"Laundry Day" and Some Gold and Dow Rhythms

57
Sun, Aug 3, 2014 - 7:25pm

Did you know the Market "Laundry" is a hundred years old! We should not be surprised that Wall St failed to bring attention to this by having a party! The newbies and regulators are not supposed to know about it ..... nudge nudge, wink wink!

Rhythm and Price Issue 171 03082014

I'm still tweaking the Audio visual format for these blog contributions to improve them. Suggestions by PM are most welcome.

Have a great weekend everybody!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author

  57 Comments

  Refresh
buzlightening
Aug 5, 2014 - 9:56am

I'm going with Bix Weir on his timeline.

I'm amazed at how many people have viewed my interview about the DTCC and have had their eyes pried open as related to their stock portfolios, 401k's and other retirement accounts. So far over 140,000 views and climbing!!

This is the kind of information you need to take to heart and act upon. Tell your friends and neighbors. THERE IS A REASON they penalize you so heavily if you take the money out of your retirement accounts and that reason is NOT for your own protection...IT IS FOR THEIRS! Dozens if not hundreds of people have the very same claim of ownership on your specific share of stock - your bond - your money market funds that you think you have. It has all been rehypothicated over and over and over again.

"They" know that the shares are not there. The bonds are not there. There is no clear title and as long as the game continues and everybody doesn't try to get out at once then nobody will know the difference.

Face it - your retirement savings are being used in a gigantic game of musical chairs where there's only one chair left and millions of people just like you will be fighting for that last chair.

But it's already gone. your brokerage company ceded over title to "CEDE & Co" never to be seen again. It's all explained in the interview.

If you have not heard it yet here it is again...

The Shocking Truth the History Channel Can't Broadcast

https://www.roadtoroota.com/public/1386.cfm

Post this interview all around the internet....the People have a right to know.

These are the End Games and it will be very messy as the truth comes out. Brace yourself. Get yourself out of their game...physical silver in your pocket, a few gold coins maybe and even a few bitcoins to ride the next roller coaster.

It is happening.

May the Road you choose be the Right Road.

Bix Weir

www.RoadtoRoota.com

...............................................................................................................................................

Lets face it folks the crack up boom to complete global bust cycle is happening before our eyes. Completely self evident to all by the end of the year, unless you trust government or the arm of flesh to save you and hold nothing outside the current corrupted financial system of worth, substance or wealth. Cycle deflationary lows for commodities, in the last remaining thin trading days of August will be short lived before we accelerate into a hyper-inflationary bust. Once the harvest is over and all commodities are in the criminal bankstering coffers; including the remaining ounces of gold and silver which may be out there, we hit the bust wall and the panic sets in. As Bix Weir states the chiars will be few as to who owns what in the rehypothecation of all things from commodities, bonzi's, and paper asset share prices; including trusts as pslv where some believe their silver is safely tucked away. Likely rehypothecated many times over. It's tucked away but who rightfully owns the trusted silver in Sprotts care? If it's not in your hand you don't own it. Final warning to all who still believe there's some paper promise which will actually maintain a contract bond. I've warned for years: 100% POSSESSION will be the LAW among the LAWLESS bankster criminals.

DeaconBenjamin
Aug 5, 2014 - 8:10am

EU may buy French warships built for Russia

PARIS, Aug. 4 (UPI) -- The European Union may acquire two Russian warships currently under construction in France, analysts say.

The possibility comes as the United States and Western Europe tighten economic sanctions against Russia, and Monday's denial of a German defense contractor's delivery of military components to Russia by the German government.

"It is being discussed in Paris as an option. It is gaining traction in Paris. There are diplomats and politicians in Paris who see that as a possibility," Eduard Tetreau of the European Council on Foreign Relations' Paris office told the publication Defense News, adding the EU could afford to undertake the $1.6 billion contract.

https://www.upi.com/Top_News/World-News/2014/08/04/EU-may-buy-French-war...

Spartacus Rex
Aug 5, 2014 - 4:04am

Biderman's Money Blog:

US is Bankrupt: $89.5 Trillion in US Liabilities vs. $82 Trillion in Household Net Worth & The Gap is Growing. We Now Await the Nature of the Cramdown.

Aug
04

By Chris Hamilton

There are many ways to look at the United States government debt, obligations, and assets. Liabilities include Treasury debt held by the public or more broadly total Treasury debt outstanding. There’s unfunded liabilities like Medicare and Social Security. And then the assets of all the real estate, all the equities, all the bonds, all the deposits…all at today’s valuations. But let’s cut straight to the bottom line and add it all up…$89.5 trillion in liabilities and $82 trillion in assets. There. It’s not a secret anymore…and although these are all government numbers, for some strange reason the government never adds them all together or explains them…but we will.

The $89.5 trillion in liabilities include:

  • $20.69 trillion
    • $12.65 trillion public Treasury debt (interest rate sensitive bonds sold to finance government spending)
      • Fyi – $5.35 trillion of “intra-governmental” Treasury debt are not included as they are considered an asset of the particular programs (SS, etc.) and simultaneously a liability of the Treasury
  • $6.54 trillion civilian and Military Pensions and Benefits payable
  • $1.5 trillion in “other” liabilitieshttps://www.fms.treas.gov/finrep13/note_finstmts/fr_notes_fin_stmts_note13.html.
  • $69 trillion (present value terms what should be saved now to make up the present and future anticipated tax shortfalls vs. present and future payouts).
    • $3.7 trillion SMI (Supplemental Medical Insurance)
    • $39.5 trillion Medicare or HI (Hospital Insurance) Part B / D
    • $25.8 trillion Social Security or OASDI (Old Age Survivors Disability Insurance)
      • Fyi – $5+ trillion of additional unfunded state liabilities not included.

Source: 2013 OASDI and Medicare Trustees’ Reports. (pg. 183),https://www.gao.gov/assets/670/661234.p

These needs can be satisfied only through increased borrowing, higher taxes, reduced program spending, or some combination. But since 1969 Treasury debt has been sold with the intention of paying only the interest (but never repaying the principal) and also in ’69 LBJ instituted the “Unified Budget” putting all social spending into the general budget reaping the gains in the present year absent calculating for the future liabilities. If you don’t know the story of how unfunded liabilities came to be and want to understand how this took place, please stop and read as USA Ponzi explains nicely… https://usaponzi.com/cooking-the-books.html

$81.8 trillion in US Household “net worth”

According to the Federal’s Z.1 balance sheethttp://www.federalreserve.gov/releases/z1/current/z1r-5.pdf, the US has a net worth of $81.8 trillion – significantly up from the ’09 low of $55.5 trillion…a $23 trillion increase in five years. Fascinatingly, “household” liabilities are still $500 billion lower now than the peak in ’08 but asset “valuations” are up $22.5 trillion. All while wages have been declining. A cursory glance at the Federal Reserve’s $4 trillion in balance sheet growth in the same time period shows how the lack of growth in “household” liabilities (currently @ $13.7 trillion) has been co-opted by the Fed.

I believe it’s clear when incomes no longer supported credit and debt growth in ’08, consumers tapped out and in stepped the Federal Reserve to bridge the slowdown. But what the Fed may or may not have realized is once they stepped in, there was no stepping out.

(Charles, would be great if you could export this chart from FRED to be included…or if you have a better idea to show this relationship, would be great???)

https://research.stlouisfed.org/fred2/graph/?g=GVF

How We Got Here – Growth of Debt vs. GDP

45 years of ever increasing debt loads, social safety net growth, corporate welfare. 45 years of Rep’s and Dem’s in the White House and Congress bought by special interests and politicians buying citizens votes with laws enacted absent the revenue to pay for them. We have a Treasury and Federal Reserve willing to “innovate” and wordsmith to avoid the national recognition of the true difficulties and implications of our present situation. 45 years of intentionally avoiding an honest accounting of our national obligations, mislabeling, and misdirecting to pretend these obligations can and will be honored. 45 years of cornice like debt and promise accumulation simply awaiting the avalanche of claimant redemptions and debt repayments.

First, an historical snapshot for perspective of the last time US Treasury debt was larger than our economy (debt/GDP in excess of 100% in 1946) and subsequent progress of debt vs. GDP…and why anyone suggesting there is a parallel from post WWII to now is simply ill informed.

Post-WWII:

  • ’46-’59 (13yrs)
    • Debt grew 1.06x’s ($269 B to $285 B)
    • GDP grew 2.2x’s ($228 B to $525 B)
    • ’60-’75 (15yrs)
      • Debt grew 2x’s ($285 B to $533 B)
      • GDP grew 3.3x’s ($525 to $1.7 T) Income grew 3.3x’s ($403 B to $1.37 T)
        • ’65 Great Society initiated, ’69 unfunded liabilities begin under a “Unified Budget”

Post-Vietnam War:

  • ’76 -’04 (28yrs)
    • Debt grew 15x’s ($533 B à $7.4 T) Unfunded liability 15x’s ($3 T to $45 T)
    • GDP grew 7.3x’s ($1.7 T à $12.4 T) Income grew 7.4x’s ($1.37 T to $10.1 T)
    • ’05 -’14 (9yrs)
      • Debt grew 2.4x’s or 240% ($7.4 T à $17.5 T) Unfunded liability 1.5x’s ($45 T to $69 T)
      • GDP grew 1.4x’s or 140% ($12.4 T à $17 T) Income grew 1.4x’s ($10.1 T to $14.2 T)
        • Z1 Household net worth grew 1.25x’s from $65 T to $82 T…

https://www.bea.gov/newsreleases/national/pi/2014/pdf/pi0614_hist.pdf

If the trends continue as they have since ’75, Treasury debt will grow 2x’s to 3x’s faster than GDP and income to service it…and the results would look as follows in 10 years:

  • ’15 – ‘24
    • Treasury debt will grow est. ($17.5 T à $34 T to $44 T)
    • GDP* will grow est. ($17 T à $22 T to $24 T)…income growth likely similar to GDP.

* = I won’t even get into the overstatement of economic activity within the GDP #’s…just noting there is an overstatement of activity.

So, while the Treasury debt growth rate skyrocketed from ’05 onward and the GDP growth slumped to its lowest since WWII, the unfunded liabilities grew even faster.

Drumroll Please – Total Debt/Obligation growth vs. Debt

Let’s go back to our ’75-’14 numbers and recalculate based on total Federal Government debt and liabilities:

  • ’75-’14
    • debt (total government obligations) grew 33x’s 168x’s ($533 B à $17.5 T $89.5 T*)
    • GDP grew 10x’s ($1.7 T to 17 T)
      • Household net worth grew 15x’s ($5.4 to $82 T) while median household income grew 3x’s (est. $17k to $51k) while Real median household income grew 1.13x’s ($45k to $51k)

*$89.5 T is the 2012 fiscal year end budget number, the 2013 fiscal year end # is likely to be approx. $5+ T higher, or debt grew 180x’s in 40 years vs. 10x’s for GDP / income….but seriously, does it really matter if debt grew at 10x’s, 16x’s, or 18x’s the pace of the underlying economy…all are uncollectable in taxes and unpayable except for QE or like programs.

Why Can’t We Pay Off the Debt or Even Pay it Down?

Take 2013 Federal Government tax revenue and spending as an illustration:

  • $16.8 Trillion US economy (gross domestic product)

    • $2.8 Trillion Federal tax revenue (taxes in)
    • $3.5 Trillion Federal budget (spending out)
      • -$680 Billion budget deficit (bridged by sale of Treasury debt spent now and counted as a portion of GDP)
      • = $550 Billion economic growth?!?
        • PLEASE NOTE – The ’13 GDP “growth” is less than the new debt (although the new debt spent is counted as new GDP) and the interest on the debt will need be serviced indefinitely.

Why Cutting Benefits or Raising Taxes Lead to the Same Outcome

While many try to dismiss these liabilities assuming we will continue to only service the debt rather than repay principal and interest; assuming we turn down the SS benefits via means testing, delaying benefits, reducing benefits; assuming we will bend the curve regarding Medicaid, Medicare, and Welfare benefits; assuming we will avoid further far flung wars and military obligations and stop feeding the military industrial complex; assuming no future economic slowdowns or recessions or worse; assuming a cheap and plentiful energy source is found to transition away from oil. But all these debts and liabilities are someone else’s future income they are now reliant upon; someone’s future addition to GDP. If these debts or obligations are curtailed or cancelled to reduce the debt or future liability, the future GDP slows in kind and tax revenues lag and budget deficits grow. Of course I do advocate these debts and liabilities cannot be maintained, but austerity (real austerity) is painful and would set the stage for a likely depression where the nation (world) proceeds with a bankruptcy determining what and how much of the promises made can be honored until wants, needs, and means are all brought back in alignment.

So What’s it All Mean?

Let’s get real, austerity is not going to happen and we aren’t going to balance the budget. We’re never going to pay off our debt or even pay it down. We’re rapidly moving from 4 taxpayers for every social program recipient to 2 per recipient. And ultimately, now we aren’t even really paying the interest on the debt…the Federal Reserve is just printing money (QE1, 2, 3) to buy the bonds and push the interest payments ever lower masking the true cost of these programs. Of course, interest rates (Federal Funds Rates) have edged lower since 1980’s 20% to todays 0% to make the massive increases in debt serviceable.

Politicians and central bankers have shown they are going to print money to fulfill the obligations despite the declining purchasing power of the money. It’s not so much science as religion. A belief that infinite growth will be reality through unknown technologies, innovations, and solutions that in four decades have gone unsolved but somehow in the next decade will not only be solved but implemented. Because it is credit that is undertaken with a belief that the obligation will ultimately allow for future repayment of principal, interest, and a profit. But without the growth, the debt cannot be repaid nor liabilities honored. Without the ability to repay the principal, the debts just grow and must have ever lower rates to avoid interest Armageddon. This knowledge creates moral hazard that ever more debt will be rewarded with ever lower rates and thus ever greater system leverage. The politicians and central bankers will continue stepping in to avoid over indebted individuals, corporations, crony capitalists, cities, states, federal government from failing. It is a fait accompli that a hyper-monetization has/is/will take place…and now it is simply a matter of time until the globe either becomes saturated with dollars and/or reject the currency (so much to discuss here on likely demotion or replacement of the Petro-dollar and more…). Because the earthquake (unpayable debt and obligations) has already taken place, now we are simply waiting for the tsunami. Forget debt repayment or debt reduction…forget means testing or “bending cost curves”…we’re approaching the moment where even at historically low rates we will not be able to pay the interest and maintain government spending…without printing currency as this generation of American’s have never seen. Bad governance and bad policy coupled with disinterested citizens will demand it.

Epilogue – So Where Do you put your Money?

No one can really know what will have value in this politicized crony capitalistic system as the hyper-monetization ramps up…all I can suggest is to hedge your bets with some physical precious metals, some minimal leveraged real estate, but also stocks and bonds and even some cash…because although there are natural forces in favor of the tangible, finite goods…there are also equally determined forces bound to push bond yields down, real estate and particularly stock prices up. Unfortunately, the more you know, the more you know you don’t know…invest and live accordingly.

https://charlesbiderman.com/2014/08/04/us-is-bankrupt-89-5-trillion-in-u...

Spartacus Rex
Aug 5, 2014 - 3:33am

Tess Pennington - It's a Scary Reality We're Living In (Ebola)

Tess Pennington - It's a Scary Reality We're Living In
Spartacus Rex
Aug 5, 2014 - 3:28am

Fave Dave In Denver

America's Structural Jobs Depression Is Here to Stay

Also from Dave:

The CFTC Commitment Of Trader Data Is Rigged After All

August 04, 2014

https://investmentresearchdynamics.com/the-cftc-commitment-of-trader-dat...

Safety Dan
Aug 5, 2014 - 3:16am
Spartacus Rex
Aug 5, 2014 - 3:03am

@ Strongsidejedi

Thanks for the update, and regarding restricted boarding for U.S. bound flights, do you or anyone else know what the time lapse between being exposed and actually exhibiting symptoms of ebola virus ? Thanks. Cheers, S. Rex

ivars
Aug 5, 2014 - 2:54am

What if they wiped out Iraqi,

What if they wiped out Iraqi, Libya, Syria, may be even other Mid East oil infrastructure and then rebuilt it? Would that be some help in creating renewed need for new loans in reserve currency?

It is king of heading that way with ISIS ( ISIL) taking over more and more of Middle East. Once they do, they can be bombed together with "collateral damage " ( pun intended) . In Libya and Syria, destruction is already pretty advanced.

Just an idea.. would that help money cartel? I can not figure out, but thinking of the role of war in complex societies (reduction of assets on top of raw materials and reduction of transaction costs) and gave me it. Plus what has been happening in ME since 2011.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

StrongsidejediSpartacus Rex
Aug 5, 2014 - 2:44am

@Spartacus Rex

Just posted to the Ebola thread an sitRep from ProMed.

Sadly the graphic is already outdated. The column on the right shows about 700 dead and 1300 ill.

The current count from ProMed suggests that WHO/UN is undercounting the dead and the ill.

ProMed is noting:

[latest WHO figures, certainly an undercount, as of 31 Jul 2014, are 1440 including 826 deaths; see ProMED archive 20140803.2656749, and many more will have died in the last 2 days. - Mod.JW]. This is nowhere near the tolls of other infectious diseases, such as HIV/AIDS, malaria, diarrheal disease and tuberculosis, which occur every day in this same region. But the ebolavirus strikes a chord of fear unlike other infectious diseases because of the quick, horrible deaths it causes [and the appallingly high case fatality rate, currently at least 57 percent. - Mod.JW].

Therefore the graphic would have to be adjusted upwards by about 60 more dead and nearly 100 more infected as of 31 July 2014.

I am amazed that the WHO is not supporting international air travel restrictions while the US air travel regulators are encouraging US carriers to restrict boarding for any individual who is ill from those nations.

I also note that several airlines have halted flights in and around Western African nations.

Interestingly, Delta Airlines has access routes from Western African nations to JFK/NYC.

Spartacus Rex
Aug 5, 2014 - 2:41am

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

Key Economic Events Week of 4/6

4/8 2:00 ET March FOMC minutes
4/9 8:30 ET Producer Price Index
4/10 8:30 ET Consumer Price Index

Key Economic Events Week of 3/30

3/31 9:45 ET Chicago PMI
4/1 8:15 ET ADP Employment
4/1 9:45 ET Markit manu PMI
4/1 10:00 ET ISM manu PMI
4/2 10:00 ET Factory Orders
4/3 8:30 ET BLSBS
4/3 9:45 ET Market service PMI
4/3 10:00 ET ISM service PMI

Key Economic Events Week of 3/23

3/24 9:45 ET Markit flash PMIs
3/25 8:30 ET Durable Goods
3/26 8:30 ET Weekly jobless claims
3/27 8:30 ET Personal Inc and Spending

Key Economic Events Week of 3/9

(as if these actually matter)
3/11 8:30 ET CPI
3/12 8:30 ET weekly jobless claims
3/12 8:30 ET PPI
3/13 8:30 ET Import Price Index

Recent Comments

by uni59, 7 min 33 sec ago
by indiana rod, 7 min 48 sec ago
by Orange, 13 min 36 sec ago
by happycamper515, 20 min 48 sec ago
randomness