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05.22.12- The Economy, the Fed, Gold, and Gold Shares
To clarify where we stand, I think the gold shares might have made THE cyclical low last Wednesday. This conclusion is predicated on a number of factors: the valuation of gold shares relative to gold hasn't been this cheap since the 2008 deleveraging crisis, pessimism among gold equity holders reached a crescendo often marked by bear market bottoms, and the macro roadmap that I foresee which should ignite gold to resume both its cyclical and secular bull markets. While I haven't been particularly accurate over the past year in regards to gold or gold shares, every day of investing is a new day and it's important to recognize a circumstance for what it is, not for what it might have been. Read More |
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05.21.12- We Are Coping With The Crash Of A 30-Year–Long Debt Super-Cycle
A “paralyzed” Federal Reserve Bank, in its “final days,” held hostage by Wall Street “robots” trading in markets that are “artificially medicated” are just a few of the bleak observations shared by David Stockman, former Republican U.S. Congressman and director of the Office of Management and Budget. He is also a founding partner of Heartland Industrial Partners and the author of The Triumph of Politics: Why Reagan’s Revolution Failed and the soon-to-be released The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy. The Gold Report caught up with Stockman for this exclusive interview at the recent Recovery Reality Check conference. The Gold Report: David, you have talked and written about the effect of government-funded, debt-fueled spending on the stock market. What will be the real impact of quantitative easing? David Stockman: We are in the last innings of a very bad ball game. We are coping with the crash of a 30-year–long debt super-cycle and the aftermath of an unsustainable bubble Read More |
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05.19.12- How Money Dies
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05.18.12- Government, Banks, Monopoly Privilege and Lack of Accountability
When you talk to people, even the statists in this world, there are many that will agree that there is a huge problem in government when it comes to accountability. The problem stems from the monopoly privilege granted to government agencies. That privilege is the monopoly on legalized force and the claim of legitimacy to use it. Using this claim, agents of the government can more or less do as they want, when they want. Should they be caught doing something considered illegal, they will often claim immunity. While this does not always work, it certainly seems to me that it works a very high percentage of the time. Government agents more often than not get away with their abuses of trust and power. Read More |
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05.17.12- Systemic Risk Is Everywhere 
The $2 billion loss of JP Morgan in derivatives trading is signaling, once again, the enormous risks big banks take with taxpayer backing. All U.S. banks are covered by the FDIC, and if a loss is big enough, it could threaten the financial system just as it did in 2008. JP Morgan has $70 trillion in total derivative exposure. The entire world has a little more than $700 trillion in derivative exposure, and one bank has 10% of all the derivative exposure on the planet! If JP Morgan gets into trouble, it alone could cause systemic failure. Today, the FBI announced an investigation into the surprise $2 billion (or more) trading loss that happened last week at the bank. Reuters reported, “The probe was seen in some quarters as necessary, given the ongoing debate in Washington about bank regulation and reform, and one expert said it raised the level of concern around what happened. ‘The FBI looks for evidence of crimes and goes after people who it alleges are criminals. They want to send people to jail. The SEC pursues all sorts of wrongdoing, imposes fines and is half as scary as the FBI,’ said Erik Gordon, a professor in the law and business schools at the University of Michigan.” Read More |
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05.16.12- The wrecking ball of hidden inflation and Fed based strategies
Food inflation far outpacing overall inflation and eating away at the purchasing power of 46,000,000 Americans on food stamps The Federal Reserve has openly called for a steady growth of inflation. This almost
dogmatic view on inflation is problematic because it is detached to the
lack of wage growth being experienced by working and middle class families. |
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05.15.12- The Fed: Mend It or End It?
Last week I held a hearing to examine the various proposals that have been put forth both to mend and to end the Fed 154127845 The purpose was to spur a vigorous and long-lasting discussion about the Fed's problems, hopefully leading to concrete actions to rein in the Fed. First, it is important to understand the Federal Reserve System. Some people claim it is a secret cabal of elite bankers, while others claim it is part of the federal government. In reality it is a bit of both. The Federal Reserve System is the collusion of big government and big business to profit at the expense of taxpayers. The Fed's bailout of large banks during the financial crisis propped up poorly-run corporations that should have gone under, giving them a market-distorting advantage that no business in the United States should receive. Read More |
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05.14.12- Exposing the Federal Reserve
We'll start way back in history to give some kind of historical perspective to this; we'll go back to the first century BC and the tiny kingdom of Phrygia. There was a philosopher by the name of Epictetus and it was Epictetus who said: "Appearances are of four kinds: things either are as they appear to be; or they neither are nor appear to be; or they are but do not appear to be; or they are not and yet appear to be." When I read that statement for the first time, I had a big chuckle over it and I thought for sure that if Epictetus were alive today he would probably be a Harvard professor of money and banking; it sounds like so many explanations that I have read about various aspects of the Federal Reserve System. Read More |
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05.12.12- The Great Crash of 2012? 
Deflation fears are once again becoming the dominant emotion in the minds of traders, with banking difficulties on both sides of the Atlantic and continuing weakness in precious metals and commodities. News that the China Investment Corporation – China’s biggest sovereign wealth fund – no longer wants to buy European sovereign debt has only added to the sense of unease. The euro continued losing ground against the dollar yesterday, and though it has rallied this morning, looks like it could test the $1.29 mark sooner rather than later. Corn, copper and Brent crude also sustained further losses, with news of a boost in OPEC production adding to the downward pressure on oil prices. Read More |
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05.11.12- The Emperor Is Naked
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05.10.12- Michael Hudson and Pierre Rinfret: The Myth of Alan Greenspan
Although he is now passed away, and his internet site has been discontinued, economist Pierre Rinfret published some rather pithy descriptions of the people whom he had known during his long career as economist in the halls of power of the US government. |
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05.09.12- Priceless: How The Federal Reserve Bought The Economics Profession
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found. This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too. Read More |
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05.08.12- Racing Towards the Cliff:
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05.07.12- Serial Bubble Blowers
The shrinking dollar is a modern problem. The U.S. dollar has been shrinking since the inception of the Federal Reserve — the very crew assigned the task of maintaining its value. Of late, the decline is accelerating at an alarming rate. For many Americans, the suggestion that the dollar is losing value is unthinkable — even unpatriotic. The problem is not simply a lack of understanding about the nature of wealth and investment used to sustain it. Read More |
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05.05.12- Jim Grant: "The Federal Reserve Is The Vampire Squid Of Vampire Squids" 
Munch's "The Scream" may be all the rage today, but to Jim Grant, in his latest interview on Bloomberg TV, the record price paid for the painting is not so much a manifestation of modern art as one of modern currency: "This is the flight into things from paper" . Thus begins the latest polemic by the Grant's Interest Rate Observer author whose topic is as so often happens, the Federal Reserve (for his latest definitive expostulation on why the Fed should be disbanded and why a gold standard should return, delivered from the heart of Liberty 33 itself, read here). The world in which we invest is a world of immense wall to wall manipulations by our friends in Washington. And people get off on Goldman Sachs because it has done this and this, it is pulling wires... The Federal Reserve is the giant squid of squids, it is the vampire squid of vampire squids." Read More |
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05.04.12- Bernanke’s Pet Peeve:
This was clearly a public relations stunt. Why would the head of the world’s most powerful central bank lecture to 30 undergraduates? This was not quite the equivalent of George W. Bush reading “My Pet Goat” to third graders, but it was close. Think of it as “My Pet Peeve.” His first speech was an overview of central banking. He used PowerPoint to create slides. The presentation had 49 slides. Any experienced lecture listener, had he known of this in advance, would have headed toward the exit. Here is the man whose verbal skills produce narcolepsy in normal people who have slept at least 10 hours. To this he added 49 slides. This violated Guy Kawasaki’s 10-20-30 rule: 10 slides, 20 minutes, 30-point font. The slides are here. Read More |
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05.03.12- An Antidote To The Fed's Destructive "Jelly Donut Policy" 
David Einhorn who crushed it this week with huge profits on his short positions in both Herbalife and Green Mountain, finally takes on the ultimate challenger: the Federal Reserve, seemingly unaware to never "fight the Fed", likening its "strategy" to a Jelly Donut policy, and explains what everyone who has been reading Zero Hedge for the past 3 years knows too well: "I will keep a substantial long exposure to gold -- which serves as a Jelly Donut antidote for my portfolio. While I'd love for our leaders to adopt sensible policies that would reduce the tail risks so that I could sell our gold, one nice thing about gold is that it doesn't even have quarterly conference calls." Or, as Kyle Bass said last year,"Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!" Not surprisingly, it is only the idiots out there who still don't get what these two investing luminaries are warning about. Read More |
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05.02.12- The Invisible Red Line
In this edition... Professor Paul Krugman and Rep. Ron Paul (R-Texas) went head to head on BloombergTV this week. True to his neo-Keynesian form, Prof. Krugman insisted that the US government could and should add further debt to stimulate growth. Rep. Paul responded by asking how much debt would be too much, to which Krugman replied: “We’re not anywhere close to a red line.” Really? What makes him so certain? Certain red lines are like tipping-points. They can only be seen in retrospect. In my view, the US has already crossed the excessive debt ‘red line’ implying a dramatic future devaluation of the dollar. It is only a matter of time before Krugman and other members of the economic and policy mainstream look back on recent developments and reach this conclusion. Financial markets, however, will not wait. Read More |
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05.01.12- The Fake Money From The Fed That Goes “Nowhere” 
The outsiders make...the insiders take. Nothing much happened last week. Except that Ben Bernanke told investors that the fix was in...and the stock market went up. The chief of America’s central bank told the world that he was prepared for more QE whenever it was needed. When will it be needed? When the stock market goes down! So, why not? Why not buy stocks? What can you lose? If they go up, you keep the gains. If they go down...ol’ Benny will be there with wads of cash to buck them up. Cash...cash...cash... How much do you need? Read More |
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04.30.12- A Gold Standard? 
There are times, my friends Michael Lewitt and Dr. Lacy Hunt agreed today at lunch, when the study of economics is best informed by a sound knowledge of history. Indeed, Michael's son wants to follow his father into the finance world, and Michael is starting him off in history. I have spent hours listening to Lacy stroll through economic history, detailing the path of economic thought from Fisher to Kindleberger to Minsky. The last few days have been one of those times when I realized how much I don't know and how much more there is to learn. Not only Lacy and Michael are here in Florida, but a long list of bright minds to learn from. James Rickards, who has recently written the tour de force book Currency Wars, Harry Dent, Doug Casey, Porter Stansberry, Greg Weldon, and John Williams of Shadow Stats, with whom I look forward to meeting (do I have questions for him!). And so many more. Read More |
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04.28.12- What Happens When All the Money Vanishes Into Thin Air?
Issuing debt and printing money do not create wealth. All they can create is a temporary illusion of wealth. I could have written "if all the money vanishes," but that would be misleading, for all unbacked money will most certainly vanish into thin air The only question is when, not if. Frequent contributor Harun I. explains why: Those who fail to understand that the Status Quo is impossible to maintain will be shocked when the disintegration is undeniable. But the whole thing was perverse to begin with. Words like capitalism and meritocracy are thrown around to make people feel good when, in reality, we have never owned anything, not even ourselves. Read More |
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04.27.12- Happy-Talking Ben
The markets genuinely liked what Fed Chair Ben Bernanke had to say yesterday in his press comments following the Fed rate meeting. A glance at that shows the Fed still thinks it has more ammo to throw into the fight against global economic collapse: Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed. Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable. Read More |
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04.26.12- Ben Bernanke’s Paper Dollar Embodies Systemic Risk
The paper dollar is now the single most important source of systemic risk to the financial system, the world economy, and the security of the American people. That is the lesson of the past 100 years that Federal Reserve Chairman Ben Bernanke did not teach during his four lectures at George Washington University’s Graduate School of Business. Instead, he celebrated the importance of the extraordinary powers he and his fellow governors have to manipulate interest rates and the value of the dollar in the name of economic growth and stability. In so doing, he ignored completely that the ever growing need for heroic interventions by the Fed is itself being created by the paper dollar system he celebrates. Read More |
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04.25.12- New federal agency OFR stirs 'Orwellian' fears
It is the most powerful federal agency you’ve never heard of -- and lawmakers from both parties on Thursday vowed to keep abreast of its astonishing growth and rein it in, if necessary. The Office of Financial Research, or OFR, was created by the Dodd-Frank financial services overhaul that President Obama signed into law in July 2010. Technically housed under the Treasury Department, the agency has until now received its funding not from the Congress, but directly from the Federal Reserve. Starting in July, the OFR Fiscal Year 2013 budget, estimated at $158 million, will be funded entirely through assessments -- also known as taxes -- on bank-holding firms with consolidated assets worth at least $50 billion. Read More |
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04.24.12- The big swindle and a
Hiding the unemployed in the higher education bubble and three years of economic recovery equates to 11.5 million more Americans on food stamps. A large part of our recovery is running on public relations trickery and smoke and mirrors debt machinery. Let me explain what I mean by this since on the surface we have been out of a recession since the summer of 2009. Government debt is soaring and public debt in certain sectors is flying off the charts. Take for example food stamp usage and student loan debt. These payments typically rise during tough times as would be expected. So you would conclude that being in year three of this so-called recovery that costs for both of these sectors would be retreating. You would be absolutely wrong in this Alice and Wonderland debt world. Read More |
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04.23.12- Fattening Wall Street; Starving Main Street: Bernanke’s Plan for the Middle Class
Do you want to understand what the Fed is doing, but don’t have time to wade through volumes of tedious economics writing? Well, now the pros at dshort.com have made all that possible. They’ve reduced 4 years of monetary policy into one chart that illustrates exactly what the Fed is up-to and who benefits from the policy. The chart shows how the Fed’s lending facilities, zero interest rates and $700 billion bank bailout (TARP) helped to put a bottom under a market that had fallen off a cliff. Read More |
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04.21.12- And Now, For Something Entirely Different: The Red Button
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04.20.12- Get Ready for 'Hot' Inflation
(Editor's Note: As I have stated, many times before, inflation is not a natural economic event. It is a devious and insidious means of theft, intentionally contrived by the criminal economic vampires that masquerade as a legitimate custodial institution that they call the Federal Reserve. The Federal Reserve is an illegitimate abomination that is sucking the life blood out of America. So many lamp posts ...so little time, - JSB) Ideological deflationists and inflationists alike find themselves both facing the same problem. The former still carry the torch for a vicious deflationary juggernaut sure to overpower the actions of the mightiest central banks on the planet. The latter keep expecting not merely a strong inflation but a breakout of hyperinflation. Neither has occurred, and the question is, why not? Read More |
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04.19.12- Special 40 mins on Federal Reserve : G. Edward Griffin interview with Glenn Beck
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04.18.12- The Trouble with Money
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Recently I was asked by a high school teacher if I had any ideas about why students today seem so apathetic when it comes to engaging with the world around them. I waggishly responded, "Probably because they're smart."
Sure, we can grow the earth's population to 9 billion (and probably will), and sure, we can extract our natural gas and oil resources as fast as possible, and sure, we can continue to pile on official debts at a staggering pace — but why are we doing all this? Even more troubling, what do we say to our youth when they ask what role they should play in this story — a story with a plot line they didn't get to write? Read More
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04.17.12- "The Fed let the real economy go to hell"
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04.16.12- Tony Robbins, Ron Paul And Ben Bernanke All Agree: The National Debt Crisis Could Destroy America
Is there one thing that Tony Robbins, Ron Paul and Ben Bernanke can all agree on? Yes, there actually is. Recently they have all come forward with warnings that the national debt crisis could destroy America if something is not done. Unfortunately, our politicians continue to spend us into oblivion as if there will never be any consequences. When Barack Obama took office, the U.S. national debt was 10.6 trillion dollars. Today, it is 15.6 trillion dollars and it is rising at the rate of about 150 million dollars an hour. During the Obama administration so far, the U.S. government has accumulated more debt than it did from 1776 to 1995. Read More |
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04.14.12- Central Bankers have Caused Deep Money Problems Everywhere 
It was 13 months ago we disclosed that the administration passed a stimulus bill known as the $17.5 billion “Hiring Incentives Act” to restore employment. It required that foreign banks not only withhold 30% of all outgoing capital flows, and disclosure of the full details of transactions of non-exempt holders to the Internal Revenue Service. They want the structure of how money ended up at that bank. In addition banks, particularly in Switzerland are required to close the account. That is equivalent to capital controls, so in future it will be easy to put currency controls of all funds entering or leaving the US. Now we have a new gem on our hands, Senate Bill 1813, which was presented by California Senator Barbara Boxer. The bill has been passed in the Senate 74-23 under the “Moving ahead for progress legislation in the 21st Century Act.” Read More |
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04.13.12- The Fed’s Janet Yellen in Her Own Words
The US Fed has aided and abetted today’s ongoing financial crisis through years of relentless intervention under Greenspan and then Bernanke to continually stimulate excessive consumer credit, support asset bubbles and reward reckless bankers with still more cheap credit. Worse, the Fed did not see any of the problems coming, even into the housing peak in 2006 as they insisted that asset bubbles were impossible to predict and that housing bubbles simply couldn’t happen. Read More |
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04.12.12- Capitalism Died Decades Ago
The following is an excerpt of James J Puplava's recent interview with Richard Duncan. When the United States stopped backing dollars with gold in 1968, the nature of money changed. All previous constraints on money and credit creation were removed and a new economic paradigm took shape; economic growth was no longer driven by capital accumulation and investment as it had been since the beginning of the Industrial Revolution. Instead, credit creation and consumption became the new drivers of the economy. And over that period of time, the United States debt increased fifty-fold to 50 trillion dollars. In 2008, however, that debt could not be repaid and the new depression began. And that’s the topic of today’s discussion, the title of a new book, The New Depression: The Breakdown of the Paper Money Economy; and its author joins me on the program Richard Duncan. Read More |
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04.11.12- Gold - A Reality Check 
For well over a decade GATA has been "ranting" about the evils of the Fed and how the world economy is going to collapse in a heap. Of course, there is an element of truth in all their arguments but the fact is that the world economy has not collapsed in a heap. "Oh but it will, it will, trust us, it will." All this negative energy - to what end? If it does collapse in a heap - and GATA turns out to be right - then what? If economic activity implodes no one will escape - not the gold holders and not the paper holders. Surely, therefore, if one has a brain with finite capacity then it would be far more constructive to apply that capacity to working out ways to solve the problems. Read More |
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04.10.12- Calling All Crash Test Dummies: Big Crash Ahead
I know, I know: the stock market will never go down because Ben Bernanke and the other central bankers won't let it It's funny how the "Bernanke/European Central Bank Put" is ranked alongside gravity as a rule of Nature until markets roll over; then talk shifts from purring adulation of central bankers' godlike powers to panicky calls for another flood of liquidity/free money to "save" the market from the harsh reality of global recession. The basic mechanism that is being overlooked is Liquidity Resistance. This is akin to insulin resistance, where insulin becomes less effective at lowering blood sugars. The amount of insulin required to maintain normal blood sugar levels increases as resistance rises until even massive doses of insulin no longer have the desired effect and the system crashes. Read More |
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04.09.12- How The Country Dies
Did you know that in 2011, The Fed purchased 61% of the total net Treasury obligations that were issued? Prior to 2008, the amounts that the Fed would purchase were negligible at best! Deficits are not being reduced in the US. This year will be equivalent to last year. Future years are not expected to be any better. The world recognizes that the fiscal situation is out of control. Their confidence in our bonds is decreasing rather than increasing. If the Fed purchased 61% in 2011, it is likely to have to purchase even more in 2012. Read More |
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04.07.12- The Fed’s Con Appears To Be Working But The Curtain Is Rising On The Third Act
In today’s conomic news, the mainstream media focused on the disappointment surrounding the FOMC Minutes, the massaged and sanitized fairy tale about what the participants said at last month’s FOMC confab. The market was shocked! SHOCKED! that most of the members saw no need for additional QE, unless things got worse. I had concluded that a couple of months ago based on the fact that every time QE speculation arose, not only did stocks rally, but so did energy and other commodity prices. The commodity vigilantes, I thought, would tie the Fed’s hands. That and the fact that the conomic data was coming in relatively perky, at least in terms of the headline data, made it highly unlikely that the Fed would do any more money printing. But here’s the thing. The minutes are fake. They are fabricated, false, phony, and sterilized garbage, designed for public consumption. To put it bluntly, they’re propaganda. Read More |
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04.06.12- Central Planning for Dummies 
The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations.
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04.05.12- Exactly Why This Time IS Different And the Fed Will Be
The following is an excerpt from my latest issue of Private Wealth Advisory. In it I lay out precisely why the coming Crisis in Europe will be THE Crisis I’ve been forecasting for the last 24 months. Over the last two years, I’ve been caught into believing a Crash was coming several times. In some ways I was right: we got sizable corrections of 15+%. But we never got the REAL CRASH I thought we would because the Fed stepped in. So what makes this time different? Read More |
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04.04.12- The Fed Confronts Itself
Wall Street is buzzing about the annual report just put out by the Dallas Federal Reserve. In the paper, Harvey Rosenblum, the head of the Dallas Fed’s research department, bluntly calls for the breakup of Too-Big-To-Fail banks like Bank of America, Chase, and Citigroup. The government’s bottomless sponsorship of these TBTF institutions, Rosenblum writes, has created a “residue of distrust for government, the banking system, the Fed and capitalism itself.” I don’t know whether to laugh or cry. Read More |
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04.03.12- The Buck Stops Here:
Already on the defensive due to a persistent failure to achieve its stated policy aims, the US Fed was subject to much fresh criticism over the past week, including from the BRIC nations, collectively the largest foreign holders of US dollar reserves. While the dollar remains the world’s pre-eminent reserve currency, there is growing recognition everywhere, except inside the Fed itself, that a choice will soon have to be made: Either the Fed must move to implement a credible, rules-based monetary policy, focused primarily on preserving the purchasing power of the dollar, or the dollar will lose reserve currency status, initiating a vicious spiral of dollar and US Treasury market weakness, which would quickly spill over into the financial system generally. Were that to happen, the current debate about how to reduce the US budget deficit would be promptly settled, as it would become impossible for the US to finance public sector deficits in the first place. Does the Fed, or the government, see the danger? Read More |
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04.02.12- Visible on the horizon: Inflation
People are beginning to realize that the inflation joke is on them, with rising prices everywhere and deflation nowhere in sight. Plus: Words of wisdom on gold. I have owned gold and gold-related investments aggressively since 2001 for one main reason: the mismanagement at the U.S. Federal Reserve, with its unplanned and unarticulated determination to debase our currency and promote inflation. Though we have had long periods of apparent stability, since 1971 stability has really been the case only when Paul Volcker was Fed chairman and immediately after his tenure. Read More |
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