05.23.13- Will It Be Inflation Or Deflation? The Answer May Surprise You
Michael Snyder

Is the coming financial collapse going to be inflationary or deflationary?  Are we headed for rampant inflation or crippling deflation?  This is a subject that is hotly debated by economists all over the country.  Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation.  Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts.

So what is the truth?  Well, for the reasons listed below, I believe that we will see both.  The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis.  Read More

05.22.13- Is America's Economy Being Sovietized?
Brandon Smith

The foundation of the Soviet model of trade and investment was centralization under the guise of "universal public ownership". The entire goal of communism in general was not to give more social and political power to the people, but to extinguish alternative options and focus power into the hands of a select few. The process used to reach this end result can vary, but the goal always remains the same. In most cases, such centralization begins with economic hegemony, and it is in our fiscal structure that we have the means to see the future. Sovietization in our financial life will inevitably lead to sovietization in our political life.

Does the U.S. economy's path resemble the Soviet template exactly? No. And I'm sure the very suggestion will make the average unaware free market evangelical froth at the mouth. However, as I plan to show, the parallels in our fundamentals are disturbing; the reality is that true free markets in America died a long time ago. Read More

05.21.13- Something Is In The Wind!
Robert M. Williams

Imagination was given to man to compensate him for what he is not, and a sense of humor was provided to console him for what he is.- Oscar Wilde

This week the IMF released a study evaluating QE and it comes at a time when the Federal Reserve is considering whether and how to exit. Without a doubt it will add to the debate around the still-controversial practice. The IMF found the bond-buying efforts of the Fed, the Bank of England, the European Central Bank and the Bank of Japan were able to restore the functioning of financial markets and provide accommodation with interest rates at near zero levels. The IMF also found that asset prices benefited globally, though capital flows increased to emerging markets. “While additional unconventional measures may be appropriate in some circumstances, there may be diminishing returns, and benefits will need to be balanced against potential costs,” the IMF study said. Read More

05.20.13- Washington Signals Dollar Deep Concerns
Paul Craig Roberts

Over the past month there has been a statistically improbable concurrence of events that can only be explained as a conspiracy to protect the dollar from the Federal Reserve's policy of Quantitative Easing (QE).

Quantitative Easing is the term given to the Federal Reserve's policy of printing 1,000 billion new dollars annually in order to finance the US budget deficit by purchasing US Treasury bonds and to keep the prices high of debt-related derivatives on the "banks too big to fail" (BTBF) balance sheets by purchasing mortgage-backed derivatives. Without QE, interest rates would be much higher, and values on the banks' balance sheets would be much lower. Read More

05.18.13- The Collapse Of Fiat Money by a Falling Energy Supply
Silver Doctors

Each passing day, the world gets closer to a total collapse of the global fiat monetary system. After the United States unilaterally terminated the convertibility of the U.S. Dollar to gold in 1971, the world has been settling trade on borrowed time. It was full faith in the dollar and U.S. Treasury market that allowed global trade to continue for 4 decades.

However, faith in the dollar is waning as debts, derivatives and dishonesty plague the financial system. Most analysts (including many in the precious metal camp) are wasting time debating over the mere symptoms and not the disease itself.

We must remember, debts are nothing more than "Energy IOU's." To pay back a debt, energy has to be burned so the market can generate goods and services. Thus, this allows for growth to continue which provides a surplus of wealth enabling the repayment of debts. Read More

05.17.13- Check this out– IRS scandal is just the tip of the iceberg…
Simon Black

Some days one can’t help but look at the headlines and think of Ayn Rand.

With all the destructive measures by desperate governments from Cyprus to Argentina, it seems sometimes like we’re reading from the pages of her seminal work, Atlas Shrugged.

But what we’re seeing now seems to have far surpassed Atlas Shrugged. We’re definitely into 1984 territory.

We’ve recently learned that the US federal government has (a) secretly tapped the Associated Press’s phone records, and (b) used the nation’s tax authorities to target opposition political groups. Read More

05.16.13- The Federal Reserve Will Panic and Climb Even Higher
Bill Bonner

Whoa! Investors are acting like it's 2007 all over again.

NEW YORK — Emboldened by soaring stock prices and record-low borrowing costs, stock investors are taking out loans against their portfolios at the fastest pace since before the Great Recession hit.

So-called margin debt hit $379.5 billion in March, the highest level since July 2007 when such debt hit an all-time record of $381.4 billion, according to the most recent data available compiled by the New York Stock Exchange.

The trend signals that investors are more comfortable with stocks and are more willing to use borrowed money to buy more securities in hopes of garnering fatter returns in a hot market that has pushed the Dow Jones industrials up more than 15% in 2013.Read More

05.15.13- The Bernanke Agenda - It Isn't What You Think It Is
Joseph Stuber

Chairman Bernanke, the engineer of the most manipulated and contrived market rally in history has informed us he won't be making an appearance at the Jackson Hole Economic Symposium this year. The reason - a scheduling conflict.

Could there be something significant here? He didn't tell us what he sees as more important than one of the biggest events of the year for a central banker. In my opinion it must be a pretty big deal. Here's what I think - by August the market will have imploded once again and world economic leaders will be "circling the wagons" to offer up an epic solution to our global economic dilemma. Read More

05.14.13- QE3 – Pay Attention If You Are in the Real Estate Market
Catherine Austin Fitts

I used to have a deputy who said that the FHA mortgage insurance funds were where mortgages went to die. That was, however, before the creation of MERS, derivatives and the explosion of mortgage fraud during the 1990's which in combination with the “strong dollar policy” engineered what I have referred to as a financial coup d’etat.

The challenge for Ben Bernanke and the Fed governors since the 2008 bailouts has been how to deal with the backlog of fraud – not just fraudulent mortgages and fraudulent mortgage securities but the derivatives piled on top and the politics of who owns them, such as sovereign nations with nuclear arsenals, and how they feel about taking massive losses on AAA paper purchased in good faith. Read More

05.13.13- Steve Forbes: Fed Sinking Real Economy; Calls QE's "Titanics"
Financial Sense

In this recent hard-hitting interview with Financial Sense Newshour, successful entrepreneur and twice presidential candidate Steve Forbes likens Fed Chairman Ben Bernanke to a blind astronomer, says quantitative easings, or "QE's", should be called "Titanics," while also warning listeners of impending wealth taxes now used in France and elsewhere.

First, on the precipitous drop in gold, Forbes explains:

I think what you saw there was anticipation that there'd be a huge rise in inflation because of the major increases in money—money printing done by the Federal Reserve. And so, starting in 2011, when we had one of these QE's, gold reached a peak of almost $1900/ounce. But what the Federal Reserve did is that it indeed did print up the money and then, what I don't think the gold market fully grasped until recently, was that the Fed then sterilized the money. Read More

05.11.13- Insanity Cubed
Jeff Nielson

Obviously this is a colloquial “definition” of insanity. However, at the very least it is an unequivocal demonstration of abject stupidity. Choosing to repeat failure is utterly indefensible behavior.

What do we see with our politicians, bankers, economists, and media talking-heads? Bludgeon your way through all of the obfuscation; and we see that most of our economic problems are derived directly from two, failed policies: excessive money-printing and excessive debt.

Yet what are the only two “solutions” for these problems being proposed by Western governments (and their apologists in the Corporate Media) today? Even more-extreme money-printing, and even more-extreme debt-creation. Putting out the fire with gasoline. Insanity.  Read More

05.10.13- The Fed and the War on You and Private Property
Szandor Blestman

The word "war" has changed over the decades. It used to mean the militaries of different nation states battling each other for dominance over certain territorial claims and the peoples living in those territories. Nowadays, because of the complete bastardization of the English language, it has come to mean a battle against anything the state wants to control but can't. It's come to mean the attempt of an elite ruling class to gain control of all the wealth, property and power in the world versus rising middle and lower classes who wish only a small portion so that they can live their lives and raise their children in relative comfort. It is a war of those who would be lords of all versus those they wish to make into serfs.  Read More

05.09.13- 11 Reasons Why The Federal Reserve Should Be Abolished
Michael Snyder

If the American people truly understood how the Federal Reserve system works and what it has done to us, they would be screaming for it to be abolished immediately.  It is a system that was designed by international bankers for the benefit of international bankers, and it is systematically impoverishing the American people.  The Federal Reserve system is the primary reason why our currency has declined in value by well over 95 percent and our national debt has gotten more than 5000 times larger over the past 100 years. Why do we need a bunch of unelected private bankers to manage our economy and print our money for us in the first place?  Wouldn't our economy function much more efficiently if we allowed the free market to set interest rates?  And according to the U.S. Constitution, Congress is the one that is supposed to have the authority to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".  Read More

05.08.13- The Greatest Lie the Fed Ever Told
Bill Bonner

Public life bumbles along under a combination of false pretenses and self-imposed delusions.

At the start of last week, it was widely reported that US central bankers had gone as far as they were willing to go. There were voices in the Fed, said the news, urging caution. There would be no further monetary stimulus measures, said the commentators.

Investors grew cautious.

But by the end of the week, they were rolling the dice again. The Fed was working hard to fight the impression that it had either lost its nerve or recovered its senses. From The New York Times: Read More

05.07.13- Correcting Gresham's Law
Jeff Nielson

In many instances, simple principles give expression to important, elementary Truths. In less formal contexts; we often term such thinking "common sense."

Conversely, merely because a principle (or so-called "Law") expresses a simple thought does not mean it automatically conveys some "important/elementary truth." Instead, sometimes "simple" is merely simplistic. Closer examination reveals that the principle lacks validity, generally due to a combination of faulty conceptual understanding and the use of misleading semantics.

This is precisely what one finds on any rigorous analytical scrutiny of the economic/monetary myth known as Gresham's Law. First however, for those readers not familiar with this dogma: definition of terms. "Gresham's Law" expresses the seemingly obvious idea that in any economy "good money will drive out bad money." Read More

05.06.13- The US Federal Reserve: What a Humiliating Failure!
Bill Bonner

Our central banks are engaged in a breathtaking programme of activism. We don't know where it will lead. But, from the historical record, activism and central banking go no better together than drinking and driving. Keep it up long enough and you're bound to have an accident.

But the accident hasn't happened yet. So most people have stopped worrying about it. They smell the liquor on the driver's breath. But they get on the bus anyway.

Why not? At least the Federal Reserve is trying…even if they see little actual good coming from it. The New York Times reports:

The Federal Reserve is making modest progress in its push to reduce the unemployment rate. But that is not the jobs goal Congress actually established for the Fed. The central bank is supposed to be maximizing employment. And on that front, it is not making progress. Read More

05.04.13- Bye-Bye, Bernanke… Hello Timmy?
Dan Steinhart

Here's a challenge for you. First, blow up a balloon. Okay, now find a way to remove half the air without letting the balloon shrink at all.

Can you do it? If so, you should apply to be the next Fed chairman – because that's exactly what he or she will need to figure out how to do for the economy.

You know the story by now: in response to the US economic crisis of 2008, Federal Reserve Chairman Ben Bernanke inundated the US financial system with trillions of dollars, an unprecedented gambit designed to reflate a rapidly deflating economy. And you have to hand it to him: phase one of his plan worked well. Stocks are at all-time highs, housing has recovered, and virtually all asset prices are inflated. Read More

05.03.12- How the Fed Creates Bull and Bear Markets
Clif Droke

Bull and bear markets don't just happen – they're created by the Federal Reserve. While few investors dispute the power that Fed interest rate policy has on the market, the extent to which it influences the direction of stock prices in both directions is often downplayed. Moreover, the health of the economy is often decided by the Fed's interest rate policy.

While it's no secret that loose monetary policy on the Fed's part benefits stocks and can lead to credit bubbles, researchers tend to underestimate the effect tight money policy has in creating market crashes and economic recessions. Restrictive money policy on the Fed's part has frequently led to falling stock prices. The extent and duration of the monetary tightness is what determines the severity of the bear market. The longer the Fed restricts money, the more severe the downturn will be. Read More

05.02.13- What is Your Inflation Rate?
Gary Christenson

(Editor's Note: As I am compelled to point out, every time I get the chance, inflation is not a natural occurence. I is a contrivance and a method of theft and is perpetrated, intentionally, by the Federal Reserve (and all other Central Banks that issue fiat currencies). - JSB)

We all know that our cost of living in increasing, but how much?

  • The official government statistics assure us that inflation is running around 2% per year. It reminds me of the line attributed to Groucho Marx, “Who are you going to believe, me or your own eyes?”
  • But, your cost of living increase – your personal inflation rate – may be much larger or smaller than that of the person next door. Your spending choices matter a great deal in determining your personal inflation rate.
  • I think we can all agree that some items are increasing much faster than others. A few that come to mind are college tuition, medical care, hospital costs, and health insurance. Several that increase more slowly are postage and milk. If you spend more on medical care and health insurance than on postage, your cost of living increase will be much larger than the person who buys more stamps than health care.Read More

05.01.13- Dollar Collapse Has Begun
Toby Connor

I've been pointing out for several months now that the recent rally in the dollar was a mirage, an illusion generated by the yen, euro, pound, and Canadian dollar all dropping into yearly, or intermediate cycle lows together. This selling pressure in the four major currencies that make up the dollar index spawned what looked like a strong dollar.

With Bernanke printing 85 billion of them a month, there is no such thing as a "strong dollar". I've been saying for months that once these four currencies completed their bottoming cluster it would be the dollar's turn to crash. The recent collapse in the yen was 23%. The Pound 9%. I think the dollar will be somewhere in between with a loss of 9-12% as it drops down into its yearly cycle low.

As this process starts to accelerate over the next couple of months the dollar bulls are going to get a rude awakening, as our currency shows its true colors. The acceleration began today as the dollar has now completed a lower low and a lower high.
Read More

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