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German Judges Pooh-Pooh Obama’s Sacred US-EU Trade Pact

Wolf Street / by  • 

A damning indictment.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

This past week saw the ceremonious signing of the Trans-Pacific Partnership (TPP) in Auckland, an event whose prime purpose was to convince the world that a trade agreement that most people have not even heard of and which has so far been approved by only one (Malaysia) out of 12 elected parliaments is already done and dusted.

Even the Sidney Morning Herald concedes that it was a giant PR exercise:

It masks the fact that for Australia and most TPP countries, the public debate and parliamentary process to pass implementing legislation, leading to final ratification of the deal, is just the beginning, and it will be a rocky road.

The road will be particularly rocky in the U.S. where the treaty’s safe passage through Congress and the Senate is far from guaranteed. Indeed, the trade agreement has become so toxic with the voting public that not a single presidential contender dares to endorse it. Even the former US Trade Representative, and now Senator, Rob Portman, has come out against TPP, albeit for the wrong reasons, most tellingly the fact that he, too, is up for reelection this autumn.


Precious Metals the Solution for Economic Crisis – David Morgan Interview

VisionVictoryPublished on Feb 7, 2016

Here It Comes: Dividend Cuts In 2015 Exceeded 2008 Level / by Bloomberg Business / 

In 2015, equity investors looking for yield suffered death by 394 cuts.

Last year, the number of dividend reductions far surpassed 2008, according to Bespoke Investment Group, citing data from Standard & Poor’s.

The ratcheting down of payouts to shareholders is a function of weak commodity prices, sluggish growth dampening corporate profits, and a tightening of credit conditions. This combination—and in particular the stingier lending—could exacerbate the carnage already seen this year in financial markets, further dampening economic activity.

The number of payout cuts enacted was almost 100 more than at the outset of the Great Recession—a time when the implosion of Lehman Brothers Holdings Inc. caused equity markets to plummet in the later stages of the third quarter:


Easing of US Recession Fears will Likely Lend Dollar Support / by Marc Chandler / FEBRUARY 17, 2016

With many equity markets having fallen 20% from their peaks, meeting a common definition of a bear market, investors, analysts, and journalists understandably seek a narrative that gives it meaning. At the very start of the year, the culprit singled out was drop in Chinese shares and the yuan. However, the yuan has stabilized as the PBOC drew down another $100 bln of reserves in January to help ease the pressure what appears to at least in part be a speculative attack by hedge funds (who conclude the yuan is overvalued).

Some narratives attributed the market turmoil to the drop in oil prices. From the end of 2015 through January 20, the price of black gold fell by nearly 30%. Here too the explanation was not very convincing, and despite the recovery in oil prices over the past two weeks, investors are still anxious. We note, for example, that the German Dax finished last week at its lowest level since late 2014.

A third narrative has been constructed: the US is recession-bound or worse. The Senior Investment Commentator at the Financial Times wrote that the tightening of lending conditions reported by the Federal Reserve’s Survey of Senior Loan Officers is a “reliable harbinger of depression in the past.” We have argued that there is no agreed upon definition of recession or depression. We have suggested that the word recession was ideological construct to distinguish the end of a business cycle with the experience in the late-1920s through much of the 1930s. The use of the word depression here is reflective of the extreme swing in market psychology. And it is over done.

The US economy is not contracting though the fallout from the energy sector the on dollar-value of industrial output, new orders, capex and the like is palpable. Not only is the US economy not contracting, but it is accelerating here in Q1. Specifically, the initial estimate of Q4 15 GDP was a lowly 0.7% annualized. Subsequent data suggests scope for a modest upward revision. More important, Q1 15 growth tracking 2.1%, according the Atlanta Fed GDPNow.


Episode #121 – SUNDAY WIRE: ‘The Levant Affair’ with guest Eva Bartlett and Stuart Hooper / BY 21WIRE / FEBRUARY 7, 2016

Episode #121 of SUNDAY WIRE SHOW resumes this Sunday Feb. 7, 2016 presented by hostPatrick Henningsen with 3 HOURS of power-packed talk radio


SUNDAYS – 5pm-8pm UK Time | 12pm-3pm ET (US) | 9am-12pm PT (US)

This week’s very special edition of THE SUNDAY WIRE is broadcasting LIVE, as host Patrick Henningsen returns this week with another very special show, covering the top news stories internationally. In the first hour we’ll look at the latest regarding the Zika Virus, the “Boy in the Bubble” running for US President, Julian Assange, and other top international stories. In the second hour we’re joined by special guest, international journalist, Eva Bartlett fresh coverage from on the ground in Syria and Palestine to discuss what is happening there and why our mainstream news reports are misleading. In the third hour we’ll talk to 21WIRE writer Stuart J. Hooper to discuss the concept of “Eye Washing” in the CIA and also cover news regarding ISIS and Turkey.

Strap yourselves in and lower the blast shield – this is your brave new world…


Iran Says No Thanks To Dollars; Demands Euro Payment For Oil Sales / by Tyler Durden on 02/07/2016 11:20

Iran enjoys trolling the United States. In fact, it’s something of hobby for the Ayatollah, who has maintained the country’s semi-official “death to America” slogan even as President Rouhani plays good cop with Obama and Kerry.

The ink was barely dry on the nuclear accord when Tehran test-fired a next-gen surface-to-surface ballistic missile with the range to hit archrival Israel, a move that most certainly violated the spirit of the deal if not the letter. Two months later, the IRGC conducted live rocket drills in close proximity to an American aircraft carrier and then, on the eve of President Obama’s final state-of-the-union address, Iran essentially kidnapped 10 American sailors in what amounted to a truly epic publicity stunt.

All of this raises serious questions about just how committed Tehran is to nurturing the newfound relationship with America, a state which for years sought to impoverish Iran as “punishment” for what the West swears was an illegitimate effort to build a nuclear weapon.

As regular readers are no doubt aware, Iran is now set to ramp up crude production by some 500,000 b/d in H1 and by 1 million b/d by the end of the year now that international sanctions have been lifted. In the latest humiliation for Washington, Tehran now says it wants to be paid for its oil in euros, not dollars.

Iran wants to recover tens of billions of dollars it is owed by India and other buyers of its oil in euros and is billing new crude sales in euros, too, looking to reduce its dependence on the U.S. dollar following last month’s sanctions relief,” Reuters reports. “In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery,” an National Iranian Oil Co. said. Here’s more:


Ep. 587 The Screwed Up GOP / 

What’s wrong with the GOP? My guest and I agree there’s a lot wrong, but we’re not always agreed as to what that is. We have a freewheeling discussion of populism, noninterventionism, localism, Trump, Cruz, Rand Paul, Marco Rubio, and more. Enjoy!


The Men Behind Ted Cruz: Neocons and a CIA Propagandist / By Kurt Nimmo via / February 5, 2016

Remarkably, more than a few Republicans believe this guy is a libertarian

Ted Cruz, the junior Senator from Texas and presumptive Republican presidential nominee, is routinely billed by the mainstream media as a Tea Party outsider who is reviled by fellow Republicans as a “wacko bird” along with Kentucky Senator Rand Paul and GOP Rep. Justin Amash of Michigan.

It is not simply his wife’s connection to Goldman Sachs and investment banking or his unreported loan from the multinational investment banking firm, however, that betrays this image.

A closer look at Cruz reveals he is a neocon insider, not a renegade outsider.


Morgan Stanley: “We Struggle To Remember When Bearish Sentiment Was As Widespread As Today” / by Tyler Durden on 02/07/2016 10:35

According to Morgan Stanley’s European equity strategist, Graham Secker, we may have just hit peak bearishness. However, does that mean that a rebound in risk sentiment is imminent, or is this just the beginning of a multi-decade mean reversion, one that will seek to unwind years of central bank intervention, and push risk assets to their ex-central bank prop fair values?

We don’t the answer just yet, although it seems unlikely that after one humiliating episode in recent months for the ECB, Fed and BOJ, each, they will simply pack up and go.

For now, however, here is Morgan Stanley, with a summary of not only why everyone is “peak bearish”, but why the one potential downside catalyst most are ignoring, namely Europe, is about to take its rightful place in the pantheon of risk factors for 2016.

A Sleuth of Bears

We struggle to remember many occasions when investor sentiment was quite as bearish and widespread as it feels today. Sure, 2008 was worse as the global financial crisis and fears of global depression created panic in markets, but today’s cool disdain for risk assets still takes some beating. When we were asked by a client this week what reason bullish investors were citing for their optimism, we had to confess that we couldn’t answer as we hadn’t met any in recent times. The collective noun for a group of bears is a ‘sleuth’, but it doesn’t take much detective work just now to identify what investors are concerned about.


Financial journalists start to notice the worldwide debt bubble / By Ambrose Evans-Pritchard via The Telegraph, London / February 5, 2016

The global oil industry is caught in a self-feeding downward spiral as falling prices cause producers to boost output even further in a scramble to service $3 trillion of dollar debt, the world’s top watchdog has warned.

The Bank for International Settlements fears that a perverse dynamic is at work where energy companies in Brazil, Russia, China and parts of the US shale belt are increasing production in defiance of normal market logic, leading to a bad “feedback loop” that is sucking the whole sector into a destructive vortex.

… For the remainder of the report:…

… Dispatch continues below …


The Psychological Reasons Why Americans Will Embrace Their Coming Enslavement / by Dave Hodges / 07 Feb, 2016

The Common Sense Show is bring forth a story of unbelievable implications to the people of the United States. Originally, the story was to be released today. However, when I released Part One, Facebook moved to suspend my account. Both of my computers have crashed within a 12 hour period, and my phone communications have been been seriously impaired.

This morning, I had an “aha” moment of insight. Even though the documentation for the validity of this story is s good is relatively good, many will not believe it because of the shocking implications of the content and even fewer will believe it because of the conditioned state of passivity that the American people find themselves in. This story addresses this point. God-willing and if I have any access to working computers left, I will publish, tomorrow, one of the biggest stories ever published by The Common Sense Show.

Three Psychological Reasons Why Americans Are Politically Paralyzed

There is a set of psychological reasons why our people, even those that are seemingly more awake than most, would accept this latest tyranny from their government. We know about cognitive dissonance which prevents people from seeing the totality of a threat and thus inhibiting their personal ability to make the paradigm shift needed to accurately perceive the threat. We also know about bystander apathy which stands as an obstacle to getting involved because in this large country, “someone else will do it”. And there is a third psychological reason which prevents us from getting involved because we have been conditioned that our actions cannot make any difference which is reflective of a condition called, learned helplessness.

The Brainwashing of America

Americans have been brainwashed into believing that their government will care for them in their time of need. Has this time in American history been foretold? I believe that it has and that H. G. Wells was the prophetic messenger of the New World Order.


An Exasperated John Kerry Throws In Towel On Syria: “What Do You Want Me To Do, Go To War With The Russians?!” / by Tyler Durden on 02/07/2016 09:48 

“Russian and Syrian forces intensified their campaign on rebel-held areas around Aleppo that are still home to around 350,000 people and aid workers have said the city – Syria’s largest before the war – could soon fall.”

Can you spot what’s wrong with that quote, from a Reuters piece out today? Here’s the problem: “could soon fall” implies that Aleppo is on the verge of succumbing to enemy forces. It’s not. It’s already in enemy hands and has been for quite some time. What Reuters should have said is this: “…could soon be liberated.”

While we’ll be the first to admit that Bashar al-Assad isn’t exactly the most benevolent leader in the history of statecraft, you can bet most Syrians wish this war had never started and if you were to ask those stranded in Aleppo what their quality of life is like now, versus what it was like in 2009, we’re fairly certain you’ll discover that residents aren’t particularly enamored with life under the mishmash of rebels that now control the city.

In any event, Russia and Iran have encircled Aleppo and once it “falls” (to quote Reuters) that’s pretty much it for the opposition. Or at least for the “moderate” opposition. And the Saudis, Turks know it.


Get Out / by Karl Denninger / 2016-02-04

This is arithmetic, not politics or “market structure” or anything else of the sort.

The last 30+ years have driven the S&P 500 from approximately 100 in 1980 to 1900 today.  This is commonly reported as being due to increasing sales and earnings, that is, a “larger economy” and “better efficiency.”

But that is, for the most part, a lie.

Oh sure, there is a kernel of truth in it, and that truth is responsible for some of the growth.  Maybe a doubling, tripling or even quadrupling between all of if — after all, population has gone up in the United States by a cumulative 1% annually, for example, and there has been a very material expansion in overseas trade and economic improvement.

But the rest of the nineteen-fold expansion didn’t come from there.

It came from this:


Sandra Postel: Repairing The Water Cycle

ChrisMartensondotcom, Published on Feb 7, 2016

El Niño has been dropping much-needed rain this winter on a parched American West. But it’s making little difference to the greater water scarcity issues the US as well as the rest of the world is increasingly facing.

Here to talk about the state of the world situation for fresh water — arguably the single most important resource to humans on the planet, next to oxygen — is Sandra Postel, Director of the Global Water Policy Project, author, lecturer, and former National Geographic Fellow. The punch-line to her message: as more and more demands are placed on our finite freshwater supply by human consumption and climate change, intelligent conservation is now an absolute must.

The Number Everyone’s Been Waiting For: Chinese Reserves Plunge By $100BN – What Does It Mean For Markets? / by Tyler Durden on 02/07/2016 09:00

As we previewed on Thursday, the biggest event of the week, and perhaps of the month, was not Friday’s nonfarm payroll report, but the January update of China’s FX reserves, which the PBOC released last night. The number came out at $3.2309 trillion, down $99.5 billion from the prior month, and $8 billion less than the December outflow of $107.6 billion.

And even as China added $3.4 billion to its gold reserves, which rose to $63.6 billion or an increase of half a million ounces to 56.66 million, this reduced the total amount of Chinese foreign reserves to the lowest level since May 2012, and down from the $4 trillion peak in the summer of 2014 when the US Dollar started its rapid appreciation on rate hike concerns, and led to nearly a trillion dollars in Chinese capital outflows.


Dollar Beaten Back but Cynicism is Unwarranted / by Marc Chandler / FEBRUARY 6, 2016

The US dollar traded higher before the weekend with the help a fairly robust jobs report. Although the jobs growth itself was somewhat disappointing, the details were constructive: More people working a longer work week and earning more. The participation rate rose, and the unemployment rate (U-3) fell. The Atlanta Fed GDPNow tracker increased to 2.2% in Q1 16 from 1.2% at the start of the week.

Despite the pre-weekend gains, the greenback lost ground against all the major currencies last week. We had anticipated a stronger showing for the dollar following the BOJ surprise rate cut and the ECB’s reassessment of its monetary policy next month. The market has jumped from the China-driver to oil and now to the risks of a US recession. We did not anticipate the rise of this fear outside of a few who have been pessimistic throughout the entire expansion cycle.

Neither the US jobs data nor the prospects for a stronger economic recovery in Q1 will persuade the cynics that the US is not recession-bound. Here the tightening of the financial conditions are important, and NY Fed President Dudley cited this in a recent speech. The Survey of Senior Loan Officers showed a tightening of lending conditions and weaker demand for the second consecutive quarter.

This means that real sector data, like the jobs report, but also next week’s retail sales, to push back against the recession talk. While next FOMC meeting is five weeks away, it is difficult to see the pendulum of expectations swinging back in favor of a March hike.


Best Option Trade For 2016 / By Chris Ebert / FEBRUARY 7, 2016

Perhaps there is no better way of measuring the health of the stock market than to check in with our three good option trading buddies: Mr. Income, Mr. Permabull and Mr. Gamble.

Mr. Income is a conservative fellow. He buys stocks and sells Covered Call options against those stocks to create a source of income. Each Covered Call option has a price (the price is generally called the premium of the option) and Mr. Income puts that premium in his pocket the day he sells the option.

It is quite similar to collecting a dividend, except that Mr. Income is making his own dividends. The only way he can end up with a loss is if his stock positions decline by a greater amount than the premiums he collects. As long as his income outweighs his losses he’s a happy option trader.

Mr. Permabull is not nearly as conservative as Mr. Income. He likes Bull markets and Bull markets only. He wants nothing to do with downturns, pullbacks, corrections, Bear markets or the like. When stock prices are going up, he buys what are known as Long Call options. When stock prices are going sideways he buys Long Call options;
and when stock prices are falling he buys Long Call options.

In each scenario he pays a premium for the option and as long as stock prices subsequently climb he can earn a profit; as such, he is the ultimate buy-the-dip opportunist. The only way he can suffer a loss is if stock prices do not rise sufficiently to offset the option premium he initially doled out. As long as the Bulls are in control and are showing their strength, he’s content.

Mr. Gamble likes to bet on the stock market. He doesn’t care whether stock prices are going up or going down. All he cares about is whether stock prices are making some moves; and the bigger the move the better. He opens option trades known as Long Straddle options. A Long Straddle is nothing complicated, just a combination of a Long
Call option and a Long Put option.

Whereas Mr. Permabull only pays a single premium for each Long Call option, Mr. Gamble pays two such premiums, one for the Call option and one for the Put option. The two premiums combined is a rather large amount, so Mr. Gamble needs a rather large profit on his stocks in order to offset the initial premium he paid for the options. The only way he can suffer a loss is if stock prices do not make surprisingly large moves in either direction. Whenever there’s a huge change in stock prices he collects on his bets.


REALIST NEWS – U.S. Trucking Industry Collapse

jsnip4, Published on Feb 7, 2016

Ep. 586 Why Capitalism Is Morally Superior to Socialism / 

Defenders of capitalism often wind up making arguments that implicitly concede the moral superiority of socialism — sure, socialism is a fine system, but we can’t live up to it. What kind of defense of capitalism is that? Jason Brennan makes a powerful moral case for capitalism that avoids this pitfall.


Negative Interest Rates Are the Next Stage in Global Stimulus / by Harry Dent via Economy and Markets / 

Since late 2008, central banks around the world have used unprecedented QE to try and stoke the global economy.

Then in June 2014, the ECB took it a step further. They went negative.

Zero short-term interest rates apparently weren’t enough. The ECB realized that if they couldn’t get banks to loan or consumers to spend, why not really light a fire under their ass and tell them: “if you’re not going to spend, you have to pay to keep your money in the bank!”

The Swiss thought this was a great idea and did the same in December 2014. Later on, the Danish and the Swedes joined the party. And last week, the Bank of Japan decided zero wasn’t enough, either – they went negative, too!

Japan can’t seem to get a grip on the fact that, as a country, they’ve been slowly walking off the plank since 1989 back when everyone (except us) thought they were going to take over the world. They actually started experimenting with QE back in 1997, right after the last of its baby boom peaked in spending as we forecast would happen. And in early 2013, they really stepped on the gas, ultimately tripling their QE!


Ambrose Evans-Pritchard: Dollar tumbles as Fed rescues China in the nick of time / By Ambrose Evans-Pritchard via The Telegraph, London / February 4, 2016

The US dollar has suffered one of the sharpest drops in 20 years as the Federal Reserve signals a retreat from monetary tightening, igniting a powerful rally for commodities and easing a ferocious squeeze on dollar debtors in China and emerging markets.

The closely-watched dollar index (DXY) has fallen 3 percent this week to 96.44 and given up all its gains since late October. This has instant effects on the world’s inter-connected financial system, today more geared to the US exchange rate and Fed policy than at any time in modern history.

David Bloom from HSBC said the blistering dollar rally of the past three years is largely over and may go into reverse as weak economic figures in the US force the Fed to pare back four rate rises loosely planned for this year.

A more dovish Fed and a weaker dollar is a bittersweet turn for the Bank of Japan and the European Central Bank as they try to push down their currencies to stave off deflation. Their task has become even harder. …

… For the remainder of the report:…


Productivity Bust Stinks Up Phony BLS Jobs Surge / by Jeffrey P. Snider via ALHAMBRA PARTNERS / 

With the BLS’s release of Q4 productivity figures, we get to check the BLS’s estimates just in time for tomorrow’s increasingly irrelevant payroll report. That much has become thoroughly apparent especially since the middle of last year as the Establishment Survey and unemployment rate only diverge with the overall breadth of economic indications. With GDP no longer corroborative, the labor reports have been in a world all their own. Far too many economists still rely upon them as their sole window for economic interpretation and these productivity numbers show further why they should not.

You have to understand what productivity means as both an economic concept and the statistic as it is constructed and presented. No economy will grow with low or even zero productivity; it’s plain common sense. Yet, the BLS’s numbers say that productivity growth has been zero or near it for five years. It has puzzled economists only because they take the calculations at face value. The fact that productivity is and remains so confusing already suggests that further investigation on all those accounts within the figure is warranted, and even demanded.

Any way you want to present the productivity estimates, clearly “something” is amiss starting around the beginning of 2011, flowing into and out of the 2012 slowdown. It has persisted at an alarmingly low state for years now, meaning that this is not simple statistical variation that will converge on its own to the mean. I have chosen to focus on the latter two years because that encompasses the “best jobs market in decades”, which serves really to highlight the major discrepancy here. In terms of economic common sense, why would businesses be hiring so robustly and getting so little out of their employees overall?

In the statistical sense, the BLS tells us that productivity since the start of 2011 is just slightly positive; during the “best jobs market in decades” it is even less so – essentially zero.



…because she could cannibalize a puppy on national television tomorrow and still win the nomination!

TRIGGER WARNING: If Hillary Clinton’s cackle is a potential trigger for you, this video could be very, very, VERY dangerous to watch. Turn back now. Go do something else, like read a good book or take a nice, warm bath or anything that isn’t watching this. You have been duly warned.


Hyperinflating Venezuela Used 36 Boeing 747 Cargo Planes To Deliver Its Worthless Bank Notes / By Tyler Durden on 02/04/2016 22:17

The weeks ago, when we showed “What The Death Of A Nation Looks Like: Venezuela Prepares For 720% Hyperinflation“, we said that after looking at a chart of Venezuela’s upcoming hyperinflation…

…  a hyperinflation in which the soaring stock market has failed to keep pace with the collapsing currency, thereby mocking all erroneous thought experiments that under hyperinflation being long the stock market is a sure hedge to currency destruction…


Cramer: Shut Up / by Karl Denninger / 2016-02-04

Give me a break.

“They spend a lot on research, the FDA makes it hard and so they have to charge a lot.”


How is it legal to charge two different people different prices by a factor of more than 1,000%?

Robinson-Patman says it’s not where market power exists.

Drugs are physical commodities.  For on-patent medicines market power by definition exists and is enforced by said patent.

If I charged you a different price for gasoline for your car based on which firm writes your car insurance that would be immediately responded to with a lawsuit and/or criminal charges.  I further remind you that textbook publishers tried to sue and have prosecuted someone that bought textbooks in Asia and then resold them in the United States; that case went to the United States Supreme Court and the textbook publishers lost.

These practices need to be stopped and the law already provides for plenty of means to do sothey are destroying our economy, as are the business practices of virtually every other element in the medical field.