Equity is the net on any asset that you own.

Equity = Assets - Liability.  Investors and potential buyers measure the value of an asset by its equity.  

There is also shareholder's equity, stocks that represents ownership in a business.  Anothet name for ownership shares is stock.  

In accounting and finance, equity is the difference between the value of the assets and the cost of the liabilities of something owned.  For example, if someone owns a car worth $15,000 but owes $5,000 on a loan against that car, the car represents $10,000 equity.  Equity can be negative if liability exceeds assets.  

In an accounting context, shareholders' equity (or stockholders' equity, shareholders' funds, shareholders' capital or similar terms) represents the equity of a company as divided among shareholders of common or preferred stock.  Accounting shareholders are the cheapest risk bearers as they deal with the public.  Negative shareholders' equity is often referred to as sharesholders' deficit.  

For purposes of liquidation during bankruptcy, ownership equity is the equity which remains after all liabilities have been paid.  

This way we know. 

Interesting article from The Dollar Vigilante . . .

One of the inspirations for our name, The Dollar Vigilante, was what used to be called the Bond Vigilantes.

Okay, that was interesting to learn.  But what really caught my eye was this . . .

Last seen in full force in the inflationary early 1980s, bond vigilantes were anti-establishment figures who were said to have rebelled. They had decided to keep central banks and governments honest by raising long term interest rates in the open market. They would do so whenever the authorities kept their own interest rates too low, or let budget deficits grow out of control.

Read the rest here:

It was in 2010 that I overheard the term "bond vigilante" on a radio program once again and laughed for a moment, saying in my own head, Ah, yes, with interest rates at near zero or negative percent, Quantitative Easing to infinity and budget deficits in the US stretching the boundaries of belief, where are the bond vigilantes now?

And I thought to myself, "I guess the system is so far out of control now that you can't sell bonds to keep central banks or government under control as they'll just print up unlimited money to keep buying it."

I then had an epiphany and told myself, "What we need today are dollar vigilantes!"

That's what started this all...

In a sense, George Soros is a fellow dollar vigilante.  An outsider who once tried to break the system... and he did.

On September 16, 1992, Black Wednesday,  he sold short more than US$10 billion worth of pounds (which is just play money today but back then it was a massive amount) against the Bank of England. He was betting on its reluctance to raise its interest rates or float its currency.

The BoE finally withdrew the currency from the European Exchange Rate Mechanism, devaluing the pound sterling, and earning Soros an estimated US$1.1 billion. He was dubbed "the man who broke the Bank of England”.

And for that, we cheer(ed) him!  What happened, in my estimation is that the ring of power (that's what the Lord of the Rings, by anarchist J.R.R. Tolkien was all about) is so strong that no one can be uncorrupted by it.

Anyway, George was called to Buckingham palace to see the Ring Master herself, the Queen of England. That must have been quite a conversation. Afterwards, George became a ring wraith.  He started his foundation and became the leftist power he is today.

He became part of the New World in other words.

These days he clearly functions at the highest (public) levels, overthrowing countries to support the coming global order. And he raises funds to support organizations like Black Lives Matter to keep the people divided and chaotic. The more social turmoil there is, the easier it is to manipulate people and even whole societies. That's how globalism is achieved.

SO WE MEET AGAIN

Now we meet George again. Not as a dollar vigilante but as a wring wraith and fellow gold buyer. He's heavily long on gold and short the US stock market.

He's plunging into gold buying 19 million shares from Barack Gold valued at over $260 million. He's purchased 1.05 million shares of the SPDR Gold Trust ETF and doubled his short-sell on the U.S. S&P 500 Index.

You can see the dramatic sell-off of long equity holdings here:

I have been writing for years that we are NOT heading for a period of high inflation. You are getting this idea from some other site. Search this site for "hyperinflation". 

You do not buy bonds to hold until maturity. You hold them for capital appreciation when rates fall. In recessions, 30-year T-bond rates fall.http://bit.ly/1HzNZuk Investors make profits.  --Gary North

The China Factor on Commodities?

Rick Rule, founder of Sprott Global Resources

August 4, 2015
Vilnius, Lithuania

On April 2, 2001, the price of gold closed the market trading session at $255.30.

And that was the lowest price that gold has seen ever since.

In US dollar terms, gold closed the 2001 calendar year higher than it did in 2000. Then it did the same thing again in 2002. And again in 2003.

In fact, after reaching its low in April 2001, gold closed higher for twelve consecutive years-- something that had never happened before in ANY financial market with ANY asset.

Then came a correction; the price started falling, and gold is now on track for 2015 to be its third down year in a row.

What’s incredible is that, despite its history of gains, and 5,000 years of tradition behind it, gold is rapidly becoming one of the most widely despised assets.

But before we pronounce it dead and write the final gold eulogy, however, let’s consider the following:

1) Nothing goes up (or down) in a straight line. After 12 straight years of unprecedented gains with any asset class, it’s not unusual to have a meaningful correction.

(Just imagine how severe the correction in stocks will be. . .)

And like all frantic booms which go way past sustainable levels, corrections also overshoot fair value.

This correction in the gold market could easily last for several more years, with prices potentially well below $1,000.

But then we could just as easily see another massive surge all the way past $2,000 and beyond.

That’s the nature of these markets-- to be extremely fickle (and highly manipulated).

Even over a period of a few years, the market can show about as much maturity as a middle school lunchroom, complete with pubescent gossip and inane popularity contests.

But it’s rather short-sighted to completely lose confidence in an asset that has a 5,000 year track record because of a few down years.

2) The gold price shed nearly 5% after the government of China announced recently that they owned 1,658 metric tons of gold.

This amount was lower than what many investors and analysts had been expecting, and the price of gold dropped as a result.

My question- since when did anyone start believing official reports from the Chinese government?

Seriously. The Chinese have a vested interest in understating their gold holdings.

They know that doing so will push the price of gold LOWER, which is exactly what they want.

China is sitting on trillions of dollars in reserves right now, a portion of which they’re rapidly trying to rotate OUT of US dollars.

So it’s clearly beneficial to the Chinese government if they can sell dollars while they’re strong and buy gold while it’s cheap.

And if they can push gold to become cheaper, even better for them.

3) Remember why you own gold to begin with.

Gold is a very long-term store of value. Notwithstanding a few down years, gold has maintained its purchasing power for thousands of years.

Paper currencies come and go. They get devalued, revalued, and extinguished altogether.

How much would you be able to buy today with paper money issued by the 7th century Tang Dynasty? Nothing. It no longer exists.

Or a pound sterling from 1817? Very little. It’s barely pocket change today.

Yet the gold backing up that same pound sterling from 1817 is worth over $250 today (165 pounds).

Even in modern history, the gold backing up a single US dollar from 1971 is worth vastly more than the paper currency that was printed 44 years ago.

But even more importantly, aside from being a long-term store of value, gold is a hedge--a form of money that acts as an insurance policy against a dangerously overleveraged financial system.

How much will your dollars and euros buy you in the event of real financial calamity? Or if there’s a major government default or central bank failure?

No matter what happens in the financial system--whether it collapses under its own weight, or cryptofinance technology revolutionizes how we do business--gold ensures that you’re protected.

4) Resist the urge to value gold in paper currency. We all have this tendency--we invest in something, and then hope it goes up in value.

But that’s a mistake with gold. It’s a hard thing for some people to do, but try to stop yourself from thinking about gold in terms of its paper price.

(It’s also important to remember that there’s a huge disconnect between the ‘paper price’ of gold, and the physical price of gold.)

Remember, gold is not an investment; there are plenty of better options out there if you’re looking for a great speculation.

So the notion of trading a stack of paper currency for gold, only to trade the gold back for a taller stack of paper currency misses the point entirely.

5) Having said that, if you find it too difficult to do this, and you catch yourself constantly refreshing the gold price and checking your portfolio, you might own too much.

Listen to your instincts; if you’re always feeling frantic about the daily gyrations in the market, lighten your load.

Don’t love anything that won’t love you back. Stay rational. Own enough gold that, in the event of a crisis, you will feel comfortable that you have enough ‘real savings’… but don’t own so much that you’re constantly worrying about the paper price. 

Until tomorrow,

Simon Black
Founder, SovereignMan.com

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