Jerome Powell is going to create the mother of all bubbles…
Jerome Powell is going to create the mother of all bubbles.
The first sign of this came in 2018 when Powell used his first Jackson Hole symposium to glorify former Fed Chair Alan Greenspan’s economic insights and “considerable fortitude” in not raising interest rates back in the late ‘90s. Read More
10.21.20- Will the Stock Market Be Dragged to the Guillotine?
The Fed’s rigged-casino stock market will be dragged to the guillotine by one route or another.
The belief that the Federal Reserve and its rigged-casino stock market are permanent and forever is touchingly naive. Never mind the existential crises just ahead; the financial “industry” (heh) projects unending returns of 7% per year, or is it 14% per year? Never mind the details, the Fed has our back and since the Fed is forever, so too will be the gains for everyone playing the rigged games in the Fed’s casino. Read More
The main central banks have been discussing the idea of implementing a digital currency. The rationale behind it escapes many citizens. Most transactions in the main global currencies are conducted digitally and one could say that the largest and most traded currencies, the US Dollar, Euro, Yen, British Pound, Swiss Franc, and the Yuan are already functioning as mostly digital money. So, what are central banks saying when they talk about a new and different digital currency? It is basically another step in the effort to gradually get rid of physical currencies, with an idea of strengthening control of the payments and make it simpler to trace the use of a particular means of payment. It is also aimed at competing with global cryptocurrencies. Read More
We have it on highest authority — the Federal Reserve itself — that it may never permit free markets again.
Federal Reserve Vice Chair for Supervision Randal Quarles:
The Treasury market is now so large that the U.S. central bank may have to continue to be involved to keep it functioning properly.
Next we come to the president of the Federal Reserve’s San Francisco outpost — Mary Daly by name: Read More
Now that nothing short of a miracle is needed to pass a new fiscal stimulus deal before the election - with Democrats and Republicans unable to reach a compromise deal even as Trump appears to have broken away from Senate Democrats and is siding with Nancy Pelosi in demanding a "big number" - attention is turning to life after the election, where bulls point to a Blue Sweep as unleashing as much as $7 trillion in fiscal spending over the next few years, an amount which Goldman believes will be more than enough to offset the adverse impact on stocks from higher corporate and capital gains taxes. Read More
Now that nothing short of a miracle is needed to pass a new fiscal stimulus deal before the election - with Democrats and Republicans unable to reach a compromise deal even as Trump appears to have broken away from Senate Democrats and is siding with Nancy Pelosi in demanding a "big number" - attention is turning to life after the election, where bulls point to a Blue Sweep as unleashing as much as $7 trillion in fiscal spending over the next few years, an amount which Goldman believes will be more than enough to offset the adverse impact on stocks from higher corporate and capital gains taxes. Read More
10.16.20- Hyperinflation is here
Definition: Hyperinflation is the condition whereby monetary authorities accelerate the expansion of the quantity of money to the point where it proves impossible for them to regain control.
It ends when the state’s fiat currency is finally worthless. It is an evolving crisis, not just a climactic event.
This article defines hyperinflation in simple terms, making it clear that most, if not all governments have already committed their unbacked currencies to destruction by hyperinflation. The evidence is now becoming plain to see. Read More
If there's anyone who should be talking about economic inequality it's Jerome Powell, a man who as Fed chair has aimed a spotlight on the issue and put the Fed on an intentional trajectory toward reducing it through policy.
Yes, but: Pressed for answers on how the central bank's policies have impacted wealth and income inequality among Americans during last week's virtual meeting with the National Association for Business Economics, Powell dodged and downplayed. Read More
10.14.20- Can the Fed End Racism?
House Financial Services Chair Maxine Waters and Senator Elizabeth Warren have introduced the Federal Reserve Racial and Economic Equity Act. This legislation directs the Federal Reserve to eliminate racial disparities in income, employment, wealth, and access to credit.
Eliminating racial disparities in access to credit is code for forcing banks and other financial institutions to approve loans based on the applicants’ race, instead of based on their income and credit history. Overlooking poor credit history or income below what would normally be required to qualify for a loan results in individuals ending up with ruinous debt. These individuals will end up losing their homes, cars, or businesses because banks disregarded sound lending practices in an effort to show they are meeting race-based requirements. Read More
10.13.20- My Wife Finally Loses It
I could see where this was going, which was my wife grinding me into the ground, picking at me because of my many faults, real or imagined, usually about the damn kids. Usually some jibber-jabber along the lines of her sweetly saying “You know, dear, that the kids and I would love it if you _____ (insert one): paid attention to them, asked them how their stupid day went, stopped being such a jerk, remembered their stupid names, or all of the above.”Read More
The Federal Reserve is warning investors in no uncertain terms that higher rates of inflation are coming. Yet markets, for the most part, have disregarded that warning.
Bond yields, for example, remain well below 2% across the entire duration range. Stock market valuations continue to reflect a sanguine outlook for inflation. And crude oil futures suggest limited upside pressure on prices. Read More
Whether Trump or Biden is elected in November, they will have to decide whether or not to appoint Federal Reserve Chair Jerome Powell to another term.
And if he is appointed again, the way he continues to handle the continuing ripple effects of the COVID-19 "shutdown" economy will be critical.
10.09.20- Me? Really???
Okay guys, you’ll all need a stiff drink for this one. I am going to talk about crypto-currency, and as you know I’ve avoided the stuff like the proverbial plague.
First off let me start with something that will seem to fly in the face of what I’m going to say later. I don’t believe in this stuff. I truly believe that bitcoin was designed by the military and the global banking system. A “trial balloon” if you will. A way to introduce digital currency to the world, see how they adapt to it, see what bugs it might have, etc. Read More
10.08.20- The Federal Reverse Is Gaslighting America
Man is the Reasoning Animal. Such is the claim. I think it is open to dispute. – Mark Twain
Around 350 BC, Aristotle was the first person to formally study logic and reason. Aristotle did not invent logic and reason any more than Isaac Newton invented gravity. He merely discovered and defined the rules already in place as a necessary condition for human beings to carry on meaningful discourse. He identified the principles of reasoning already built into our humanity.
Logic measures the relationship between ideas, premises, and propositions. It allows for two or more ideas to be compared to see if they are consistent and coherent or contradictory. Read More
10.06.20- And Now, for Something Entirely Different: An International Group of Lawyers Have Brought a Lawsuit That the Covid Pandemic is an Orchestrated Hoax in Behalf of Pharmaceutical Profits and Police State Control
This will be taken down. Watch the video and save it before it is disappeared.
An International Group of Lawyers Have Brought a Lawsuit that the Covid Pandemic Is an Orchestrated Hoax in Behalf of Pharmaceutical Profits and Police State Control. Read More
10.03.20- The Fed and the Housing Bubble/Bust
[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in late 2020.]
In chapter 8 we presented Ludwig von Mises’s circulation credit theory of the trade cycle, or what is nowadays referred to as Austrian business cycle theory. In the present chapter, we will apply the general theory to the specific case of the US housing bubble and bust, which began sometime in the early 2000s and culminated in the financial crisis in the fall of 2008. Read More
In Part 1 of this article I detailed the purposeful systematic destruction of global economies, with a bad flu as the catalyst, as part of a plan by the Davos elite to reconstruct the world in a manner most beneficial to these evil men and detrimental to you and me. The fight remains to be fought. Orwell’s worst fears are coming to fruition. Read More
The Federal Reserve isn’t going to lift interest rates anytime soon. That’s what it says, and that’s what outside observers say, given the central bank’s new commitment to what is called average inflation targeting, as well as its stated desire to minimize income inequality.
But in a new piece on financial markets from private-equity giant KKR, strategists led by Henry McVey, head of global macro and asset allocation, say the central bank hasn’t committed to keep financial markets bubbling up. Read More
09.30.20- The Fed's Bazooka Is Broken –
One of the Fed’s congressionally charted objectives is to promote stable prices for the goods and services we all purchase. Investors have been lulled to sleep for over 20 years by “price stability.” As a result, few investors have an appreciation for how inflation can impact their investments.
Despite stable price increases for the last two decades, the Fed now wants more inflation.
Given the negative impact inflation has on our wealth, why does the Fed wish to boost inflation? Maybe more important, how can they generate inflation? Read More
Up until recently I had never given much thought to the subject of economics. I never took an economics class in school and my understanding of the subject could be best explained by, “Don’t spend more than you earn.” However, the more I’ve learned about our system of government, and the men who created it, the more I’ve realized that I’ll never understand the extent of what they did unless I gain some insight into money; how it is created, how it is controlled, and how people profit from its exchange. Read More
“The great masses of men, though theoretically free, are seen to submit supinely to oppression and exploitation of a hundred abhorrent sorts. Have they no means of resistance? Obviously they have. The worst tyrant, even under democratic plutocracy, has but one throat to slit. The moment the majority decided to overthrow him he would be overthrown. But the majority lacks the resolution; it cannot imagine taking the risks.”
~ H. L. Mencken (1926). “Notes on Democracy,” Read More
09.26.20- "An Extremely Dangerous Game" - Central Bankers 'Extend & Pretend' Has Increased Risk Of "Catastrophic Collapse"
We also know that the Fed just committed to let inflation run hot, which is likely to take a big bite out of retirement savings in the form of higher costs for consumers.
09.24.20- The Fed Can Generate Higher Inflation
The Fed can generate inflation. Perhaps that seems obvious. After all, the Fed can create money at essentially zero marginal cost. But the point has been disputed. Several decades ago, a generation of Keynesians held firm to the belief that inflation was not a problem if the economy was not at full employment. In a world where inflation expectations lag behind actual inflation, expansionary monetary policy boosts aggregate demand, increasing the level of real output (productivity). Only when the economy is at full employment does an increase in the level of total expenditures translate entirely to an increase in the price level associated with inflation. Read More
09.23.20- Digital Money Is Coming to America
SAN MARTIN, ARGENTINA – For half a century, America’s greatest export has been the dollar. So much so that there are now more physical dollars outside the U.S. than in it.
Overseas, people use dollars as an alternative to their own money. Foreigners are more familiar with Ben Franklin than Americans. In many places, people cling to U.S. dollars like a drowning man to driftwood. Read More
To me slavery is the loss of freedom; when my life; my property; and my rights can be taken from me without my consent based upon the whim and caprice of others. If there is nothing that I can call my own, then I am, in fact, a slave.
Your government can, and does, tax you to its heart’s content. It may allow you to keep a portion of your earnings, but if it raised the income tax rate to 90%, 100%, what could you do to stop them from taking every penny you earned. Government can seize your property through liens and eminent domain. Read More
When the Federal Reserve announced in July its intent to let inflation "run hot," there was fear that prices would rise rapidly.
According to Chair Jerome Powell, it hasn't happened yet — or at least not to the degree that he would like. Here's how a CNBC article summarizes the Fed's latest policy stance, which demonstrates the central bank's belief that inflation has not yet increased: Read More
The Fed is recklessly driving us towards an unavoidable reckoning
When asked what the biggest risks facing the economy are, David Stockman, lifelong Capital Hill and Wall Street insider, says “That’s easy. There are three: The Fed, The Fed and the Fed.”
After decades of misguided policy and chronically missing its targets, Stockman thinks the Federal Reserve is truly barreling off the rails now, hurtling our market economy towards disaster. Read More
09.18.20- This Is Why Inflation
This is why inflation will rip everyone’s faces off: production will continue to stagnate no matter how many trillions the Federal Reserve prints and throws around.
This is how market capitalism is supposed to work: consumers decide (for whatever reason) to buy more toilet paper. This increase in demand strips the shelves of TP and pushes the price up as demand exceeds supply. Read More
The bulk of it denounced us viciously. We are with the devil, readers insisted.
For we are dispensing falsehoods — and possibly condemning the witless dupes who heed our evil counsel to early, needless graves.
And if not condemning our witless dupes to early, needless graves… possibly condemning their elder and compromised relations to early, needless graves. Read More
Looking at today's FOMC decision at 2pm, and Powell press conference 30 minutes later, both of which will be the Fed's last public comments before the Nov 3 election (the next FOMC 2-day meeting takes place on Nov 4-5, right after the election) consensus is for a steady policy outcome after the Fed firmly took Yield Curve Control, enhanced forward guidance, and an extension in the QE maturity horizon off the table in its July 28 meeting. As BMO notes, the breadth of expectations run from "little change with an emphasis on the 2023 dots" to "extension of the weighted-average-maturity of QE with firmer forward guidance." That, however, could prove a disappointment to equities given the Fed’s uber-dovish efforts heretofore, although he lays out four considerations. Read More
09.15.20- Money Creation Mechanics
Since the Fed implemented its first Quantitative Easing (QE) program in 2008-2009, many analysts have claimed that QE adds to bank reserves but does not increase the money supply (bank reserves aren’t counted in the money supply). Such claims are patently wrong.
Anyone who bothered to do some basic calculations would see that when the Fed monetises securities, as it does when implementing QE, it adds to the economy-wide supply of money. Specifically, if you add-up the increases in the dollar amounts of demand and savings deposits within the commercial banking system during a period in which the Fed ran a QE program and subtract from this the amount of money loaned into existence during the period by commercial banks, you will find that the difference is equal to the net dollar value of securities purchased by the Fed. Read More
“Your right to swing your arms ends where another person’s nose begins.” While this widely attributed quote sounds ostensibly libertarian in terms of respecting self-ownership, it’s actually quite misleading. One need not abide some lunatic swinging his arms about near one’s face, being forced to tolerate it as long as no physical contact is made. Rather, property owners may establish rules regarding the conduct of those who choose to enter their property, including prohibitions against swinging arms near other people’s faces. Individuals may then decide what rules they are willing to tolerate when they enter another’s property, and competition between property owners enables them to determine what bundle of rules consumers prefer. Read More
09.12.20- Another Weekend Rant: When There are No Consequences for Anything
The Democratic Party with its deep state auxiliaries begins to look like a monstrous hybrid of Matt Taibbi’s fabled Vampire Squid and the skulking Kraken of the maelstrom, devouring the innards of our republic in its deep, dark depths one institution at a time while a storm rages on the surface and citizen’s eyelids flutter in horror, frozen like sleepers in the paralysis of a nightmare, at the rising havoc and ruin. Or, to put it plainly: what the fuck is going on in America? Read More
09.11.20- The Fed Promises More Dollar Destruction
The Federal Reserve has potentially had the most memorable year in its more than a century–long history. What started out as a year of “Will they or won’t they cut interest rates?” blossomed into a time of slashing rates to near zero, unleashing unlimited quantitative easing, purchasing corporate and municipal bonds, and growing its balance sheet to a record high. Now, as the economic consequences from the covid-19 pandemic linger, the Fed has taken advantage of the crisis to modify its policies to be more expansionary—which will inevitably blow bubbles and wreak havoc on households everywhere. Read More
Like Lincoln, Trump faces many threats today both within his own neocon-infested administration as well as within the British run deep state that…
While some onlookers have found themselves cheering on this impending meltdown of the “great American empire”, I think it is wiser to take a more measured approach to the tragedy now unfolding in America and across the entire trans-Atlantic Community. After all, what would we expect to see under conditions of dissolution of the union into civil war and economic collapse? Would economic injustice disappear as the Eurasian multipolar alliance swept the world to restore peace and win-win development on everyone? Read More
Federal Reserve Chairman Jerome Powell recently announced that the Fed is abandoning “inflation targeting” where the Fed aims to maintain a price inflation rate of up to two percent. Instead, the Fed will allow inflation to remain above two percent to balance out periods of lower inflation. Powell’s announcement is not a radical shift in policy. It is an acknowledgment that the Fed is unlikely to reverse course and stop increasing the money supply anytime soon. Read More
09.08.20- Inflation — Running Out Of Road
If you think that price inflation runs at about 1.6% you have fallen for the BLS’s CPI myth. Two independent analysts using different methods — the Chapwood Index and Shadowstats.com — prove that prices are rising at a far faster rate, more like 10% annually and have been doing so since 2010.
This article discusses the consequences of price inflation suppression, particularly in the light of Jerome Powell’s Jackson Hole speech when he downgraded the importance of price inflation in the Fed’s policy objectives in favour of targeting employment. Read More
Do you see what is happening, Dear Reader?
We’re entering a new phase. Up until now, the Federal Reserve was backstopping Wall Street. This created a huge shift in wealth from average people – with few financial assets – to the “rich,” who own most of them.
But it was fake wealth. That is, the U.S. stock market could easily be cut in half. In a flash, about $17.5 trillion of “wealth” would disappear. Read More
Since the pandemic lockdowns were first implemented in the US I have been more concerned with the government and central bank response than the virus itself. As I have noted in past articles, the pandemic restrictions and subsequent economic and social crisis events they help to create will cause far more deaths than Covid-19 ever will. Not only that, but the actions of the Federal Reserve continue to con the American public into believing that there is some kind of “plan” to stop the crash that THEY engineered. Read More
09.04.20- Inflation - DOW 50,000 - Gold $50,000
The buzz word of Central Bank Chiefs at Jackson Hole was INFLATION: “The Fed to tolerate higher inflation” says Powell, “ECB to inject more monetary stimulus to ensure inflation” says ECB Chief Economist, “Bank of England has ample fire power to support UK economy…… and not tighten monetary policy until inflation returns“ says Governor of BoE.
INFLATION IS COMING Read More
09.03.20- The Fed's Stupidity is Still Well Anchored
Fed Vice Chair Richard H. Clarida gave a speech today touting the Fed’s new framework.Alleged Robust Evolution
A Non-Robust and Painfully Slow Evolution
Please consider A Robust Evolution by Richard Clarida.
09.02.20- This Has To Be A Joke,
After thinking about it all day, I’m still not quite sure this isn’t a joke; a high-brow commitment of utterly brilliant performance art, the kind of Four-D masterpiece of hilarious deception that Andy Kaufman would’ve gone nuts over. I mean, it has to be, right?
09.01.20- The Fed and the
The Federal Reserve system made a future financial panic or currency panic impossible. It made stable for the first time in the history of the United States the credit system of the people of the United States. – Senate Documents, 64th Cong., 1st Sess., December 6, 1916
We have been watching the bailout of the financial system by the Federal Reserve with astonishment. Never before has a central bank tried single-handedly to rescue both the financial system and a large proportion of U.S. corporations. We were taken aback then by Fed actions and are now just as worried about what it has given birth to. Read More
08.31.20- The Fed Has Yet Again
This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: The Federal Reserve props up gold once again, another $2 to $3 trillion are expected to be poured into the gold market, and the surprising cheapness of gold and silver.
Gold jumps as Federal Reserve strengthens inflation expectations Read More
In 1976, economist Herbert Stein, father of Ben Stein, the economics professor in Ferris Bueller’s Day Off, observed that U.S. government debt was on an unsustainable trajectory. He, thus, established Stein’s Law:
Stein may have been right in theory. Yet the unsustainable trend of U.S. government debt outlasted his life. Herbert Stein died in 1999, decades before the crackup. Those reading this may not be so lucky. Read More
08.28.20- Space Oddity & Helicopter Money
“Ground control to Major Tom … Your circuit is dead, there’s something wrong. Can you hear me Tom. Can you here me Tom”….Tom: “I am floating around in my tin can and there is nothing I can do.” (David Bowie)
Yes, Ground Control in the form of the major central banks have totally lost control and the world economy is now floating around helplessly without direction. Since the end of 2006, the major CBs (Fed, ECB, BOJ & PBOC) have increased their balance sheets from $5 trillion to $25.5t today. The great majority of the extra $20t created since 2006 has gone to prop up the financial system. Read More
Yesterday we explained why Bank of America, a contrarian voice among Wall Street banks, believes that hopes for an explicit announcement of Average Inflation Targeting by Jerome Powell in his highly-anticipated speech titled "Monetary Policy Framework Review" which wraps up an examination of inflation which started in early 2019 among both among central bank officials andthe public, will be a disappointment.
The first reason that an explicit policy would entail picking a specific time period over which PCE inflation is required to average 2% before beginning a policy normalization (hiking) process. Read More
08.26.20- Central Banks Driving Gold
Gold as an asset class is confusing to most investors. Even sophisticated investors are accustomed to hearing gold ridiculed as a “shiny rock” and hearing serious gold analysts mocked as “gold bugs,” “gold nuts” or worse.
As a gold analyst, I grew used to this a long time ago. But, it’s still disconcerting when one realizes the extent to which gold is simply not taken seriously or is treated as a mere commodity no different than soybeans or wheat. Read More
The biggest news for the markets right now concerns the Fed and inflation.
For the last 20 years, the Fed has argued that it is targeting an inflation rate of 2%.
Everyone knows that the real rate of inflation is well above this level. But the Fed is the Fed. And as the primary director of the financial system, the Fed’s target rate of inflation is used as a baseline for all major portfolio managers.
Which is why the following story is of MAJOR import: Read More
08.24.20- Fed Can Control Yield Curve.
In a response to the coronavirus crisis, the Fed has already cut interest rates to zero and implemented quantitative easing. But that’s not enough and the U.S. central bankers are now talking about “yield curve control”. What is it and how it could affect the gold market? Read More
We are living in strange times…
Conflict with China is by far one of the single biggest threats to the dollar. So it's worth paying attention to, because, as the last Cold War proved, it can escalate rapidly and persist for decades.
But there is another threat to the dollar that is being developed on our own shores – and by our own central bank. Read More
“Earlier today apparently a woman rang the BBC and said she had heard that there was a hurricane on the way. Well if you are watching, don't worry, there isn't.”
It’s blowing a full hooley out there this morning, which is very bad news for my olive trees as the storm is shaking the ripening fruit off. Shame. It’s the first time our little olive grove has produced what looked likely to become full-sized olives. I was going to add them to Dirty Martinis. Meanwhile, mink farms are being wiped out by coronavirus which is proving 100% fatal to the well-dressed ferrets. Interesting, but what does it mean…? Read More
08.20.20- The Response To The Fed's Minutes
Triffin's Paradox demands painful trade-offs to issue a reserve currency, and it demands the issuing central bank serve two competing audiences and markets.
Judging by the headlines and pundit chatter, the U.S. dollar is about to slide directly to zero. This sense of certitude is interesting, given that no empire prospered by devaluing its currency. Rather, devaluing the currency is a sure path to dissolution and collapse of the empire. This dynamic--devaluation leads to decline and collapse--is not exactly a secret. Read More
We aren’t going to any kind of a gold-backed monetary system because we already know that by doing that, central banks will lose power. Their goal is…
The Federal Reserve is actively trying to destroy the dollar, which was the plan when they started enslaving humanity in 1913. The goal has always been to own the world through the debt-based monetary system. Read More
If some Congress members get their way, the Federal Reserve may soon be able to track many of your purchases in real time and share that information with government agencies. This is just one of the problems with the proposed “digital dollar” or “fedcoin.
Fedcoin was initially included in the first coronavirus spending bill. While the proposal was dropped from the final version of the bill, there is still great interest in fedcoin on Capitol Hill. Some progressives have embraced fedcoin as a way to provide Americans with a “universal basic income.” Read More
Depending on which liars you listen to, we have had the Wuhan/Covid 19 flu for about 9 months. In that time we should have learned a lot. The quality of our data should be better now than it was back in February/March. Alas I think the opposite is true. We are being lied to more and more every day.
There is some kind of flu that probably came from Wuhan that may or may not have been deliberately released. If you are in the narrow band of people susceptible to it, it can and does kill. Read More
08.14.20- This Is What
Back in October, I published a blog post titled, “This Is What Monetization of the Debt Looks Like,” arguing that the Fed’s intervention in the repo market at the time was not a return to “quantitative easing,” as many critics suggested at the time, but simply the central bank acting as lender of last resort to the Federal Government. It was, in its purest form, a commitment to monetize that amount of debt that could not be absorbed by the market. Read More
The health of retirement accounts could soon take a big blow, thanks to a combination of rising price inflation and recent monetary policy issued by the Federal Reserve.
First, let's shine a light on the Fed monetary policy…
SAN MARTIN, ARGENTINA – This weekend, as expected, the Trump Team came forward with more ways to spend the money it doesn’t have.
The package, announced by Mr. Trump himself, ignored the people’s representatives – who, alone, according to the Constitution, have the right to determine how money is raised and spent – and declared a $400 per week bonus for people who don’t work.
As for those who do work, they will get something for nothing, too. Read More
Judy Shelton, a Trump nominee to the Fed Board of Governors, may not have coined the excellent term “Fed Bug,” but she used it to delicious effect in this 2019 Financial Times interview:
If you want to understand America’s dangerously deepening travails, youhave to start at the Federal Reserve’s Eccles Building.
After a 30-year rolling coup d’etat, its occupants have imposed a regime of destructive falsification onAmerica’s financial, economic, political, and social life.
It has become the heart of mushrooming darkness taking prosperity, liberty, and democracy down for the count. Read More
08.08.20- Judy Shelton is Right About the Gold Standard
Dr. Judy Shelton, one of President Trump’s nominees to the Federal Reserve’s Board of Governors, recently passed a Senate committee vote and is currently waiting to be confirmed by the full Senate. She has drawn scathing criticism from the commentariat, mostly due to her positive view of the gold standard. Shelton’s detractors have published several attacks on the gold standard in recent weeks. Steven Rattner, a counselor to President Obama’s Treasury secretary, writes that the gold standard is “a long-abandoned approach” and that a Fed official supporting it “would be akin to a Supreme Court justice embracing the Code of Hammurabi.” David Wilcox, a former research director at the Federal Reserve Board, lambaststhe gold standard as an “outmoded approach to setting monetary conditions.” The Los Angeles Times editorial staff complains that the “gold standard is the antithesis of modern monetary policy. Read More
08.07.20- The Consequences of Worthless Cash
08.06.20- How Central Banks Made
Historical events are complex phenomena, and monocausal explanations are therefore by definition wrong when explaining history. Many factors go into explaining why people and the world’s governments reacted as they did to the coronavirus. It is, however, my contention that examining the inflationary policies pursued by central banks and governments are fundamental to understanding how the current corona hysteria developed. Read More
Yesterday, we were looking at “transfer” payments. Today, we look closer. What exactly are we talking about?
Our developing hypothesis is that the furious money-shoveling in the last quarter was not just a “fluke.” It was part of a pattern, like the M.O. of a major thief. And it won’t stop until the criminal is behind bars. Read More
08.04.20- Second Fed President Calls
Richmond Fed President Thomas Barkin issued a video call today for more free money.
Thomas Barkin joins Minneapolis Fed President Neel Kashkari in the free money call. Read More
Over the past decade, the one common theme despite the political upheaval and growing social and geopolitical instability, was that the market would keep marching higher and the Fed would continue injecting liquidity into the system.
The second common theme is that despite sparking unprecedented asset price inflation, price as measured across the broader economy (at least using the flawed CPI metric) would remain subdued (as a reminder, the Fed is desperate to ignite broad inflation as that is the only way the countless trillions of excess debt can be eliminated and yet it has so far failed to do so). Read More
08.01.20- Say’s Law and the Effects of a Growing Money Supply
Modern central banks have tried to foster the boom and avoid the slump…
The credit cycle drives the business, or trade, cycle. It should be obvious that changes in the quantity of money, mostly in the form of bank credit, have an effect on business conditions. Indeed, that is why central banks implement a monetary policy. By increasing the quantity of money in circulation and by encouraging the banks to lend, a central bank aims to achieve full employment. Read More
Central banks worldwide have injected further stimulus into the economy, as European Union (EU) leaders recently approved a $2.1 trillion budget, the Bank of England boosted stimulus injections in mid-June, and the Federal Reserve announced on Wednesday that it would keep lending until the end of the year. Meanwhile, bank indexes show that financial institutions based in the UK, Japan, and the EU are about to break support levels that have held up since the mid-eighties. Read More
07.30.20- Is Gold Going to Call the Fed’s Bluff?
The Fed now has a major problem on its hands…
The Fed now has a major problem on its hands.
That problem is the fact that gold is ripping higher.
Americans see gold as a measure of inflation. Food prices, car prices, home prices, stock prices, practically the price of anything can rise and the average American won’t think “inflation.”
It’s a different story with gold. Read More
07.29.20- The “Government Put,”
Gold recently crested $1900, where it is today as of this writing. For some, the $1900 price level is an important indicator of momentum building. I’ll share with you some advice on the gold price offered by my zoom interview this week, George Gammon, Rebel Capitalist, below.
In an effort to help you sort things out, I’ve invited George to help us put the macro picture into perspective given the pandemic, shutdown of the economy, a bizarrely resilient stock market and prospects for your investments now and in the future. Read More
07.28.20- The Case of Dred Scott
Never before have I seen the case of Dred Scott as completely and accurately presented as John Remington Graham presents it in his monograph, Blood Money: The Civil War and the Federal Reserve.
Dred Scott was a slave who belonged to a United States Army officer, an army surgeon, John Emerson. In 1834 Emerson took Scott with him when assigned duty at Fort Snelling, which was located in Wisconsin Territory, a part of the Louisiana Purchase where slavery had been prohibited by the Missouri Compromise of 1820. Read More
The most frequently asked question I get these days is what is going to happen in November, 2020. The election seems to be on the majority of people's minds even more so that the coronavirus pandemic. In the summer of 2016 I accurately predicted that Donald Trump would enter the White House and met endless opposition to the idea. At the time, an overwhelming number of analysts in the liberty movement assumed Trump would lose, and that Clinton, by hook or by crook, would become president. Obviously this was not the case. Read More
Last week, Tyler at Zero Hedge ran an article from a site called Adventures in Capitalism, in which the writer (Kuppy?!) lets his light shine on the CIVD19 situation. He concludes that we’re all going to get it, it’s no use resisting, there will never be a vaccine and herd immunity is all we have left to hope for.
And I was thinking: what if he’s -largely- right? What if the utter lack of preparedness and the glaring incompetence we see displayed before our eyes all across the globe has made escape -almost- impossible? Surely at the very least we should prepare for that, too, even if it’s not the only thing we should prepare for. Read More
07.24.20- Blood Money: The Civil War and the Federal Reserve
Continuing from the prior column John Remington Graham’s thesis that the mis-named “civil war” was fomented by bankers who desired a large national debt that they could acquire in order to exand and contract currency and credit and thus control the econony and government, I present today with permission Graham’s analysis of the repeal, in effect, of the Missouri Compromise.
The Missouri compromise was put in place by statesmen determined to keep the North and the South, two separate countries with different legislative interests, in a state of even power in the US Senate. The compromise admitted Maine as a non-slave state and Missouri as a slave state. Thus, North and South retained the same number of senators, which forced compromise if anything was to happen. Read More
07.23.20- The Fed Can’t Make Pi
In 1897, the Indiana state legislature proposed a bill to assign a specific value to the mathematical constant pi. The Greek letter π, or “pi,” is often used to represent the ratio of a circle’s circumference to its diameter. According to historical accounts, the legislature debated proposals to set the legal definition of pi equal to 3.2 or a similar constant. Read More
Wealth inequality has become a major talking point for those primarily on the Left who are vehemently against capitalism. Often espoused by leftist professors, lawmakers, and think tanks, the increasing disparity in wealth among Americans has been a growing concern. Many have questioned for years whether the Federal Reserve and their fiat currency monetary system is a fundamental fraud in our economy today. Is the Federal Reserve causing wealth inequality, thereby sowing the seeds of Marxism? Read More
It’s time to show you’re Fed up! Get mad as hell! Don’t take this any more! Scorch the earth with your rage! Yell from the rooftops! Stick your head out the window and scream! Fight the economic injustice that serves the rich! Kick political asses, and kick them hard! Don’t just whine, do something about it!
Ten commandments to show you’re Fed up! Read More
In the beginning of the film Gladiator, after the defeat of Germania, there is a scene when Marcus Aurelius calls Maximus into his tent and tells him of his plans for Rome after he dies. During that conversation Caesar tells Maximus, “There was once a dream that was Rome.” Caesar was telling Maximus that Rome was more than just a spot on a map, it was an idea; and, while they had strayed from that idea it was Caesars hope that by placing Maximus in charge he could steer Rome back towards its founding idea as a republic. That idea, that concept, has been on my mind a lot lately as I watch the country I love circle the toilet. Read More
07.18.20- The Last Gasps of
It was a mid-afternoon in 2006 in Cannes, where I joined Dr. Kurt Richebächer at his apartment to collaborate on a book project that, unfortunately, failed to come together before his death a year later.
The old man grabbed his cane and moved to a comfy chair and clicked on a widescreen TV.
Bloomberg. In German. Read More
Most everyone you know is a member of a cult. It’s not their fault, and they didn’t consciously seek it out, but your friends and family and almost everyone you know and even come in contact with belong to a system that has brainwashed them.
This cult is robbing them. And it’s doing so clandestinely, without their knowledge or approval. It’s so sly that they don’t even know it’s happening.
In fact, the leaders behind this cult have convinced them that this system is normal. They accept it, since that’s the way things are done and the way everyone else does it. Read More
07.16.20- The Fed’s Liquidity Confusion
The most essential function of the Federal Reserve is to provide money, or liquidity, to the financial system. The Fed is responsible for ensuring that the supply of money is equal to the total amount demanded. It is not responsible, however, for ensuring that each company and municipal government has sufficient cash to meet its obligations.
Fed Chair Jerome Powell recently testified to Congress regarding the Fed’s response to the coronavirus outbreak and lockdown. In addition to cutting interest rates to near zero, Powell described the Fed’s “forceful measures in four areas:” Read More
Federal Reserve Chair Jerome Powell and San Francisco Fed President Mary Daly both recently denied that the Federal Reserve’s policies create economic inequality. Unfortunately for Powell, Daly, and other Fed promoters, a cursory look at the Fed’s operations shows that the central bank is the leading cause of economic inequality.
07.14.20- The Bottom’s Falling Out
Imagine you’re standing across the street from a house that’s on the verge of falling apart, a condemned building, an edifice devoured by rot from bottom to top. Now imagine you see a construction crew arriving to repair it, and they start to fix the roof. You would think that’s not much use if the walls, floor and foundation are just one wolf’s huff and puff away from collapse.
Still, that is what the world’s central banks are doing today: they “fix” the top by bailing out banks and allege that somehow that will fix the rest of the edifice too. In that same analogy, while central banks prop up banks, governments try to support the walls, by bailing out businesses. Again, while the floors and foundations keep on rotting away. And when the floors cave in, so of course will the walls, just like the roof. Read More
Since the onset of the pandemic, the Fed has entered into the most aggressive monetary campaign. Its goal was to bolster asset markets to restore confidence in the financial system. However, the trap is the Fed is in a position where they can never stop QE as interest rates can’t rise ever again.
As we discussed previously, Jeremy Siegel already declared the end to the 40-year bond bull market.
It’s nothing but rosy news coming from the Federal Reserve.
Recently the Fed released this reassuring statement:
“The banking system remains well-capitalized under even the harshest of these downside scenarios. . .”
In other words, everything is just fine. Read More
As the inverted pyramid collapses, the effects will be non-linear...
Round about late March, we entered a Financial FantasyLand in which all the sins and excesses of rampant financialization were going to be painlessly washed away. Never mind the entire U.S. economy is an inverted pyramid of balance-sheet “value” and debt resting on a shrinking foundation of collateral; everyone would be made whole in the Federal Reserve’s Financial FantasyLand. Read More
During the first wave of pandemic lockdowns, America became a rather surreal place. The initial shock that I witnessed in average people in my area was disturbing. Half the businesses in the region closed and a third of the grocery store shelves were empty. The look in people’s faces was one of bewilderment and fear; their eyes were like saucers, no one was staring into their cell phones as they usually do, and people huddled over their shopping carts like wild dogs protecting a carcass. Read More
Make It So!
Back in the 1980s there was a lot of discussion at my college about “post-modernism”. At that point it was in a strictly cultural sphere. It meant different things to different people, but I personally found enlightenment in the example of Jean-Luc Picard, captain of the starship Enterprise. To be “post-modern”, I was told, was to be a cultural creation from beyond the modern era. The original Star Trek had been modern (indeed, ultra-modern for the time), but it had clearly been based on pre-modern concepts, such as novels like Horatio Hornblower and Westerns. On the other hand, Star Trek: The Next Generation was based on Star Trek, and hence was “post-modern”. Read More
07.07.20- A Long and Perilous Journey
Suppose you knew tragedy would occur at the end of a long journey. That knowledge would change your behavior, attitudes, and expectations. Global financial systems are near the end of a long journey.
What Long Journey?
Most unbacked fiat currencies issued by governments and central banks have failed and ended in tears, inflation, abuse, and corruption. Governments collapsed, devalued currencies to minimal or zero value, and people lost jobs, savings, retirements, and homes. Read More
In last week’s article I discussed the issue of American “balkanization” and the rapid migration of conservatives and moderates from large population centers and states that are becoming militant in their progressive ideology. In my home state of Montana there has been a surge of people trying to escape the chaos and oppression of leftist states. Some are here because of the pandemic and the harsh restrictions they had to endure during the first lockdowns. Others are here because they can’t stand the hostility of identity politics, cancel culture and race riots. Either way, they are fleeing places with decidedly leftist influences. Read More
In a recent disclosure to Congress, the Fed revealed that it just purchased $429 million in bonds from 86 corporations.
They did this through something called a Secondary Market Corporate Credit Facility (SMCCF). Buried on the Fed’s website, the press release explains the intention behind this purchase of bonds:
In the minutes of the June 9-10 FOMC meeting, the Fed discussed racism, Covid, Forward Guidance, Asset Purchases, and Yield Curve Caps.
07.02.20- Central Banks: Gold’s Greatest Ally
You’re likely aware of the price action in gold lately. Gold has rallied from $1,591 per ounce on April 1 to $1,782 per ounce as of today. That’s a 12% gain in less than three months.
My earlier forecast was that gold would hit $1,776 by the Fourth of July. I guess I was a bit early!
Today’s price of $1,782 per ounce is the highest since 2012 and a 70% gain from the low of $1,050 per ounce at the end of the last bear market in December 2015. Read More
I’d like to thank Jay Powell and his marvelous printing press. The equity side of my investment fund, which I manage, is 100% mining stocks – mostly juniors – and as of today it’s up 100% QTD. Thank you Jay. Almost every stock we hold is from the ideas I present in my Mining Stock Journal.
But I’m here to discuss the “idiot stocks.” I’ve decided to label stocks like SHOP, W, TSLA, BYND, CVNA, etc as “idiot stocks.” Yes, ignorant speculators have managed to get lucky trading these stocks during a period of time when the Fed has printed the greatest amount of money in its history. Read More
While the economic storm caused by COVID-19 has seemed to wane (temporarily?), the stock market can’t seem to go but one direction—up. Graham and Dodd’s meaty 700-page Security Analysis has soared to number 7695 on the Amazon best-seller list. According to Warren Buffett, the book is “A road map for investing that I have now been following for 57 years.”
One wonders what roadmap the young people who saw the pandemic March meltdown as an opportunity to buy slices of familiar technology stocks are following? Read More
06.29.20- Into Darkness:
The system is hurtling towards breakdown. Protect yourself now.
As you may know, I was one of the very first voices publicly reporting on covid-19, issuing an alert that the virus was a significant pandemic event on Jan 23rd, 2020.
This was long before most media outlets even managed to write their first “It’s just the flu, bro!” article. Read More
There seems to be no end to the Federal Reserve’s arrogance. Fed officials believe that through their wise actions, they can eliminate the business cycle, lower unemployment and make society prosperous. But it’s actually much more limited in what it can do.
All the Fed can reliably do is stop bank runs and limit liquidity panics. It can also fund (or “monetize”) the U.S. federal deficit, as it has done in recent months.
By buying essentially the same amount of U.S. Treasury securities the government has issued, the Fed has taken pressure to fund mammoth federal deficits off of the private sector. Read More
06.25.20- Why the Central Bank "Bailout of Everything" Will Be a Disaster
Despite massive government and central bank stimuli, the global economy is seeing a concerning rise in defaults and delinquencies. The main central banks’ balance sheets (those of the Federal Reserve, Bank of Japan, European Central Bank, Bank of England, and People’s Bank Of China) have soared to a combined $20 trillion, while the fiscal easing announcements in the major economies exceed 7 percent of the world’s GDP according to Fitch Ratings.
This is the biggest combined stimulus plan in history. However, businesses are closing at a record pace and unemployment has reached extremely elevated levels in many countries. Read More
The New World Order is progressing at a rapid rate and Donald Trump isn’t even putting speed bumps in the way
While the mainstream media focuses on which senile sycophant will be the bankers’ puppet for the next four years, the central banks are destroying what’s left of the economy and sovereignty to usher in the New World Order. The election is all just a distraction from the real enemy; the banking cabal that runs the world and has already selected the next president. Read More
In a sign that the Federal Reserve is growing increasingly desperate to jump-start the economy, the Fed’s Secondary Market Credit Facility has begun purchasing individual corporate bonds. The Secondary Market Credit Facility was created by Congress as part of a coronavirus stimulus bill to purchase as much as 750 billion dollars of corporate credit. Until last week, the Secondary Market Credit Facility had limited its purchases to exchange-traded funds, which are bundled groups of stocks or bonds. Read More
You thought that monkey on your back was light as a feather, but now it transmogrified overnight into a crushing gorilla.
Dear junkies addicted to the Federal Reserve's free-money smack: like all addicts, you firmly believe you're not addicted. Never mind those tracks, you can stop any time. Yeah, sure, but we all know you're going to buy the dip and max out your margin account because the craving cannot be denied. Read More
06.20.20- Revealed: The Fed’s Next Trick
Today we lower our ear to the rail… and report the approach of a rumbling locomotive.
Free and honest markets are roped to the tracks, squirming, writhing, sobbing.
This iron horse is barreling toward them. Mr. Jerome Powell is at the controls…
And murder is on his mind. Read More
The coronavirus was a heck of a cover for the Federal Reserve’s failings, and the riots are laying even more cover for what’s to come. While the masses focus on what’s happening on the surface, the real criminals laugh at our ignorance from their metaphorical ivory towers.
As we fight amongst ourselves and try to figure out which violence is more acceptable looting or police brutality, the ruling class is tightening the chains of our enslavement. With the help of the mainstream media, we are distracted from the core of the problem while dividing ourselves as the masters command. Read More
06.18.20- Our Wile E. Coyote Economy: Nothing But Financial Engineering
Ours is a Wile E. Coyote economy, and now we're hanging in mid-air, realizing there is nothing solid beneath our feet.
The story we're told about how our "capitalist" economy works is outdated. The story goes like this: companies produce goods and services for a competitive marketplace and earn a profit from this production. These profits are income streams for investors, who buy companies' stocks based on these profits. As profits rise, so do stock valuations. Read More
06.17.20- Goodbye, Free Market
Fremdschämen is a noun of the German language. It translates this way:
Embarrassment for those incapable of feeling embarrassment.
Today we suffer embarrassment for Mr. Jerome Powell and his fellows of the Federal Reserve…
For no action they take lowers their heads in shame… or blushes their cheeks with embarrassment. Read More
06.16.20- Fed Gold Buying May Soon Be the “Policy Option of Choice”
06.15.20- Savings Are Critical to a Prosperous Economy
The heart of economic growth is the expanding pool of real savings. Monetary pumping destroys the flow of real savings and in turn…
It is held by most mainstream economists that spending is the heart of economic activity. Economic activity is depicted as a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and vice versa. In contrast saving is viewed negatively as it weakens the potential demand for goods and services. Read More
The doyenne of MMT, Stephanie Kelton, has published a book this week explaining modern monetary theory. This article examines the foundations of MMT which Kelton explained in an earlier video released last year.[i]
Macroeconomics has become so far removed from reality that its practitioners cannot understand what is happening in the real economy. Never has this been more obvious than today. While they claim to be economically literate, macroeconomists are in thrall to their paymasters; a combination of government, quasi-government and financial institutions with a vested interest in not looking too closely at the full consequences of government economic and monetary policies. Read More
Ignorance is Bliss
The investment community witnessed financial history on Wednesday. For fifty minutes, Federal Reserve Chairman Jay Powell highlighted the risks to the economy. Specifically, he indicated that there is so much uncertainty to the economic outlook that the Fed’s forecasts in the Summary of Economic Projections are essentially useless. He warned that there are 22-24 million people out of work, and that millions will remain out of work when the economy recovers. He skillfully dodged a couple of questions about asset prices. Finally, with the last question of the day, Bloomberg’s Mike McKee nailed it when he asked the questions on all investors' minds. Read More
British economist Charles Goodhart observed in the mid-1970s that “when a measure becomes a target, it ceases to be a good measure.” Some 45 years later, Goodhart’s Law is at the center of a fierce debate in financial markets over whether governments and central banks turned riskier assets such as equities into targets. And if so, are markets no longer measures of the economy?
Small investors seem to have figured out that the Federal Reserve has, indeed, targeted markets through its unprecedented stimulus programs. They know that markets are now designed for investors to win, as evidenced by the S&P 500 Index’s about 43% gain since late March despite the worst economic recession since the Great Depression. Dave Portnoy, the founder of the website Barstool Sports who recently took up day trading, recently explained it best: Read More
Over the next several weeks everything Charles Holt Carroll got right in his assessment of the damage wrought by inflation, and everything Jerome Powell got wrong in dismissing the Fed's role in causing wealth inequality will be discussed. It will also be shown that the Fed's leading role in the concentration of wealth is merely a by product of the enormous inflation the Fed has created since it was freed from the constraints imposed on it by the Bretton Woods agreement of 1944. This agreement made the dollar the world's international reserve currency and valued the dollar at $35 per ounce of gold. (gold now trades around $1700 per ounce) Per this agreement, any national central bank could present $35 to the Federal Reserve and exchange the currency for one-ounce of gold. (individuals couldn't do this) Read More
America the Combustible
If we had all only known in March how everything was going to turn out we might have been able to do something different. Like move to Antarctica. What passed for worries for most Americans last year at this time certainly seem a bit trivial now that lockdown fever has exploded into full-blown civil unrest.
If this all seems a little too slick, organized, and, well, scripted it’s because it is. The first draft of this nightmare was written by the original hipster beard boy commie Karl Marx over 170 years ago. Read More
Governors Encourage Mass Protests While Keeping Others Locked Down
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up later in the program we have a conversation with Michael Pento of Pento Portfolio Strategies. Michael weighs in on the massive increase in the Fed’s balance sheet over the last several months, amounts that make the stimulative response to the Great Recession a decade ago look like chump change. Read More
06.06.20- Gangster State Capitalism
Hanne Herland of the European Herland Report has just had her book published in which she argues that the ruling elite has resurrected feudalism by financializing the economy and offshoring middle class jobs. The title is New Left Tyranny, but it is about gangster state capitalism.
Historically, capitalism freed labor from bondage by making labor the private property of the person. Serfs who owed labor obligations to lords became free individuals. Free labor markets and emergent capitalism made productive by technological advancements created with time rising living standards and a free people determined to protect their independence by holding government accountable.Read More
SAN MARTIN, ARGENTINA – We read the news. We are appalled.
Yesterday, we saw that, soon, it may not be only Blacks who want to set fire to police stations.
Since the bottom of the Crisis of ’08-’09, the 20% of the population at the bottom of the heap – largely young and/or Black – has lost 25% of its wealth.
The next and biggest group, those with more than the bottom 20% but less than the top 40%, are essentially even. That is, they hit bottom in March ’09… and never recovered. Read More
The scapegoating has already started. In almost every sector of the economy that is collapsing, the claim is that “everything was fine until the pandemic happened”. From tumbling web news platforms to small businesses to major corporations, the coronavirus outbreak and the subsequent national riots will become the excuse for failure. The establishment will try to rewrite history and many people will go along with it because the truth makes them look bad. Read More
The debate over the morality and practicality of forced vaccinations has been raging for many years, long before the coronavirus ever hit the US population. With the advent of the pandemic the narrative has shifted to one of “necessity”. The media and the majority of governments around the world now act as if mass vaccinations are a given; the “debate is over”, as collectivists like to say when they are tired of having to deal with any logical or factual complaints.
In the case of the novel coronavirus there is no vaccine yet; unless of course the virus was engineered or evolved in a lab (as more and more evidence is suggesting), and then perhaps there is one already developed. Typically, vaccines take years to test and produce, and whenever a vaccine is rushed onto the market very bad things tend to happen. Read More
06.02.20- This Time, the Fed Can’t Avoid Inflation, Says Expert
Can the Federal Reserve avoid inflation once again?
As the dust around the 2008 financial crisis settled, some may have been surprised that the eagerness of the Federal Reserve to print money did not cause inflation, or even hyperinflation. Yet those who are expecting the same turnout this time around should look at the underlying nature of both crises. Read More
06.01.20- Defining "Inflation" Correctly
Inflation is typically defined as a general increase in the prices of goods and services—described by changes in the Consumer Price Index (CPI) or other price indexes.
If inflation is a general rise in measured prices, then why is it regarded as bad news? What kind of damage can it inflict? Mainstream economists maintain that inflation causes speculative buying, which generates waste. Inflation, it is maintained, also erodes the real incomes of pensioners and low-income earners and causes a misallocation of resources. Read More