World’s Largest Hedge Fund Manager Slams Mainstream Media’s Fake & Distorted News Epidemic

Ray Dalio, founder of Bridgewater – the world’s largest hedge fund, has “been reflecting for quite a while on the destructive effects that fake and distorted media are having on our society’s well-being,” but it appears a recent Wall Street Journal article about his fund – full of intentional distortions, appears to have pushed the billionaire over the edge at just “how destructive and widespread these ‘fake’ and ‘distorted’ agendas are.”

Ironically, by slamming the WSJ, a shining beacon of the supposedly “non-fake news”, as a representative of just that (for his personal reasons), Dalio has effectively discovered what many who have dealt with “professional journalists” have learned over time: agenda-driven, “real news” is just as bad, if not worse, than “fake news.”

Dalio discovers what anyone who has ever dealt w MSM journo knows: agenda over facts, little intellectual curiosity, low effort to gain knlw https://t.co/KSewlyvVec

— Barbarian Capital (@BarbarianCap) January 3, 2017

Dalio’s full takedown of the WSJ:

The Fake and Distorted News Epidemic and Bridgewater’s Recent Experience With The Wall Street Journal

Via LinkedIn.com

To me, fake and distorted media are essentially the same problem in different degrees. My own experience, which I will share later in this piece, is just one small case within an epidemic. While Bridgewater will survive this case—and even if we didn’t, the world would be just fine—it is questionable whether the world will be just fine if this fake and distorted media epidemic is not arrested. As Martin Baron, the Washington Post’s Executive Editor, said in reflecting on the problem, “If you have a society where people can’t agree on the basic facts, how do you have a functioning democracy?”

Distorted pictures lead us to make bad decisions. In my opinion, if people don’t correct such inaccuracies and don’t fight against this problem, continued distortions in the media will prevent the public’s accurate understanding of what is happening, which will threaten our society’s well-being. We in the financial community now openly talk about fake or distorted media being used to manipulate market prices to the harm of many, and similar conversations are taking place in most areas.

This is not just a fringe media problem; it is a mainstream media problem. And while it is widely recognized, there is no discussion underway about how to rectify it. The Associated Press said that only 6 percent of Americans surveyed have “a lot of trust” in the media. A recent Gallup study showed that Americans’ trust in the media has dropped to an all-time low, with only 32 percent of those surveyed saying that they have either a “fair” or “great deal” of trust in the media. That compares with 55 percent having such confidence in 1999 and 72 percent in 1976. The dramatically decreased trustworthiness has even plagued icons of journalistic trust such as The Wall Street Journal and The New York Times, as sensationalism and commercialism have superseded accuracy and journalistic integrity as primary objectives.‎ Many, if not most, “journalists” are trying to write the story that they want to write and fit the facts to it rather than accumulating facts to accurately report pictures of what is true. To be clear, I am not saying that this is the case for all people in the news media as there are a number of true journalists who do seek to convey accurate information; I’m just saying that they are a rapidly shrinking percentage of the total and the poll numbers reflect that.

The failure to rectify this problem is due to there not being any systemic checks on the news media’s quality. The news media is unique in being the only industry that operates without quality controls or checks on its power. It has so much unchecked power that even the most powerful people and companies are afraid to speak out against it for fear of recrimination. In fact, I presume that I will be widely attacked in the media for what I am saying here. Nonetheless I am compelled to say what many people express privately, which is that 1) the quality of news media is declining in general, 2) those in the news media have an enormous amount of power, 3) the news industry is unique in not having its standards of behavior specified and overseen, and 4) this confluence of realities is dangerous.   

While we all treasure our free press which is the reason that those in this industry are not overseen, the accelerating loss of faith in the media appears to be coming to a head and will probably lead to a backlash. I worry that if the industry doesn’t fix its problems, other forces will cause the pendulum to swing in the opposite direction, which will lead to some of the cherished press freedoms being lost. That too could undermine the public’s ability to know what is true. There is no getting around the fact that we need a responsible news media, and the powers that be need to start talking about how to bring that about. Personally, I hope that prominent media organizations will explore ways of self-regulating the quality of what they are producing, or at least create ratings in the way the Motion Picture Association of America provides its movie ratings. If the industry created a self-regulatory organization that set standards and conveyed assessments of quality as is done in a number of other industries, it would be much better than most of the other alternatives. In any case, it’s not my place to determine how this problem is resolved as much as to speak up about the problem and encourage discussion of it. 

*  *  *

A Case in Point

I have mixed feelings about describing our most recent experience with The Wall Street Journal because many people might misconstrue my doing this as me simply complaining about an article that I didn’t like. While I certainly don’t want to let the inaccuracies about Bridgewater stand, my more pressing motivation is to give you a window into how media is often made because I believe that those of you who haven’t seen it from the inside will find it eye-opening. It probably will be a little bit like watching sausage being made for the first time.

 

About six weeks before the Wall Street Journal story by Rob Copeland and Bradley Hope came out, we were contacted by Copeland, who was “fact-checking” and seeking information about Bridgewater. Many of the things he was asking about were downright wrong, so we were presented with the choice of either cooperating with him or allowing the incorrect information to go out. Because we’ve had a history of Copeland and Hope writing misleading stories about Bridgewater even when we cooperated with them, we were inclined to not engage with them because we expected that they might again distort whatever we said. Copeland however insisted that they wanted to “reset the relationship” to present an accurate picture of the firm. He offered to enter into an agreement in which we would provide him with information that he didn’t already have in order to give him a fuller picture but only on the condition that he would not use that information unless we mutually agreed that his presentation of it in the article was accurate. We understand that the culture behind our exceptional success over the last 40 years is both unusual and commonly misunderstood, so we decided to enter into that agreement with him. As explained below, he broke the agreement by presenting distorted pictures of what we told him even after he asked us to “fact check” his assertions and we replied in writing that they were inaccurate.

 

Copeland and Hope allege that Bridgewater is an oppressive environment based on very few conversations—as they put it, on interviews with “more than a dozen past and present Bridgewater employees and others close to the firm.” We have about 1,500 people who work at Bridgewater, most of whom love it rather than feel oppressed, so the picture they gleaned from these dozen people was clearly not representative. Bridgewater obviously could not have been as successful for as long as it has been without a culture that values its employees and fosters excellence; Copeland wasn’t seeking to understand that. We explained to him in writing that “You are painting a one-sided negative picture of the work environment. The problem is that people who are happy with their experience and respecting our rules are not allowed to speak with the media so you end up hearing disproportionately from disgruntled people. It becomes a gross exaggeration and none of the joy of the Bridgewater experience gets represented.” We offered to provide Copeland an extensive list of employees and former employees who could freely speak with him. He did not take us up on that offer.

 

We also offered to put Copeland in contact with three prominent organizational psychologists and researchers who, out of their own curiosity, had studied our culture in depth and conveyed their highly-regarded analyses in three different books. These researchers were on site at Bridgewater and had access to anyone they wanted to speak with when they did their studies. Copeland and Hope never even walked though Bridgewater speaking to its people, yet they also chose not to speak with these experts. If you are interested in reading a few much more informed assessments of Bridgewater, we suggest that you read An Everyone Culture by Robert Kegan and Lisa Lahey, Originals by Adam Grant, and/or Learn or Die by Edward Hess or read the quotations from these books that are included here.

 

Copeland asked us about our culture of radical transparency, so we explained the logic behind it. We directed him to Principles, which describes it in depth. We agreed that Bridgewater is a challenging place to work, that the characterization of the firm being like “an intellectual Navy Seals” is apt, and that it isn’t for everyone. We made clear that nobody doubts that our unique culture has worked remarkably well for 40 years, and that no company could produce the results we have without there being deep and meaningful relationships among the people who work there. We tried to explain how the culture works and how it has produced our unique results, and we tried to provide him with facts that substantiated that assertion. For example, in our most recent anonymous annual survey, 89 percent of employees agreed that “running Bridgewater according to the culture and principles is key to Bridgewater’s success” and 94 percent agreed that “the culture helps my personal evolution.” Similarly, 89 percent of our clients said that they were satisfied or very satisfied with Bridgewater, 95 percent said that “Bridgewater’s investment insights are uniquely valuable,” and 95 percent said that “Bridgewater’s personnel are honest and direct with me, even when we disagree.”

 

We also explained the logic behind radical transparency in conversations and in the following written statement: “If you agree that a real idea-meritocracy is an extremely powerful thing, it should not be a great leap for you to see that giving people the right to see things for themselves is better than forcing them to rely on information that is processed for them by others. Radical transparency forces issues to the surface—most importantly (and most uncomfortably) the problems that people are dealing with and how they’re dealing with them—and it allows the organization to draw on the talents and insights of all of its members to solve them. Eventually, for people who get used to it, living in a culture of radical transparency is more comfortable than living in the fog of not knowing what’s going on. And it is incredibly effective. But, to be clear, like most great things it also has drawbacks. Its biggest drawback is that it is initially very difficult for most people to deal with uncomfortable realities.” Copeland and Hope chose to not use any of that. Rather than seeking to understand how the culture and radical transparency work or referring to such facts in their article, they chose instead to push the story that they wanted to write.

 

We discussed turnover rates at Bridgewater and showed them the statistics that make clear that in the first year or two turnover is unusually high and in subsequent years it is unusually low. This pattern is a result of Bridgewater’s culture and its having tough and unique standards. The company is not for everyone but for those who it is for, there is nothing like it. The numbers substantiate this—21 percent leave in the first year and another 10 percent leave in the second year, but the turnover rates of those in years three, four, and five are exceptionally low, at only six percent, four percent, and three percent respectively. Copeland and Hope chose to focus only on the relatively high early turnover saying “Bridgewater says about one-fifth of new hires leave. The pressure is such that those who stay are seen crying in bathrooms.” They omitted the longer-term high retention rates and the satisfaction levels behind them.

 

When Copeland asked about how radical transparency works, he suggested that we were disingenuous because we didn’t pursue it totally. We explained our approach: “Don’t get me wrong: radical transparency isn’t the same as total transparency. It just means much more transparency than is typical. We do keep some things confidential, such as illnesses or deeply personal problems, sensitive details about intellectual property or security issues, the timing of a major trade, and at least for the short term, matters that are likely to be distorted, sensationalized, and harmfully misunderstood if leaked to the press.” And we pointed him to the relevant principles. Copeland and Hope chose to ignore those explanations and write “he decided to let only 10 percent have the full measure of what he calls radical transparency.” After he passed that by us, we replied that “It is incorrect that only 10 percent get radical transparency. Here’s the fact. Everyone can see most everything, but only the top 150 or so people get to see the most sensitive type of stuff which, in most companies would be limited to only the top 5 or 10 people.” The authors chose to go with their mischaracterizations, even though doing so was misleading.

 

Similarly, their representations regarding our “secret project” to systemize our criteria for management decision making were both sensationalistic and misleading. We explained that what we are doing in systemizing management decision making is the same thing we have been doing for 30 years in systemizing our investment decision making, which is to collectively agree on good principles for making decisions and to express them in computer code. This allows us to input the relevant data and for the computer to process it according to our mutually agreed-upon criteria. We explained that we are doing this because we have learned that this principled and systemized decision making process allows us to get above our emotional attachments to our own conclusions and focus instead on deciding what our decision making criteria should be, which ultimately leads to better decisions because computers can process these criteria in much better ways than humans can. For example, by collecting data on people, we can learn what they are like, what jobs they are best suited for, and how they would most effectively work together. People also learn a lot about themselves, which helps them and their personal development. We are collecting and building these criteria collectively, yet the writers chose to characterize all this as being “like trying to make Ray’s brain into a computer” because that fit better with their desire to paint a picture of Bridgewater being a crazy, oppressive place run by a Dr. Frankenstein type character — even though the evidence shows it to be an idea-meritocracy which has, for several decades, succeeded in producing meaningful work, meaningful relationships, and unparalleled results through its radical truthfulness and radical transparency.

 

Copeland and Hope mischaracterized several other things (e.g., my thinking on Jim Comey, a man whom I admire). In each case, I explained to them that they were mischaracterizing and they chose not to convey anything that didn’t fit with the story they wanted to write. I won’t delve into more examples because we are past the point of diminishing returns.

So there you are. You now have a window into how some media is being made, and you’re left facing the dilemma I described in the first part of this piece. There is no established party to assess the accuracies of what is being said, and you are left to wrestle with questions of what is true based on the scant evidence you have in front of you. I suggest that rather than worry about what’s true about Bridgewater, which probably won’t have an effect on your life, you worry instead about the systemic risks arising from fake and distorted media.

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Germany Sees “Overwhelming” Surge In Sales Of Hitler’s Mein Kampf

After a 70-year ban, Adolf Hitler’s Nazi manifesto Mein Kampf was made available again in Germany in 2016, and as The BBC reports, the German publisher of a special annotated edition of the anti-semitic text says sales have soared since its launch a year ago.

How fortunate for governments that the people they administer don’t think.
– Adolf Hitler

As The BBC reports, about 85,000 German-language copies of the anti-Semitic Nazi manifesto have been sold.

Publisher Andreas Wirsching said “the figures overwhelmed us”.

 

He is director of the Institute of Contemporary History (IfZ) in Munich.

 

At the end of January the IfZ will launch a sixth print run. The book contains critical notes by scholars.

 

Unlike the Nazi-era editions, the IfZ’s Mein Kampf (My Struggle) has a plain white cover – without a picture of Hitler. The swastika and other Nazi symbols are banned in Germany.

 

Mr Wirsching told the German news agency DPA that the IfZ was planning a shorter, French-language edition. “But two-thirds of our commentaries will be translated” for it, he said.

 

He said the IfZ had obtained solid legal advice before republishing the book on a limited scale. And the scholarly edition was aimed partly at pre-empting any editions put out by Nazi sympathisers.

 

“It would be irresponsible to just let this text spread arbitrarily,” he told DPA.

But, as Mike Krieger noted previously, sales of Hitler’s manifesto have been soaring worldwide for the last few years. At this point, we’d like to remain hopeful that these sales trends spring from a similar curiosity on behalf of the population, rather than from a darker more hateful place. From Time:

The infamous manifesto Adolf Hitler wrote while in prison after a failed coup in 1923, Mein Kampf or My Struggle, in which the dictator outlined his idea of a global Jewish conspiracy, is a surprise hit on the ebook market. While the book’s print copy sales remain stagnant, the ebook is in the top 20 on iTunes’s Politics & Events chart, next to books by Sarah Palin and Glenn Beck, the number one Propaganda & Political Psychology book on Amazon, and the 17th bestseller in the company’s Nationalism list. How could that be?

 

Chris Faraone explains why in a fascinating essaythat argues ebooks provide the perfect format for reading controversial material. “Mein Kampf could be following a similar trend to that of smut and romance novels,” Faraone writes. Customers may have not wanted to be seen reading the book or having it on their shelf at home, but the cheap digital copies “can be quietly perused then dropped into a folder or deleted.”

 

Ebook reviewers’ comments support the 50 Shades of Grey theory. “I think I waited 45 years to read Hitler’s words… I wish I had read it sooner,” wrote Steven Wagg. “Curiosity killed me to get this book,” said another reviewer. The document also functions as a warning: “People need to understand that if we do not learn from people like this, then we will fall into their traps again,” Ray D’Aguanno wrote on Amazon.

Ronald Lauder, president of the World Jewish Congress, says it “‘would be best to leave ‘Mein Kampf’ where it belongs: the poison cabinet of history.'”‘Unlike other works that truly deserve to be republished as annotated editions, ‘Mein Kampf’ does not,'” he adds.

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Trump Takes Victory Lap After Ford Cancels $1.6 Billion Mexican Expansion Plan As “Vote Of Confidence” In President-Elect

Update: sure enough, here comes Trump’s twitter victory lap:

@DanScavino: Ford to scrap Mexico plant, invest in Michigan due to Trump policies”https://t.co/137nUo03Gl

— Donald J. Trump (@realDonaldTrump) January 3, 2017

 

* * *

Trump’s recent “strong hints” to US-based automakers to keep production within the US are starting be heard loud and clear, and nowhere more so than at Ford, which just hours after observing the beat down Trump gave to competitor GM on Twitter, announced that it is scrapping plans for a new $1.6 billion plant in San Luis Potosi, Mexico after itself coming under criticism by Donald Trump for shifting small-car production south of the border, and announced it would instead invest $700m in a plant expansion in Flat Rock, Michigan.

Mark Fields, Ford’s chief executive officer, announced the plan today at a press conference at the automaker’s factory in Flat Rock, Michigan, south of Detroit. The second largest U.S. automaker builds the Mustang sports car and Lincoln Continental sedan from its Flat Rock plant, which employs more than 3,700 workers according to Bloomberg. Ford idled the factory for a week in October due to declining Mustang sales, which fell 13 percent in the first 11 months of 2016.

The automaker’s CEO Mark Fields told CNN that the move is a “vote of confidence” in President-elect Donald Trump’s pledge to create a pro-business environment. Fields emphasized, however, that he did not negotiate any special deal with Trump.

“We didn’t cut a deal with Trump,” he said. “We did it for our business.”

Perhaps, but as Reuters notes, Ford wasted no time to notify Trump of its decision this morning, perhaps before it even went public with the announcement:

MORE: @Ford chairman says told @realDonaldTrump this morning of decision to invest in U.S. and cancel Mexico plant

— Reuters Business (@ReutersBiz) January 3, 2017

Trump had previously slammed Ford on the campaign trail over the automaker’s plan to invest $1.6 billion in Mexico by shifting its North American small-car production south of the border. Ford had emphasized that the move would not affect U.S. jobs because the automaker would be putting new vehicles into the Michigan plants.

But now Ford will instead build the Ford Focus at an existing plant in Mexico and invest $700 million in its plant in Flat Rock, Mich. in an effort to produce more electric and self-driving cars. The automaker has said it plans to build a fully self-driving car by 2021.

“I am thrilled that we have been able to secure additional UAW-Ford jobs for American workers,” said Jimmy Settles, United Auto Workers vice president, according to CNN.

And so, it would appear that Trump was right, and won, again.

Curiously, according to CNBC, a high level Ford source said that “Trump had nothing to do with Ford’s decision to expand its Michigan plant.”

Sure, it was just a bigly coincidence.

We look forward to his victory lap on Twitter in moments.

* * *

From the press release:

FORD ADDING ELECTRIFIED F-150, MUSTANG, TRANSIT BY 2020 IN MAJOR EV PUSH; EXPANDED U.S. PLANT TO ADD 700 JOBS TO MAKE EVS, AUTONOMOUS CARS

Ford today detailed seven of the 13 new global electrified vehicles it plans to introduce in the next five years, including hybrid versions of the iconic F-150 pickup and Mustang in the U.S., a plug-in hybrid Transit Custom van in Europe and a fully electric SUV with an expected range of at least 300 miles for customers globally.

The automaker also announced plans to invest $700 million to expand its Flat Rock Assembly Plant in Michigan into a factory that will build high-tech autonomous and electric vehicles along with the Mustang and Lincoln Continental. The expansion will create 700 direct new jobs.

The moves are part of a $4.5 billion investment in electrified vehicles by 2020, offering customers greater fuel efficiency, capability and power across Ford’s global vehicle lineup. The plans are part of the company’s expansion to be an auto and a mobility company, including leading in electrified and autonomous vehicles and providing new mobility solutions.

“As more and more consumers around the world become interested in electrified vehicles, Ford is committed to being a leader in providing consumers with a broad range of electrified vehicles, services and solutions that make people’s lives better,” said Mark Fields, Ford president and CEO. “Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years.”

Ford is focusing its EV plan on its areas of strength – electrifying its most popular, high-volume commercial vehicles, trucks, SUVs and performance vehicles to make them even more capable, productive and fun to drive.

The seven global electrified vehicles announced today include:

  • An all-new fully electric small SUV, coming by 2020, engineered to deliver an estimated range of at least 300 miles, to be built at the Flat Rock plant and sold in North America, Europe and Asia
  • A high-volume autonomous vehicle designed for commercial ride hailing or ride sharing, starting in North America. The hybrid vehicle will debut in 2021 and will be built at the Flat Rock plant
  • A hybrid version of the best-selling F-150 pickup available by 2020 and sold in North America and the Middle East. The F-150 Hybrid, built at Ford’s Dearborn Truck Plant, will offer powerful towing and payload capacity and operate as a mobile generator
  • A hybrid version of the iconic Mustang that will deliver V8 power and even more low-end torque. The Mustang Hybrid, built at the Flat Rock Plant, debuts in 2020 and will be available in the North America to start
  • A Transit Custom plug-in hybrid available in 2019 in Europe engineered to help reduce operating costs in even the most congested streets
  • Two new, pursuit-rated hybrid police vehicles. One of the two new hybrid police vehicles will be built in Chicago, and both will be upfitted with their police gear at Ford’s dedicated police vehicle modification center in Chicago
  • In addition, Ford announces that its global utility lineup will be the company’s first hybrids powered by EcoBoost® rather than naturally aspirated engines, furthering improving performance and fuel economy.

The company also plans to be as aggressive in developing global electrified vehicles services and solutions. These include EV fleet management, route planning and telematics solutions.

Building the Future

To support the new era of vehicles, Ford is adding 700 direct new U.S. jobs and investing $700 million during the next four years, creating the new Manufacturing Innovation Center at its Flat Rock Assembly Plant. Employees there will build the all-new small utility vehicle with extended battery range as well as the fully autonomous vehicle for ride-hailing or ride-sharing – along with the iconic Mustang and Lincoln Continental.

“I am thrilled that we have been able to secure additional UAW-Ford jobs for American workers,” said Jimmy Settles, UAW vice president, National Ford Department. “The men and women of Flat Rock Assembly have shown a great commitment to manufacturing quality products, and we look forward to their continued success with a new generation of high-tech vehicles.”

This incremental investment in Flat Rock Assembly Plant comes from $1.6 billion the company previously had planned to invest in a new plant in Mexico.

Ford today announced it is cancelling plans for the new plant in San Luis Potosi, Mexico. It also announced that, to improve company profitability and ensure the financial as well as commercial success of this vehicle, the next-generation Focus will be built at an existing plant in Hermosillo, Mexico. This will make way for two new iconic products at Michigan Assembly Plant in Wayne, Michigan, where Focus is manufactured today – safeguarding approximately 3,500 U.S. jobs.

* * *

The Mexican peso is understandably unhappy following the news:

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Crude Is Crashing

As the Dollar Index surged post-manufacturing data, WTI Crude began to lose altitude from its overnight ramp. Combined with ongoing concerns over Libya’s production ramp, crude just crashed from over 55.00 to under 53.00 in minutes on heavy volume

It seems the catalyst was the USD index breaking recent highs…

But now both Oil and the dollar are tumbling…

 

But as Bloomberg notes, Libya, the holder of Africa’s biggest crude reserves, is ramping up output from its biggest oil field again after two years of internal conflict, the latest reminder of just how vulnerable OPEC’s quest to clear a global crude glut might be.

The Sharara deposit in the Libya’s south west will ship almost 1.9 million barrels this month from its Zawiya port near Tripoli, according to a loading program obtained by Bloomberg. That compares with a pumping rate from the field of almost 9 million barrels a month as recently as late 2014, before internal conflict halted flows.

 

If maintained, the amount Libya is pumping would be about 125,000 barrels a day higher than the North African country was producing in October, thestarting point for when most other OPEC nations are supposed to limit their collective supply.

 

Mustafa Sanalla, the chairman of Libya’s National Oil Corp., said Dec. 21 that output would reach 900,000 barrels a day early of this year. By hitting that target, Libya would replace about one third of the supplies being cut by other OPEC nations.

Meanwhile, gold is rallying…

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Silver Prices and the Russian Connection

Hold your real assets outside of the banking system in one of many private international facilities  –>    https://www.sprottmoney.com/intlstorage 

 

 

 

 

Silver Prices and the Russian Connection

Posted with permission and written by Gary Christenson (CLICK HERE FOR ORIGINAL)

 

 

 

Silver prices nearly reached $50.00 in April of 2011. They crashed to a low under $14 in December of 2015 and currently (December 2016) sit at about $16.

 

Silver prices, in our increasingly unreal debt based fiat currency world, streak higher and subsequently crash to unbelievable lows.

 

Option One: Silver prices are near the end of their correction and will rally substantially higher. Why? Exponential increases in debt and total currency in circulation lift the prices for nearly everything, including college tuition, cigarettes, the S&P, housing, health care, silver and gold. We have heard this before and we see the consequences of using our “fake money” every day.

 

Option Two: Silver prices reached a generational high in 2011 and will collapse even further in coming years. Why? Supposedly the crushing deflation will rule the world for several years and prices for stocks, bonds, real estate, gold and silver will crash to unbelievable lows. We have heard this before. Some prices will probably crash, but silver and gold should rise because they are real money and independent of (surging) counter-party risk.

 

The Silver to S&P 500 Ratio: This ratio shows the relative valuation of silver compared to stocks in the U.S. See the chart below for the ratio since 1990.

 

 

Silver is currently too low compared to the S&P 500 Index. We live in an exponential world – exponentially increasing debt, banker profits, silver prices, monetary nonsense and more. Examine the increase in U.S. national debt and the – more or less – parallel increase in silver prices – both on log scales.

 

 

 

Silver prices increase exponentially along with debt, currency in circulation, and consumer prices. However, if the world had cast aside economic delusions and returned to a world without central banks, fiat money, fractional reserve lending, unpayable debts … but I digress.

 

Assume that debt will continue to increase (it will as long as politicians and the Fed are “on the job”) and that the last 17 years of silver prices tell the story…

 

 

This chart uses a log scale and shows exponentially increasing prices. A green line connects highs since 2001 and another green line connects lows since 2001. The purple line is the geometric mean between the high and low boundary lines.

 

Prices are propelled higher above the purple line and then crash lower. Assume the purple line is an equilibrium line which suggests we will see the next multi-year move surge above the purple line.

 

Examine the deviation of the monthly price of silver as a percentage above or below the purple equilibrium line. Silver prices oscillate around the equilibrium line of zero on the following chart.

 

 

Silver is far below the equilibrium line and too low compared to its own exponential price history as well as compared to the S&P. The next major move should be UP!


WHY?


Ted Butler:

“The big theme, as I see it, is JPMorgan becoming more aggressive in acquiring physical silver and gold while at the same time reducing its COMEX short position in each almost as aggressively. It’s hard to imagine a more bullish backdrop for futures prices.”


Bill Holter: 


“I believe deflation will destroy financial assets and not stop until fiat currencies (including and specifically the dollar) themselves are destroyed. The coming credit event will wipe out currencies … and what is the result of grossly lower or worthless currencies? Hyperinflation.”


Currencies are created by increasing debt and are backed by nothing but hope, faith and confidence. Exponentially increasing debt is not sustainable. How long before the dollar, pound, yen and euro begin to resemble the Venezuelan and Argentinian currencies?

 

It is more sensible to own physical silver, knowing it is grossly undervalued compared to the S&P, national debt, total sovereign debt, and more.


THE RUSSIAN CONNECTION:


In accordance with the current blame-game promoted by the “fake news” diversions: We can blame Russia for HRC losing the election, releasing scandalous emails that the Democratic National Committee desperately wishes had remained private, the election of Trump, NSA spying on everyone, global terrorism, excess debt in the western world, the failure of hope and change, Federal Reserve monetary policy, unemployment, weak silver prices, strong stock markets, global bond market correction, the coming recession, derivatives disasters, slowing retail sales, Italian banking, cold weather, one brutally assassinated reindeer no longer able to pull Santa’s sleigh and a tardy delivery of goodies from the Easter Bunny next year…

 

 

Well … maybe Russia should not be blamed for all the above …

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

Silver Prices and the Russian Connection

Posted with permission and written by Gary Christenson (CLICK HERE FOR ORIGINAL)

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Washington Post Admits Its ‘Russians Hacked A US Utility’ Story Was ‘Fake News’

Over the weekend we noted that the Washington Post was caught spreading “fake news” about an alleged attempt by “Russian hackers” to take over a Vermont Utility (see “Washington Post Caught Spreading More Fake News About ‘Russian Hackers’“).  Within hours of reporting that the “Russian hackers” had gained access to the electrical grid, the Burlington Electric Department in Vermont had to issue a statement confirming that the provocative Wapo story simply wasn’t true and that a laptop found to be infected with malware was never actually connected to the grid.  An embarrassed Wapo was subsequently forced to change it’s sensationalized headline and publish a retraction.

Now, as they often do, it appears this Wapo “fake news” rabbit holes gets even deeper.  Not only are “federal officials” now confirming that “Russian hackers” never targeted the Vermont electrical grid, but the whole mishap was derived from an employee’s attempt to check his Yahoo email account which, as Wapo reports, resulted in his computer connecting to a “suspicious IP address” that is “found elsewhere in the country suggesting the company wasn’t being targeted by Russians.

The Post now reports that the Vermont utility hack was just an employee connecting to a flagged IP address… https://t.co/fapgFHt9aQ pic.twitter.com/zIGp0NEXnl

— Eric Geller (@ericgeller) January 3, 2017

 

Moreover, not only was the malware not linked to a specific attempt of “Russian hackers” to penetrate the U.S. electrical grid, the software in question isn’t even linked to the “Grizzly Steppe” group that the Obama administration says is behind the DNC and John Podesta email hacks.  Of course, this is a direct contradiction to the opening paragraph of Wapo’s original story which directly connected the Vermont “hack” back to “Grizzly Steppe”…apparently with no evidence whatsoever.

U.S. officials are continuing to investigate the laptop. In the course of their investigation, though, they have found on the device a package of software tools commonly used by online criminals to deliver malware. The package, known as Neutrino, does not appear to be connected with Grizzly Steppe, which U.S. officials have identified as the Russian hacking operation. The FBI, which declined to comment, is continuing to investigate how the malware got onto the laptop.

Wapo goes on to point out that the “murkiness of the information” makes it difficult to relay meaningful information to the public about alleged “hackings.” 

The murkiness of the information underlines the difficulties faced by officials as they try to root out Grizzly Steppe and share with the public their findings on how the operation works. Experts say the situation was made worse by a recent government report, which they described as a genuine effort to share information with the industry but criticized as rushed and prone to causing confusion. Authorities also were leaking information about the utility without having all the facts and before law enforcement officials were able to investigate further.

Here’s an idea, how about you simply avoid reporting “murky” information until you have all the facts?  But that wouldn’t help advance your “Russian hacking” narrative now would it?

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