Tag: finance

Submitted by Doug French via Casey Research,

No wonder investors don't take economists seriously. Or if they do, they shouldn't. Since Richard Nixon interrupted Hoss and Little Joe on a Sunday night in August 1971, it's been one boom and bust after another. But don't tell that to the latest Nobel Prize co-winner, Eugene Fama, the founder of the efficient-market hypothesis.

The efficient-market hypothesis asserts that financial markets are "informationally efficient," claiming one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis.

"Fama's research at the end of the 1960s and the beginning of the 1970s showed how incredibly difficult it is to beat the market, and how incredibly difficult it is to predict how share prices will develop in a day's or a week's time," said Peter Englund, secretary of the committee that awards the Nobel Prize in Economic Sciences. "That shows that there is no point for the common person to get involved in share analysis. It's much better to invest in a broadly composed portfolio of shares."

Fama is not just a Nobel laureate. He also co-authored the textbook, The Theory of Finance, with another Nobel winner, Merton H. Miller. He won the 2005 Deutsche Bank Prize in Financial Economics as well as the 2008 Morgan Stanley-American Finance Association Award. He is seriously a big deal in the economics world.

So if Fama has it right, investors should just throw in the towel, shove their money into index funds, and blissfully wait until they need the money. Before you do that, read what Fama had to say about the 2008 financial crisis.

The New Yorker's John Cassidy asked Fama how he thought the efficient-market hypothesis had held up during the recent financial crisis. The new Nobel laureate responded:

"I think it did quite well in this episode. Prices started to decline in advance of when people recognized that it was a recession and then continued to decline. There was nothing unusual about that. That was exactly what you would expect if markets were efficient."

When Cassidy mentioned the credit bubble that led to the housing bubble and ultimate bust, the famed professor said:

"I don't even know what that means. People who get credit have to get it from somewhere. Does a credit bubble mean that people save too much during that period? I don't know what a credit bubble means. I don't even know what a bubble means. These words have become popular. I don't think they have any meaning."

No matter the facts, Fama has his story and he's sticking to it.

"I think most bubbles are 20/20 hindsight," Fama told Cassidy. When asked to clarify whether he thought bubbles could exist, Fama answered, "They have to be predictable phenomena."

The rest of us, who lived through the tech and real estate booms while Fama was locked in his ivory tower, know that in a boom people go crazy. There's a reason the other term for bubble is mania. According to Webster's, "mania" is defined in an individual as an "excitement of psychotic proportions manifested by mental and physical hyperactivity, disorganization of behavior, and elevation of mood."

Financial bubbles have occurred for centuries. In January 1637, the price of the common Witte Croonen tulip bulb rose 26 times, only to crash to 1/20^th of its peak price a week later.

Eighty years later in France, John Law flooded the French economy with paper money and shares of the Mississippi Company. The public went wild for stock in a company that had no real assets. The shares rose twentyfold in a year, only to crash. Law, a hero in the boom, was run out of France in disgrace.

At the same time across the channel, the British public bid up South Sea Company shares from ?300 to ?1,000 in a matter of weeks. Even the brilliant Sir Isaac Newton was caught up in the frenzy. He got in early and sold early. But he then jumped back in near the top and went broke in the crash.

In the modern era, booms and busts are too numerous to count: Japanese stocks and property, real estate (multiple times), stocks, commodities, stocks again, farmland (multiple times), and art are just a few. Yet the newest co-Nobelist denies the existence of booms and busts and advises you to put your money in index funds and hope for the best.

However, investor returns have not been the best. The last complete calendar decade for stocks ending in 2009 was the worst in history. The Wall Street Journal reported, "Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade."

When you adjust that for inflation, the results were even worse, with the S&P 500 losing an average of 3.3% per year.

This decade, stocks have been on a tear—as have bonds, farmland, and art. At first glance, it's nonsensical that the price of virtually everything is rising. But when you remember that the Federal Reserve's cheap money has flooded Wall Street but hasn't come close to Main Street, it becomes clear. The money has to go somewhere.

If Fama were correct, there would be no legendary investors like Doug Casey or Rick Rule. There would be no opportunities for ten-baggers and twenty-baggers in resource stocks.

Fama is like the economist in the old joke who sees a hundred-dollar bill on the ground but doesn't pick it up. "Why didn't you pick it up?" a friend asks. The economist replies, "It's impossible—a hundred-dollar bill would have already been picked up by now."

Of course savvy investors know there are hundred-dollar bills to be picked up in the market. With tax-selling season upon us, now is the time to be shopping for bargains.

Doug's friend Rick Rule often says, "You can either be a contrarian or a victim." Taking Fama's advice will make you a victim. The path to wealth is to run against the herd, not with it.

Learn how to be a contrarian… how to make handsome gains from the best precious metals, energy, and technology stocks… how to find investment opportunities even in the most unlikely places… how to recognize profitable trends before they start. Read all this and more in our free daily e-letter, the Casey Daily Dispatch—click here to get it now.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/zCgBL1j-Lws/story01.htm Tyler Durden

Submitted by Doug French via Casey Research,

No wonder investors don't take economists seriously. Or if they do, they shouldn't. Since Richard Nixon interrupted Hoss and Little Joe on a Sunday night in August 1971, it's been one boom and bust after another. But don't tell that to the latest Nobel Prize co-winner, Eugene Fama, the founder of the efficient-market hypothesis.

The efficient-market hypothesis asserts that financial markets are "informationally efficient," claiming one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis.

"Fama's research at the end of the 1960s and the beginning of the 1970s showed how incredibly difficult it is to beat the market, and how incredibly difficult it is to predict how share prices will develop in a day's or a week's time," said Peter Englund, secretary of the committee that awards the Nobel Prize in Economic Sciences. "That shows that there is no point for the common person to get involved in share analysis. It's much better to invest in a broadly composed portfolio of shares."

Fama is not just a Nobel laureate. He also co-authored the textbook, The Theory of Finance, with another Nobel winner, Merton H. Miller. He won the 2005 Deutsche Bank Prize in Financial Economics as well as the 2008 Morgan Stanley-American Finance Association Award. He is seriously a big deal in the economics world.

So if Fama has it right, investors should just throw in the towel, shove their money into index funds, and blissfully wait until they need the money. Before you do that, read what Fama had to say about the 2008 financial crisis.

The New Yorker's John Cassidy asked Fama how he thought the efficient-market hypothesis had held up during the recent financial crisis. The new Nobel laureate responded:

"I think it did quite well in this episode. Prices started to decline in advance of when people recognized that it was a recession and then continued to decline. There was nothing unusual about that. That was exactly what you would expect if markets were efficient."

When Cassidy mentioned the credit bubble that led to the housing bubble and ultimate bust, the famed professor said:

"I don't even know what that means. People who get credit have to get it from somewhere. Does a credit bubble mean that people save too much during that period? I don't know what a credit bubble means. I don't even know what a bubble means. These words have become popular. I don't think they have any meaning."

No matter the facts, Fama has his story and he's sticking to it.

"I think most bubbles are 20/20 hindsight," Fama told Cassidy. When asked to clarify whether he thought bubbles could exist, Fama answered, "They have to be predictable phenomena."

The rest of us, who lived through the tech and real estate booms while Fama was locked in his ivory tower, know that in a boom people go crazy. There's a reason the other term for bubble is mania. According to Webster's, "mania" is defined in an individual as an "excitement of psychotic proportions manifested by mental and physical hyperactivity, disorganization of behavior, and elevation of mood."

Financial bubbles have occurred for centuries. In January 1637, the price of the common Witte Croonen tulip bulb rose 26 times, only to crash to 1/20^th of its peak price a week later.

Eighty years later in France, John Law flooded the French economy with paper money and shares of the Mississippi Company. The public went wild for stock in a company that had no real assets. The shares rose twentyfold in a year, only to crash. Law, a hero in the boom, was run out of France in disgrace.

At the same time across the channel, the British public bid up South Sea Company shares from ?300 to ?1,000 in a matter of weeks. Even the brilliant Sir Isaac Newton was caught up in the frenzy. He got in early and sold early. But he then jumped back in near the top and went broke in the crash.

In the modern era, booms and busts are too numerous to count: Japanese stocks and property, real estate (multiple times), stocks, commodities, stocks again, farmland (multiple times), and art are just a few. Yet the newest co-Nobelist denies the existence of booms and busts and advises you to put your money in index funds and hope for the best.

However, investor returns have not been the best. The last complete calendar decade for stocks ending in 2009 was the worst in history. The Wall Street Journal reported, "Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade."

When you adjust that for inflation, the results were even worse, with the S&P 500 losing an average of 3.3% per year.

This decade, stocks have been on a tear—as have bonds, farmland, and art. At first glance, it's nonsensical that the price of virtually everything is rising. But when you remember that the Federal Reserve's cheap money has flooded Wall Street but hasn't come close to Main Street, it becomes clear. The money has to go somewhere.

If Fama were correct, there would be no legendary investors like Doug Casey or Rick Rule. There would be no opportunities for ten-baggers and twenty-baggers in resource stocks.

Fama is like the economist in the old joke who sees a hundred-dollar bill on the ground but doesn't pick it up. "Why didn't you pick it up?" a friend asks. The economist replies, "It's impossible—a hundred-dollar bill would have already been picked up by now."

Of course savvy investors know there are hundred-dollar bills to be picked up in the market. With tax-selling season upon us, now is the time to be shopping for bargains.

Doug's friend Rick Rule often says, "You can either be a contrarian or a victim." Taking Fama's advice will make you a victim. The path to wealth is to run against the herd, not with it.

Learn how to be a contrarian… how to make handsome gains from the best precious metals, energy, and technology stocks… how to find investment opportunities even in the most unlikely places… how to recognize profitable trends before they start. Read all this and more in our free daily e-letter, the Casey Daily Dispatch—click here to get it now.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/zCgBL1j-Lws/story01.htm Tyler Durden

The world's first Bitcoin ATM will be ready for use this week at a coffee shop in Vancouver, Canada. Created by Las Vegas based Robocoin, the new ATM in Vancouver will allow users to turn bitcoins directly into Canadian dollars, or turn Canadian dollars into bitcoins. As The Telegraph reports, the ATM first scans the user's palm to ensure security and transfers are limited to CAD$3,000 per day. Until now, the currency existed only on the web but the introduction of these ATMs brings bitcoin-as-cash usage closer.

 

The Bitcoin ATM Promo…

 

The Bitcoin ATM in action…

 

Via CBC,

Bitcoiniacs says it has ordered five Bitcoin kiosks from a Las Vegas-based company called RoboCoin… and will be rolled out starting this week in Vancouver…

 

Four more kiosks will arrive in December and although their locations are not yet certain, Bitcoiniacs says it's eyeing major Canadian cities such as Toronto, Montreal, Calgary and Ottawa

 

"Basically, it just make it easier for people to buy and sell Bitcoins and hopefully will drive the adoption of Bitcoin, and make it more accessible for people," says Mitchell Demeter, the 27-year-old owner of Bitcoiniacs.

 

…

 

Currently, acquiring Bitcoins is often done through an exchange, an arduous process that requires users to jump through several hoops, including linking their bank account to the exchange and sending in paperwork to verify their identity.

 

…

 

The RoboCoin kiosks are expected to make the process of buying and selling Bitcoins much easier says Jordan Kelley, the company's chief executive.

 

"Our goal is to make Bitcoin truly grandma-friendly," says Kelley.

 

…

 

Using a kiosk means you don't have to wait to verify your account on an exchange or hand cash to a stranger, says Kelley. It also makes Bitcoins more accessible to people by adding an element of legitimacy and increases liquidity in the market.

 

…

 

RoboCoin plans to ship out 10 to 15 kiosks to customers before the end of the year. The first one will go to Bitcoiniacs, says Kelley.

 

Demeter says many Bitcoin startups are gravitating to Canada because the Financial Transactions and Reports Analysis Centre of Canada — also known as FINTRAC — aren't as strict as regulators in the U.S.

 

"It's a lot more open up here, that's for sure," says Demeter.

 

Those last two paragraphs/comments are especially notable in light of President Obama asking Eric Schmidt if "Bitcoin is anything he has to worry about?"

 

Via Mike Krieger of Liberty Blitzkrieg blog,

Here’s a story recently related to me by a guest at a White House dinner, which included Google’s Eric Schmidt: The president, whose most important job is surely to protect the integrity of the monetary system, smugly asked Schmidt if Bitcoin, one of many growing challenges to currency hegemony, was anything he had to worry about.

 

– From a USA Today article titled: How CEOs are Clueless About Technology

If the above is accurate (and I have no reason to suspect it isn’t), it is priceless information on so many levels. First of all, rather than ask about Bitcoin in an inquisitive manner free of prejudice as a enlightened leader surely would, Obama is merely primatively wondering if he needs to “worry about it.”

Actually Barry, if you had any sense and foresight whatsoever you would be looking at it as a great opportunity. An opportunity for the nation to lead the way in growing the Bitcoin economy and shed the archaic, feudalistic monetary system we are currently enslaved under. However, since you work directly for the oligarch money manipulators themselevs, you are clearly and disastrously unable to see things in a more productive and beneficial way.

Second, as I highlighted earlier this year, Eric Schmidt had no clue what Bitcoin was when Julian Assange first mentioned it to him in a lengthy interview in 2011. The initial exchange went as follows:

Assange: On the publishing end, the magnet links and so on are starting to come up. There’s also a very nice little paper that I’ve seen in relation to Bitcoin, that… you know about Bitcoin?

 

Schmidt: No.

 

Assange: Okay, Bitcoin is something that evolved out of the cypherpunks a couple of years ago, and it is an alternative… it is a stateless currency.

So Obama is asking Schmidt for his advice about Bitcoin, when Schmidt had no idea what it was two years after it had been created and released into the wild. One bureaucratic control-freak asking another for advice. What could possibly go wrong?

More from the USA Today article:

The president surely believes his important expertise is in matters of policy, law and political machinations. But he is, too, the chief executive of the U.S. government, with its increasing dependence on digital performance. And, in that area, he seems a near-illiterate, or at least a big boob.

 

An older establishment that still regards technology as a back-office function, or infrastructure issue, or buyable skill set, vs. an emerging native digital establishment that sees technology as an end in itself, serving a customer base with ever-higher technology expectations and standards.

 

It is certainly a pertinent question: If the government can’t run an e-commerce website, how in the world can it process all the data that they are supposedly sweeping up to spy on outlaws and citizens?

 

Non-tech people, no matter their good intentions, can’t do tech, at least never as well as tech people do it. This is something ever-more evident to people steeped in daily digital life, as most Americans are. It is less clear to CEOs, many of whom are somehow still uncertai
n in their digital habits and reflexes.

Let’s just hope these clowns don’t grasp Bitcoin until it’s already way too late…which fortunately it may already be.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6qz4w8pUljw/story01.htm Tyler Durden

The world's first Bitcoin ATM will be ready for use this week at a coffee shop in Vancouver, Canada. Created by Las Vegas based Robocoin, the new ATM in Vancouver will allow users to turn bitcoins directly into Canadian dollars, or turn Canadian dollars into bitcoins. As The Telegraph reports, the ATM first scans the user's palm to ensure security and transfers are limited to CAD$3,000 per day. Until now, the currency existed only on the web but the introduction of these ATMs brings bitcoin-as-cash usage closer.

 

The Bitcoin ATM Promo…

 

The Bitcoin ATM in action…

 

Via CBC,

Bitcoiniacs says it has ordered five Bitcoin kiosks from a Las Vegas-based company called RoboCoin… and will be rolled out starting this week in Vancouver…

 

Four more kiosks will arrive in December and although their locations are not yet certain, Bitcoiniacs says it's eyeing major Canadian cities such as Toronto, Montreal, Calgary and Ottawa

 

"Basically, it just make it easier for people to buy and sell Bitcoins and hopefully will drive the adoption of Bitcoin, and make it more accessible for people," says Mitchell Demeter, the 27-year-old owner of Bitcoiniacs.

 

…

 

Currently, acquiring Bitcoins is often done through an exchange, an arduous process that requires users to jump through several hoops, including linking their bank account to the exchange and sending in paperwork to verify their identity.

 

…

 

The RoboCoin kiosks are expected to make the process of buying and selling Bitcoins much easier says Jordan Kelley, the company's chief executive.

 

"Our goal is to make Bitcoin truly grandma-friendly," says Kelley.

 

…

 

Using a kiosk means you don't have to wait to verify your account on an exchange or hand cash to a stranger, says Kelley. It also makes Bitcoins more accessible to people by adding an element of legitimacy and increases liquidity in the market.

 

…

 

RoboCoin plans to ship out 10 to 15 kiosks to customers before the end of the year. The first one will go to Bitcoiniacs, says Kelley.

 

Demeter says many Bitcoin startups are gravitating to Canada because the Financial Transactions and Reports Analysis Centre of Canada — also known as FINTRAC — aren't as strict as regulators in the U.S.

 

"It's a lot more open up here, that's for sure," says Demeter.

 

Those last two paragraphs/comments are especially notable in light of President Obama asking Eric Schmidt if "Bitcoin is anything he has to worry about?"

 

Via Mike Krieger of Liberty Blitzkrieg blog,

Here’s a story recently related to me by a guest at a White House dinner, which included Google’s Eric Schmidt: The president, whose most important job is surely to protect the integrity of the monetary system, smugly asked Schmidt if Bitcoin, one of many growing challenges to currency hegemony, was anything he had to worry about.

 

– From a USA Today article titled: How CEOs are Clueless About Technology

If the above is accurate (and I have no reason to suspect it isn’t), it is priceless information on so many levels. First of all, rather than ask about Bitcoin in an inquisitive manner free of prejudice as a enlightened leader surely would, Obama is merely primatively wondering if he needs to “worry about it.”

Actually Barry, if you had any sense and foresight whatsoever you would be looking at it as a great opportunity. An opportunity for the nation to lead the way in growing the Bitcoin economy and shed the archaic, feudalistic monetary system we are currently enslaved under. However, since you work directly for the oligarch money manipulators themselevs, you are clearly and disastrously unable to see things in a more productive and beneficial way.

Second, as I highlighted earlier this year, Eric Schmidt had no clue what Bitcoin was when Julian Assange first mentioned it to him in a lengthy interview in 2011. The initial exchange went as follows:

Assange: On the publishing end, the magnet links and so on are starting to come up. There’s also a very nice little paper that I’ve seen in relation to Bitcoin, that… you know about Bitcoin?

 

Schmidt: No.

 

Assange: Okay, Bitcoin is something that evolved out of the cypherpunks a couple of years ago, and it is an alternative… it is a stateless currency.

So Obama is asking Schmidt for his advice about Bitcoin, when Schmidt had no idea what it was two years after it had been created and released into the wild. One bureaucratic control-freak asking another for advice. What could possibly go wrong?

More from the USA Today article:

The president surely believes his important expertise is in matters of policy, law and political machinations. But he is, too, the chief executive of the U.S. government, with its increasing dependence on digital performance. And, in that area, he seems a near-illiterate, or at least a big boob.

 

An older establishment that still regards technology as a back-office function, or infrastructure issue, or buyable skill set, vs. an emerging native digital establishment that sees technology as an end in itself, serving a customer base with ever-higher technology expectations and standards.

 

It is certainly a pertinent question: If the government can’t run an e-commerce website, how in the world can it process all the data that they are supposedly sweeping up to spy on outlaws and citizens?

 

Non-tech people, no matter their good intentions, can’t do tech, at least never as well as tech people do it. This is something ever-more evident to people steeped in daily digital life, as most Americans are. It is less clear to CEOs, many of whom are somehow still uncertain in their digital habits and reflexes.

Let’s just hope these clowns don’t grasp Bitcoin until it’s already way too late…which fortunately it may already be.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6qz4w8pUljw/story01.htm Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs?  Did you know that 1.2 million public school students in the U.S. are currently homeless?  Anyone that uses the term "economic recovery" to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either "poor" or "low income" at this point.  Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse. 

The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a "Robin Hood mentality" that could cause a tremendous amount of social chaos in the years ahead.  Anger at the "haves" in America continues to rise at a very alarming pace, and the "have nots" are becoming increasingly desperate.  At some point all of this anger is going to boil over, and you won't want to be anywhere around major population centers when that happens. 

Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding…

1. What can you say about a nation that has more people getting handouts from the federal government than working full-time?  According to the latest numbers from the U.S. Census Bureau, the number of people receiving means-tested welfare benefits is greater than the number of full-time workers in the United States.

2. New numbers have just been released, and they show that the number of public school students in this country that are homeless is at an all-time record high.  It is hard to believe, but right now 1.2 million students that attend public schools in America are homeless.  That number has risen by 72 percent since the start of the last recession.

3. When I was growing up, it seemed like almost everyone was from a middle class home.  But now that has all changed.  One recent study discovered that nearly half of all public students in the United States come from low income homes.

4. How can anyone deny that we are a socialist nation when half the people are getting money from the federal government each month?  According to the most recent numbers from the U.S. Census Bureau, 49.2 percent of all Americans are receiving benefits from at least one government program.

5. Signs of increasing poverty are even showing up in the wealthiest areas of the nation.  According to the New York Post, New York subways are being "overrun with homeless".

6. According to the U.S. Census Bureau, approximately one out of every six Americans is now living in poverty.  The number of Americans living in poverty is now at a level not seen since the 1960s.

7. The gap between the rich and the poor in the United States is at an all-time record high.  The wealthy may not consider this to be much of a problem, but those at the other end of the spectrum are very aware of this.

8. The "working poor" is one of the fastest growing segments of the U.S. population.  At this point, approximately one out of every four part-time workers in America is living below the poverty line.

9. According to numbers provided by Wal-Mart, more than half of their hourly workers make less than $25,000 a year.

10. A recent Businessweek article mentioned a study that discovered that 300 employees at one Wal-Mart in Wisconsin receive a combined total of nearly a million dollars a year in public assistance…

“A decent wage is their demand—a livable wage, of all things,” said Representative George Miller (D-Calif.). The problem with companies like Wal-Mart is their “unwillingness, not their inability, to pay that wage,” he said. “They hand off the difference to taxpayers.” Miller was referring to a congressional report (PDF) released in May that calculated how much Walmart workers rely on public assistance. The study found that the 300 employees at one Supercenter in Wisconsin required some $900,000 worth of public assistance a year.

11. The stock market may be doing great (for the moment), but incomes for average Americans continue to decline.  In fact, median household income in the United States has fallen for five years in a row.

12. The quality of the jobs in America has been steadily dropping for years.  At this point, one out of every four American workers has a job that pays $10 an hour or less.

13. According to a Gallup poll that was recently released, 20.0% of all Americans did not have enough money to buy food that they or their families needed at some point over the past year.  That is just under the record of 20.4% that was set back in November 2008.

14. Young adults are particularly feeling the sting of poverty these days.  American families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.

15. As I wrote about a few weeks ago, one out of every five households in the United States is on food stamps.  Back in the 1970s, about one out of every 50 Americans was on food stamps.

16. The number of Americans on food stamps now exceeds the entire population of Spain.

17. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of "Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming."

18. We are told that we live in the "wealthiest nation" on the planet, and yet more than one out of every four children in the United States is enrolled in the food stamp program.

19. The average food stamp benefit breaks down to approximately $4 per person per day.

20. It is being projected that approximately 50 percent of all U.S. children will be on food stamps before they reach the age of 18.

21. Today, approximately 17 million children in the United States are facing food insecurity.  In other words, that means that "one in four children in the country is living without consistent access to enough nutritious food to live a healthy life."

22. It may be hard to believe, but approximately 57 percent of all children in the United States are currently living in homes that are considered to be either "low income" or impoverished.

23. The number of children living on $2.00 a day or less in the United States has grown to 2.8 million.  That number has increased by 130 percent since 1996.

24. In Miami, 45 percent of all children are living in poverty.

25. In Cleveland, more than 50 percent of all children are living in poverty.

26. According to a recently released report, 60 percent of all children in the city of Detroit are living in poverty.

27. According to a Feeding America hunger study, more than 37 million Americans are now being served by food pantries and soup kitchens.

28. The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.

29. It has been reported that 4 out of every 5 adults in the United States "struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives".

These poverty numbers keep getting worse year after year no matter what our politicians do.

So is there anyone out there that would still like to argue that we are in an "economic recovery"?

And as I mentioned above, the "have nots" are becoming increasingly angry at the "haves".  For example, just check out the following excerpt from a recent New York Post article…

The maniac who butchered a Brooklyn mom and her four young kids confessed that he did it because he was jealous of their way of life, a police source told The Post on Sunday.

“The family had too much. Their income (and) lifestyle was better than his,” the source said.

The bloody suspect was caught holding the kitchen knife he used during the Saturday night rampage inside the Sunset Park apartment where he had been staying with the victims, the source added.

Sadly, this was not an isolated incident.  All over the western world, a "Robin Hood mentality" is growing.  This is something that I am so concerned about that I made it a big part of my new book.  At this point, even wealthy Hollywood-types such as actor Russell Brand are calling for a socialist-style "revolution" and a "massive redistribution of wealth".

Perhaps Brand does not understand th
at what he is calling for would mean redistributing most of his own wealth away from him.

When the next major wave of the economic collapse strikes, I fear that all of this anger and frustration that are growing among the poor will boil over in some very frightening ways.  I believe that we will see a huge spike in crime and that we will eventually see communities all over America looted and burning.

But I am not the only one that is thinking along these lines.  A new National Geographic Channel movie entitled "American Blackout" attempts to portray the social chaos that could erupt in the event of an extended national power failure…

American Blackout, National Geographic Channel’s two-hour, edge-of-your-seat movie event imagines the story of a national power failure in the United States caused by a cyberattack — told in real time, over 10 days, by those who kept filming on cameras and phones. You’ll learn what it means to be absolutely powerless.

You can view a clip of the film that was made available by NatGeo for the SHTFplan.com community right here.

What would you do if something like that happened to you?

How would you handle desperate, hungry people at your fence asking for food?

And what if those people were armed and were not "asking nicely" for your food?

Don't ignore what is happening in America right now.  It is setting the stage for some very chaotic times.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VnBGLr78imw/story01.htm Tyler Durden

“Obama built that”…  And now good luck tearing it down and its several hundred million lines of code, and rebuilding it from scratch.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mTpVJP6vVc4/story01.htm Tyler Durden

“Obama built that”…  And now good luck tearing it down and its several hundred million lines of code, and rebuilding it from scratch.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mTpVJP6vVc4/story01.htm Tyler Durden

On the back of dismal data this morning merely compounding the belief that whatever happens, there will be no Taper anytime soon (and record high physical premiums over spot as Indian demand surges), gold prices broke back above $1360 this morning to five-week highs. Of course, that ‘rise’ was very quickly squelched as stocks POMO’d higher from the US open; but, as Citi’s FX technicals group notes, the break of $1343 points to a test of $1430 and a bias to testing back above the $1522-32 region.

 

 

Via Citi,

Gold and Silver should continue pushing higher

– Gold is breaking through resistance around $1,343 and should move towards the $1,430. We continue to be of the bias that Gold is setting up for a multi-year rally and a break above the $1,522-$1,532 area would solidify this view.

– In periods in which Gold does well, Silver actually outperforms. It is already setting up a double bottom which targets $24.40 and an overshoot of that area could take Silver towards $26 in the near term.

Gold is pushing higher

Gold is pushing higher through the 55 day moving average and we continue to expect higher levels in both the near and long-term. The next resistance level to watch in the short-term is the $1,430 area, where the 200 day moving average converges with the August high.

Through there the $1,522-$1,533 area could provide further resistance. This area held well as support in 2011 and 2012 and the break below this year led to accelerated losses. A break higher through that area would suggest to us that the correction for this year is over and that the long-term uptrend has resume (as we have previously articulated, we remain of the bias that Gold will continue to see gains in the coming years and maintain a long-term target of $3,500 – this is further supported by the idea of no Fed tapering for the foreseeable future)

Silver outperforms when Gold moves higher

We have seen over the last decade that in the periods where Gold rallied, Silver actually outperformed (red arrows). During periods where Gold prices declined, Silver did worse than Gold (green arrows). If we are in fact seeing the beginning of a long-term Gold rally, we would expect Silver to once again outperform.

Levels to watch on Silver

Silver is now through the neckline of a double bottom which targets $24.40, in line with resistance around the $24.24-$25.00 area, where the 200 day moving average converges with the late April and August highs.

Through there $26 is an important resistance area (lows from late 2011 and 2012) and a move through there suggests much higher levels for Silver going forward.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z2vwqubTFFA/story01.htm Tyler Durden

On the back of dismal data this morning merely compounding the belief that whatever happens, there will be no Taper anytime soon (and record high physical premiums over spot as Indian demand surges), gold prices broke back above $1360 this morning to five-week highs. Of course, that ‘rise’ was very quickly squelched as stocks POMO’d higher from the US open; but, as Citi’s FX technicals group notes, the break of $1343 points to a test of $1430 and a bias to testing back above the $1522-32 region.

 

 

Via Citi,

Gold and Silver should continue pushing higher

– Gold is breaking through resistance around $1,343 and should move towards the $1,430. We continue to be of the bias that Gold is setting up for a multi-year rally and a break above the $1,522-$1,532 area would solidify this view.

– In periods in which Gold does well, Silver actually outperforms. It is already setting up a double bottom which targets $24.40 and an overshoot of that area could take Silver towards $26 in the near term.

Gold is pushing higher

Gold is pushing higher through the 55 day moving average and we continue to expect higher levels in both the near and long-term. The next resistance level to watch in the short-term is the $1,430 area, where the 200 day moving average converges with the August high.

Through there the $1,522-$1,533 area could provide further resistance. This area held well as support in 2011 and 2012 and the break below this year led to accelerated losses. A break higher through that area would suggest to us that the correction for this year is over and that the long-term uptrend has resume (as we have previously articulated, we remain of the bias that Gold will continue to see gains in the coming years and maintain a long-term target of $3,500 – this is further supported by the idea of no Fed tapering for the foreseeable future)

Silver outperforms when Gold moves higher

We have seen over the last decade that in the periods where Gold rallied, Silver actually outperformed (red arrows). During periods where Gold prices declined, Silver did worse than Gold (green arrows). If we are in fact seeing the beginning of a long-term Gold rally, we would expect Silver to once again outperform.

Levels to watch on Silver

Silver is now through the neckline of a double bottom which targets $24.40, in line with resistance around the $24.24-$25.00 area, where the 200 day moving average converges with the late April and August highs.

Through there $26 is an important resistance area (lows from late 2011 and 2012) and a move through there suggests much higher levels for Silver going forward.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z2vwqubTFFA/story01.htm Tyler Durden

Submitted by Lance Roberts of STA Wealth Management,

Gone are the days where people looked towards next year when building their portfolios, or five years down the road as they approach retirement. Now from a combination of apprehensiveness and shear paranoia in our unstable markets, investors are looking only as far as they can throw for their personal investment decisions.

In more than 30 years of money management, I've never seen such a rapid change in the way people make financial plans. Instead of saving for the future, many are opting for fast gains — yet at the same time they want low risk. Others are playing it completely safe. In fact, in a quarterly poll my firm took, 83% of respondents said they were holding on to their cash versus investing in the stock market.

Why are investors so hesitant to invest when markets are at record highs?

It should come as no surprise that the 2008 financial crisis is still a major factor. As the banks were crumbling, the housing market caved and unemployment rocketed, investors' confidence sunk.

But in the years that followed, we saw a huge amount of government intervention in the form of various stimulus packages. While some may argue that this stimulus, including the Federal Reserve's quantitative easing, saved our economy, this injection of billions of dollars each month to buy government bonds has created a dangerous façade of market strength.

This is because although we get a visible boost from QE, these upward swings are merely a temporary high. The public has taken note of the Fed's parlor trick. An overwhelming 93% of participants in our survey wanted to end QE and let the markets readjust without government support. And we have every reason to worry. By the Fed thinking they can own an entire Treasury market, it is funding a new asset bubble that is at risk of bursting.

What should the Fed be doing to create jobs and economic recovery?

The Fed's recent decision not to slow its bond purchasing surprised everyone. This move, or lack thereof, only underscores the Fed's uncertainty about the U.S. economic recovery, making already uneasy investors think twice about throwing their hat — or their money — into the ring. And the fact that in a post-financial crisis world, investors are viewing the U.S. economic climate with a skeptical eye makes it all the more important for financial advisers to adapt to a different economic environment while also managing client psyche.

At STA Wealth Management, we've had to accommodate these new lines of thinking by reinventing our investment philosophy. Many of the risk management tools are no longer as useful. For example, in the past we could use the market's long-term moving averages to determine support and resistance levels. When these levels were broken it was historically indicative of a change in market trend. However, the impact of monetary interventions has rendered many of these longer-term tools ineffective.

The same applies to fundamental and inter-market analysis. Correlation between asset classes is high and stocks with low share-floats and poor fundamentals outperform fundamentally sound investments. While we still make fundamentally sound investment decisions, our analysis has had to change to be more accommodative to the increased price volatility of the markets.

The core fundamentals have changed because of central bank intervention, high-frequency trading and artificially suppressed interest rates. This is coupled with a large, and growing, amount of distrust with Washington. Our STA Wealth Management poll found that 46% of respondents felt that partisan politics were stalling U.S. economic growth.

The public is tired of not seeing solid movement to help our economy recovery in the wake of 2008. In the past five years, all we have been able to sustain is a stagnant unemployment rate and an influx of stimulus packages that are holding our economy together by the bootstraps instead of enabling it to grow on its own.

While we try to find that path to recovery among failed policies, investors are going to continue to gauge their risks and develop a new type of strategy to adapt to an extremely unclear future.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rkwqyE175zw/story01.htm Tyler Durden