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9.3.15 - THE BLIND (Fed) LEADING THE BLIND (Chinese)

Gold last traded at $1,124 an ounce. Silver at $14.70 an ounce.

NEWS SUMMARY: U.S. stocks traded mixed Thursday despite upbeat economic data which boosted the odds of a Fed rate hike in September. Meanwhile, the U.S. dollar rallied on the data and precious metal prices drifted slightly lower.

U.S. Wages Falling Backward -New York Times
"Despite steady gains in hiring, a falling unemployment rate and other signs of an improving economy, take-home pay for many American workers has effectively fallen since the economic recovery began in 2009, according to a new study by an advocacy group that is to be released on Thursday....'Stagnant wages are a problem for everyone at this point, but the imbalance in the economy has become more pronounced since the recession,' said Irene Tung, a senior policy researcher at the National Employment Law Project and co-author of the study....Friday’s jobs report is especially significant because it is the last one before Federal Reserve policy makers meet in mid-September to decide whether to go ahead with or delay their long-telegraphed move to raise short-term interest rates from near zero." Discover why the U.S. is now trapped by our government's zero growth policy decisions in The Biggest Bank Heist in History.

Fox Business China Stock Manipulation Follows Failed Fed Model -Fox Business
Swiss America Chairman Craig R. Smith was a guest on Fox Business with Cheryl Casone discussing what China learned from the U.S. about boosting their stock market. "The Fed in November 2010 turned on the spigot and we watched the Dow rise from 13,000 to 17,000 in the next four years, then to 18,000 this year," says Mr. Smith. "China has $3.5 trillion in reserves which they can use to prop up the stock market." China may think manipulation makes their stock market look attractive but that same strategy has not worked in the U.S. Mr. Smith reminds viewers that China is still a communist nation who claims to want a free market but only on its terms.

Banks Are Perilously Exposed to China -Bloomberg
"Until very recently, large exposure to China was seen as an advantage, a toehold in the market of the future. Now it's seen as a risk, and some of the world's most advanced companies seem to be on the losing side of a huge bet. The danger may be overstated in some cases and understated in others....Last month, Goldman Sachs created a list of S&P 500 stocks with the most exposure to China. Inexplicably, Apple, which generates more than a quarter of its revenue from Greater China, is not on the list. Nonetheless, all but three of the 20 companies listed are in the tech sector." As covered in DON'T BANK ON IT! ... underfunded fractional reserve banks in China and worldwide "has the potential to turn every rumor or problem into a crisis."

Bank Supervisors should not tell truth about bank health -Reuters
"Banking supervisors should withhold some information when they publish stress test results to prevent both bank runs and excessive risk taking by lenders, according to a paper co-authored by a Bundesbank economist....European banking authorities are due to carry out a fresh round of stress tests next year as they try to restore investor and depositor confidence in the continent's banks after the financial crisis....The paper, presented at a conference in Mannheim last week but yet to be published in its current form, says stress tests should be used to influence depositor behavior and warns against giving too much away." So much for truth in lending...and reporting.

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Gold last traded at $1,133 an ounce. Silver at $14.66 an ounce.

NEWS SUMMARY: U.S. stocks rebounded Wednesday as traders brushed off disappointing jobs data and China fears temporarily subsided. Meanwhile, the dollar rebounded and precious metal prices consolidated recent gains.

Stocks Sending Recession Warning -Fiscal Times
"The bad omens are building in the stock market. Set aside the situation in China, where data released Tuesday showed manufacturing activity dropped last month to a three-year low and reached contractionary territory - the given reason for Tuesday’s market tumble. Forget for a moment about the Federal Reserve, which seems committed to raising interest rates this month for the first time since 2006. The stock market itself is warning of big trouble. The technical damage to stock prices has been severe. The S&P 500 has suffered its first 'Death Cross' - a plunge of the 50-day moving average below the 200-day moving average, a sign of lost medium-term momentum - in four years. The long-term trend is at risk, as the index closed Monday’s session below its 12-month moving average, a strong predictor of bear markets....Deutsche Bank's chief strategist Binky Chadha recently wrote to clients that equity market corrections of 10 percent or more are "rare outside recessions," with only 13 occurrences in the last 65 years in the context of a falling unemployment rate."

Putin "Aims To Eliminate US Dollar From Trade" -Zero Hedge
"Something is afoot as de-dollarization escalates around the world. With CNY/RUB trading volumes up a stunning 400% year-over-year to record highs, and hot on the heels of China's (and much of EM Asia) dumping dollar assets, Russian President Vladimir Putin has just unleashed a new bill aiming to completely eliminate the US dollar from the trade of goods....But that’s just the beginning of the end for the US dollar. Amid a major meltdown in Chinese stock markets the People’s Republic sold off billions in dollar assets last week in what was reported to be an effort to stabilize their collapsing financial markets." For the full story about the coming global assault on the U.S. dollar, read What's Next For The Dollar?

Surging ranks of America's ultrapoor -Moneywatch
"By one dismal measure, America is joining the likes of Third World countries. The number of U.S. residents who are struggling to survive on just $2 a day has more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation. That's according to '$2.00 a Day: Living on Almost Nothing in America,' a book from publisher Houghton Mifflin Harcourt that will be released on Sept. 1."

Canada officially enters recession -AFP
"Reeling from low oil prices, Canada fell into a recession in the first half of the year, government data confirmed Tuesday, putting Conservative Prime Minister Stephen Harper on the defensive in the run-up to October elections. According to Statistics Canada, the economy contracted 0.5 percent in the second quarter after retreating 0.8 percent in the previous three months....It is Canada's second recession in seven years and it is the only Group of Seven nation in economic retreat. The figures are the weakest since the 2008 global financial crisis."

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Gold last traded at $1,139 an ounce. Silver at $14.62 an ounce.

NEWS SUMMARY: Stocks indexes worldwide slid 2-3% Tuesday on China fears. Meanwhile, precious metal prices rose on safe haven buying amid a falling commodity prices and a weak dollar.

Weak Global Manufacturing Data Wallop Wall Street -FoxBusiness
"Wall Street kicked off September on a sharply negative note as China growth worries slammed global markets yet again. All ten S&P 500 sectors were in negative territory, with energy falling the most, dropping 3.13% in recent action....In the U.S., a gauge on factory activity from the Institute for Supply Management saw a bigger-than-expected drop in August to 51.1 from 52.7 in July. Overnight, data from China showed the nation’s manufacturing sector slipped to a three-year low and back into contraction territory for the first time in six months."

September 2015: We Officially Enter The Danger Zone -Zero Hedge
Michael Snyder of The Economic Collapse blog, writes ... "When I issued my first ever 'red alert' for the last six months of 2015 back in June, I was particularly concerned with the months of September through December, and not just for economic reasons. All of the intel that I have received is absolutely screaming that big trouble is ahead....Throughout history, there have only been 11 times when the S&P 500 has declined by more than five percent during the month of August. When that has happened, the stock market has almost always fallen in September as well....So how far could stocks eventually fall? John Hussman is projecting that we could ultimately see the market decline by more than 50 percent....When things start completely falling apart in this nation, millions upon millions of Americans will complain that nobody warned them in advance about what was coming. Well, I am warning you right now."

Gold Prices Higher as Possible Fed Rate Rise Seen Later -Wall Street Journal
"Gold prices were higher on the London spot market Tuesday, as the potential timing of an impending U.S. interest rate raise continued to move into the long grass. Now, market consensus has shifted to focus on December or beyond. 'Gold has been closely tracking changes in Fed policy expectations of late and we expect this influence on price action to continue up ahead,' said UBS. 'The link is likely going to become more acute in the next two weeks as the September FOMC [Federal Open Market Committee] meeting draws near.'" The Fed is now trapped in a zero interest, zero growth world. How will it all end? Read The Biggest Bank Heist in History.

How America Can Restore the Gold Standard -Breitbart
"Judy Shelton, Ph.D. closed out the conservative Jackson Hole Summit this past weekend by offering a practical pathway to re-restore the U.S. dollar as a gold-backed currency without economic disruption by having the Fed pledge about 7 percent of America’s gold in Fort Knox as collateral to issue gold-convertible Treasury Bonds....She believes Americans want their money to function as a useful tool for measuring value, not as the means through which government attempts to implement economic and social policy....Dr. Shelton suggests that the U.S. Treasury issue the equivalent of 44 million ounces of 'gold-convertible' Treasury bonds. The bonds would be equivalent to regular 5-year Treasuries, but the face value would be redeemable at the option of the bondholder into dollars or a fixed amount of gold." Learn how to put yourself on a personal gold standard starting today in The Timeless Truth About Gold & Silver.

Abolish cash? You’d be losing a free society -Telegraph
"No one wants to stand in the way of technological innovation. But outlawing cash? That is surely a step too far....From today, France is banning the use of cash for transactions worth more than €1,000, or slightly more than £700. On one level, that is about combating crime and terrorism. But on another, it is also part of a growing movement among academics and now governments to gradually ban the use of cash completely. It is inefficient, oils the underground economy, and makes it harder for central banks to manage the economy, or so runs the argument. Much like gold, it is a 'barbarous relic', as some publications loftily dismiss it....The trouble is, cash is also incredibly efficient. And it is a crucial part of a free society. There is no convincing case for abolition." To better understand why governments worldwide have declared a "war on cash" read THE SECRET WAR.

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Gold last traded at $1,132 an ounce. Silver at $14.58 an ounce.

NEWS SUMMARY: U.S. stocks fell again Monday, ending the month down about 6% amid China fears and Fed interest rate hike worries. Meanwhile, oil and precious metal prices rose on a weaker U.S. dollar.

The Dangerous Politics of Central Banks -Economist
"The struggles of the Chinese authorities to manage their currency, stock market and financial sector are well-known. But investors clearly feared that the Federal Reserve was underestimating the extent of the global slowdown or the impact of a rate rise; hence the strong recovery in equities at the end of the week when a September rate increase seemed less likely. The role of central banks is so important now that, inevitably, they are being dragged into political controversy, albeit for different reasons. In America, the 'audit the Fed' is worried about the expansion of the central bank's balance sheet and wants to know from whom the Fed bought its massive security pile....It is hardly surprising that politicians should regard the powers of modern central banks with envious eyes; why go through all the potential unpopularity of raising taxes to fund your spending plans when you can get a compliant central bank to do it for you?" As covered in DON'T BANK ON IT! ..."Because fractional-reserve banking adds the risk of bank runs to the economy, it makes a society more vulnerable and unstable. It has the potential to turn every rumor or problem into a crisis."

Citigroup Chief Economist: Only "Helicopter Money" Can Save The World -Zero Hedge
"China has bungled its attempt to slow the economy gently and is sliding into 'imminent recession', threatening to take the world with it over coming months, Citigroup has warned. As The Telegraph's Ambrose Evans-Pritchard reports, Willem Buiter, the bank’s chief economist, said the country needs a major blast of fiscal spending financed by outright 'helicopter' money from the bank to avert a deepening crisis....Mr Buiter had some more to add on the idiocy of Chinese Equity markets. He said the stock market crash in Shanghai and Shenzhen...So, it seems, all of a sudden - despite the permabulls, asset-gatherers, and commission-takers saying otherwise - China matters!" In THE SECRET WAR, authors Craig Smith and Lowell Ponte warn about the risks of money printing ... "As Austrian economist Ludwig von Mises remembered watching during the Weimar hyperinflation of the early 1920s, the wise made a 'flight into things,' exchanging their evaporating German Marks for inherently valuable things such as gold that could not be run off a government printing press by the trillions and thereby debased, like fiat currency."

Time to Reform the Fed - Because It Doesn’t ‘Have a Clue’ -National Review
"Since the Great Recession ended in 2009, the recovery has been slow and painful. Wages have been so stagnant that the average American family earns $1,000 a year less in income than it did in 2008. That’s why some two-thirds of people believe that their children won’t be better off than they were — a reversal of the American Dream. A growing number of people believe the Federal Reserve has hurt rather than helped the recovery. It has pursued zero-interest-rate policies that have perversely made it impossible for many businesses to get credit to expand. The Fed and other central banks have injected trillions of dollars into the global economy; according to the New York Sun, the result is that 'the world is now afflicted by a public-sector debt bubble that could rupture in any of a number of countries.'....Benn Steil, the director of international economics at the Council of Foreign Relations, told [the author] it was 'embarrassing' to see so many people hang on every word uttered by central bankers at their Jackson Hole conference. 'I’ve heard officials there say they may have to raise interest rates just because they said they would, and they’d lose credibility if they didn’t,' he says." Yes, the Fed may lift interest rates slightly this year to save face, as covered in The Biggest Bank Heist in History.

Wal-Mart Cuts Workers’ Hours After Pay Raise Boosts Costs -Bloomberg
"Wal-Mart Stores Inc., in the midst of spending $1 billion to raise employees’ wages and give them extra training, has been cutting the number of hours some of them work in a bid to keep costs in check. The request has resulted in some stores trimming hours from their schedules, asking employees to leave shifts early or telling them to take longer lunches, according to more than three dozen employees from around the U.S. The reductions started in the past several weeks, even as many stores enter the busy back-to-school shopping period."

The Death of Cash: notes and coins could disappear by 2025 -Telegraph
"Cash is on the way out as growing numbers of Britons believe contactless cards and mobile payments will be the dominant means of purchasing goods and services in the near future. Only half of Brits believe cash will still be in day-to-day use in a decade’s time, while 48% believe they will use contactless payments every day by 2025, according to the survey from Lloyds Bank. " We are being warned that cash is on the way out. Discover the wisdom of putting yourself on a personal gold standard by reading The Timeless Truth About Gold & Silver.

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