Friday, September 26, 2014

When LEVERAGE FAILS and HOPE turns to FEAR

"In today’s TedBits we will be outlining a lot of smoke signals.  They signal fires burning and about to break out.  As everyone is aware, the Federal Reserve has been tightening monetary policy for almost a year now and has been joined by the Chinese central bank.   The Federal Reserve has been reducing its balance sheet expansion from $85 billion a month (85,000 million) to zero in mid-November.  While the fed does not characterize it as a tightening, it is one.  Numerous studies have put the amount of interest rate reduction to -3 % when QE3 was at full bore.  Now that the reduction is approaching zero negative interest rates are ending, they have raised rates by about 3% in real terms.  We are Austrians at TedBits and believe in all of the core truths from Ludwig Von Mises:

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
 
- Ludwig von Mises"

at http://www.zerohedge.com/news/2014-09-26/when-leverage-fails-and-hope-turns-fear 

5 U.S. Banks Each Have More Than 40 Trillion Dollars In Exposure To Derivatives

"When is the U.S. banking system going to crash?  I can sum it up in three words.  Watch the derivatives.  It used to be only four, but now there are five "too big to fail" banks in the United States that each have more than 40trillion dollars in exposure to derivatives.  Today, the U.S. national debt is sitting at a grand total of about 17.7 trillion dollars, so when we are talking about 40 trillion dollars we are talking about an amount of money that is almost unimaginable.  And unlike stocks and bonds, these derivatives do not represent "investments" in anything.  They can be incredibly complex, but essentially they are just paper wagers about what will happen in the future.  The truth is that derivatives trading is not too different from betting on baseball or football games.  Trading in derivatives is basically just a form of legalized gambling, and the "too big to fail" banks have transformed Wall Street into the largest casino in the history of the planet.  When this derivatives bubble bursts (and as surely as I am writing this it will), the pain that it will cause the global economy will be greater than words can describe..."

at http://theeconomiccollapseblog.com/archives/5-u-s-banks-each-have-more-than-40-trillion-dollars-in-exposure-to-derivatives

“Stunning Demand” One Individual Buying $40 Million Of Gold

"Today the man who owns one of the largest gold and silver dealers in the United States told King World News that there is massive and stunning buying of physical gold and silver now taking place at these levels.  One individual has contacted him about purchasing $40 million worth of gold, which is equivalent to one ton of physical gold.  Below is what 41-year market veteran Bill Haynes had to say about the massive physical gold and silver buying..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/25_Stunning_Demand_One_Individual_Buying_$40_Million_Of_Gold.html

Global Market Collapse & Wealth Destruction Is Now Upon Us

"Today a 42-year market veteran warned King World News that a global market collapse and massive wealth destruction is now upon us.  He also discussed the gold market.  Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this extraordinary interview..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/25_Global_Market_Collapse_%26_Wealth_Destruction_Is_Now_Upon_Us.html

Maguire - Stunning 650 Tons Of Gold Bought In Takedown

"Today London metals trader Andrew Maguire told King World News that a stunning 650 tons of physical gold has been purchased by sovereigns and central banks during the recent takedown in the gold market.  Below is what London metals trader Maguire had to say in Part I of a series of interviews that will be released today on KWN.

Eric King:  “Since gold exited the $1,300s in the third week of August (just over one month ago), how much physical gold has been purchased by sovereigns and central banks?”

Maguire:  “A good example was yesterday, and that (21 tons of physical gold buying) was slightly more visible because the name was known....

“But if we look at the thousands of tons of of paper gold that has been supplied in the marketplace, an accurate number would be 650 tons (of physical gold purchased by sovereigns and central banks during this takedown in the past month).  We have seen tonnage in the teens being accumulated on a daily basis.

Bear in mind that leverage has a huge effect.  So when you have leveraged paper selling against unleveraged physical buying, then obviously you have a spring being compressed but it’s under the radar until it releases.  And the good thing is we are coming to the point where the physical markets are now migrating to the East, and I think the catchup (in terms of price) is going to surprise a lot of people, Eric.” 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/26_Maguire_-_Stunning_650_Tons_Of_Gold_Bought_In_Takedown.html

Wednesday, September 24, 2014

50 Tonnes In Ten Days: Gold Smuggling Overwhelms Government Restrictions In India

"So much for the mainstream media reports of a waning interest in gold in India and elsewhere.

USAToday did a rerun of 'Why Warren Buffett Hates Gold' the other day.  

No one outside the dollarsphere is listening anymore, or cares.   

Things are certainly warming up.  The mispricing of risk is formidable.

The entire story can be read here.

Hindustan Times
50 tonne gold smuggled into India in 10 days, 30% reached Mumbai
By Manish Pachouly
Mumbai, September 23, 2014

About 50 tonnes of gold has been smuggled into the country in the past 10 days, and subsequently taken into the market to cater to a surge in demand for the precious metal in the festive season. There is a heavy demand for gold during Dussehra, for which booking and supply will start from Thursday, when shradh ends and Navratri starts.

Market sources said that 30% of the smuggled gold has been supplied in Mumbai to unscrupulous jewelers, while the rest was distributed to different parts of the country..."

at  http://jessescrossroadscafe.blogspot.com.tr/2014/09/50-tonnes-in-ten-days-gold-smuggling.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+JessesCafeAmericain+(Jesse%27s+Caf%C3%A9+Am%C3%A9ricain)

Gold Rush Is On In China (to replace USD with a gold-backed Renminbi?)

"Based upon the charts below, and assuming China’s yearly gold accumulation remains stable (i.e. a 10.7% CAGR),  China will possess nearly 14,000 tonnes of gold by the year 2020. Compare this to U.S. gold reserves at 8,134 tonnes, which is today the world’s largest gold holder.  This gives credence to the oft expressed idea that the PBOC in Beijing plans to eventually back its Renminbi via gold with a view to replacing the U.S. dollar as the world’s reserve currency.
World’s Largest Consumer of Gold
The country overtook India as the world’s largest consumer of gold in 2013, with consumer demand soaring 32% to 1,066 tonnes for 2013. That’s the most gold ever demanded annually by one country’s consumers.
World’s Largest Importer of Gold
Chiina imported more gold imports than any other country – a record 1,108 metric tons in 2013, up 33% from a year ago – via Hong Kong.
Chinese gold imports
World’s Largest Miner of Gold
China is already the world’s top producer of gold, mining 437 tonnes in 2013 on industry estimates, with the largest annual increase globally for 2013 having displaced South Africa as the world’s largest gold producer in 2007.
Chinese gold production
Below is the same view over 84 years showing the parabolic nature of China’s gold accumulation (Production plus Net Imports), especially since the year 1980. It is imperative to note that China’s gold accumulation is enjoying an astounding 10.7% Compound Annual Growth Rate (CAGR).
Chinese gold production and net imports
Above Charts Source Courtesy of Nick Laird & http://www.sharelynx.com/
Forecast for China’s Gold Accumulation by 2020
Based upon the above charts and assuming China’s yearly gold accumulation remains stable (i.e. a 10.7% CAGR),  it translates to the Sino nation possessing nearly 14,000 tonnes of gold by the year 2020. Compare this to US gold reserves at 8,134 tonnes, which is today the world’s largest gold holder…
Conclusion
History is testament that  a universally accepted  world currency has material control over all other currencies as the18th century financier Mayer Amschel Rothschild once said:  Give me control of a nation’s money and I care not who makes the laws.
In the event China backs its Renmini currency with sufficient gold,  The Peoples Bank of China will control the world’s currencies from Beijing – and that includes the U.S. greenback."

at http://www.munknee.com/gold-rush-china-replace-usd-gold-backed-renminbi/

China, Russia, Germany, India & A Roadmap To $10,000 Gold

"...This is all part of who should have the reserve currency.  Again, it will be some combination of the yuan, rubles, the German mark, possibly part of the Indian rupee, but it will be convertible into gold.  Chinese leader, Xi, recently visited India.  Xi has said China will invest up to $400 billion in infrastructure for India.  That’s a great deal of money.  It’s far more than the West would ever be willing to invest in India.  So Xi is consolidating Chinese power throughout the entire eastern part of the world.”

Leeb added:  “The Wall Street Journal recently had an article about how successful shale oil drilling has been.  They also talked about the increased productivity of this technology.  The Wall Street Journal pointed out that over the last 10 years the maximum productivity of a shale well has gone from 800 barrels per day to 2,400 barrels per day.

The Journal also noted that it took 60 times more water to in order to achieve the increased productivity.  It also took 2.5 times more cement.  Well, how do they get that water and that cement into that shale well?  They deliver it with trucks, and that takes a tremendous amount of energy.  This is what has been called ‘The Red Queen Phenomena.’  Yes, we can increase productivity but it’s going to take a lot more energy to do it.  

So basically what you have here are contrasting policies.  There is one in the East in which China is spending trillions of dollars on renewable energies.  Germany is running their entire electric grid on alternative energy.  China is also assuring that India has a renewable energy policy.

Then we have the U.S. with its shortsighted shale policy that is losing its influence around the world.  To have the world’s reserve currency you must have military and economic dominance, and the respect of the world.  The U.S. is losing on all of those fronts day by day.  We are losing it to China and the East.

Eric, the flow of gold and power continues from the West to the East.  Xi is setting up international gold exchanges in China.  Xi and the Chinese are also attracted to partners who have a lot of gold such as India, Russia, and Germany.

So there is very little downside left in the gold market.  But the upside targets haven’t changed at all.  Gold will be at least $10,000 an ounce or higher.  We will have to see $10,000 gold in order to rationalize the kind of trade the world does.  That’s the bottom line.  So investors have to own the metal ahead of the coming repricing of gold in order to protect themselves.  

Virtually every news item I read points to a major inflection point.  The world is moving dramatically toward the East.  This will create one of the greatest wealth transfers in history and only the savviest investors in the West will come through this historic transition not only unscathed but prosperous.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/23_China,_Russia,_Germany,_India_%26_A_Roadmap_To_$10,000_Gold.html

Celente - Increased Worldwide Danger To Rock Gold Market

"...“Look at where crude oil prices are now trading as we speak.  We have seen prices decline in the crude oil markets because demand is down.  So we have oil prices going down while the Middle East heats up?  This is not what usually happens.

But look at one of Turk’s charts below:

 

Yes, there is a dramatic falloff in retail sales by gasoline refiners in the United States.  There is something else that is interesting going on here.  It’s not only that millenials aren’t buying homes, but they can’t afford to buy automobiles either.  This is all part of a bigger symptom of job losses and a significant decline in real wages.  People just don’t have money to drive the way they used to.

As David Stockman recently pointed out, the United States has lost 18,000 jobs each month that pay $50,000 or more since the year 2000.  That’s well over 3,000,000 high paying jobs that have been lost.  So the trend is down and it’s showing up in virtually every statistic you look at.”

Eric King:  “Gerald, we also have the U.S. Dollar Index hitting a new recent high above 85.  This has also been accompanied by continued pressure on gold and silver as they near the end of their brutal bear market.”

Celente:  “The dollar is strengthening because interest rates are anticipated to rise.  This move is temporary because this has been an interest rate recovery.  So this is all leading to another stimulus plan from the Fed because low interest rates are the only thing that has kept the U.S. economy on life support.

When the Fed comes out with the new stimulus program, that’s when you are going to see gold prices rise and go into the next phase of the gold bull run.  Gold prices will then go much higher than when they peaked back in September of 2011 at $1,921.

And let’s not forget that gold has held a special status in all of recorded human history.  Now the world is facing a period of accelerating geopolitical strife.  Gold is the ultimate safe haven in times of war.  Should geopolitical tensions escalate, the price of gold will soar and gold will again be cherished for the safe haven it is.

Right now the U.S. has just invaded Syria.  This is all part of a greater trend toward increased geopolitical tensions.  If this spins out of control in the Middle East and the geopolitical tensions spread across the globe, the price of gold will turn around overnight.  The repricing of gold will be dramatic and it will take the world by surprise if increased tensions lead to even more conflict.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/24_Celente_-_Increased_Worldwide_Danger_To_Rock_Gold_Market.html

Tuesday, September 23, 2014

China Moves To Dominate Gold Market With Physical Exchange

"China is slowly moving to dominate the global gold market and it is important to join the dots regarding a few key recent developments in China relating to gold.
When the International Board of the Shanghai Gold Exchange (SGE) was launched last Thursday September 18 during an evening trading session, it was notable that the first transactions were put through by a diverse group comprising HSBC, MKS (Switzerland), and the Chinese banks,  ICBC, Bank of China and Bank of Communications.
MKS is the Geneva headquartered precious metals trading group that also owns the large PAMP refinery company in Switzerland. 
There are reportedly 40 international participants signed up to trade on the SGE International Board (SGEI), but the SGE hasn't specifically confirmed the identities of all participants. 
Like the domestic SGE which counts precious metals refineries as members, the SGEI will have a diverse group of trading participants including a number of international refineries as well as bullion banks and trading houses. 
Precious metals refineries Metalor Technologies and Heraeus have confirmed that they will be participants and along with MKS, this represents three of the largest gold refineries in the world. 
International bullion banks who have already announced their participation include ANZ, Standard Chartered and HSBC, and its also known that Standard Bank, JP Morgan and the Bank of Nova Scotia were said to be interested. The Perth Mint was also said to be interested. 
The presence of international refineries and possibly international mints as possible direct participants within SGEI trading should improve liquidity and price discovery on the new international exchange and help it become a serious competitor to the existing duopoly of gold price discovery carried on in the London OTC market and the New York gold futures market. 
One encouraging factor about the SGE and the SGE international platform is that there is a lot of physical gold flowing through the Exchange. Therefore, price discovery is not just based on an inverted pyramid of mostly unallocated gold as in London or mostly cash-traded futures paper gold as in New York..."

at  http://www.zerohedge.com/news/2014-09-23/china-moves-dominate-gold-market-physical-exchange

Monday, September 22, 2014

Two Estimations of Chinese Gold Demand

"I found it interesting that these two estimations of Chinese gold demand arrive at similar answers from two different methods and assuming two different start dates.
 
Before anyone asks, Koos Jansen has addressed the notion of 'round trips' of gold on the Shanghai Exchange in some detail.   It is not the same sort of bullion game that is the hall mark of the Comex.
 
The first chart is from the data wrangler Nick Laird at Sharelynx.
 
The second chart is from GoldSilver.com.
 
I don't think anyone knows the exact amount of physical gold that China and the BRICS are absorbing.   And how much unencumbered gold remains in many of the Western vaults either.
 
One has to chuckle at 'analysts' who just ignore what of the more significant trend changes in the international money markets.   The BRICS are buying tonnes of gold and adding them to their reserves?  Nothing to see here.  Just the usual hijinks of the uninformed and unsophisticated.

But no matter how one looks at it, there was a profound change in the metals markets around 2006, and that it is somehow involved with what has been called a 'currency war.'  As it has done in the past, the nature of the global reserve currency system is changing.

Gold is flowing from West to East."

at http://jessescrossroadscafe.blogspot.com.tr/2014/09/two-estimations-of-china-gold-demand.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+JessesCafeAmericain+(Jesse%27s+Caf%C3%A9+Am%C3%A9ricain)
 
 

The Dow And S&P 500 Soar To Irrational Heights – Meanwhile The Ultra-Wealthy Rush To Buy Gold Bars

"Did you know that the number of gold bars being purchased by ultra-wealthy individuals has increased by 243 percent so far this year?  If stocks are just going to keep soaring, why are they doing this?  On Thursday, the Dow Jones industrial average and the S&P 500 both closed at record highs once again.  It is a party that never seems to end, and there are a lot of really happy people on Wall Street these days.  But those that are discerning realize that we witnessed the exact same kind of bubble behavior during the dotcom boom and during the run up to the last financial crash in 2007.  The irrational exuberance that we are witnessing right now cannot go on forever.  And the bigger that this bubble gets, the more painful that it is going to be when it finally bursts.  Those that get out at the peaks of the market are the ones that usually end up making lots of money.  Those that ride stocks all the way up and all the way down are the ones that usually end up getting totally wiped out...

Meanwhile, the ultra-wealthy are making moves to protect themselves from the inevitable chaos that is coming.
For example, the Telegraph recently reported that sales of gold bars to wealthy customers are up 243 percent so far in 2014...
The super-rich are looking to protect their wealth through buying record numbers of "Italian job" style gold bars, according to bullion experts.
The number of 12.5kg gold bars being bought by wealthy customers has increased 243 percent so far this year, when compared to the same period last year, said Rob Halliday-Stein founder of BullionByPost.
"These gold bars are usually stored in the vaults of central banks and are the same ones you see in the film 'The Italian Job'," added David Cousins, bullion executive from London based ATS Bullion.
Do they know something that we don't?
The ultra-wealthy are able to stay ultra-wealthy for a reason.
They are usually a step or two ahead of most of the rest of us.
And any rational person should be able to see that this financial bubble is going to end very, very badly."

at http://theeconomiccollapseblog.com/archives/the-dow-and-sp-500-soar-to-irrational-heights-while-the-ultra-wealthy-rush-to-buy-gold-bars

Marc Faber : Bubble in Everything, Everywhere

""We have a bubble in everything, everywhere," the publisher of The Gloom, Boom & Doom Report told CNBC's "Squawk Box" on Friday. Faber has long argued that the Federal Reserve's massive asset purchasing programs and near-zero interest rates have inflated stock prices."

at http://www.marcfabernews.com/2014/09/marc-faber-bubble-in-everything.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28MARC+FABER+BLOG%29#.VCBtz_na6m4

Russians Stunned As Chinese Leader Pushes Gold Backed Yuan

"...Also, Eric, I was invited to give a speech at the first ever Chinese Gold Congress, which was sponsored by the Chinese government and the 5 big gold companies, including (state owned) China National Gold.  There was a heavy Chinese government representation (600+ attendees).  The fact is that the Chinese remain bullish on gold and they have been buying up to 1/3 of world supply.

All five Chinese producers echoed that their reserve life is something that concerns them.  So all of them are looking internationally to acquire reserves in the ground.  Even the president of China National Gold said that the renminbi, which is becoming internationalized, should have a gold backing.

It was also announced that the Chinese have planned another gold vault which will be equipped to store about 1,900 additional tons of gold.  And that will be located across from Hong Kong in the Chinese city of Shenzhen.  I believe that brings the total number of gold vaults in China to four.  This is necessary because they are such a big player in the physical market and their presence in the gold market will only increase over time.

When I was in China the Shanghai Gold Exchange announced that they will be trading gold internationally, and they intend to set the physical price for gold.  The importance of that, Eric, is that they are going to initially introduce something like 11 renminbi contracts.  So gold will be transacted and settled in renminbi instead of the U.S. dollar.

All the big houses are there -- HSBC, Goldman, ANZ, etc.  In fact, recently we’ve seen even more evidence of the huge appetite on a physical basis that the Chinese have.  So together with the vaults and the changes at the Shanghai Gold Exchange opening up for international investors, this tells me the Chinese are setting up to dominate the gold market in the future as they continue to soak up the world’s available supply of gold.

I also found it interesting that the Russians were attending and listening intently at the Chinese Gold Congress.  I’m sure the Russians were surprised at the open discussion of a Chinese gold backed currency.  This shows that the Western sanctions have moved Russia and China closer together as the Russians look to the East for financing.  We also know that the Russians have been big buyers of gold.  The Russians have moved up their reserves from 600 tons to well over 1,000 tons.  So the Russians also continue accumulating gold.”

Ing added:  “What we are seeing is the last gasp in terms of U.S. dollar strength.  You see the Chinese, Russians, and other countries buying currencies other than the U.S. dollar.  In fact, this move away from the dollar will be one of the catalysts to move gold higher.  We seem to be in the midst of a currency war where every country is trying to weaken their currencies, including the Japanese and the Chinese.  These currency wars are a very favorable backdrop for higher gold prices.  So on a risk/reward basis, the downside is somewhat limited in gold and the sky is the limit on the upside.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/20_Russians_Stunned_As_Chinese_Leader_Pushes_Gold_Backed_Yuan.html

John Embry On The Wild Action In Gold, Silver & Other Markets

"Embry:  “I am focused on the recent carnage in the gold and silver markets.  It has been the same story of constant paper selling pressure in gold and silver, where they hit the markets with algorithm-driven paper short selling during the quiet periods of trading.  Last night silver fell over 40 cents in the blink of an eye.  Silver is an asset that is now extraordinarily undervalued by any metric you choose to use....

“At one point on Friday silver had plunged 3.5 percent.  And then, as I said, it was briefly down another 2 percent in the overnight trading session.  


This is manipulation of the worst sort and I don’t know quite what the endgame is because when this is over the silver price is going to increase many, many multiples of the current silver price.  People should either add to their physical silver positions now or hold what they have.  Regardless, they should not let this artificial manipulation create enough frustration to separate themselves from their silver.  Silver will be one of the few life rafts available to investors when this whole Ponzi scheme comes unglued..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/22_John_Embry_On_The_Wild_Action_In_Gold,_Silver_%26_Other_Markets.html

Wednesday, September 17, 2014

China, Russia, Gold & A New World Order Rising From The East

"Today an acclaimed money manager spoke with King World News about China, Russia, gold, and a New World Order that is rising in the East.  Stephen Leeb also spoke about how the Russians and the Chinese are planning to set up this new hub of power in the East.

Leeb:  “I am watching what is developing between China and Russia.  They have a shared desire to establish a region that is completely independent of the West.  China has had a persistent focus on gold...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/16_China,_Russia,_Gold_%26_A_New_World_Order_Rising_From_The_East.html

Rule Rule - Massive Fund Flows Pouring Into Gold & Silver

"Today one of the wealthiest people in the financial world told King World News that despite the pullback in gold and silver prices, last week saw extremely large fund flows into virtually everything gold and silver related.  Rick Rule, who is business partners with Eric Sprott, also discussed why he is so bullish going forward.

Rule:  “The last 10 days for me has been consumed by the Precious Metals Summit near Vale, and then the gathering by the Denver Gold Group.  There were 400 companies exhibiting.  Denver, in particular, had the major gold mining companies from around the world as well as many intermediates and juniors...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/17_Rule_Rule_-_Massive_Fund_Flows_Pouring_Into_Gold_%26_Silver.html

The Divergence Between Debt and Gold

"There is little doubt that gold is 'money' in the de facto, if not official, sense. It has been so for at least two thousands years, if not longer.

In a policy regime in which the Western central banks wish to quietly devalue their currencies in concert, it would be awkward to allow gold to speak embarrassing truths.

I would like to think that now, unlike ten years ago before almost every market was shown to be manipulated and sometimes on a global scale, that a concerted effort to discredit the message that gold carries would not be beyond their capability. They certainly have the motive.

As you may recall, in 1985 Larry Summers and Robert Barsky wrote a paper on Gibson's Paradox showing the linkage between prices and interest rates, and more specifically the price of gold under a gold standard.  With the price of gold going higher, it would be much more difficult to manage longer term interest rates lower, he asserts. 

We are not under a gold standard at this time.  But with the turning of central bank purchasing towards gold in 2006, with a substantial boost from Asian reserves acquisitions, the fears of the Western central bankers became paramount.  Once again, they 'stared into the abyss.'

I caution that correlation is not causation.  But it is more likely where there are independent linkages, fundamental reasons that support the linkage as it were.

And I also remind the reader that divergence and convergence run in cycles. And convergence tends to return, and often does so with a vengeance.

Brace yourselves, not so much for patience while under determined financial repression, but for the time coming when the failed schemes of today's financial engineers collapse from exposure, a challenge from the East, or from sheer exhaustion.

This chart is from the data wranger Nick Laird at Sharelynx.com."

at http://jessescrossroadscafe.blogspot.com.tr/2014/09/the-divergence-between-debt-and-gold.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+JessesCafeAmericain+(Jesse%27s+Caf%C3%A9+Am%C3%A9ricain)

Venture Capital Risk Taking and Cash Burn Rates Unprecedented Since 1999; 47% of Nasdaq in Bear Market

"Venture capital risktaking and burn rates on cash are at levels that exceed the technology bubble in 1999. Companies that haven't made a dime, and perhaps never will, have valuations of $10 billion more.

Curiously, it' venture capitalist Bill Gurley who Sounds Alarm on Startup Investing in an interview with the Wall Street Journal. 
 WSJ: Mr. Gurley, who often voices his opinions on his blog, Above the Crowd, sat down with The Wall Street Journal as part of a Journal event series called "Tech Under the Hood." The investor in Uber, Zillow, OpenTable and other Web startups spoke on a wide range of topics. What follows is an edited excerpt of a conversation specifically about potential cracks in the tech-startup investing scene.

Mr. Gurley: Every incremental day that goes past I have this feeling a little bit more. I think that Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now. Unprecedented since ‘'99. In some ways less silly than '99 and in other ways more silly than in '99. I love the Buffett quote ["Be fearful when others are greedy and greedy when others are fearful"]  because it lays it out.

And I guarantee you two things: One, the average burn rate at the average venture-backed company in Silicon Valley is at an all-time high since '99 and maybe in many industries higher than in '99. And two, more humans in Silicon Valley are working for money-losing companies than have been in 15 years, and that's a form of discounted risk.

In '01 or '09, you just wouldn't go take a job at a company that's burning $4 million a month. Today everyone does it without thinking. 
Bubble Risk

The Guardian picks up on the story in Leading tech investors warn of bubble risk 'unprecedented since 1999'
 Two of the world’s leading tech investors have warned the new wave of tech companies and their backers are taking on risk and burning through cash at rates unseen since 1999 when the “dotcom bubble” burst..."


at http://globaleconomicanalysis.blogspot.com/2014/09/venture-capital-technology-risk-taking.html#FLgRThLF6tVlDpM5.99

The Depression, World War II, And What They Really Mean

"Nearly a century after the fact, the Great Depression remains THE object lesson for virtually every branch of economics. To monetarists the fact that the US money supply fell by nearly a third in the 1930s illustrates the need for a central bank to maintain steady money growth. To Keynesians the Depression’s depth and duration proved that capitalist systems are inherently unstable and need a big, powerful government to manage them. World War II, in this framework, saved the US economy from permanent 25% unemployment.
To Austrians, meanwhile, the Depression demonstrated that 1) the best way to prevent a bust is to avoid the preceding boom, which is another way of saying that the size and composition of the national balance sheet is the key to everything, and 2) the best way to get through a bust is to let market forces liquidate the bad debt as quickly as possible.
September 14 DollarCollapse column took the Austrians’ side in the debate and illustrated the point with the following chart, which depicts the massive deleveraging of the 1930s..."
at http://dollarcollapse.com/credit-bubble-2/what-the-great-depression-and-world-war-ii-really-teach-us/
Debt during depression