SPECIAL GUEST: NICK BARISHEFF , Nick Barisheff is the president and CEO of Bullion Management Group Inc., a bullion investment company which provides investors with a cost-effective, convenient way to purchase and store physical bullion. Widely recognized as a North American bullion expert, Barisheff has written and been quoted in numerous articles on bullion and current market trends.

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Published 10-31-14

33 Minutes

Nick Barisheff Talks FINANCIAL REPRESSION and the Real Chinese Gold Inventories.

FINANCIAL REPRESSION

Financial Repression is a massive wealth transfer from the savers to the borrowers, where the borrowers are primarily the government and Wall Street.  It is done so subtly that the vast majority of people are unaware of their loss of purchasing power over the years of true financial repression.

It is simply about real negative interest rates which are worse than most realize if you use John Williams' ShadowStats inflation rate of close to 10% in the US. Presently negative real interest rates are witnessed worldwide in all the heavily indebted developed economies.

These Governments haven’t been able to get out from under too much debt by either: 1- Austerity measures, 2- Taxation policies, 3- Inflation or 4- Economic Growth. The only politically expedient solution left is Financial Repression. The middle class feel this in two ways: 1- Lost interest income and 2- Earned income through wages not keeping up with inflation.

As a gold expert, Nick Barisheff believes gold should be included in investor’s portfolio as insurance. Gold should normally be 10% of assets but presently should be considered strategic and the allocation should be closer to 20%. He cites why but startling lays out the degree to which China is presently acquiring Gold.

THE REAL CHINESE GOLD INVENTORIES?

Nick believes China is closer to 5000 tons of gold than the 1000-1700 currently reported by official sources. He believes China is acquiring physical Gold in its Sovereign Wealth Fund which doesn’t have to report it to anyone. The last time they did the Chinese Central Bank Gold Reserves went from 800 to 1600 tonnes.  They haven’t reported in five years.

During this 5 years Nick argues the gold is coming from Leased Gold. There has been approximately 1500 tonnes per year in net leasing over the last 10 years.

Nick believes when this all becomes properly understood it will send shock waves through the system

GOLD EXPROPRIATION

There is no answer to how governments might react to markets suddenly pushing Gold prices up dramatically. Nick is skeptical of countries expropriating gold from its citizens like the US did in the 30’s but investors need to be prepared for surprise reactions. His view is the best answer is Diversification within the 6 Investment Asset Classes and within the Precious Metals class to be diversified between gold, silver and platinum. There have never been government attacks on Silver and Platinum.

• Investors should be Diversified
• Investors must Educate themselves
• Investors Under Current Conditions should Strategically hold 20% of their

This is a most watch video for anyone interested in Gold Investing.

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SPECIAL GUEST: GRANT WILLIAMS , Grant Williams is Portfolio and Strategy Advisor for Vulpes Investment Management in Singapore−a hedge fund running $200 million of largely partners' capital across multiple strategies. Grant has 26 years of experience in finance on the Asian, Australian, European and US markets and has held senior positions at several international investment houses. Grant also writes the popular investment blog 'Things That Make You Go Hmmm...'

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Published 10-25-14

38 Minutes

Grant has 26 years of trading experience in Asian equity markets, beginning his career with Robert Fleming in 1986 trading Japanese equities and derivatives in both London and Tokyo. Subsequently he has run Asian equity, convertible bond and ADR/GDR trading desks in New York, Hong Kong, and Singapore as well as spending several years trading Australian equities in Sydney. During that time, he spent 6 years with UBS and a further 9 years with Credit Suisse. Most recently he was Head of Asian Equity Trading for Jefferies in Singapore.

This is a 38 minute video discussion between Grant Williams and Gordon T Long on Financial Repression.

FINANCIAL REPRESSION

Grant suggests that the dictionary defines repression as essentially about trying to repress true feelings. Financial Repression is the government’s attempt to steer behavior away from true investments and into those that assist the government to pay down its debts.

“The result is essentially outright theft by borrowers from savers. The pool of savings on earth is the last really untapped pool of capital that government has to go after”.

According to Grant the explosion in credit through removal from the Gold Standard, financial engineering and keeping interest rates low has left a differential between Credit Growth and GDP that has forced governments with no choice but to adopt Financial Repression policies. By debasing their currency and through inflation government create the most insidious type of wealth transfer that most people just don't understand.

Grant believes we are in a trap with no way out.

He makes his point crystal clear by pointing out how truly devastating Financial Repression has been to savers in real terms:

WILLIAMS ADVISES INVESTORS

• Be Flexible
• Consider Cash (Short Term) on a Risk / Reward Basis
• Consider Gold as an Insurance Policy

MESSAGE

• Be Engaged,
• Understand What is Happening,
• Question What You Are Being Told,
• Be Cautious,
• Avoid Potentially Large Drawdowns

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SPECIAL GUEST HOST: JOHN RUBINO, Author & Publisher of DollarCollapse.com

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PHASE SHIFT?

Does the Current Market Volatility Signal A Trend Change in Sentiment?

Published 10-18-14

31 Minutes, 49 Slides

Gordon T Long poses three questions for debate with John Rubino regarding the current Geo-Political Event Risks and Macro Economics developments:

1. Are the risks in fact bigger and more serious problems than we were seeing while the market was going up?
2. Could it actually be a matter that investors are reacting differently because underlying mood / sentiment has changed for some reason?
3. Are we unknowingly now over focusing on the Geo-Political Event Risks and Macro Economics developments as a result of the market going down (maybe for other reasons like reduced liquidity flows that no one is presently talking about - yet)?

John steps the discussion through risks such as: 1-the Islamic State, 2- Ebola, 3- The Strong $$$, 4- Japan & Europe, 5- Junk Bonds and 6- The"October" problem to illustrate that though the problems are more serious the real shift is in perceptions. He suggests that a phase shift occurs when "new headlines suddenly begin to seem both oppressive and really, really numerous, the public starts to feel that maybe we’re not okay after all!“

John suggests that the public is justified in being both confused and nervous because of the degree of market manipulation going on which has distorted price discovery, the pricing of risk and has allowed malinvestment to be hidden by continued roll-overs of every increasing levels of debt. He feels it will end, but it is impossible to know when - just that it will.

Gordon points out that the Federal Reserve still has more ammunition ready to go. He illustrates this with the recent derivatives contract signed between the Fed and the US option exchanges and well as the $300B Reverse Repo account "locked and loaded" in anticipation of any market correction that might ignite a potential cascading collateral collapse. This has the potential to change sentiment from fear to greed once the much needed bond rotation is complete.

Additionally, Gordon feels that though the central bankers are no doubt nervous they have not reached the dangerous point where they panic and pull out all the stops to protect the implosion of an over indebted and financially repressed system.

With the aid of 49 slides, this 31 minute video covers a lot of ground in an easy to follow dialogue.

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Regular Co-Host: CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com

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with Charles Hugh Smith & Gordon T Long

25 Minutes

Charles Hugh Smith and Gordon T Long continue their discussion on Crony Capitalism in America.

HOW CRONY CAPITALISM WORKS

 -- Private interests influence government spending and regulations with lobbying and campaign contributions: Governance by the highest bidder.

-- The more successful the cronyism, the more money the corporations have to spend on lobbying, which serves to further protect their profits and share of government spending. This feedback loop rewards crony capitalism and limits classical capitalism’s key features: transparent markets and competition.

– An economy dominated by crony capitalism stagnates as competition is suppressed and government enriches those who are “more equal than others” (to borrow a phrase from Orwell)

SPECIAL INTEREST VETO POWER

-- One key dynamic in America’s political dysfunction is the veto power extended to special interests: any reform that costs them profits and/or impacts their share of Federal funds is vetoed.

-- Reform that doesn’t carry political/financial pain is not real reform

-- When every politically potent entrenched interest can veto unfavorable legislation and regulation, real reform is impossible 

ABSENCE OF REAL REFORM

 -- Without real reform, the system stagnates and manageable problems become crises.

-- Since entrenched interests refuse to accept any pain, problems fester for years beneath the half-measures and toothless “reforms” passed for public-relations purposes.

-- The problems (unfunded liabilities, explosive financial risks buried in the shadow banking system, etc.) then blossom into full-blown crises that cannot be resolved.

-- Crisis management leads to politically expedient Band-Aids that mitigate the symptoms without addressing, much less solving, the underlying political/financial diseases.

THE CRONY TRIBUTE SYSTEM

Gordon argues that Crony Capitalism today closely resembles the Roman "Tribute" System also adopted by the Mafia.Crimes being created today are met with fines. Guilty parties do not go to jail but rather the corporation pays a fine. Billion dollar crimes are assessed Million dollar fines. A percentage that closely mirrors a Tribute System. The government makes money through enforcement but not prevention. Corporations make fortunes with confidence that the government will settle for a piece of the fleecing of the people - and the game continues.

Gordon believe,s as the recent tapes released by Carmen Segarra indicate, the US regulatory system has effectively put the "Fox in charge of the Hen House"

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SPECIAL GUEST: DOUGLAS E. FRENCH , Author, Past President of the Ludwig von Mises Institute and Casey Research Contributor

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Douglas French of Casey Research

on FINANCIAL REPRESSION

Published 09-30-14

28 Minutes

He received his master's degree in economics from the University of Nevada, Las Vegas, under Murray Rothbard with Professor Hans-Hermann Hoppe serving on his thesis committee. He is the former president of the Mises Institute. He is the author of Early Speculative Bubbles & Increases in the Money Supply and Walk Away: The Rise and Fall of the Home-Ownership Myth. Douglas E. French teaches at Troy University and writes for Casey Research.

This is a 28 minute video discussion between Douglas E French and Gordon T Long on Financial Repression.

Douglas French was a banker for 20 years in Las Vegas during its heady days and has many stories including witnessing sale people selling derivative products. "There is nothing like being on the ground. It is very easy to speculate and second guess people about bubbles (how could you do that!) when you are sitting in the Ivory Tower, but it is a lot different when you are on the ground seeing the bubble from inside out".

"The biggest bubble we have is US Treasuries. The believe you can't get hurt is a quality you always see in a bubble. The idea that lending an entity, that is $17T and going to $18T and beyond in debt, and will never be able to pay that back and the idea that you will get 2.5% for 10 years and it is 'return free risk' is certainly bubble territory!"

FINANCIAL REPRESSION

“You have PhD’s at the Fed trying to create economic growth with inflation and low rates. The repression is that people like you and I won’t ever be able to retire because we won't be able to get any return on our money so we can prop up the government and keep it in business."

This is the overall Macro Strategy of the government but central planning has never worked! ..... They are essentially trying to print their way out of a jam! ....... Because of Financial Repression almost ¾ Trillion dollars has gone to the government that should be in private hands!!!"

FRENCH WARNS INVESTORS

• People should be worried about their pensions,
• People should be worried about the Fed's Repo market and primary dealer delivery failures. This will likely be the cause of the next crash. Money Managers are playing musical chairs every quarter to keep this game going.
• People should be concerned about liquidity seizures which need to be closely monitored as money managers currently scramble for collateral.
• "Collateral through Rehypothecation has been pledged and pledged, over and over again.... the average person is going to extraordinarily shocked by something they never saw coming because it is something that is hard to explain and hard to understand".

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