Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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David Morgan Silver Price Predicition

Gold was always considered as solid and save instrument. Many Countries currency was based on Gold reserves. People loved to make investment in Gold. But now this Gold is in crisis. These Gold crisis are linked with economic, financial, debt and currency crisis. Anyhow, too much dependence on one instrument always brings down fall. This video is showing What the Gold and Debt Crisis are? Share and...

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Get ready, the silver price is heading up, Interview with David Morgan

Get ready, the silver price is heading up, Interview with David Morgan Share and...

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Simon Black – It’s official. America’s Suez moment has arrived [video]

September 12, 2013 Hong Kong In the summer of 1956, Egyptian president Gamal Abdel Nasser nationalized the Suez Canal, sparking a worldwide crisis. The Suez links the Mediterranean to the rest of the world, and it’s one of the most important maritime thoroughfares in international trade. So this was a big deal. Britain was a major stakeholder in the canal, and almost immediately, the British government put together a small coalition consisting of the UK, France, and Israel to regain Western control. Their subsequent military action, however, greatly displeased the US government. And Uncle Sam quickly asserted its new role as the world’s superpower. True, Britain had once been the dominant power in the world. But years of unsustainable finances and economic decline changed all of that. By the end of World War II, Britain was nearly bankrupt. But reality hadn’t set in yet. They still saw themselves as a superpower. British policymakers were still at the peace table. They helped set up the UN, divide up Germany, and even influence the new global financial system at Bretton Woods. Reality finally hit during the Suez Crisis. It became clear that the UK no longer had the economic fortitude or international standing to do as it pleased. And with the US opposed to the invasion of Egypt, the British government had no choice but to withdraw their troops. In doing so, Britain handed the reins of world dominance over to the United States. And America held this position for decades. But to anyone paying attention, this status has waned. Asia is rising. Major centers of wealth and power have grown around the world. US finances are desolate. And its currency is now widely reviled by foreign governments. But US politicians have completely ignored this trend over the last decade. They spend and act as if US global dominance is an endless river. With Syria, though, the US may have finally reached its Suez moment. Russia has now almost single-handedly precluded the US government from carrying out an attack in Syria. And the Russian President has even taken his case to the American people in which he eloquently criticized both US policy as well as the notion of American exceptionalism. Vladimir Putin is a brute. But he commands a nation that has all the power and might it needs to stand up to the United States and the rest of the West. Just a few months ago, it was the Russians who wagged their fingers at European governments for confiscating bank accounts in Cyprus, comparing such tactics to the Soviet Union. It’s also been the Russians who have stood up to...

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Investing Legend: There Is No “Equity Risk Premium”

The following is an excerpt from a recent issue of Private Wealth Advisory. As noted yesterday, generally speaking stocks today are showing all of the hallmark signs of topping out. The market is overpriced, overbought, the smart money is selling, CEOs are bearish, market breadth is shrinking and earnings growth looks poor. Now, I am not officially calling a top in the market today. But I do want to alert you that a top of some kind, possibly major, is forming. In terms of predicting how far the market will fall, we first need to consider that the stock market is in a bubble. Historically, bear markets feature a drop of 32%. Bursting bubbles on the other hand, usually feature a drop of 50%. Indeed, if you look at the last two market Crashes over the last 13 year, all of them featured drops of roughly 50% or so. Based on this measurement, this would mean the S&P 500 falling to sub-900. Other indications of a market top forming can be drawn from historical price movements. Mark Hulbert from Marketwatch recently noted that of 35 market tops since the 1920s, the preceding bull market has seen stocks rise 21% in the previous 12 months. The S&P 500 just hit a 23% gain in the last 12 months (see Figure 5 below). So we’re on track with a market top in terms of historic price trends. Finally, there are major valuation concerns for the markets today. Since the S&P 500’s founding in 1926, stocks have returned an average of 11% per year. Consider the following: had you invested $ 10,000 in the S&P 500 in 1926 (at that time it was the S&P 90) with dividends reinvested today it would be worth over $ 33 million. Without dividends reinvested, it would be worth $ 1.9 million. Put another way, without dividends, which are paid out of earnings, stocks return only slightly more than Treasuries, though with considerably more risk. Thus, the ideal time to invest in stocks is a time in which future earnings yields from stocks are expected to grow considerably. This would indicate that dividends are likely to grow, thus allowing for a considering stock market “premium” in terms of returns. Today is not such a time. As famed value investor John Hussman notes, the 10-year Treasury bond is currently yielding 2.6%. Hussman believes stocks will average 2.8% per year going forward for the next 10 years. Thus, there is literally no “equity risk premium” at this time. Put another way, the benefits of owning stocks based on future earnings is simply NON-existent. The time to prepare for...

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Fed QE Tapering: Quanticlimax for Gold & Silver Bears?

Gold and silver rose on QE. So tapering must drive precious metal prices lower again, right…? Ben Bernanke, head of the US central bank, will announce the beginning of the end for quantitative easing at this month’s policy meeting in Washington. Everyone thinks so. Gold and silver prices seem to agree, drifting to new multi-week lows Wednesday morning in a reversal of their pattern when QE was ramped up from 2009 to 2012. And Bernanke pretty much said in June that QE’s end would start this month. Policy-makers have been talking about it since April. Those two months loom large for anyone trading gold or silver. But looking at this week’s 4% drop so far, traders have to ask: Is it a case of sell the rumour, buy the news? It was always the reverse when QE was growing. Acting in what we christened “quanticipation”, gold and silver prices tended to rise ahead of the US Fed’s various QE launches (you remember – QE1, QE2, and so on). They then fell back once the announcement was made, only to resume their longer-term rise. So the outlook today? The aim of QE is to juice assets which might help boost the economy, or at least make it look that way. So since March 2009, the very depths of the post-Lehmans’ banking collapse, the Fed’s QE program has created and spent some $ 2.735 trillion by our maths. That’s greater than the sum total of all US cash and household savings in existence only 25 years ago. It’s equal to one Dollar in every four held by US savers today. This flood of money, you’ll recall, has been used primarily to buy US Treasury bonds. The stated plan was to push up the price of “risk free” government debt investments, pushing down the interest rate they offer. That way, investors would be forced to make riskier bets if they wanted any hope of a decent return. Borrowers could then raise loans at cheaper rates, greasing the wheels of the economy. Did it work? US consumer debt is lower today by 12% from the peak of end-2008, just before QE began. That fall has been driven entirely by a drop in mortgage debt, despite a good chunk of the Fed’s electronic cash also going to buy mortgage-backed bonds as well as Treasury debt. Wall Street’s own debt has meantime shrunk by one fifth, while corporate borrowing by non-financial firms has risen, but not by much when you account for inflation. What has soared, of course, is the stock market, with the S&P rising to all-time record highs as QE has been piled...

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US Gold rises above $1368 after stimulus concerns ease

MUMBAI (Commodity Online): US gold recorded a recovery from its recent bearish rally and recorded a jump on Thursday after US Federal Reserve said that it would maintain its ‘bullion friendly’ monthly bond purchases at $ 85 bn levels. The yellow metal jumped most in 15 months. Comex gold futures on electronic platform jumped 3.9% to $ 1358.9 per troy ounce for December delivery as of 09.27 IST on Thursday. The Federal Open Market Committee (FOMC) “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” according to a statement from the FOMC on Wednesday after a two day meeting. On Wednesday, gold prices recorded decline and fell below $ 1300 before the release of FOMC statement on concerns that US Central Bank would start curbing its monetary stimulus later this month on improving economic conditions in the US and around the world. The Central Bank has stated yesterday, that it requires further evidence that economic conditions in the US have been improving to reduce its monetary stimulus. Gold recorded a rise of 70% from the end of December 2008 to June 2011 after US Central Bank started its monetary stimulus. Firm gold demand would determine the yellow metal’s price trend in 2013 and 2014 as investment demand would be declined, said HSBC in its recent report. HSBC has raised its 2013 average price estimate for gold to $ 1,446 an ounce, up $ 50 from its previous estimate, based on the rise in physical demand. HSBC left its 2014 and 2015 estimates unchanged at $ 1,435 and $ 1,395, respectively. Weak data releases from the United States released on Wednesday may have supported the yellow metal prices further in the global market to certain extent today. Silver futures for December delivery on Globex platform of Comex was seen trading with a gain of $ 1.51 at $ 23.07 per troy ounce as of 09.53 IST on Thursday. US Gold rises above 68 after stimulus concerns ease Share and...

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Simon Black – Why Japan’s new home run king forebodes the biggest default in history

September 16, 2013 Tokyo, Japan Suicide has long played a bizarre role in Japanese culture. In feudal Japan, for example, dishonored samurai would often commit seppuku, a suicide ritual that involved ceremonial disembowelment. It was torturous pain lasting for hours. In World War II, the Japanese military churned out suicide attackers known as the kamikaze that routinely antagonized allied warships in the Pacific. And of course, citizens in Hiroshima and Nagasaki simply went back into their homes and waited to become burnt toast despite ample warnings from the US military. Even after the Fukishima disaster, TEPCO employees went rushing back into deadly levels of radiation exposure in what could only be characterized as a suicide mission. Despite the obvious prospect of certain death, the Japanese collective still did what was expected of them by the state. Even if it meant roasting alive under a mushroom cloud. This fierce commitment to the nation has often been abused by the Japanese government which disposed of its people like kindling. It’s the same today. Looking purely at the numbers, Japan’s medium-term fundamentals are among the bleakest in the world. Total government debt amounts to over 200% of the country’s entire GDP– a figure so large that the Japanese government spends 51.5% of the 43 trillion yen ($ 430 billion) they collect in tax revenue just to pay interest! Perhaps even more astounding is that ‘primary balance expenses,’ i.e. normal government expenditures, totaled 70.3 trillion yen, or 163% of tax revenue. The only way they’ve managed to stay afloat is by issuing more debt, which makes the problem even worse. In fact, 46% of the 2013 budget is being financed by debt. These guys are running out of rope. And fast. The government is trying to ‘fix’ this by appealing to Japanese people’s sense of national pride to get them to buy more government bonds. Needless to say, this is like a modern-day economic kamikaze– letting the people commit financial suicide for the good of the state. And perhaps decades ago, this tactic may have worked. But not today. Times are changing, and people aren’t willing to lay down like they used to. Here’s an interesting example– Japan is a baseball obsessed nation. They love the game. And their equivalent of Babe Ruth is a player named Sadaharu Oh who retired in 1980. Oh is a national hero for hitting 55 home runs in a single season, a record which stood for decades. This season, a foreign player named Wladimir Balentien started challenging Oh’s record. And as he got close, many Japanese pitchers in the Nippon league refused to even throw to him...

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Keiser Report: No jail for banksters in real world Monopoly (+Andrew Maguire)

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the real world Monopoly board game without a jail and on which most players must pass ‘go’ and receive just $200 in foodstamps while a select few get to pass ‘go’ and collect $200 billion in bailouts, bail-ins and subsidies. In the second half, Max talks to precious metals expert, Andrew Maguire, about the run on the bullion banks happening right now. Share and...

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This Time Around the Fed IS The Bubble

Market tops always involve insanity. And today we have that in abundance. On Wednesday the Fed surprised the world by not announcing a QE taper. Stocks and all “risk” assets exploded higher. Today, a mere 48 hours later, Fed President Bullard says the Fed should taper soon. Stocks collapse. For the markets to react so significantly to such issues is a tell-tale sign that we are near a major top. The reliance on Fed stimulus has never been greater with even a hint of Fed policy actually having more impact that the policy itself. Rumors, whispers and threats dominate trading. This is the sign of market mania. The most important element is that this mania has been driven by the Fed, not some new technology (the Internet in the tech bubble), new asset growth (housing), but the Central Bank. In the past, the Fed has been the fuel for bubbles. This time around, the Fed IS the bubble itself, with its balance sheet expansion driving ALL assets higher. So when this bubble bursts, it will be truly catastrophic because no one can bail out the Fed. Interest rates are already at Zero. QE is already running non-stop. There will literally be nothing the Fed can do. I cannot say the top is in today, nor can I say it will be here in a week. But THE top is forming. And it will be absolutely awful when it’s done. We’ve now had three SERIAL bubbles in the markets in the last 13 years. Each bubble’s bursting has been worse than the last. The next one will be THE biggest one yet. Best Regards Graham Summers Gains Pains & Capital   Share and...

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Simon Black – After $1+ trillion, the Fed can’t even create jobs in the banking industry

September 20, 2013 Santiago, Chile One of those generally accepted truths that most people believe is that banks are safe. We seem to be told this for our entire lives… that banks, in their grandiose buildings and marble floors, are veritable rivers of money. We’re also told that bankers are conservative fiduciary stewards, unflappably restrained in managing other people’s money. And even in the infinitesimally unlikely event of an anomaly, the government is standing behind the banks to ensure that depositors don’t lose. With such a strong propaganda machine behind the banks, you can’t really blame people for not giving a second thought to where they park their cash. But this is actually a huge decision. A bank is like a silent financial partner. And when the going gets tough, choosing the wrong financial partner can be as destructive as a bad marriage. Just ask anyone in Cyprus. In the Land of the Free, the Godfather of the banking industry is the Federal Depository Insurance Corporation (FDIC), the primary entity that is charged with regulating and insuring the banking industry. Given such a prodigious task, particularly in these tumultuous times, you’d think the FDIC would have a vast treasure trove of reserve funds to guarantee the entirety of the US banking system. Again, though, this is another case of reality being far, far from the sentiment and propaganda. Based on the FDIC’s recently published numbers, their reserve fund holds a mere $ 37.9 billion. This sounds like a lot. Except when you compare it to the $ 5.25 trillion of ‘insurable deposits’ held in the US banking system. In other words, the FDIC’s reserve fund constitutes just 0.7% of the bank deposits they’re obliged to guarantee. This is hardly a resilient figure. Especially when the FDIC’s own report names 553 ‘problem’ banks which control nearly $ 200 billion in assets, about 5 times the size of their reserve fund. These decisions matter. It matters where we hold our savings. And how. We cannot simply assume away that our home country’s banking system is in good financial condition. Or that our funds are safe. It’s important to take a look at the hard numbers, and then make a rational, informed decision about the best place to hold your hard-earned savings. The world is a big place, and there are plenty of attractive alternatives. Norway, for example, presents some of the best capitalized banks in the world. They’re backed up by a government that has zero debt and is awash with cash. And the Norwegian krone is mathematically the safest currency in the West. There are many other great options to...

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