by gross domestic product per capita would plunge into negative territory without its dependence on borrowed money, according to data compiled by Bloomberg.


In fact, the U.S. would fall almost to the bottom of a ranking of 114 economies by GDP per capita. Only Italy, Greece and Japan would fare worse.

That’s a seismic shift from America’s comfortable No. 5 spot on a list based on conventional measures.

Our massively inflated debt-fueled standard of living is completely and utterly dependent on the continual creation of more debt.

In essence, this study found that without debt we wouldn’t have much of an economy at all. In fact, Bloomberg says that U.S. per capita income would collapse from $66,900 a year to “negative $4,857”…


To get this somewhat dystopian measure, Bloomberg took each economy’s 2020 GDP as projected by the International Monetary Fund as a starting point. We then adjusted the number by removing the ability to borrow, while adding reserves to create an alternative wealth measure.


U.S. per capita income of $66,900 would be slashed to a negative $4,857 using this measure. That’s a total loss of almost $72,000 for every man, woman and child.


So the only thing keeping us from complete and total economic collapse is the fact that debt is flowing like wine.


But what would happen if some sort of major national crisis erupted someday and all of a sudden everyone was afraid to lend money?


That is something to think about, because such a scenario may be a whole lot closer than many people might think.


As it stands, we appear to be on the precipice of the worst economic downturn since the last financial crisis, and our trade war with China just went to an entirely new level as the month of September began…


The biggest reason for last week’s torrid stock market rally was rekindled “optimism” that the escalating trade war between the US and China may be on the verge of another ceasefire following phone conversations, fake as they may have been, between the US and Chinese side. This translated into speculation that a new round of tariffs increases slated for this weekend may not take place or be delayed.


However, that did not happen, and with no trade deal in sight, at 12:00am on Sunday, the Trump administration slapped tariffs on $112 billion in Chinese imports, the latest escalation in a trade war that’s ground the global economy to a halt, sent Germany into a recession, and given the market an alibi to keep rising because, wait for it, “a trade deal is imminent.”


Only, it isn’t, and 1 minute later, at 12:01am EDT, China retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. The target list strikes at the heart of Trump’s political support – factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down.


The Chinese knew that these tariffs were about to go into effect, and so they were ready and waiting to retaliate just one minute later.

Of course many U.S. companies will be hit extremely hard by these tariffs that the Trump administration just implemented. The following comes from CNBC…
That means that when an electronics company imports a TV, or a smart speaker, or a drone from China starting September 1, it will have to pay a 15% tax to the U.S. government.


Eventually, this will end up raising prices on gadgets and other products for people in the United States, said Bronwyn Flores, a spokeswoman for the Consumer Tech Association (CTA), a trade group that represents 2,000 different companies in the electronics industry, including brands like Apple and LG and retailers like Walmart and Best Buy.


Basically, people are not going to be able to buy as much stuff during the holiday shopping season, and overall economic activity will be slower than it otherwise would have been.

Meanwhile, President Trump continues to sound hopeful that trade talks with China will bear fruit…

President Donald Trump said trade talks with Beijing are still planned for September after a new round of tariffs went into effect on Sunday.

“We are talking to China, the meetings in September, that hasn’t changed,” Trump told reporters Sunday on the White House South Lawn after returning from Camp David.


These sorts of comments helped stabilize the financial markets last week, but if there was any hope that a trade agreement was imminent we would not have seen both sides impose new tariffs on Sunday.

And now we are moving into the month that is traditionally the worst for Wall Street. The following comes from Fox Business…

Investors may breathe a sigh of relief that August, typically a volatile month for stocks, is over, but history shows that September could be even worse for Wall Street.

Since 1950, September has been the worst month for the S&P 500 Index, which has dropped, on average, 0.5% during the month, a phenomenon referred to as the September effect. According to Dow Jones market data, the average decline of the Dow Jones Industrial Average in September is 1%, while the Nasdaq Composite generally sees an average fall of 0.5%.


We shall see what this September brings. Certainly things are really shaky on Wall Street right now, and any piece of really bad news is likely to set off another wave of panic.

Without a doubt, the market is more primed for a crash than it has been at any point since 2008, and it definitely will not take much to make this a “September to remember”...

https://kingworldnews.com/greyerz-sa..._szWwd185uxgXc

As the world edges closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies just issued an important short term warning and said that the price of silver is set to skyrocket.


Silver Will Skyrocket In Coming Years
September 3 (King World News) – Egon von Greyerz: “There is one spectacular investment opportunity today that virtually no one talks about. It represents less than 0.1% of global financial assets. This investment has a potential upside of 36x or 3,500%. The downside is extremely limited since supply is finite and demand strong. It is selling at around production cost and has a real intrinsic value. It has also been money for thousands of years.

Yes, I am of course talking about silver. It is probably one of the most undervalued investments that you can buy today. Since the top in 2011 at $50, silver went as low as $14 in 2015. But we must remember that silver was $4 in 2002. Many investors have been burnt by silver, buying high and selling low. I have heard of investors who bought at $50 as they expected a breakout above the 1980 high, which was $50. A fall of up to 70% since then obviously hurts, but fortunately all silver investors will be amply rewarded in coming years, whatever their buying price was…

Listen to the greatest Egon von Greyerz audio interview ever

by CLICKING HERE OR ON THE IMAGE BELOW.

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Silver’s $4 Surge Is Nothing Compared To What Is Coming
If you hold silver today, or if you intend to buy, you are now looking at one of those times in history when an investment is likely to make spectacular gains for an extended period of several years. At some point, probably this year, silver will move up several dollars and later tens of dollars. Over the next 5 years silver could exceed $500.
But let me warn you, silver is not for widows and orphans. The move up will also see periods of vicious corrections that will keep you awake at night if you are a nervous investor. Thus, there will be massive volatility, so the gains will also involve regular pains. That is why it is definitively better to buy now before the real move starts. We have already seen a $4 move from the lows at the end of June, but that is nothing compared to what is coming.

Silver’s $4 Surge Since June Is Just The Beginning

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Don’t wait for normal pullbacks because they might not come or they may come from much higher levels. So although we will see massive volatility in silver, most of the surprises will be on the upside. There will be periods when all technical indicators are screaming overbought but the price continues to run. But don’t forget that there will also be vicious corrections.

So why I am so certain that silver will move up now? I have often stated that the real upturn in the precious metals would always be led by silver. Once gold broke the 6 year Maginot resistance line at $1,350 in late June, this was the signal for the metals getting out of the starting blocks. That break was the signal and the gold/silver ratio peaked a few days later at 94 (see chart below).

Gold/Silver Ratio Peaked At 94/1

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As silver is now going up faster than gold, the ratio is coming down fast and has, so far, tumbled 13%. But that is just the beginning. I expect that ratio to first come down to the 2011 low at 30. This means silver will go up 3x faster than gold (ratio moving from 94 to 30). If we take an example that gold will reach an intermediate top at say $2,000, and the gold/silver ratio then reaches 30, that would mean a silver price of $66.

The long term historical average of the ratio is 15. That corresponds pretty well to the quantity of silver to gold in the ground which is 19 times, and to the quantity of silver to gold mined which is 9, (9 ounces of silver mined for every one ounce of gold).

TARGET: The Gold/Silver Ratio Will Collapse To 15/1

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$667 Silver
If we take our long term forecast for gold, which is at least $10,000 in today’s money, and apply the gold/silver historical ratio of 15, we get a silver price of $667 which is quite possible. GoldChartsRUS has produced a silver chart adjusted for real inflation (Shadow Statistics inflation index), which produces an adjusted silver price of $840 in 1980 instead of the actual peak price of $50. Thus, a price of $667 is certainly possible in the next 5 years.

We May See $667 – $840 Silver In The Next 5 Years

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There Will Be No Physical Silver Available
We must remember that the futures markets are totally manipulated with chronic and massive short positions. Just the silver shorts in New York and China represent more than one year’s silver worth of production. Once the futures market breaks, there will be no physical silver available.

Silver demand is now increasing dramatically and the ETFs have seen an increase of 125 million ounces in the last month. That equals 500 million per year which is 50% of annual production. Investment silver is normally around 30% of demand with the rest being industrial use and silverware. Thus, there is not enough silver for this elevated demand and we must question if the ETFs are actually getting the deliveries of physical silver or just paper promises. I would not count on the promise that they are getting physical silver.


Where Is All Of The Gold Coming From?
There is a similar situation in gold. Since June, gold ETFs, Published Repositories and Mutual Funds, increased their gold holdings by 250 tonnes, which is a record since 2016. The question is, where is the gold coming from to meet this increased demand?

Swiss refiners are still reporting very slow business and high stock levels. They are seeing material coming back from the Far East, including China and Thailand. The same is true with many bullion banks which are reporting unusually high stocks. We would clearly have expected the Swiss refiners, who produce 70% of all the gold bars in the world, to reflect the increase in demand from ETFs and other sources. I can only assume that the ETFs are not actually getting physical deliveries but are just buying paper gold with an undertaking by the bullion bank to deliver physical.


This confirms my strong opinion that no one should ever buy gold or silver ETFs. All you get is a piece of paper that you own x ounces of gold. Most ETF prospectuses state that they don’t have to hold the physical. And judging by the slow business and high stock levels of refiners and bullion banks, the ETFs seem to top up their paper stock rather than the physical.


Even if the ETFs do hold physical metals, it is still within the banking system with all of the risks that involves. Investors in ETFs don’t have their own bars, so they have no access to their gold. The gold is not insured and it is subject to all the risks of the financial system, especially if the ETF only has a paper claim on the bank it bought the gold or silver from.


Gold Has Had A Spectacular Year
Gold has had a spectacular year so far and outperformed virtually all major investment classes. In 2019, gold is up 20% in US dollars, 24% in Euros, 25% in UK Pounds and 15% in Yen. In August we have seen strong moves in gold. Gold took off when the Maginot Line was broken at $1,350 back in June.

Gold Has Surged Strongly Since Breaking The Gold Maginot Line At $1,350

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When The Paper Market Breaks
The lack of physical demand confirms what we have always known, namely that the gold price is determined by the paper market. So in spite of the best year for gold since 2009, it is not yet reflected in the physical market. In one way this situation makes the coming price move in gold and silver even more bullish. Futures exchanges and bullion banks are clearly accumulating even bigger short paper positions in gold and silver. When the paper market breaks there will be absolute panic in the physical market with gold going up by $1000s and silver by $10s. That will definitively happen in the next few years but it could happen at any time.


I have given some potential price projections in this article. They are by no means meant to be sensational since I believe they are very realistic. But remember that you are not buying gold or silver for short term price gains and therefore price targets are unimportant. Physical precious metals are bought for wealth preservation purposes. You buy and own physical gold and silver as insurance against a totally rotten and manipulated financial system which is unlikely to survive in its present form.


If you don’t already own gold and silver, buy now. Don’t be greedy and wait for pullbacks. If you wait for pullbacks you might miss the boat totally, which doesn’t just mean losing a potential investment gain. Instead, it means that you will be totally unprotected and unprepared for what is going to hit the world in coming years.

Even if you have to pay up when buying in the near term, that is totally irrelevant. In a few years gold and silver will be multiples of what they are now being quoted. And if you store it in the safest vaults and jurisdictions you will be able to sleep well at night.

IMPORTANT SHORT TERM WARNING
It looks like this week we could see the perfect storm starting in global markets. It will be of a much greater magnitude than Hurricane Dorian, which is now reaching the US.
The technical picture of markets tell us that major moves could start this week. The trigger could be a geopolitical event like the Hong Kong riots or some financial event. What we could see this week are stock markets beginning a major fall that will lead to a crash. More importantly, gold and silver as well as platinum are now poised for major moves higher starting this week. All of these moves will last for many years, but this week could be the beginning.


Whether the moves start this week or a bit later, investors should prepare themselves for the biggest wealth destruction ever taking place over the next few years…For those who would like to read more of Egon von Greyerz’s fantastic articles CLICK HERE.


One Of The Greats Says Gold Headed To $1,800
READ THIS NEXT! GOLD UPDATE: One Of The Greats Says Despite Volatility Gold Bull Is Headed To $1,800 CLICK HERE TO READ

More articles to follow…

In the meantime, other important releases…

What A Wipeout, Hedge Fund Gold Bets Increase, China Can Play The Game…But They Are Losing, Plus A Reality Check CLICK HERE TO READ

This Is What Is Really Driving The Price Of Gold Higher CLICK HERE TO READ

Bullion Banks And Commercials Remain Near All-Time Record Short The Gold Market! CLICK HERE TO READ

A Look At Where Things Stand In The Gold & Silver Markets CLICK HERE TO READ

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