1. Democratic artificial intelligence will shape future technologies: Gartner

    Artificial intelligence (AI) has become a key area of research and development, and while AI and machine learning algorithms begin to influence everything from our cars to our social media news feeds, the technology will soon be available to everyone.

    That is if Gartner’s predictions on emerging technology trends prove to be true.”

    Click here to continue.

  2. China’s Plan to Tank Their Own Stock Market

    When I say the fix is in for FXI that’s not meant to be mysterious. FXI is the ticker symbol for a U.S. exchange-traded fund (ETF) composed of the largest Chinese stocks.

    The phrase “the fix is in” simply refers to government-backed manipulation. When you combine the two into a government plan to tank their own stock market, at least to a point, you’re as close to a sure thing as stock market indexes allow these days. That’s exactly what’s going on in China right now.

    To read more of this article, click here.

  3. Keep Your Eye on China

    The trade war is beginning to take its toll on China as the Chinese economy is losing momentum. Beijing has pledged to increase small-business lending and increase infrastructure investment to help offset the impact.

    Ting Lu, chief China economist at Nomura Intl. in Hong Kong, said, for example, “The Chinese economy will get worse before getting better. It takes several months to turn around. Beijing will step up credit easing and fiscal measures to deliver a recovery and prevent financial troubles such as a rise of bond defaults.”

    To read more of this article, click here.

  4. Iran’s Navy Runs Anti-U.S. Ship Exercises. Just for Show or for Real?

    Iran and the U.S. have engaged in round after round of hostage taking, sabotage, cyberwarfare, sanctions, negotiations and attempts at normalization since the Islamic Revolution of 1979. The latest development, an important one, was Trump’s termination of the Joint Comprehensive Plan of Action, JCPOA, the nuclear constraint deal hammered out in 2015 by Iran, the U.S., the U.K., the EU, Germany, France, Russia and China.

    The U.S. provided hundreds of billions of dollars of cash, gold and other financial relief to Iran in exchange for a release of U.S. hostages and Iran’s agreement to mothball its nuclear enrichment activities for 10 years. Obama’s hope was that 10 years would be enough time for a friendly evolution in Iran’s government so that if enrichment resumed in 2025, Iran would be an “acceptable” nuclear state in the manner of India or Israel.

    Trump rightly criticized the JCPOA because its hope for a reasonable regime in Iran was wishful thinking and because Iran could use its payoff money to fund terrorism, which it has in Sinai, Gaza, Lebanon, Yemen and elsewhere. Trump ended the JCPOA on May 8, 2018, and instituted a campaign of “maximum pressure” involving economic sanctions, account freezes and secondary boycotts by the U.S. of European and other companies that continued business as usual with Iran.

    The Iran response has not been to negotiate or reconcile. Instead, Iran has commenced naval drills in the Persian Gulf that could both facilitate attacks on the U.S. Navy and close the Straits of Hormuz and cut off Gulf oil from the world. This latest military escalation is reported in this article.

    The question for investors is motive. If these Iranian naval drills are solely to boost domestic morale, they should be watched closely but not otherwise impeded. But if Iran is taking the first steps toward an attack on U.S. forces or closing the straits, then the U.S. and its Gulf allies may be close to a shooting war with Iran.

    The situation is highly uncertain. One more reason to partially reallocate from equities to cash and gold until the dust clears.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

  5. Fed Declares Monetary Policy Is Working Fine. That’s a Dangerous Sign

    Did you know the Fed has been off by orders of magnitude on nine straight annual economic forecasts? Did you know the Fed has never accurately forecast a recession in 105 years? I could go on, but you get the point.

    The Fed has the worst forecasting record of any major finance-oriented institution. It’s not because they’re dumb (they’re not), but it is because they have deficient models and don’t see the deficiencies. That’s why it was nerve-racking when Simon Potter, market chief of the Federal Reserve Bank of New York, recently said, “The monetary policy implementation framework continues to provide the FOMC with excellent control over overnight money market rates, and has proven its ability, including recently… to flexibly respond to new developments.”

    In other words, “Don’t worry folks, we’ve got everything under control.” Of course, the Fed has nothing under control and worse yet doesn’t realize it.

    This article explores the Fed market chief’s remarks made recently in Manila. The remarks are a case study in model complacency as the source of market complacency.

    Everything Potter said is exactly right until the moment it isn’t. Market rates can soar or crash. Liquidity preferences can turn on a dime. “Excellent control” is no more than a mirage. Fed policy’s “proven… ability” is another mirage.

    Potter’s remarks will go down in the history books right next to Bernanke’s assurance in mid-2007 that the mortgage crisis would blow over. Yet all investors can be grateful to Potter for his remarks. Self-assurance and overconfidence based on a shortsighted reading of history are fair warning that the Fed is blundering into another abyss and will take the markets with them.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

  6. Let’s Give Bitcoin Big Shots Credit for New, Creative Ways to Lose Money

    Bitcoin is a funny combination of my least favorite topic and my most studied sector. It’s my least favorite because the nonsustainability, nonscalability and nonsecurity make bitcoin blaringly unsuitable as currency. It’s my most studied because I’m continually dragged into gold versus bitcoin debates on the gold side, so I take the time and effort to become expert on bitcoin in order not to be outscored by the bitcoin side (so far, I’ve won every debate of this sort).

    So there you have it. I’m a total expert on something that makes no sense. At least the expertise is in high demand!

    As part of my studies, I focus on the number of ways bitcoin groupies have invented to scam naive bitcoin investors. There are the usual scams (pump-and-dump, hack-and-steal, simple frauds, coordinated crypto-bots and many more). Yet every time I pat myself on the back for having comprehensive scamming expertise, the bitcoin gangs come up with a new way to steal your money.

    This article highlights the latest. A “bitcoin whale” with a huge (probably underwater) long position tried to wipe out losses and generate some profits by making a $400 million-plus long bet on bitcoin using futures listed on the OKEx, a Hong Kong-based exchange. Predictably, bitcoin crashed and the trader (ID 2051247) lost a fortune and refused to make good or meet margin calls at the exchange.

    The exchange itself had inadequate reserves and had to “claw back” the actual losses from innocent member accounts that had nothing to do with the scam. As cowboy card players used to say, “Read ’em and weep.” The bitcoin whale bet big, lost, walked away and left the ruins to be cleaned up by the bystanders.

    One more way for bitcoin scammers to take your money. I’m sure I’ll find a new one by my next column.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

  7. Coalition of Germany’s “Iron Chancellor” Merkel Looks Shaky

    In a world where the U.K. voted to leave the EU, the U.S. elected Trump, Italy empowered its dissident Five Star Movement to enter a coalition government and Austria elected a 31-year-old rightist as its new prime minister, it’s fair to say the nationalist anti-immigration right wing is having its moment in the sun.

    A look around the U.S.-Euro-Japan political landscape reveals almost only one powerful ruler who is still on the globalist glide path — the inimitable Chancellor Angela Merkel of Germany. Yet there’s a serious problem with the description of Merkel as a “powerful ruler.” While this description was true during most of her reign (2005–2018), her standing lately has deteriorated to the point that her continued role as chancellor is in doubt.

    This article pulls back the curtain and takes a close look at one of Merkel’s coalition party leaders who joined the now ruling coalition that launched in March 2018. Andrea Nahles, leader of coalition member Social Democrats, SPD, has expressed deep misgivings about Merkel’s tighter immigration policies.

    Nahles’ comments might not normally be decisive, but the ruling coalition is meticulously stitched together and any dissent could be enough to tip it into dissolution and new elections. This prospect combined with Merkel’s declining poll numbers leave the Iron Chancellor hanging by a thread.

    Far from being a role model for globalists, Merkel looks more like the last domino standing in the fall of globalists across the board. Nahles would not be pushing Merkel unless she felt that her target was more than a bit wobbly.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

  8. Big Names “Run for Cash” Ahead of Election Uncertainty. It’s a Good Idea

    We have recommended a reduced exposure to equities and increased allocation to cash for months. This reallocation of assets has obvious benefits.

    Equities are obviously vulnerable (still 4% below the January 2018 all-time high with asset inflation in FAANG stocks, financials and other sectors). Cash offers the double benefit of reduced portfolio volatility and increased optionality. That cash-linked optionality is valuable in a market crash because you can go shopping among the knocked-down stocks and pick up some strong long-term plays.

    Warren Buffett has been validating this; he’s up to $111 billion in cash at Berkshire Hathaway and that stock is hitting record highs. Suddenly, the cash endorsement field is getting crowded. According to this article, major institutions such as OppenheimerFunds, Federated Investors, BMO Global and many others are moving from equities to cash.

    Their motives are not partisan, but they are political. The midterm House election results are highly uncertain. A Democratic victory could lead straight to impeachment, while a Republican victory could be an economic booster shot. Take your pick.

    Institutions despise uncertainty and the best way to deal with that is move to cash and bide your time. Our readers are ahead of this curve. Still, the article is a good reminder that the cash move will get stronger, not weaker, until this fall.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

  9. U.S. Must Turn to Russia to Contain China

    Vladimir Putin stands accused in the media and global public opinion of rigging his recent reelection, imprisoning his political enemies, murdering Russian spies turned double-agent, meddling in Western elections, seizing Crimea, destabilizing Ukraine, supporting a murderous dictator in Syria and exporting arms to terrorist nations like Iran.

    At the same time, the country of Russia is more than Mr. Putin, despite his authoritarian and heavy-handed methods. Russia is the world’s 12th-largest economy, with a GDP in excess of $1.5 trillion, larger than many developed economies such as Australia (No. 13), Spain (No. 14) and the Netherlands (No. 18).

    For more of this article, click here.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

  10. Fed Says the Economy Is “Strong;” Plans Rate Hike. Wrong but Consistent.

    The Fed has the worst economic forecasting record of any major institution, with the IMF running a close second. Every year the Fed produces a one-year forward forecast. In 2009, a 2010 economic forecast is produced, and so on through today. If the Fed were off by a few tenths of one-percent, I’d be the first one to congratulate them.

    That’s not what happens. The realistic range for forecasts is about 8 percentage points, (from +5% to -3%, although more extreme outcomes are possible). Being off by 1 or 2 percentage points means missing the green on approach by 12.5% to 25% of the outcomes. That’s a huge miss and is exactly what the Fed has been doing since 2009 (“green shoots”), 2010 (“recovery summer”) and ever since.

    The Fed’s latest forecast, found here, issued last week is that the U.S. economy is “strong” and that the Fed is on track for another rate hike in September as planned. That forecast relies on steady job creation, low unemployment and the predictive power of the Phillips Curve. That’s fine except that “job creation” ignores ten million able-bodied adults who have dropped out of the workforce and are not considered unemployed; “unemployment” ignores forty-year low labor force participation, and the Phillips Curve has not produced statistically reliable forecasts since the 1960s.

    Meanwhile the Fed ignores the negative impact of trade wars, currency wars, falling ISM services expectations surveys, stagnant wages and a host of other important data. Leave aside the fact that the Fed has never forecast a recession in its 105-year institutional history. What’s unfolding is a slow-motion train-wreck in which weak forecasting and over tightening by the Fed are about to collide with a weak U.S. economy and lead to a recession.

    The best outcome is that the Fed wakes up to the data by late summer and pauses its rate hikes in September, December or both. The worst outcome is the Fed remains asleep at the switch, keeps tightening, and actually causes the recession they’re preparing to avoid.

    Let’s hope for the best. But, just in case, an increased allocation from stocks to cash will reduce portfolio volatility and create optionality if the Fed gets this wrong again.

    Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.