In light of the recent election results on Tuesday, our advice is simple: Prepare for upheaval!
This sentiment isn’t solely due to Obama’s reelection; it’s about the broader economic realities that lie ahead. As John Embry, chief investment strategist at Sprott Asset Management, warns, 2013 might very well go down as “one of the ugliest years on record.”
“I anticipate we will start to see the negative repercussions of money printing manifesting in 2013,” Embry states. “Currently, money velocity is on a decline because, despite the central banks injecting a significant amount of high-powered money into the economy, neither banks nor the public seem able to activate the lending process effectively.”
“Banks are hesitant, while the public is burdened with debt. Nevertheless, this will likely prompt an even more aggressive approach to quantitative easing, leading to a collective epiphany among those holding bonds and cash: ‘My goodness, this money is losing value. I need to get out.’”
“This realization will shift the velocity of money, paving the way for rapidly escalating inflation.” Continue reading
By the end of today, the victor of the 2012 Presidential Election will likely be clear. However, there is always a chance that it could be too close to call, potentially necessitating a recount due to ambiguous ballots. History has taught us that such occurrences are not uncommon.
Nevertheless, Bill Gross, the so-called Bond King, opines that the election results will be inconsequential.
“Obama or Romney—are we really facing the most critical election of our lifetime? The truth is, they represent the same interests, funded by the same money. Our country has become one governed by SuperPACs. The ‘people’ are merely pawns on election day, pulling levers for Democrats or Republicans to receive the same outcomes every four years.”
Gross may have a valid point… Yet, whether a pawn in this system or not, the act of voting remains our choice, and honestly, we are weary of President Obama. Continue reading
Putin Is the New Global Shah of Oil
By Marin Katusa, Casey Research
Exxon Mobil has lost its standing as the leading oil producer worldwide. As of October 25th, that title now belongs to Rosneft, Russia’s state-controlled oil entity.
Rosneft is in the process of acquiring TNK-BP, a vertically integrated oil company co-owned by the British firm BP and a consortium of Russian billionaires known as AAR. TNK-BP was among the top ten privately owned oil producers globally, having produced 1.74 million barrels of oil equivalent daily in 2010 from its Russian and Ukrainian operations while refining nearly half that amount.
With TNK-BP under its control, Rosneft will oversee an impressive production level of over 4 million barrels per day. And at the helm of Rosneft? None other than Vladimir Putin, the resource-rich President of Russia.
While TNK-BP has proven to be a lucrative operation, generating billions in dividends for its stakeholders, it has also been a source of complex international relations. Continue reading
The Commerce Department recently reported that Gross Domestic Product (GDP) grew at an annual rate of 2 percent in the third quarter. This marks an increase from the 1.3 percent growth observed in the previous quarter. However, it’s imperative not to get too optimistic.
According to Lucia Mutikani of Reuters, sustained economic growth needs to surpass 2.5 percent over multiple quarters to effectively reduce the unemployment rate. Furthermore, this growth is not indicative of genuine wealth generation stemming from savings and investments. Instead, it resembles a façade of growth reflected in GDP figures when capital reserves deplete and wealth diminishes.
Consumer spending, which constitutes close to 70 percent of the U.S. economy, saw an increase of 2 percent in the third quarter. Yet, during the same period, incomes rose by only 0.8 percent. The 1.2 percent gap is unlikely to have been offset by savings.
It’s worth noting that 40 percent of Americans have just $500 or less in savings. Moreover, 28 percent of Americans hold no savings at all. Consequently, the difference between the 2 percent rise in consumer spending and the 0.8 percent increase in incomes is likely funded through new debt—essentially borrowed from the future. Continue reading
