Interest Rates Will Now Rise Sharply – Part II

Interest Rates Will Now Rise Sharply – Part II

Interest Rates Will Now Rise Sharply – Part I

Interest Rates Will Now Rise SharplyThe rise in the stock market will eventually force the Federal Reserve to abandon its attempt to appease international central bankers who are still locked into negative interest rates.

This is actually the exact pattern that took place after the first real G4 meeting, as I call it when the US Fed lowered rates in 1927 to try to deflect the capital flows back to help Europe. It is ironic that history is repeating this same way once again…

Kansas City Federal Reserve President Esther George stated today that the Fed may need to “reverse” the three rate cuts implemented in 2019 that brought rates down to 1.5% to 1.75%… “We will need to asses whether the 2019 rate cuts prove to be ‘insurance cuts’ that will need to be reversed if headwinds fade.”

The Fed will once again turn to its domestic policy objectives and stop trying to help Europe which is trapped into its negative rate policy. Even Sweden has abandoned negative rates stating they have failed to provide what they were claimed to have accomplished.

I want to remind you that rising interest rates are bullish, not bearish. When the time comes to let you know when and what to buy and sell, we will provide those signals to our members. As money continues to move out of Europe to the USA we will let you know here.

Europeans Owe More Than Every Man, Woman, and Child Can Earn!

Europeans Owe More Than Every Man, Woman, and Child Can Earn!

For more than 40 years, Europeans have been living like kings and working like couch potatoes.

They have enjoyed

  • wine and nibble on cheese in their cafés,
  • enjoyed 35-hour works,
  • mandatory month-long vacations,
  • free health care.

They’ve been running up a socialistic tab that boggles the mind.

Of the 28 countries in the European Union, 20 are deep in debt despite repeated efforts to bail them out.

The people of Spain, for example, would have to fork over EVERY DIME OF THEIR ANNUAL INCOME in taxes just for the government to break even.

But many countries owe MORE than their people and businesses can produce each year (GDP).

  • Cyprus owes 8% more
  • Portugal owes 30% more
  • Italy 32% more
  • Greece takes the cake with 79% more money in debt than every man, woman and child in Greece can earn!

Of course, some historically ignorant economists say it doesn’t matter. They say you can just keep printing more money forever.

As a cycles analyst, I can tell you this for a fact:

History has shown that this Socialism cannot continue with plugged in money printing press. Debased currency always collapses with terrible consequences for 99.9% of its people.

Every single civilization that debases its coins eventually pays the price. Since Roman emperors began debasing their coins, we’ve known there’s always a price to pay at some point.

Oh, by the way, if that Roman debasement did not occur, can you tell me why we call it Ancient Rome? It was a republic as well!

For many of my European friends, you remember Debasement very well:

For those of you living in Venezuela right now, how does it feel?

Fortunately, it is not time for the USA to pay the piper. But, unfortunately for Europe, the day of atonement is coming very shortly.

Everything that has held the EU together is starting to collapse.

Hordes of refugees have amassed in camps at Europe’s border, threatening to climb over the fences.

  • They want their share of the free socialism, too
  • Tens of thousands of young male refugees have broken through to Northern Europe.

Unable to speak the language or find jobs, they hang out on street corners, some harassing European women and throwing rocks and bottles at men.

And terrorism is also on the rise. In Paris, terrorists killed 130 innocent people and injured 368 more in November of 2015.  In March of 2016, terrorists killed another 31 people in Brussels, the capital of the European Union. Then, the attacks became more frequent: Berlin, December 2016. Westminster, March 2017. Stockholm, April 2017. Manchester, May 2017. London, June 2017. Barcelona, August 2017.

The British citizens were sick of the EU’s controlling political elitists and finally realized it was a big mistake. So, they voted to get the heck out. Other nations, such as Hungary and Poland, wish they’d never joined the EU in the first place. According to the New York Times, “the EU could dissipate faster than even its detractors could’ve dreamed.”

Opportunity for huge profits exists even in the midst of disaster.

Diamonds Are A Girl’s Best Friend!

Diamonds Are A Girl’s Best Friend!

I have to apologize to my wife for buying her a ring for our engagement 24 years ago . . .

 

That ring may have just dropped in value by 98% according to this amazing find:

Don’t tell the Hatton Garden gang: scientists just unearthed an eye-watering hoard of diamonds, so valuable it would completely destroy the world’s economy.

The scientists reckon there’s a quadrillion tonnes of diamond buried in the ‘cratonic roots’ in continents.

There’s plenty more where these came from (Getty) Cratonic roots are the most ancient sections of rock under tectonic states, shaped like upside-down mountains. The researchers estimate that the roots may have 1-2% diamond, meaning that about a quadrillion tons of diamond are buried there.

Given that a ton of diamond is 50,000,000 carats, worth at least £3,000 each, that comes out at a tasty £150,000,000,000,000,000,000,000,000 by our relatively unscientific calculations.

‘This shows that diamond is not perhaps this exotic mineral, but on the [geological] scale of things, it’s relatively common,’ says Ulrich Faul, a research scientist in MIT’s Department of Earth, Atmospheric, and Planetary Sciences.

‘We can’t get at them, but still, there is much more diamond there than we have ever thought before.’

The researchers concluded that there were diamonds down there due to an anomaly in seismic data – where sound waves seemed to speed up. Faul and his colleagues calculated that the anomaly could be caused by 1%-2% of diamonds in the ‘cratonic roots.’ Faul said, ‘Diamond in many ways is special. One of its special properties is, the sound velocity in diamond is more than twice as fast as in the dominant mineral in upper mantle rocks, olivine.’

Read more: https://metro.co.uk/2018/07/16/scientists-just-found-150000000000000000000000000-diamonds-ground-7722550/?ito=cbshare

Senate Passes Tax Plan

Senate Passes Tax Plan

The U.S. Senate on Saturday narrowly approved a tax reform, moving Republicans and President Donald Trump a big step closer to their goal of slashing taxes which will create an economic boom in the United States and draw-in capital from around the globe.

This will put tremendous pressure upon Europe, Canada, and even Japan which all tax their economies significantly to the suppression of economic growth. The United States will have the lowest unemployment rate if this passes compared to the lost generation in Europe of high unemployed youth.

It will attract money rapidly and an economic boom can occur.

Pension Crisis Expanding

The Pension Crisis is brewing rapidly and we will begin to see this make headlines much more so around the world, not just in the USA. We all will see the expantion of Soveriegn Debt statewide and worldwide starting in 2018. In fact, there is hardly a country not in trouble (Norway the exception), where pensions are underfunded as governments have relied upon tax revenue.

As the crisis in Spain brews, it will be the pension crisis there which blows the lid off of the entire problem. The Spanish pension system is moving rapidly toward a major crisis threatening its collapse. The Madrid government needs to issue debt to close the huge gaps as, without new debt, the pension crisis would have a meltdown this year. The question becomes when will buyers of debt realize that it is not even backed by economic growth. This is similar to a person without a job borrowing from the bank just to pay the rent.

What governments have done in the management of pensions is criminal for anyone in the private sector.

Spain faces a major social crisis as we cross the threshold of 2018. The situation keeps getting worse by the day. For years, the Spanish government, like so many others, has been using funds from its pension reserves to finance expenses elsewhere in the budget ever since 2012. Billions have been used to offset the widening deficits in the welfare system. Consequently, the pension fund has collapsed from 66 billion euros in 2011 to only about 15 Billion euros in 2016. At this rate, Spain goes into default in 2018.

The crisis materializes when those who buy debt suddenly see there is no possible way to repay the debt from future revenues. A default becomes possible when there is NO BID for new debt. This is how it will begin. The peripheral economies will go bust and then a contagion begins as traders look around and say –OMG! They are all the same and there are NO BUYERS!


The Effect on YOU.

Yes, so this debt is exploding. Cities, states, and countries are going broke, I get it. But what can I do about it? Subscribers to our Wealth Preserver and other subscriptions levels are informed and guided through the coming crisis that will make 2008 look tiny in comparison.

Venezuela Government Creating Digital Currency

Venezuela Government Creating Digital Currency

Venezuela is creating a digital currency to combat a financial blockade by the United States, President Nicolas Maduro announced Sunday.

The Petro will be backed by Venezuela’s oil and gas reserves and its gold and diamond holdings, the president said in his weekly television program.

“This is going to allow us to move toward new forms of international financing for the country’s economic and social development,” the president said.

The government also announced the creation of a “blockchain observatory” — a software platform for buying and selling virtual currency.

Although the president did not offer many details, analysts such as Henkel Garcia see the possibility of success as limited.

“You can build it, but trust, acceptance and use is what will determine the cryptocurrency’s success. For me, it will be quite limited. The bolivar is is also backed by reserves and has no strength,” Garcia, director of consultancy Econometrica.

“Confidence in a country is going to depend on the levels of production and the wealth it generates. For example, people trust the dollar for the levels of wealth associated with it,” he said.

The announcement comes as Venezuela faces acute financing problems after creditors and ratings agencies declared the government and state-run oil firm PDVSA to be in partial default for missing interest and principle payments on bonds.

Maduro blames sanctions imposed by the United States in August barring American citizens and companies from buying any new Venezuelan government or PDVSA bonds.

Venezuela is mired in a deep economic crisis triggered mainly by a fall in crude oil prices and a drop in oil production. Petroleum is its main source of hard currency.

Over the past year, the Venezuelan bolivar has plummeted 95.5 percent against the dollar on the black market.

Virtual currency is not new for Venezuela — considered by specialists a haven for bitcoin production with minimal costs.

It is estimated that tens of thousands of people mine bitcoin to protect themselves from inflation — set to surpass 2,300 percent in 2018 — by exchanging earnings for dollars or more bitcoin.

In Venezuela, a the law does not expressly prohibit mining bitcoin — experts say officials are involved — but the authorities persecute those who do it for power theft.

Pension Crisis Update

Pension Crisis Update

The Illinois Supreme Court has used STRICT CONSTRUCTION to defend the State against State Employee pensions that have been bankrupting the State. Previously, back in 2014, the Supreme Court ruled that health care benefits provided to state employees were a “permanent benefit” guaranteed by the state constitution. That has led to a complete disaster as healthcare costs have risen out of control thanks to Obamacare, which handed insurance companies more money and a monopoly status that everyone had to have insurance even the y7outh who never used it.

Those health care costs are destroying the fabric of the entire economy pushing pension costs over the top. The Supreme Court is mindful of the disaster he caused with its 2014 ruling and they have been obvious under political pressure to reverse it. They figured a way to do this using STRICT CONSTRUCTION. Therefore, the benefit cannot be greater than what was expressed in the statute. Consequently, they now delivered a six-word ruling on Thanksgiving eve refusing to hear the retirees’ appeal of a state Appellate Court ruling that essentially upheld Mayor Rahm Emanuel’s now-completed, three-year phase-out of retiree health care coverage.

The Supreme Court magically taketh away with one hand what the previous hand gave.“For the city, this is a huge benefit. The amount in government pensions for health care is dropping from $137 million a year to between $7 million and $8 million. Effectively, The courts have now held that you cannot rely on anything the city tells you unless you can prove that person had authority to bind the city.

In December 2015, the court ruled that the city employee pension funds have an obligation to provide and subsidize retiree health care with funds provided by the city, but only at levels outlined in 1983 and 1985 amendments to the state’s pension code. That is the key. The statue only guaranteed subsidy amounts to $55-a-month for police and fire retirees not eligible for Medicare and $21 for those who are. For retirees covered by the Municipal Employees and Laborers pension funds, the guaranteed monthly subsidy amounts to just $25. The explosion in health care insurance which Congress has done nothing about is undermining the pensions and will explode in crisis resulting in civil unrest over the next 5 years.

Courts are put in place by politicians. When ruling will go against the government, judges are word-smiths. They know how to ignore the law when they must. This is all part of how the system collapses. Once the Rule of Law fails, nothing will SURVIVE. It is time to turn out the lights.

We will continue to follow the politics behind the markets and keep your retirement protected. Just follow the Wealth Preserver in the US, and your countries Wealth Preserver outside the US. We will help keep your retirement and wealth protected and in tact.

Pension Crisis Expanding

Pension Crisis Expanding

The Pension Crisis is brewing rapidly and we will begin to see this make headlines much more so around the world, not just in the USA. We all will see the expansion of Sovereign Debt statewide and worldwide starting in 2018. In fact, there is hardly a country not in trouble (Norway the exception), where pensions are underfunded as governments have relied upon tax revenue.

As the crisis in Spain brews, it will be the pension crisis there which blows the lid off of the entire problem. The Spanish pension system is moving rapidly toward a major crisis threatening its collapse. The Madrid government needs to issue debt to close the huge gaps as, without new debt, the pension crisis would have a meltdown this year. The question becomes when will buyers of debt realize that it is not even backed by economic growth.  This is similar to a person without a job borrowing from the bank just to pay the rent.

What governments have done in the management of pensions is criminal for anyone in the private sector.

Spain faces a major social crisis as we cross the threshold of 2018. The situation keeps getting worse by the day. For years, the Spanish government, like so many others, has been using funds from its pension reserves to finance expenses elsewhere in the budget ever since 2012. Billions have been used to offset the widening deficits in the welfare system. Consequently, the pension fund has collapsed from 66 billion euros in 2011 to only about 15 Billion euros in 2016. At this rate, Spain goes into default in 2018.

The crisis materializes when those who buy debt suddenly see there is no possible way to repay the debt from future revenues. A default becomes possible when there is NO BID for new debt. This is how it will begin. The peripheral economies will go bust and then a contagion begins as traders look around and say –OMG! They are all the same and there are NO BUYERS!

The Effect on YOU.
Yes, so this debt is exploding. Cities, states, and countries are going broke, I get it.  But what can I do about it? Subscribers to our Wealth Preserver and other subscriptions levels are informed and guided through the coming crisis that will make 2008 look tiny in comparison.

Is Hartford The Next City To Go Bankrupt?

Is Hartford The Next City To Go Bankrupt?

The majority leader in Connecticut’s Democrat-controlled House of Representatives said he “can’t envision any scenario” in which Hartford would seek to declare bankruptcy if a bipartisan budget that provides a financial lifeline to the capital city becomes law.

Matt Ritter, who represents Hartford and is the second-most-powerful Democrat in the House, said the budget would give the city about $20 million in aid from a fund for distressed municipalities and provide $20 million a year to cover costs on its bonds. Hartford would also be able to issue debt backed by Connecticut, which would allow it to save money by refinancing at lower rates.

“It doesn’t mean the city is out of the woods yet, they have to govern locally and make decisions,” Ritter said in a telephone interview. But “if this bill passes the state would have done above and beyond what was asked of us. The state would have given the city all the tools and resources it needs to put itself on a firmer footing.”

Hartford’s bonds have tumbled since credit-rating companies cut the securities deeply into junk grade, and Moody’s Investors Service has warned that the city could default as soon as next month. If it went bankrupt, it would be the biggest U.S. city to do so since Detroit’s collapse four years ago.

Hartford will get cash “very, very quickly” if the legislature’s bipartisan budget is signed into law, said Ritter, who is also a municipal-bond attorney at Shipman & Goodwin LLP in Hartford. Lawmakers may vote on the budget this week. Ritter said he wasn’t worried about the city’s ability to pay about $20 million in notes due Oct. 31.

Mayor Luke Bronin said the capital city would be pushed to seek bankruptcy by next month if the state fails to enact a budget and provide the city with additional aid. Hartford, where a third of its 123,000 residents live in poverty and about half the property is tax exempt, faces a $50 million deficit, nearly 10 percent of its budget. In the last year, debt costs have almost doubled to about $60 million while pension and benefit payments increased almost 30 percent.

“No matter what’s in the state budget this year, any truly sustainable solution is going to require the participation of all of our stakeholders — including labor and bondholders, ” Bronin said in an emailed statement. “That means we’re going to have a lot of tough, important work left to do.”

Hartford’s police officers have been working without a contract since July 2016. The city’s biggest civil employees union in May rejected a contract that would have saved the city about $4 million over six years, according to the Hartford Courant. Bronin hasn’t specified the concessions he’s asking for.

Connecticut’s bipartisan budget would also establish a Municipal Accountability Review Board composed of representatives of the governor’s office, the state treasurer and labor whose powers would depend on the “tier” that municipalities are designated. In tier 3 municipalities, like Hartford, the board would have the power to review all collective bargaining agreements, arbitration awards and bond authorizations.

Connecticut’s Special Capital Reserve Fund, which would be used to back newly issued Hartford bonds, is a longstanding mechanism to provide additional security for authorities or municipalities by guaranteeing to replenish draws on debt-service reserves. The state used the SCRF program to back $100 million in deficit financing by Waterbury as part of a bailout of the city in the early 2000s.

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