Government

Marc Faber Warns Of Trump Inheriting ‘Hugely Inflated Asset Markets’

In an interview with CNBC-TV18 (India) earlier today, Swiss-born investment advisor/money manager Marc Faber talked about a potential financial “poisoned chalice” U.S. President-elect Donald Trump might be inheriting. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report was asked about what he thought “the biggest risk for global markets in 2017” could be. “Doctor Doom,” as the financial press like to call him, responded with a trade war with China and the following:

When Mr Ronald Reagan became president in 1981, he was elected in November, 1980, asset markets were very depressed and interest rates at very elevated level. The treasury yields in America on the 20-year and 30-year bonds was over 15 percent. So, he inherited a huge tailwind of diminishing inflation, falling interest rates and depressed assets that had a huge upside potential in the 1980’s. Trump, he inherits, and that is the biggest risk, hugely inflated asset markets. The bond markets in the developed countries, as you know, have the lowest yield they ever had in the history of mankind. The bond yields will not go much lower. Now, can the 10-years yield that has gone from 1.3-1.4 percent to 2.5 percent, can it go back to 1.7 percent or 1.5 percent? Yes, possible, but it will not go much below 0 percent.

And number two, when you look at stock markets as a percent of the economy, the stock markets around the world as a percent of the economy are at a very high level, especially in the US. In other countries less so, but in the US they are. Furthermore, the US stock market has significantly, and I repeat, significantly outperformed other markets in the world since 2011 and it leaves it vulnerable to an adjustment. The adjustment may happen with the US not going up a lot. But other markets like India, emerging markets in general, Europe outperforming the US, or it could happen with everything coming down and then the US underperforming, going down more than other markets, which actually would be my view, what will happen. This is the risk…

(Editor’s notes: source CNBC-TV18 transcript and bold added for emphasis)

You can read the entire interview here on the CNBC-TV18 website.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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HeyJackass! On 2016 Chicago Murder Tally: ‘We’ll Most Likely Exceed The 800 Level’

“As the gunfire dies down, HeyJackass will finalize the numbers for 2016, the Department will lie about the other numbers, death investigations will be scheduled for reclassification, Rahm will pretend that 600 black people weren’t murdered in his city by other black people, another 3,600 weren’t maimed and that 25 police shootings are the real problem…”

-New Year’s Day post on Chicago police blog Second City Cop

Happy New Year everyone. Hopefully readers were able to ring in 2017 safely- particularly those in Chicago, where the last weekend of 2016 turned out to be another bloody one.

Just how bad were shootings and murders in the “Windy City” in 2016? Well, consider the following from the CBS News website yesterday:

One of the most violent years in Chicago history ended with a sobering tally: 762 homicides, the most in two decades in the city and more than New York and Los Angeles combined

(Editor’s note: Bold added for emphasis)

That’s pretty awful. And once the final tally is in, 762 murders might be significantly lower than the actual body count.

From the popular HeyJackass! website (“Illustrating Chicago Values”):

Preliminary 2016 Totals
Shot & Killed: 713
Shot & Wounded: 3665
Total Shot: 4378
Total Homicides: 795

And under the section “New Year’s Stupidity” on the site:

While the 800 homicide gorilla awaits entry into 2016’s frunchroom, the fact is we’ll most likely exceed the 800 level soon after the New Year due to late passings and reclassified death investigations. Happy New Year!

(Editor’s note: Bold added for emphasis)

Stay tuned…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

SCC. “2016 Final Numbers- Pending.” Second City Cop. 1 Jan. 2017. (http://secondcitycop.blogspot.com/2017/01/2016-final-numbers-pending.html). 3 Jan. 2017.

“Chicago saw more 2016 murders than NYC, LA combined.” CBS News. 2 Jan. 2017. (http://www.cbsnews.com/news/chicago-murders-shootings-2016-more-than-new-york-city-los-angeles-combined/). 3 Jan. 2017.

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Tuesday, January 3rd, 2017 Crime, Government, Public Safety, Self-Defense No Comments

Robert Shiller: ‘There Might Be A Trump Boom Coming’ In U.S. Housing Market

Earlier this month, I blogged about Yale University Economics Professor Robert Shiller discussing a “Trump Rally” in stocks. Tuesday morning, the Nobel Prize winner- who correctly-called the dot-com and housing busts of the last decade- spoke to Bloomberg TV about a potential “Trump Rally” in the U.S. housing market. He told viewers:

Existing home sales are high. New home sales are high. There might be a Trump boom coming. I’m not forecasting that. I’m wondering…

Later, Dr. Shiller talked about home price gains going forward:

I could easily see a continuation of the trend that we’ve been having in recent years- the five percent nationwide- going on. That’s one scenario…

The other scenario is the “Trump Boom” scenario. And I just don’t know. The Fed is showing tightening. But Janet Yellen is not apparently a big Trump supporter. So there’s a little tension going on. But I think the “boom” might win out. It’s a possibility. It’s a scenario…


“Yale’s Robert Shiller on U.S. Housing Market”
Bloomberg Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Thursday, December 29th, 2016 Crash Prophets, Government, Housing, Monetary Policy No Comments

2017 Tax Hits To Chicagoans

“Broken record” time.

“New/higher fees, fines, and taxes, and less government services.”

Regular readers of Survival And Prosperity (and older ones from my Boom2Bust days) know I’ve been warning about this for years now (since 2008?) concerning Chicago- as well as Cook County, Illinois, and lots of other places aroud the country.

And it’s pretty much what has transpired from what I’ve seen.

Particularly in the “Windy City”- where the hits keep on coming. Hal Dardick reported on the Chicago Tribune website this morning:

Chicago property owners hoping for a respite from rapidly rising taxes will be disappointed in 2017, when city government and Chicago Public Schools will continue digging deeper into their pocketbooks.

Two more major property tax increases are coming. So is a new tax on water and sewer service. And some city dwellers will face other rising costs: a fee for each store-provided disposable bag and slightly higher Park District fees.

Come mid-year, city and suburban residents will be paying a new sweetened beverage tax effective in all of Cook County, and another round of Metra fare hikes is coming soon. Here’s a look at what to expect…

(Editor’s note: Bold added for emphasis)

Dardick did a good job summarizing the dents Chicagoans (and Chicagoland residents) could expect to their finances in the new year. Head on over to the Tribune website here to get the entire story.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Further Confirmation Of Chicago Police Department’s Manpower Shortage

Reading the popular Chicago police blog Second City Cop on a regular basis, I became aware several years ago of the manpower shortage going on in the Chicago Police Department.

Subsequently, I started blogging about the city’s truly “thin blue line” a little over five years ago.

Further confirmation of the depleted CPD ranks comes from Dan Mihalopoulos over at the Chicago Sun-Times, where he reported on their website this evening:

Even if Mayor Rahm Emanuel manages to add nearly 1,000 cops in the next couple years, his promised surge of new hires would barely make up for the decline in the Chicago Police Department’s ranks on his watch.

There were 6,244 rank-and-file police officers working the city’s 22 police districts as of Oct. 19, records obtained by the Chicago Sun-Times show. That’s down more than 800 from the 7,047 beat cops shortly after Emanuel took office in 2011

(Editor’s note: Bold added for emphasis)

And then there’s retirements. Mihalopoulos added:

The already-brisk pace of retirements is rising. In October, the Sun-Times reported 274 officers declared their intention to retire by June 30, driven by an expiring offer of free health care for cops who are 55 years old…

(Editor’s note: Bold added for emphasis)

Mihalopoulos wrote an insightful piece about this situation, which can be found here on the Sun-Times website.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Friday, December 9th, 2016 Government, Public Safety Comments Off on Further Confirmation Of Chicago Police Department’s Manpower Shortage

Robert Shiller On Stocks: ‘I Can Imagine That It Might Go Up From Here, For A While, Even Though It’s At A High Level’

Yale University Economics Professor Robert Shiller was on CNBC this morning taking about the “Trump Rally” in stocks. The Nobel Prize winner, who correctly-called the dot-com and housing busts of the last decade, was asked if he thought U.S. President-elect Donald Trump is good for stocks. He replied:

Probably in the short run… I’m tempted to be optimistic, for the short run…

(Editor’s note: Bold added for emphasis)

On the possibility that equities might be at the end of a cycle, Dr. Shiller responded:

I’m certainly not saying we’re there now. In fact, it’s the other way around. I’m thinking, the market does look high. I think, maybe I wouldn’t go overall in a big way into the market. But going into under-priced, lower-priced sectors at this point- it still looks okay. It’s still going to give you a better return than investing in fixed incomes.

(Editor’s note: Bold added for emphasis)

The “crash prophet” was also asked if he was at the point of raising a “red flag” on the stock market rally. Shiller told viewers:

I can imagine that it might go up from here, for a while, even though it’s at a high level.

(Editor’s note: Bold added for emphasis)


“Shiller: It’s not a good time, but I’m not saying panic”
CNBC Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Latest edition of the Dr. Shiller classic…

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Thursday, December 8th, 2016 Crash Prophets, Government, Investing, Stocks Comments Off on Robert Shiller On Stocks: ‘I Can Imagine That It Might Go Up From Here, For A While, Even Though It’s At A High Level’

Bloomberg On Chicago: ‘Nowhere Will Political Power Evaporate More Dramatically’ When Donald Trump Takes Office

If readers still don’t think there will be repercussions to Chicago from a Trump administration despite its unabashed support for Hillary Clinton on Election Day (the Democrat received 83.63% of the city’s votes on Election Day), its official policy of providing “sanctuary” to illegal aliens, and political grandstanding (Trump’s honorary street signs downtown were removed this past weekend, courtesy of the City Council), then consider what was published on the Bloomberg website yesterday:

“Chicago Faces Political Power Outage as Trump Succeeds Obama”

Chicago is racing the clock.

Nowhere will political power evaporate more dramatically at noon on Jan. 20 than in the third-largest U.S. city, a bastion of Democratic power that’s enjoyed special access to Washington during President Barack Obama’s eight years in the White House.

When Donald Trump becomes the 45th president, Chicago will trade a first family and top advisers with deep ties to the city for a chief executive who has repeatedly called it a violent mess embodying the failed policies of his predecessor and the Democratic Party…

Not since the era of Abraham Lincoln have Chicago and Illinois enjoyed such strong ties to the White House and Washington. Obama’s exit will bring an end to that

(Editor’s note: Bold added for emphasis)

I wrote back on November 11 in a post entitled “Chicago Could Lose Billions In Federal Funding Under Trump Administration”:

Drip. Drip. Drip.

That’s the sound of federal funds to the “City By The Lake” drying up.

A real possibility. And a lot of moolah at stake, which John McCormick describes in detail in that Bloomberg piece.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Wednesday, December 7th, 2016 Government, Immigration, Political Parties Comments Off on Bloomberg On Chicago: ‘Nowhere Will Political Power Evaporate More Dramatically’ When Donald Trump Takes Office

Signs Of The Time, Part 115

This “Signs Of The Time” post is actually about signage.

U.S. President-elect Donald Trump’s honorary street signs in downtown Chicago.

The Chicago Tribune reported this afternoon:

After much fanfare from Chicago aldermen over the righteousness of tearing down President-elect Donald Trump’s honorary street signs, city workers quietly removed the placards over the weekend.

A city sign shop crew pulled down the remaining two street signs on Wabash Avenue near Trump Tower at 8 a.m. Sunday, according to Chicago Department of Transportation spokesman Michael Claffey. A third Trump sign was stolen months ago…

(Editor’s note: Bold added for emphasis)

Regular readers of Survival And Prosperity may remember me blogging about this decision by Chicago’s City Council last month. I wrote in a November 11 post entitled “Chicago Could Lose Billions In Federal Funding Under Trump Administration”:

Finally, there’s this little bit of political grandstanding more characteristic of the ruler(s) of some “Banana Republic.” Fran Spielman reported on the Chicago Sun-Times website back on November 1:

Chicago may well have earned Donald Trump’s unflattering ‘war zone’ label after piling up 17 homicides last weekend and 633 already this year.

But don’t tell that to a City Council filled with Democrats.

On Tuesday, the Council followed through on its promise to strip the Republican presidential nominee of an ego tribute he covets: the honorary ‘Trump Plaza’ designation outside the 96-story Trump International Hotel & Tower on the Chicago River that bears his name in huge, white letters

(Editor’s note: Bold added for emphasis)

If rabid opposition and Sanctuary City-status didn’t already motivate U.S. President-elect Donald Trump to steer federal funds to other areas of the country, it’s a pretty good bet this stunt was the icing on the cake.

Trump tweet forthcoming?

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

“Chicago removes remaining Donald Trump street signs.” Chicago Tribune. 6 Dec. 2016. (http://www.chicagotribune.com/news/local/politics/ct-donald-trump-chicago-street-signs-removed-met-1207-20161206-story.html). 6 Dec. 2016.

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Tuesday, December 6th, 2016 Crime, Government, Political Parties, Signs Of The Time Comments Off on Signs Of The Time, Part 115

‘Black Lawmakers From Chicago’ Key To Reducing City’s Gun Violence?

Before the weekend, I blogged about Chicago Police Superintendent Eddie Johnson’s recent appearance on WGN-TV (Chicago Channel 9) where he discussed the city’s gun violence. Johnson brought up much-publicized (and delayed) legislation targeting repeat gun offenders, telling viewers:

So with this particular piece of legislation, we’re not changing the sentencing years. What we’re doing is giving our judicial partners the wherewithal to be able to sentence them somewhere between the mid-range to high-end of the sentencing guideline, which will be I think the high-end is maybe 14 years. Mid-range will be about 6 years…

He added:

So we, I’m optimistic that we’ll have it done at the beginning of the year. But in terms of what’s taking so long? I guess they just want to get the language of it right. Because it’s more important to get it right than to rush through it. But we have to do something. Because most of our violence in Chicago is perpetrated by repeat gun offenders

(Editor’s note: Bold added for emphasis)

No doubt “getting the language right” is important. But, there could be another reason why it’s taking so long for this legislation to see the light of day. I was listening to WLS-AM 890 (Chicago) back on September 23 when I caught the following. John Dempsey reported on the radio station’s website that day:

In his speech at Malcolm X college, Emanuel also talked about implementing a three year mentoring program to provide support to over 7,000 at-risk youth in Chicago. The Mayor also called on Illinois lawmakers to toughen penalties for gun crimes, something black lawmakers from Chicago have thwarted in the past, out of concern that harsher gun laws would unfairly target African-Americans.

Eddie Johnson told WLS he is currently talking with those lawmakers about drafting a law that would address the real need the city has to make sure repeat offenders are kept behind bars for longer periods of time. “I think that the legislators are coming around now because before we didn’t have concealed carry and you know the sentencing that I’m looking for is not mandatory. It’s focused at repeat gun offenders so that’s not casting a net over the minority population. It’s more like using a spear to focus on the guys that are consistently telling us they don’t want to play by the rules of society. The way we want it to go is that repeat gun offenders would be sentenced on the mid to high end range of sentencing as opposed to giving them lighter sentences.”

(Editor’s note: Bold added for emphasis)

Meanwhile, almost 78 percent (567 victims) of shooting deaths in Chicago in 2016 have been African-Americans (source: HeyJackass!).

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Dempsey, John. “Eddie Johnson with Big John and Ray: More cops just a ‘piece of the puzzle.'” WLS-AM 890. 23 Sep. 2016. (http://www.wlsam.com/2016/09/23/eddie-johnson-with-big-john-and-ray-more-cops-just-a-piece-of-the-puzzle/). 6 Dec. 2016.

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Tuesday, December 6th, 2016 Crime, Government, Legal, Public Safety Comments Off on ‘Black Lawmakers From Chicago’ Key To Reducing City’s Gun Violence?

Jim Rickards: Donald Trump Has Ronald Reagan’s Financial Playbook, But Faces ‘Headwinds’

Marc Faber. Peter Schiff. Now Jim Rickards. Three “crash prophets” who aren’t convinced U.S. President-elect Donald Trump can magically solve America’s economic ills. Rickards, an American lawyer, economist, investment banker, and best-selling author, was on the RTÉ Radio 1 (Ireland) show Today with Sean O’Rourke last Wednesday talking about his new book when he informed listeners of the following:

Less regulation, lower taxes, and a lot more infrastructure spending. This was Ronald Reagan’s playbook. This is what Ronald Reagan did in 1981 with a lot of success. But there are big differences, reasons to believe Trump will not be as successful. Namely because when Reagan came in, the U.S. debt-to-GDP ratio- the amount of debt relative to our economy- was 35 percent. Today it’s almost 105 percent. Reagan had inflation of 20 percent. Trump has it close to zero. In other words, Reagan had a lot of tailwinds– inflation had to come down, interest rates had to come down, he had fiscal space to run up the debt. Trump has headwinds

(Editor’s note: Bold added for emphasis)

The editor of the financial newsletter Jim Rickards’ Strategic Intelligence believes the next economic crisis (2018?) will be worse than the 2008 edition. When asked by O’Rourke what people with a “smaller or medium-size financial nest-egg” might do to prepare for it, Rickards advised:

For savers and investors at any level, modest or wealthier, put 10 percent of your investible assets in physical gold or silver. For smaller amounts, silver might do well…

He added some cash is good too.

You can listen to the entire interview (a little over 13 minutes) on the RTÉ Radio 1 (Ireland) website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Rickards’ new book…

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Monday, December 5th, 2016 Commodities, Crash Prophets, Currencies, Debt Crisis, Fiscal Policy, GDP, Government, Inflation, Infrastructure, Interest Rates, Investing, Precious Metals, Spending, Taxes Comments Off on Jim Rickards: Donald Trump Has Ronald Reagan’s Financial Playbook, But Faces ‘Headwinds’
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