4.February 2019

www.https://think-beyondtheobvious.com

This guest contribution in the FINANCIAL TIMES (FT) is so good and virtually brings bto's world of ideas to the point. It clearly shows that we are at the end of a decades-long malfunction that can and will end only in a big bang, combined with a reset of the System:

„While many investors are fretting over what stage of the business cycle we are in, the global monetary system is collapsing — with a whimper initially, but ultimately a bang. The whimper is causing losses for equity investors. The bang will impact global asset prices as much as the end of the Bretton-Woods system or the end of the gold standard.“

  • „The system that is ending has no name. It is a system patched together in the embers of the Asian economic crisis, when many countries intervened in the foreign exchange markets to prevent the appreciation of their currencies. The impacts for investors were profound. The roughly $10tn rise in world foreign exchange reserves between 1999 and 2014 resulted in the forced purchasing of US Treasuries. Foreign central bankers owned just 13 per cent of the Treasury market in 1995, but held a third of it by 2014.“ bto: Das ist das, was Leute wie Ben Bernanke und Larry Summers als “global savings glut”
  • „This monetary system thus provided a funding holiday for global savers, freeing them to focus on funding the private sector instead. Meanwhile, central bank liabilities increased by $10tn. What could be better for global investors than a monetary system that depressed the global risk-free rate while boosting growth through an explosive rise in the money supply of emerging markets, particularly China? For equity investors the combination of a low discount rate and high growth rate drove prices and valuations higher until 2014.“

  • „(…) as foreign exchange reserves have stopped climbing, the job of funding the US government has fallen to savers, not central bankers. Foreign central bank ownership of US Treasuries has fallen from a third five years ago to just under a quarter today. Savers must take up the funding slack, while also buying the Treasuries now being sold by the Federal Reserve. This structural shift in the demand for Treasuries comes as supply is boosted by the Trump administration’s fiscal policy. Savers now have to fund the US government, and to do so they have to either sell other assets or save more.“

  • „The whimper is evident, but how will the bang look? Lower growth, lower inflation, lower asset prices and the prospect of declining cash flows will always raise questions about solvency. The global ratio of non-financial debt to gross domestic product is 234 per cent, compared with 210 per cent in December 2007, just before the last credit crisis. If the bang of credit default was possible 12 years ago, how much more likely is it today? For 10 years the growth of debt has outstripped growth in broad money and nominal GDP. Central bankers have bought growth by sacrificing financial stability.“
  • „(…) problems are particularly acute in China, with broad money growth at its lowest in the post-Mao era. The country’s debt-to-GDP ratio is rising at probably the fastest rate ever for a big economy in peacetime. This is the economy that we are told is de-gearing and reflating! It is not, and the burden of the economic adjustment enforced by theend of the growth in its foreign exchange reserves, and hence money supply, will probably be deflationary and will involve debt default. China will probably move to a flexible exchange rate, thus creating the freedom to grow and inflate away these debts.“

  • „The key consequence of this collapse will be the destruction of the euro. The expected success of the far-right and far-left in the European parliamentary election in May this year augurs the beginning of the end for the currency union. Both extremes share a commitment to the return of sovereignty to their parliaments that is incompatible with a single currency. That end will come even more quickly with the resultant economic pain from the collapse of the global monetary system (…).“

  • „(…) it is likely to begin with the imposition of capital controls by key eurozone countries. In the financial, political and social maelstrom of a eurozone dissolution, investors should not expect property rights to be respected.“

  • „The UK, where democracy and the rule of law will remain largely unchallenged, will become an attractive safe-haven investment for European investorsfacing increasingly authoritarian regimes and property sequestration on the mainland. Monetary collapses bring social and political ruptures and we now face two such collapses. It would be naive for any investor to assume that ‘government of the people, by the people, for the people’ will survive such ruptures. The risks remain highest in Europe.“

 

 

https://kingworldnews.com


I, DONALD J. TRUMP, President of the United States of America, find that the prevalence and severity of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, such as those committed or directed by persons listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

I therefore determine that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, and I hereby declare a national emergency to deal with that threat.

I hereby determine and order:

Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i) the persons listed in the Annex to this order;

(ii) any foreign person determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General:

(A) to be responsible for or complicit in, or to have directly or indirectly engaged in, serious human rights abuse;

(B) to be a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in:

(1) corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery; or

(2) the transfer or the facilitation of the transfer of the proceeds of corruption;

(C) to be or have been a leader or official of:

(1) an entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section relating to the leader’s or official’s tenure; or

(2) an entity whose property and interests in property are blocked pursuant to this order as a result of activities related to the leader’s or official’s tenure; or

(D) to have attempted to engage in any of the activities described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section; and

(iii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General:

(A) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of:

(1) any activity described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section that is conducted by a foreign person;

(2) any person whose property and interests in property are blocked pursuant to this order; or

(3) any entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section, where the activity is conducted by a foreign person;

(B) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; or

(C) to have attempted to engage in any of the activities described in subsections (iii)(A) or (B) of this section.

(b) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the effective date of this order.

Sec. 2. The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 1 of this order would be detrimental to the interests of the United States, and the entry of such persons into the United States, as immigrants or nonimmigrants, is hereby suspended. Such persons shall be treated as persons covered by section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic Powers Act Sanctions).

Sec. 3. I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by section 1 of this order.

Sec. 4. The prohibitions in section 1 include:

(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(b) the receipt of any contribution or provision of funds, goods, or services from any such person.

Sec. 5. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Sec. 6. For the purposes of this order:

(a) the term “person” means an individual or entity;

(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization; and

(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

Sec. 7. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of a listing or determination made pursuant to this order.

Sec. 8. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA and the Act as may be necessary to implement this order and section 1263(a) of the Act with respect to the determinations provided for therein. The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions to other officers and agencies of the United States. All agencies shall take all appropriate measures within their authority to implement this order.

Sec. 9. The Secretary of State is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA, the INA, and the Act as may be necessary to carry out section 2 of this order and, in consultation with the Secretary of the Treasury, the reporting requirement in section 1264(a) of the Act with respect to the reports provided for in section 1264(b)(2) of that Act. The Secretary of State may, consistent with applicable law, redelegate any of these functions to other officers and agencies of the United States consistent with applicable law.

Sec. 10. The Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General, is hereby authorized to determine that circumstances no longer warrant the blocking of the property and interests in property of a person listed in the Annex to this order, and to take necessary action to give effect to that determination.

Sec. 11. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

Sec. 12. This order is effective at 12:01 a.m., Eastern Standard Time, December 21, 2017.

Sec. 13. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

THE WHITE HOUSE,
December 20, 2017.

Posted by on  

It was a headline designed for shock value. The title screamed, Investors Dumping SLV at Fastest Pace in 6 Years!

The headline came from Bloomberg, the epitome of “mainstream” news in my opinion. The article reported that investors were “dumping” holdings in SLV, the largest silver exchange-traded fund. They claimed the silver market had been “hit by a gale force, spurring an exit from ETFs backed by the metal.”

As you might guess, we do a lot of reading around here. And this was the first I’d heard of a “mass exodus” from SLV. Did I somehow miss this development?

It’s important because if holdings in SLV were really cratering, it might be a sign that the market—or at least these types of investors—had changed their mind about silver. You might know that holdings in silver-backed ETFs have been stubbornly high for years, refusing to bow to any price pressures. During the crash of 2008, for example, holdings rose sharply in spite of the price falling off a cliff. Same thing happened in 2013 when the price cratered… holdings never really declined all that much, in spite of GLD shares dropping hard.

Given that, you might understand why I perked up upon seeing their Chart.



Looks ominous. I needed to check it out…

Fun with Facts

The above chart is correct. There have been outflows from SLV.

But the message the journalists portray is incorrect. We went directly to the SLV site and created a chart of the fund’s holdings. I expected to see a big drop over the past few months. Instead, I saw this.



Holdings have barely moved. They’re still higher than in 2009… in 2011… and in 2013. The “mass exodus” is barely noticeable on a long-term chart.

Okay, so maybe there’s been a big drop in the number of shares. Yeah, that’s probably it…



The number of shares has dipped, but they remain higher than they were 18 months ago. If investors were selling their SLV shares in droves, it’d show up here. It doesn’t.

The idea that investors are exiting the silver industry is simply not accurate. Silver has a message for anyone who thinks so: “The reports of my demise have been greatly exaggerated.”

In fact, if there is any message about silver right now, it’d probably be this:



The ratio of the silver price to the S&P 500 hasn’t been this low in over a decade. Clearly, silver is undervalued compared to common stocks. This chart screams “buying opportunity!” If you own common stocks and feel the pressure to lighten up, silver is one of the deepest value assets you can buy right now. Someday the ratio in that chart will look just the opposite, where silver is much higher and stocks are much lower.

And of course, you can’t examine the silver market without looking at China. Here’s what was reported only a few days after that Bloomberg article:

  • “China has been importing noticeably more silver for several months. According to data from the customs authorities, August silver imports soared by 68% year-on-year to 422 tons. Silver imports were already 45% or 860 tons above the year-on-year level in the first eight months of the year.”

The simple fact is, there is no “exodus” from SLV. Investors aren’t dumping the fund, nor silver itself. Demand for coins in North America remains subdued, but that’ll change abruptly once stocks, real estate, and other overpriced assets reverse. Nothing lasts forever, and once they start to fall, investors will turn back to precious metals in droves.

Mike and I and everyone else at GoldSilver are preparing for a major reversal back into gold and silver. We continue to accumulate, while prices are low.

You can check out the original article here: Analyzing the Mainstream Analysts: Are SLV Holdings Really Plummeting?



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