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Edited by Alfred Adask
Friday, March 4, AD 2016
Between Friday, February 26AD 2016 and 
Friday, March 4, AD 2016, the bid prices for:

Gold rose 3.0 % from $1,222.30 to $1,259.10

Silver rose 5.7 % from $14.67 to $15.51

Platinum rose 7.1 % from $913 to $978

Palladium rose15.2 % from $481 to $554

Crude Oil rose 10.4 % from $32.89 to $36.31

US Dollar Index fell 0.9 % from 98.10 to 97.25

DJIA rose 2.2 % from 16,639.97 to 17,006.77

NASDAQ rose 2.8 % from 4,590.47 to 4,717.02

NYSE rose 3.6 % from 9,619.80 to 9,968.41


"Only buy something that you'd be perfectly happy to hold
if the market shut down for 10 years." --Warren Buffett 

"If the markets shut down for 10 years, what investment would you dare to hold-- 
other than gold"? --Alfred Adask

Republican Leaders Prefer Hillary to Trump

by Alfred Adask

The day before the Super Tuesday primary elections, The Washington Times published an article entitled "Trump eyes Super Tuesday landslide as Republicans beg voters to back away". According to that article:

"The GOP presidential field mounted a last-ditch effort to derail Donald Trump ahead of Super Tuesday's slate of primaries.

"Stunned by polls showing Mr. Trump easily leading in most of the dozen states that vote Tuesday-and a new poll showing him approaching majority support among Republicans nationwide-Republican leaders, strategists and candidates pleaded with voters to back away from Mr. Trump."

Rank and file Republicans-ordinary Americans-have pushed Trump to the top of the polls. Republican leaders, however, are trying to derail Trump's candidacy.

This controversy within the Republican Party is more than a difference of political opinions. This schism is evidence that the Republican leaders are trying to thwart and disregard the will of the Republican rank-and-file.

* This isn't the only report of Republican leaders opposing (some say, "betraying") rank-and-file Republicans. published an article entitled, "The GOP Is On The Verge Of A Meltdown: Senior Republicans Threaten To Vote For Hillary."

Thus, elements of the Republican leaders aren't only discouraging Republican voters from supporting Trump, they're even warning they will personally vote for Hillary Clinton-a Democrat!-before they vote for the Republican Trump.

This conflict is particularly interesting in light of the Republican leadership's demand late last year that Mr. Trump pledge to support whoever is nominated by the Republican Party and not start a third-party candidacy if he's not nominated by the Republican Party. Mr. Trump agreed to support whoever the Republican Party nominates.

Unfortunately, the Republican leadership made no similar pledge. If Trump wins the Republican nomination, Republican leaders recognize no obligation to support Trump in the actual election.

You'd think that the Republican Party leaders would be obligated to support the Republican Party's candidate if only in the name of party loyalty.

However, if you thought that, apparently, you'd be wrong.

All of which raises a very interesting question: If Republican leaders aren't bound by party loyalty to support whoever the Republican Party nominates, to whom are those Republican leaders really loyal?

* The willingness of some Republican leaders to turn their backs on Trump is evidence that these Republican leaders' loyalty is not to the Republican Party, but may be to a single "establishment" that includes both Republican and Democrat leaders-but does not really include the ordinary, rank-and-file people who identify with either political party.

Trump is the #1 contender for the Republican nomination because the ordinary people of the Republican Party want him to be their candidate. By rejecting Trump, Republican "leaders" are essentially saying "screw you" to rank and file Republicans who've pushed Trump to the top of the polls. These Republican "leaders" don't lead, and they refuse to follow and they won't serve the will of the rank-and-file majority. Apparently, these leaders' only objective is to control rank-and-file Republican voters and lead them into neo-fascism and/or the New World Order.

* I have no idea how many Republican leaders are actually working against the Republican Party's current determination to nominate Donald Trump. Perhaps there's only a handful of such disloyal Republican "leaders". But if there's only a few "bad apples" in the Republican Party leadership, why don't the purported majority of leaders who are "good apples" run the bad ones out of the Party?

Whatever the answer that question may be, the perception of widespread Republican leader disloyalty to the Republican Party is exactly why so many people are sick of the Republican Party. Republican leaders exhibit a persistent hypocrisy and pattern of betrayals of the GOP's rank-and-file members.

The Republican leadership betrays rank-and-file Republicans by routinely cooperating with Obama. They betray the rank-and-file by working against Trump and perhaps even for the Democrat candidate, Hillary. These "leaders" are betting that the rank-and-file will accept these betrayals because there's no other viable political option other than to vote for Democrats. Having no viable, third political option, the rank-and-file Republicans can either put up with the Republican leaders' decisions or shut up.

But in that perceived treachery, these Republican "leaders"-no matter how few they may be-only kindle a smoldering determination in the hearts of ordinary Republicans to nominate Donald Trump, no matter what.

But, Trump's nomination isn't really the issue. The issue is Who's really running the Republican Party? The rank-and-file majority? Or the minority of Republican leaders?

Trump isn't being nominated by ordinary Republicans to defeat Hillary. He's being nominated to defeat the treachery found in the Republican Party's leadership.

* Republican leadership's treachery isn't new. In A.D. 2008, before the Democrat nomination for president was decided, an attorney associated with Hillary Clinton uncovered evidence that Barack Obama was not born in the U.S. and was therefore ineligible to be elected president. To this day, the question of Obama's eligibility to be president has not been resolved. The one birth certificate Mr. Obama submitted as proof of his U.S. birth turned out to be photo-shopped and therefore fraudulent.

I'm not going to argue here whether Obama was, or was not, eligible to be President.

However, I will argue that the issue of Obama's eligibility remains unresolved and has therefore been valid for the past eight years.

I'll also argue that eligibility issue could've played a decisive role in determining who won the Democrat nomination in A.D. 2008 and who won both the A.D. 2008 and A.D. 2012 presidential elections.

I'll argue that it's odd to the point of being almost inconceivable that Hillary Clinton-who probably wanted (and wants) to be President more than any other living person-and also every PAC supporting her nomination refused to raise the issue of Obama's eligibility during the 2008 Democrat primaries.

Hillary's failure to raise that issue probably cost her the 2008 Democrat nomination. That failure told me that someone or some institution more powerful than Hillary decided that Obama should win the Democrat nomination-and Hillary accepted that decision without public complaint. Who th' helk is big enough to shut that woman up?

Worse, in A.D. 2008, evidence of Obama's ineligibility was readily available to all of the Republican Party's candidates for President-and not one of them raised that issue in public. Not one of the PAC's associated with the Republican Party or conservatism raised the eligibility issue. Even John McCain and Sarah Palin, the Republican nominees for President and Vice President, inexplicably failed to raise the eligibility issue.

I believe that issue could've caused a 5% swing in voters from Democrat/Obama to Republican/McCain. Maybe more. That issue could've defeated Obama and elected McCain. And yet, not one Republican or conservative PAC raised that issue prior to the '08 election.

I was shocked then. I remain shocked today.

By refusing to publicly raise the eligibility issue, the Republican Party's leaders apparently chose to lose the election.

* I've never believed that Hillary's and the Republican Party's failure to raise the eligibility issue was accidental. The silence of both parties concerning Obama's eligibility demonstrated to me that both major political parties are subservient to some single, higher "power". Neither party is independent. Both appear to be controlled by a "higher power".

The identity of the person or institution that seemingly pulled the strings of both political parties is unknown to me. I can only infer the existence of that "power" much like astronomers can infer the existence of small, unseen planets from seemingly inexplicable, gravitational effects on other planets.

Following that A.D. 2008 inference to this year's election, it appears to me that whoever wielded the power to select Obama in A.D. 2008 is wielding that same power today to defeat the Trump nomination. Trump, it seems, will not "just follow orders" from the "power".

In order to defeat Trump, Mitt Romney-a time-tested loser-has reportedly entered into the race for the Republican nomination for President. There's little doubt that Romney's candidacy is intended to derail the Trump nomination. There's little hope that Romney could actually be elected next November. But if Romney could win a few primaries and siphon off enough support from Trump to prevent Trump from winning the Republican nomination on the first round of balloting at the Republican convention, there'd be a second round of balloting that would free some or all delegates to vote for anyone they liked and thereby defeat Trump's nomination-and probably guarantee Hillary's election.

Do Republican leaders mind if the Republican Party loses in November? Apparently not.

Do Republican leaders mind that, by working openly to defeat their own party's frontrunner, they'll probably throw the election to Hillary Clinton? Apparently not.

The apparent willingness of Republican Party leaders to throw the election to Hillary in order to defeat Trump will only increase many people's determination to support Trump as well as view the Republican leadership with contempt. (Those leaders really are "Rino's"-Republicans In Name Only.)

* I can't yet prove my argument or inferences, but the evidence still seems sufficient to suppose that the Republican Party's leadership has been captured by an external "power" that intends to control the Republican Party's rank-and-file, rather than serve them.

As I've said since A.D. 2008, what this country needs is a viable third political party that's not subservient to any other political force, movement or power. The Republican Party's leaders "Jihad" against Trump supports my contention.

If Republican Party leaders won't support the rank-and-file Republicans' choice for President, then either those leaders must be ejected from the Republican Party, or the Republican rank-and-file must leave that party in search of a viable third party that will support their interests and objectives.

The Problems with NIRP

by Alfred Adask

"I now believe negative interest rates for the entire world is inevitable; and with them, the imposition of increasingly draconian capital controls-from FATCA and FBAR-like reporting requirements; to limitations on withdrawals and capital exportation; and ultimately, "cashless societies" in which investors are forced to hold savings as digital deposits at insolvent banks-In which, arbitrary government decrees like negative interest rates-will be used to not only confiscate wealth, but destroy all remaining remnants of capitalism."

A dire warning, indeed-but what, exactly, is "NIRP"?

* Bill Bonner described NIRP in a recent article entitled "Trifecta of Absurdity":

"In Japan two-thirds of government debt carries a negative yield; savers pay a bankrupt government for the privilege of lending it fictitious money.

"NIRP is an absurdity trifecta.

"First, the money is phony.

"Second, the borrower is insolvent.

"Third, the interest rate is less than nothing.

"Central banks are doing this to drive bank lending rates into negative territory. Not only will bondholders pay to lend their currencyto governments but also anyone with a bank deposit will be charged to save money.

"Sweden, Denmark, Switzerland, the eurozone, and Japan have pushed their key lending rates into negative territory. The Federal Reserve is considering following suit and pushing its key rate into negative territory."

The Federal Reserve has implemented ZIRP (Zero Interest Rate Policy) but has not yet implemented NIRP (Negative Interest Rate Policy).

* Reuters ("BOJ launches negative rates, already dubbed a failure by markets") described NIRP:

"The Bank of Japan's negative interest rates came into effect on January 29th in a radical plan already deemed a failure by financial markets, highlighting Tokyo's lack of options to spur growth as global markets sputter."

To say that that the central bank of Japan or of any other country, has a "lack of options to spur growth" is a lie. It's only true to say that Japan has a "lack of options" within the limits and premises of Keynesian economics and of the debt-based monetary system.

Japan, the U.S., EU and China still have other "options" outside of Keynesian theory and outside of our debt-based monetary system-if they choose to use them. For example, if Japan really wanted to stimulate its economy, it could abandon Keynesian theory and debt-based currency, and restore an asset-based monetary system founded on physical gold and silver.

But central bankers can't abandon Keynesian economics or the debt-based monetary system without also abandoning their primary power and foundation for the New World Order: the power to "spin" fiat currency out of thin air.

In a debt-based monetary system, it's easy to create fiat currency from nothing. In an asset-based (gold/silver) monetary system, no such "currency creation" is possible-you either work, earn and possess the physical gold or you don't. Unlike paper or digital currency, physical gold can't be "spun" into existence.

Without Keynesian economics and debt-based currency, the central banks would cease to exist or at least cease to wield any significant power.

The current "limits" in the central bankers' powers to stimulate the world's economies aren't based on reality. Instead, those "limits" are based on the central bankers' choice to advocate and implement Keynesian economics and a debt-based monetary system. If they would choose to implement classical economics and an asset-based monetary system, they'd almost certainly have a number of "new" options to stimulate the economy.

* Almost everyone knows that QE (Quantitative Easing) and ZIRP (Zero Interest Rate Policy) have failed to stimulate the world's economies. Central Banks are therefore trying NIRP (Negative Interest Rate Policy) to see if that might work.

What's NIRP? It's ZIRP on steroids.

If ZIRP (an interest rate of, or near, zero) won't persuade the public to borrow, spend and stimulate the economy, then the central bankers will try a negative interest rate of, say, -2%. And if a negative interest rate of -2% won't move the public to borrow, spend and stimulate the economy, then maybe they'll try a negative interest rate of -5%, or -10% of maybe even -50%.

It's all insane, of course, but the central banks will go as far as they must not only to somehow stimulate the economy but also (and more importantly) to maintain the illusion that Keynesian theory and debt-based currency are valid, rational concepts.

So far, central banks won't admit or even consider the possibility that the fundamental premises of Keynesian economics and of a debt-based monetary (which have empowered the central banks) are irrational. Instead, they're pursuing the madness of their economic principles to their logical extreme-which will be an economic calamity.

* The central banks' real problem is that the people in nation after nation will no longer allow themselves to be conned into going deeper into debt. Despite the central banks' most enticing offers ("free currency" and "we'll pay you to borrow from us"), the public won't borrow enough and spend enough to stimulate the economy. Rather than offering the public ever-bigger doses of negative interest rates and "free" currency, the central banks should be seeking to learn WHY the public no longer bites at the central banks' "bait".

Something has happened to the people of Japan, EU and U.S. that discourages them from borrowing to the same extent as they did in the 1990s. More than likely, the Great Recession has taught the dangers of debt to enough people to prevent more of the "irrational exuberance" (easy credit, more debt) that Alan Greenspan warned of in A.D. 1996.

There is a solution to the economic problem of people refusing to borrow and then spend enough to stimulate the economy. But, that solution will be found only by going back into the economic fundamentals of Keynesian economics and debt-based monetary systems and then finding, admitting and eliminating the false (and even fraudulent) premises on which those concepts are based.

* When the BoJ first implemented NIRP, "senior BoJ officials expected only a minor impact on Japanese banks, but their stock prices plunged, contributing to a global market sell-off."

Implication: Results that are both significant ("global") and unexpected imply that the BoJ doesn't know what it's doing. They're experimenting with NIRP. The people of Japan (and of the world) are the experiment's guinea pigs. More, the fact that they're now experimenting with NIRP in hope of finding a cure for their economy's depression is evidence that they have no other reliable solution to the problem within the limits of Keynesian economics and debt-based currency.

Once you accept the premises of Keynesian economics and debt-based currency as rational and true, the logic of those premises will inevitably drive you to accept NIRP as reasonable. But NIRP doesn't work.

No matter. NIRP is being tried anyway since QE and ZIRP don't work either-and all for the very same reason: the fundamental premises of Keynesian economics and debt-based currency are false and arguably fraudulent. Even so, central bankers can't admit that those premises are false without losing the foundation for the central bank's power: creating fiat currency from nothing.

Within the limits of Keynesian economics and debt-based currency, the BoJ (like other central banks) is out of Schlitz. Within those limits, the central banks have no weapons or strategies able to alleviate Japan's 20-plus years of economic recession and/or depression. Within those limits, there'll be no relief for the U.S. economic recession/depression.

Realistically, what's left to do besides face the truth, let the Japanese economy implode and then, after the dust settles, rebuild their economy on a financially-solid foundation like classical economics and an asset-based monetary system?

But central banks won't return to classical economics and/or asset-based currency since doing so would deprive them of their only great power (spinning currency out of nothing) and leave them impotent, irrelevant and dead.

Saturday, February 13, 2016

Weekly Commentary: The Global Bubble

Doug Noland is not a financial advisor nor is he providing investment services. This blog does not provide investment advice and Doug Noland's comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. The Credit Bubble Bulletins are copyrighted. Doug's writings can be reproduced and retransmitted so long as a link to his blog is provided.

Credit is not innately good or bad. Simplistically, productive Credit is constructive, while non-productive Credit is inevitably problematic. This crucial distinction tends to be masked throughout the boom period. Worse yet, a prolonged boom in "productive" Credit - surely fueled by some type of underlying monetary disorder - can prove particularly hazardous (to finance and the real economy).

Fundamentally, Credit is unstable. It is self-reinforcing and prone to excess. Credit Bubbles foment destabilizing price distortions, economic maladjustment, wealth redistribution and financial and economic vulnerability. Only through "activist" government intervention and manipulation will protracted Bubbles reach the point of precarious systemic fragility. Government/central bank monetary issuance coupled with market manipulations and liquidity backstops negates the self-adjusting processes that would typically work to restrain Credit and other financial excess (and shorten the Credit cycle).

A multi-decade experiment in unfettered "money" and Credit has encompassed the world. Unique in history, the global financial "system" has operated with essentially no limitations to either the quantity or quality of Credit instruments issued. Over decades this has nurtured unprecedented Credit excess and attendant economic imbalances on a global scale. This historic experiment climaxed with a seven-year period of massive ($12 TN) global central bank "money" creation and market liquidity injections. It is central to my thesis that this experiment has failed and the unwind has commenced.

The U.S. repudiation of the gold standard in 1971 was a critical development. The seventies oil shocks, "stagflation" and the Latin American debt debacle were instrumental. Yet I view the Greenspan Fed's reaction to the 1987 stock market crash as the defining genesis of today's fateful global Credit Bubble.

The Fed's explicit assurances of marketplace liquidity came at a critical juncture for the evolution to market-based finance. Declining bond yields by 1987 had helped spur rapid expansion in corporate bonds, GSE securitizations, commercial paper, securities financing (i.e. "repos," Fed funds, funding corps) and derivative trading (i.e. "portfolio insurance"). Post-crash accommodation ensured that the Federal Reserve looked the other way as Bubbles proliferated in junk bonds, leveraged buyouts and commercial and residential real estate on both coasts.

It's instructive to note that period's momentous financial innovation/expansion.  In the 10-year period 1986 to 1995, total Debt Securities (from Fed Z.1 report) surged $7.097 TN, or 159%, to $11.574 TN. For comparison, bank Loans increased 73% ($3.309 TN) to $7.839 TN. Leading the charge in marketable debt issuance, GSE Securities (with their implied government backing) surged 283% ($1.777 TN) to $2.406 TN. Corporate Bonds jumped 254% ($2.213 TN) to $3.085 TN. Outstanding Asset-Backed Securities inflated an incredible 1,692% ($626bn) to $663 billion.

The other side of issuance boom was a revolution in the structure of financial asset management. Mutual Fund assets inflated 653% ($1.607 TN) during the '86-'95 period to $1.853 TN. Money Market Fund assets surged 206% ($499bn) to $741 billion. Security Broker/Dealer assets jumped 288% ($860bn) to $1.159 TN. Wall Street Funding Corps rose 195% ($242bn) to $366 billion, and Fed Funds and Security Repurchase Agreements increased 171% ($802bn) to $1.271 TN. Certainly also worth noting, over this period the global derivatives market expanded from almost nonexistence to about $64 TN.

Market-based Credit is highly unstable. Predictably, the evolution to market finance created persistent instability and, over time, acute fragilities. The early-nineties saw the bursting of Bubbles in junk bonds, M&A and commercial real estate. The neglected S&L crisis festered from a few billion-dollar problem to a $300 billion debacle. By 1991, the U.S. banking system was significantly impaired.

There was a school of thought that S&L losses were akin to money flushed down the toilet. It had been destroyed and should simply be replaced with new money. "Helicopter money" was not yet reputable - much less fancied. So the Greenspan Fed instead slashed rates, manipulated the yield curve and accommodated the rapid expansion of market-based finance. If not for the '87 bailout, the early-nineties stealth bailout and cultivation of non-bank Credit would not have been necessary.

Spurring market-based Credit - and the financial markets more generally - proved the most powerful monetary policy mechanism ever. The collapse in the Soviet Union couple with the proliferation of new technologies provided powerful impetus to New Paradigm and New Era thinking.

The unfolding historic inflation of "money" and Credit by the world's reserve currency did not come without profound consequences. Massive U.S. Current Account Deficits flooded the world with dollar balances. Meanwhile, the flourishing leveraged speculating community broadened their targets from U.S. debt markets to higher yielding securities around the world.

By 1993, market-based finance and leveraged speculation was gaining momentum globally. Apparently there was no turning back. So it's been serial booms, busts and progressively more audacious policy accommodation ever since. The GSEs bailed out the bond, MBS and derivative markets in 1994, ensuring much more spectacular Bubbles to come. The 1995 Mexican bailout created a backdrop ensuring that fledgling "Asian Tiger" Bubbles inflated precariously. When those Bubbles chaotically imploded in 1997, the perception took hold that the West would never allow Russia to collapse. Such thinking spurred speculative excess in Russian debt and currency derivatives that imploded in September, 1998.

Global Bubble Dynamics had certainly taken deep root by 1998. U.S.-style financial innovation was taking hold throughout Asia and Europe. Financial flows were booming across the markets, and the world's big financial conglomerates were aggressively adopting securitization, speculation and globalization. Moreover, a booming leveraged speculating community, with trades propagating across the globe, ensured increasingly tight linkages between international markets. When Long-Term Capital Management (LTCM) - with egregious leverage along with $2.0 TN of notional derivative exposures around the globe - failed in the fall of 1998, it was a case of top U.S. officials acting as the "committee to save the world."

The Bubble saved back in 1998/99 has inflated uncontrollably and today has the world at the precipice. Historic debt expansion unfolded virtually everywhere, much of it tradable in the marketplace. The global leveraged speculating community has inflated from about $400 billion to $3.0 TN. Global derivatives have exploded to $700 TN. An ETF complex has risen from nothing to more than $3.0 TN.

The LTCM bailout ensured an almost doubling of Nasdaq in 1999, with that Bubble imploding in 2000. I'm not so sure the euro currency would exist in its current form if not for the efforts of "the committee...". Leveraged speculation played an instrumental role in the collapse in Italian and Greek bond yields, a miraculous development that proved pivotal for highly indebted Greece and Italy's inclusion in the euro monetary regime. I also believe that the U.S. Credit Bubble, fueled largely by the GSEs and non-bank Credit creation, played prominently in the huge flows boosting the euro currency. Global demand for euro-based securities created fatefully loose Credit conditions for the likes of Greece, Portugal, Ireland, Italy and Spain.

If not for the "committee to save the world" and the 1998 bailouts, I doubt we would have witnessed the rise of "Helicopter Ben." The '87 stock market crash drove fears of another depression. Depression worries returned with the early-nineties banking crisis, and then again in 1998. When U.S. stock and corporate bond Bubbles burst in 2000-2002, Dr. Bernanke, the foremost expert on the Great Depression, was summoned to the Federal Reserve to provide the theoretical framework for a major reflationary effort.

With Wall Street cheering all the way, the Greenspan/Bernanke Fed collapsed rates and targeted (the fledgling Bubble in) mortgage Credit as the primary mechanism for system reflation. Mortgage Credit doubled in almost six years, in the process inflating home prices, corporate profits, securities prices and incomes. Much more so than the "tech" Bubble, the mortgage finance Bubble became deeply systemic. Unprecedented Current Account Deficits, the weak dollar and enormous speculative flows further inundated the world with finance. As the U.S. Credit Bubble became increasingly global, policymakers around the world remained too (pro-global Bubble) accommodative.

The bursting of the mortgage finance Bubble almost incited global financial collapse. It took concerted central bank intervention, $1.0 TN of Bernanke QE, unprecedented bailouts, zero rates and massive fiscal stimulus to hold catastrophe at bay. Massive monetary stimulus pushed fledgling EM and China Bubbles to historic ("blow-off") extremes. The Chinese instituted a $600 billion stimulus package then proceeded to completely lose control of their financial and economic Bubbles. QE, zero rates and dollar devaluation incited a spectacular Global Reflation Trade that has collapsed spectacularly. Ultra-loose finance on a global basis ensured epic over- and malinvestment throughout the energy and commodity sectors. Virtually free-"money" incited massive over-investment in manufacturing capacity, especially throughout China and Asia. In the U.S. and globally, zero rates and liquidity excess fueled crazy tech and biotech Bubbles 2.0.

Along the way the global government finance Bubble became deeply systemic. Zero rates and QE inflated securities markets and asset prices on an unprecedented scale. Leveraged securities speculation engulfed the entire globe. Derivatives trading became globalized like never before. And each instance of market vulnerability was met with an aggressive concerted central bank response. As the global Bubble succumbed to "blow off" excess, central bankers completely lost control of inflationary processes.

The European Bubble was at the precipice in 2012. If not for Bernanke's QE gambit, I seriously doubt Draghi and Kuroda would have ever succeeded in pushing their massive "money" printing operations through the ECB and BOJ. With the Fed, ECB, BOJ and others moving forward with "whatever it takes" concerted QE, global securities Bubbles morphed into one big play on the global monetary experiment.

It's now been more than three years of absolute monetary disorder. The commodities Bubble went bust, which, in the age of over-liquefied and speculative global markets, worked to spur only greater "blow off" excess throughout global securities markets. The EM Bubble burst, which provoked only greater stimulus measures in China. Chinese reflationary policies incited precarious "blow off" stock and bond market excesses. The timid Fed's failure to begin rate normalization spurred speculative Bubble excess throughout equities, fixed-income and derivative markets.

On an unprecedented global scope, extreme monetary measures fueled financial excess at the expense of real economies. Monetary disorder and Bubble Dynamics ensured highly destabilizing wealth redistribution - within and between nations. Extreme central bank policies spurred leveraged speculation around the globe. Extraordinary devaluation measures from the ECB and BOJ ensured the euro and yen were used aggressively for leveraged "carry trade" speculations. "Carry trade" and currency derivative-related leverage became powerful sources of liquidity driving securities market "blow off" excess - again on a globalized basis. With the global Bubble faltering, risk is now too high to maintain highly leveraged bets.

In the face of faltering energy and commodities, weakening CPI trends, a highly vulnerable global economic backdrop and mounting social and geopolitical tension, highly unstable global securities markets lurched higher. It all became one gargantuan bet on the global central bank experiment with boundless monetary stimulus. Global securities markets diverged from fundamental economic prospects like never before.

In the end, the runaway global Bubble was built chiefly upon confidence in central banking and policymaking more generally. Markets then rather abruptly lost confidence in the ability of Chinese officials to manage their faltering Bubbles. With the historic Chinese Credit and economic Bubbles at risk of imploding - and energy and commodities collapsing - faith in the capacity of global central bankers to keep the game going began to wane. The sophisticated leveraged players commenced risk reduction - and suddenly there were few buyers. Instead of more QE, central bankers have responded to "risk off" with negative interest rates. Negative rates don't alleviate market illiquidity and they won't bolster faltering global Bubbles. They do intensify the unfolding crisis of confidence.

Between the faltering Chinese Bubble and the unwind of securities market speculative leverage globally, global Credit and economic backdrops have turned ominous. The downside of a historic global Credit cycle has commenced. De-risking/de-leveraging ensure a process of much tighter Credit conditions. This is problematic for leveraged speculators, companies, countries and regions - certainly including banks and securities firms around the world.

Negative rates, collapsing energy companies and weak global prospects hurt bank sentiment. Yet bank stocks are collapsing globally because of the faltering global Credit Bubble. Between waning confidence in central banking and the global banking system, one is left to question the functioning of global derivatives markets. And if counter-party risk becomes an issue in the global risk "insurance" marketplace, global securities markets quickly face a potentially catastrophic backdrop.

A tremendous number of bets were placed based on a world of ongoing liquidity abundance, risk embracement and growth. In a "risk on" world of cheap finance, the latest Greek bailout strategy appeared manageable. In today's "risk off" faltering global Bubble reality, Greece is a disaster. Greek sovereign yields were up 370 bps in six weeks. A bursting global Bubble will shake confidence in the European periphery - and likely European integration more generally. Periphery spreads widened meaningfully again this week.

Here at home, contagion effects have made it to the investment-grade corporate debt market. In "risk on," loose "money" as far as the eye can see, writing insurance on corporate Credit (CDS) became a quite popular endeavor. But with the market now questioning the global economy, central bank efficacy, and the soundness of the banking system and Wall Street firms, it makes more sense to unwind previous speculations and buy insurance. This equates to a major unwind of leverage throughout the corporate debt marketplace, in addition to huge amounts of additional selling to hedge new CDS trades. Suddenly, liquidity abundance is transformed into problematic marketplace illiquidity. Again, a major tightening in Credit conditions bodes ill for leveraged entities. It also bodes ill for the general economy - the Credit Cycle's self-reinforcing downside.

Booming international corporate debt markets have been instrumental in fueling the global securities market boom - and the Global Credit Bubble more generally. And I would add that perceived low-risk corporate Credit has been at the (Crowded) epicenter of the central bank-induced "Moneyness of Risk Assets" phenomenon. If I'm right on the unfolding global backdrop, prospects for corporate Credit as a liquid store of value are dismal. A Crisis of Confidence in Corporate Credit would severely impact an already fragile global financial and economic backdrop.

A Brokered Convention - A middle finger to the GOP voters - Really?


Though it has been nearly 70 years since the GOP has had a brokered convention, the establishment is leaking and screaming that they may do just that. All this is due to the surge and popularity of Donald Trump. Of course, we all know the race and primaries aren't over yet and Cruz, Rubio and Kasich are trying their hardest.

Numbers are changing all the time but according to NPR Trump currently has 319-226 in a delegate count over Cruz. Rubio has 110 and John Kasich 25.

...So, the brokered convention rumors are pushed on the people like a deadly octopus intending to squeeze the voice and freedom out of the GOP voters. All this because of Trump's popularity with the people.

Magically, the desperate establishment pulls their sterile and 'dead to the world' trump card out of the hat - Mitt Romney. You know, the one who Trump endorsed back in 2012 when he was running for President. Many millions have heard the speech of Romney thanking and complimenting Trump. How, the 'Judas' trail turns from support to betrayal and lies.

We have watched the pretend 'non interest of a run' by Mitt Romney if Trump prevails. Suddenly he is acting if there is a brokered convention and no other option to get rid of Trump, Mitt would comply as a candidate. He will throw himself under the GOP bus and reluctantly become a presidential candidate. Aren't you all shocked? We the people never anticipated that the GOP would actually consider a rule change, brokered convention or pulling Pee Wee Herman out of their card deck...sorry, my bad, I meant stiff-Mitt Romney, but they are.

So, assuming Trump wins most of the delegates and his dreaded supporters build to millions more and the GOP pulls a brokered convention? What will the majority of people and Trump do? For the good of the country and winning against Hillary will all get behind whom the GOP picks - perhaps stiff-Romney? I say, No No and triple No.

If the GOP pulls the dreaded brokered convention, mega millions of us will place the GOP behind Obama and Hillary - the anti America, voter and freedom attackers where they belong. I predict it will be a suicide blow to the GOP. The angry and fragile list of millions will be all right but not the supporter part. I predict this will finally launch the insurant class - the independent ticket right behind a Donald Trump win. Bring it oh arrogant ones and see what happens.

Having never in my conservative media life as a former conservative national radio host for 16 years and a commentator, voted for any President but a Republican, I will leave and go Independent. If the voting will of the people is violated I will be the first to lead the charge in a massive revolt. Everyone must search their heart and vote for whom they feel will best serve America at this unique and troubled time.   Get mad at me...hate me...put me on another bad list, but I am proudly voting for Donald Trump whatever party he runs on. GOP, are you planning to live or die? America won't be controlled and violated anymore!

Toxins Create Necrosis

by Wendy Wilson, Herbalist

What is necrosis? Necrosis is a word taken from the Greek word meaning "death." Toxins create death on a cellular level. Some people like to refer to this cell death as "cell injury". However, that description does not support the destruction which is really happening. We must understand that toxins present the opportunity for cells to die prematurely and without replacement cells. The human body is complex and according to science it has more than 200 different cell types and tissues. This means the body has thousands of bio-chemicals to support functions. While some cells and tissues have the capacity to repair (epithelial cells), others are limited or have no capacity to regenerate (example is nervous system cells). The body has an uncanny ability to compensate in order to survive. Let's take a look at what to expect when we are overloaded with toxins and how to reverse or prevent cell death from happening.


The major causes for cell damage and cell death (necrosis) are:

  • infection (natural and artificial such as vaccines)
  • toxicity
  • oxygen deficiency
  • radiation and heat
  • lack of circulation (blockage)
  • immune system failure (suppression)
  • trauma and death.

When cells become damaged and begin to die they swell. The cell turns into toxic debris and invades the surrounding tissues. This is what is referred to as a "breakdown of intracellular environment." Acids are released during this process (arachidonic (a-rack-i-donic) and FFA fatty acids or enzyme substrates called cyclooxygenases (cy-clo- oxygen-asis)), which neighboring tissues see as toxic. This instigates an inflammatory process. An example of such inflammation would be rheumatoid arthritis. The immune system sends cells to migrate to the area to protect against any microorganisms. In some instances this can create more inflammation and could lead to irreversible tissue damage. This is why in many cases doctors prescribe steroids and other anti-inflammatory drugs.


There is a natural cell death preprogrammed into our cell DNA as a defense called apoptosis (a-po-tosis). Cells have a job to do and when it is completed those cells die off and are replaced by healthy new cells. This is a normal process and does not give rise to an inflammation response or toxicity. In a cases such as cancer, if a cell becomes corrupted the cell attempts to initiate cell death (apoptosis). The cell will die to avoid the disease from spreading. If there is a defect in the cell preventing it to kill itself, then cancer is allowed to grow. What can cause the defect? There are several things that can cause this cell malfunction such as; viruses, cellular stress and DNA damage (mutation). There are many things that can cause the defective damage such as; chemical toxins, radiation, toxic drugs, vaccinations etc. When a cell becomes damaged it inactivates the cells ability to die off and allows diseases like cancer (neoplasm) to replicate within the cell's mutated DNA.


We all need to acknowledge and be aware that everyday life exposes us to a buildup of toxins. The human body has functions to detoxify itself, however there are situations that can produce overwhelming toxicity to the system and unnatural cell death is the result. Unnatural cell death itself produces more toxins, which cause inflammation of surrounding tissues. When inflammation is significant, it can block the body's ability to locate the dead tissues to remove them as waste products (known as phagocytosis (fag-o-cy-tosis)). It is this situation it often ushers in surgical procedures to cut away the dead tissue (debridement). Too much dead localized tissue risks the development of gangrene.


When we become toxic we run the risk of the nuclei being changed and damaged, which breaks down the DNA. There are two types of cell death; apoptosis (programmed cell death) and necrosis. When this happens, science reports three different ways the cell dies, which also alters blood plasma.

  • Karyolysis (kary-ol-is)- the nucleus of the cell fades from DNA loss and degradation.
  • Pyknosis (pick-nosis)- the nucleus shrinks and condenses.
  • Karyorrhexis (kary-o-rex-is)- shrinking nucleuses fragment and disperse.


If our cells become injured by toxins it doesn't mean there is no hope. However, there is a point of no return in some instances so you don't want to put off trying to detox the body to improve cell regeneration. Cell damage in many instances can be reversed, however one thing has to occur for this repair to happen. We have to remove the source of cellular stress (toxins) as much as possible causing the damage. The source could be diet, smoking, stress, alcohol or drugs (street or prescription). In some cases cell damage can remain as a permanent injury to the cells and they function in a diminished capacity. An example is kidney failure or congestive heart failure. The two major damaging factors which negatively affect cells involve:

  • swelling
  • fatty change


With regards to the swelling response from cells, it is usually due to a lack of oxygen in arterial blood causing what is called cellular hypoxia. A lack of oxygen to the cells will damage the cell membrane and the pump and this changes the electrolyte balance inside the cell and then causes an influx of fluids producing the swelling. This condition of cell swelling is reversible by eliminating the cause. An example would be gout.

Fatty changes

The second thing that can damage our cells is fatty changes and this is a more serious cell injury. When this occurs the cell is damaged and cannot metabolize fat. The fat accumulates and is dispersed inside the cells cytoplasm. So, what happens is the fat invades the nucleus or space inside the cell where the mitochondria is and hinders the cell's metabolism or function. An example is a fatty liver slowing the liver's processes and hindering regeneration of liver cells. If we had zero toxins, the body the system is designed to replace all the liver cells within thirty days. It would be like having a brand new liver every month.


Most of the internal medicine diseases are preventable, which are instigated by too much toxicity in the body. Therefore, if you cleansed your system fairly regularly to remove the toxins, exercise and eat organic foods you will reduce your risk of serious disease significantly. When you cleanse using organic medicinal herbs, you remove the cellular stress on the cells. You remove the likelihood the cells will swell or become fatty, die or mutate and invite disease such as cancer. Simply put, that you have the power to sidestep major illness with God's herbs.


The concept of cleansing away toxicity and refortifying the body with organic nutrition is very basic, easy and inexpensive. Our cells give off energy and it is important that the foods you eat and the medicines you take also give off healthy energy. When you look at foods and herbs through a spectrometer the light spectra of energy is detectible. Studies have shown that a spectrometer, and other light sensitive equipment, can reveal the obvious difference between conventionally grown foods and organically grown foods. The organic foods and herbs have more light and energy readings. This translates to more regeneration and healing power to your cells to avoid cell death and prevent or reverse disease. If you would like to learn more about your power to control your health destiny, call Apothecary Herbs and ask about their certified organic organ cleanses, Body Foundation plant food mix, anti-inflammatory herbs and immune boosting herbs. Call now to order or for a free product catalog 866-229-3663, International 704-885-0277, where your healthcare options just became endless. Money saving coupons on their web site.



Herbalist Wendy Wilson on Herb Talk Live

Saturday morning show:
7 am EST on GCN

Weekday show:
7 pm EST on AVR
Shortwave show 8 pm EST WWCR 4840

Go to Herb Talk Live & Radio Archive area for network link access and past shows to download and share. For Android users you can download a FREE app for Herb Talk Live on GCN. See the download link under radio archives at top of page at


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