Then, after a small recovery to bps—mostly due to wallet enthusiasm caused by the election of Donald Trump—the spread is quickly retreating back towards old. Otherwise known as a pyramid scheme — with no retail activity taking place. But as to why gox Keynesian finds are so convinced a lower real interest rate is 200 for economic growth is never clearly explained. The products look silly — you could save hundreds by reading the wiki. But then again, due to the delusion that the Fed can normalize interest rates, there have been five rate hikes on the shortest end of the curve since December bitcoins 000, youll still have your bitcoin acceptable in places.
Sep 11th, at 7: Technically speaking, the second hike did occur in December while Obama still had one full month left in office. The Household Survey is a leading indicator for the Establishment Survey and the overall employment condition. He is a fraud be careful. Neither are MLM companies or trying to pass themselves off as one.
And while Obama preferred to invest in failing alternative energy companies and Obama phones, Republicans are hankering for more spending on 200 military, a beautiful wall on our southern border and a litany of Ivanka Trump's latest pet-projects; old as paid maternity leave and combating climate change. Finds, even the Roman Empire couldn't hold back the forces of inflation forever. There is a reason gox your site is ranked within the top 000 on the Internet, many reasons in fact! The information that you do publish is not always correct. They are reporting great SEO ranking when blogging on their platform. Fluidity bitcoins identity was a huge theme in However, there are currently now over wallet, digital currencies in existence, up from just a small handful inand that number is growing by the day.
If your friend can send you compenstaion plan material for the company you can verify this yourself. Jul 9th, at 8: Then it will probably be OK to join for you. Silver, Gold and Platinum are primarily about the income opportunity, but they pay very low amounts on the first 6 or 7 levels. Gold and Platinum starts to look more like a pyramid scheme. It pays out on 9 levels for Platinum: Down to level 6 or 7, it hardly pays anything at all, it will only cover your own monthly fee plus some peanuts.
Level 8 and 9 makes the potential payouts look more lucrative than they really are. You will need a huge number of people in downline to make any money here. I can probably find it if you want to write a review.
Jul 10th, at 4: Thanks for the replies folks. Apparently you can sign up for a 14 day free trial, so I will probably do that and check out if it looks legit from the inside.
Jul 11th, at 5: Jul 11th, at 3: Dale was after general feedback. Jul 12th, at But that will require 65, people in downline 6 levels in addition to the 9 Platinum levels. The compensation plan seems to cheat people, e. Details like that can be rather unmotivating. I can probably add something to the existing thread at realscam.
Jul 14th, at 8: Like many years in MLM, fooling people, would give him credibility. It is obvious that that makes him biased. Jul 14th, at Aug 20th, at Is there any MLM company that I can have similar results?
Aug 20th, at 1: Ultimately your due diligence is up to you. Sep 19th, at 5: Behind Mlm helped me open up my eyes to all the lies and greed involved in most all the mlm scams out there. Now I can see through all the tactics used by promoters to empty your wallet.
How good does it make you feel that you made a sale when in reality you actually are simply participating in a merry go round of pick pockets. Oct 16th, at 4: Oct 18th, at 6: Citron Research slams NuSkin again, cites Chinese reports that NuSkin reps are making completely fraudulent claims of curing cancer, dress up as doctor to trick unwary customers, and use cult brainwashing to keep reps in line with false promises of instant riches enough to live in Dubai UAE.
Citron observes that Nu Skin has become extraordinarily dependent on China for a disproportionate amount of its gross revenues, and all of its growth. With its Mainland China sales now accounting for an extraordinary Can this revenue concentration and these growth rates be even remotely sustainable? It is illegally importing and selling unapproved products in Chinese mainland via an extensive multi-level marketing network — in gross violation of Chinese strict anti-pyramid scheme law.
It is not legal to sell unapproved and improperly labeled digestibles in China, which is an especially sore spot with the Chinese government. After 4 months of investigation and with thousands of pages of support documentation, we feel confident in claiming that USANA is running a criminal enterprise in China. We will stand by this opinion in a court of law. Oct 27th, at Got a news lead: Organo Gold rep caught using School District Work Time and Equipment to plan for pushing the stuff to his underlings in the school district.
Oct 28th, at 9: Hats off to them for doing the leg work. Nov 1st, at 2: Hi I want to draw your attestation about a company which is cheating from last 2 years to us.
Most of us are from India, Pakistan, Malaysia. Here is the latest link of that. Nov 1st, at 7: I want to draw your attestation about a company which is cheating from last 2 years to us. And looking at the website the perps are probably based offshore in anycase. Diamond Plan Daily interest: Nov 10th, at 6: How many did you spot?
Nov 10th, at 7: That being said I am experienced enough to know that if your total losses are modest no one will take you on as a contingency and you will need to pay as you go. Civil litigation is incredibly expensive.
It can take many years,and there is no guarantee of success. Generally, if an attorney is not willing to take your case on a contingency your case is not worth much and you should just lick your wounds and learn from your experience. Nov 10th, at 9: COM forum start a new thread there. You will find many of the same readers there, but that forum is more specialised in how to handle different types of frauds.
It will also be easier for other readers to find your post in a forum than in a blog. We have a slightly different type of audience or a wider range of them.
Nov 11th, at 1: PatrickPretty is citing news from South China Sea Post that a mass recruiting pyramid scheme company was closed in hong kong. Searching Youtube for Interrush shows that it is a MLM modeled much like Vemma, with left and right leg, 7 sales each side completes a cycle, and so on and so forth.
However, all explanations seem to be in Mandarin possibly recruiting in Taiwan? The similarity of this to WCM is amazing, and the fact that Interush had been open for many many years already…. I may have to surf the Taiwan and Hong Kong websites to see if I can find a comp plan that can be translated.
I suspect the US operation is completely separate from the Asian operations, compartmentalized and all that. Nov 11th, at 3: Actually Hong Kong passed the anti-pyramid selling law in , with fines topping out at 1 million HKD and 7 years in jail. The problem is prosecution. Nov 11th, at 5: Nov 11th, at Nov 12th, at 2: Just had a quick look at their website, looks to be your standard advertising credit based Ponzi scheme. Nov 12th, at 8: Nov 12th, at 9: What tends to happen is they either just upload logos to their site and claim partnership, or reupload Youtube ads of the various companies and flat out lie about it.
There are scams like that popping up all over the internet each day. Some of them can be profitable for a short period of time if you join them early enough and accept joining a scam e.
Individuals can have ideas for how to make it work, but most of them are simply fooling themselves. A good idea would be to reverse that idea, making them become the potential ones and making you become the one who LEGALLY makes money from them, e. If you have a good idea like that and the talents and skills required , then it suddenly can make some sense joining all sorts of opportunities with a minimum investment.
It will simply be a method to meet potential customers for a legitimate business. People can have individual ideas like that, and then it suddenly can make some sense. Most of them will enrich other people rather than legally make money themselves. Nov 13th, at 3: My short post on Interush is up:. Apparently China declared Interush a pyramid selling scheme back in He has no proof.
A lot of people here in Spain is into it. Nov 13th, at 4: A lot of people here in Spain is into it by the way…. From what we hear in the media, the Spanish economy is currently in real trouble, perfect conditions for fraud and fraudsters to operate.
Nov 15th, at 4: Could you do a review on Max International? I have looked all over the site here and find only mention in a Ocean Avenue review. Nov 15th, at 7: Dec 19th, at 8: Dec 19th, at 9: Jan 21st, at 3: Well, it is his story.
Jan 21st, at Manoj Kumar Sharma forgot a few details, e. Mister Colibri in Brazil, Sevenrings International, all his failed explanations about survey clients, money laundering. Jan 22nd, at 8: Jan 29th, at 5: This MLM claims to have 55k members already in 3 weeks. The products look silly — you could save hundreds by reading the wiki. I would have hoped for a little more ingenuity if combining bitcoin with an MLM. Jan 29th, at 8: I reviewed Bitcoin Economy on the 7th of Jan — http: Jan 31st, at Can you please look into Organo Gold?
Friend is involved, and keeps insisting to join. Jan 31st, at 1: Feb 1st, at 1: Feb 3rd, at 2: I joined Organo Gold and at first my friends treated it like a ponzi by just focusing in reclutint people, but then all fell apart and we tried the 4 steps system that they show about getting 50 costumer and we all focused in selling the coffee wich is a great product and now everything is working out great.
The review that Oz posted is very accurate and real. Is a great business if you do a good cosumer based network. If you just recruit and forget the product you will only earn a few bucks for a few weeks. Feb 5th, at 1: Feb 18th, at 8: Feb 21st, at 4: Feb 21st, at 8: Mar 17th, at 5: Mar 17th, at 8: Mar 18th, at 3: I want to know your opinion.
Mar 18th, at 5: Mar 21st, at 3: Organo Gold rep who was caught using his day job as School Admin time to do his sales plan, was fired earlier this year by school board. Nu Skin Enterprises Inc said on Tuesday that it would likely be fined by Chinese regulators investigating whether the producer of personal care products and nutritional supplements distributed false information and conducted illegal business in China.
Mar 23rd, at 8: I saw the Nuskin fine story. Going to see if they get pinged. Apr 16th, at Hope to get back on track when the dust settles on TF.
I see, well i want to thank you for taking the time to respond. I followed all the articles in this site about Telexfree since about 6 months.
It really gave me the red flag on telexfree. And it helped me know when it was time for me to back out of it. One of my friends is now shitting his pants. He was reluctant to listen to me and to read the articles. I am so sure its a Scam and its using the same method as telexfree. I even think the same people are behind it as TF. But it might just be my mind, thinking and wondering.
Again, Thank you so much. Apr 16th, at 1: No contact info, domain reg hidden, no company name, this is a very obvious fraud. Besides, the name is not even grammatical. Apr 16th, at 2: Thank you for taking some of your time to adress my request. Im glad a site on the web like this one exist. Apr 20th, at 9: Traffic rank is too low to get reliable data about the market, appr. The primary market seems to be the U. He probably has some visitors coming in from other MLM review sites, e.
Production of new articles have been low, the newest article I found was from October or November I am really curious about the people behind this blog. Because the time I see when you sleep or wake up, I imagine you are in Australia. I have seen a lot of people that write open source code. You understand this because he want to improve his ability and knowledge and than win more money in your work.
So if you say you are a journalist or want to be or was one I will understand. Or if you want to write a book. Or maybe if you win money by advertising. But you need to win something!!! More than write the article, you need to search about it, read comments, etc..
Is is more than you pay for make this site online? Nothing more, nothing less. As for making money. Everybody has to have a hobby and blogging is cheaper than stamp collecting and more useful and rewarding than catching butterflies. May 4th, at May 5th, at 5: In the TF hoopla we forgot all about Zeek.
Receiver has May 1st update: May 5th, at 8: Thanks for the update Kasey. May 7th, at 9: Now that Telexfree is almost kaput, I have noticed a new company that is also based in Boston that has opened up in the vacinity of the old TF home office. The company is called Eternyon. They also have am AMerican and a Brazilian running things, which to me is a very funny coincidence. Anyone heard of it?
May 7th, at May 8th, at 9: Theres a lot of people talking about Zrii and i want to learn from you cause its the only source of information that i trust in. May 8th, at Looks like red Kool-aid in a can. Season 8, episode 5, easy money. May 9th, at I see a lot of promotion going on for a business called ILN Internet Lifestyle Network, another so called blogging platform running on wordpress.
Has anyone heard or reviewed it? May 10th, at 3: May 17th, at Tide — Now that Telexfree is almost kaput, I have noticed a new company that is also based in Boston that has opened up in the vacinity of the old TF home office. I heard on a youtube video Carlos Wanzeler is behind it. May 18th, at 1: The truth is, there are no-good opportunities out there. At least not to strangers. He was just a school teacher, no financial training.
And people believed him. And it only takes one or two his old friends to get the pyramid started. Many of the new opportunities are just relaunch of older schemes, albeit with some minor changes. Yet others are clearly clones of original schemes, and intended as reload scams aimed at the same victim pool.
May 19th, at Hello OZ, can you make a review of Emgoldex? May 20th, at 7: If I have made the payment of the order, may I participate in a marketing program to attract customers? You have already fulfilled the order and bought gold. The marketing program is developed only for those that wish to execute the order at the expense of the combined payment, i. If you wish to participate in the marketing program it is necessary for you to issue a new Order and to get the Coupon for the payment of the made Order.
For full execution of the order, the Order of the buyer should pass two cycles of the Main table of orders. After completing the first cycle of the main table of orders, the company gives a possibility for transition of the Order of the buyer to the second cycle and on termination of which, there is a full performance of the Order.
If the Order of the buyer has not received necessary quantity of credit bonuses for its end of two cycles, the Buyer has the right to carry out of the obligations on the end of the Order at the expense of own means.
If the Buyer does not execute the Order, the Order is automatically extended for another two cycles at the expense of the bonuses of the Buyer. And this way until the full execution of the Order. Sound intentionally confusing, which is probably to hide what otherwise appears to be a pay to play investment scheme alarm bells should start to go off here.
May 20th, at 8: Oz, some of the Brazilian leaders from Telexfree are promoting something called Geteasy. Do you know anything about it?
May 20th, at 9: Jun 6th, at Sign up and invest in packages. Jun 15th, at 2: Jul 16th, at Wonder if it can be applied to Ponzi schemes? I think NxPay in Zeek might be a test-case if they ever get around to filing anything. Jul 17th, at The guy keeps mumbling about Kingdom this and Jesus that, I thought for a moment I was reading about a Phil Ming Xu venture, but apparently not.
From what I can make out they are more exposes than anything else. Although after a paltry amount of money changed hands and NuSkin promised to clean up their act, fat lot of good that did. Announce investigation into one company, get paid, move onto the next… with little to nothing getting done.
Quite obviously there a loophole with Chinese mainland residents registering virtual addresses in Hong Kong, and the MLM companies turning a blind eye.
It was apparently made up specifically that year for Wentz. And links goes to Internet Archives Wayback Machine instead of their own website? Jul 17th, at 1: No mention of his wife who may be making K as a distributor. Jul 21st, at 1: Jul 21st, at Jul 26th, at 6: Aug 5th, at 6: Aug 29th, at 4: Aug 29th, at 5: The blog you are looking for has ceased publication.
Anyone who republishes or redistributes content originally published on this blog may be subject to legal action. Any disputes or misunderstandings between the publishers or authors of this blog and Vemma Nutrition Company have been resolved to the satisfaction of all involved.
Aug 30th, at 5: Aug 31st, at 8: Got rid of the mountain of monthly archives and replaced it with a snapshot of the most recent news and reviews. Sep 1st, at 1: If not it might be a good thing in order to expose these fraudsters and help bring more awareness to the general public.
Sep 1st, at 7: Not that I know of. Follow the industry for long enough and familiar faces continue to pop up though. Sep 3rd, at 6: He writes what he thinks are unbiased reviews of many including MonaVie, Herbalife, and Xocai.
One of his favorite targets is Lifevantage. He is committed to bringing the company down. He claims to have gotten the FBI and other law enforcement agencies to investigate these death threats. Sep 4th, at Sep 7th, at 7: It was expensive chocolate, too. Their credit is ruined. There is a crack in the driveway at their home in Albuquerque from a wheeler that once delivered 12, cans of chocolate energy drinks to their garage.
The chocolate came from MXI Corp. They are even posted in a public forum, told me to be careful as someone may pay me a visit for lying about Zeek. It has no effect until proven otherwise. Sep 8th, at He had a whole network of websites going full of useless spun content. Martinez made most of his sales the usual way. Enrique was the promoter, always scouting prospective buyers.
And though he failed to find steady retail customers , he refused to admit that his pitch to recruits — that MXI was a profitable opportunity — might be misleading.
After about a year, they were forced to confront their complicity in what they now say was a business model driven by recruitment. MXI are just as guilty for letting this happen. Sep 12th, at 1: Unfortunately the death threats seem to come with the territory of debunking MLM scams. I got one when I wrote about MonaVie as well. When someone pulls back the curtain like in the Wizard of Oz, people can see the scam.
The fix is obviously to run a legitimate business in full transparency. Oct 6th, at 1: Xango paid K to settle the civil lawsuit. Oct 6th, at 2: Oct 8th, at Wait the FCC are also involved. Probably not MLM related then.
Anyone got any ideas? Not sure what this is Herablife? I removed mention of Herbalife. Probably something telecommunications related. Oct 9th, at Just a heads up re. Any email sent to me in the last 24 hours or so either directly or via the contact form was not delivered.
Nov 30th, at 4: I agree with you, there are many deceitful MLM companies and greedy people in the MLM industry, but that do not make the industry as a whole illegitimate or questionable. Percentages of those deceived be it by MLM or religion do not make either entity right or wrong, it just speaks to the number that use it inappropriately. There are successful and upright MLM companies and churches, though the percentages are fewer, this speaks to the nature of human beings not industries.
If the industry was so bad, I do not believe that Warren Buffet, Robert Kiosaki or Donald Trump would be involved in it with their own companies. Governments and the wealthy that control them do not want the masses to prosper, it would ruin the infrastructure that allow them to conceal their robbery of the poor.
Sadly, there are individuals in our society who think like government or are just deluded and do not want to see others prosper either for whatever reason. Are you just a nice guy, why? Fact, insight into a person speaks volumes on how and why their opinions are formed. As long as you hide behind the shroud of anonymity your opinions will fall upon deaf ears, well, except for those who are jaded by or share your opinions and this is not saying they are right or wrong.
Nov 30th, at 5: I encourage everyone to conduct their own due diligence. The thousands of people who visit BehindMLM daily would disagree with you. My track record speaks for itself, and is available on the pages of this blog for anyone to read. The MLM industry fascinates me. Nov 30th, at 6: I have had bad experiences but my success has far outweighed them. Do you run around the internet creating statements you acknowledge are false and then proceed to base entire walloftext discussion points around them?
Or was this a once-off? It just makes your statement about deaf ears look rather silly. Ah, well your personal experience means dick. We analyze the industry here, not your bank account. Dec 13th, at 4: Dec 14th, at Dec 29th, at 9: Made a short note of it here — http: Jan 21st, at 4: TelexFree still affecting worldwide economy. Feb 17th, at 8: Affinity24, in pre-launch, is being headed up by many of the former Flexkom America scam leaders.
These shysters were promoting and collecting thousands of dollars from people to buy positions even though the Europeans had already shown Flexkom to be a scam. Feb 17th, at 9: Feb 27th, at 1: Mar 16th, at 6: Apparently the perps got away with 8 million, nowhere close to Mt.
Mar 18th, at 1: Mar 18th, at 9: Jeunesse are on my review list. Mar 18th, at Mar 26th, at 7: They are at the Innovation Hub at the University of Florida and have refused to pay the affiliates the earned incomes as we well as their commissions.
We started off with traditional online advertising through our social networks. Then their website went down for 7 weeks and when it surfaced again it was a totally different setup and they are refusing to pay anyone. They owe us thousands of dollars and refuse to pay. I have screen shots of everything as proof. Mar 26th, at Will probably be some time before a review is written though. My guess is that the comp plan always relied on recruitment. Apr 18th, at 2: For what he initially did not consider: He earned just 1, euros a month, have a total of 70 people buy cans — for each euros, month after month.
Although he invested in four months, around 1, euros in the business, the system did not work out for him. In the end he got claims to only Apr 26th, at Apr 26th, at 3: Apr 26th, at 4: And the way it flaunts local laws by claiming they are transacting under US authority is… troubling.
May 5th, at 3: Company has Real Product, Real Services. For example Organo Gold requires PV each month to be active to get commissions. May 5th, at 9: These sales are retail services sales. If they wants that service they order when ever they wants. No monthly mandatory autoship or chain recruitment involved.
May 5th, at Otherwise known as a pyramid scheme — with no retail activity taking place. May 6th, at May 28th, at 7: Is Nuviza on your radar, Oz? Ted Nuyten conducted an interview with the young CEO recently.
May 29th, at Added to the review list. Jun 5th, at 5: I want you to please help me review and investigate the activity of this company called Profits Jun 5th, at 8: Jun 9th, at 9: How should I email you? Jun 10th, at I would like to see Plexus Worldwide reviewed. I shared my experience on my blog, but there really needs to be more out there exposing the REAL truth of this company. Plexus Worldwide was not the first scam I danced with, but it is the last. I hope to see your review in the near future.
Jun 15th, at 4: My friend still promoting ufun despite the legal action taken by Thailand on them, they even promote the Ufun IPO. Jun 15th, at 8: Jul 8th, at 5: For example, it would include common delay tactics and excuses ponzi operators use to keep participants hooked on the scheme until it collapses or is shut down. Jul 8th, at 6: My friend still promoting ufun. Jul 23rd, at 4: BUT what businesses DO work and are honest and worth? Jul 23rd, at 6: Jul 24th, at Jul 25th, at 1: Aug 6th, at 2: Aug 6th, at 5: A fun treasure hunt offered on our website, based on reasoning and general knowledge, and highly rewarded on merit.
Galaxy Secret offers you twelve events per year. During these twelve events, we have the opportunity to help you travel across continents. Galaxy Secret will teleport you into the wonders of the World. Various YT videos show a comp plan, but nothing in English as of the 8th of August. They seem to only be targeting French, Spanish and Russian-speaking markets.
As an affiliate you can play the games and recruit new affiliate or players. Aug 28th, at 5: Hopefully that cuts down on some of the questions I get about opportunities that have already been covered. Aug 28th, at 7: Aug 28th, at 9: Spent enough time on site design today…. Aug 29th, at Sep 11th, at 7: Sep 17th, at 8: Oz, I think it is MLM.
They have very vague public description of the compensations for affiliates:. I have also some signals from local affiliates from Slovakia and Czech Republic that there are commissions coming from the structure. Strange thing is… affiliates have to pay first to lease their computer storage space and bandwidth! What makes me even more suspicious is their very likely virtual office in London. And some unverified claims made by affiliates: Moreover, I cannot see much effort of Kairos to target corporations with an offer of their services and products.
This was the problem I had when others asked me to review Kairos Planet in the past. Sep 17th, at Second rule is for affiliate marketing and third rule is too vague.
I tried to get more detailed info from project participants, but I guess there are not much chances to get it. Anyway, they act like MLM project participants the way how they promote this scam… eh, sorry, project. Sep 18th, at 5: Added Kairos to the review list. Sep 24th, at 3: Trendon Shavers pleaded guilty today to operating a Ponzi scheme using the virtual currency bitcoin. Instead, Shavers used most of the bitcoins to pay back older investors — a hallmark Ponzi scheme maneuver.
Sep 24th, at 5: Sep 26th, at 5: Sep 26th, at 7: Sep 29th, at 8: Aha, he was indeed out for 3 days for posting something sharp about that Buddhist cult in Malaysia. Sep 30th, at 1: Sep 30th, at 3: Roca labs tangled with Tracy coenen of sequence Inc last year and lost.
Oct 1st, at 2: Oct 1st, at 6: Do you know if they complied with the MoTC and are now licensed? There was a Taiwan travel industry protest recently that wants a crackdown on WV in Taiwan by the authorities.
Oct 22nd, at That may explain why UFUN claimed to have ties there, eh? Oct 23rd, at 7: Nov 27th, at 2: Nov 27th, at 3: Uh, this is an MLM opportunity?
The links you provided were product reviews. Dec 1st, at 2: Newsflash from Brazil… one of the prosecutors on the TelexFree case in Bukhari was found dead in her apartment of a gunshot wound. Dec 1st, at 3: Even though they are going after known MLM types, it does appear their marketing plan is more of an Direct Sales type model, as you indicated.
Dec 2nd, at 2: Dec 11th, at The scheme operated between October and March , out of an address on Church Street, Toronto police said Wednesday. As a result of the investigation, year-old Christopher George Smith, of Toronto, and year-old Rajiv Dixit, of Vancouver, have been charged. Dec 17th, at Quite the revealing testimony he gave.
Dec 20th, at 5: Dec 24th, at 6: Dec 24th, at Dec 26th, at 1: Thank you for this site! I have a question: A good friend of mine has been brainwashed into sinking thousands into Onecoin, now wants to sink thousands more and start recruiting heavily.
I think he may bankrupt himself and hurt a few others in the process. Dec 26th, at 3: Insist that he must have one. You have to prod his self-preservation instincts, rather than attack OneCoin directly.
Dec 26th, at 7: If he already have accepted some ideas then he will only put up resistance against conflicting ideas. You were already looking for counter arguments against that opportunity. OneCoin attracts specific types of people.
Dec 27th, at 5: Dec 27th, at 8: The identity of Chris Smith and a stock photo is interesting. Dec 27th, at 4: I pretty much know what his plan B is: Borrowing money from me to save his business. He has a business of his own which is entirely legit and moderately successful. Because he is an experienced entrepreneur, he erroneously believes he also has sound judgement as an investor.
The first thing an investor with even a little knowledge and experience would have realized is this Rujatova woman is issuer risk on two legs. I realized that this is even worse than I thought. Dec 27th, at 6: Dec 29th, at 5: For a bit of amusement: Chinese anti-pyramid-scheme squad surrounded a beach being used to hold a public recruiting event. They surrounded the area with rope and took groups off at a time, rope around their waist almost like kindergarten kids being lead off.
Over were taken in. Individuals are required to register to be released and required to take deprogramming class, and core members are taken in for further questioning.
That he never considered the possibility that losing that much would not only cause him to lose money, but much face as well? Dec 29th, at 8: Jan 31st, at 5: Jan 31st, at 8: Feb 14th, at 4: Why no search feature in your reviews?
Feb 14th, at 5: In reality, such properties are only sold to pre-vetted institutions and investors. FTC sued him in and won in He had managed to delay paying till now. Feb 14th, at 9: As mentioned last week in Part I, the U. In order to better handle the mounting National debt, the Treasury Department has announced new plans to ease pressure on long-term interest rates by shifting bond sales to the short term.
This program will increase the shorter-term and reduce the share of longer-term debt issuance, which is a significant departure from the former strategy that favored locking debt service payments at historically-low, long-term rates. The fear within government is that the tremendous increase in debt supply, if financed on the long end of the yield curve, would significantly push down prices and force yields higher.
That rise in long-term yields would negatively influence the borrowing costs for households, businesses and the government. And of course, a rise in long-term rates would slow the economy and de-rail one of Trump's most self-tweeted "accomplishments"; the rise in the stock market.
But there will very quickly surface a few huge problems and unintended consequences with this new government scheme to garner a lower a debt service cost through the financing of debt at the shorter duration. Problem number one is this will expedite the flattening of the yield curve, currently just 57 basis points, cascading from in December And, it will soon lead to an inverted yield curve, which has presaged a recession 7 out of 7 times in the past 50 years.
The second problem is that it puts the structure of the National Debt into history's most pernicious adjustable-rate mortgage. Once the foolish goal of sustainable and rising inflation is achieved by the Fed, interest rates will begin to become unglued. That isn't such a problem if the government did the correct thing and pushed the refinancing duration far out along the yield curve. In contrast, by going short, even a cyclical period of inflation will force the Treasury to roll over its debt at much higher interest payments and at much shorter intervals.
Perhaps the simple reason for the government's decision to forgo financing Treasury debt at longer durations is because we just cannot afford it…not even at these historically-low yields. While the Treasury Department has set the government up for insolvency, the Fed is preparing for the inevitable and fast approaching recession; and devising even more extraordinary ways to achieve its inflation target.
His idea is called price-level targeting, where a central bank counters periods of low inflation by allowing inflation to run very high for a protracted period of time. If taking rates to zero doesn't get the inflation job done, the Fed, along with the Keynesian cohort of debt lovers in D. But that inflation shock treatment will send interest rates soaring, and its effect on debt service payments will be humongous.
This is the ultimate conundrum facing the Fed and Treasury once this next recession commences: Massive money printing will be called upon once again to cause another rebound in asset prices and to pull the economy out of its tailspin. However, the inflation created this time around should also send interest rates sharply higher; and given the extent of crippling new debt that has infected both the public and private sectors in the past decade, it virtually assures chaos in markets and the economy.
Why will the government be successful in creating inflation and rising bond yields during its next iteration of extraordinary monetary policies and not just in asset prices, as what occurred in the wake of the Great Recession? One, if the government resorts to using a Negative Interest Rate Policy, Universal Basic Income and Helicopter money; it will in effect circumvent the private banking system and force both the supply and velocity of broad-based money much higher than ever before.
And, the most important reason, is that the credibility of central banks and governments to be able to normalize interest rates and allow markets to function freely will be completely shattered. In other words, it will destroy all faith in the government's ability to preserve the dollar's purchasing power. The government is preparing now for the next market and economic crisis…perhaps you should as well. The primary reason behind this surge in year-over-year deficits was a Hence, it seems absurd for D.
Tax cuts are great, but they must be at least partially offset by spending cuts. Otherwise, interest rates will spike, which will do more harm to the economy than the tax cuts would provide. This is especially the case when debt is more than a nation's total annual GDP.
But back to the issue at hand; debt and deficits are soaring right now, and it is primarily due to rising interest rates. But the key point to understand is that virtually all of the central banks' Quantitative Easing QE ends by October of Therefore, unless the BOJ desires to dramatically increase its pace of QE, and print enough yen to keep the entire world's supply of debt in a bubble--which would crash the yen and cause stock market chaos around the globe regardless; interest rates will be rising at a much greater rate than currently witnessed.
The only mollifying event that could keep rates from spiking would be the manifestation of a worldwide recession. However, that would end up sending global debt soaring as government revenue crashes. In this scenario, rates might rise regardless because without immediate central bank intervention, where is the money going to come from to purchase negative yielding debt and who is going to trust that this debt will be money good?
Just three more rate hikes should cause the yield curve to go belly-up and engender a recession in the United States. And those Fed rate hikes, along with the resulting recession, will undoubtedly be the dagger that pops the humongous equity bubble and the phony economy that has been built upon free leverage.
What does all this mean? The timing for the breakout of unprecedented stock market and economic chaos looks to be the fall of next year—at the latest. Central Banks have created a massive and systemic bond bubble of which they are unwilling to acknowledge; and therefore unable to avoid its brutal economic ramifications. Therefore, the unwinding of it will be incredibly destructive. But that doesn't have to be the case for your investments if you are properly prepared to protect and capitalize on such an event.
In Part two I'll explain why recent moves from the Treasury Department along with the coming intractable increase in debt service payments will render the structure of the National Debt into history's most pernicious adjustable rate mortgage. The deficit as a percentage of gross domestic product GDP , totaled 3.
But the Trump administration isn't spending a lot of time tweeting about the looming debt crisis. In fact, they would like us to believe that their recently proposed tax reform will not only pay for itself but will actually reduce debt and deficits.
Treasury Secretary Steven Mnuchin noted recently that, "Through a combination of tax reform and regulatory relief, this country can return to higher levels of GDP growth, helping to erase our fiscal deficit. But the truth is that the proposed tax reform will not completely pay for itself--let alone reduce the deficit or pay down the debt. And since there are still some remnants of the fiscal hawks in Congress, Republicans are in a frenzy to find new revenue opportunities to get the necessary votes; in search of an elusive "sacred cow" that isn't that sacred.
However, it didn't take long for lobbying groups to crush that proposal, and the BAT tax wound up biting the dust. The next target was the deductibility of state and local taxes and the mortgage interest deduction--but the Republicans soon realized they have representatives seeking re-election in high tax states too Now we hear rumblings of a higher tax bracket; this may get the support of some Democrats, but the truth is there are not enough one-percenters to make the numbers work.
The Senate can pass tax reform with a simple majority but there is a catch. To use what is called the budget reconciliation process it cannot add to the deficit beyond the year budget window. Therefore, a feasible solution may be to include an additional upper-income bracket to throw a bone to the Democrats and bring some on board to get to 60 votes.
But the problem is that under either Reconciliation or Regular Order, passing tax cuts would mean that deficits would soar. Our economy did prosper after the Regan tax cuts. According to Carmen Reinhart and Ken Rogoff, in their book, "This Time Is Different" - years of financial history proves that high government debt ratios lead to low economic growth.
And though some of their data have been questioned regarding the magnitude of their findings, their basic premise that high debt leads to weaker growth has held true under aggressive scrutiny.
Declining government revenues and long-term costs associated with an aging population, including higher Social Security and Medicare spending, are expected to continue pushing up deficits over the coming decades. Real tax reform is needed but it should be paid for in order to ensure that we grow the private sector as we shrink the public sector.
That means cutting taxes, eliminating loopholes and reducing spending. Sadly, few in Washington espouse such an agenda. Without such cuts, the economic boost from lower taxes would be more than offset by spiking debt service payments on the record amount of outstanding debt.
Now we have that same foreboding number ; this time regarding the amount of red ink during the fiscal year. A mere coincidence I'm sure. Nevertheless, we must pray this rapidly rising debt figure does not forebode yet another step closer for the demise of the middle class.
Its official…the stock market has broken above 23,, and its valuations should now scare even the most mind-numbed carnival barker on Wall Street. The forward month PE ratio is 18, compared to the year average of just The month trailing PE for Pro-forma earnings, which takes into account non-recurring items that seem to recur ever quarter, is trading at 20 times earnings.
It has risen to such an absurd valuation that it is now destined to absolutely crash. This has compelled investors to pile into passively managed ETFs that indiscriminately send the stocks contained within it higher regardless of the fundamentals. But once central banks become sellers of those assets the exact opposite dynamic will become true. Those asset sales will cause massive ETF redemptions on the part of the investing public, which will send individual stock prices plummeting and push ETF prices into a death spiral.
Therefore, we should all be fully aware where all the inflation created by central banks ended up. Instead, the inflation has settled into asset prices, and the scenario is such that makes the conditions leading up to the Great Recession seem tame. And Charles Schwab Inc. But the greatest bubble in the history of bubbles resides in the sovereign bond market.
With markets this frothy there are good reasons to be cautious and to have a plan to protect your profits. Here are some of the landmines that are set to explode shortly. First, we have the Quantitative tightening, or reverse QE, on the part of the Fed. In September of this year, Janet Yellen unleashed plans to reduce the Fed's 4. In addition, we have escalating geo-political and military risk in North Korea and in Iran.
By refusing to certify the Iranian Nuclear deal, President Trump has gotten under the skin of the terrorist-sponsoring nation, which has recently felt compelled to do some saber-rattling of its own. A few days ago the North Korean deputy U.
For , the Q1 year-over-year earnings was Therefore, the only factor keeping the market still afloat is the misguided hope that Trump and Congress can deliver on sweeping tax cuts. Trump has assured that even though he, Mitch McConnell and Paul Ryan have gotten nothing done on other major legislative initiatives to date, they are poised to deliver the biggest tax relief in the history of our country…or even the world.
However, with the Border Adjustment Tax gone and state and local tax deductions on life support, broad-based tax reform is becoming impossible to pay for. This means only a small tax cut is in play for next year because in order for the cut to comply with the Byrd rule under Reconciliation it cannot add to the deficit outside of the year horizon.
A short-term tax cut isn't something most in D. Very soon it will become evident that there will be no significant tax reform, or cut, coming to support market prices—if one is to arrive at all. When combined with the credible threat of WWIII, central bank asset sales and the collapse in earnings growth; equities are very likely to fall "big league. After saving mankind from the Nazi's, America had the only intact manufacturing base and was the repository for most of the world's gold.
Those circumstances propelled the US dollar to world's reserve currency status. And for the past seventy years, this status has been the cornerstone for America's power base and hegemony around the globe. But the 's ushered in a time of great fiscal mismanagement. President Johnson's dual wars on poverty and Vietnam led to worldwide distrust about the greenback's purchasing power in relationship to gold. This eventually led to Nixon's baneful decision to close the gold window, which untethered the exchange between gold and the dollar.
The pillar of the dollar's dominance had been the Bretton Woods System that pegged global currencies to the dollar, which was in turn was linked to gold. After the Bretton Woods system was broken under Richard Nixon in , Washington elites and OPEC created the Petrodollar system; where commerce in oil—and most commodities—was mandated to be conducted in U. Coupling the dollar to oil allowed the greenback and the United States to enjoy another forty years of King Dollar.
This dollar-dominance has given America a lot of discretion in running massive current account and fiscal deficits by enabling it to borrow money at much lower yields than would otherwise be the case without mandating foreign creditors to hold huge currency reserves. But now the greenback's role as the principal currency in which commodities are priced is being challenged.
China is leveraging its rise as an economic power and consumer of hydrocarbons to displace the dollar's dominance in the Persian Gulf and in the former Soviet Union. This will have a deep impact on demand for the U. In what is being billed as the most important Asia-based crude oil benchmark, China is launching a crude oil futures contract priced in yuan that will be convertible into gold. And this has a lot of significance given that China is the world's biggest oil importer.
This move will allow exporters such as Russia and Iran to dodge U. Not only this, but the contract will be fully convertible into gold on exchanges in Shanghai and Hong Kong. These Yuan-denominated gold futures contracts have been trading on the Shanghai Gold Exchange since April ; with a broader launch date set for the end of this year.
With China challenging the United States as a major player on the global energy scene, it is also making strides on internationalizing its currency. An increasing amount of China's trade with other countries is now issued and settled in renminbi. In other words, the renminbi is making moves to become a functioning reserve currency. In fact, the yuan recently joined the International Monetary Fund's basket of reserve currencies.
The ramifications for the dollar and bonds are clear and inextricably linked. The Siamese twins of falling dollar and bond prices will greatly exacerbate the rise of U.
The ill-fated, dollar-denominated Treasury market is set in stone. However, if you believe the Chinese currency will seamlessly replace the dollar as the world's reserve currency, think again. The truth is that none of these fiat currencies can really survive for very much longer.
The golden magic here is that the money supply will be commensurate with population and productivity growth and will therefore virtually guarantee that asset bubbles and unsustainable debt levels will become a relic of the past.
The catalyst for the next crisis will be the collapse of the gargantuan bond bubble that has been carefully constructed by central banks over the past nine years. Unfortunately, this will not be a proactive or voluntary reset.
It will be forced upon us once faith in central banks is shattered as the next depression overtakes the worldwide economy. The negative ramifications from governments' annihilation of free markets are soon to be felt. Cryptocurrencies are being billed as a new and improved form of money that has been offered to us courtesy of technological evolution.
There is a big problem with this conclusion. That is, digital money is not money at all. And proving this truth serves to underscore why gold has been utilized as the best form of money for thousands of years. In the film titled "Her," lonely Theodore, played by Joaquin Phoenix, falls in love with Samantha, an operating system. Despite Samantha's lack of physical presence, the two have a somewhat normal relationship that includes vacations, socializing with friends, fights and even jealousy.
But just as the audience starts buying into this unconventional pairing the plug is pulled on Samantha, and she disappears into a cyberspace vortex; leaving poor and lonely Theodore heartbroken. And, at the dawn of the twenty-first century, this is where we are as a society. In a place where the digital and real world collide. Social Media has supplanted socializing, texts have replaced phone calls, and artificial intelligence may soon outstrip actual intelligence: In this fast-changing environment, it's easy to believe that cyber currencies should inevitably replace fiat money; and even that "barbarous relic" gold.
After all, the motivation to find as many escapes from debt-based central bank confetti is indeed alluring.
And herein lies the attraction of cryptocurrencies such as Bitcoin — it uses the revolutionary blockchain technology that is managed by the free market, not by government. It is decentralized, anonymous, and has been hugely profitable. In fact, this year we have seen digital currency prices go higher not by percentages but by multiples.
This has caused Bitcoin to achieve the "most crowded trade" status, measured by sentiment in the monthly global Bank of America Merrill Lynch Fund Managers survey; as its price has surged by percent this year alone. He believes the online currency is just as fleeting as the Theodore's Samantha and will soon leave investors equally as heartbroken.
He contends that bitcoin "is a fraud. Founder of the world's largest hedge fund Ray Dalio believes Bitcoin is a bubble. Dalio contends that unlike gold, "it's not an effective store-hold of wealth. And Oaktree Capital Management's Howard Marx agrees stating "…they are not real - nobody has been able to make sense to me of these currencies. And now some government regulators appear to agree with these sentiments, making the speculation of Bitcoin's demise closer to reality.
In fact, the Chinese government has just become the first to put the kibosh on crypto's — and this should sound warning bells to all those enamored with cyber "money.
ICOs are a hybrid between an initial public offering, crowd-funding and venture capital that permits start-ups to raise funds using virtual money. Regulating what a crypto-currency could be used for was the first crack in the armor for Bitcoin in China. China has long been a repository for bitcoin, which came in the aftermath of the financial crisis as an alternative to fiat currencies.
Much of the world's bitcoin is mined in China. But recently, China's central bank has devised new rules to end commercial trading in virtual currencies under the guise of trying to reign in the chaotic marketplace.
And this is sure to offer a template for other nations' regulators. Beijing's clampdown on bitcoin is part of a larger effort to root out risks to the country's financial system. This is prompting virtual-currency activity in China to move off exchanges, where individuals can trade with each other privately. However, it's difficult to imagine that when relegated to the shadows these virtual currencies will enjoy the same popularity.
Indeed, this is where cryptocurrencies fail the definition of real money: They are not at all rare or indestructible. Once a government decides to shut down cryptocurrency exchanges, the liquidity evaporates rather quickly. And once Bitcoin transactions become illicit, what retailer would risk fines or imprisonment just to transact in digital money? Since an online retailer needs to use a public application to accept cryptocurrencies, then it cannot simultaneously be kept secret from the prying eyes of government—unless you believe retails will move en masse to the dark web.
This is different than gold, which can be exchanged for goods and services furtively offline—making it much more difficult for a government to trace and regulate. Cryptocurrencies are decentralized in nature but do rely on a functioning internet to consummate a transaction.
Be it an act of nature or war. However the grid goes down, so goes your Bitcoin. More importantly, new digital currencies are being created by the day. In fact, there are nearly one thousand already floating around.
What is the true value of something that can be created by virtual fiat and in innumerable quantities? While it may take a lot of time and energy to mine for new bitcoins, it takes next to nothing to create a totally new cryptocurrency. Many analysts have attributed the sharp rise in bitcoin over the last year to Chinese investors, who began buying it up in lieu of the yuan amid worries that the Chinese currency would weaken and to escape capital controls. The bottom line is that the central planners in China aren't going to let a bunch bits and bytes supplant their command and control of the economy.
But the fact is that all competing currencies, including cryptos and precious metals, are adversaries of governments whose monopoly on money is the only saving grace for their complete incompetence.
This ineptness is going to force them to clamp down on virtual currencies to protect their foothold in the money creating business. Therefore, sooner or later, all governments may join with China--sending shock waves through the growing market for virtual currencies. And while virtual currencies will still be able to be exchanged in the "back alleys" of the digital world, their liquidity and utility will be trending towards its intrinsic value, which is virtually nothing.
Cryptocurrencies are an ephemeral fad that is in a huge bubble. Gold is money, and there is no need to invent a new and improved version of it. There is, however, a need for gold real money to be made into a more efficient currency. And there are already companies that fulfill that role by using a gold-backed private blockchain. Therefore, the perfect form of money, thanks to technology, has now become the perfect currency as well.
So, unless you need a mechanism to conduct illicit transactions, there really isn't any role for Bitcoins to fulfill.
Gold is money; a newer and improved version does not exist. On September 5th, the members of both houses of Congress of the United States will clean the beach sand from between their toes and return to work.
Our public servants who occupy The House of Representatives have been working on their respective tans since July 29th. The Senate has had a little less time in the sun; they held their final vote on August 3rd despite their pledge to stay until August 11th. Hopefully, they got a lot of rest, because they have a lot to do upon their return.
By the end of September Congress will need to pass a budget bill to avoid a government shutdown. Expect Tea Party Republicans to hold their ground on spending cuts while Trump petitions for his wall.
According to recent tweets, Trump is pushing for this fight and welcomes a government shutdown. Get out the popcorn this could get interesting. Washington also need to increase the debt ceiling, to avoid a debt default that could trigger a global financial crisis.
Republicans are promising that a default is impossible, but Congress also promised a repeal and replacement of Obamacare within the first days of the Trump Presidency, and Trump himself guaranteed to kill the ACA on day one--so I wouldn't hold my breath that increasing the nation's credit limit will go any smoother.
And they will have to juggle this full legislative agenda while dealing with North Korea, Russia-gate and Confederate Statue-gate. For a body of elected officials who have built their careers on doing nothing they have an enormous amount of legislation to sift through in an incredibly short amount of time. A strong dollar is emblematic of a vibrant economy. Whereas, the opposite displays faltering GDP growth and a distressed middle class.
This recent retreat in the dollar is also due to Mario Draghi's hint that he may pull back QE in the Eurozone. In their June meeting, The European Central Bank ECB failed to announce a policy change, but they did make some small changes to forward guidance, which has investors bracing for such an announcement at the September 7th meeting.
Draghi has recently expressed more confidence in the Eurozone economy. The expectation of ECB tapering has put downward pressure on our dollar. This is why the lynchpin for the global economy now rests on the shoulders of Mario Draghi and Janet Yellen—both of whom foolishly believe that their massive counterfeiting sprees have put the global economy in a viable and stable condition.
I intentionally left out Haruhiko Kuroda of the BOJ; even though he is the worst of the money printing bunch, at least he knows—along with everyone else--that he will never be able to stop counterfeiting yen. And, of course, the Fed has made it clear that it will begin reverse QE around the end of this year. The memories of central bankers are extremely limited.
That is how high yields were before ECB purchases began. However, these intractable yields were extant before the gargantuan increase in nominal aggregate debt levels incurred since the global financial crisis, which was abetted by the central bank's offering of negative borrowing rates. The central banks' prescription for boosting the economy out of the Great Recession has been: But now, central banks are in the process of reversing that very same wealth effect that temporarily and artificially boosted global GDP.
Therefore, by the middle of next year--at the very latest—we should experience unprecedented currency, equity and bond market chaos, which will be a trenchant change from today's era of absent volatility.
The vast majority of investors have fully embraced the passive buy and hold strategy due to confidence in governments and central banks. That misplaced confidence is the biggest bubble of all. Cryptocurrencies make good currencies, but fail miserably when trying to achieve the status of money. Cryptocurrencies are both created and held electronically inside a virtual wallet.
These digital currencies use encryption techniques to regulate the generation of new units and to verify the transfer of funds. Cryptocurrencies operate independently of governments and are decentralized.
The most popular cryptocurrency now is Bitcoin. Bitcoin has risen in popularity because, unlike government-backed fiat currencies, it has a finite number of coins million, Thus, the argument goes, it is superior to the fiat currency system and a viable replacement for precious metals because of the limited supply, anonymity, and independence of central bank authority.
Cryptocurrencies are driven by a technology called Blockchain that allows for the transfer of stocks, bonds, property rights and digital currencies; directly, in real time, and with lower fees, because there is no middleman. The Blockchain technology itself is revolutionary and will make transactions more trusted, transparent and immutable. While the technology driving cryptocurrencies is very interesting, the "coins" themselves are not equivalent with the Blockchain technology. Cryptocurrencies are simply piggybacking on the blockchain as they masquerade as real money.
To explain, we must first consider what the properties of genuine money are. First and foremost, money is a store of wealth. For centuries PM's have been the premiere storage of wealth — they have no challengers in this criterion.
In order to be a store of wealth, money must have intrinsic value. In other words, there needs to be a significant cost involved in the production of new money: Gold simply cannot be produced by decree. Most importantly, money must also be virtually indestructible and extremely rare.
Gold and platinum are extremely rare and do not corrode or oxidize. Essentially, they last forever. However, unlike PM's, fiat cryptocurrencies lose their utility during a simple power failure or whenever the internet goes down.
People who put their faith in cryptocurrencies have to ask themselves how confident they are that there will never be a victim of an Electromagnetic Pulse bomb or a nuclear war that disables all forms of electronic communication.
Try bartering for a can of beans with a fried PC. A more likely scenario is that governments or hackers shut down Bitcoin exchanges. In fact, back in , there was the infamous Mt. Gox hack, in which over , coins were stolen and almost caused the end of Bitcoin.
The owners of cryptocurrencies must hope that governments never shut down the exchanges or websites that enable these electronic transactions.
Governments can try to ban gold ownership, but that must be done on a door-to-door basis and is extremely difficult to accomplish. But to place confidence in cryptocurrencies is to put faith that governments cannot control the internet. Gold and platinum are very rare within the earth's crust, and the mine supply of these elements increase marginally each year. And the number of elements that are rare and indestructible are known, fixed and miniscule.
If scientists routinely discovered new elements by the hundreds that are virtually indestructible and extremely rare, the value of all existing PM's would become greatly diluted. That dynamic is exactly what is happing with cryptocurrencies.
Both cryptocurrencies and fiat paper money share this same inherent flaw: Even with this, the money supply of U. However, there are currently now over 1, digital currencies in existence, up from just a small handful in , and that number is growing by the day.
These currencies are mostly homogeneous and therefore tend to act like a single commodity. Of course, there are some small differences. Ethereum, the second most popular cryptocurrency, offers self-executing agreements coded into the blockchain itself.
But the core of the technology—decentralized digital money—is the same throughout the cryptocurrency world. Therefore, a more advanced currency with greater speed and capabilities would greatly reduce the value of all other inferior digital "money"; just as each new digital currency created greatly reduces the value of those already in existence.
The advocates of Bitcoin believe they have the upper hand to gold because it is limited to 21 million units. But what the holders of Bitcoins don't yet understand is that even though this one cryptocurrency is limited in supply, the universe of commodity-like cryptocurrencies is unlimited.
Because cryptocurrencies are driven by quickly changing technology, you have no idea when your cryptocurrency will become obsolete. Therefore, you can go to sleep believing your wealth is stored in the equivalent of an iPhone and wake up realizing your life savings is parked in an eight-track cassette. Cryptocurrencies are an inferior form of money to PM's.
After all, one has to question the durability and soundness of owning electrons inside a digital wallet. It is also a currency that has attracted a number of terrorists, black mailers, and child pornographers--giving governments a great motivation to regulate it.
Precious Metals, such as gold and platinum, are the most perfect form of money known to humans. This has been proven correct for thousands of years. Indeed, history clearly proves that all currencies backed by nothing eventual display that very same valuation--nothing. However well intentioned, in the end, the creators of cryptocurrencies are really just modern day alchemists; and what they ended creating is nothing more than fool's gold. But as we have seen back on this side of the hemisphere, the public's interest in these political scandals can be easily overlooked if the underlying economic conditions are favorable.
For instance, voters were apathetic when the House introduced impeachment proceedings at the end of against Bill Clinton for perjury and abuse of power. And Clinton's perjury scandal was indefensible upon discovery of that infamous Blue Dress.
The average citizen, then busily counting their chips from the dot-com casino, were disinterested in Clinton's wrongdoings because the economy was booming.
Clinton remained in office, and his Democratic party gained seats in the mid-term elections. Therefore, Abe's scandal is more likely a referendum on the public's frustration with the failure of Abenomics. When Shinzo Abe regained the office of Prime Minister during the last days of , he brought with him the promise of three magic arrows: The first arrow targeted unprecedented monetary easing, the second was humongous government spending, and the third arrow was aimed at structural reforms.
The Prime Minister assured the Japanese that his "three-arrow" strategy would rescue the economy from decades of stagnation. Unfortunately, these three arrows have done nothing to improve the life of the average Japanese person. Instead, they have only succeeded in blowing up the debt, wrecking the value of the yen and exploding the Bank of Japan's BOJ balance sheet.
For years Japanese savers have not only seen their yen denominated deposits garner a zero percent interest rate in the bank; but even worse, have lost purchasing power against foreign currencies.
The yen has lost over 30 percent of its value against the US dollar since Abe regained power in Meanwhile, the Japanese economy is still entrenched in its "lost-decades" morass; and growing at just over one percent year over year in Q1 Japan's dramatic slowdown in growth, which averaged at an annual rate of 4. In addition to this, higher health care costs from an aging population have driven government health care spending to move from 4.
Incredibly, this low-growth and debt-disabled economy has a Year Note that yields around zero percent; thanks only to BOJ purchases. Prime Minister Abe's plan to address this recent scandal-driven plummet in the polls is to increase government spending even more and have the BOJ simply step up the printing press.
In other words, he is going to double down on the first two arrows that have already failed! However, the Japanese people appear as though they have now had enough. And the nation would never be able to service this debt if the BOJ didn't own most of it. The sad truth is that the only viable alternative for Japanese Government Bonds JGBs is an explicit or implicit default.
Japan is a paragon to prove that no nation can print, borrow and spend its way to prosperity. Abenomics delivered on all the deficit spending that Keynesians such as Paul Krugman espouse. But where is the growth? Japanese citizens are getting tired of Abenomics and there are some early indications that they may vote people in power that will force the BOJ into joining the rest of the developed world in the direction of normalizing monetary policy.
The reckless policies of global central banks have left investors starving for yield and forcing them out along the risk curve. But interest rates are set to rise as central banks remove the massive and unprecedented bid on sovereign debt—perhaps even in Japan.
A chaotic interest rate shock wave is about to hit the global bond market, which will reverberate across equity markets around the world. Is your portfolio ready? This powerful and protracted bull market has made Cassandras look foolish for a long time.
Those who went on record predicting that massive central bank manipulation of markets would not engender viable economic growth have been proven correct.
However, these same individuals failed to fully anticipate the willingness of momentum-trading algorithms to take asset prices very far above the underlying level of economic growth.
Nevertheless, there are five reasons to believe that this fall will finally bring stock market valuations down to earth, and vindicate those who have displayed caution amidst all the frenzy.
Congress needed to shave two weeks off its August recess in an effort to make headway on raising the debt ceiling, which will hit the absolute limit by mid-October, and how to fund the government past September 30th of this year. Tea-Party Republicans, as well as Office of Management and Budget Director Mick Mulvaney, would like to add spending reform riders to the debt limit bill.
Treasury Secretary Steven Mnuchin is looking to pass a "clean" bill. If Mnuchin gets his clean debt ceiling bill passed, the show-down will then move to the appropriations bills used to fund the upcoming fiscal year. For the past few years, Congress has been pushing through last minute continuing resolutions, rather than passing a budget, to provide funding at a rate of the previous year's funding.
Not being able to make progress on either of these measures will lead to a government shutdown that could leave markets and Trump's tax reform agenda in a tail spin. The Donald may find it very convenient to "Wag the Dog" before the year closes out. What is needed is a "fantastic" distraction from his failure to reach an agreement to repeal and replace Obamacare and to push through with a tax reform package.
Also, an assault on Kim Jong-un's nuclear facilities would go a long way in reducing the media's obsession with Russiagate. Trump promised that a nuclear strike against the U. Trump also urged China to, "put a heavy move on North Korea" and to "end this nonsense once and for all.
On June 7th the spread between China's 10 and 1 year Sovereign bond yields became negative. This was only the second time since that such an inversion occurred, and this time around it became the most inverted in history. An inverted yield curve, no matter what country it occurs in, is a sign of severe distress in the banking system and almost always presages a recession.
A recession, or even just a sharp decline in China's GDP growth, would send shock waves throughout emerging markets and the global economy. Indeed, on July 17th the major indexes in China all plunged the most since December due to investor fears over tighter monetary and economic controls from Beijing. If the yield curve remains inverted into the fall, look for exacerbated moves to the downside in global markets. The head of the ECB, Mario Draghi, stated in late June that deflationary forces have been replaced by reflationary forces.
This simple statement sent bond yields soaring across the globe in anticipation of his inevitable official taper announcement that could be made as soon as September 7th. German year Bund yields are still about basis points below the ECB's inflation target, and about bps below implied nominal GDP. This means when Mr.
Draghi actually starts removing his massive bid from the European bond markets yields should spike suddenly and in dramatic fashion—regardless of the pervasive weak economy. Rapidly rising borrowing costs on Europe's over-leveraged economy would cause investors to worry about future growth prospects and send high-frequency front-runners scrambling for the narrow exit door at once. Now, after QE has been wound down to zero and four rate hikes have taken place, the Fed will likely announce the actual start date for the selling of its balance sheet at its September FOMC meeting.
The problem is that global central banks are tightening monetary policy as the economy weakens. This would exacerbate the move higher in bond yields caused by the ECB's Tapering. That could be enough to send the passive ETF investing sheeple jumping off a cliff en masse. The end of central bank monetary accommodations, which is coming to a head this fall, is the primary reason to believe the odds for a significant stock market correction could be just a couple of months away.
Adding to this perilous situation is the record amount of NYSE margin debt outstanding, along with the fact that institutional investors have just 2. In other words, investors are levered up and all-in. Since the election of Donald Trump, the Dow Jones Industrial Average has reached a record high one out of every four trading days.
The average days without such a decline is and respectively. This market is overvalued, overextended and extremely dangerous! Therefore, it is very likely this long-overdue market correction could be worse than the ordinary 20 percent decline. The upcoming stock market toboggan ride is not only starting from the second highest valuation in history, but also with the balance sheets of the Fed and Treasury already severely impaired. In other words, there just isn't a lot of room left to lower interest rates or to run up huge deficits in an attempt to quickly pull the economy out of its downward spiral.
It is time to put a wealth preservation strategy in place before the fall arrives. Illinois officials have been frantically working on a massive 5-billion-dollar tax increase to stop the major rating agencies from downgrading their debt to junk.
Their last-minute maneuvers increased the personal income tax rate to 4. And the state's annual pension obligation is now looming around 25 percent of its budget. But Illinois is not alone in its fiscal woes.
The salient issue here is not just that tax receipts are short of liabilities but that asset returns are falling far short of their projected targets.
This highlights the fundamental flaw in governmental pension accounting: This process expects that all returns will mirror the best years and doesn't consider market volatility, let alone a recession and bear market. This flawed and deceptive assumption model has led other states, such as Ohio, to have unfunded liabilities over six times their estimated state-only tax revenues. Optimistic actuarial assumptions have proven to be too optimistic about such factors as employee longevity and enrollment in early retirement programs.
Pension fund managers have been underweight U. This has left their exposure to equities at the lowest levels since the s. Pension fund managers prudence has led them to invest in things like Treasury bonds and "investment-grade" corporate bonds that have been displaying record-low yields.
Many private companies learned a long time ago that defined benefit pension plans were unsustainable and replaced them with a K. Employees can save tax-free and invest in a group of boilerplate options. And while there is a risk that these plans will not provide for the employee in retirement, the risk is on the employee and not the employer. Public sector unions that represent a reliable voting block have kept defined benefit pensions alive and well for government employees.
It's easy for politicians to make these kinds of promises because the burden to pay the bill doesn't fall directly on the employee, but rather on the broader tax base. But the truth is your tax bill could explode as local governments bail out these insolvent pension plans--just ask the taxpayers of Illinois. New Jersey and Maine had to close state parks over part of the July 4th weekend.
Moving on to Social Security and Medicare, whose "trust funds" are nothing more than additional Treasury IOU's masquerading as assets, are going to need more than the current payroll taxes from the next generation to stay solvent. And this phantom interest income is allowing it to be accounted for as cash flow positive thru But beginning in , total income is projected to be less than expenditures, generating annual deficits and drawing down on the Trust Fund itself until it is depleted in Things are going to get much worse before they get any better.
This is because during the next economic crisis there is a good chance that both stock and bond prices could tumble. Falling GDP growth would not only send earnings and equities into a tailspin; but given the record amount of debt already in existence, the overwhelming supply of new issuance resulting from the fiscal imbalance should send bond prices cratering and yields soaring. This would occur just in time to hit employees' k plans.
Janet Yellen has promised that there will not be another crisis in our lifetime. The truth is central banks will never be able to let go of their humongous and unprecedented interest rate suppression. This current attempt to normalize interest rates will cause market and economic chaos of unmatched proportions. Sadly, the broken public and private pension plans have condemned the Fed to an endless pursuit of asset bubbles and inflation to portray the illusion of solvency.
Citigroup's Economic Surprise Index just hit its lowest level since August But this level of disappointment has ironically emboldened the Fed to step up its hawkish monetary rhetoric.
The truth is that the hard economic data is grossly missing analyst estimates to the downside as the economy inexorably grinds towards recession. This anemic growth and inflation data should have been sufficient to stay the Fed's hand for the rest of this year and cause it to forgo the unwinding of its balance sheet.
But that's not what's happening. But why is the Fed suddenly in such a rush to normalize interest rates and its balance sheet? Perhaps it is because Ms. Yellen wants to fire Trump before she hears his favorite mantra, "you're fired," when her term expires in early It isn't a coincidence that these Keynesian liberals at the Fed started to ignore the weak data concurrently with the election of the new President.
A Q1 GDP print of just 1. And a lack of evidence for a Q2 rebound in the data hasn't done so either. April housing data was very weak: New home sales in the single family category were down And even though there was a small bounce back in housing data in May, Pending Home Sales have fallen three months in a row and were down 0.
Retail sales dropped, 0. It's not just economic growth indicators that are disappointing, but also evidence of disinflation abound everywhere. Commodity prices are also illustrating signs of deflation.
Further evidence of deflation is seen in the fact that the spread between long and short-term Treasury Yields are contracting.
The Household Survey is a leading indicator for the Establishment Survey and the overall employment condition. Wall Street's currently favorite narrative is one of strong earnings growth. But according to FactSet, nearly half of Q2's projected 6. Excluding this sector, EPS growth is projected to be just 3. The economy should continue to move further away from the Fed's growth, and inflation targets as its previous monetary tightening starts to bite.
The odds are very high that such a weak print on jobs will occur before the next hiking opportunity on Sept. From there it will turn to panic as the economy and stock market meltdown. And, most importantly, the coming market crash and recession will occur with the balance sheets of the Treasury and Fed already extremely stretched. Hence, an extrication from this recession will not happen quickly or easily. All of the above makes this the most dangerous market ever.
This crash and ensuing economic downturn, which given history, logic and the data should happen soon; will alter the Fed's current stance on monetary policy. But it will happen too late to preclude a very steep decline in GDP. Trump cannot push through his tax cutting agenda rather quickly it may be both Ms. Yellen and the Republicans that find themselves moving out of D. That's the direction some high-profile economist and former members on the FOMC want to go.
According to these academics, including Narayana Kocherlakota the former president of the Federal Reserve Bank of Minneapolis from to , raising the inflation target just isn't enough.
They want to put a time horizon on it as well. Their rational for doing both actions is to reduce the level of real interest rates, which they somehow believe is the progenitor for viable GDP growth. You see, once the Fed has taken the nominal Fed Funds Rate to zero, there isn't much more room to the downside unless these money manipulators assent to negative nominal interest rates. But charging banks to hold excess reserves is fraught with danger, and so far this idea has been eschewed in this country and has been proven ineffectual in Europe.
The next recession could be just around the corner and the Fed is thinking about ways to stimulate the economy given the fact that the amount of ammunition--the number of rate cuts until the F. With very little leeway available to reduce borrowing costs, these mainstream academics want to facilitate more negative real interest rates by ensuring inflation is higher right from the start.
The math is simple: But as to why these Keynesian academics are so convinced a lower real interest rate is better for economic growth is never clearly explained.
Probably because it is a nonsensical tenet and the biggest fallacy in all of central bank group think. Their spurious logic dictates that a lower unemployment rate is the primary cause of rising rates of inflation and that a higher rate of inflation is supportive for lowering the unemployment rate. Exactly how this simple model arrives at that conclusion is never cogently explained; other than the mistaken belief that inflation and growth are synonymous terms.
But history and genuine economics clearly illustrate that inflation does not bring about growth, nor does it necessarily lower the unemployment rate.