The Money Bubble

As for tried-and-true business practices being supplanted by “innovations,” consider the fact that no major country balances its budget any more, while all engage in historically-unprecedented deficit spending and money printing.

Japan is the world’s most rapidly-aging nation. To cite just one of many extraordinary data points, in 2012 its citizens bought more diapers for adults than for children.

A handful of major banks sold gold futures contracts worth tens of billions of dollars on the Comex futures exchange, frequently at odd times when trading was thin. This pushed the “paper” price of gold through technical support levels, which activated sell programs of momentum-trading hedge funds. The resulting additional selling pressure forced g

But in a fiat currency system, where money is not redeemable into a tangible asset and circulates solely because the government says one kind of paper is valuable and other kinds aren’t, perception isn’t just another tool of monetary policy – it is the policy’s prime directive. Because once perception-management fails, the next option is direct coe

as the trend progresses, it comes to be understood that the central, underlying system that is being corrupted is the currency, that most of today’s political and financial malfeasance depends on easy money, and that inflation is an ongoing policy of this pervasive new regime. When this realization becomes sufficiently wide-spread, the trends towar

The national mints generally sell to wholesalers who sell to dealers who sell to individuals, which can result in a fairly high mark-up at the retail level. So while there are advantages to owning well-recognized forms of bullion like gold eagles or maple leafs (for example, they often are easier to sell), our advice is to get the most metal for yo

Today’s fiat currencies emphatically meet the above bubble criteria. The prices of government bonds denominated in euro, yen and dollars have risen to extraordinary levels (which is the same as saying interest rates have been forced to extraordinarily-low levels). And befitting its size and scope, this bubble is rationalized with two popular mantra

The world’s governments thus find themselves in an ever-shrinking box. And all it will take to trigger the crisis is a return to historically-normal levels of interest rates. As recently as 2000, 30-year Treasury bonds yielded over 6 percent and 30-year mortgages cost 7.5 percent. Let rates return to those levels and the global financial system imp

To understand how the current system might spin out of control and where the unraveling might begin, look at where the complexity – aka systemic risk – is of late being concentrated most quickly. Post-2008, the two areas that stand out are government debt – which has been substituted for private debt as governments have borrowed unprecedented amoun