Steve Bull's Blog, page 1345
July 24, 2017
The Dynamics of a Riot
In my lifetime, I’ve had the misfortune of being present in two major natural disasters and one violent social crisis. Each taught me valuable lessons.
In the aftermath of a natural disaster, there’s the danger of the loss of shelter, services, and food. In most cases, people who experience the loss of shelter and services realise that “things are bad all around” and they tend to do the best they can, accepting that life will be hard for a period of time.
Food is a different matter. People, no matter how civilized, tend to panic if they become uncertain as to when they will next be able to eat. And, not surprisingly, this panic is exacerbated if they have dependents, particularly children who are saying, fearfully, “Daddy, I’m hungry.” As Henry Lewis said in 1906, “There are only nine meals between mankind and anarchy.” Quite so.
But this is not the only cause of riots. In the post-1960 period in the West, a new phenomenon has occurred that has steadily grown: Governments and the halls of higher education have increasingly taught people that they are “entitled.”
Governments have been guilty of this for millennia, beginning at least as early as the “bread and circuses” of ancient Rome. It’s a way for governments to get people to be dependent upon them and thereby to do their bidding. But, since the 1960s, it’s become a systemic norm.
And it always ends in the same way. The false economy of “free stuff” eventually devolves into overtaxation and economic collapse. When it does, people are more likely to riot, as the entitlements are “owed” to them. In today’s world, however, this condition has peaked far beyond what the world has ever seen before.
…click on the above link to read the rest of the article…
Peak Shale: Anadarko Just Became The First US Oil Producer To Slash CapEx
It appears that Horseman Global’s Russell Clark may have been spot on with his bearish take on the US shale sector.
As a reminder, in his latest letter to investors, Clark said that “the rising decline rates of major US shale basins, and the increasing incidents of frac hits (also a cause of rising decline rates) have convinced me that US shale producers are not only losing competitiveness against other oil drillers, but they will find it hard to make money…. at some point debt investors start to worry that they will not get their capital back and cut lending to the industry. Even a small reduction in capital, would likely lead to a steep fall in US oil production. If new drilling stopped today, daily US oil production would fall by 350 thousand barrels a day over the next month.”
What I also find extraordinary, is that it seems to me shale drilling is a very unprofitable industry, and becoming more so. And yet, many businesses in the US have expended large amounts of capital on the basis that US oil will always be cheap and plentiful. I am thinking of pipelines, refineries, LNG exporters, chemical plants to name the most obvious. Even more amazing is that other oil sources have become more cost competitive but have been starved of resources. If US oil production declines, the rest of the world will struggle to increase output. An oil squeeze looks more likely to me.
While the bearish thesis has yet to play out, moments ago Anadarko poured cold water on US energy investors after it missed earnings badly, reporting a Q2 EPS loss of 77c, more than double the 33 cent loss expected.
…click on the above link to read the rest of the article…
India: The Lunatics Have Taken Over the Asylum
Goods and Services Tax, and Gold (Part XV)
Below is a scene from anti-GST protests by traders in the Indian city of Surat. On 1st July 2017, India changed the way it imposes indirect taxes. As a result, there has been massive chaos around the country. Many businesses are closed for they don’t know what taxes apply to them, or how to do the paperwork. Factories are shut, and businesses are protesting.
A massive anti-GST protest in Surat [PT]
Increases in administrative costs have made economics of trading and manufacturing unfavorable for many. Most lack access to accounting and IT skills to implement the new system — India simply does not have that many skilled people. As many as half of all transportation trucks are not operating. The media have “decided” not to cover the demonstrations.
The new indirect tax is a value-added tax, but as can be expected from the Indian government, it is chaotic, bureaucratic, extremely complicated, and full of loopholes. If you pay GST to your supplier but if he fails to deposit it, you cannot claim it as an input tax, making a businessman not only a collector of tax but an enforcer — this kind of draconian VAT system likely does not exist anywhere else.
There are about 40 tax returns required each year for each province that a company operates in. While tax officers don’t know how the new system should work, failure to comply will lead to imprisonment.
A case of unforeseen complexities. Note: generally only four different levels of GST are advertised, but there are actually special rates for precious stones, gold and sugary drinks, so there are seven rates in total. [PT]
…click on the above link to read the rest of the article…
Don’t Be Fooled – The Federal Reserve Will Continue Rate Hikes Despite Crisis
Though stock markets in general are meaningless and indicate nothing in terms of the health of the economy they still function as a form of hypnosis, or a kind of Pavlovian mechanism; a tool that central bankers can use to keep a population servile and salivating at the ring of a bell. As I have mentioned in the past, the only two elements of the economy that the average person pays attention to in the slightest are the unemployment rate and the Dow. As long as the first is down and the second is up, they aren’t going to take a second look at the health of our financial system.
Historians and economists often wonder after the fact how it was possible for so many “experts” and others to miss the flashing red lights leading into market implosions like that which occurred in 2008. Well, this is exactly how; within any casino there is an inherent bias towards false hope. Meaning, many people will invariably ignore all negative factors and past experience because positivism is more pleasant. Central bankers are keen to take advantage of this condition.
When observing from the outside-in, this attitude rings of desperation. Investors, with no positive fundamental data to turn to in the economy, have now been relegated to scouring press releases and speeches for ANY indication that the central bank might not take the punch bowl away as they have been doing slowly over the past few years. In fact, in most cases negative data has actually triggered spikes in equities because the assumption on the part of investors is that bad data will cause the Fed to second-guess its stimulus reduction policies. In this way, central bankers can, at least for now, fake-out investors with a simple word or phrase released in a strategic manner.
…click on the above link to read the rest of the article…
Wisconsin Firm Microchips Employees: “It’s Inevitably The Next Thing… And We Want To Be Part Of It”
In April we noted that Swedish company Epicenter had begun implanting RFID chips into workers hands… and the workers loved it… it makes opening doors and buying smoothies so easy and convenient, and your coworkers will even throw a party for you once you take the plunge to become a cyborg.
The injections have become so popular that workers at Epicenter hold parties for those willing to get implanted.
“The biggest benefit I think is convenience,” said Patrick Mesterton, co-founder and CEO of Epicenter. As a demonstration, he unlocks a door by merely waving near it. “It basically replaces a lot of things you have, other communication devices, whether it be credit cards or keys.”
Workers there seem alright with the idea. In the article, the general attitude is perhaps best captured by the comment of one 25-year-old worker:
“I want to be part of the future.”
And now, as ABC5 reports, a Wisconsin company is about to become the first in the U.S. to offer microchip implants to its employees.
“It’s the next thing that’s inevitably going to happen, and we want to be a part of it,” Three Square Market Chief Executive Officer Todd Westby said.
More than 50 Three Square Market employees are having the devices implanted starting next week. Each chip is about the size of a single grain of rice.
The company designs software for break room markets that are commonly found in office complexes. Just as people are able to purchase items at the market using phones, Westby wants to do the sam thing using a microchip implanted inside a person’s hand.
…click on the above link to read the rest of the article…
A Mystery Investor Has Made A 262 Million Dollar Bet That The Stock Market Will Crash By October
One mystery trader has made an extremely large bet that the stock market is going to crash by October, and if he is right he could potentially make up to 262 million dollars on the deal. Fortunes were made and lost during the great financial crisis of 2008, and the same thing will happen again the next time we see a major stock market crash. But will that stock market crash take place before 2017 is over? Without a doubt, we are in the midst of one of the largest stock market bubbles in U.S. history, and many prominent investors are loudly warning of an imminent stock market collapse. It doesn’t take a genius to see that this stock market bubble is going to end very badly just like all of the other stock market bubbles throughout history have, but if you could know the precise timing that it will end you could set yourself up financially for the rest of your life.
I want to be very clear about the fact that I do not know what will or will not happen by the end of October. But one mystery investor is extremely convinced that market volatility is going to increase over the next few months, and if he is correct he will make an astounding amount of money. According to Business Insider, the following is how the trade was set up…
To fund it, the investor sold 262,000 VIX puts expiring in October, with a strike price of 12.
The trader then used those proceeds to buy a VIX 1×2 call spread, which involves buying 262,000 October contracts with a strike price of 15 and selling 524,000 October contracts with a strike price of 25.
…click on the above link to read the rest of the article…
Greyerz – We Are Now In The Frightening Endgame
Today the man who has become legendary for his predictions on QE, historic moves in currencies, warned King World News that we are now in the frightening endgame.
Fear And Propaganda
Egon von Greyerz: “Stock investors are rejoicing about stock markets making new highs in many countries, totally oblivious of the risks or the reasons. It seems that this is an unstoppable rally in a “new normal” market paradigm. No major increase is expected in the inflation rate or the historically low interest rates. The present rally has lasted 8 years since the 2009 low. There is virtually no fear in the stock market so investors see no reason why this favorable climate would not continue for another 8 years at least.
Yes, of course it could. All that is needed is that governments worldwide print another $20-50 trillion at least and that global debt goes up by another $200-500 trillion…
Anyone in government is incapable of telling the truth. Automatically when someone assumes an elected position their Pinocchio nose grows extremely long since their entire purpose is then to be all things to all people in order to be re-elected. This is why virtually no elected official has a backbone nor any morals or principles. Because if they had, telling the truth would make them unelectable.
Egon von Greyerz continues: “The gullibility of people today is exacerbated by the power of the internet and social media. Anything we read is accepted as fact or the truth, while a major part of it is just fake news. This is of course nothing new as it has been used by governments for centuries….click on the above link to read the rest of the article…
July 17, 2017
Ron Paul On The Coming Dollar Crash, Cashless Society & False Flags (Video)
Josh Sigurdson interviews former congressman and host of The Liberty Report, Dr. Ron Paul.
Dr. Paul responds to the Federal Reserve’s Janet Yellen’s delusional claim that we will not see another major crisis in our lifetime. He updates everyone on his views regarding the coming fiat dollar crash as medias across the board put his comments out of context. The fundamentals are off the table due to the level of manipulation so one cannot put an exact date on the fiat crash, we just know it will indeed happen.
Dr. Paul also goes into his thoughts on the cashless society we’re seeing unroll in front of us on a global scale. From India to Australia, from China to Canada, the implementation of cashless systems is a dire concern for many as many of the top globalist financiers endorse the notion of implementing it into the SDR (Special Drawing Rights) at the IMF. Ron Paul breaks down his thoughts on this out of control centrally planned system and whether he thinks it will be accomplished or not.
Josh also asks Dr. Paul about the possibility of further false flags to bring the United States into a potential violent conflict with Russia as the media hypes the anti-Russia narrative all day, every day. This shows the true nature of the similarities between both collectivist Democrats and Republicans as they obsess over “Russian collusion” and attempt to create a distabilizing narrative between the U.S. and Russia. No matter who is president, the deep state continues to perpetuate everything we’ve seen in the past. The Trilateral Commission, the CFR, they all continue to map out global policy regardless of the figurehead president.
Ron Paul gives a voluntaryist bottom line as to how he believes people can encourage more people to understand the message of individual liberty, free markets, sound money and freedom in general.
Carl Bernstein: “Cold Civil War” Has Taken Over Media; “Fact-Based Debate Is Becoming Impossible”
To say that the U.S. media has a developed a bit of a credibility issue of late would be an understatement. Mass hysteria over Trump’s victory in November has clearly resulted in a staggering deterioration in reporting standards as dropping the latest “bombshell” and inflicting the latest wound on the Trump administration has been prioritized over truthful, fact-based reporting. All of which, as we’ve noted frequently of late, has resulted in a number of embarrassing corrections from several major media outlets who have been forced to admit their reporting was just outright “fake news.”
And, in case you missed it, Carl Bernstein, who is best known for his investigative reporting for the Washington Post that shed light on the Watergate scandal, appeared on CNN, of all places, this weekend to discuss the media’s credibility issue which he argued has largely developed in the “cable news era” as media outlets have become increasingly politicized in their race for ratings.
Among other things, Bernstein said that media outlets in this country are engaged in a “cold civil war” and that, as a result, “fact-based debate is becoming impossible.”
“The difference between Watergate and now is that we are in the midst of a cold civil war in this country. A political and cultural civil war and all of our reporting is taking place in the context of that cold civil war. And nothing quite like existed at the time of Watergate.”“And part of the cold civil war itself is the configuration of media with Fox News, with CNN, being perceived by different sets of viewers as representing different truths. When, in fact, Fox has changed American politics as perhaps no institution has since its invention in 1996.”
…click on the above link to read the rest of the article…
Brodsky: This Is A Red Flag Warning
Authored by Paul Brodsky via Macro-Allocation.com,
Red Flag Warning
Two identifiable dynamics may signal significant market shifts imminently:
1. The US debt ceiling will be debated soon and signs point towards a messy outcome.
2. Recent economic data have been weak, confirming our thesis that US economic growth is slowing and will not be reversed until a recession is acknowledged.
Debt Ceiling
Excessive debt has a way of catching up with people and institutions, and the first true test for the US government may be at hand. Congress was expected to raise the debt ceiling by October or else Treasury could not fund all the government’s programs and current obligations. Yet talk of Trump tax reform in 2016 may have given taxpayers incentive to defer their liabilities. As a result, Treasury received about 3 percent less in revenues than expected, accelerating the timetable to debate and raise the debt ceiling.Progress on raising the ceiling will unlikely be made in August, as Congress is in recess.
Meanwhile, the political atmosphere in the Republican Party has splintered further under President Trump. The conservative wing, which tried to block raising the ceiling in the past, has signaled it will again dig in its heels to force the government to begin balancing its budget. Though it caved in the past, the conservative caucus’ resolve should not be doubted this time, judging by its will and ability to so far block health care reform that does not absolutely repeal the Affordable Care Act.
Treasury Secretary Mnuchin has stated that the Department has options if Congress does not raise the ceiling, but has not been forthcoming with specifics. If a cash flow shortfall develops in the fourth quarter, principal and interest payments on Treasury debt would be prioritized so that the government would avoid default.
…click on the above link to read the rest of the article…
