June 29, 2016

Syrian migrants menace NB high school — Could UK rape gangs happen in Canada?

EZRA LEVANTREBEL COMMANDER

Have you been watching Faith Goldy’s investigative reports into the Syrian migrants to Canada, who were dumped into Fredericton High School in New Brunswick? 

These Muslim students were demanding sex segregation of classes, were swearing at teachers, hitting on uncovered Canadian girls, and more. 

Some of these Muslim students are in their early twenties. 

All I can think about is Rotherham, in the UK. Over a decade, Muslim gangs blackmailed, raped and prostituted 1,400 British girls. Social workers detected it. Police and politicians were advised. 

But no-one wanted to be called racist, so nothing was done. 

We’re not at Rotherham yet. But for two days now, we’ve broken the news about Fredericton High School, and there's been total silence from the rest of the media.

DYI Comments:  Any common sense American knows this is coming to the U.S. soon or already has occurred yet not being reported due to political correctness.  Our emigration policy is nothing more than open borders with mass migration now centered with central American nations along with the Obama administration bringing in refugees from the middle eastern countries the U.S./U.K./NATO/E.U. alliance destabilized.

Here's a emigration policy that is easily comprehended.  Hire up recruiters and search the world over for their best and brightest among their young people.  Such as an open heart surgeon from Finland who is still in his 30's.  Or a German with advanced degrees in industrial sciences. See where I'm going with this?  Think any of these people will be on welfare?  Not a chance! Possible job creators?  You bet they will!  This should have been America's primary emigration program from day one. 

DYI

 Concealed Carry Prevents Mass Shooting at SC Night Club

A man with a concealed carry license stopped a shooter after the latter opened fire on a crowd of people at a nightclub in South Carolina early Sunday morning, according to WISTV.com. 

After getting into a fight with another person, the 32-year-old suspect pulled out a gun and began to fire at a crowd of people gathered outside of the club, hitting and injuring four, WISTV reports. One of the victims, who holds a concealed-carry permit, shot back in self-defense, hitting the suspect in the leg. 

The suspect has been charged with four counts of attempted murder. He was also charged for unlawfully carrying a weapon and for carrying one while committing a violent crime. 

The concealed carrier who shot back won’t be facing any charges, as his permit to carry was valid.

Same incident as reported  from channel 10 news South Carolina

Wistv.com

                                        LYMAN, SC (FOX Carolina) -

Deputies with Spartanburg County said a man faces multiple attempted murder charges after opening fire outside a nightclub early Sunday morning. 

The shooting happened around 3:30 a.m. at Playoffz nightclub on Inman Road in Lyman. 

Deputies said 32-year-old Jody Ray Thompson pulled out a gun after getting into an argument with another man and fired several rounds toward a crowd that had gathered out in front of the club. 

"His rounds struck 3 victims, and almost struck a fourth victim, who in self-defense, pulled his own weapon and fired, striking Thompson in the leg," Lt. Kevin Bobo said. 

Bobo said the man who shot Thompson has a valid concealed weapons permit, cooperated with investigators, and won’t be facing any charges.

DYI Comments:  Our founding fathers placed into the Bill of Rights our second amendment for three reasons.  One: if or when our government becomes tyrannical our citizens has some means of fighting back.  Two:  Invasion from a foreign power providing our citizens some means to resist.  Three:  Self protection against criminal acts especially in cases of deadly force.

One:  Tyrannical government.  Read your history; the first thing dictators or politburo style governments do is systematically disarm the populous.  Gun control/confiscating is inversely proportional to the level of freedom in any country around the world.  The latest gun grab was in Venezuela by the late ballot box stuffing dictator Hugo Chavez.  Now that socialism reigns Venezuela populous is starving along with rampant crime.  The current ballot box stuffing dictator Nicolas Maduro massive army military exercise in Venezuela in order to intimidate the his citizens into compliance.  If the citizens were well armed Maduro would think twice before unleashing the army. 

Two:  Invasion from a foreign power.  A saying that has been inaccurately attributed to Admiral Yamamoto of Japan during WWII regarding possible invasion of America's west coast: "There will be a rifle behind every blade of grass."  Admiral Yamamoto didn't say those words but the point is well made.  Or....Switzerland has the same mentality only they have gone much further with a large army reserves who keep their military fully automatic weapons with massive amounts of ammunition at home!          

Three:  Self protection.  When it comes to the national main stream press mass shootings are blamed on; "the gun."  Not the person pulling the trigger or to go against political correctness to declare "radical Islamist terrorists."  Now we have a situation where a law biding citizen ends a potential mass killing(not a terrorist) with the use of a hand gun.  Will this be reported in the national main steam press.  Not likely.  If it is, it will be covered quickly with zero emphasis on the positives of gun ownership.

DYI  

‘Silver tsunami’ threatens to wipe out South Korean rural communities

GUNWI, SOUTH KOREA – It’s lunch break at Seoksan Elementary School and the entire student body has taken to the vast playground for a game of football — with just three players on each side. 

“We don’t really have enough people and there’s no goalkeeper, but it’s still fun,” said Lee Jung-bin, playing on the same side as his sole fourth grade classmate, Kim Dong-won. 

Lee is one of only six students — all boys aged seven to 11 — attending the school in the southern South Korean rural county of Gunwi, which once boasted 700 pupils. 

Seoksan is one of many “mini-schools” struggling to stay open in rural communities that have been decimated by a dramatic demographic shift in South Korea, which now has one of the world’s lowest birth rates.

 Birth Rate

Country	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
South Korea	1.72	1.72	1.72	1.56	1.56	1.26	1.27	1.28	1.2	1.21	1.22	1.23	1.23	1.24	1.25

By 2030, a quarter of all South Koreans will be over 65 years old, and the overall population is expected to peak at around 52 million the same year before entering a period of steady decline. 

This so-called “silver tsunami” poses a major challenge for Asia’s fourth-largest economy as the young, working-age population declines and the cost of caring for the elderly escalates.

South Korea has a fertility rate of 1.19 births per woman — the lowest among OECD member nations.

The central government has launched similar schemes across the country, pumping more than 80 trillion won ($68.3 billion) since 2006 into programs aimed at encouraging people to marry young and have larger families, according to health ministry data. 

But critics say such schemes ignore the root causes of the problem, including a lack of quality jobs, childcare facilities and support for working mothers.

DYI Comments:  If anyone believes that the world will be over populated have not kept up with the worlds declining birth rate since 1970.  The world birth rate is approaching replacement and within 30 to 40 years will be below replacement(2.1).  Best private estimates have the world's population in decline by 2070.  Already the increase in population momentum is slowing dramatically. 

Brilliant Maps

Country	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2011	2012	2013	2014
World	2.8	2.73	2.7	2.65	2.62	2.6	2.59	2.59	2.61	2.56	2.46	2.47	2.45	2.43

The reason for the drop in fertility rate is simple the more modern the economy there is less need for children as an economic base for the family.  When you have a manual labor based agrarian society the family needs as many workers it can muster to work the fields.  Training is simple with many working the fields as young as 7 or 8.  

Today modern farming with its massive machines taking the place of manual labor children now have to be educated to enter our high tech world.  To achieve middle class status education is needed beyond high school such as apprenticeship programs and/or college.  Many children will not officially, so to speak, leave mom and dad until the age 25.  That is a quarter of a century!  The costs even if college/technical training is reigned in is still staggering for the parents and double for a single head of household.  Magnify with a family of 4 or 5 children and the expenses go through the roof.  Hence smaller families.

The drop in fertility comes at a fortuitous time as the world is in low level resource wars primarily oil and gas to power their economies.  Hopefully this trend will accelerate dropping below replacement sooner than the anticipated 30 to 40 years having this achieved by modernizing the economies of high birth rate countries.

DYI       

Democratic Party Platform Calls For Prosecuting Climate Change Skeptics

This seems like something Attorney General Loretta Lynch would gladly take up, as she’s already admitted the department is looking into the possibility of pursuing civil action against climate change deniers. 

“This matter has been discussed. We have received information about it and have referred it to the FBI to consider whether or not it meets the criteria for which we could take action on,” Lynch said at a Senate Judiciary Committee hearing in March.

 Looks like it’s time to say goodbye to free speech.

DEMOCRATIC PLATFORM DRAFTING MEETING CONCLUDES

Climate Change and Clean Energy: Moving beyond the “all of the above” energy approach in the 2012 platform, the 2016 platform draft re-frames the urgency of climate change as a central challenge of our time, already impacting American communities and calling for generating 50 percent clean electricity within the next ten years. The Committee unanimously adopted a joint proposal from Sanders and Clinton representatives to commit to making America run entirely on clean energy by mid-century, and supporting the ambitious goals put forward by President Obama and the Paris climate agreement.  Another joint proposal calling on the Department of Justice to investigate alleged corporate fraud on the part of fossil fuel companies who have reportedly misled shareholders and the public on the scientific reality of climate change was also adopted by unanimous consent.

DYI Comments:  So much for the first amendment and let the witch hunts begin.  So many of these climatologist have been caught falsifying their data to fit the global warming narrative.  I'm old enough to remember in the late 60's and all of the 70's it was global cooling that was going to end the world.  Guess what? It didn't!  

All this is is a plan to generate a carbon tax here in the states then eventually the world managed by the U.N.  All of the money that comes in from this tax you will have to petition your semi elected (establishment/elites both parties) representative to dole out your money back to your community and keep you dependent.

And by the way if anyone thinks this will only be directed at fossil fuel companies think again.  This is nothing more than pre-Renaissance mentality who imprisoned heretics who believed the world is round or the earth revolves around the sun.  Everyone knows global cooling, errr ehhh, I mean global warming, oops, climate change is caused by man. and not changes in sun spot activity.  Or does it!?

DYI     

1 percent yield on 10-year Treasuries look increasingly likely

Gary Shilling Blog

1 percent yield on 10-year Treasuries look increasingly likely

The majority of people somehow are looking for steady patterns and simplistic answers. They’re looking for something that fits into what used to be the regular cycles, but this is just not anything like that. 

What they’re recognizing is the global issues are very much influencing the U.S., ‘No man is an island,’ and no country is an island -- to quote John Donne.”

DYI Comments:  Countries the world over are in a slow down, recession, or outright depression.  First world central banks have created so many bubbles they are almost impossible to keep track of.

I've only listed the most meaningful countries and cities.

Real estate bubbles:  Country and most overvalued cities
Canada - Vancouver and Toronto
England - London
Australia - Brisbane, Sydney, and Melbourne
New Zealand - Auckland
United States - New York, San Francisco
Russia - Moscow

Stock market bubbles:  Countries
United States
England
Germany
France
Australia
New Zealand

Bond market bubbles:  Countries
United States
England
All Central European Countries
Spain
Portugal
Japan

Countries in recession:
All Central European countries
Canada

Countries in depression:
Russia
Spain
Japan
Brazil

Countries in total social breakdown:
Venezuela

As more and more of these bubbles begin to pop the world over there will be a flight to quality.  Despite U.S. problems Treasury securities are well sought after plus we still have positive interest rates.  After all of this has played out it would not be surprising for the 10 year T-bond under 1% and the 30 year T-bond under 2% with 5 year notes zero to negative!

DYI    

  

June 27, 2016

Brexit and the Bubble in Search of A Pin

John P. Hussman, Ph.D.

First things first. While the full attention of financial market participants is focused on “Brexit” - last week’s British referendum to exit the European Union - the singular factor to recognize here is that the vulnerability of the financial markets to steep losses has very little to do with Brexit per se. 

Rather, years of yield-seeking speculation, encouraged by central banks, had already brought the financial markets to a precipice prior to last week’s vote.  

It’s not entirely clear whether Brexit is a sufficient catalyst to burst the bubble, as we recall that the failure of Bear Stearns in early-2008 was followed by a period of calm before the crisis was sealed by Lehman's failure, and numerous dot-com stocks had already been obliterated by September 2000, when the tech bubble began its collapse in earnest. We’ll take the evidence as it comes, but we’re certainly defensive at present, for reasons that have little to do with Brexit at all. 

The high-level churning in global financial markets since late-2014 represents what we view as the top formation of the third speculative bubble in 16 years. 

For the U.S. market, valuation measures most reliably correlated with actual subsequent market returns pushed to the third most offensive extreme in history at the May 2015 market high, eclipsed only by the 2000 and 1929 peaks 

(see Choose Your Weapon for a ranking of various measures, and the chart series in Imagine for a current perspective). 

Because this speculative episode has infected nearly every asset class, rather than favoring tech stocks or mortgage securities as in previous bubbles, 

the median price/revenue ratio across individual U.S. stocks actually pushed to the most extreme level on record in recent weeks, before promptly retreating on Friday.

Republican ex-Treasury chief Paulson slams Trump, to vote for Clinton

"When it comes to the presidency, I will not vote for Donald Trump," Paulson, who was chief executive of Goldman Sachs before becoming Treasury chief under Republican President George W. Bush, wrote in an opinion piece in the Washington Post. 

"I'll be voting for Hillary Clinton, with the hope that she can bring Americans together to do the things necessary to strengthen our economy, our environment and our place in the world," he said.

DYI Comments:  A bubble looking for a pin.  Whether it is Brexit or something else this bubble will burst as every bubble the world over has done before.  DYI's model portfolio is in great shape to weather any financial storm.

Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 6/1/16

Active Allocation Bands (excluding cash) 0% to 60%

83% - Cash -Short Term Bond Index - VBIRX

17% -Gold- Precious Metals & Mining - VGPMX

 0% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

The reason I posted the article regarding Hank Paulson not voting for Trump he is nervous for his former firm Goldman Sachs along with many others who are now heavily leveraged. When this bubble bursts and it will - with Trump in the White house, Trump will tell these boys to file bankruptcy just as he had to do in the past. There will be no bail out.

It is also highly likely Trump would unleash the Department of Justice prosecuting the firm(s) and more importantly the top brass for fraud.  This would not be a witch hunt the amount of securities fraud is rampant especially the top tier commercial, investment, and merchant banks.  The misdeeds is endless.

Unfortunately for the sake of justice the statute of limitations has run out for Hank Paulson. Seeing this scalawag in prison would be a step in the right direction.  When he was Treasury Secretary(2009 downturn) he misled Congress from buying the toxic asset to outright bailout for Goldman Sachs and all the rest.  On top of that it went against the American public who were and continues today dead set against bail outs.

Simply, this rat wants to privatize their gains and have the American public pay their losses.           

DYI

Chart Of The Day: Global Trade Volume Rolling Over

by David Stockman • June 23, 2016

DYI Comments:  More and more seeds of a global recession on the horizon.  So far too soon to call for a immediate recession here in the States.  With an overvalued market both for stocks and long term bonds(especially junk) all we can do is wait for a recession to knock the legs out from under prosperity and this market will come tumbling down.  Stocks, as measured by the S&P 500, have the very real potential of dropping from peak to trough 45% to 60%.

So hang onto your head while everyone else is losing theirs!

THE GREAT WAIT CONTINUES

DYI 

Brace Yourself: Our Latest Look at Student Debt

June 13, 2016

by Jill Mislinski

College Tuition and Fees constitute one of the biggest threats to our economic outlook. Here is a chart of data from the relevant Consumer Price Index sub-component reaching back to 1978, the earliest year Uncle Sam provides a breakout for College Tuition and Fees. As an interesting sidebar, we've thrown in the increase in the cost of purchasing a new car as well as the more substantial increase for the broader category of medical care, both of which pale in comparison.

During the decade of the 1990's, when real out-of-pocket funding declined 25%, tuition and fees rose 92%, which sounds substantial ... until you compare it to the 1272% across the complete data series. For early boomers (a decade before the time frame in the chart above) paying for college was sort of like buying a car. But in recent decades, it has become more like buying a house, for which the strategy of a minimum down payment is commonplace for first-time buyers.

DYI Comments:  Student loans the third party payer who's goal in life is to continue to shovel more and more money to cover the ever increasing cost of schooling never understanding that the lenders are responsible for pushing the costs ever higher.  The money from day one went to tuition, fees, plus the extras in the form of wages, college/university infrastructure[building projects] all to allure more students.  The process today is to churn as many students through the university system whether they graduate or not to capture their loans.

To stop dead in its tracks the hyperinflation for schooling do away with student loans.  This would have the immediate effect to reduce the costs of schooling.  College/universities will not be able to charge more than their customers can afford for if they do their campuses will have very few students along with massive layoffs.  They will scream bloody murder [they lost their subsidy] that the educational world will come to an end[no it won't] costs once again will drift back as stated in the article: "for early boomers (a decade before the time frame in the chart above) paying for college was sort of like buying a car."

A student would once again work a part time job, a little help from mom and dad, and graduate debt free.  Instead we are creating a nation of debt slaves!

DYI    

Gary Shilling presentation and talk at the Money Show.

DYI Comments:  A video of Gary Shilling explaining the continuing conditions of deleveraging with its subsequent deflation.  Here are his picks for cyclical and secular trades along with my take for each of them.

1.)  Short commodities

Over the next 4 to 6 years deflation will rule the day as 1st world citizens (U.S. included) continue to work off their debt load.  Since citizens are paying down debt to improve their balance sheets they are simply delaying or reducing their purchases.  Less purchases equals less need for commodities.  Add on the slow down in China commodity prices will go soft. However to achieve a commodity price smash that requires a world wide recession.  China's massive debt bubble could very possibly trigger such a panic.

2.)  Short oil stocks

Gary Shilling continues with his forecast of $10 to $20 dollar per barrel oil.  This is due to the continuing effect of 1 to 2 million barrels per day over demand.  Here at DYI a possible softening of prices, as with basic commodities, a world wide recession is needed to drive oil to such low prices.  If it does happen and oil prices become a teenager(below $20)[I have no idea if it will] then lump sum into the Adams Natural Resource Fund symbol PEO.  Will this happen?  I don't know but it is a possibility of merit.  Like a good Boy Scout BE PREPARED.  If it does  -  oil/gas/service companies will be on the give - away - table - at once in  a lifetime prices.

3.)  Long dollar

I agree.  When you look in depth at the other major countries currencies, despite what is said about the demise of the Dollar, it is the other currencies that are in big trouble.  

Central Europe - Euro

The Euro unless you have been asleep like Rip Van Winkle Central Europe with its Union could very well fly apart.  Massive debt due to retirement programs in vast need of reform due to demographic imbalances[birth rate significantly below replacement].    

Japanese - Yen

Japan with its massive public and private debt load who's central bank invented the idea of QE.  Now they are discussing the possibility of direct payments from their central bank to fund infrastructure/social programs.  Once that money is digitally printed it is impossible to return to the central bank and retire those monies.  As with QE the bonds that were purchased and in the case of Japan stocks as well sit on the central bank's balance sheet they can be sold retiring the digitally printed Yen.  Not so with direct payments.  A day will come for Japan they will have their lower Yen and inflation.  The Yen will crash and inflation could easily hit 15% to 25% per year.  When? Don't know.  But the seeds of destruction are present.

British - Pound

England despite being in the EU has maintain their own currency the British Pound. Whether or not they stay in the EU they have a debt bubble and massive fraud in their commercial and investment banking plus a real estate bubble centered in London of biblical proportions.  Reform is an understatement for a 1st world country of this magnitude.  When the Pound crashes it will be one hell of a wake-up call for their citizens providing them with pitch forks aimed at their politicians back sides!

Russia - Ruble

Russia's problems are immense.  Their birth rate is the same as Central Europe way below replacement for almost two decades possibly longer add on the fact that Russian men median mortality is age 54!  Alcoholism, industrial accidents, car accidents [alcohol related] along with TB outbreaks.  Massive corruption.  The biggest thief is Putin his net worth is estimated at 200 billion U.S. dollars add on the Russian top brass plus the oligarchs they have stolen an estimated one to one point five trillion U.S. dollars.  And the thievery continues.  If Putin stays in power long enough will he retire as the 1st Trillionaire? 

China - Yuan

China has a debt bubble that I've been forecasting for almost five years will blow sky high. Ghost cities have been build that can house 75,000 or more people dot the Chinese landscape. Fantastic levels of over production for manufacturing driving profits to razor thin levels only kept going by China's central bank shoveling out more and more cheap money. Add on a one child policy(only recently ended) they are now experiencing a demographic imbalance similar to Europe or Russia.

Anyone expecting China to displace the U.S. dollar as the reserve currency is living in a dream world. 

Switzerland - Franc

Great country with very few problems.  Their central bank about a year or so ago stopped maintaining the Franc in lock step with the Euro.  Thank God!  The Swiss are once again Swiss. 

Switzerland is the home of a hard currency and looks to stay that way for years to come. However they are far too small of an economy to displace the U.S. dollar as the reserve currency.      

  

Central & South America  Asia, Africa

Either too many problems or too small to displace the U.S. dollar as the reserve currency

United States - Dollar

The best looking horse in the glue factory

Problems?  You bet the U.S. has problems.  Medical,  Military and Educational industrial complex along with (my favorite word) massive consolidation by the top 25 banks which hold 85% plus of deposits.  A Federal Reserve that has lost its mind with insane monetary policies that have done nothing to help the economy but has driven stocks and bonds to bubble proportions. The list is long and I'm not going to turn this into a rant plus I've posted before about these problems and others.

There are of course many positives for the U.S.  Fantastic geography access to both the Atlantic and Pacific.  Port facilities second to none plus multiple super ports.  Navigable river systems with the majority located by the richest farm land in the world.  Excellent railroad and a reasonable freeway/airport system.  A people with an independence streak and an entrepreneurial mind set as well.  The government simply has to trust the people and get out of the way this economy will take off like a jack rabbit.

4.)  Short emerging stocks and bonds
First world economies are in a bubble and when it bursts world bond and stock markets will drop significantly including and especially emerging countries.  This will also produce a world wide recession these countries will devalue their currencies in an effort to export their way out of the recession.  It will be a race to the bottom with one after another emerging currencies dropping like a rock.  Stocks, bonds, and their respective currency will decline, a losers bet.

5.)  Short Junk bonds
U.S. corporate low rated or junk bonds will get crushed when the bubble bursts.  First we had high tech/dot.com stocks year 2000, then junk mortgages in 2008 and now corporate low rated junk bonds for 2016.  When will the dam break producing a huge pool of defaults? Don't know.  All I do know is the seeds for future misery are present.

6.)  Long 30 year Treasury bonds
Amazing how long the secular bull market for declining rates has lasted.  Since February of 1982 at 14.56% today 30 year T-bonds are 2.50%!  Could rates drop further?  Anything is possible and very well probable.  DYI is stopped out of the long term bond market as rates are now way below their historical average since 1871!  DYI see's this as an interesting speculation.  It is within the realm to have 10 year T-bonds under 1% and 30 year T-bonds below 2%.

7.)  Short U.S. stocks
DYI model portfolio is long only.  With low oil prices and world central banks hell bent on levitating stock prices, shorting, if the timing is off, remaining solvent is very difficult.  The S&P 500 has been on multi month arch like top.  When the market will break to the downside is anyone's guess.  As value players just as with long term bonds stock values have moved into bubble land.  DYI will leave the speculation to the speculators.

      Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 6/1/16

Active Allocation Bands (excluding cash) 0% to 60%

83% - Cash -Short Term Bond Index - VBIRX

17% -Gold- Precious Metals & Mining - VGPMX

 0% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

 This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

DYI

From Investment-Grade to Bankruptcy in 4 Months: Why Ratings Agencies are Still a Joke

by Wolf Richter • June 21, 2016

American Fitch Rating Service 

The largest bankruptcy in Brazil’s history occurred on Monday when telecommunications carrier Oi SA threw in the towel. On Tuesday, it also filed for Chapter 15 bankruptcy protection in the US. A euro-denominated debt payment is coming due in less than a month, and it doesn’t have the money.

Those downgrades over the past four months should have been spread over two or three years! But this is why ratings agencies are still a joke, despite the bitter lessons learned during the Financial Crisis when they slapped tripe-A ratings on subprime mortgage-backed securities shortly before they imploded. Of course, ratings agencies still being paid by the issuer and thus are reluctant to bite the hand that feeds them. Investors are on their own, always eager to get fleeced in their search for yield!

DYI Comments:  With the zeal for yield still in full force desperate investors will leap before they look.  This is one of many consequences of sub atomic low interest rates average investors would normally stay with CD's at the bank or move into short to medium term maturity Treasury bonds.  We're at the point all of the quality bond deals are long gone and to satisfy insatiable appetite for yield quality continues to move lower and lower. Yet the rating agencies are under pressure by the corporation who are paying for the rating so grade inflation rules. They also know that higher the rating for a new issue the easier it is to sell the bonds.  When the next recession arrives many investors who thought of themselves as conservative will be badly burned.  This also includes institutional investors.

DYI             

A New Rush to Gold Has Begun

So here’s the good news. A new rush to gold has begun. To see where we’re headed, let’s first see where we’ve been. 

Gold and silver owners in the first ten years of this new century were in for quite a ride, watching gold soar to $1,895 and silver to $49 by 2011. Even those who jumped in midway saw their paper money values zoom. 

Gold had bottomed at $255.95, Apr 2, 2001. Note the gold bull began months before the attacks of 9/11. Silver bottomed nine weeks after the attacks at $4.06, alongside crashing stock markets. 

The national debt in 2001 was $5.8 trillion, on its way to today’s $20 trillion. Savers and retirees could depend on CD and bond returns well north of 5%. U.S. bonds were still triple-A rated. You could take your cash from your bank without federal snooping. 

“War on cash” was an unknown socio-economic term. No one predicted massive, taxpayer funded bail-outs, threats of bail-ins, or the terrible twins, ZIRP and NIRP – zero and negative interest rates. 

While the DOW and S&P languished in the agony of three crashes from March of 2000 through 2009, gold and silver got no respect from Wall Street or financial media. That’s despite gold doubling in paper money terms 2.8 times from 2001 to 2011. Silver had 3.5 doubles. Both metals had short-lived drops along the way.

 From High to Low since the year 2000 as of 6-1-16

+319.5% Gold

+161.9% Transports

+132.7% Utilities 

+  91.8% Oil
+  59.4% 30 year Treasury bond

+  58.5% Swiss Franc's

+  54.7%  Dow
+  42.7% S&P 500

+  21.6% Nasdaq 

Thanks, in part, to the top-down manipulation of bullion bank price suppression, gold steadily fell 55% and silver 72% from 2011 through 2015. Supply and demand played no role. Governments and banks did a superb job protecting the illusion paper money still has value.

Global Negative Bond Yields – Swiss 30-year bond yield dips into subzero territory

Global bond yields are now heading into subzero territory. Investors simply pay just to place their cash in government debt. After German 10-year sovereign bonds dipped to under zero this week (SEE: German 10-year sovereign bond yields reach negative territory for first time in history), Swiss government debt followed suit. 

The yield on the 30-year Swiss bond declined into negative territory on Thursday, according to MarketWatch. During the trading session, the 30-year bond yield tumbled 5.5 basis points to negative 0.055 percent.

DYI Comments:  European demographic imbalances.  Far more older folks than young slowing their economy to crawl along with social programs that are in need of reform.  With so few young citizens the burden becomes excessive to pay for their version of social security and health care so the politicians leaned heavily on borrowing to make up the difference.  Now the European central bank is buying up the debt in an effort to free up the private economy.  If the union doesn't fly apart their central bank in the end will result in direct payments for the remaining portion of their social programs that taxes are unable to support.  In other words they will use the most inciduous tax of all: INFLATION!  This is comming to the U.S. during the 2020's but first it will be Europe and that is what the gold market is telling us.

DYI  

'At the limit,' Mexico buckles under migrant surge to U.S.

TAPACHULA, MEXICO/WASHINGTON | BY GABRIEL STARGARDTER AND JULIA EDWARDS

Mexico is struggling to stem the flow of Central American migrants traveling to the United States ahead of the U.S. presidential election, causing major concern in Washington, which is weighing sending more agents to help.

DYI Comments:  DYI's opinion oil/gas are in a secular bull market that is only temporarily derailed by economic and/or geopolitical events.  Oil prices bottomed inflation corrected in 1998 at $12.25 per barrel, today prices are hovering around $50.  308% increase!   Oil prices especially for Central American countries are inversely proportional to their economic growth.  In a nut shell, higher the oil price greater the devastation for their economies.  This is turn provides the seeds for social unrest leading to the rise of criminals, tin horn dictators, or just flat out anarchy.  These conditions will not improve until their populations have been reduced in relationship to the availability and cost of energy.  A massive diaspora has ensured Mexico and the ultimate destination the U.S. or any other country that have significant oil/gas reserves.  

Venezuela launches government food distribution program as residents turn to dumpsters for food

Amid widespread food and beverage shortages, Venezuelan dumpsters have transformed into grocery stores in the “socialist paradise.” This is what you get when you integrate central planning, price controls and wacko socialist leaders. 

According to a report from the Associated Press, many Venezuelan residents are turning to dumpsters and garbage bins to feed themselves and their families, and even consumers. 

In order to combat the food crisis, the Venzuelan government has established a food distribution program. President Nicolas Maduro announced that communal councils would distribute 70 percent of the nation’s food directly to family homes. 

We all know how well government food distribution programs work (sarcasm).

DYI Comments:  Here is a country with known energy reserves granted it is high sulfur or what is commonly called in the oil trade as "dirty oil."  It is much harder to refine, environmental problems, in other words far harder to sell in the world markets.  Be that it may Venezuela has reserves and could at least developed it for their own use to power their economy.  Venezuela was sold on the age old propaganda trick that you can obtain something for nothing by the means of socialism.  First by Hugo Chavez and then compounded by the current President Maduro.  How far will Venezuela degrade before a turnaround occurs?  If the socialist remain in power another Cuba will transpire and with it massive emigration the U.S. being the ultimate destination.  With a population at 30 million it would be of no surprise having that number drop by 10 million over the next 5 to 10 years if the socialist remain.

'We're living worse than in a war': Venezuela's deepening economic crisis

Critics have slammed president for embracing socialist blueprint instead of free-market policies

CBC News Posted: Jun 21, 2016 5:00 AM ET Last Updated: Jun 21, 2016 5:43 AM ET

The oil-exporting South American country is caught in a perfect storm of droughts, food and power shortages, and devastating inflation and recession caused by plummeting crude prices. 

DYI Quick Comment:  CBS don't forget insane government rules, regulations, and programs all in the name of socialism.  At least further into the article they do address socialism.  Good for you CBS.

While Maduro has blamed the downturn on an "economic war" he claims is being waged against his government by the political opposition, the private sector and Washington, his critics have slammed the president for sticking to Chavez's socialist blueprint instead of embracing free-market reforms. 

"Within 2½ years, Maduro has taken an unsustainable [economic] model and just ridden it right off a cliff," David Smilde, a senior fellow and Venezuela expert with the Washington Office on Latin America,previously told CBC News.

Lack of food and necessities 

The floundering economy has resulted in a shortage of basic supplies like food and medicine. 

Teacher Becky Jordan says you have to wait in line for hours for a loaf of bread, and live without essentials like soap and toothpaste. 

"Daily life has become increasingly challenging, difficult, frustrating, even humiliating," Jordan said. 

The government only allows people to shop one day a week at state-run supermarkets, with the day pre-determined by ID number.

DYI Comments:  That just says it all.  Government run supermarkets along with many other directly government owned enterprises all lacking in effienciancies which lead to price discovery. Higher prices along with property rights [socialism must end] will end food shortages and over time drop the cost of food.  This process if placed in all industries would revitilize Venezuela in 5 years after 10 years they would be noted as the economic tiger nation of South America.

If only Americans accross the board would reject socialism our country would once again be the beacon of hope.  The expression "The American way" would be synomous with free minds and free markets.

DYI