A Fragile System

 

Ronald StoeferleRonald Stoeferle, managing partner and investment manager at Incrementum AG, and probably best known to our readers as  co-author of the “In Gold We Trust” report, the most widely read gold report in the world

Photo credit: Elke Mayr / WB

 

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Problems, problems, problems all day long…

The Everly Brothers

 

No Answers

PARIS – We were sitting in the restaurant at a chic hotel in Paris on Sunday morning. Next to us was a German family – a man about our age with his daughter and his two grandsons, about 9 and 10 years old. The man spoke to his daughter in German, but to the boys in English.

 

Munich-shooting-017Germany has been shaken by a series of attacks – the worst of them occurred in Munich, and was apparently the only one not inspired by IS (the shooter seems to have been a “normal” spree killer.  Video snippets of the incident can be seen here).

Photo credit: Wael Ladki / AP

 

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Champion of the Downtrodden?

 

“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.”

H.L. Mencken

 

A mass e-mail has been making the rounds lately, and it is quite possible that many of our readers have already seen this. For those who haven’t, we wanted to share this moment of hilarity provided to us by Deep State candidate Hillary Clinton. It revolves around this picture:

 

HillarmaniHillary Clinton delivers a speech – the topic was reportedly “inequality”.

Photo credit: Getty Images

 

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Once Upon a Time…

Prior to 1933, the name “dollar” was used to refer to a unit of gold that had a weight of 23.22 grains. Since there are 480 grains in one ounce, this means that the name dollar also stood for 0.048 ounce of gold. This in turn, means that one ounce of gold referred to $20.67.

 

US_Gold_CertificateA 1922 20 dollar gold certificate – this note was actually redeemable for gold on demand, i.e., it was a money substitute. Today irredeemable banknotes are “standard money”.

Image via ma-shops.de

 

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Apples to Oranges

 

Either we’re doing something wrong or we’ve got the most criminal population on the planet.

– Senator and 2016 presidential candidate Jim Webb

 

webbFormer Virginia senator Jim Webb wonders what’s wrong.

Photo credit: AFP / Getty Images

 

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Duped and Distorted

DUBLIN – When you start thinking about what money is and how it works, you face isolation, shunning, and possible incarceration. The subject is so slippery – like a bead of mercury on a granite countertop – you become frustrated… and then… maniacal.

 

maniac-4What thinking about money can do to you

Illustration by Jhonen Vasquez

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Mid Summer Momo Update

It is hot and it is humid over here in Valencia. You want to know how hot? The other day a poodle’s tail caught fire just waiting in the sun. The more frantically he was wiggling his tail the brighter it burned.

 

2016-07-25_summer_beach-1000x562A time for quiet contemplation of the bright blue sea… while next door, the poodle burns!

Photo via piktpool.com

 

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One Cannot Trade Based on the Endgame

The prices of the  metals were down again this week, -$15 in gold and more substantially -$0.57 in silver.

Stories continued to circulate this week, hitting even the mainstream media. Apparently gold is going to be priced at $10,000. Jump on the bandwagon now, while it’s still cheap and a bargain at a mere $1,322!

 

atlas-launch-muos-1920All aboard… or maybe not? It all depends on what one wants to achieve – there’s many a slip ‘twixt the cup and the lip…

Photo credit: National Geographic Channel

 

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As Ye Sow…

DUBLIN – Dublin is a delightful city. But it is backward. It was warm last night. From the vent, no Arctic air issued at gale force. So, we did something retrograde… something that you can’t do in most U.S. business hotels: We opened the window.

 

dublin-top-ten-hapenny-bridge-bgHa’penny bridge in Dublin. Where are the gun reports and the sirens at night? How can anyone sleep in such a quiet place?

Photo via ireland.com

 

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Time the Taskmaster

DUBLIN – “Today’s money,” says economist George Gilder, “tries to cheat time. And you can’t do that.” It may not cheat time, but it cheats far easier marks – consumers, investors, and entrepreneurs.

 

12109143_10153644062379417_1863326510450484797_nTempus fugit – every action humans undertake has to take time into account. In the economy, interest rates serve as the signal and regulator of the inter-temporal structure of capital. In an unhampered free market economy, they tell entrepreneurs how large the  pool of available savings is, and whether consumers have become more or less future-oriented. The issuance of additional money from thin air can neither alter the size of the pool of real savings, nor can it alter actual consumer time preferences. But it can and does temporarily suppress interest rates and distort relative prices. This falsifies economic calculation and promotes the malinvestment of capital – which in turn sets the boom-bust cycle into motion.

Photo credit: fmh

 

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Anecdotal Skepticism vs. Actual Data

About one month ago we read that risk parity and volatility targeting funds had record exposure to US equities. It seems unlikely that this has changed – what is likely though is that the exposure of CTAs has in the meantime increased as well, as the recent breakout in the SPX and the Dow Jones Industrial Average to new highs should be delivering the required technical signals.

 robot tradersThe bots keep buying…

Illustration via carolublog.wordpress.com

 

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$300 Trillion in Debt

DUBLIN – After our trip to Las Vegas, we spent one night in Baltimore and then got on another airplane. Standing in line, unpacking bags, getting zapped by X-ray machines – it has all become so routine we almost forget how absurd it is.

 

 

A TSA agent waits for passengers to pass through a magnetometer at Los Angeles International Airport (LAX) on November 22, 2010 in Los Angeles, California. Some passengers are subjected to Advanced Imaging Technology AIT scanners that see through clothing to photograph the entire body to reveal undisclosed objects. Increasing use of the scanner at airports by the Transportation Security Administration (TSA) is being met with outrage by many US travelers. Passengers who refuse an X-ray scan are required to undergo an intimate pat down by TSA agents.Get ready to be invaded, citizen…

Photo by David McNew / Getty Images

 

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THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
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