Infinite Unknown

- Washington State Considers Gold and Silver as Legal Tender (The New American, Jan. 31, 2012):

In an effort to protect the property of citizens from the harmful effects of inflation created by the Federal Reserve, lawmakers in Washington State introduced a bill (PDF) over the weekend to declare gold and silver legal tender within the state. Sound-money advocates across the nation immediately praised the effort.

Citing several provisions of the U.S. Constitution and various rulings by the U.S. Supreme Court, the legislation notes that only gold and silver are to be considered legal tender by the states. The bill also blasts the federal government for imposing an unconstitutional monetary system on the states and for unjustly confiscating citizens’ wealth by allowing the Fed to create money.

The legislation seeks to offer the people of Washington an opportunity to use constitutional money instead of the ever-depreciating paper currency issued by the American central bank, lawmakers who sponsored the bill told The New American. However, no one would be forced to accept gold or silver as payment.

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Tags: Constitution, Dollar, Economy, Fed, Federal Reserve, Global News, Gold, Government, Law, Politics, Silver, Society, U.S., Washington

- Stephen Roach Explains How The Fed Is Pulling The Wool Over Our Eyes (ZeroHedge, Jan. 27, 2012):

“Bernanke is betting the ranch on open-ended QE and zero interest rates and it worries me” is how Stephen Roach of Morgan Stanley starts this must-see reality-check interview with Bloomberg TV’s Tom Keene. The reason for his concern is simple, the current Fed modus operandi is a framework for rescuing economies in crisis but does little to sustain economic recovery. Roach agrees with Cal’s Eichengreen that the European and US central banks are indeed in a policy trap, committed to a path of action that has to be perpetually ante’d up to maintain the dream. With Europe in recession already in his view, Roach does not expect the tough structural action until we see greater social unrest or overwhelming unemployment and reminds us of how close we got when Greece threatened the referendum in the late summer. He goes on to discuss China (positive on their efforts and ‘solid strategy’) and it’s relative success as a regime which he contrasts with our “central bankers who pull the wool over our eyes with ZIRP and magical QE”. Taking on the mistakes of Greenspan, letting capitalism go unchecked, and his incredulity at the ‘glide-path’ charts we were treated to yesterday by the Fed’s bankers (‘accountability‘), Roach sees the painful process of deleveraging from excess debt, insufficient savings, and over-consumption as likely to take a long time as we should not assume investment will be the driver as Obama goes ‘protectionist’ (in the SOTU) on our 3rd largest export partner – yes, China.

Tags: Banking, Economy, Fed, Federal Reserve, Global News, Government, Morgan Stanley, Politics, Quantitative Easing, Stephen Roach, U.S.

- Bill Gross’ Explains The FOMC Decision: “QE 2.5 Today, QE 3, 4, 5 … Lie Ahead” (ZeroHedge, Jan. 25, 2012):

Pimco just saved you lots of garbage sellside “research” “analysis” on the topic.

Tags: Bill Gross, Dollar, Economy, Fed, Federal Reserve, Global News, Gold, Government, Obama administration, PIMCO, Politics, Quantitative Easing, Silver, U.S.

- No One Knows Truth About $300 Billion Bonds From Alleged ’34 Plane Crash (Bloomberg, Jan. 18, 2012):

Chris Estrella, a Filipino social worker, says he led a troop of five porters out of a Mindanao jungle in January 2000 with a weather-beaten iron and leather box crammed with $25 billion of U.S. government bearer bonds.

“The elders of the Umayamnon tribe told me an American plane crashed in their river in the 1930s,” Estrella, 47, says by mobile phone from a footpath between the tribal village and Davao, the largest city on the Philippine island. “The river dried up in the 1990s, and the natives went into the plane and found 12 boxes that contained $300 billion in bonds.”

Each box, emblazoned with the Great Seal of the United States and the words “Federal Reserved Bond,” held five gold coins struck with a portrait of George Washington on one side, Estrella says. They rested atop stacks of certificates purporting to have been issued by the Federal Reserve Bank of Atlanta in 1934 and redeemable in gold bullion. The notes bore the signature of then Treasury Secretary Henry Morgenthau Jr.

Such fixed-income instruments, also known as coupon bonds, belong to whoever holds them, rather than to a registered owner. Vouchers representing interest payments were attached to the 30- year bonds that were denominated in amounts of as much as $100 million. Estrella says he later brought three other similarly filled chests out of the jungle. Continue reading »

Tags: Bonds, Debt, Economy, Fed, Federal Reserve, Global News, Government, Philippines, Politics, U.S.

YouTube Added: 16.01.2012

Tags: Bailout, Banking, Barack Obama, Bill of Rights, Constitution, Debt, Economy, Fed, Federal Reserve, Global News, Government, Obama administration, Politics, Ron Paul, Society, Students, U.S.

Wow!

YouTube Added: 15.01.2012

Tags: Bill of Rights, Constitution, Debt, Economy, Fed, Federal Reserve, Global News, Government, Jon Huntsmen, Michele Bachmann, Mitt Romney, Newt Gingrich, Politics, Rick Santorum, Ron Paul, Society, Tom Davis, U.S.

YouTube Added: 10.01.2012

YouTube

Tags: Bailout, Banking, Bill of Rights, Constitution, Debt, Dollar, Economy, Fed, Federal Reserve, Freedom, Global News, Government, Keynesianism, Middle Class, Military, Politics, Quantitative Easing, Ron Paul, U.S.

YouTube

See also:

- US: As ’11 Just Ended Here Are 11 Charts Of 11 Disturbing 11 Year Trends

Tags: Banking, Dictatorship, Dollar, Economy, Fed, Federal Reserve, Gerald Celente, Global News, Government, Law, Max Keiser, MF Global, NDAA, New World Order, Obama administration, Paul Craig Roberts, Police State, Politics, Quantitative Easing, Society, U.S., Unemployment

- Record Consecutive Treasury Dump From Fed’s Custody Account (ZeroHedge, Jan. 6, 2012):

While there were few nuggets worth mentioning in yesterday’s H.4.1 update, one item is certainly worth noting. After we pointed out last week when we noted that there was a record monthly dump of Treasury paper from the Fed’s custodial account amounting to some $69 billion, the week ended January 4 has seen yet another outflow, this time amounting to $9 billion in US Treasurys. This is the 5th week in a row of foreigners selling US paper, and while it has yet to match the record 6 weeks of outflows from October (discussed here), the consolidated outflow notional is now a record high at $77 bilion, higher than the previous record of $52 billion. Needless to say banks from around the world are repatriating dollars. The question is what they are converting the USD into, and how much longer will the go on for: the last thin the US can afford is a wholesale dumping of its Treasurys. Because as the chart below vividly demonstrates, the traditional diagonal rise in foreign holdings of US paper has not only pleateaued, but it is in fact declining: a first in the history of the post-globalization world.

Tags: Bonds, Debt, Fed, Federal Reserve, U.S.

- Top Three Central Banks Account For Up To 25% Of Developed World GDP (ZeroHedge, Jan. 5, 2012):

For anyone who still hasn’t grasped the magnitude of the central planning intervention over the past four years, the following two charts should explain it all rather effectively. As the bottom chart shows, currently the central banks of the top three developed world entities: the Eurozone, the US and Japan have balance sheets that amount to roughly $8 trillion. This is more than double the combined total notional in 2007. More importantly, these banks assets (and by implication liabilities, as virtually none of them have any notable capital or equity) combined represent a whopping 25% of their host GDP, which just so happen are virtually all the countries that form the Developed world (with the exception of the UK). Which allows us to conclude several things. First, the rapid expansion in balance sheets was conducted primarily to monetize various assets, in the process lifting stock markets, but just as importantly, to find a natural buyer of sovereign paper (in the case of the Fed) and/or guarantee and backstop the existence of banks which could then in turn purchase sovereign debt on their own balance sheet (monetization once removed coupled with outright sterilized asset purchases as is the case of the ECB). And in this day and age of failed economic experiments when a dollar of debt buys just less than a dollar of GDP (there is a reason why the 100% debt/GDP barrier is so informative), it also means that central banks now implicitly account for up to 25% of developed world GDP!

What does this mean? It means that nearly $8 trillion in world economic growth is artificial and exists only courtesy of central bank intervention – if one is looking for the reason why there is no mean reversion to a more stable period of time, there’s your answer. It also means that central banks will never unwind their “assets”, either actively, or passively, by letting them mature, as doing so would effectively mean an accelerated return to a non pro forma status quo, one in which global GDP suddenly finds itself $8 trillion less. It also means that in this age of ongoing consumer and corporate deleveraging, central banks will have no choice but to continue monetizing not to generate incremental growth, but to offset debt destruction elsewhere. And of course, in order to sustain global GDP growth of ~3%, they will have to print even more, in other words, accrue more liabilities (excess reserves) which of course would be funded by monetizing even more paper issuance (which Congress would be delighted to oblige with). Which is why we find the announcement by the Fed that it will notify in advance what the Fed Funds rate will be, to be beyond humorous: after all in an environment of active monetization, the only possible interest rate is zero (although the ECB tried a brief experiment otherwise, when it held higher rates than 1% to combat inflation even as it tried, unsuccessfully, to create a debt monetizing off balance sheet vehicle- the EFSF and the ESM).

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Tags: Bank of Japan, ECB, Economy, Fed, Federal Reserve, GDP, Global News