Mainstream economists continue to defend and even praise Ben Bernanke’s response to the 2008 financial crisis. But as it becomes more and more obvious that the United States economy never fundamentally recovered from the Great Recession, savvier analysts are speaking up. On Bloomberg TV, David Stockman lambasted Bernanke for flooding the markets with zero-cost money, arguing that the former Fed Chairman’s book would be better titled The Courage to Print, rather than The Courage to Act. Stockman ended with a dire warning for investors:
This market is going to collapse, and if it doesn’t I’ll shave my beard. It’s absolutely going to collapse, because when you give traders and speculators free money overnight, they just roll it. They roll it and roll it. They take every kind of position…”
On Monday, the United States national debt increased $339 billion.
In one day. Just like that.
What caused the sudden spike?
That same day, President Obama signed a bill into law suspending the debt ceiling until March 15, 2017. That allows the government to once again borrow, free from the constraints of an $18.1 trillion ceiling.
Peter Schiff joined two other guests on Fox Business’ Closing Bell with Liz Claman. They discussed what it would take for the United States government to balance its budget without deficit spending. Peter Hoekstra, a former Republican Congressman from Michigan, argued that the government had managed to balance the budget in the 1990s. However, Peter Schiff pointed out that the balanced budget of the ‘90s was a fantasy based upon the dot-com bubble. What the US really needs is real monetary reform and a restructuring of its economy.
The cost of government is not what it taxes, but what it spends. The Democrats are all about something for nothing. Republican candidates who talk about tax cuts without corresponding spending cuts – that’s the same thing. It’s something for nothing. “
One of America’s largest online retailers has prepared for a financial crisis. Have you?
During a recent speech (see video below) at the United Precious Metals Association, Overstock.com Chairman Jonathan Johnson said the company has stockpiled $10 million in gold and silver outside of the banking system. He said most of the gold is in the form of “button coins” suitable for payroll:
We want to be able to keep our employees paid, safe, and our site up and running during a time of financial crisis.”
Sales of American Silver Eagle bullion coins shot through the roof over the past several months and will likely break a record in 2015.
According to a Newsmax Finance report, 2015 sales year-to-date are ahead of last year’s pace. Through the third week in October, sales stood at 38,986,000 ounces. That compares to last year’s 38,121,000 ounces. If this trend continues, 2015 sales will exceed last year’s record of 44,006,000 ounces.
Swedes are reportedly hiding money in microwave ovens in a desperate attempt shield it from the negative effects their central bank’s “war on cash.”
As Business Insider puts it, the Nordic country is “shaping up to be the first country to plunge its citizens into a fascinating — and terrifying — economic experiment: negative interest rates in a cashless society.”
The Swedish central bank, the Sveriges Riksbank, on Wednesday held its benchmark interest rate at -0.35%, the level it has been at since July. Though retail banks have yet to pass that negative rate on to Swedish consumers, they face increased pressure to do so as long as the rates remain where they are. That’s a problem, because Sweden is the closest country on the planet to becoming an all-electronic cashless society.”
Doug Casey spoke with Greg Hunter of USAWatchdog. Just like Jim Rickards, Jim Grant, and Dr. Ron Paul, Casey believes we’re in the middle of a cataclysmic era of central bank intervention that will result in an unprecedented monetary collapse. In fact, Casey doesn’t think the United States ever got clear of the economic hurricane that devastated the markets in 2008. Instead, we’re simply in the eye of the storm, and things are going to get much worse before they get better. His advice? Buy gold and silver:
The average guy after he does these things I’ve just mentioned, should buy gold, frankly. Don’t keep your savings in a bank, so much as [in] gold coins… Or silver coins. Silver is more volatile than gold, and of course since it’s worth so much less, it’s harder to store if you have a significant amount of wealth. But absolutely [also buy silver]. In fact, I think there’s more upside in silver than there even is in gold… “
Gold-backed exchange-traded funds (ETFs) generally follow the price of gold. As a result, they have been underperforming relative to the general stock market this year.
For instance, SPDR Gold Trust (GLD) lost about 28.3% of its value in 2013, fell another 2.2% in 2014 and yet another 3.8% so far this year. It was recently trading at $109.72 per share.
ETFs are backed by physical gold held by the issuer, and are traded on the market like stocks. They allow investors to play gold without having to buy full ounces of gold at spot price. Since their purchase is just a number in a computer, they can trade their investment into another stock or cash pretty much whenever they want, even multiple times in the same day. Many speculative investors appreciate this liquidity.
There are also gold mining ETFs that track the value of gold mining companies and also generally follow the price of gold. These are very popular with speculative commodity investors and some of the most popular hit record lows this past summer, like the Market Vectors Gold Miners ETF (GDX).
With gold ETF prices being so low, many of Peter Schiff’s clients have asked if they should be investing in these ETFs.
Ernie Hancock of Declare Your Independence interviewed Peter Schiff about the tragic death of his father, Irwin. They discussed Irwin Schiff’s legacy and his influence on Peter’s understanding of economics. Peter has chosen to promote his father’s principles by educating the public about how to avoid the US government’s most insidious tax – not the income tax, but the inflation tax that comes from the destruction of the dollar’s purchasing power. One of the best ways to protect your hard-earned savings? Buy physical gold and silver.
I’m trying to do the best that I can to help Americans protect themselves agains that tax. My father was trying to get people to not pay the income tax. Well, this inflation tax is going to be worse, because it’s going to hit your principal – not just what you earn, but everything you have. If you don’t want to lose what you have, you have to take action now…”
Investors and central banks around the world are buying gold.
Overall worldwide demand for the yellow metal surged during the third quarter. According to a Reuters report, demand for gold coins and gold bars, along with buying by central banks, drove a 7% Q3 increase.
Demand for gold coins and bars jumped by 26% year-on-year in the last quarter, GFMS analysts at Thomson Reuters reported in the Q3 update of their Gold Survey 2015. Retail investment surged in top consumers India, China and Germany, with buying rising 30%, 26% and 19% respectively. Those three markets alone accounted for an additional 26 tons of retail buying.”
