Swiss America Blog Archive

5.19.15 - Your Money Under Arrest?

Gold last traded at $1,206 an ounce. Silver at $17.07 an ounce.

NEWS SUMMARY: U.S. stocks struggled to maintain record high levels as upbeat housing data boosted the buck. Meanwhile, oil and precious metal prices fell back as traders mulled over the possible impact surging housing data may have upon Fed interest rate policy.

HOUSING: "U.S. housing starts jumped to their highest level in nearly 7-1/2 years in April and permits soared," reports CNBC. "The strength in housing is in stark contrast with weakness in consumption, business spending and manufacturing, which have prompted economists to lower their second-quarter growth estimates." What is interesting is that the U.S. home builders confidence index has been down four of the last five months. Is it possible they know something buyers only suspect? That the housing market is again getting ahead of economic growth? We shall see.

BANKS: Last week HSBC bank warned, "The World Economy Faces a 'Titanic' Problem" without any lifeboats. Today Financial Times reports, "HSBC has become one of the biggest global banks to say it will begin charging clients on deposits in a basket of European currencies....Central banks in Sweden, Denmark and Switzerland have also imposed negative policy rates of between minus 0.25 per cent and minus 0.75 per cent as they battle deflation and currency pressures....JPMorgan Chase said this year it would start charging some of its biggest institutional customers, such as hedge funds and foreign banks, to make 'excess' deposits, which have become too costly under new liquidity rules." Negative interest rates were predicted in DON'T BANK ON IT!, page 217, major bank threat #14 ...

14. European banks - with American banks soon to follow - have begun formally charging savers a fee for their account while paying them zero interest, a policy now formally called "negative interest." American savers could in the near future be charged a bank fee for the honor of putting their money at risk by being lent out for bank profit.

CASH: Money Under Arrest: Months ago Bloomberg reported that "cash in the mattress may be safer than bank deposits," but transporting cash also has increasing risks - such as seizure by law enforcement agents who may presume the cash is the result of committing a crime. CNBC reports one such example,"Joseph Rivers of Dearborn was on his way to California to start a career as a music video producer when he was stopped by DEA agents in New Mexico, who seized $16,000 in cash Rivers had in a bank envelope, the Albuquerque Journal reported. Rivers' story is one of many from U.S. citizens who say the government unfairly seized their assets under the Justice Department's Asset Forfeiture Program. In 2014, government agencies seized $4.6 billion in more than 10,000 forfeitures, 91 percent of the year's total. Critics say civil asset forfeiture is at best overused and targets innocent people and at worst is a cash cow for local law enforcement agencies." Last October NY Timesreported, "Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required - which is a topic also covered in DON'T BANK ON IT! as part of the Obama Administration's "Operation Choke Point."

GOLD: Precious metal prices were "steamrollered" by the surging U.S. dollar index today, offering yet another excellent buying opportunity. While bank depositors in Europe and the U.S. are struggling with zero and now negative interest rates, "Indian banks may offer interest on gold deposits," reports Reuters. Bankers in India are seeking a way to monetize the large gold holdings in Indian households.

"Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry said in its guidelines released on Tuesday to seek opinions about its gold monetization scheme....The government is trying to convince households, who sometimes have little faith in financial institutions, to break the tradition and hand over gold passed down the generations."

This proposal is reminiscent of the U.S. origin of fractional banking when the town goldsmiths issued a receipt for gold held on deposit, then noticed people were happier trading receipts. These receipts later morphed into paper notes of currency, which under the Federal Reserve lost their redeemability to gold. Bottom line: The safest way to own gold is always physically in your own possession.

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5.18.15 - Banks Offer "Titanic ... Twilight Zone" Warnings

Gold last traded at $1,226 an ounce. Silver at $17.68 an ounce.

NEWS SUMMARY: U.S. stocks cautiously inched higher on Monday, despite major banking analyst warnings of a scary summer, laden with “Titanic” risks without life boats as investors remain stuck in Fed-induced "Twilight Zone" markets. This is precisely what Craig Smith and Lowell Ponte discussed in their 2011 book, The Inflation Deception. "Get ready for the printing presses to run night and day churning out debased dollars for an exploding population of government 'employees' and dependents, as Alice [in Wonderland] moves us to the Twilight Zone."

BANKS: Speaking of the Twilight Zone, Bank of America confesses to Bloomberg, Markets Are in a 'Twilight Zone' and It's Time to Hold More Cash and Gold. "Investors remain trapped in 'The Twilight Zone', the transition period between the end of QE and the first rate hike by the Fed, the start of policy normalization...until (a) the US economy is unambiguously robust enough to allow the Fed to hike and (b) the Fed's exit from zero rates is seen not to cause either a market or macro shock (as it infamously did in 1936-7)..."

Meanwhile, HSBC, the world's third largest banks' chief economist Stephen King warns, "The World Economy Faces a 'Titanic' Problem". Mr. King, it seems, is already planning for the next recession. In a note to clients last week, he warns: "The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers." So we now have two major banks warning of titanic problems ahead, then recommending gold as the solution. It appears the old, soft, debt-based bankers are now paving the way for the new, hard asset-based bankers!

DEBT: "Debt Traders to Fed: We Dare You to Try Raising Rates This Year," reports Bloomberg. "The market is essentially calling the Fed's bluff. Traders are betting that policy makers won't be able to raise rates this year without disrupting stocks and bonds, something that they'd really rather not do. So either U.S. policy makers will have to risk another market-wide tantrum, or they'll give in to traders who embrace the idea of these historically low borrowing costs sticking around for longer." Yes, the Fed is stuck in zero interest quicksand, as Smith and Ponte cover in a recent White Paper, The Biggest Bank Heist in History.

GOLD: Precious metal prices extended gains Monday despite a sharply higher U.S. dollar index on bargain hunting and growing bullishness as gold prices topped $1,225 an ounce. "We Are Entering The Terminal Phase Of The Global Financial System," bestselling author David Stockman tells Zero Hedge. Mr. Stocksman says what happened in each of the previous U.S. market crash episodes was a short-run break in the system, a collapse of confidence and then a flight to gold. "What I think we are facing now is a terminal phase of a monetary system that isn't viable, stable or sustainable. Therefore, gold has but one characteristic - massive upside in the years ahead." Gold has a 4,000-year history of preserving wealth and offering instant liquidity worldwide, while offering you a way to maintain your personal privacy. Read more: The Timeless Truth About Money

5.15.15 - Moving Toward Prosperity, Away From Redistribution

Gold last traded at $1,223 an ounce. Silver at $17.49 an ounce.

NEWS SUMMARY: U.S. stock prices stalled Friday amid lifeless factory orders and sagging U.S. consumer sentiment. Meanwhile, CNBC reports economists now estimate that U.S. economic growth will slow to 2.5% in 2015, down from 3%. Precious metal prices shined this week, ending near 3-months highs, with gold prices rising 3% for the week.

ECONOMY: Consumer sentiment hit a seven-month low, signaling shoppers are growing more concerned about how the economy and non-recovery will affect their personal finances, according to data released Friday. This is no surprise in the Fed's modern world of Zero Interest Rate Policy (ZIRP), as Craig Smith and Lowell Ponte point out in a recent White Paper, The Biggest Bank Heist in History. "In many such ways, ZIRP undermines the health of the body politic and the free market economy. It not only sucks away the lifeblood of capitalism - capital - but also destroys the morals, values, entrepreneurship, work ethic and thrift needed for successful free enterprise," write Smith and Ponte.

OPTIMISM: "Welcome to the Death of Liberalism," reports ReadingTheWorld. "Our optimism about the future is grounded in the evolving 'death of liberalism'. The US has been moving, albeit slowly, towards prosperity/growth and away from stagnation/redistribution since 2010. 2016 could prove to be the final blow to liberalism unleashing an economic prosperity not seen in over thirty years," writes John Tamny of RealClearMarkets. "We are optimistic that harmful policy ideas like targeted middle class tax cuts will never make it out of the primaries, and the GOP nominee will have been chosen because he embraces Laffer style, pro-growth policy solutions. The result will be the creation of more capital, more jobs, more companies and higher middle class incomes."

BANKS: "Modern Innovations May Render Banking Obsolete," writes Jeffrey Snider, the Chief Investment Strategist of Alhambra Investment Partners. "There are still 7.7% of households without a bank account and 20% are underbanked. The FDIC is clearly trying to make this a poverty issue, as they refer to that 'fact' that in 2013 34% of unbanked respondents report a job or significant income loss as contributing to their status as unbanked. Under the guise of 'protecting the poor', the government is out to assail these providers under the legion of the Dodd-Frank monstrosity, the aptly named (for 21st century Orwell-ianism) Consumer Financial Protection Bureau (CFPB). In terms of payment technology, the prepaid system and the newer innovations that are just now becoming active make banking in the monetary sense obsolete - banks are expensive distractions. Banking, properly defined, is a matter of finance and there is no good reason to combine the two except as a means of power and influence." Our latest book, DON'T BANK ON IT! covers this topic in more detail.

MID-EAST: Israeli news service Haaretz reports, "Iran fires on Singaporean cargo ship in Gulf, says U.S. official. A U.S. official says an Iranian naval boat fired on a Singaporean commercial ship in the Persian Gulf in an apparent attempt to disable it. The Iranians initially fired warning shots Thursday after the MT Alpine Eternity refused to move into Iranian waters. When the ship began heading toward territorial waters of the United Arab Emirates, the Iranians tried to disable it with machine gun fire, according to the U.S. official..." Just one spark in the MID-EAST could send the global economy, the banking system and U.S. dollar up in smoke, according to AMERICA ENGULFED, the latest White Paper by Craig Smith and Lowell Ponte.

GOLD: "Gold may be headed to $5,000 an ounce," says Peter Schiff to Marketwatch, "despite the Fed." $5,000 gold would mean a 300% price growth from the current price. "The Fed is still 'posturing' as if it'll soon raise interest rates, but it won’t", Schiff predicts. "We'll always have to do [quantitative easing] to offset the damage from the previous QE," said Schiff, who argued that the Fed has made "mistakes" and has done a "horrible job" with monetary policy. Meanwhile, the World Gold Council's 2015 Q1 report says, "The contrast between the global picture and the more granular demand data clearly demonstrates the multi-faceted nature of the gold market. The numerous and varying roles that gold plays means it responds to different cues in different ways, smoothing out the fluctuations occurring at a more localized level..." Bottom line: Gold's future is looking brighter as the dark clouds gather over the global economy. Now is the time to own gold for protection first, and growth potential second. Here is an amazing opportunity to buy U.S. $20 gold coins at 2007 price levels!

5.14.15 - Best Gold Buying Opportunity Since 2007!

Gold last traded at $1,221 an ounce. Silver at $17.46 an ounce.

NEWS SUMMARY: U.S. stocks rose on Thursday, with the major indexes flirting with record highs. U.S. producer prices dipped 0.4% in April, indicating the 2% inflation target the Fed has been trying to boost is instead falling. Meanwhile, former Fed Chairman Alan Greenspan yesterday warned that the stock market will get another "taper tantrum" if and when the Fed decides to raises interest rates. Precious metals hit a 3-month high on a weaker dollar and technical momentum buying.

DOLLAR: The U.S. dollar extended losses Thursday, falling to a four-month low, reflecting weakening retail sales and deflationary producer price data. CNBC reports, "As the prospect of Fed rate hikes pushes further out, the likelihood that other central banks will be forced to maintain easy monetary policy settings for longer also increases," Jane Foley, a senior currency strategist at Rabobank, said in a note on Thursday.

GOLD: A top performing asset over the past 15 years is now presenting gold buyers with an opportunity not seen since 2007. The MS63 $20 Liberty Gold coin is now trading at the same price it was when gold was $700.00 per ounce. What this means to you is very limited downside risk and tremendous upside potential. This is the type of opportunity every investor seeks but is rarely presented with. Full Story

BANKS: "For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote," reports NY Times. "But when five of the world's biggest banks (Barclays, JPMorgan Chase, Citigroup, UBS and the Royal Bank of Scotland) plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup." This outcome was predicted in DON'T BANK ON IT!, in the "Too-Big-To-Jail" chapter.

5.13.15 - Gold Rallies On Weak U.S. Data

Gold last traded at $1,218 an ounce. Silver at $17.22 an ounce.

News Summary: U.S. stocks ended mixed, gold rallied over 2% and the U.S. dollar fell roughly 1% on a batch of weak U.S. economic reports. "The data puts into question the Fed's notion that the weak first-quarter data was transitory," said Adam Sarhan, chief executive of Sarhan Capital in New York. "Growth in the first-quarter slowed to a crawl as a strong dollar, harsh winter and a steep fall in oil prices hurt profits and discouraged consumers from spending" according to Reuters.

Economy: The U.S. received a number of disappointing reports today, the biggest one being a weak retail sales report. U.S retail sale were unchanged in April as households cut back on spending on big-ticket items. The U.S. economy is struggling to make a strong rebound after an already weak first quarter. Another report shows U.S. import prices dropped for a 10th straight month. According to CNBC these reports are signs that the Federal Reserve could delay raising interest rates.

In a recent note to clients, HSBC chief economist Stephen King warns: "The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers." King believes that this far into the recovery there is a lack of "traditional policy ammunition" as Treasury yields are still not rising, the budget deficit is still not falling, and welfare payments remain on the rise.

Metals: Gold hits a two-week high, pushing above the $1,200 an ounce level, after weaker-than-expected U.S. data pushed back expectations for an interest-rate hike by the Federal Reserve. Gold found more support as Treasury yields extend gains -pushing down yields - and the U.S. dollar weakens. Silver also had solid gains, hitting a six-week high above $17.00 an ounce.

“We still aren’t really seeing the big recovery that was anticipated in the wake of the weather-depressed first quarter. This just really reinforces the view that a June hike isn’t happening and that September looks the more probable start point,” said James Knightley, economist at ING Bank.

Chicago: Moody's also had some bad news for the economy as they downgraded Chicago's credit rating to junk level "Ba1" from "Baa2." Moody's cited a recent Illinois court ruling voiding state pension reforms as the reason for the negative outlook on the city's credit.

"Whether or not the current statutes that govern Chicago's pension plans stand, we expect the costs of servicing Chicago's unfunded liabilities will grow, placing significant strain on the city's financial operations absent commensurate growth in revenue and/or reductions in other expenditures," the agency said in a release.

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5.12.15 - Gold Advances After Global Bond Selloff

Gold last traded at $1,192 an ounce. Silver at $16.52 an ounce.

News Summary: Stocks in the U.S. and Europe retreat after a global selloff in government bonds. The U.S. dollar weakens against its rivals as Treasury yields turned lower. Dovish comments from New York Fed President William Dudley also weighed on the dollar. Dudley "doesn't know when interest rates will rise" which the markets interpreted as the central bank will begin rate hikes later than expected.

Gold: Gold prices jumped higher today on a falling U.S. dollar and a drop in global bonds. Gold may see even more gains after it was reported by Forbes that China may soon be launching a facility that allows the yuan's value to be fixed against gold. This is another step China is taking to become a global financial player. "The establishment of a China-based gold fix for the yuan also marginally undermines the dollar as the global benchmark currency" says Jan Dehn of Ashmore Group. "The establishment of a gold fix will probably also aid China's ambition to achieve Special Drawing Rights inclusion this year" Dehn added.

Bonds: The prices of government bonds fell across the world, including a major German bond sell-off labeled "large and vicious" by Goldman Sachs. The yields on 10-year German government notes rose by more than 20%. U.S. Treasuries saw wild swings after yields climbed by as much as 3.7% before sliding back to where they began. According to The Telegraph, analysts suggest this correction reflected stretched valuations in the debt markets as investors struggle to reposition themselves due to thin supply.

Greece: Greece has been forced to tap into an emergency account to make its debt interest payments to the IMF, BBC reported. The government used its reserves to make the payment on Monday, one day ahead of the deadline. One Greek official told Reuters that the reserves the government had used to make the payment must be replenished in the IMF in "several weeks."

Greek finance minister Yanis Varoufakis warned that his country's financial situation was "terribly urgent" and the crisis would come to a head in a matter of weeks. "The liquidity issue is a terribly urgent issue," Varoufakis told reporters, "from the perspective [of timing], we are talking about the next couple of weeks." Greece has until the end of June to reach a reform deal with its international creditors.

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5.11.15 - U.S. Economy Not Growing Fast Enough

Gold last traded at $1,183 an ounce. Silver at $16.31 an ounce.

Market Summary: Stocks closed lower as investors cashed in on last week's gains. Stocks also seemed to struggle as worries over Greece's financial condition grew as well as slowing growth was reported in China. Oil prices also fell, pulling down energy stocks. The People's Bank of China cut its benchmark lending and deposit rates by a quarter of a percentage point which has little impact on U.S. markets.

Jobs: It is clear the pace of hiring in the U.S. has lost its momentum, according to several surveys. The Fed's index of labor market conditions fell to -1.9 in April from -1.8 in March; the first time the gauge has been negative two months in a row since 2012. This index tracks 19 indicators and is used by the central bank to assess the health of the U.S. labor market.

A separate survey generated by the privately run Conference Board shows that the pace of hiring is no longer increasing as fast as it was in 2014. Hiring has been hurt in part by a stronger U.S. dollar and layoffs in the energy sector after the drop in oil prices according to an article on MarketWatch.

Debt: According to calculations by the Committee for a Responsible Federal Budget; higher interest costs, Social Security and Medicare for baby boomers will cause the federal debt held by the public to hit $40 trillion in 2035. Back in 2009 the forecast for 2035 was at least $7 trillion lower. "The economy just isn't growing fast enough to keep pace with the costs of caring for the soaring ranks of the elderly, and the discrepancy between spending and revenue is estimated to widen in the next few decades" according to Bloomberg.

Greece: Talks continue in Greece as their vast debt load continues to mount. These talks not only include politicians from other European nations but officials from the European Central Bank and the International Monetary Fund, both creditors to Greece. Greece is currently expected to repay 750 million euros to the monetary fund on Tuesday. However, Greece still needs to repay the fund another 12 billion euro before the year is over.

Politicians are racing against the clock to forge a deal that would give Greece enough money to repay both the IMF and ECB. There is no sign either institution is considering yielding on its payment schedule. If there are no signs of progress in talks on Monday, a majority of the central bank's governing council would favor placing additional restrictions on lending to Greek banks.

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5.8.15 - April Jobs Bring May Bears

Gold last traded at $1,188 an ounce. Silver at $16.48 an ounce.

News Summary: The US economy added 223,000 jobs in April, rebounding from a poor performing March. Unemployment fell to 5.4%. Analysts are calling the April figures a “Goldilocks” report – good enough to boost stocks but not strong enough to encourage a June rate hike by the Fed. Gold ended higher on Friday after revisions to US Payroll data further supported speculation the Fed would hold off on raising rates.

Stocks: “Don't buy into this jobs-fueled rally, market timer warns” via MarketWatch. “Tom McClellan, editor of the widely-read McClellan Market Report, doesn’t care that a market-friendly jobs report sent stocks surging on Friday. He said he’s turning neutral from bullish after Friday’s close, for both the short- and intermediate-term time frames, and will look to get bearish next week.”

Social Security: “Social Security's in worse shape than you thought” according to a new study presented by CNBC. “The Social Security Administration projects that its trust funds will be depleted by 2033 - not an optimistic forecast. But it may be even bleaker than that. New studies from Harvard and Dartmouth researchers find that the SSA's actuarial forecasts have been consistently overstating the financial health of the program's trust funds since 2000.”

According to Laurence Kotlikoff, a Boston University professor of economics, “We have a situation that is like Enron accounting, and the public doesn't want to hear about it.” Kotlikoff wants the agency to calculate its liabilities using fiscal gap accounting, which considers the difference between the government's projected financial obligations and the present value of all projected future tax and other revenue.

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5.7.15 - Investors Await Friday's Report

Gold last traded at $1,182 an ounce. Silver at $16.29 an ounce.

News Summary: U.S. stocks shrugged off early losses after the release of the jobless claims report. Many investors are sitting on the sidelines as they await the release of Friday's highly anticipated nonfarm-payrolls report. Oil prices tumbled 3 percent as traders and investors turned their focus to the oversupply in crude and gasoline. The dollar finally jumped since its downtrend began at the beginning of the month in anticipation of Friday's U.S. employment report.

Many experts continue to chime in saying the markets are overvalued and due for a correction. As we mentioned yesterday, Yellen sees danger in high stock valuations, while bankers and regulators express fear of a bond collapse. Now, Colin Cieszynski, chief market strategist at CMC Markets, says the stock market is likely to trade sideways for some time. “Markets have rallied so much, that there are excesses which either need to be flushed out in a correction or trade sideways for the rest of the year and the let the economy catch up,” says Cieszynski.

Business: Companies continue to borrow at insane rates and then use that money to buy back shares, ultimately driving up their share prices, according to an article at MarketWatch. An analysis by investment bank SG Securities calculates that "in reality Corporate America has 'overspent' in recent years to the tune of hundreds of billions of dollars."

Over the last five years, the cash pile of non-financial U.S. corporations has risen $570 billion, while debt has risen $1.6 trillion. "It is also those companies with the weakest sales growth that are buying back the most," warns one SQ quantitative strategist.

Jobs: It was reported today that U.S. jobless claims remain near a 15-year low. This comes as shocking news because according to ZeroHedge, April saw the biggest rise in job cuts since 2011 as well as the worst year on year increase for April in the last decade. Texas has been hit the hardest, leading the nation in job losses due to the struggling energy industry and plummeting oil prices.

Iran: It has been reported that two Iranian generals taunted the United States, saying the "military option to destroy Iran's nuclear facilities is 'ridiculous,' that Washington knows it can't be done, and that their country welcomes war with the US.'" This warning came as Western power prepared to have a sit down for another round of negotiations with Iran in an attempt to put curbs on Iran's nuclear program.

Greece: Greece still remains in turmoil as they make desperate attempts to avoid a default. According to The New York Times, a majority of the ECB's influential Governing Council are growing "increasingly uncomfortable with the central bank's growing financial exposure to Greece." Many members are worried the council has already stretched the rules in order to extend help to the banks, whose financial health has been in serious decline.

The European Central Bank has already lent about 110 billion euros to the banks in Greece. While the central bank does not want to provoke a mass failure of Greek banks, it may soon be forced to tighten its flow of credit to the banks if Greece can not produce the set of economic overhauls that creditors are demanding.

Precious Metals: Gold ended the day slightly lower amid bearish outside markets. However, as the decline of confidence in paper currency continues, one expert believes gold will soon have its day. In an interview with The Gold Report, Chris Mancini, analyst with Gabelli Gold Fund, states the Federal Reserve is fast running out of ways to prop up the U.S. dollar and he expects gold prices to continue in the $1,200-$1,300 range for 2015 and see a much better year in 2016. Check out the interview HERE.

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5.6.15 - Today's 'Flash Crash' Economy

Gold last traded at $1,189 an ounce. Silver at $16.48 an ounce.

NEWS SUMMARY: U.S. stocks fell today, on the fifth anniversary of the 2010 'Flash Crash', after the U.S. ADP national employment report for May came in with a big downside miss at 169,000, far short of the 205,000 jobs expected. Meanwhile, Fed Chairwoman Janet Yellen now sees danger in high stock valuations, while bankers and regulators express fear of a bond collapse. The U.S. Dollar index sank further, helping to boost oil prices. Gold prices steadied below $1,200 an ounce.

OUR 'FLASH CRASH' ECONOMY: What We Need to Learn from an Ominous Anniversary - By Lowell Ponte

"On May 6, 2010, the New York Stock Exchange suffered what came to be called 'the Flash Crash,' when the Dow Jones Industrial Average plummeted unexpectedly by nearly 1,000 points in only minutes," Craig R. Smith and I wrote in our book DON'T BANK ON IT! The Unsafe World of 21st Century Banking.

crash A single Sell order valued at approximately $4.1 Billion purportedly set off a cascade of computerized buy-and-sell programs around the world that are designed to respond immediately, and without consulting human beings, to key changes in market prices. As each major trading computer reacted, it could have triggered programmed reactions in similar computers.

"Some of these systems use High Frequency Trading (HFT) that today can launch trade decisions, buy and sell orders, in mere thousandths of a second or less," we wrote. This, according to critics, allows traders who have paid millions for this razor-thin advantage-in-time to detect incoming stock purchases; front-run and automatically buy that stock before the competing slower order gets processed; and sell the stock a fraction of a second later to the slower order at a slightly higher price.

"Such are the systems, with their risk of triggering buy or sell cascades around the world, that are being used in today's merging worlds of high-tech investing and high-money banking," we warned.

Some want to believe that enough circuit breakers have been added to stock trading to prevent an economy-shattering crash like the one that cost traders more than a trillion dollars in only a few minutes five years ago.

But as we continued in Don’t Bank On It!, a "violent sell-off in stocks" on February 29, 2012 was in its own way even more frightening – because evidence suggests that it was driven by a powerful intelligence that was not human.

The lesson to learn from this ominous anniversary of the 'Flash Crash' is that by diversifying your investments and savings to include tangible assets - not just politically manipulated dollars or stocks denominated in such paper dollars - can give you the security of financial insurance in an age of growing uncertainty and instability. more...

Five years later the regulatory response to 2010 'flash crash' remains snarled in red tape, reports Marketwatch. "A giant data project at the center of the regulatory response to the 2010 'flash crash' that sent the DJIA plummeting nearly 1,000 points is years behind schedule and mired in red tape." No big surprise here. "Computer algorithms swap thousands of stocks each instant - and could set off a financial meltdown," reports Mother Jones.

BONDS: "Bankers and Regulators Voice Fears on Bond Market, reports the New York Times. "Wall Street chieftains, huge investment firms and top bank regulators are all sounding the same alarm. In recent months, they have been warning that the world's bond markets, where companies and countries borrow trillions of dollars, are in danger of breaking down." Bonds may soon become a graveyard for the dying dollar.

CASHLESS: "Denmark moves step closer to being a cashless country," reports the London Telegraph. "The Danish government said as of next year, businesses such as clothing retailers, petrol stations and restaurants should no longer be legally-bound to accept cash.... Financial institution lobbyist Finansraadet said going cashless would save shops money on security and time on managing change from tills. However, there are some fears that a complete move to electronic payment may increase the risk of fraud. In Sweden, for example, such cases have doubled in the past decade." Convenience has its price.

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5.5.15 - Economic Stagnation Stunts Confidence

Gold last traded at $1,193 an ounce. Silver at $16.58 an ounce.

STOCKS: U.S. stocks slid lower Tuesday as debt rose, economic confidence fell and tech earnings disappointed. The U.S. government today announced the U.S. trade gap rose to $51.4 billion last month, the largest since October 2008. This illustrates the negative impact of a stronger U.S. dollar, which creates a flood of imports of everything from autos to cellphones.

ECONOMY: "Economists now believe that the U.S. economy probably contracted slightly in the first quarter", according to a Moody's/CNBC survey. The median of 10 economists' estimates suggests the economy shrank 0.3 percent in the first quarter. This is substantially worse than the initial data of +.2% GDP in Q1 2015 released last week. While, some areas of the U.S. have seen pockets of growth, Gallup's U.S. Economic Confidence Index fell to its lowest weekly score since December.

OIL: Get ready for a 'frack counterattack', warns CNBC. "U.S. oil prices are heading into a sweet spot that could spur the fracking industry to crank up some of the drilling it shut down when crude prices collapsed." Unrest in the Mid-East amid worries over Iran's support of terrorist states could drive oil and gasoline prices up further this year, as well as weakening the U.S. dollar, as explained in Swiss America's newest White Paper AMERICA ENGULFED: One Spark Could Burn Down the World Economy.

ISIS: "IS group claims Texas shooting, first attack on US soil", reports AFP News. The Islamic State group on Tuesday claimed responsibility for its first attack on US soil in which two gunmen were killed after opening fire at an event in Texas showcasing cartoons mocking the Prophet Mohammed. One of the gunmen resided in Phoenix, Arizona. Jihad supporters now appear to be firmly planted within U.S. borders, as well as throughout the Middle East.

GOLD: Precious metals rose Tuesday on bargain hunting and technical buying ahead of Friday's jobs report. The rally in gold prices on Monday - despite a firmer dollar - illustrates that gold is decoupling from the U.S. dollar and is becoming the 'safe haven' asset of choice in a world awash in paper IOUs.

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5.4.15 - Underestimating Risk

Gold last traded at $1,186 an ounce. Silver at $16.44 an ounce.

STOCKS: U.S. stock prices edged higher Monday as U.S. Factory Orders rose for first time in eight months. But with U.S. stock indexes still near break even so far in 2015, the Wall Street party could be very near an end. "Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria," said famed Sir John Templeton. Take heed to this sage market advice from Templeton, one of the world's most respected investors. "When almost no one believes the market is dangerous, that's when it is most dangerous," author and stock-market expert Mark D. Cook tells Marketwatch.

U.S. DOLLAR: The dollar rose slightly amid upbeat economic data, but "The Dollar Joins the Currency Wars," writes Nouriel Roubini at ProjectSyndicate. "The sum of all trade balances in the world is equal to zero, which means that not all countries can be net exporters - and that currency wars end up being zero-sum games. That is why America's entry into the fray was only a matter of time." Meanwhile, the CIA's Asymmetric Warfare Advisor Jim Rickards, asks "Should China's plan to position the Yuan as a world reserve currency serve as a warning sign that something much more dangerous is approaching?" Rickards says yes. We agree! The U.S. dollar is now being attacked from all sides, as Craig Smith and Lowell Ponte detail in their latest White Paper, AMERICA ENGULFED.

MID-EAST: Today America is engulfed in the religious and political struggles in the Middle East and Persian Gulf for one reason: to protect the flow of oil, which props up the dwindling monopoly status of U.S. dollar. "A stunning 96 percent of Americans expect more violence this summer of the type we have seen in Baltimore and Ferguson, Missouri. Internationally, events spin out of control, with Iran on the verge of the greatest diplomatic snookering of our times and fomenting violence across the Middle East," reports the Washington Post.

GOLD: Precious metal prices rebounded sharply on Monday - despite a stronger dollar. Many analysts feel geopolitical risk today remains underestimated by market investors. The Ukraine or the Middle East could flare up overnight and very well could be the catalyst for the next stage of gold's bull market. Now is the time to protect your hard-earned assets with hard-owned assets. Call your Swiss America representative at 800-289-2646 to discuss the wisdom of owning physical gold and silver before the next economic accident occurs.

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5.1.15 - Fireproof Assets in a Tinder-Laden World

Gold last traded at $1,177 an ounce. Silver at $16.11 an ounce.

NEWS SUMMARY: U.S. stocks rose Friday in choppy trading amid a firmer dollar and weak manufacturing data as investors digested slowing U.S. economic growth prospects. ZeroHedge reports, "It seems logical to assume that absent a major international economic accident, the current Fed is bound and determined to continue stimulating asset prices until we once again have a fully-fledged bubble," says GMO's Jeremy Grantham. Meanwhile, precious metal prices fell for a second day, following a $590 million gold futures sell trade which hit the market early, prices then bounced back later near $1,175 an ounce.

MID EAST: "The Middle East is in flames - and Obama's making it worse," reports CNN. U.S. policy in the Middle East remains mired in a contradiction between principles and action on the ground.

For example, the President asserted in the interview that "the U.S.'s core interests in the region are not oil, are not territorial ... Our core interests are that everybody is living in peace, that it is orderly, that our allies are not being attacked, that children are not having barrel bombs dropped on them, that massive displacements aren't taking place."

Yet, at the very moment that the President was offering this assessment, U.S. allies, such as the Arab Gulf states, Jordan, Lebanon and the legitimate government in Yemen, found themselves under serious threat and attack; the Syrian regime was continuing to relentlessly bomb its own citizens; and the Middle East was faced with the biggest refugee crisis in its history.

Implementing the core U.S. interests outlined by Obama in the interview is clearly not working. This is an huge understatement. U.S. interests are not being served by Obama domestically nor internationally, as Craig Smith and Lowell Ponte explain in their latest free White Paper AMERICA ENGULFED: One Spark Could Burn Down the World Economy. We now recognize that President Obama, a radical community organizer, has attempted to govern via bureaucratic regulation, executive orders and emergency decrees.

Under him, the government and Federal Reserve have created out of thin air $8 Trillion in stimulus funding and zero-interest lending. According to the Keynesian economics embraced by White House economists, our economy fueled by this much money should be rising like a skyrocket. Instead, economic growth in the first quarter of 2015 was originally measured at zero, then revised by the Federal Reserve to 0.2 percent growth so that two such quarters would not officially define us as back in a recession.

GOLD OUT OF THE DOG HOUSE: Craig R. Smith shares the final in a series of ten two-minute stories entitled, The History of Your Money.

The history of your money today focuses on an area that absolutely astonishes me.

Could you imagine tomorrow if you saw a commercial from McDonald's telling you to go buy Burger King? That's literally what we're seeing happening in the tangible hard asset world.

For years Wall Street has criticized the lack luster performance of gold. They have criticized the wisdom of taking a portion of your assets and putting it away in a vault to protect you from inflation. And yet even the critics agree now is the time to have a portion of your money in gold.

Chief economist, Walter Murphy from Merrill Lynch said, "Gold is a buy of the generation." CNBC's Lawrence Kudlow, the most ardent bull on Wall Street (he believes the Dow one day will be multiplies of 10 thousand) is even suggesting people buy gold.

Why? Because gold represents safety. Lets learn from history to better prepare our families and finances for the future.

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