Sunday, October 29, 2017

Mike Maloney: The Real Game Changer for Gold

There are clear supply pressures coming to the gold market, so the last thing it needed was a new source of demand. But that’s exactly what it’s about to get, and as you’ll see, it could potentially push supply into a strained predicament. 

If this new development catches on it could lead to some fireworks in the gold market. This source of demand comes from China’s announcement that oil exporters to China will accept yuan as payment. 

This is normally done in dollars (hence known as the petrodollar system). The yuan is not well established internationally yet, so as an incentive, China will offer its exporters the option to convert their yuan into gold. This will essentially result in a new source of gold demand, one not currently present in the market.

- Source, Gold Silver

Thursday, October 26, 2017

The Root Cause of Current Debt Levels

The simplest explanation is that governments spend more than they bring in. And since each year's deficit is added to the debt, the total keeps going up and up. It’s so high now that it’s mathematically impossible to repay (at least in current dollars).

How is it that central bankers and politicians can continue this free-for-all spending? You can tie it to one thing…

The world made a final break from a gold standard in 1971, when President Nixon ended gold convertibility. Up to that point there was some kind of gold (or silver) monetary regime for literally centuries (the primary exception to a lid on spending was during periods of war as the chart shows).

Now the entire world is on a fiat currency system for the first time in recorded history. And a fiat currency system always leads to ever increasing debt and money printing, because politicians and central bankers have no built-in controls to prevent them from doing so. Need more currency? Just spend it anyway or print it.

I have a question for those who mock the gold standard, or believe the fiat system is superior: why have all of the following events occurred since the world severed its last monetary tie to gold in 1971?
  • UK property and secondary banking crisis, 1973-1975
  • US Recession and oil crisis, 1973-1975
  • US Recession, 1980
  • US Recession, 1981-1982
  • Numerous Emerging Market defaults, mid-1980s
  • US Savings and Loan mass failures, late 1980s/early 1990s
  • Nordic banking and economic crises, late 1980s
  • US Recession 1990-1991
  • Japanese asset price bubble bursting, 1992
  • Mexican Peso crisis, 1994
  • Asian financial crisis, 1997
  • Long-Term Capital Management crisis, 1998
  • crash, 2000
  • US Recession, 2001
  • Housing market crash, 2007
  • Stock market crash, 2008
  • Great Recession, 2008-2009
  • Euro Sovereign crisis, 2010-2012

That’s 18 major financial crises in 46 years. An average of one every two-and-a-half years.

I don’t think it’s reasonable to assume we’ll escape another crisis. Government debt is simply too high, and history shows this makes crises much more likely, maybe even inevitable.

This is a primary reason Mike and I continue to buy gold regularly. In fact, while researching this article, I ordered another one of these.

I hope your portfolio is ready for the next financial shock that history says is on its way.

- Source, Jeff Clark of Mike Maloney's Gold Silver

Monday, October 23, 2017

History Says Global Debt Levels Will Lead to Another Crisis

It may feel like we’ll escape a debt crisis since, well, the world hasn’t ended in spite of runaway debt levels. Some of us hard money people feel like we’re taking crazy pills; how the heck can debt be so out of control, so completely unpayable, and yet the financial system keeps chugging along as if nothing’s wrong?

Well, history has a message for us: the current calm won’t last forever, because there is a direct link between government debt levels and the number of financial crises that occur. And since global debt levels are high—the second highest level in the past 150 years—it’s not exactly a stretch to conclude that another financial crisis is coming.

Analysts at Deutsche Bank recently released an extensive study that demonstrates the link between debt and crisis. One chart in particular screamed for attention.

They measured G-7 government debt levels, as a percent of GDP, and charted that figure against the number of crisis those countries have experienced. Here are the primary events they classified as a crisis or shock:
  • 15% fall in stocks
  • 10% decline in the country’s currency exchange rate
  • 10% fall in bonds
  • A sovereign default
  • 10% inflation rate
They logged every time a nation encountered any of these events within a one-year period, and compared that to government debt levels. It’s not hard to spot the correlation.

Since 1864, the higher government debt levels, the greater the number of countries hit by a financial crisis or shock. Even in the 1970s when debt was “low,” it rose steadily, indicating politicians were relying on debt to help solve their economic problems. And that reliance led to greater crises.

You can see that current G-7 government debt levels are at the second highest reading in at least 153 years. Are these countries really going to buck the historical trend and avoid any further financial crises or shocks? It would be borderline irresponsible to think so (hello, gold haters).

So how did we get into this debt spiral?

- Source, Jeff Clark of Mike Maloney's GoldSilver

Friday, October 20, 2017

Bitcoin Was Useless In This Disaster Scenario - Cash & Gold King In Hurricane Maria

Note from Dan Rubock, Producer of Hidden Secrets of Money series: You can help Rincon (my hometown, also Edd Santoni in this video) by donating at the following link:

This local restaurant has become a community hub and savior for many people in Rincon.They have literally closed their business down to become a relief center, it is still one of the few places folks can get internet. 

They went above and beyond during this disaster, cooking meals via torchlight for anyone who needed to eat...thank you donating to help them out. Please send them a message to say that Dan sent you...I may get a free beer out of this when I get back home. Many thanks, Dan.

- Source, Gold Silver

Monday, October 16, 2017

What You Can Learn From Hurricane Maria

The biggest lesson you can learn from hurricane Maria is to be prepared. Puerto Ricans are suffering right now with the grid down, and limited access to cash. Make sure you are prepared BEFORE an emergency situation occurs.

- Source, Mike Maloney

Friday, October 13, 2017

What I Told Corporate Investors about Weak Gold Demand

I gave a presentation to some corporate board members recently, and they had one primary question on their mind. Why is overall gold demand weak?

These are smart people. They’re successful, both professionally and with their investments. They even believe in owning a little gold. But they’ve been puzzled by the significant drop in demand for physical metal. They had some ideas, which were mostly right, but their main concern was if they were overlooking some critical factor that was making other investors ignore gold.

What was especially interesting was their reaction. Once they grasped the reasons why physical demand has been down, they instinctively concluded that they needed to buy more of it. Now.

See if you’d come to a similar conclusion after viewing my presentation…

- Jeff Clark of Mike Maloney's Gold Silver, Read More Here

Tuesday, October 10, 2017

Alarm Bells Ringing For Stock Markets, Gold & Silver Capitulation

Are we overdue for the “Big One”? It seems everyone is buying stocks again. And no one is interested in precious metals. Mike Maloney believes we may have reached capitulation.

- Source, Gold Silver

Saturday, October 7, 2017

Its True All Fiat Currencies Have Failed Throughout History

The word “fiat” sounds obscure, even mystical, but it’s actually simple. Fiat is Latin for “let it be done,” or “it shall be.” Apply that definition to money and it simply means that the currency we use is “money” because a government says it’s money. The dollar bill in your wallet is money by government decree.

Have all fiat currencies really failed?

I began to look through history to provide documentation of Mike’s claim. But I ran into a problem: there were too many to include in an article!

So I thought I’d look at just those that went bust since the beginning of the 20th century. There were still too many.

So I looked at just those since I was born in 1958. You guessed it, still too many.

I decided to cut it off at 1975, the year gold was made legal to own again in the US. I still found 17 of them—and that’s not even a comprehensive figure.

As you glance through the pictures, keep in mind that every single one of these currencies is now worthless. They’ve all gone bust, whether they got there quickly or took a century or more. And they’re not all from third world countries, either.

How can this possibly be? As Mike explains, a fiat currency relies on faith—and if it’s not backed by anything (like gold), leaders eventually succumb to the temptation to create more and more currency to solve their financial problems. And that dilution has always and inevitably led to extinction.

The scary part? For the first time in recorded history, all of today’s currencies are fiat.

That’s why Mike believes that before the end of this decade, an economic crisis will hit that will eclipse the Great Depression and 1929 stock market crash...

- Source, Gold Silver, Read the Full Article Here

Wednesday, October 4, 2017

The One Word Every Fiat Currency Faces: WORTHLESS

You may not know how old your national currency is, or even know what the word “fiat” means, but the following pictorial will tell you what’s happened to all of them.

No fiat currency has lasted forever. Eventually, they all fail.

Monday, October 2, 2017

Gold and Silver Owners Will be the Survivors of the Next Crash

Many analysts are convinced that in the next crisis, the US government will not let banks fail. That’s right, 2008/09 all over again.

Except this time the problem will be much, much deeper. The amount and value of derivatives is MUCH larger than in 2008. And the banks can’t unwind their derivatives because—you’re not going to like this—they’re not able to accurately value them. There’s simply too many and the daisy chain too big and complicated.

But here’s the thing… in the next financial crisis—and there will be another financial crisis, it’s unavoidable—traditional wealth won’t be destroyed by the turmoil in the banking sector. It will destroyed by the reaction of governments and central bankers.

If governments refuse to let the financial industry fail—and logic dictates that they cannot under any circumstances let that happen—and the problem is much bigger than the last financial crisis, then the level of intervention by central bankers and politicians will be on a truly unprecedented scale.

We don’t know exactly what they’ll do, but we do know they will react. We also know what some of the likely options will be—all of which will devalue the dollar bill in your wallet…

• More QE/money printing

• Helicopter money

• Massive expansion of credit

• Massive launch of government backed bonds

As Mike states in his video, the debt based global monetary system has allowed deficit spending, trade imbalances, and bubbles to persist and balloon to levels unprecedented in all of history. They threaten to take down the world economy.

However, Mike is very clear on who he believes will be the survivors: gold and silver owners.

Your wealth will not be destroyed in the next crisis if you own a meaningful amount of gold and silver bullion.