07.20.19- The Most Dangerous Game
Sven Henrich

How can I not talk about the Fed? How can I not talk about the daily jawboning? It is all around us. Every. Single. Day.

And it keeps working.

I feel like I’m being reduced to a loon conspiracy theorist documenting the very reality of it.  But I’m not. From my perch I’m doing a public service doing it, because the background motivation for why it is being done reveals a deeper and disturbing truth: They are scared, they are worried and they are desperate to keep the balls in the air. Read More

07.19.19- Oxygen Tank Empty:
Even Gold Won’t Help You!
Lior Gantz

This is the most brutally-honest publication I’ve ever written and it might cause you to have goose bumps, just as it did to me, as I realized the situation, in its entirety. I didn’t sugarcoat anything, nor have I done the opposite by exaggerating and provoking undue fear, since reality is weird enough.

The reason that gold won’t save most people from what’s coming is because the ones that need financial stability the most are the ones that CAN’T AFFORD to own sufficient amounts of it to put them out of risk.

I have already converted 24 months’ worth of my family unit’s living expenses into gold eagles, and will be adding an additional 12 months’ worth in silver eagles by the end of this week. Read More

07.18.19- What Would Happen If the Federal Reserve Did Nothing?
Bill Bonner

The FOMC [Federal Open Market Committee] has been navigating between the shoals of overheating and premature tightening with only a hazy view of what seem to be shifting navigational guides…

– Jerome Powell, Chair of the Federal Reserve

YOUGHAL, IRELAND – The Fed has a less than “hazy” view of its “navigational guides.” It is lost at sea. It has no idea what is north or south… up or down… right or left. Read More

07.17.19- Global Central Banks "Are Trapped By Their Own Inflation Targets"
Tyler Durden

Negative Rates Would Lead To #Chaos

Central bankers attending the G-7 meeting are sounding remarkably coordinated in their message. The global economy is growing but inflation isn’t. And that, along with the oft-cited global headwinds, means they’re ready and able to add more liquidity to the system. In the case of the U.S. they have virtually promised that it’s underway. They can assure markets that they’re “ready.” But the far more important assertion is driving home that they’re still “able.” Read More

07.16.19- A Long Shadow Creeps Over The Economy This Summer
David Haggith

It’s time to turn around and see the darkness that the Fed sees looming over you. Earnings season is already extending signs of recession with the first corporate reports coming in far darker than expectations that were already twilight dim in FactSet’s estimations, which pegged earnings as likely to show a 2% contraction.

Even the Fed sees problems ahead. Jerome Powell’s speech to congress has been called “one of the most dovish Fed speeches ever!” While that quickened the heart of a sugar-hungry stock market, what does it really tell you about how soon or likely the Fed sees recession looming for the economy or sees trouble for the stock market? Why else would Father Fed suddenly become the “most dovish … ever?” Does the Fed become its “most dovish … ever” when the economy and the stock market are doing great? Read More

07.15.19- The Hidden Reason Why Fed Chairman Powell and "Systemically Important" Banks Oppose a Gold Standard
Mike Gleason

Chairman Powell’s testimony this week was closely scrutinized not just for its economic implications but also for its political overtones. Powell cited “trade tensions” as cause for concern about the strength of the global economy. He clearly seemed to be blaming President Trump’s tariffs.

But if the tariffs are what ultimately move the Fed to cut rates, Trump will have finally gotten what he wants out of Powell. In recent weeks, Trump has stepped up his attacks on the central bank, calling it the biggest problem facing the economy, floating the idea of firing Powell, and suggesting his administration would match China’s and Europe’s "currency manipulation game." Read More

07.13.19- How Much U.S. Currency is Held Overseas?
JP Koning

What is the U.S.’s greatest export? Banknotes. There is probably no other product for which the balance of trade is so tilted in the U.S.’s favour. No foreign bills circulate in the U.S., but U.S. bills are eagerly used all over the world.

According to the Federal Reserve, there are currently $1.74 trillion paper dollars in circulation. How many of these notes circulate in the U.S. and how many are used overseas? Read More

07.12.19- Ray Dalio: There Is As Little As One Year Of Fed Stimulus Left In The Bottle
Tyler Durden

At the end of May, the world's largest bond manager, Pimco, whose bread and butter depends entirely on the future of the price of bonds and by implication, interest rates (and being able to correctly predict where they go) and thus, on the Fed's continued control of the market, made an ominous warning. Speaking to Bloomberg TV, the CIO of core strategies at PIMCO, Scott Mather, said that "we have probably the riskiest credit market that we have ever had" in terms of size, duration, quality and lack of liquidity" adding that the current situation compares to mid-2000s, just before the global financial crisis. Read More

07.11.19- Cavalier Attitudes
Michael Every

The combination of surprisingly dovish comments from Fed Chair Powell and the tone of the June FOMC minutes reassured the market about the prospect of some policy stimulus at the end of the month.  In response to questions from Congress men and women, Powell clarified that the stronger than expected US June Labor Report did not shift the Fed’s policy outlook.  Instead he stated that uncertainties about global growth and trade continue to weigh on the outlook. Read More

07.10.19- Are Investors Grossly Underestimating The Fed?
Michael Lebowitz

If you think the Fed may only lower rates by .50 or even .75, you may be grossly underestimating them.

Currently, the December 2019 Fed Funds futures contract implies that the Fed will reduce the Fed Funds rate by nearly 75 basis points (0.75%) by the end of the year. While 75 basis points may seem aggressive, if the Fed does embark on a rate-cutting policy and history proves reliable, we should prepare ourselves for much more. Read More

07.09.19- The New Hysteria: Rate-Cut Rationalizing
Jeffrey Snider

Even though it was everywhere, one of the primary things that struck me about the peak period for Reflation #3 was how ridiculous it got. If you have a strong argument, there’s no need for so much hyperbole. But it wasn’t just that, it had become openly ridiculous.

Interest rates had nowhere to go but up, “they” said. Fine, it was always possible. But inflation, we were repeatedly told, was the only outcome, the definite product of skillful monetary handling leading to a biblically tight labor market. And to prove it, there would be no data just the strongest possible wording? Read More

07.08.19- Key Events This Week: All Eyes On Powell Again
Tyler Durden

Just in case you had an urgent craving of even more Fed talk, the US central bank will once again be under the spotlight this week with Powell due to testify before Congress on the US economy and monetary policy while a busy schedule of Fedspeakers is also scattered throughout the week. We’ll also get the latest FOMC meeting minutes and US CPI and PPI data. And days after a blistering payrolls report which slammed near-term rate cut odds, inflation data is also due to be out in Europe and China while the UK PM voting process begins. Read More

07.06.19- Bizarro World: The Herd Has
Truly Gone Mad
Adam Taggart

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

~ Charles Mackay (1841)

Like me, you may often feel gobsmacked when looking at the world around you.

How did things get so screwed up?

The simple summary is: the world has gone mad. Read More

07.05.19- How Monetary Policy Leads To Destruction Of The Middle Class And Rise Of Populism
Alexey Yeremenko, PhD

Austrian bonds with maturity in 2017 were placed at sub 1.2% yield to maturity at the time when European swaps market started assigning a significant probability of further rate cuts by the ECB after Mario Draghi’s dovish comments at the ECB forum in Sintra. Dr. Draghi’s main argument was an absence of inflation in Eurozone.

As a consumer living in a Eurozone country, I don’t feel like that inflation is hovering around an official 1% estimate. Fair enough, my consumption basket might be different from the one, which is considered to be an average. Still, there are plenty of people living in the Eurozone that share exactly the same sentiments. Read More

07.04.19- America's Concealed Crisis: Fifty Years of Economic Decline, 1969 to 2019
Charles Hugh Smith

If we consider the long term, it's clear America's economy and society have been declining for the average household for 50 years.

What if the "prosperity" of the past 50 years is mostly a statistical mirage for the bottom 80% of households? What if whatever real gains (adjusted for real-world loss of purchasing power) accrued only to the top of the wealth-power pyramid, those closest to financial and political power? What if the U.S. economy and society shifted from "everybody wins" to "winner takes all" or at best, :winner take most"? Read More

07.03.19- Three Steps to Save America from Collapse
George Gilder

Our monetary system is broken. It’s given us low growth, a shrinking job force, inequality beyond what a healthy economy would produce, inefficiency, and the unnatural growth of finance as a portion of the economy. 

Our aging Federal Reserve System starves both small businesses and Silicon Valley of the capital needed to grow jobs and wages.

Fed policy translates into zero-interest-rate loans for the government and its cronies, and little or nothing for savers or small businesses. And it has transformed Wall Street from an engine of innovation into a servant of government power. Read More

07.02.19- How the Fed Wrecks the Economy Over and Over Again
Michael Maharrey

When people talk about the economy, they generally focus on government policies such as taxation and regulation. For instance, Republicans credit President Trump’s tax cuts for the seemingly booming economy and surging stock markets. Meanwhile, Democrats blame “deregulation” for the 2008 financial crisis. While government policies do have an impact on the direction of the economy, this analysis completely ignores the biggest player on the stage – the Federal Reserve.

You simply cannot grasp the economic big-picture without understanding how Federal Reserve monetary policy drives the boom-bust cycle. The effects of all other government policies work within the Fed’s monetary framework. Money-printing and interest rate manipulations fuel booms and the inevitable attempt to return to “normalcy” precipitates busts. Read More

07.01.19- The Pain Of This New Economic Downturn Is Starting To Show Up All Over The Country
Michael Snyder

It is going to take a miracle for the U.S. economy to pull out of this tailspin, because the economic numbers are really starting to deteriorate very rapidly now.  On Tuesday we got some more new numbers, and they were just as bad as we thought they might be.  But even before today’s numbers all of the data were telling us the exact same thing.  The New York Fed’s Empire State manufacturing index just suffered the worst one month decline in U.S. history, Morgan Stanley’s Business Conditions Index just suffered the largest one month decline that we have ever seen, global trade numbers are the worst they have been since the last recession, and just last week I detailed the complete and utter “bloodbath” that we are witnessing in the U.S. trucking industry right now. Read More

06.29.19- And Now, for Something Entirely Different: Why Boeing and Its Executives Should be Prosecuted for Manslaughter
Russell Mokhiber

Type the word “manslaughter” into any news search engine and up will come a series of stories of ordinary Americans charged with killing others through criminal negligence or recklessness.

One such case that came up this month involved a Pennsylvania man who plead guilty to manslaughter. The man was accused of texting while driving and as a result killed a 12-year old girl walking on the side of the road. The driver obviously didn’t intend to kill the 12-year old girl. But due to his recklessness, he did. And he will now spend time in jail. Read More

06.28.19- The Real Reason Why The Fed Isn't Cutting Interest Rates
Brandon Smith

In an article published in September 2015 titled 'The Real Reason Why The Fed Will Raise Interest Rates' I outlined a kind of economic war game, a predictive theory in which the Federal Reserve would hike rates into clear economic weakness in order to deliberately cause the implosion of the vast financial bubble they had created through several years of quantitative easing. At that time this theory received a lot of opposition. Nearly everyone in the mainstream and in the alternative media argued that the Fed was going to shift to NIRP (negative interest rates), in order to continue propping up the system. The idea that the Fed would actually raise rates and cause an engineered crash after propping up the system for so long was treated as outlandish. Read More

96.27.19- Inflation Has Pushed Households And Small Businesses To The Edge
Charles Hugh Smith

Local Government Is an Engine of Inflation

Insolvency isn’t restricted to private enterprise; governments go broke, too.

One reason the economy is so much more precarious than advertised is inflation has pushed households and small businesses to the edge–and one engine of that inflation is local government. This is not to dump on local government, which is facing essentially unlimited demands from the public for more services while mandated cost increases in government union employee wages and benefits ratchet higher. Read More

06.26.19- Powell Folded Like a Deck of Cards
Danielle DiMartino Booth

Read More

06.25.19- America’s Fake Money Will Get Fakier
Bill Bonner

Money is one of the primary measures of value in any society, perhaps the primary one, the principal repository of value. As such, money is a central source of stability, continuity, and coherence in any community. Hence to tamper with the basic money supply is to tamper with a community’s sense of value. By making money worthless, inflation threatens to undermine and dissolve all sense of value in a society. – Paul A. Cantor Read More

06.24.19- Square Minus Zero
Raúl Ilargi Meijer

I intentionally start writing this mere minutes away from Fed chair Jay Powell’s latest comments. Intentionally, because the importance ascribed to those comments only means we have gotten so far removed from what capitalism and free markets are supposed to be about, that it’s pathetic. The comments mean something for rich socialists, but nothing for the man in the street. Or, rather, they mean that the man in the street will get screwed worse for longer.

And it’s not just the Fed, all central banks have it and do it. They play around with rates and definitions and semantics until the cows can never come home again. And they have such levels of control over their respective societies and economies that the mere use of the word “markets” should result in loud and unending ridicule. There are no markets, because there is no price discovery, the Fed and ECB and BOJ got it all covered. Any downside risks, that is. Read More

06.22.19- Is the Fed Dead?
David Haggith

The US deficit this year is already over three-quarters of a trillion dollars, putting the first eight months of the fiscal year almost equal with the entire past fiscal year. It is also $200 billion above the previous record for this portion of the year, and this May’s deficit alone was 40% higher than last May’s. 

The previous deficit record was set in the middle of the last recession, which means the government is already spending more than it did to try to pull us out of the last financial crisis. In spite of all of this fiscal stimulus, the economy appears to be receding on many fronts.  Read More

06.21.19- Dollar bear market called as Gundlach sees moment of truth
Susanne Barton

The dollar is poised to slide into a “modest bear market” as Treasury yields collapse on the back of the Federal Reserve’s dovish pivot.

That’s the view of Amundi Pioneer Asset Management’s Paresh Upadhyaya, who says Intercontinental Exchange Inc.’s U.S. Dollar Index may drop 5 per cent to 10 per cent from current levels as American short-term interest rates fall closer to yields in the rest of the world. The gauge’s decline to its 200-day average price signals a “moment of truth,” tweeted Jeffrey Gundlach, chief executive officer at DoubleLine Capital. Read More

06.20.19- Rejoice. The end of Banking is nigh
Simon Black

On January 3, 2009, about six months before I launched Sovereign Man more than a decade ago, the Bitcoin blockchain came into existence. 

50 bitcoins were mined by the network’s creator in that very first transaction. And within a few days, the first open-source Bitcoin software was released. 

Few people noticed. By October of 2009, the value of a single Bitcoin was still just $0.0009 (9/100th of a penny). Read More

06.19.19- Chairman Powell – You're Fired
Michael Lebowitz

Since President Trump first discussed firing Jerome Powell, out of a sense of frustration that his Fed Chair pick was not dovish enough, he has regularly expressed his displeasure at Powell’s lack of willingness to do whatever it takes to keep the economy booming beyond its potential. Strong economic growth serves Trump well as it boosts the odds of winning a second term.

This thought of firing the Fed Chair took an interesting turn yesterday when Mario Draghi, Jerome Powell’s counter-part in the ECB, commented that he was open to lowering interest rates and expanding quantitative easing measures if economic growth in the E.U. didn’t start to pick up soon. Read More

06.18.19- And Now, for Something Entirely Different: Celebrating 10 years from the oldest hotel in the world
Simon Black

In the year 705 AD, a Japanese entrepreneur named Fujiwara Mahito opened a small inn at the foot of the Akaishi mountains in central Honshu.

At the time, few people probably thought the inn would last very long. 

Fujiwara didn’t know anything about being an innkeeper… he had been groomed to follow in his father’s footsteps and serve the emperor as a bureaucrat. Read More

06.17.19- Inflation: The Soviet Tool for
Destroying Money
Chris Calton

In March 1919, the Communist Party headed by Vladimir Lenin stated in its newly drafted program that among the party objectives was the complete abolition of money. The State Bank of Russia would be “abolished and turned into the central bookkeeping office of the Communist society.” In theory, the ruling party could have simply decreed money out of existence, but this would fail to eliminate the circulation of currency throughout a vast country that the Bolsheviks did not fully control in 1919.

Instead, their strategy was to resort to the printing press. The banks were among the first institutions the Bolsheviks seized, and control over the money supply allowed them to pay salaries to the recently formed secret police and Red Army that were used to consolidate Bolshevik control following the 1917 revolution. Read More

06.15.19- And Now, for Something Entirely Different: Midwest Flooding Will Cause Shortages Of These Foods
Cat Ellis

Floods are dangerous natural disasters. People and animals can be swept away and easily drown. Floods can carry bacteria and pollutants great distances. Floods can bust through levees and tear down bridges. Floods can also lead to food shortages when they destroy farms, like the recent floods in the Midwest have. Smart preppers will take measures to beef up their food storage now.

By now, most US-based preppers have either heard about (or experienced) the massive, damaging floods in the Midwest since this past March. To make matters worse, the potential for more floods in key agricultural states looms in front of us as more rain is predicted for the rest of this spring. Read More

06.14.19- Fed Chair Powell’s Plan to Pickle the Economy
MN Gordon

The Dow Jones Industrial Average made another concerted run at the elusive 27,000 milestone over the last several weeks.  But, as of this writing, the index has stalled out short of this psychosomatic barrier.  By our estimation, this is for the best.

While not always apparent, the stock market generally maintains a loose connection to the underlying economy.  Over long multi-decade periods, as measured by the price-to-earnings (P/E) ratio, it will undulate between stages where it’s cheap and stages where it’s dear.  Eventually, however, the stock market reverts towards its mean P/E ratio. Read More

06.13.19- Warning: Some of the Market's Vast Liquidity Is a Mirage
Mohamed A. El-Erian

A star fund manager’s stumble over liquidity is just a beginning. Far more will fail the test when there’s a downturn.

Beware of learning too few lessons from the difficulties facing Neil Woodford’s equity fund in the U.K. The takeaway is not simply to watch out for other open-ended funds with lots of inherently illiquid holdings. The case is also a warning to look seriously at the market as a whole – elements of which have grown too comfortable and too complacent operating in the ample liquidity pumped in by years of unconventional central bank policies. An economic downturn or a financial shock could create liquidity-induced dislocations that would heighten investor insecurity and complicate companies’ access to capital. Read More

06.12.19- The Fed Stops Pretending
Peter Schiff

Well, it didn’t take much and it didn’t take long. After years of delays, a tentative start, many cautious pauses along the way, and a top speed that never really hit cruising velocity, the Fed has taken the first available off-ramp on the road towards policy “normalization.” In a speech on Tuesday this week in Chicago, Fed Chairman Jerome Powell delighted Wall Street by signaling that the Fed may soon deliver the gift that investors had been hoping for…the first interest rate cut in almost a decade. Read More

06.11.19- Central banks set to flood market with cheap loans as trade war threatens to plunge global economy into recession
Enoch Yiu

• Analysts expect central banks in the US, India, Indonesia, South Korea and Malaysia to ensure ample liquidity if their economies show signs of weakening
  
  
• Traders expect a 70 per cent chance of a US rate cut in July; Hong Kong’s Linked Exchange Rate System to ensure HKMA moves lockstep with the Federal Reserve Read More

06.10.19- Here’s My Prediction: If the Fed Doesn’t Cut Rates 3 or 4 Times by Dec 11,
Markets Are Going to Crap
Wolf Richter

Stock market and corporate bond market are in la-la-land, pricing in an economic boom. They’re not seeing a rate-cut economy. So why would the Fed?

Granted, Wall Street always wants rate cuts, no matter what. But this is getting funny. The probability of three and even four rate cuts by December 11 are suddenly gaining the most favor in how the market are betting on 30-day Fed Fund futures. Read More

06.08.19- Lower Income Americans Are Begging The Fed For Less Inflation
Tyler Durden

While the Fed may be surprised that low income workers aren't as enthused about inflation as they are, we are not. A recent Bloomberg report looked at the stark disconnect between Fed policy and well, everybody else but banks and the 1%.

While the Fed sees low inflation as "one of the major challenges of our time," Shawn Smith, who trains some of the nation’s most vulnerable, low-income workers stated the obvious: people don't want higher prices.  Smith is the director of workforce development at Goodwill of Central and Coastal Virginia. Read More

06.07.19- Forget velocity of money circulation
Alasdair Macleod

If there is one concept that illustrates the difference between a top-down macro-economic approach and the reality of everyday life it is the velocity of circulation of money. Compare the following statements:

“The collapse in velocity is testament to the substantial misallocation of capital brought about by the easy money regimes of the past 20 years.” Broker’s research note; and

“The mathematical economists refuse to start from the various individuals’ demand for and supply of money. They introduce instead the spurious notion of velocity of circulation according to the pattern of mechanics.” Ludwig von Mises, Human Action. Read More

06.06,19- The US Economy's Dirty Big Secret
Todd Buchholz

There is a dirty little secret in economics today: the United States has benefited – and continues to benefit – from the global slump.

The US economy is humming along, even while protesters in the United Kingdom hurl milkshakes at Brexiteers, French President Emmanuel Macron confronts nihilist yellow-vested marchers, and Chinese tech firms such as Huawei fear being frozen out of foreign markets. Read More

06.05.19- Nothing to see here even if the charts come from the St. Louis Fed themselves
Bill Holter

Read More

06.04.19- From Gold To Nothing: How 1971 Changed Everything In The Economy
Duino Schiappapietra

The monetary system is a major component of the whole economic system. Despite that, today we take it for granted and don’t even ask ourselves how it works and if it is the best solution available or the correct way to manage things.

Even though it appears to be stable, history shows that monetary systems changed periodically in the last century (20–30 years on average).

The main difference between our current monetary system and previous monetary system is that today it is entirely based on FIAT Currency, in contrast to older monetary systems that were backed by gold. Read More

06.03.19- Interest rates, time-preference and gold
Alasdair Macleod

The interest rate fallacy

There is a widespread assumption that interest rates represent the cost of borrowing money. In the narrow sense that it is a rate paid by a borrower, this is true. Monetary policy planners enquire no further. Central bankers then posit that if you reduce the cost of borrowing, that is to say the interest rate, demand for credit increases, and the deployment of that credit in the economy naturally leads to an increase in GDP. Every central planner dreams of consistent growth in GDP and they seek to achieve it by lowering the cost of borrowing money. Read More

06.01.19- One-Two Trade War and Fed Policy Punch May Trigger Correction
Birch Gold Group

Maybe you’ve seen this scenario before: A boxer gets back up after violently being knocked down, only to get knocked out shortly after.

At the end of last year the Dow Jones suffered a severe correction from October 3 to December 24 (see both red arrows below):

After recovering, the Dow now seems to be struggling to “stay up” since the end of April. Could this mean we are headed towards another major correction? Read More

05.31.19-And Now, for Something Entirely Different: New York City trying to “liberate” teachers from their “whiteness”
Simon Black

Happy Friday everyone. Here’s our weekly roll-up of some of the most bizarre (and occasionally happy) stories from around the world that we’re following:

NYC schools training teachers to discriminate against white students

A new mandatory, $23 million “anti-bias” program is training New York City school teachers to discriminate against white children, no matter what. Read More

05.30.19- An Essay On The History Of Banking
stack.jones

In 1913, the U.S. Congress passed a bill called the Federal Reserve Act. This bill allowed an independent, non-government group to privatize, and take control of America’s monetary system. The Federal Reserve Bank’s name was chosen by this group so as to deceive the American people into believing that the Federal Reserve was a branch of the U.S. government. This privately held monopoly continues even today to give enormous power to a handful of international bankers, non-Americans, to issue America’s money, to set interest rates, to finance endless wars, and to enslave the American citizens, and the other nations of the world in a state of perpetual debt. This debt based monetary system is what has destroyed the American economy, and has brought with it depressions, and recessions for several generations.  Read More

05.29.19- Regime hange For the Fed — Honest Rates
James Grant

Ladies and gentlemen, it’s a blemish on the age that so many of us know the name of the Federal Reserve chairman. In a better world, that government functionary would be as obscure as what’s-his-name, the home plate umpire who got no arguments calling balls and strikes at Yankee Stadium the other night.

Who elected the Greenspans, Bernankes, and Powells to be the arbiters of interest rates, asset prices, the rate of inflation and who knows what else? It wasn’t Alexander Hamilton. Nor was it the Fed’s own founders. If the authors of the 1913 Federal Reserve Act could return to earth to inspect their handiwork, the shock might kill them all over again. Read More

05.28.19- Financial Markets To Federal Reserve: Time To Start Cutting Rates
John Rubino

In late 2018 the US stock market tanked, in effect holding a gun to its own head and threatening to pull the trigger unless the Fed stopped raising interest rates. The Fed, painfully aware that an equities bull market is an existential threat in today’s hyper-leveraged world, quickly caved, promising no more rate increases if the market would just put down the gun.

This worked for a little while. Stocks jumped to new record highs and unicorn tech IPOs started pouring out of Silicon Valley. Normal, which is to say booming, markets were back. Read More

05.27.19- Hints of gold returning as sound money as Trump readies new Gold Standard Fed Governor while Congressman submits bill to audit gold supply
Ken Schortgen

With two of President Trump's primary picks to fill vacant slots on the Federal Reserve's Board of Governors having dropped out in recent weeks, rumors of his newest pick could very well send shockwaves through the central bank.  And that is because according to Mish Shedlock in an article published on May 12, Trump appears to be readying Gold Standard advocate Judy Shelton as his next nominee. Read More

05.25.10- Corporations Leverage Fed’s Rate Pause to Lock-in Lower Rates on Junk Debt
Birch Gold Group

“Too Big to Fail” corporations searching for an opportunity to refinance high-risk debt have been given a gift. But this gift comes with risks.

Fed Chairman Powell decided back in January to pause any rate hikes after evaluating multiple risk factors, according to USA Today:

In an interview with the CBS news program “60 Minutes,” Powell said that the Fed decided to pause its rate hikes in January, after increasing rates four times in 2018, because the global economy was slowing and other risks to the U.S. economy were rising.Read More

05.24.19- The Fed Is Caught Behind The Curve
Avi Gilburt

I have written many times about how the Fed follows the market and does not lead it.  And, we are about to see yet another example of history’s lessons.

For those that followed our work over the years, you would know that we called for a top to the bond market on June 27, 2016, with the market striking its multi-year highs within a week of our call.  Since that call, TLT dropped 22%, until we saw the bottoming structure develop in late 2018. Read More

05.23.19- Jim Grant Says It’s Time
to Abolish the Fed
Rick Ackerman

Ladies and gentlemen, it’s a blemish on the age that so many of us know the name of the Federal Reserve chairman. In a better world, that government functionary would be as obscure as what’s-his-name, the home plate umpire who got no arguments calling balls and strikes at Yankee Stadium the other night. Who elected the Greenspans, Bernankes, and Powells to be the arbiters of interest rates, asset prices, the rate of inflation and who knows what else? It wasn’t Alexander Hamilton. Nor was it the Fed’s own founders. If the authors of the 1913 Federal Reserve Act could return to earth to inspect their handiwork, the shock might kill them again. Read More

05.22.19- How To Earn More On
Your Savings Deposits
Tekoa Da Silva

Thank you for your interest in this Paper. It is intended to help you earn more money on your savings (while taking less risk), and to give you the ability to discern whether or not you are getting a ‘good deal’ on savings & deposit products, relative to a low-risk product category called: U.S. Treasuries.

In this paper we’ll discuss:

1. Short-Term U.S. Treasuries and why they may be superior to bank deposit or certificate products.
2. How to buy U.S. Treasuries.
3. Short-Term interest rates in the U.S. (as of 2019) Read More

05.21.19- The Fed's Tragic Plan For Long Term Rates Revealed
Mike Maloney

View Video

05.20.19- Humpty Dumpty Had A Great Fall, Caused By The Federal Reserve
Bill Sardi

Shhh… Don’t forward this posting to widows who placed a $100,000 in their savings account over a decade ago and who think they really have $100,000 of purchasing power stashed in their bank account, or we might have a bank run on our hands.

Oh, the banks would close and even more severe limits on withdrawals would be invoked than are currently in place should a widespread run on the banks ever occur.  There is no way a run on the banks will ever be allowed to happen again, like in the Great Depression when the Stock Market crashed in 1929 and anxious depositors withdrew their savings, forcing banks to liquidate (call in) loans, which led to many bank failures.Read More

05.18.19- The Income Tax is Destroying the World Economy
Martin Armstrong

(Editor's Note: Although the Internal Revenue Service is considered to be a Bureau of the Department of Treasury, like the Federal Reserve, they are not part of the Federal Government, and in fact were incorporated in Delaware in 1933. It is pointed out that all official Federal Government mail is sent postage-free because of the franking privilege, however, the IRS has to pay their own postage, which indicates that they are not a government entity. They are in fact a collection agency for the Federal Reserve, because they do not collect any taxes for the U.S. Treasury. All funds collected are turned over to the Federal Reserve. If you have ever sent a check to the IRS, you will find that it was endorsed over to the Federal Reserve. The Federal Reserve, in turn, deposits the money with the IMF of the United Nations, where it is filtered down to the International Development Association (see Treasury Delegation Order No. 91), which is part of the International Bank for Reconstruction and Development, commonly known as the World Bank. Therefore, it is now clear, that the American people are unknowingly contributing to the financing of a World Government in-the-making. Read More

05.17.19- Can the Fed Keep This Long Cycle Going?
Brendan Brown

There have already been three completed growth cycles in this super-long business cycle. Can the Fed keep it going?

Our current super-long economic cycle is a monetary curse. Under sound money it would not exist, and under the pre-1914 gold standard, it never occurred. The present business cycle expansion in the US — the longest ever — comes in the wake of three recent super-cycle expansions: 1991-2000, 1982-90, and 1961-69. Arguably, the first super-long cycle was in the early years of the Federal Reserve, from 1921-9. Read More

05.16.19- Fed Launches ‘Rate Peg Instead of QE’ Trial Balloon for Next Crisis
Wolf Richter

Wall Street hype artists and assorted QE mongers would be deeply disappointed.

This came packaged into the middle of a speech by Federal Reserve Board Governor Lael Brainard, on “How Does Monetary Policy Affect Your Community?” It was under the subheading, “Some Issues to Explore.” And it would be a huge shift in how the next crisis will be handled. Read More

05.15.19- Gold & Silver: Why I'm Buying
THE Safe-Haven Assets, Right Now.
Mike Maloney

View Video

05.14.19- Judy Shelton, Trump's Next Fed Choice, Favors A Gold Standard And Free Trade
Mike Shedlock

Economist Judy Shelton, a Trump economic advisor and a gold standard advocate is rumored to be Trump's next Fed pick.

Bloomberg reports White House Considers Economist Judy Shelton for Fed Board

The White House is considering conservative economist Judy Shelton to fill one of the two vacancies on the Federal Reserve Board of Governors that President Donald Trump has struggled to fill. Read More

05.13.19- And Now, for Something Entirely Different: Seeking Arrangement Might Just Burst the College Bubble
Aaron Carey

There are THREE WARNINGS for this article. 

1.  This article contains links and discussion about porn and pornographic sites. You have been warned.

2.  This article is also written from a cold, clinical, empiricist economic viewpoint absent of any human emotion which you will find more insulting.  You have also been warned.

3.  This article is about a solid 45 minute read.  It's not for those of you with the attention span of goldfish or millennials.  Be careful reading it.  Your intellect might be stimulated  Read More

05.11.19- And Now, foe Something Entirely Different: 3 Things Everyone Should Do Before They Die
Nilus Mattive

The average life expectancy for those born in 2018 in the United States is 76 for males and 81 for females. 

Compare these figures to almost 80 years ago, where males born in 1940 lived until age 61 and females age 65, and there’s no question we are living longer. 

But eventually we’re all going to die. And as morbid as that sounds, there are some things you need to consider before your time is up. Read More

05.10.19- The Three Stages of
Modern Monetary Theory
MN Gordon

Stage One: Yielding to Dreamers

Some ideas are so bad they’re best ignored.  Like resentments – or stray cats – if you don’t feed them, they’ll go away.  Before long, they’re forgotten altogether.

That has been our approach to Modern Monetary Theory (MMT).  The idea’s so obviously foolish, reckless, and outright suicidal.  Why feed this dorkus maximus of economic thought? Read More

05.09.19- When Deutsche Bank’s Crisis Becomes Our Crisis
Christopher Whalen

Our friends in Europe seem totally incapable of addressing their failing financial sector. And that's not good for anyone.

Americans generally think of Europe first as a wonderful place to visit. They rarely ponder the economic and financial ties between the United States and European Union, but in fact these ties are extensive and significant to the stability of both economies.Read More

95.08.10- The "Muzzle" On Inflation
Tyler Durden

The "muzzle" on reported inflation has policymakers and analysts perplexed. Numerous economic explanations and theories have been offered, and policymakers are considering making changes to their operating price-targeting framework.

Yet, before any decisions are made policymakers should consider all of the factors that could be keeping a "muzzle" on published inflation.

I am going to discuss two. Read More

05.07.19- The Real Reason for Income Inequality? The Fed
Josh Hammer and Todd J. Stein

Federal Reserve Chairman Jerome Powell. The Fed's quantitative easing over the last decade is responsible for income inequality, not low taxes.

Income inequality in America has worsened in recent decades. Many on the left, buttressed by a not-insignificant number of those on the right, have argued for an increasingly progressive income tax code to tackle this problem. Read More

05.06.19- The Fed Is Stuck Between
A Rock And A Hard Place
Frank Suess

On the one hand, the need to normalize its policies is urgent, lest it has no tools left to fight the next recession, and on the other hand…

As discussed in the latest Digger, despite all the tightening and rate hike talk by the Fed during the past year, it seems that reality has now finally caught up with it. With the markets being dangerously addicted to its accommodative policies, the Fed (as well as the ECB and the BOJ) has backed itself into a corner with no moves left. Read More

05.04.19- And Now, for Something Entirely Different: White People Will Be Rubbed Out Along With Their History
Paul Craig Roberts

Recently I wrote of the failure of white liberals to realize the consequences of their good intentions toward preferred minorities.

The cost of this miscalculation rises by the day. Now white people in America are to be stripped of their history, because white history traumatizes preferred minorities.  At George Washington High School in northern California an historic mural depicting the school’s namesake has been declared offensive.  Read More

05.03.19- The Fed Has Lost Control Of Rates As 'Technical Tweak' Fails
Tyler Durden

While the rest of the world is distracted by the plummeting unemployment rates and trade deal hype, a funny (well not so funny) thing happened in the short-term funding markets in the world's reserve currency.

As we noted previously, something unexpected has been going on in overnight funding markets: ever since March 20, the Effective Fed Funds rate has been trading above the IOER. This is not supposed to happen. Read More

05.02.19- Returning to currencies
with hard anchors?
William Coats

After years of discretionary management of monetary policy by the Federal Reserve, there is a strong case for re-fixing our fiat currency system to a hard anchor. Though the dollar was far more stable under the gold and gold exchange standard era than after it’s delinking from gold in 1971, those systems came with significant weaknesses that contributed to their ultimate abandonment. To avoid these, three key elements of the Fed’s operation should be modified. These are: 1. The monetary policy rules determining how currency fixed to a hard anchor is issued and redeemed; 2. The monetary anchor itself; and 3. What the currency is issued or redeemed for. Read More

05.01.19- The Fed’s Dangerous Inflation Game
Jim Rickards

By now you’ve heard that the U.S. economy expanded at an annualized rate of 3.2% in the first quarter of 2019. That was reported by the Commerce Department last Friday morning.

That strong growth coming on top of 4.2% in Q2 2018 and 3.4% in Q3 2018 means that in the past twelve months, the U.S. economy has expanded at about a 3.25% annualized rate. That’s a full point higher than the average growth rate since June 2009 when the expansion began and it’s in line with the 3.22% growth rate of the average expansion since 1980. Read More

04.30.19- World's Monetary Reserves and
the End of an Era
Hugo Salinas Price

We had been observing the evolution of the total of Central Bank Monetary Reserves for several years, and noted a peak on August 2, 2014, when these Reserves reached a maximum of the equivalent of $12.032 Trillion dollars, according to Bloomberg.

As of April, 2019, a review of Central Bank Monetary Reserves, according to Bloomberg, yields some interesting information. Read More

04.29.19- Not Modern, Not About Money, and not Much of a Theory
Charles Gave

Ronald Reagan used to say that there are two kinds of economists. The first, usually disliked by politicians, believe like Milton Friedman that there is no such thing as a free of lunch. The second, very much liked by politicians, believe that if only the government were to spend more, growth would accelerate for the greater good of all. Reagan would then go on to say that the first kind tend to believe in God, and the second kind believe in Santa Claus. Unfortunately, Santa Claus doesn’t exist. Read More

04.27.19- Weekend Rant: Washington Has Destroyed Western Liberty
The Era of Tyranny Has Begun
Dr Paul Craig Roberts

A fish rots from the head. In the Western world rot is accelerating. The rot in Washington is swiftly spreading to state and local governments and abroad to the Empire’s vassal governments.

Washington’s attack on journalism represented by the illegal arrest of Julian Assange has now spread to France. The US government’s policy of sanctions against sovereign countries that do not follow Washington’s orders has spread to the state of New York, where the governor has threatened sanctions against financial institutions that do business with the National Rifle Association. Read More

04.26.19- Central Banks Have Broken Capitalism
Alberto Gallo

While many agree that current monetary policies are not sustainable, few have offered realistic alternatives. Here are three.

It has been a decade since the Federal Reserve and other central banks began cutting interest rates to zero — or even below — and injecting unprecedented amounts of cash into the global financial system via quantitative easing. And while global stocks are at or near record highs, central banks around the world are increasingly abandoning their hopes of normalizing policy with economic growth slowing. On top of that, public and private debt levels are higher than ever. Read More

04.25.19- We Give Up! Part 6: Federal Reserve “Resigned” To Blowing Bubbles
John Rubino

After raising interest rates and getting slapped around by the markets last year, the Fed now appears to accept that future monetary policy can only be easy, even at the cost of ever larger and more destabilizing financial bubbles. On one hand this is a truly epochal change. On the other hand it’s just a recognition of the new normal in which central banks have already lost control. 

From Bloomberg: 

Fed Seems Resigned to Bubble Risk in Effort to Extend Expansion Read More

04.24.19- The Fed’s key interest rate keeps climbing, and that could become a problem
Jeff Cox

The Federal Reserve’s benchmark interest rate has inched up to its highest level in 11 years even though the central bank has sent a clear message that it is done tightening policy indefinitely.

In recent days, the effective fed funds rate, which targets the overnight level that banks charge each other for loans, has moved up to 2.44%. That’s the highest since March 2008 and is just 6 basis points from the top of the target range and the closest to the top since December, when the Fed last raised rates. Read More

04.23.19- Will Powell’s Dovish Turn Support Gold?
Arkadiusz Sieroń

It was a big surprise. The dovish surprise. In March, Powell doubled down on its accommodative stance. Does he know something we are not aware of?  We invite you to read our today’s article about the recent Fed’s U-turn and find out whether it will support the gold prices.

Three months can make a big difference! In December 2018, the Fed raised the federal funds rate and signaled another two hikes in 2019 and further one in 2020. Powell also reaffirmed that the Fed would continue to unwind its balance sheet, by up to $50 billion per month, and he sounded very hawkish. But just six weeks later, at the FOMC meeting at the end of January, he sounded much softer, announcing that the Fed would pause its balance sheet normalization this year. Read More

04.22.19- Waxing philosophically
Johnny Silver Bear

I was, again, fortunate this past week when I found myself in a lively debate about the differences between truth and reality. I say "fortunate" because the subject has, at least to me, grown a great deal in relevance over the last sixteen years, as my inuring tenure as your editor has transpired.

I fancy myself Jeffersonian Constitutionalist, a champion of liberty, and a seeker of the truth. The combination of these three dutiful involvements provides me meaning and satisfaction, and coalesce into a condition that I consider wholesome, fulfilling, and one that I aspire to continue to achieve. There are too few truth seekers, although the attraction to the truth seems to be spreading in the face of an overtly devolving social condition. Read More

04.20.19- The S&P Index at 2900: The Biggest Wall Street/Fed Whopper Ever Told
Christopher Gisiger

Once upon a time, the stock market reflected the state of the main street economy and the level of business profits. In the present age of Keynesian central banking, not so much.

To wit, since the first quarter of 2012, the S&P 500 has risen from 1300 to 2900 or by nearly 125%. At the same time, pre-tax corporate profits of $2.20 trillion (annualized rate) in Q1 2012 have gone nowhere at all – actually posting a tad lower at $2.18 trillion in Q4 2018; and that dismal number, in turn, was down by nearly 6% from the peak $2.32 trillion level posted in Q3 2014. Read More

04.19.19- The Fat Lady Is Clearing Her Throat - Dancing Towards the Abyss
Jesse's Café Américain

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population.  Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. 

These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry. Read More

04.18.19- How U.S. Government Debt May Impact Social Security
Birch Gold Group

Fiscal year 2018 wasn’t a good one for U.S. Government net-worth. While that may hardly be surprising, it’s possible we’re reaching a “tipping point.”

From an official report released by the U.S. Treasury, Sovereign Man pulled out a few key highlights:

• In 2018, the government’s total net loss was $1.16 TRILLION.
  
• … they spent over $4.5 trillion.
  
• … nearly HALF went to Social Security and Medicare.
  
• … spent a record $523 billion just on interest payments on the national debt! Read More

04.17.19- Central Banks Soften Us Up
For Higher Inflation
John Rubino

There was a time when “price stability” – that is, money that buys the same amount of stuff every year – was considered a good thing. But as debts began to pile up around the world, it became clear to policymakers that managing that debt required money that got a little less valuable over time, say 2%, to allow debtors to pay interest in cheaper currency and employers to placate workers with “cost of living” raises. 

This delayed the reckoning on the old debt but at the cost of soaring new debt, as pretty much everyone figured out that it’s smart to borrow depreciating currency. Read More

04.16.19- Counterfeiting Money Is a Crime —
Whether Done by the Fed or A Private Individual
Patrick Barron

A few years ago, shortly after the 2008 subprime lending disaster, the Fed sent a public relations team around the country to conduct supposedly "educational sessions" about how the Fed works and the wonderful things it does. The public was invited, and there was a question and answer session at the end of the presentation. One such session was held in Des Moines, Iowa. At the time I was teaching a course in Austrian economics at the University of Iowa, so I lusted at the prospect of hearing complete nonsense and having a shot at asking a question. I was not disappointed. Read More

04.15.19- And Now. for Something Entirely Different: Julian Assange Is Guilty Of Only One Thing: Revealing The Evil Soul Of US Imperialism
Federico Pieraccini

Julian Assange was bundled away by British police after Lenin Moreno, the president of Ecuador, gave the green light for the expulsion of the Wikileaks publisher from the Ecuadorian embassy in London. Assange's arrest represents an abuse of power, highlighting not only how true journalism has now been banished in the West, but also how politicians, journalists, news agencies and think-tanks collude with each other to silence people like Julian Assange and his Wikileaks foundation who are a nuisance to US imperialism. Read More

04.13.19- Unsolicited Advice to Fed Chair Powell
MN Gordon

American businesses over the past decade have taken a most unsettling turn.  According to research from the Securities Industry and Financial Markets Association, as of November 2018, non-financial corporate debt has grown to more than $9.1 trillion.

[ed note: this number refers to securitized debt and business loans, other corporate liabilities would add an additional $11 trillion for a total of $20.5 trillion] Read More

04.12.19- My Fancy-Schmancy “Fed Hawk-o-Meter”
Jumps 18%,
Wolf Richter

What’s the Fed Trying to Say?

My fancy-schmancy Fed Hawk-o-Meter jumped 18% from 22 to 26, after having been on a downtrend for four Fed meetings in a row. Something’s up.

The Fed Hawk-o-Meter checks the minutes of the FOMC meetings for signs that the Fed sees the economy as strong and that rates should rise; or that the economy is OK but not strong enough to raise rates further; or that the economy is spiraling down to where rates need to be cut. It quantifies and visualizes what the Fed wishes to communicate to the markets by counting how often “strong,” “strongly,” and “stronger” appear in the minutes to describe the economy. In the minutes of the March 19-20 meeting, released this afternoon, those words appear 26 times, up 18% from 22 times in the prior minutes: Read More

04.11.19- Hey, Ray Dalio, It's The Fed, Stupid!
David Stockman

If you want to know had badly Keynesian central banking has corrupted the financial discourse, just check into the current PC sensation of the week.

We are referring to Ray Dalio’s punking of the very capitalism under which his $160 billion hedge funds has become the largest in the world and his net worth has soared to a tidy $18 billion. Yet Sunday night he told millions of “60 Minutes” viewers that the American Dream is dead, capitalism is in desperate need of reform and that wealth, income and opportunity maldistribution in the US is so severe that the President should call an national emergency. Read More

04.10.19- Trump Is Right To Blow Up The Fed"
Christopher Whalen

The Federal Reserve is out of control, acting in ways and with powers that were never explicitly granted by Congress...

Last week, President Donald Trump set the economics community aflame by suggesting that he will appoint businessman and presidential aspirant Herman Cain to the Federal Reserve Board. Even more than political economist Stephen Moore, the critics maintain, Cain represents a threat to the cabal that has controlled the central bank for decades. Why? Because Cain is a successful executive who founded a real business, took risks, and created jobs, things most academic economists will never ever do. Read More

04.09.19- The Price Of Inflation
Atle Willems

Summary

The three previous financial crises in the U.S. had their own distinctive characteristics, individual stories, and villains attached to them.

Yet, the underlying reason for all three was one and the same.

After a near decade-long bull market, the mother of all financial bubbles has created catalysts for the next financial crisis that are ripe and ready to drop. Read More

04.08.19- And Now, for Something Entirely Different: Why and How Capitalism
Needs to Be Reformed (Part 1)
Ray Dalio

Summary

I was fortunate enough to be raised in a middle-class family by parents who took good care of me, to go to good public schools, and to come into a job market that offered me equal opportunity. I was raised with the belief that having equal opportunity to have basic care, good education, and employment is what is fair and best for our collective well-being. To have these things and use them to build a great life is what was meant by living the American Dream. Read More

04.06.19- The Economics Profession
Needs New Models
Jim Rickards

The list of policy and predictive failures by mainstream economists is longer than the typical 9-year-old’s Christmas list. They failed to foresee the 2007 mortgage bubble and the 2008 financial crisis. They cheered “green shoots” in 2009 when that was a complete illusion. They welcomed the “recovery summer” in 2010, which was nothing but more of the same punk growth.

They spent six years pursuing QE and seven years with zero interest rates and had nothing to show for it except an inflated balance sheet, inflated asset values and $4 trillion of lost wealth through below-trend growth. The latest failure was proclaiming “synchronized global growth” in 2017 when there was nothing of the sort. Major economies are now slipping into recession. Read More

04.05.19- Why Is the Fed Paying So Much Interest to Banks?
Ellen Brown

“If you invest your tuppence wisely in the bank, safe and sound,
Soon that tuppence safely invested in the bank will compound,

“And you’ll achieve that sense of conquest as your affluence expands
In the hands of the directors who invest as propriety demands.” — Mary Poppins, 1964

When Mary Poppins was made into a movie in 1964, Mr. Banks’ advice to his son was sound. Banks were then paying more than 5%  on deposits, enough to double young Michael’s investment every 14 years. Read More

04.04.19- Fed’s Interest Rate U-Turn
Highly Bullish for Gold
Birch Gold Group

This week, Your News to Know rounds up the latest news involving precious metals and the overall economy. Stories include: Why the Fed’s policy shift is good for gold, Russia is dumping U.S. dollars in favor of gold, and how silver often takes first place for both collectors and investors.

The Fed’s Policy U-Turn is Decidedly Good for Gold

Last week, the Federal Reserve announced that it will probably not hike interest rates at all this year and downgraded its growth forecast for 2019. According to a recent article on Kitco, the announcement shot down market expectations that 2019 would see a minimum of two rate hikes. Perhaps more importantly, the dovish sentiment by Fed officials stood out in stark contrast to the hawkish rhetoric of 2018. Read More

04.03.19- Here’s why the Federal Reserve rejected the safest bank in America
Simon Black

In the spring of 1692, an energetic young Scotsman named John Campbell started a new business in central London.

Campbell was a goldsmith, and his business sold jewelry and other crafted metals like plates and silverware.

But Campbell’s new company had another business line as well: banking. And the company he started eventually became Coutts & Co., a bank that still exists today in the UK. Read More

04.02.19- The Fed Corrupts Society: Is It Intentional, Or Out of Ignorance?
Dr. Ron Paul

View Video

04.01.19- Hyperinflation History May Provide Valuable Lessons for Fed’s “Target”
Birch Gold Group

In April of 1980 inflation peaked at a staggering 14.76%. That same year, the Fed triggered a rise in interest rates to near 20% around the same time, employing the controversial “Volcker Rule.”

Paul Solman explained in a 2009 PBS Newshour:

If by “interest rates” you mean the rate set by the Fed — the Fed funds rate — it rose to TWENTY PERCENT in 1980. But no, it was not inaction but just the opposite: a deliberate rise in rates triggered by inflation. Read More

03.30.19- The Fed Broke This Economic Cycle;
It is a Game Changer for Investors
Paul Ebeling

Here is a quote from my friend Peter Boockvar that has drawn an enormous amount of interest: “We no longer have business cycles, we have credit cycles.”

Let’s cut that small but meaty sound bite into pieces. What do we mean by “business cycle,” exactly? Well, it looks something like this.

A growing economy peaks, contracts to a trough (what we call “recession”), recovers to enter prosperity, and hits a higher peak. Then the process repeats. Read More

03.29.19- Our Flawed Monetary System
& Why It's Doomed
Martin Armstrong

QUESTION: You mentioned that Rome had no national debt and no central bank. Exactly how did it function for 1,000 years?

ANSWER: In addition to not having a national debt or a central bank, Rome had no police force or agency charged with enforcing the law. There were specific crimes against the state that would be prosecuted such as arson and treason. But the prosecution of a murder would be carried out by the family. The responsibility for enforcing the law thereby fell on the kin, tribe, gens and patron of the offended individual. Read More

03.28.19- The Federal Reserve's Controlled Demolition Of The Economy
Is Almost Complete
Brandon Smith

The Federal Reserve is an often misunderstood entity, not only in the mainstream, but also in alternative economic circles. There is this ever pervasive fantasy on both sides of the divide that the central bank actually “cares” about forever protecting the US economy, or at least propping up the US economy in an endless game of “kick the can”. While this might be true at times, it is not true ALL the time. Things change, agendas change, and sometimes the Fed's goal is not to maintain the economy, but to destroy it. Read More

03.27.19- Why is the Fed Preparing the Public for NIRP, Permanent QE, and Worse?
Silver Bullion

The next crisis will soon hit the financial system.

If you don’t believe me, I have to ask… if this statement is false, why is the Fed desperately attempting to lay the groundwork for the next round of monetary easing at a time when the stock market is within 5% of its all time highs?

This has included:

1)   The Fed stating it is DONE with rate hikes in 2019 when just three months ago it was talking about raising rates 3-4 times this year. Read More

03.26.19- Why Modern Monetary Theory
Will Destroy Money…
Doug Casey

MMT centers around the notion that the economy in general, and money in particular, should be the creatures of the State.

It’s not a new idea – the meme has been around in one form or another since at least the days of Marx.

MMT basically posits that the wise and incorruptible solons in government should create as much currency as they think is needed, spend it in areas they like, and solve any problems that occur with more laws and regulations.

It’s nothing new. Just a more radical version of the economic fascism that’s dominated the U.S. since at least the days of the New Deal. It’s just another name for an old, and very stupid, set of economic ideas. By stupid I mean, “showing an inability to predict the indirect and delayed consequences of actions.” Read More

03.25.19- And Now, for Something Entirely Different: The Year The World Falls Apart
Doug Casey

It’s “Totally Incorrect” week here at Casey Research...

We’ve shared Doug Casey’s uncensored insights – on topics ranging from the climate change hoax to the next 9/11-type event.

But today’s essay may be the most controversial one yet…

Doug says a disaster of historic proportions is on the menu for 2019.

And it’s critical to understand what’s happening. Read More

03.23.19- Three Props for the Dollar's 2018 Rally Seen Reversing This Year
Chris Anstey

Three key dynamics that drove the dollar higher last year look set to reverse in 2019, arguing for the U.S. currency’s depreciation, according to Morgan Stanley.

“A cyclical slowdown in the rest of the world, rising risks of protectionism and a loose fiscal, tight monetary policy mix in the U.S.” propelled the greenback last year, Morgan Stanley strategists led by Hans Redeker in London wrote in a note Thursday. “2019 is looking like a reversal of 2018.” Read More

03.22.19- Central Banks Are
Messing with Your Head
Thorsten Polleit

Human action and the interest rate

People value present goods more highly than future goods. For instance, an apple available today is considered more valuable than the same apple available in, say, one month. This is expressive of time preference — which is an undeniable fact, a category of human action.

The sentence “Humans act” is a logically irrefutable truth. It cannot be denied without causing a logical contradiction. By saying “Humans can not act”, you act and thus contradict your very statement.  Read More

03.21.19- Paul Volcker Can’t Save Us This Time…
Bill Bonner

Still no visible crack in the stock market. But the economy may be breaking down.

First, there is growing recognition that the Obama/Trump recovery has been a flop.

A headline at Yahoo Finance:

Jamie Dimon: The U.S. economy should have grown 40% in the last decade, not 20%

Hardly a week has gone by since the White House proposed its new budget, counting on 3% growth. Now, it too is already admitting that it won’t work. The New York Times:  Read More

03.20.19- Today Is International Happiness Day, And It's All Up To Powell
Michal Every

Happy Happiness Day!

Today is International Happiness Day. But are you feeling happy? A large part of your answer might well depend on the Fed, which of course meets today. We know no rate move will happen, of course, which is cheering for some (and deeply depressing for others). But what will their updated dot-plot and press conference show us? Is there still an expectation for all this lack of action just being a pause? If so that will be depressing for some (and deeply cheering for others). Either way we are expecting a US recession in 2020 and only some markets are priced that way, not others, with the economy the S&P just shy of its all-time high.  Read More

03.19.19- The Bank Is Being Robbed
Jeff Thomas

In 1903, the desperado in the image to the right appeared in an early film about a robbery. He was the classic guy in a black hat and, of course, he was eventually foiled by the guys in the white hats.

That was a simpler time.

Today, law enforcement is assisted so much by modern technology that the guys in the black hats rarely try to rob a bank, as they’ll almost surely be caught. Read More

03.18.19- Chairman Powell’s “Wait and See” Approach May Let Price Inflation “Run Hot”
Peter Reagan

Once you heat up a pan on a stove top, the pan will stay hot as long as the stove top continues to provide heat, even if you ignore the stove top.

Right now, CPI inflation since 2011 is providing “heat” like a stove top. Future rate hikes are the “pan,” and it seems like Chairman Powell wants to ignore the stove top.

Just look at the FRED chart below… Read More

03.16.19- Weekend Rant: Your Opinion Is Of No Concern To Me… Unless It Can Be
Supported By Fact
Neal Ross

Can anyone tell me why we, as Americans, hold these events called elections every couple of years? Now I know that some of y’all are probably going to say something like, “So that we can choose from a field of candidates the most qualified and deserving one to hold political office.” While that isn’t altogether incorrect, it isn’t quite the answer I was hoping for. Maybe if I rephrase the question it might help, “Why are we, as Americans, the ones who get to choose who will fill the various seats of power within our government?” There, does that make it clearer the kind of answer I was looking for? Read More

03.15.19- And Now, for Something Entirely Different: The Cavemen Capitalist... how wealth was created from nothing
Joe Jarvis

The natural state of human existence is abject poverty. That’s the starting point–naked, hungry, and homeless.

Any effort towards survival is the most basic form of wealth creation.

Labor is a key element in creating any wealth. Even cupping your hands together to draw water from a stream is labor. And it is required to survive. That is a rudimentary form of wealth trickling down your throat.

But wealth also requires property. In order to drink that life-sustaining water, you must hold exclusive rights over that water. Read More

03.14.19- The Fed’s Failures Are Mounting
Danielle DiMartino-Booth

In the decade between “60 Minutes” interviews, the central bank has sparked a recovery without inflation but not much else

Friday marks the 10-year anniversary of the Federal Reserve Chairman Ben S. Bernanke’s groundbreaking “60 Minutes” interview. To listen to current Fed Chairman Jerome Powell on the same show a decade later, the central bank’s best laid plans since then would seem to have played out according to script with one glaring exception: the Fed’s balance sheet. Read More

03.13.19- Central Banks Suppress Price To Buy More Cheap Gold Ahead Of
The March 29th Re-Monetization
Chris Powell

Mainstream financial news organizations are finally beginning to point out the central bank deceptions regarding the gold market…

Financial analysis published two weeks ago by a major Italian newspaper, Il Sole / 24 Ore (The Sun / 24 Hours), asserted frankly that central banks have been using gold futures and derivatives to suppress the monetary metal’s price so they can obtain more of the metal less expensively in advance of its remonetization under new rules promulgated by the Bank for International Settlements to take effect March 29. Read More

03.12.19- Ides and Tides
James Howard Kunstler

Just as presidents are expected to act presidentially, Federal Reserve chairpersons are expected to act oracularly — as semi-supernatural beings who emerge now and again from some cave of mathematical secrets to offer reassuringly cryptic utterances on mysteries of the economy.

And so was Jerome Powell wheeled out on CBS’s 60 Minutes Sunday night, like a cigar store Indian at an antique fair, so vividly sculpted and colorfully adorned you could almost imagine him saying something. Read More

03.11.19- And Now, for Someting Entirely Different: Damascus To Become A “Ruinous Heap”?: Syria Threatens To Attack The Golan Heights And Israel Prepares For War
Michael Snyder

The winds of war are blowing once again, and it isn’t going to take much to spark a major conflict in the Middle East.  This week is the eighth anniversary of the beginning of the civil war in Syria, and after the nightmare that the people of Syria have been through, you would think that the Assad regime would be eager for peace.  But instead, Assad appears to be ready to go for broke.  If Syria can spark a Middle East war that results in the complete destruction of Israel, Assad would be remembered as a hero in the Islamic world forever. Read More

03.09.19- Fake Money's Face Value Deceit
MN Gordon

Shane Anthony Mele stumbled off the straight and narrow path many years ago.  One bad decision here.  Another there.  And he was neck deep in the smelly stuff.

These missteps compounded over the years and also magnified his natural shortcomings.  Namely, that he’s a thief and – to be polite – a moron.  Recently the confluence of these two failings came together like a sewage spill to a river draining through the center of town. Read More

03.08.19- The Fed Is Playing A Dangerous Game
John Mauldin

In an ideal world, we wouldn’t have to read the Federal Reserve’s rabbit entrails to discern the economy. But Since the Fed exists in the real world, and its decisions matter, we have to pay attention.

Just so new and perhaps even old readers know my views on the Fed: I believe we need it to handle the practical matters of the banking system plus interact with other international central banks (we live in a complicated world) and, in the midst of crisis, act as a lender of last resort and liquidity provider. I agree with Walter Bagehot’s (pronounced badget) very important pronouncement (often called "Bagehot's Dictum") that “in times of financial crisis central banks should lend freely to solvent depository institutions, yet only against sound collateral and at interest rates high enough to dissuade those borrowers that are not genuinely in need.” That rule or dictum remains wise. Read More

03.07.19- And Now, for Something Entirely Different: Will Artificial Intelligence be Used for Total Economic Control?
Brandon Smith

I have recently been exploring the deeper issues surrounding Artificial Intelligence and the implications of its use by the establishment, and what I have found is an ever increasing propaganda drive to acclimate the masses to the notion that AI influence in every aspect of our lives is “inevitable”. That is to say, whether it is good or bad, whether we like it or not, it’s going to happen. The tech-headed swooning over AI is embarrassing and often naive. In their minds, AI can and should do everything, and will supposedly do it better than human beings ever could. Read More

03.06.19- The Fed Chair Just Admitted On Record That The US is Heading For a Debt Crisis
Graham Summers

Yesterday, Fed Chair Jerome Powell made a starling admission,

 “The U.S. federal government is on an unsustainable fiscal path,”Powell told the Senate Banking Committee, noting that “debt as a percentage of GDP is growing, and now growing sharply... And that is unsustainable by definition.”

Source: Yahoo! Finance

What Powell said has been obvious to anyone with a functioning brain for years. However, we have to remember one key item… Read More

03.05.19- The Magic Money Tree
Gary Christenson

Our Current Financial Circumstances:

• The U.S. is $22 trillion in debt and burdened with $100 – $200 trillion more in unfunded liabilities. Just to pay the interest the U.S. must borrow. Debt is rapidly rising and cannot be paid unless “they” default or hyper-inflate the dollar.

• Chairman Jerome Powell stated, “The U.S. federal government is on an unsustainable path.” Even the Fed admits what everyone should realize. Read More

03.04.19- Before King Dollar loses his throne, inflation will take off
Wolf Richter

Predictions of doom for the US dollar are not new and have so far come to nothing. Yet while it might not happen tomorrow, the risk warnings are there, says John Stepek – here’s how to get your portfolio ready.

Ever since the Bretton Woods Agreement in 1944, the US dollar has been the acknowledged top dog of global currencies – the reserve currency. And for almost as long, people have been predicting that it would be toppled from that position. As yet, of course, it hasn’t happened. But with Donald Trump running the public finances as imprudently as he managed his own, and his opponents talking about printing money to fund pet projects, could it be different this time? Read More

03.02.19- The Danger Lurking In The Fed's Monetary Policy
James Grant

William McChesney Martin, top left, the Fed’s boss in the ‘Fifties and ‘Sixties, probably wouldn’t have liked the policies of the central bank’s current chairman, Jerome Powell, bottom right. 

Last Monday, the Federal Reserve embarked on a yearlong listening tour to discover the concerns of the American people. The whole shebang of modern monetary methods - manipulated interest rates, levitated asset values, the supposed necessity of a 2% inflation rate - is on the table for constructive criticism.

But you know how it is with constructive criticism. The friend who asks to hear it really doesn’t want any. So it is with Richard H. Clarida, the Columbia University economist turned vice chairman of the Federal Reserve Board. Read More

03.01.19- The Approaching Winter:
The Super-Cycle Has Turned
Charles Hugh Smith

How would you describe the social mood of the nation and world?

Would anti-Establishment, anti-status quo, and anti-globalization be a good start? How about choking on fast-rising debt? Would stagnant growth, stagnant wages be a fair description? Or how about rising wealth/income inequality? Wouldn’t rising disunity and political polarization be accurate?

These are all characteristics of the long-wave social-economic cycle that is entering the disintegrative (winter) phase. Souring social mood, loss of purchasing power, stagnating wages, rising inequality, devaluing currencies, rising debt, political polarization and elite disunity are all manifestations of this phase. Read More

02.28.19- The Fed’s positive feedback loop
David P. Goldman

An eerie calm on Wall Street yesterday and today is a strong sign that the Fed has done all it can to revive the stock market

The Fed responds to the market, and the market responds to the Fed, until both are so attuned to each other that neither does anything. Today’s much-anticipated release of minutes from the January Federal Open Market Committee meeting revealed that the Federal Reserve would do… nothing.

On Tuesday and Wednesday morning prior to the release of the minutes, the US stock market did… nothing. And after the release of the minutes, the US stock market did… nothing. Read More

02.27.19- The Doomsday Scenario for the Stock and Housing Bubbles
Charles Hugh Smith

It was always folly to believe that inflating asset bubbles could solve the structural problems of a post-industrial economy.

The Doomsday Scenario for the stock and housing bubbles is simple: the Fed's magic fails. When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the deflating bubbles, punters will realize the Fed's magic only worked the first three times: three bubbles and the game is over. Read More

02.26.19- If Central Banks Are the Only Game in Town, We’ve Lost
Satyajit Das

Relying on monetary policy to prop up asset prices and smooth out global volatility is a recipe for disaster. 

Just since December 2018, central banks have collectively injected as much as $500 billion of liquidity to stabilize economic conditions. The U.S. Federal Reserve has put interest rate increases on hold and is contemplating a halt to its balance-sheet reduction plan. Other central banks have taken similar actions, fueling a new phase of the “everything bubble” as markets careen from December’s indiscriminate selling to January’s indiscriminate buying. Read More

02.25.19- Fed Tightening And Crumbling Fundamentals Expose The Recovery Lie
Brandon Smith

It is hard to say exactly when it started – in 2008 in the midst of the credit crisis, in the early 2000's when the Federal Reserve initiated artificially low interest rates which helped to create the vast US mortgage bubble, or maybe the root goes all the way back to 1913 when the Federal Reserve was founded, but somewhere along the line America entered severe economic decay. One certainty is that signals in the fundamentals become visible every time the Fed inflates a financial bubble to stall a crash and then tightens policy without waiting for the economy to show true alignment. Read More

02.12.18- Some Holes In the Fed’s Story
Chris Marcus

While many in the financial markets often take what the Federal Reserve says as gospel, given everything that’s occurred over the past decade, it’s worth considering a few unanswered questions that the central bank has yet to explain.

Perhaps the most important of which is that if we are now a decade after the last financial crisis, and the economy is really as strong as the president and Federal Reserve continue to assert, exactly when will it be time to finally undo the unprecedented monetary easing? Read More

02.22.19- America: 52nd in Freedom
Bill Bonner

GUALFIN, ARGENTINA – Let’s see, Dear Reader, what were we talking about?

We are on a walkabout… looking at others in order to see ourselves.

And, oh yes… the gist of the last few days’ conversation was that you should be more generous… and more open-minded.

You should be ready to give your money, your freedom… and maybe even your life… for “our” benefit.  Read More

02.21.19- Get Used to the “Powell Put”
Nomi Prins

In the land of the Federal Reserve and its market-manipulating mechanisms, there’s now an unofficial market term called the “Powell Put” or the “Powell Pivot.”

It is in direct reference to Fed chairman Jerome Powell. Before he became chairman, Wall Street referred to prior heads’ policies with terms like the “Greenspan Put” the “Bernanke Put” and the “Yellen Put.”

In layman’s terms, what the term means is that if the markets fall by too much, the Fed will swoop in and try to save the day, the month, or the year. A “put” in options terminology is insurance against a drop in prices. Nowadays, the “Powell Put” is the market’s insurance that the Fed will act to stimulate the markets if necessary. Read More

02.20.19- The "Powell Call": What Do We Need To See For The Fed To Hike Again
Tyler Durden

There was significant shock two months ago when Powell made public the Fed's dramatic dovish reversal, effectively ending the Fed's rate hiking trajectory and at the same time unleashing a dramatic market rally. But why? Perhaps it has to do with the popular view that the Fed has an advantage in forecasting and in some cases has "inside information". In fact, as BofA notes, the Fed's forecasting accuracy is on par with that of market consensus, in other words rather dismal, and swayed more by the market than underlying fundamentals. Read More

02.19.19- Jay Powell's Gift to Markets
James Rickards

Fed Chair Jay Powell did not deliver any early Christmas presents to the markets last month, but he did pop the cork on a bottle of Champagne as a belated New Year’s gift on Friday, Jan. 4.

With just a few words, Powell sent the most powerful signal from the Fed since March 2015. Investors who understand and properly interpret that signal stand to avoid losses and reap huge gains in the weeks ahead.

First, let’s focus on Powell’s comments. Then we’ll explain what they actually meant. Read More

02.18.19- The Birth of a Monster
David Howden

The Federal Reserve’s doors have been open for “business” for one hundred years. In explaining the creation of this money-making machine (pun intended — the Fed remits nearly $100 bn. in profits each year to Congress) most people fall into one of two camps.

Those inclined to view the Fed as a helpful institution, fostering financial stability in a world of error-prone capitalists, explain the creation of the Fed as a natural and healthy outgrowth of the troubled National Banking System. How helpful the Fed has been is questionable at best, and in a recent book edited by Joe Salerno and me — The Fed at One Hundred — various contributors outline many (though by no means all) of the Fed’s shortcomings over the past century. Read More

02.16.19- Fed Tightening Is Over: Markets Now Expect Cuts In 2019
John Rubino

People who assumed the Fed, along with the rest of the government, would cave the minute the financial markets got a little choppy turned out to be right. A couple of bad months and the “normalization” of both interest rates and the Fed’s balance sheet have stopped cold. Now the markets expect falling rates and (apparently) rising asset purchases.

From today’s Wall Street Journal:

Debt Investors Embrace ‘Upside Down’ World After Fed Shift

Signs that the Federal Reserve may be done with its yearslong campaign to raise interest rates are sending ripples through markets.  Read More

02.15.19- What Happens When More QE Fails to Reverse the Recession?
Charles Hugh Smith

The smart money is liquidating assets, paying off debt and moving capital into collateral that isn't impaired by debt or speculative valuations.

The Federal Reserve's sudden return to "accommodative" dovishness in response to the stock market's swoon telegraphs its intent to fire up QE once the recession kicks into gear. QE (quantitative easing) are monetary policies designed to ease borrowing and the issuance of credit, and to prop up assets such as stocks and real estate. Read More

02.14.19- Fed Warns Dollar "Might Not Retain Its Dominance Forever"
Tyler Durden

When the TBAC published the minutes to its quarterly refunding decision two weeks ago, the most interesting part of the discussion was the "unique challenges" faced by the Treasury over the medium term, especially the possibility of significant financing gap over next 10 years amounting to over $12 trillion and the potential need for more domestic investor participation if foreign reserve growth slows.

Here, among other things (which potentially include the Green New Deal, with its $6+ trillion cost) the TBAC cautioned that the Treasury’s financing needs are expected to increase significantly even without factoring in recession possibilities over the next decade. Read More

02.13.19- As The Fed Reflates The Stock Bubble The Economy Crumbles
Dave Kranzler

I get a kick out of these billionaires and centimillionaires, like Kyle Bass yesterday, who appear on financial television to look the viewer in the eye and tell them that economy is booming.  Kyle Bass doesn’t expect a mild recession until mid-2020. Hmmm – explain that rationale to the 78%+ households who are living paycheck to paycheck, bloated with a record level of debt and barely enough savings to cover a small emergency.

After dining on a lunch fit for Elizabethan royalty with Trump, Jerome Powell decided it was a good idea to make an attempt at reflating the stock bubble. After going vertical starting December 26th, the Dow had been moving sideways since January 18th, possibly getting ready to tip over. Read More

02.12.19- Debt Trifecta at All-Time Highs – Billionaires Panic
Birch Gold Group

The “trifecta” of national, corporate, and consumer debt has reached all-time highs, and could prove to be catastrophic if a recession hits.

Let’s start by quickly bringing each part of this debt trifecta up to date as much as possible…

U.S. National Debt

The national debt, ever on the rise, currently sits at around $22 trillion: Read More

02.11.19- Fed Crumples - and Seals
the Dollar's Fate
Clive Maund

The Fed didn’t just fold on Wednesday, it crumpled, capitulated. A long time ago we had figured out that when push came to shove, this is what it would do. However, we thought that it would take a market crash to force it to change course, in order that it could use that as solid justification for a U-turn, instead of which it only took a crashlet, or the start of a crash.

The Fed’s “Prime Directive” is to serve the interests of their Masters, the fabled 1% who control society, and they have done an admirable job of it over the past 10 years since the market crash, with their QE and ZIRP policies, which have funneled the wealth of the lower and middle classes up to the top of the pyramid, to the 1%, whose wealth has increased enormously as a result, while the common man has lost. Read More

02.09.19- Why Monetary Easing Will Fail
Alasdair Macleod

The major economies have slowed suddenly in the last two or three months, prompting a change of tack in the monetary policies of central banks. The same old tired, failing inflationist responses are being lined up, despite the evidence that monetary easing has never stopped a credit crisis developing. This article demonstrates why monetary policy is doomed by citing three reasons. There is the empirical evidence of money and credit continuing to grow regardless of interest rate changes, the evidence of Gibson’s paradox, and widespread ignorance in macroeconomic circles of the role of time preference. Read More

02.08.19- The Real Elephant in the Room... Debt
Nell Sloane

We decided to wait till the FOMC meeting to release this week’s letter so that we could capture the most important event of the week. It’s not that we didn’t expect a few of the tech giant earnings would be painted with bullishness, but we felt maybe the earnings didn’t really matter. Maybe all that mattered was the “Powell Put” which was made quite obvious by the monotonous speech he gave after the FOMC decision. It’s amazing how quickly the FED has caved to the pressure laid out by both the bond market and #POTUS himself. Here are the bullet points as laid out from Zhedge: Read More

02.07.19- The Categorical Insanity of
Central Banking
MN Gordon

Currency debasement.  Asset price inflation.  Booms, bubbles, and busts.  Yes, folks, central bankers have succeeded at making full hash of the world at large.  This goes for the Federal Reserve too.

Tracing back recent financial disasters we find the mortgage meltdown coincided with the Fed’s interest rate raising cycle.  The Fed had dropped rates following the dot com bust and, in return, puffed up a massive housing bubble.  So they raised rates to let some air out and – pop! – the bubble exploded. Read More

02.06.19- Will Government Shutdown Return As The Trade War Expands?
Brandon Smith

The mainstream economic community has a notoriously short attention span and a lack of long-term perspective. After the longest government shutdown in American history subsided, the mainstream proclaimed the fight well and over – in other words, nothing to see here, Trump “folded” and all is well. Of course, what they consistently seem to ignore is the fact that the shutdown was only placed on a three week hiatus. This is hardly any assurance of a return to “normalcy”.

As I write this, the Trump Administration has yet to make its State Of The Union Address, and it is possible we will know more afterwards on the shutdown issue. Read More

02.05.19- A Survival Guide For 2019
Adam Taggart

As the first month of the year concludes, it's becoming clear that 2019 will be a very different kind of year.

The near-decade of 'recovery' following the Great Financial Crisis enjoyed a stability and tranquility that suddenly evaporated at the end of 2018.

Here in 2019, instability reigns.

The world's central banks are absolutely panicking. After last year's bursting of the Everything Bubble, their coordinated plans for Quantitative Tightening have been summarily thrown out the window. Suddenly, no chairman can prove himself too dovish. Read More

02.04.19- Powell Put Sends Stocks Soaring, Recession Must be Near
David Haggith

Federal Reserve Chair Jerome Powell placed his put in stocks while saying there is none. When he doubled down today on a more dovish approach to the economy, Powell claimed the Fed is not designing interest rates to keep the market climbing. If that is true, recession must be near:

Fed delivers a “double-barrel dovish blast”

The Fed sees recession dead ahead. You have only that choice in how to interpret this because the Fed made a major course correction in late December, which instantly saved the crashing market, and today it announced it fully intends to stay the new course while stating that had nothing to do with the market. After all, Read More

02.02.19- Here’s the ‘most contrarian trade’ on Wall Street — and investors can thank the Fed, Bank of America says
Mark DeCambre

Remember that time when the Federal Reserve was busily dialing up benchmark interest rates to normalize crisis-era monetary policy? Well, Wall Street doesn’t either, after a 180-degree pivot on Wednesday by Powell & Co. that sent expectations for future rate increases to rock-bottom levels — at least for the moment.

Bank of America research analysts on Friday described wagers for interest-rate hikes in 2019 as the “most contrarian” investment bet in the world, in a popular “flow show” research report titled “Long risk, long leverage, short vol.” Read More

02.01.19- The Plan to Ditch King Dollar
Jim Rickards

When critics point to Japan’s debt-to-GDP ratio of over 200%, Japan’s defenders are quick to say that most of the Japanese debt is owned by the Japanese themselves in insurance companies, banks, pension plans and personal portfolios, not to mention the Bank of Japan.

There’s truth in this. Japan has a highly homogenous culture.

The Japanese are all in the same lifeboat rowing in the same direction. As long as no one rocks the boat, the debts can keep piling up.

But it’s not the same for the US. Read More

01.31.19- The Stock Market Would Crash Without Central Bank Support
Dave Kranzler

The mis-pricing of money and credit has also driven a terrible misallocation of capital and kept unproductive zombie debtors alive for too long. Saxo Bank, “Beware The Global Policy Panic”

“Mis-pricing of money and credit” refers to the ability of the Fed to control interest rates and money supply.  Humans with character flaws and conflicting motivations performing a role that is best left to a free market.   After the market’s attempt in December to re-introduce two-way price discovery to the stock stock market, the Fed appears ready to fold on its “interest rate and balance sheet normalization” policy, whatever “normalization is supposed to mean. Read More

01.30.19- Screwed
Sven Henrich

James Madison: “We are free today substantially but the day will come when our Republic will be an impossibility. It will be an impossibility because wealth will be concentrated in the hands of a few.” 

The tax cut has now been shown the very scam I outlined it to be in 2017. Debt is soaring and so are debt financing obligations. The CBO estimated that the US will have to add $12 trillion in debt over the next 10 years. As growth estimates for GDP keep being revised downward into 2019 and 2020 there is zero evidence that the tax cut has added anything but a 2 quarter temporary bump to GDP, but the financial consequences will linger for years to come. The promises of resulting investments were lies: Read More

01.29.19- The Fed Sends Market Big, Fat Gift
Brian Maher

The clouds part, and a crack of sunshine scatters the gloom…

Markets learned today the Federal Reserve may soon declare victory… and mothball its ambitious balance sheet reduction plans.

From today’s Wall Street Journal:

Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they began shrinking those holdings two years ago, putting an end to the central bank’s portfolio wind-down closer into sight.

Does the Journal speculate to simply draw itself a crowd? Read More

01.28.19- U.S. Debt Worries Fed Chairman Powell – Fears May Be Confirmed in March
Birch Gold Group

As we enter 2019, the U.S. national debt continues to grow, approaching $22 trillion with global Government debt sitting at $72 trillion.

It seems like the 21st century is hitting the U.S. with a debt “haymaker,” according to CNBC (emphasis ours):

U.S. debt began accelerating at the turn of the 21st century. The total jumped 85 percent to $10.6 trillion during former President George W. Bush’s two terms, another 88 percent to $19.9 trillion under President Barack Obama and has risen 10 percentduring the first two years of President Donald Trump’s term. Read More

01.26.19- And Now, for Something Entirely Different: When Science Isn't Science
Jason Morgan

The Earth’s climate is extraordinarily complex. Unlike dinosaur fossils or organic chemistry or primate behavior, climate is always in flux, with countless factors influencing one another in an endless unfolding of diachronic stochastics. Given this complexity, one might presume that scientists who study planetary climate would be endowed with exceptional patience, scholarly integrity, and intellectual humility. After all, it takes a long time to learn even a little bit about such an intricate system, so part of the job description of climate scientist would seem to be acknowledging that there is only so much that is known about the 1.09 x 1044 or so molecules swirling about in the atmosphere.Read More

01.25.19- The Magic's Gone - Central Bankers Will Be "Surprised" & "Shocked"
Jeffrey Snider

For the magic trick to work, it has to be credible. The audience has to be given something concrete upon which they will suspend their disbelief. Quantitative Easing was just such a trick, though only the public held onto any basis for success. You still hear it all the time, how QE was “money printing.” That was the trick.

It doesn’t work if there is the slightest doubt. We know as late as 2013 even policymakers had them, the Dallas Fed President’s hushed “monetary head fake.” That actually makes it sound better than it was, that officials were doing the faking rather than being in the group who fell for it. Read More

01.24.19- Fire The Fed?
Ron Paul

By firing Powell, President Trump would once and for all dispel the myth that the Federal Reserve is free from political interference…

President Trump’s frustration with the Federal Reserve’s (minuscule) interest rate increases that he blames for the downturn in the stock market has reportedly led him to inquire if he has the authority to remove Fed Chairman Jerome Powell. Chairman Powell has stated that he would not comply with a presidential request for his resignation, meaning President Trump would have to fire Powell if Trump was serious about removing him. Read More

01.23.19- And Now, for Something Entirely Different: The Cost of the Government Shutdown
Financial Sense Staff

Ryan Sweet, Director of Real-Time Economics for Moody’s Analytics spoke with Financial Sense’s Jim Puplava on the impact of the government shutdown on U.S. GDP and how it’s not only affecting thousands of American families but is beginning to trickle into areas of the economy like housing and small business. Sweet tells us when he predicts the shutdown will end and what happens if it continues into the coming months. Read More

01.22.19- Warning: This Market Rig
is Going to End BADLY
Graham Summers

The market rally has devolved into a complete farce.

The latest reason stocks rallied? An article from the Wall Street Journalclaiming that  the Trump admin was considering cutting tariffs on China (implying a trade deal is close). 

The story was debunked as 100% FAKE NEWS within an hour.

This kind of ridiculous intervention ALWAYS ends terribly. We saw the same thing in 2008, right before the meltdown hit. I’m beginning to suspect the same situation is about to play out.  Read More

01.21.19- "Modern Monetary Theory" Is a Joke That's Not Funny
Michael Strain

Yes, a government that issues its own currency can pay its bills. But piling up debt for no urgent reason is lunacy...

If you follow the debates over U.S. economic policy, you had probably heard of modern monetary theory well before freshman Democratic Representative Alexandria Ocasio-Cortez spoke favorably about it earlier this month.

If you thought from the start that the whole idea sounded like lunacy, you were right, even if it’s possible to admit some sliver of sympathy for it. So why is MMT, as it is known for short, generating such intense interest now? Read More

01.19.19- Federal Reserve Confesses Sole Responsibility for All Recessions
David Haggith

In a surprisingly candid admission, two former Federal Reserve chairs have stated that the Federal Reserve alone is responsible for creating all recessions in the United States.

First, former Fed Chair Ben Bernanke said that

Expansions don’t die of old age. They get murdered. - MarketWatch

To clarify this statement, former Chair Janet Yellen placed the murder weapon in the Fed’s hands:

Two things usually end them…. One is financial imbalances, and the other is the Fed.  Read More

01.18.19- Trillion-Dollar Deficits From Here to Eternity
Bill Bonner

BALTIMORE, MARYLAND – We are on our way to the future. Not that we know what will happen, but we’ve been looking at the broad patterns of history. Most likely, they will repeat themselves… and surprise everyone.

Over the last few days, we’ve looked at three of them.

First, stocks go up and down in a cycle that seems to last 30-40 years, peak to peak. Stocks have been falling since October.

Movers and shakers can move and shake the stock market. Most investors are hoping they can keep prices moving up forever. But it’s never happened. Every boom is followed by a bust. Read More

01.17.19- Volatility Holds the Key to Markets in 2019
Nomi Prims

Over the last two weeks, after making good on the four-rate interest hike of 2018, Fed Chairman, Jerome Powell, became more dovish to start 2019.

His change in tone is worth considering because of his historical stance on reducing the amount of artificial stimulus coming from the Fed. Last week, after the required five-year holding period for Fed transcripts were up, we got a glimpse into Powell’s thoughts from 2013, before he was Chairman.

Powell tried to persuade then-Chairman, Ben Bernanke, to reduce the Fed’s stimulus, even though it would lead to greater near-term market volatility. The Fed was purchasing an estimated $85 billion per month mix of Treasuries and mortgage-backed securities. Read More

01.16.19- 2018-2019 Pop Goes The Bubble
Darryl Robert Schoon

Fiat paper money: Once gold and silver derivatives 

Today, instruments of debt issued by central banks 

Afer the 2008 financial crisis, Fed Chairman Ben Bernanke invoked Milton Friedman’s theory that a helicopter drop of money could prevent a collapsing credit bubble from becoming a Great Depression.

When credit bubbles burst, defaulting debt and disappearing demand cause the velocity of money to plunge; and, in 2008, Bernanke resorted to Friedman’s untested theory hoping to prevent the US economy from collapsing as it did in the 1930s. Read More

01.15.19- Can You Time Peak Crazy?
Mike Krieger

You don’t need me to tell you how completely crazy and distorted the financial markets have become over the last decade. Anyone reading this already knows that, which is partly why I stopped writing on the topic several years ago. I came to the conclusion there was no point in constantly screaming at the top of my lungs about what a farce the global financial system was. Instead, I decided to step back, let things play out to their predictably tragic end, and then play closer attention as the curtains started to come down. As has been made clear in my recent commentary, I think we’re now reaching that point.

I’ve begun reflecting a little more about the lessons I’ve learned over the past several years of status quo stupidity, and one particular conversation I had a while ago with a friend who was a portfolio manager at a major hedge fund came to mind. Read More

01.14.19- The Fed Dilemma
Valentin Schmid

For the most part in 2017 and 2018, only academics and easy-money cranks scolded the Federal Reserve for raising rates. After all, the stock market was bubbling up and the economy was strong.

The economy is still strong, but the stock market has ended its record 10-year bull-market run with a bang. The 20-percent drop in the S&P 500 during one of the worst quarters in market history classifies as a bear market, although prices rebounded at the end of 2018 and in early 2019.

Now everybody from traders to retirees as well as President Donald Trump is scolding Fed Chairman Jerome Powell for his relentless path to higher interest rates and a reduction in the Fed’s balance sheet. Read More

01.12.19- The Crash Of The “Everything Bubble” Started In 2018 - Here’s What Comes Next In 2019
Brandon Smith

In 2018, a very significant economic change occurred which sealed the fate of the U.S. economy as well as numerous other economies around the globe. This change was the reversal of central bank policy. The era of stimulus and artificial support of various markets, including stocks, is beginning to fade away as the Federal Reserve pursues policy tightening, including higher interest rates and larger cuts to its balance sheet.

I warned of this change under new Chairman Jerome Powell at the beginning of 2018 in my article ‘New Fed Chairman Will Trigger Stock Market Crash In 2018’.  Read More

01.11.19- At Taxpayers’ Expense, Fed Paid Banks $38.5 Billion in Interest on “Reserves” in 2018. Here’s How
Wolf Richter

Normally, this would be ironic: The Fed doesn’t need to borrow; it creates money when it needs some. So it wouldn’t pay interest. But these are not normal times.

The Fed reported its preliminary results this morning for the year 2018. The headline is that it sent $65.4 billion of its profits to the US Treasury Department in 2018, and that this amount had plunged by 18.5% from the remittances, as they’re called, in 2017, and by 44.1% from the peak of $117 billion in 2015.  Read More

01.10.19- The Powell Helium Pump
Dave Kranzler

The stock market has gone “Roman Candle” since Fed Chairman, Jerome Powell, gave a speech that was interpreted as a precursor to the Fed softening its stance on monetary policy.  Not that intermittent quarter-point Fed Funds rate nudges higher or a barely negligible decline in the Fed’s balance sheet should be considered “tight” money policy.

Credible measures of price inflation, like the John Williams Shadowstats.com Alternative measure, which shows the rate of inflation using the methodology in place in 1990, show inflation at 6%.  The Chapwood Index measures inflation using the cost of  500 items on which most Americans spend their after-tax income.  The index is calculated for major metro areas and has inflation averaging 10% (The John Williams measure which uses 1980 Government methodology also shows the current inflation at 10%). Read More

01.09.19- The Fed IS the Ugly Truth
Raúl Ilargi Meijer

This Fed thing just keeps going on, and it needs to stop. There is nothing in the discussion about the Federal Reserve these days that has any value other than it provides even more proof that the Fed has killed off the most essential elements of what once made the US economy function. All markets, stocks, bonds, housing markets, all price discovery, all murdered. No heartbeat. Pining for the fjords.

And instead of addressing that, and I’m not even talking about addressing fixing what is wrong, all I see is neverending stuff about Jay Powell using, or not using, terms such as “patient” or “accommodative”. Like any of it means anything coming from him and his ilk. Other than for making ‘investors’ a quick buck. Like a quick buck could ever trump the survival of entire market systems. Read More

01.08.19- The Fed Is Ignoring the Biggest Lesson of 2008
David Shipley

Banks should be raising capital while they still can.

The 2008 financial crisis showed what happens when the banking system lacks an adequate foundation of loss-absorbing equity capital. Unable to raise what they needed from wary investors, banks were forced to slash lending at precisely the worst time for the economy. Ultimately, only the full faith and credit of the U.S. government — and a direct infusion of more than 200 billion taxpayer dollars — could prop them up.

The lesson seems clear enough: Banks should raise capital while they can, and before they have to. The Federal Reserve apparently hasn’t learned it. Read More

01.07.19- Perhaps The Fed Is Not Clueless
Zoltan Ban

There has been quite a bit of criticism of current Federal Reserve policy in media and certain political circles lately. I have to admit that this article has been inspired by Mr. Cramer's semi-populist rhetoric in regards to the Federal Reserve's policy of raising interest rates, as well as President Trump's criticism in this regard. This critical rhetoric is easy to embrace, especially among the investment community, which has been somewhat rattled by the market activity we saw in the past few months. I cannot say that I am necessarily happy about it myself, given that I have gone from having six out of seven stocks in my portfolio being up, to only three being up, as I write this. Read More

01.05.19- The Economic Tsunami IS COMING and Can't be Stopped!!
HighImpactFlix

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01.04.19- Markets Are in a Tizzy.
So What Will the Fed Do?
Wolf Richter

Investors are waking up after years of somnolent money-making.

Markets are in a tizzy. They’re finally reacting to the Fed’s rate-hike cycle, the slowest rate-hike cycle in history. It took three years to nudge up the effective federal funds rate from near zero to 2.40% now. Throughout, the Fed has communicated its goals of “removing accommodation” from the “financial conditions” in the markets — thus tightening “financial conditions” that had become loosey-goosey during years of zero-interest-rate policy and QE. Read More

01.03.19- 2019: The Beginning Of The End
Adam Taggart

For ten long years, the world’s central banks have dragged everyone along for one last attempt at scaling Mount Credit.

At several points along the way, in 2011, in 2013 and then again in 2016 it seemed all but certain that the wrong route had been picked and all was lost.  We warned people then about the risks, but to no avail. They found a way to navigate even higher from there.

And here we are again in 2018, warning everyone of the same risks. Starting back in August of 2018 we were questioning whether “it” had arrived and then were declaring that it had throughout October and November. Read More

01.02.19- "QE Has Done Something Much More Damaging Than The Fed Could Have Imagined"
Lindsay Politi

"I think of the markets like an ecosystem," the fund manager told me.

"The environment causes some strategies to flourish and multiply, while others die off. The abnormally long, QE-fueled bull market killed off anything that wasn't, at its core, a short volatility strategy. Now, whether it's risky credit, levered equities, or risk parity, almost all strategies are taking similar risks. QE has done something much more damaging than the Fed could have imagined. It changed the very nature of the market, destroying the diversity of the market ecosystem, and making it incredibly vulnerable to the smallest change in the macro environment." Read More

01.01.19- A Debt Based System Can't Succeed Without Population Growth
Chris Hamilton

Last week, I highlighted that since '00, when the Federal Reserve has ceased adding to its balance sheet or begun "normalizing" (via rolling off assets), equity markets have swooned (detailed HERE).

A simple idea today... that the end of population growth (where it matters) has long been upon us (detailed below).  Absent population growth among the nations that do nearly all the consuming, a debt based economic and financial system (to coerce ever higher levels of debt fueled consumption) can't ultimately succeed.  That is, without population growth, assets generally don't appreciate, homes are just shelter rather than "investments", and debt is generally only a drag on future spending.  Likewise, without population growth, total global energy consumption is on the precipice of secular decline. Read More

12.31.18- The Recline and Flail of Western Civilization and Other 2019 Predictions
MN Gordon

Darts in a Blizzard

Today, as we prepare to close out the old, we offer a vast array of tidings.  We  bring words of doom and despair.  We bring words of contemplation and reflection.  And we also bring words of hope and sunshine.

After all, the New Year’s nearly here.  What better time than now to turn over a new leaf?  New dreams, new directions, and new delusions, are all before us like a patch of ripe strawberries.  Today’s the day to make a double-fisted grab for all of them – and more. Read More

12.29.18- Where to Put Your Money in 2019
Dan Denning

As Dan shows below, the “new permanent portfolio” could be your best strategy to protect and grow your wealth in 2019 and beyond.

Diversification and asset allocation can help you reduce your risk as an investor.

For your kids and grandkids, a depression could be just the tonic they need. In a world where real wage growth is stagnant and the robots are taking all of our jobs, your best chance to build a fortune is to buy assets when they’re cheap. You can only get them at that price after a crash.

Do you think it’s a coincidence that famed investor and economist Benjamin Graham wrote his investment classic, Security Analysis, in 1934, just five years after the Great Crash of 1929?  Read More

12.28.18- The Federal Reserve Is A Suicide Bomber With A Deeper Agenda
Brandon Smith

Central bankers are sociopathic in nature and sociopathic people tend to behave like robots. When one understands the motivations of central bankers, or at the very least what their goals are, their actions become rather predictable. The question is, what truly motivates these people?

I believe according to the evidence that the central banks are motivated by ideological zealotry with the core purpose of total global centralization of economic and political power into the hands of a select group of elitists. This agenda is really just a modern “reboot” of feudalism or totalitarianism. They sometimes refer to the plan in public as the “new world order,” or the “global economic reset.” I often refer to the ideology as “globalism” for the sake of expediency. Read More

12.27.18- Fed Med is Dead: How We Went from Fake Recovery to Freefall
David Haggith

Until you got to this tax and spending deal a year ago, it was one of the most hated bull markets. The markets steadily climbed one wall of worry after another, and the problem was that the economic data did not confirm it. - Bloomberg

That’s right. The market was not rising for the past ten years due to a healthy underlying economy. On the contrary, the market was rising due to the Federal Reserve pumping out stratospheric amounts of thin-air money, which needed somewhere to land. Read More

12.26.18- Are The Financial Markets
Rejecting The Fed?
Rudi Fronk

Last Wednesday, the Fed raised the Fed Funds rate by a quarter point as expected. The FOMC statement was suitably “dovish” by reducing the consensus forward guidance on future rate hikes from three to two. The Fed also signalled that its Quantitative Tightening program would continue on “autopilot” as planned. The response was not what the Fed expected. Stocks fell hard and bonds soared.

Financial markets are about to revisit some important questions.

First, does QE actually work? Does it boost the real economy or does it simply drive up valuations by speculation? We think the weakest economic recovery in two generations provides the answer. Read More

12.25.18- The Ghost of Christmas Past
Bill Bonner

Editor’s Note: Happy Holidays from Bonner & Partners!Today’s Diary, originally penned in 2000, will begin a special three-part Christmas series from Bill. 

Old Greenspan was not dead. Not dead as a doornail, nor dead as a door knocker. Not even as dead as a laptop computer after the power goes out – not even John Maynard Keynes is that dead.

Not even God himself… but that is another story.

Nothing is as dead as a computer without power. For even a nail continues to provide good service after the spark of life has gone out of it. Read More

12.24.18- In Defense Of Powell's Restoration Of Price Discovery
Charles Hugh Smith

Relying on fakery and addictive stimulus is the acme of fragility and vulnerability.

Having become addicted to the Federal Reserve's nearly free money for financiers and the infamous Fed Put stock market players are now weeping and thrashing about in the agony of withdrawal as Fed chair Jay Powell has instituted a cold-turkey withdrawal from the financial stimulus of the Bernanke-Yellen days.

12.22.18- Murky 2019 Could Be In Store for U.S. Economy Thanks to Fed’s Monetary Policy
Birch Gold Group

December 19 marks the day the Fed may have decided it’s going “all in” on the idea of a “strong U.S. economy.”

The Fed locked in an increase of the Federal Funds Rate from 2.25% to 2.40%, and it will increase the primary credit rate to a full 3.00%. These December increases were pretty much anticipated back in early November.

The increases came in spite of commentary by Jeffrey Gundlach from Doubleline, who said the Fed shouldn’t have raised rates: Read More

12.21.18- Is this a joke?
Bill Holter

As the year comes to a close, we all look back and reflect on what happened, what didn’t, and what should or should not logically happen in the future. During some recent reflection, I could only laugh and finished my thoughts by thinking “is this a joke”?

We all (even the brain dead) know something has seriously changed in our financial markets. Emotional thought has morphed from buy the dip to sell the rip. In other words, fear is now in the process of replacing greed as the prevailing sentiment. But why? What has changed? Read More

12.20.18- Powell To Markets: "You're Wrong!"
Nicholas Colas

“Today’s prices are wrong” is the central tenet of active portfolio management. Without that belief, no manager could justify his or her role in capital markets. Systematically identifying mis-priced assets is the first line of a PM’s job description.

At the same time, investors have grown accustomed to questioning the existence of rampant asset price inefficiencies. That has driven the growth of passive management, of course. But it has also made “what’s your investment edge?” the only question that matters when quizzing everyone from a junior hedge fund analyst to the most senior long-only manager. Read More

12.19.16- It’s Lose-Lose For The Fed And For Everyone
Dave Kranzler

A friend asked me today what I thought Powell should do.  I said, “the system is screwed. It ultimately doesn’t matter what anyone does.   The money printing, credit creation and artificially low interest rates over the last 10 years has fueled the most egregious misallocation of capital in history of the universe.”

Eventually the Fed/Central Banks will print trillions more – 10x more than the last time around. If they don’t this thing collapses. It won’t matter if interest rates are zero or 10%. You can’t force economic activity if there’s no demand and you’ve devalued the currency by printing it until its worth next to nothing and people are toting around piles of cash in a wheelbarrow worth more than the mountain of $100 bills inside the wheelbarrow. Read More

12.18.18- Trump Slams Fed On Eve Of Rate Decision: "Incredible" Fed Hiking With
"World Blowing Up"
Tyler Durden

On the eve of Wednesday's Fed decision, President Trump is once again bashing the Federal Reserve over its plans to raise interest rates at a time when markets are already in chaos and the "world is blowing up" thanks in part to the central bank's "double-barreled blitz" of higher rates and tighter liquidity.

But instead of insinuating that Fed Chairman Jerome Powell is trying to undermine the administration, the president ticked off a reasonable list of factors that should give a truly "data-dependent" Fed reason to reconsider. Read More

12.17.18- Wall Street, Banks, and Angry Citizens
Nomi Prins

The Inequality Gap on a Planet Growing More Extreme

As we head into 2019, leaving the chaos of this year behind, a major question remains unanswered when it comes to the state of Main Street, not just here but across the planet. If the global economy really is booming, as many politicians claim, why are leaders and their parties around the world continuing to get booted out of office in such a sweeping fashion?

One obvious answer: the post-Great Recession economic “recovery” was largely reserved for the few who could participate in the rising financial markets of those years, not the majority who continued to work longer hours, sometimes at multiple jobs, to stay afloat. Read More

12.15.18- It’s official:
the Federal Reserve is insolvent
Simon Black

In the year 1157, the Republic of Venice was in the midst of war and in desperate need of funds.

It wasn’t the first time in history that a government needed to borrow money to fight a war. But the Venetians came up with an innovative idea:

Every citizen who loaned money to the government was to receive an official paper certificate guaranteeing that the state would make interest payments.

Those certificates could then be transferred to other people… and the government would make payments to whoever held the certificate at the time. Read More

12.14.18- Fed Net Worth Turns Negative Following Record $66BN In Paper Losses
Tyler Durden

While the Fed has been engaging in quantitative tightening for over a year now in an attempt to shrink its asset holdings, it still has over $4.1 trillion in bonds on its balance sheet, and as a result of the spike in yields in the last summer, this massive portfolio suffered substantial paper losses which according to the Fed's latest quarterly financial report, hit a record $66.453 billion in the third quarter, raising questions about its strategy at a politically charged moment for the central bank, whose "independence" has been put increasingly into question as a result of relentless badgering by Donald Trump. Read More

12.13.18- Jerome Powell Is Between
A Rock And A Hard Place
Nomi Prins

One of the major drags on the market, besides trade wars, has been uncertainty about whether the Fed will raise rates this month. Despite the verbal bravado of Federal Reserve Chairman, Jerome Powell, over how strong the U.S. economy is, he doesn’t live in a vacuum.

Powell’s borne the brunt of President Trump’s recent accusations that the Fed’s hikes are what’s hurting the stock market and threatening the economy. That lead to a media debate over whether Powell would “cave” to Trump or demonstrate that the Fed is the independent body that it’s legally designed to be, and continue with planned hikes anyway. Read More

12.12.18- The Fed Dollar System Is Going To Fail, The System Is Ready For A Reset
Craig Hemke

View Video

12.11.18- JPMorgan Teams Up With French Central Bank To Juice Gold-Lending
Ronan Manly

The central bank gold lending market, centered in London, is probably the most secretive financial market in the world, with very little known about its transactions and market structure.

The gold lending market’s opacity is further supported by regulators who protect the secrecy of the central banks, and mainstream financial news agencies whose editorial policies seem to forbid any market investigations, in-depth or otherwise. Read More

12.10.18- Every Bubble Is In Search Of A Pin
Chris Martenson

The 'Everything Bubble' has popped

Now that the world’s central banking cartel is taking a long-overdue pause from printing money and handing it to the wealthy elite, the collection of asset price bubbles nested within the Everything Bubble are starting to burst. 

The cartel (especially the ECB and the Fed) is hoping it can gently deflate these bubbles it created, but that's a fantasy. Bubbles always burst badly; it's their nature to do so. Economic suffering and misery always accompany their termination.

It's said that "every bubble is in search of a pin". History certainly shows they always manage to find one. Read More

12.08.18- Yield Curve Poised to Invert – Where Will Fed Go From Here?
Birch Gold

Looks like the yield curve the Fed swept under the rug back in June continues to prove itself a reliable potential signal for market correction.

On Tuesday, the Dow Jones continued to trend downward since October 3, dropping 800 points. After a tumultuous ride on Thursday, the index ended the week on Friday by dropping another 550 points.

An article over at MarketWatch highlighted the yield curve between 2-year and 10-year treasury notes as one potential signal of Tuesday’s drastic drop: Read More

12.07.18- How Private Banks Create Bubbles —
with the Help of Central Banks
Frank Shostak

With meagre resources at his disposal, an individual is likely to allocate these resources (i.e., his wealth) towards essentials such as food, clothing and a roof over his head.

He is unlikely to allocate his meagre wealth to less essential goods as far as life and wellbeing is concerned. His variety of consumer goods is likely to be very limited.

As his real wealth begins to expand, the individual is likely to expand the variety of goods consumed, thereby raising his living standard. Read More

12.06.18- The Art of Defaulting
Niels Clemen Jensen

… the debt-financed overspending of the 1960s had continued into the early 1970s. The Fed had funded this spending with easy-credit policies, but by paying back its debts with depreciated paper money instead of gold-backed dollars, the U.S. effectively defaulted. -Ray Dalio

Principles for navigating big debt crises

Ray Dalio of Bridgewater Associates is one of my role models in life and, when he writes a new book, I would normally visit Amazon.co.uk more quickly than you can count to ten, but not this time! Read More

12.05.18- Why the Yield Curve Inverts
in One Simple Picture
Mike Mish Shedlock

The yield curve inverts when the Fed keeps hiking in the face of a slowdown.

OK. But Why?

Answer: The Fed kept hiking in the face of a slowing economy as the chart I posted shows.

Thus, whether or not the 3-month to 10-year spread inverts may very well depend on how many more hikes the Fed gets in. Read More

12.04.18- This Is How the “Everything Bubble”
Will End
Nick Giambruno

I think there’s a very high chance of a stock market crash of historic proportions before the end of Trump’s first term.

That’s because the Federal Reserve’s current rate-hiking cycle, which started in 2015, is set to pop “the everything bubble.”

I’ll explain how this could all play out in a moment. But first, you need to know how the Fed creates the boom-bust cycle…

To start, the Fed encourages malinvestment by suppressing interest rates lower than their natural levels. This leads companies to invest in plants, equipment, and other capital assets that only appear profitable because borrowing money is cheap. Read More

12.03.18- Caved
Sven Henrich

Of course Powell caved. Isn’t it obvious why?

Home sales are dropping hard. Global growth is slowing hard. Financial conditions are tightening. Stock have been dropping. Never mind all the Fed Crying or Trump expressing his displeasure.

Real rates are still negative and the Fed’s tough talk on raising rates came to a sudden halt:

Fed’s Powell, in dovish shift, says rates near neutral: Read More

12.01.18- Chairman Powell Talks Out of Both Sides of His Mouth
Birch Gold Group

In a speech on Wednesday, Federal Reserve Chairman Jerome Powell stated that he had a “neutral” outlook on rates. According toa CNBC article, he was quoted:

Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth.

But CNBC notes that, as recently as October, Powell’s was indicating that rates were “a long way from neutral.” Could the change in tone simply be public relations damage control? Read More

11.30.18- Don't Get Distracted By The Trump/Fed Soap Opera - The Crash Will Continue
Brandon Smith

At the beginning of 2018 I wrote extensively on what was likely to happen under the administration of Jerome Powell, the new Federal Reserve Chairman. In my article ‘New Fed Chairman Will Trigger A Historic Stock Market Crash In 2018‘, published in February, I predicted that the Fed would continue interest rate increases and balance sheet cuts throughout the year and they would knowingly initiate a crash in equities.Read More

11.29.18- Dollar Dumps, Gold Jumps As Powell Abandons Hawkish "Long Way" From Neutral Stance
Tyler Durden

As Bloomberg's Brendan Murray notes, there are the key takeaways from Powell's prepared text:

• Powell says rates "just below" range of estimates for neutral policy, raising the question of whether he's walking back an earlier view that neutral was a longer way off

• He says even after eight hikes since December 2015, rates are still low by historical standards

• Powell explains Fed's gradualism, saying the approach is meant to balance risks of moving too fast or too slowly Read More

11.28.18- Bitcoin’s Crash Looks Like a Real Currency Crisis
Lionel Laurent

In a virtual world without a central bank, who is the buyer of last resort?

Bitcoin is in crisis. You can never really declare it dead — the idea of an electronic currency that is theoretically borderless and lawless will always live on somewhere — but its price has slumped 80 percent in less than a year, wiping about $700 billion off cryptocurrency markets.

Where does it go from here? True believers are betting on a simple repeat of past asset bubbles, like dot-com stocks or real estate: a system-wide cleansing of bad actors before the roller-coaster ride begins anew. On that argument there’s a price for everything, even niche assets with no intrinsic value. Maybe Bitcoin should be above $3,700. Read More

11.27.18- A Message for Trump
Hugo Salinas Price

Mr. President Trump, Sir: you are working tirelessly, against tremendous odds, to carry out your mission in life, which is to “Make America Great Again”.

I propose to you a measure fully in accord with your vision of a great, united nation of America, working for prosperity; a measure that conveys a fundamental message of inspiration for the American people. The greatness of a nation flowers when its moral stature is elevated, and such is the object of the measure that I suggest to you. Read More

11.26.18- This RED PILL Will Change EVERYTHING You Thought You Knew!
HighImpactVlogs

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11.24.18- Who Owns The Fed?...
Does It Even Matter?
Ron Paul

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11.23.18- Why Interest Rates Are Rising Long-Term
Alasdair Macleod

There are growing expectations that the current cycle of rising interest rates will result in a deflationary recession. While a credit crisis is increasingly likely to evolve in the coming months, it is a highly inflationary situation. A combination of higher interest rates and catastrophic falls in the purchasing power of fiat currencies will continue to plague welfare-driven states in the wake of a credit crunch.

The standard post-crisis solution of monetary and fiscal reflation will not be available. This article examines the ultimate consequences of the West’s abandonment of sound money, free markets and wealth creation in favour of increasing state intervention and wealth destruction. Read More

11.22.18- Jim Cramer Rips Housing’s “Toxic Cocktail” Created by the Fed
Birch Gold Group

Home builders across the U.S. are struggling to come to grips with an incredibly toxic combination of rising rates and lack of affordability in the housing market.

National Association of Home Builders (NAHB) Chairman Randy Noel downplayed the situation, saying customers are “taking a pause” to see how high rates will go and keeping an eye on prices.

Sentiment dropped 8 points in November alone to 60. The total drop of 12 points since November 2017 is the sharpest drop in one year since 2014. The red arrow points to the start of an even bigger downward trend (sustained drop over time). Read More

11.21.18- Unthinkable!
Gary Christenson

Sometimes we must consider the unthinkable.

Official US national debt is $21.6 trillion. Unfunded liabilities are five to ten times higher. Global debt is about $250 trillion. US national debt has doubled every eight to nine years for decades.

1. National debt in 2018 – $21.6 trillion
   
   
2. National debt in 2026? – $40+ trillion
   
   
3. National debt in 2040? – $100+ trillion  Read More

11.20.18- Central Banks Take Aim at Bitcoin
Bill Bonner

DUBLIN – We’re in Dublin… en route to the USA for the holidays.

Dublin is a vibrant, lively city. Not especially elegant, unlike Paris… and not especially dynamic, unlike London… Nor is it especially huge and imposing, like New York or Chicago.

Instead, it is a comfortable, charming, livable place… with many restaurants, hotels, and bars where you can pass an agreeable hour in front of a fire while drinking a pint of Guinness.

But let’s turn to our beat – money. Read More

11.19.18- Rates on Their Way to 10-Year High After Hawkish Fed’s Recent Meeting
Birch Gold

Round and round we go, where the hawkish Fed stops, nobody knows…

There was a bit of tension in the markets last week. This tension stemmed from a prediction that the federal funds rate would be well on its way to a decade high even if the Fed did nothing at their November meeting.

Well, that concern has been justified. In a statement issued after the meeting, the Fed kept their funds rate at 2 – 2.25%, the same range after their September meeting.  Read More

11.17.18- As the Fed Tightens, Where Will the Credit Crunch Pinch First?
Yves Smith

Josh Rosner of Graham Fisher has graciously allowed us to republish their latest report on the outlook for banks and credit. Rosner was the first to warn of the dangers of allowing widespread mortgage lending with low down payments in his 2001 article: A Home Without Equity is Just a Rental With Debt. Rosner was the co-author with Gretchen Morgenson of Reckless Endangerment and describes himself as a “recovering GSE analyst.” From his analysis; the full document is embedded at the end of this post:

This report is the first in an ongoing series in anticipation of the likely recession of Q3 2019  Read More

11.16.18- The Fed Will Continue Tightening Until Everything Breaks
Brandon Smith

Around three years ago, in September 2015, I wrote an article titled ‘The Real Reasons Why The Fed Will Hike Interest Rates‘ in which I predicted that the Federal Reserve, in the face of criticism, would soon pursue a program of interest rate hikes into economic weakness. I argued that this plan would be somewhat similar to what the Fed did in the early 1930’s; an action that prolonged the Great Depression for many more years. So far, my prediction has proven to be correct. Read More

11.15.18- Fate Has A Sense of Irony
Neal Ross

“All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.” ~ John Adams

In 2016 Governor Gerry Brown signed into law SB-3 which would phase in a series of increases in California’s minimum wage until it finally reaches the goal of $15 per hour in 2023. This was done to provide a ‘living wage’ for those working minimum wage jobs. I’m telling you right now, you may as well start stuffing little squares of toilet paper in your wallets and purses, because if you don’t learn about the nature of coin, credit and circulation it will have about the same value as the money you currently use to purchase goods and services. Read More

11.14.18- The Fed Is “Triple Tightening” Into Crisis
Jim Rickards

I’m in Dublin, Ireland, today, where I was honored and humbled to receive a writing award from Trinity College.

It’s my job to continue pointing out the risks to the financial system that we still face and to try to help people prepare for the next crisis. Of course, central banks are a big part of the problem.

If you have defective and obsolete models, you will produce incorrect analysis and bad policy every time. There’s no better example of this than the Federal Reserve. Read More

11.13.18- It’s Fraud & Theft, the Central Banks Get Special Set of Laws to Steal Our Wealth
Mike Maloney

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11.12.18- When Fake Money Becomes Scarce
MN Gordon

Remaining Focused

A rousing display of diversions this week assured the American populace was looking every which way but right under its collective nose.  Midterm elections.  White House spats with purveyors of fake news.  The forced resignation of Attorney General Sessions…

Old drug warrior (otherwise recused) on his way home to Alabama…

Sideshows like these, and many more, offered near limitless opportunities to focus on matters of insignificance. Read More

11.10.18- And Now, for Something Entirely Different: The Nation's Fiscal Doomsday Machine is Now Unstoppable
David Stockman

Earlier this year the Donald provoked a bleep-hole moment per the Fox "family channel" or what was otherwise known as the shit-hole moment across the rest of the MSM.

But whatever you called the contretemps spurred by the president's crude utterance with regard to certain countries domiciled on the African continent, the claim this was evidence that he's an incorrigible racist was risible. Actually, we already knew that the Donald is a semi-literate bully, who never got (read) the memo on racial comity---to say nothing of political correctness. Read More

11.09.18- The Fed Will Continue Tightening Until Everything Breaks
Brandon Smith

Around three years ago, in September 2015, I wrote an article titled ‘The Real Reasons Why The Fed Will Hike Interest Rates‘ in which I predicted that the Federal Reserve, in the face of criticism, would soon pursue a program of interest rate hikes into economic weakness. I argued that this plan would be somewhat similar to what the Fed did in the early 1930’s; an action that prolonged the Great Depression for many more years. So far, my prediction has proven to be correct. Read More

11.08.18- The Next Big Market Risk: Here Comes A Sharp Slowdown In Stock Buybacks
Brandon Smith

Stock buybacks may be back as blackout session ends, but suddenly companies' appetite to repurchase their own shares appears to be slowing sharply.

After an initial record surge in the amount of US corporate cash repatriated from offshore jurisdictions (if only for accounting purposes, as the bulk of said cash was already largely invested in domestic securities via offshore entities) following Trump's tax law overhaul and tax repatriation holiday, the movement of foreign cash has slowed sharply. This comes at a time when record notional corporate buybacks have not only surpassed total capex spending for the 2nd quarter in a row, but have been seen as responsible for the relentless bid supporting the stock market. Read More

11.07.18- The Fed Crying Has Begun
Northman Trader

So stocks dropped a little in October. Ok they actually dropped a lot and all of a sudden the S&P 500 was miles away from the all those optimistic 3,000+ year end targets. And what happens when stocks drop hard? Bulls cry for the Fed to come to the rescue.

It was quite the scene.

Here’s the global market cap wiped off in just October: Read More

11.06.18- The Fed's Misleading
Money Supply Measures
Steve H. Hanke

The most robust national income determination model is the monetarist model. The course of the economy when measured in nominal terms is determined by the course taken by the money supply. Indeed, the positive relationship between the growth rate of the money supply and both nominal GDP and nominal aggregate demand growth is unambiguous and overwhelming.

So, just what is the measure of money that is most suited for taking the temperature of the economy and forecasting its course? Is a narrow metric, like the monetary base (M0), the best? Or, should we focus on broad money metrics, like M3 and M4? For national income determination, the more inclusive the metric, the better. Indeed, for the most complete and accurate picture, one should include all the important components of money supply, not just a few. Read More

11.05.18- What Happens When You Stomp The Gas and the Brake Simultaneously? Pro-cyclical Trump / Congress vs. Counter-cyclical Fed
Chris Hamilton

Fiscal Conservatism is Dead - Surging Government Spending Coupled with Tumbling Tax Receipts Are Fiscal Populism

Many American's believe in a simple idea called fiscal conservatism.  Low taxation coupled with low government spending and low (or reduced) government debt.  However, the nations leadership (executive and legislative branches) have fallen in love with the idea of spending tax money you and I haven't made yet.Read More

11.03.18- Central Banks Have Gone Rogue,
Putting Us All at Risk
Ellen Brown

Excluding institutions such as Blackrock and Vanguard, which are composed of multiple investors, the largest single players in global equity markets are now thought to be central banks themselves. An estimated 30 to 40 central banks are invested in the stock market, either directly or through their investment vehicles (sovereign wealth funds). According to David Haggith at Zero Hedge:

Central banks buying stocks are effectively nationalizing U.S. corporations just to maintain the illusion that their “recovery” plan is working. … At first, their novel entry into the stock market was only intended to rescue imperiled corporations, such as General Motors during the first plunge into the Great Recession, but recently their efforts have shifted to propping up the entire stock market via major purchases of the most healthy companies on the market. Read More

11.02.18- Time to Worry
James Grant

It took the United States 193 years to accumulate its first trillion dollars of federal debt. We will add that much in the current fiscal year alone.

America’s deteriorating public credit is the cold-button issue of the 2018 midterms. With rare bipartisanship, Democrats and Republicans compete to pretend that the country isn’t going broke. In 1992, the third-party presidential candidate Ross Perot likened the widening gap between federal receipts and federal spending to “the crazy aunt tucked away in the room upstairs nobody talks about.” The old gal’s dottier than ever. Read More

11.01.18- The Fed Will Panic…
Bill Bonner

A wonderfully fraudulent confrontation is setting up… 

On one side is Donald J. Trump, pretending that he has “already made America great again” and blaming the Fed for ruining his beautiful work. He wants the Fed to lower interest rates, not raise them.

On the other is the Fed, pretending that it is the architect and creator of such an amazing economy, and that it’s now guiding it to perfection. It believes it is “normalizing” the economy by gradually raising rates.

So who’s right? Read More

19.31.18- Halloween Special: The Monster Mash
James Howard Kunstler

The sad reality is that last week’s Pittsburgh synagogue massacre is only the latest float in the long-running parade of ghastly homicidal spectacles rolling across this land and will be just as forgotten in one week as was last year’s Las Vegas Mandalay Bay slaughter of 58 concert-goers plus over 800 wounded and injured, a US record for non-military acts of violence. The Pittsburgh shootings elbowed the mass pipe bomber, Cesar Sayoc, out of the news cycle — but then Sayoc didn’t manage to actually hurt any of the high-profile figures he targeted with his mailings. What I wonder — and what the news media has so far failed to report — is just how incompetent a bomb-maker Sayoc was. Fake news meets fake bombs. Read More

10.30.18- Trump Is Right, The Fed IS Crazy
Ron Paul

President Trump recently called the Federal Reserve’s interest rate hikes crazy. Leaving aside President Trump’s specific complaint, which is likely motivated by the belief that low rates will help him win reelection, he is right that “crazy” is a good way to describe the Federal Reserve.

When not forced to use a government-created currency, individuals have historically chosen to use a precious metals as money. The reasons include that precious metals are durable and their value tends to remain relatively stable over time. A stable currency ensures that prices accurately convey the true value of goods and services. Read More

10.29.18- The Cantillon Effect: Because of Inflation, We’re Financing the Financiers
Jessica Schultz

It may come as a surprise to you that the United States has been financing a welfare program that takes money from the poor and gives it to the rich.

If you read a lot of modern macroeconomic literature or major in economics in college, you’ll hear economists talk of the “multiplier effect” of monetary and fiscal stimulus. In times of economic slump, money injection (for monetary policy) or government spending (fiscal policy) greases the wheels of our complex economic machine, bringing unemployment down and output up. Read More

10.27.18- Weekend Rant: The Establishment Must Undermine Alternative Economists As Crisis Unfolds
Brandon Smith

There is a notion within the mainstream media that certain economic indicators are unassailable; they never stop being reliable. The way they look at and report on the system is rather outdated and extremely limited in scope; showcasing and cherry picking only net-positive statistics, even if those stats don’t represent reality. The result is a kind of holographic view of the financial structure; a mirage of a healthy and vibrant foundation that simply does not exist.

This fraudulent view appeals to the masses for a time because it provides fuel for false hopes. In economics, an analyst must always account for two major factors: the hard math and human psychology. Read More

10.26.18- Central Banks And ETF Investors
Start Buying Gold Aggressively
Jason Hamlin

The gold price has been rising over the past month, driven by investors seeking safe-haven assets as the stock market sells off sharply. On the technical chart, we can see a bottoming pattern followed by a price spike higher. I am now looking for gold to break above resistance at $1,240, which was support twice in the past year. Major support levels often turn into resistance on the charts and overcoming such resistance levels can lead to an inflow of funds from technical traders. Read More

10.25.18- Trump vs. The Fed: When Markets Crash, Who Is To Blame?
Brandon Smith

After a certain length of time examining history in-depth, anyone who is honest and relatively objective comes to understand that most of what we are told about our past in the mainstream is completely fabricated. We learn that much of “history” is not about posterity or heritage and more about a continuous set of false narratives peppered with half-truths. That is to say, what we thought we knew is actually lies.

Unfortunately, these lies can be complex, to the point that even many alternative researchers get caught up in their own biases to the point that they lose track of reality. Of course, this is what propaganda and 4th generation warfare is meant to accomplish; it creates a series of filters that thin out the crowd of truth seekers a little at a time. Read More

10.24.18- Inside The Fed's Survey Of Economic (Un)Well-Being
Richard Rosso

The Federal Reserve Report on the Economic Well-Being of U.S. Households in 2017 was recently released.

The Federal Reserve Board’s Division of Consumer Affairs 5th annual Survey of Household Economics and Decision-making is designed to gain understanding of how adults in the U.S. feel about the state of their finances.

A sample of 12,000 received the survey in late 2017. What’s unique about the study in my opinion, is that it tackles subjective well-being from a financial perspective and emerging issues that may be formidable obstacles in the future. Read More

10.23.18- And Now, foe Something Entirely Different: Forget Russia. Here’s the Real Threat to American Elections…
Bill Bonner

WATERFORD, IRELAND – Alleluia!

We join with all Americans today in breathing a sigh of relief; justice is being done.

The bad guys are being hunted down. Our pristine democracy – in its pure white, unblemished, unsullied, and unbelievable gown – is being protected.

Finally, at least one of our foreign enemies has been nabbed by the gendarmes and will soon be railroaded by the courts; others will surely follow. Read More

10.22.18- Bubbles, Balloons, Needles and Pins
Raúl Ilargi Meijer

It’s no surprise that China has its own plunge protection team -but why were they so late?-, nor that Beijing blames its problems on Trump’s tariffs. GDP growth was disappointing at 6.5%, but who’s ever believed those almost always dead on numbers? It would be way more interesting to know what part of that growth has been based on debt and leverage. But that we don’t get to see. 

So we turn elsewhere. How about the Shanghai Composite Index? It may not be a perfect reflection of the Chinese economy, no more than the S&P 500 is for the US, but it does raise some valid questions. Read More

10.20.18- Weekend Rant: It Ain't So, Alan! Why Greenspanian Central Banking Is the Mortal Enemy of Capitalist Prosperity
David Stockman

We can thank bubblevision and the Maestro himself for a splendid reminder today that Greenspanian central banking is the greatest menace to capitalist prosperity ever invented. This was made abundantly clear by his pronouncement on CNBC regarding the current labor market:

“Tightest labor market I’ve ever seen.” – Greenspan on @CNBC

Read More

10.19.18- Bill Fleckenstein: Fed Confidence Won't Last & the Dollar Will Collapse
Egon von Greyerz

Bill Fleckenstein is one of my all time favorite market commentators and one of the few that understands how badly the Fed is making the economic situation in this country. He talks today about last week's market volatility, Apple, GE, the precious metal markets and why Jerome Powell is an "idiot". 

Bill is a professional money manager with over 30 years of experience. He has written daily commentary on market action since 1996 and FleckensteinCapital.com launched in 2003. His website is:  https://www.fleckensteincapital.com/ Read More

10.18.18- My Proprietary Fed “Hawkometer” is Redlining
Wolf Richter

It’s untested, results may vary, and it may appear a tad tongue-in-cheek. But it shot up 240% from long-run average and 500% from a year ago.

Reading the purposefully repetitive and strategically mind-numbing minutes of the FOMC meetings, such as the minutes that the Fed released today, can be a brutal affair. But it’s where the Fed discusses the economy and vaguely hints at risks balling up in it. It sprinkles in clues about its decisions on interest rate hikes. So these minutes are a link in understanding where interest-rate policy might go in the future, and they’re designed to communicate precisely that. Read More

10.17.18- Chairman Powell - You're Fired!
Michael Lebowitz

“I’m a low interest rate person” – Donald Trump 2016

On Donald Trump’s hit TV show, The Apprentice, contestants competed to be Trump’s chief apprentice. Predictably, each show ended when the field of contestants was narrowed down by the firing of a would-be apprentice. While the show was pure entertainment, we suspect Trump’s management style was on full display. Trump has run private organizations his entire career. Within these organizations, he had a tremendous amount of unilateral control. Unlike what is required in the role of President or that of a corporate executive for a public company, Trump largely did what he wanted to do. Read More

10.16.18- Powell has lost his North Star, and the Fed is flying blind
Peter Morici

The Fed risks raising interest rates too much as the compass spins wildly

Federal Reserve Chairman Jerome Powell is in an unenviable position. Folks expect him to fine-tune interest rates to keep the economy going and inflation tame but he can’t make things much better...only worse. Read More

10.15.18- Trump Is Right: The Federal Reserve Is Crazy And Here Are 101 Reasons
Why It Should Be Shut Down
Michael Snyder

Donald Trump just made one of the most brilliant moves of his entire presidency.  By accusing the Federal Reserve of “going loco”, he is placing the blame for the coming stock market crash and horrifying economic downturn squarely where it belongs, and he is firing up millions of true conservatives among his base at the same time.  For many, many years, a lot of us have been trying to educate the American people about the deeply insidious Federal Reserve system.  As Ron Paul once so astutely observed, it is actually about as “federal” as Federal Express is.  The Federal Reserve is an unelected cabal of central bankers that is running our economy into the ground, and the only way we are going to fix our long-term economic and financial problems is if we abolish it.  So for those of us that understand these things, it is extremely exciting to hear President Trump use language such as this… Read More

10.13.18- Weekend Rant: Of Course
The Fed Is Crazy
Raúl Ilargi Meijer

Finally financial ‘markets’ go through a substantial dip, which Steve Mnuchin claims is just temporary and Donald Trump says is caused by the fact that the Fed is ‘loco’. Mnuchin may well be right, but it won’t be because he knows something you don’t. 

And Trump is certainly right, but in reality the Fed has been loco for many years, so why be surprised if it acts crazy now? The reason Mnuchin and a million other ‘experts’ may be right without realizing it is that the Fed has been crazy enough to kill the financial markets. Read More

10.12.18- Convincing Congress to Abolish the Fed
Freedom League, Sept/Oct 1984

When Congress borrows money on the credit of the United States, bonds are thus legislated into existence and deposited as credit entries in Federal Reserve banks. United States bonds, bills and notes constitute money as affirmed by the Supreme Court (Legal Tender Cases, 110 U.S. 421), and this money when deposited with the Fed becomes collateral from whence the Treasury may write checks against the credit thus created in its account (12 USC 391). For example, suppose Congress appropriates an expenditure of $1 billion. To finance the appropriation Congress creates the $1 billion worth of bonds out of thin air and deposits it with the privately owned Federal Reserve System. Upon receiving the bonds, the Fed credits $1 billion to the Treasury's checking account, holding the deposited bonds as collateral. Read More

10.11.18- The Myth Of The Eternal Market Bubble And Why It Is Dead Wrong
Brandon Smith

Economic collapse is not an event — it is a process. I’ve been saying this since the initial 2008 crash, and I suppose I will keep saying it until it burns into people’s minds because I don’t think that it is a widely understood concept. When alternative analysts talk about financial collapse, we are not talking about something that suddenly happens out of the blue, we are talking about an ongoing decline that occurs in stages. This decline is happening today in the U.S. and around the world, and it has been accelerating since the chaos of 2008. When we bring up the reality of collapse, we are referring to something that is happening NOW, not something waiting on the distant horizon. Read More

10.10.18- Why Do Most Nations Use Fiat Money Today?
Jeff Clark

The primary reason nations use fiat money today is that it doesn’t limit how much of their currency they can put into circulation.

This reality starts with the meaning behind the word “fiat”…

The term fiat may sound obscure, even mystical, but it’s actually straightforward. Fiat is Latin for “let it be done,” or “it shall be.” Apply that definition to money and it simply means that currency is “money” because a government says its money. The dollar bill in your wallet is money by government decree. Read More

10.09.18- Why Your Vote Hasn’t Mattered Since 1913
Joe Jarvis

“No taxation without representation!”

That was a popular phrase during the decades leading up to the Revolutionary War. Colonists thought it was unfair to be taxed and subjected to English rule without consent.

Today Washington DC hands down laws and taxes to every one of the 320 million people living in the United States.

And just like under English rule, we are not represented in the federal government. Read More

10.08.18- The Federal Reserve’s Rising Interest Rates Are A Ticking Time-bomb For U.S. Economy
Steve St Angelo

One of the worst things for an over-heated and extremely leveraged economy is rising interest rates.  So, with the recent 2-2.25% interest rate, big trouble is on the horizon,  Also, with higher interest rates, the U.S. Treasury will have to fork out even more money to service its debt.  In just a little more than two years, the U.S. Fed Funds Rate jumped by nearly 2%.

This is indeed a big change for the Federal Reserve’s “economic stimulation policy” as it kept interest rates below 0.25% since January 2009.  And with extremely low-interest rates, nearly zero, it allowed the United States to more than double domestic oil production.  Unfortunately, this newly created oil supply has come at a cost. Read More

10.06.18- Will Phillips Curve Revenge Trigger Inflation?
Kurt Kallaus

Milton Friedman promulgated the Phillips Curve interpretation that posits a tight labor market generates higher inflation. Since 1967 this has been the primary tool of Central Banks and economists in forecasting inflation. During the previous generation it appeared that falling unemployment during an economic recovery would always trigger a strong inflation response. Today’s near record low unemployment should support a robust economic expansion, but has confounded economists expecting worrisome inflation. The inflation to unemployment sensitivity was strong in the 1960’s and 1970’s as Boomers entered the workforce triggering abnormal rates of spending and inflation. Combined with the Vietnam War and Johnson’s 1964 War on Poverty, this inflationary Baby Boom phase caused the US to close the Gold window in 1973 and send the world to free floating currencies. Read More

10.06.18- Will Phillips Curve Revenge Trigger Inflation?
Kurt Kallaus

Milton Friedman promulgated the Phillips Curve interpretation that posits a tight labor market generates higher inflation. Since 1967 this has been the primary tool of Central Banks and economists in forecasting inflation. During the previous generation it appeared that falling unemployment during an economic recovery would always trigger a strong inflation response. Today’s near record low unemployment should support a robust economic expansion, but has confounded economists expecting worrisome inflation. The inflation to unemployment sensitivity was strong in the 1960’s and 1970’s as Boomers entered the workforce triggering abnormal rates of spending and inflation. Combined with the Vietnam War and Johnson’s 1964 War on Poverty, this inflationary Baby Boom phase caused the US to close the Gold window in 1973 and send the world to free floating currencies. Read More

10.05.18- The Tragically Flawed Fed Policies And The Eventual Reset Of The Gold Price
Dave Kranzler

With gold showing good resiliency as it has tested the $1200 level successfully after enduring aggressive paper gold attacks during Comex floor trading hours, it’s only a matter of time before gold breaks out above $1220 and heads toward $1300. Gold has been under attack in the futures market this week as the world’s largest physical gold importer, China, has been closed all week for holiday observance. In addition, with financial market conditions stabilizing in India, the world second largest physical gold importer’s peak gold buying season resumed this week. When gold spikes over $1220, it will unleash an avalanche of short-covering by the hedge funds. Read More

10.04.18- Fed Chair Powell Hints He May Soon Crash The Market
Tyler Durden

Speaking at an event at the Atlantic Festival in Washington, Jerome Powell's second public appearance of the week, the Fed chair took the opportunity to underscore just why he remains so complacent about the US economy, saying "it’s a remarkably positive set of economic circumstances,” and “there’s no reason to think it can’t continue for quite some time."

Powell also praised the wage increases, saying some gains are welcome and noting that "the Phillips curve is not dead, just resting." Read More

10.03.18- UN Report Cites Central Bank Liquidity Bubbles, Loose Money, Debt Expansion
Mike "Mish" Shedlock​

A UN report has everything wrong as to the cause of current problems. Yet, the report mentions central bank liquidity.

Seldom does one see a report that "debt is the problem" while being 180 degrees wrong as to the cause of the buildup in debt.

The United Nations' Trade and Development Report for 2018 blames the "Free Trade Delusion" for what ails the word. Read More

10.02.18- Fed Indicates
You’d Be Wise To Get Some Gold
Chris Marcus

This week the Federal Reserve had its latest policy meeting, and as widely expected raised its short-term interest rate by another 25 basis points. Which given the precarious state of today’s economy, is great reason to purchase gold and silver as a response.

As a result of the Fed’s interest-rate increases in recent years, many of the emerging market economies are already experiencing currency chaos. And while wider turbulence has yet to impact the pricing in the U.S. markets, the evidence that the real estate market is running into trouble continues to emerge. With similar consequences becoming increasingly more likely in the stock and bond markets as well as the Fed continues to attempt to unwind its low-interest-rate policy. Read More

10.01.18- The Fed is Facing Two Bubbles…
And It Can Only Save One
Graham Summers

Yesterday, the Federal Reserve stated it would no longer be “accommodative” with its monetary policy. 

On that same day Fed chair Jerome Powell stated that stock market valuations were in the “upper reaches of historic ranges” i.e. bubbly.

And most importantly, the Fed stated it would likely hike rates again in 2018… with another three rate hikes in 2019. If each rate hike were for 0.25%, the Fed is targeting an interest rate of 3.25% before it’s done. Read More

09.29.18- Banks Sputter After
Hawkish Fed Raises Rates
Birch Gold Group

In March we warned of continued Fed rate hikes. In May, we reported on more rate hikes and their potential impacton stocks. In August, the QT “time bomb” started ticking…

On Wednesday, the Fed raised rates for the eighth time since tightening started. But the KBE Bank ETF — which holds Bank of America and Citigroup among others — failed to rally.

This could be a sign of an alarming trend beginning to unfold. Read More

09.28.18- Fed QT is Bull's Death Knell
Adam Hamilton

The Federal Reserve's unprecedented quantitative-tightening campaign is finally ramping to its full-steam speed in Q4. That will destroy $50b per month of quantitative-easing money created out of thin air! QT will need to maintain this terminal pace for over two years to meaningfully unwind the Fed's grotesquely-bloated balance sheet. This record tightening poses a dire threat to today's QE-inflated overvalued stock markets.

This week traders are focused on the Fed's 8th rate hike of this cycle, which was universally expected. Ever since the FOMC's previous meeting in early August, federal-funds futures have implied odds of another hike way up at 91% to 100% at this latest meeting. But the Fed's ongoing hiking pales in comparison with what it's doing with its balance sheet. One year after its birth, quantitative tightening is hitting full speed. Read More

09.27.18- Member of Economic Elite Comes Clean
Jim Rickards

Many of those who warn of near-term economic collapses or market panics are consigned to the fringes of economic analysis.

The mainstream analysts at university faculties or Wall Street banks are almost unanimous in saying, “All is well.” Most predict years of strong growth ahead, higher stock prices and higher interest rates.

Of course, these are the same people who told you Brexit would never happen and Hillary would be president and who never saw the 2008 panic coming when it was staring them in the face. Read More

09.26.18- The Fed's In A Box And People Are Starting To Notice
John Rubino

It’s long been an article of faith in the sound money community that the Fed, by bailing out every dysfunctional financial entity in sight, would eventually be forced to choose between the deflationary collapse of a mountain of bad debt and the inflationary chaos of a plunging currency.

That generation-defining crossroad is finally in sight.

On one hand, a tight labor market is pushing inflation to levels that normally call for higher interest rates: Read More

09.25.18- With a New Crash Looming, it is Time to Learn the Lesson of 2008
Harley Schlanger

A decade after the meltdown of the Trans-Atlantic financial/monetary system in September 2008, there are calls circulating for an urgent return to Glass Steagall banking regulation.  The original Glass Steagall bill was passed in 1933 to deal with the banking collapse of the Great Depression, as an essential part of Franklin D. Roosevelt's New Deal.  Its leading features were the establishment of a wall of separation between commercial and investment banks, and an insurance program to protect depositors.  Its repeal in 1999, by the Gramm-Leach-Bliley Act, with support from leaders of both U.S. political parties, opened the door for an orgy of speculative swindles,  allowing commercial banks to buy and sell "instruments of financial innovation", such as "derivatives" and "swaps", which are in reality worthless pieces of paper with no underlying value.  The blowout of the Mortgage-Backed Security bubble, which had been pumped up by speculative lending from deregulated financial institutions was the trigger for the Crash in 2008.  Read More

09.24.18- Central Bank Gold Purchases Now Control 10% Of The Total Market
Steve St Angelo

Central Banks have become big players in the gold market and now control 10% of the total market demand.  Now, this wasn’t always the case.  Just ten years ago, the Central Banks were main suppliers via their policy of dumping gold into the market.  However, the Central Bank strategy to sell gold into the market to depress the price, had quite the opposite effect.

For example, Central Banks dumped over 2,600 metric tons of gold into the market between 2003 and 2007, according to data from the World Gold Council.  So, what kind of impact on price did the sale of 84 million oz of Central Bank gold have on the market during that period?  The price of gold doubled from $363 in 2003 to $695 in 2007. Read More

09.22.18- The 10-Year “Illusion” that May Signal a Repeat of the 2008 Financial Crisis
Birch Gold Group

It’s been 10 years since Washington Mutual, Lehman Brothers, and other financial institutions went bust. When that happened, thousands lost their jobs.

The real estate market dried up, and the mortgage industry’s exotic loan products put subprime buyers out on the streets.

In September 2008 the stock market crashed at an unprecedented rate, costing many investors and retirees their livelihoods. Read More

09.21.18- Hyperinflation Has Destroyed Venezuela
Alex Deluce

Has coffee become an unattainable luxury? It is if you live in Venezuela’s capital of Caracas. In July, the price of a cup of coffee was 2 million bolivars. In a country where the minimum wage has been raised to 3 million bolivars, coffee has become as unaffordable as food, housing, clothing, and medicine.

Venezuela is in crisis mode. Ninety percent of citizens live in poverty conditions. Most of them have lost up to 25 pounds due to lack of food. Call it the Maduro Quick Weight-Loss Plan. President Maduro, who has blamed everything but his own socialist policies for the economic disaster, points out that he has raised the minimum wage to 3 million bolivars. For Venezuelans, this is utterly meaningless when prices are doubling every 18 days. Read More

09.20.18- Heroes & Whores
Jim Qunn

“Certainly one of the most important things I learned is that numbers can be deceiving. There is a logic to mathematics, but there is also the underlying human element that must be considered. Numbers can’t lie, but the people who create those numbers can and do. As so many people have learned, forgetting to include human nature in an equation can be devastating.” ― Harry Markopolos, No One Would Listen

The quote I used from Harry Markopolos’ No One Would Listen book about the Bernie Madoff ponzi scheme in my last article triggered a bittersweet recollection. For me, the experience captured the true nature of our warped financial markets, a culture  glorifying wealthy arrogant criminal assholes, while ignoring or ridiculing honest, hard working, highly intelligent truth tellers. Read More

09.19.18- And Now, for Something Entirely Different: "I Don't Have An Attorney General": Trump Blasts Sessions, Says FBI Is A "Cancer In Our Country"
Tyler Durden

Ever since Attorney General Jeff Sessions decided to recuse himself from overseeing the DOJ's probe into alleged collusion between the Trump campaign and Russia back in the Spring of 2017 - a decision that set the stage for the appointment of Special Counsel Robert Mueller - President Trump has subjected his AG to an unceasing wave of public abuse and belittling comments, all the while suggesting that Sessions might soon be cut loose thanks to his disloyalty to his boss. Read More

09.18.18- The Committee to Destroy The World:
The Federal Reserve
Virginia Fidler

The general belief among average citizens is that the purpose of central banks is to help the economy by fighting inflation and mitigating financial crisis. It’s a fairy tale that politicians like to encourage. If there were any truth to it, however, where was the Federal Reserve during the crisis of 2007? Rather than helping, it was widening the crisis with its easy money policies.

While central banks are not a government entity, their primary purpose is to create money for the benefit of the government. By mindlessly printing fiat currency, central banks create a shaky illusion of financial stability. In reality, each central bank is a monopoly that controls the production of distribution of currency and interest rates.  Read More

09.17.18- By the Time the Fed Hits the Neutral Rate of Interest, the Markets Will Be Crashing
Graham Summers

The Powell Fed has set one goal and one goal only for its policy…

Hitting the “neutral rate of interest.”

The neutral rate of interest is when the Fed has rates equalto the pace of inflation. While this is technicallywhat the Fed is SUPPOSEDto be doing, NO Fed (or any other Central Bank for that matter) has done it in over 30 years: the Greenspan, Bernanke, and Yellen Feds were all notorious for running “accommodative” policy in which rates were kept well BELOW the rate of inflation.  Read More

09.15.18- The Fed's Plan for "Countercyclical Capital Buffers" Is Just More of the Same
Christopher Westley

If you follow financial news related to Fed policy, you would have noticed arecent push for the use of “a new monetary tool,” called countercyclical capital buffers. Some prominent Fed officials and Fed watchers — the monetary version of all the king’s horses and all the king’s men — have decided the time is now to start raising such requirements, notwithstanding resistance to their implementation.

A countercyclical capital buffer, often abbreviated CCyB, is a capital requirement enforced on the US’s largest banks to promote bank stability when the inevitable recession hits. Restated in FedSpeak, CCyB Read More

09.14.18- How the Trade War Helps Hide Central Bank Sabotage Of The Economy
Brandon Smith

Almost every aspect of the global economic downturn, which started ostensibly in 2007-08 and is still ongoing to this day, can be traced back to the actions and policies of central banks. The Federal Reserve, for example, used artificially low interest rates and easy money to create a supposedly no-risk loan environment. This translated into a vast amount of toxic mortgage debt along with a web of derivatives (Mortgage Backed Securities) attached to that debt. Read More

09.13.18- Blame the Fed — Not Investors — For Asset Bubbles
Frank Shostak

In his speech on April 7 2010 at the Economic Club of New York the President of the New York Fed, William Dudley argued that asset bubbles pose a serious threat to real economic activity.

The New York Fed chief is of the view that the US central bank should develop effective tools to counter this menace.

According to Dudley, it should be the role of the Fed to stop the expansion of the bubble while it is still in the making. Read More

09.12.18- The End Of Cheap Debt: The Fall & Rise Of Interest Rates
Adam Taggart

Perhaps the greatest single trend impacting the next decade

Total debt (public + private) in America is currently at a staggering $67 trillion.

That number has been rising fast over the past 47 years, following the US dollar's transformation into a fully-fiat currency in August of 1971.

Perhaps this wouldn't be such a big concern were America's income, measured by GDP, growing at a similar rate. But it's not. Read More

09.11.18- Bubble Watch: The Fed Has Burst the Everything Bubble
Graham Summers

The Fed has burst the Everything Bubble.

No one has noticed it. Indeed, everyone in the US seems to be blissfully unaware. But the reality is that the massive bubble created between 2008 and 2018 is in the process of bursting.

And the Fed was the needle.

If you think I’m being dramatic, consider what has happened around the world in the last nine months. Read More

09.10.18- Congressmen Introduce Bill to End Taxation of Gold and Silver
Stefan Gleason

The battle to end taxation of Constitutional money has reached the Federal level with this newly introduced sound money legislation. Here are the details…

Washington, DC (September 7, 2018) – The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) pictured right, today introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion. Read More

09.07.18- Fed Said to Be More Unprepared For Crisis Than 10 Years Ago
Tyler Durden

A group of current and former policymakers and academics in the financial industry that comprise the "Group of 30" - a financial industry working group that includes names like Mario Draghi and Mark Carney and which is the "who's who" of economists and experts that led the world into the last financial crisis - has come to the same conclusion that the many in the "fringes of economic thought" have been warning about for the last decade: the Fed is going to be in worse off shape to fight the next major crisis than they were in 2008.

“Some of the tools to fight the hopefully rare but extreme crises in the future have been weakened,” Tim Geithner, a distinguished Group of 30 member, told Bloomberg. Read More

08.06.18- The Shocking History of Market Shocks
Jeffrey Bennett

It is Labor Day weekend.

The nation pauses to acknowledge its sweating and groaning classes — those who hew its wood… and draw its water.

Or at least it pretends to.

Today is also Sept. 1.

On this day in 1939, the lights went out across Europe as the German Wehrmacht rolled on Poland.

Nearly six years, it would be, before they came on again. Read More

09.05.18- The Fed Will Not Give up “Dark Money”
Nomi Prins

When it comes to second quarter U.S. economic growth figures, interpretation is everything.

On one hand, the projection of 4.1% second quarter growth is a sign of a surging economy set to grow for years to come.

But on the other hand, it is seen as temporary sugar rush created by tax cuts and debt. It’s unsustainable in the light of higher tariffs, an escalating trade war that could impact large portions of the economy, and rising federal deficits that put America even deeper in debt. Read More

09.04.18- Mike Maloney: REVEALED —
The Dangerous F.O.G
Alexander Trigaux

The current US economy is like 100 cars flying down a fog-shrouded highway at 80MPH with two feet of visibility. Everyone is all-in, bullish as can be, and simply hoping against hope that nobody in front of them hits the brakes.

The Federal Reserve is the communal foot on the gas. Their massive QE campaigns have injected titanic liquidity into risk assets and kept the stock market free-floating into bubbled-out valuation territory for years on end.

And by pursuing a zero (or nearly zero)-interest-rate policy for the better part of a decade, corporations and consumers alike were heavily incentivized to leverage themselves to the extreme. Read More

08.03.18- How Trump Turns on The Fed
Bill Bonner

POITOU, FRANCE – The U.S. economy… all $20 trillion of it… explained in a single tweet (any similarity between this and one you might get from the president of the United States of America is pure coincidence):

Just look at the Dow (near an all-time high)… and unemployment (near an all-time low)…

The tax cuts ARE WORKING! The trade war, too! And those who say otherwise are just jealous SOBs! Read More

09.01.18- Inflation Is A Policy Decision
Gary Christenson