Tag Archives: central banks

Fascinating Interview with Biographer of Blythe Masters (in English)

17 May

This interview presents the raw perspective of a journalist, Pierre Jovanovic, who spent several years researching the career of Blythe Masters. His comments are extremely insightful for everyone who wants to understand who she is and what she has done. Unfortunately, his book is only available in French. This interview is the only means I know of to access the core of what he addresses in his book.

For those of us who are familiar with Masters, much of what he has to say is merely confirmation of we know. What’s interesting is how seriously this man, who is more of a journalist than an economist, reacts to Masters’ effect on the global landscape.

I am deeply grateful for this opportunity to finally hear his thoughts. I encourage you to check out his website that says more about the book: http://jovanovic.com/angeQDM.htm. Thankfully, non-French speakers can use translation features in their browser (available at least in Chrome) to understand the page. Hopefully the book comes out in English too.


A Coming Bull Market in Gold and Silver?

10 May

I am sick of people saying what is and is not a bull market. I want to see real evidence before I even begin to ask the question. When we think about how that kind of claim can be justified (instead of going by what CNBC tells us) one of the first places to start is the accumulation-distribution line.

According to www.stockcharts.com, here’s what the A/D line indicates:

“The Accumulation Distribution Line is a cumulative measure of each period’s volume flow, or money flow. A high positive multiplier combined with high volume shows strong buying pressure that pushes the indicator higher. Conversely, a low negative number combined with high volume reflects strong selling pressure that pushes the indicator lower. Money Flow Volume accumulates to form a line that either confirms or contradicts the underlying price trend. In this regard, the indicator is used to either reinforce the underlying trend or cast doubts on its sustainability. An uptrend in prices with a downtrend in the Accumulation Distribution Line suggests underlying selling pressure (distribution) that could foreshadow a bearish reversal on the price chart. A downtrend in prices with an uptrend in the Accumulation Distribution Line indicate underlying buying pressure (accumulation) that could foreshadow a bullish reversal in prices.” 1

Translation: acc/dist line shows when people are buying more or selling more. That means that REAL predictive value about bull or bear markets lies in one’s assessment of buying momentum.

I want to draw your attention to how this is happening right now in gold and silver. Check out this silver chart from stockcharts.com:

And this gold chart from stockcharts.com:

Note the massive divergence in the a/d line from the price line. What does this say? Two things: 1) that someone is selling a lot of gold and silver right now (either in physical bullion or paper contracts), and 2) that, despite the massive selling, much more money is flowing into these assets than the price reflects. In short, someone is intent on selling low and everyone else is much more intent on buying it up.

So, is this “sell-off” bullish or bearish? According to the article I previously mentioned, “A downtrend in prices with an uptrend in the Accumulation Distribution Line indicate underlying buying pressure (accumulation) that could foreshadow a bullish [emphasis mine] reversal in prices.”

This line does not say what the future will bring. It could be at some point that this buying momentum drops off. But so far, there is a massive divergence that often portends the coming of a bull market. Silver and Gold may continue to go down, but the a/d line should inform you about the level of risk you are taking if you decide to buy.


Ron Paul Demolishes CNBC for an Hour

30 Apr

This show is unbelievable. At least 6 different people offer the most complex questions they can throw at the aging-yet-energetic congressman, Ron Paul. Calling his views “extreme”, bringing on multiple economists, and implying that he has no chance of victory are just a few of the games they played with him. But Congressman Paul rose far above the fray.

No one can watch this video and deny his competence and commend him for such excellent answers. Furthermore, Paul is extremely patient, dignified, and nuanced in all his assessments and responses. This appearance is flawless as it gets.

And yet, one gets the sense that, in spite of his ability to comprehensively speak to all types of issues, these people will simply continue obfuscate and misrepresent such ideas in the future.

But man, what an incredible performance from Ron Paul. Go Ron!


Brazil’s President Nails It

21 Apr

Start the link at 17:35 to get the good stuff.

President Dilma Rousseff of Brazil recently came to Washington to meet with President Obama to discuss a variety of issues, most of which dealt in the economic realm. While they met with the press, President Rouseff unleashed a scathing attack on the expansionist monetary policies of the U.S.

Her most poignant criticism focused on the way in which the U.S. spending programs drive U.S. monetary expansion (i.e. inflation) that gives the U.S. an unfair trade advantage especially against developing nations, including Brazil.

Note this moment: 18:20. Her translator mistakenly said “[The US expansionist monetary policies] lead to a depreciation of emerging currencies.” At this point she corrects him and he says, “Rather…a depreciation of  developed currencies.” What that means is simple: when we print more dollars, our dollars are worth less. Thus, our exports are cheaper for other countries to buy. Thus, our products sell and other countries who cannot depreciate their currency as much as we can, simply are stuck with having equal goods which artificially become more expensive to purchase.

Few politicians know economics as well as she.

This is exactly the point we’ve been talking about for the two months we’ve run this site. Because America owns a major (some might say THE major) world currency, we can print out our own money to buy from other countries. Think of all the massive programs like SNAP where America hands out free money to the masses to buy essential goods at places like grocery stores. Those are the fiscal policies that enable so much monetary expansion. Inflation not only kills the middle and working classes, it viciously attacks smaller countries by causing massive trade disadvantages.

President Rousseff is a courageous woman who clearly has done her homework. She is absolutely right to criticize Obama in this way. It is no disrespect to speak the truth like she is doing.


Condensed Crash Course

18 Apr

One of the reasons young people are having attention deficit issues is that there are few people worth paying attention to any more. Chris Martenson is one of the people you need to pay attention to. And it isn’t hard to. This condensed version of the much longer 3+ hour version “Crash Course” (also equally worth your time) is an excellent way to get to know what Chris has to offer.

Why should you listen to Chris?

In short, because he has a very holistic view of the world. I don’t agree with everything he says, but there is very little he ignores when he says what he does, and that’s important. One of the main priorities I have in this blog is to incorporate what God says into as much of what I think about economics as I can. Chris has helped me to do that.

Inflation – Why it Matters

9 Apr

In the media climate of America in 2012, headlines have focused on some of the most inconsequential nonsense of our history. Celebrity deaths, Kardashians, Rick Santorum’s sweater vests, the Catholic church’s view of contraception, and the last 35 or so debates between Republican candidates which only led us to find the guy everyone liked most at the beginning is the one they like most in the end.

Why does the news cycle focus so much on things that are so far from being important? I have no idea. But I do know who enables them: you and me. When we talk about this nonsense, when we re-post it, and when we google it, we pay back the advertisers for every dime they pour into the media.

Image What should they be talking about? Cereal.

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Blythe Masters Shows her Hand in New Interview

6 Apr

Throughout the blogosphere, especially ZeroHedge, there has been major news due to a rare appearance from the head of JP Morgan’s Head of Global Commodities: Blythe Masters. The vitriol poured out on her in the comments at zerohedge is unbelievably bad. Some comments should not be read, let alone written.

Let’s shift away from the smut and point out a few things no one has yet said: Blythe should be congratulated on such a great performance. While she starts out looking quite pensive, her overall demeanor is composed, she made eye-contact continuously, and she generally engaged in very few lying “tells”. But also note how her attire itself (today and, to some extent, the 2009 interview) is almost militant. Most women try to look strong in a competitive business world. But Masters seems to wear clothing that appears particularly secure and defensive.

Second, this interview is highly scripted. CNBC camera crews don’t just hang out at UC Boulder waiting for executives to drop by. This is a coveted exclusive interview with a reclusive voice from the financial center of the world. And just judging from the interviewer’s incidental remarks, they had an extensive pre-interview talking about silver already. Blythe has been extensively prepped by the interviewer. You think they do that for Peter Schiff? You think they’re going to cut her off when she filibusters? Not a chance.

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