From the article:
“Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly…. Central banks, including the U.S. Federal Reserve, have taken aggressive action, consistently lowering interest rates such that today they hover near zero. They have also pumped trillions of dollars’ worth of new money into the financial system. Yet such policies have only fed a damaging cycle of booms and busts, warping incentives and distorting asset prices, and now economic growth is stagnating while inequality gets worse. It’s well past time, then, for U.S. policymakers — as well as their counterparts in other developed countries — to consider a version of Friedman’s helicopter drops. In the short term, such cash transfers could jump-start the economy… The transfers wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them”…
- It Begins: Council On Foreign Relations Proposes That “Central Banks Should Hand Consumers Cash Directly” (ZeroHedge, Aug 26, 2014):
… A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money
- Ben Bernanke, Deflation: Making Sure “It” Doesn’t Happen Here, November 21, 2002
A year ago, when it became abundantly clear that all of the Fed’s attempts to boost the economy have failed, leading instead to a record divergence between the “1%” who were benefiting from the Fed’s aritficial inflation of financial assets, and everyone else (a topic that would become one of the most discussed issues of 2014) and with no help coming from a hopelessly broken Congress (who can forget the infamous plea by a desperate Wall Street lobby-funding recipient “Get to work Mr. Chariman”), we wrote that “Bernanke’s Helicopter Is Warming Up.” Continue reading »
… and Europe:
H/t reader squodgy:
“Being a former member of the chosen few, he rejected their ways and chose a form of Christianity.
He knows how the corrupt jews think and plan, and so far, his assessment has been spot on.
This next forecast is worrying, not least because it proves where all the bail out money has gone…..and it isn’t to the middle and lower classes…..”
Bail-ins are coming to a country near you.
Brother Nathanael’s YouTube channel is blocked in several countries, which is why I have provided some alternative uploads for you.
Prepare for collapse.
Physical gold and silver will protect you from bail-ins, but only real preparedness (food, water etc.) will keep you and your family alive.
They don’t need to confiscate your guns, all they need to do is collapse the system and head to their DUMBS …
Most people have only food for 3 days and then the only thing they have left is guns and ammo, lots of ammo.
And then what?
In 2002 one of Dr. Rima E. Laibow’s patients, a head of state, told her:
“It’s almost time for the great culling to begin.”
Dr. Rima E. Laibow’s husband is Albert “Bert” Newton Stubblebine III a retired Major General in the United States Army. He was the commanding general of the United States Army Intelligence and Security Command from 1981 to 1984, when he retired from the Army.
What she really is, is a sad elite puppet.
- Janet Yellen Is An Insult To Americans (ZeroHedge, Aug 22, 2014):
By Raul Ilargi Meijer of The Automatic Earth
Janet Yellen Is An Insult To Americans
If you’re a girl and you’re old and you’re grey and you’re the size of a hobbit, who’s going to get angry at you? If your predecessor had all the qualities anyone could look for in a garden gnome, and his predecessor was known mainly as a forward drooling incoherent oracle, how bad could it get? Think they select Fed heads them on purpose for how well they would fit into the Shire?
Janet Yellen has a serious problem: the story no longer fits. The Fed under Bernanke said in its forward guidance that it would taper if certain job market conditions were met. And now they have been, at least on paper, but Yellen knows only too well that those are not the real numbers [ZH: as we explicitly warned would happen in December 2012]. Continue reading »
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- Car Repos Soar 70% As Auto Subprime Bubble Pops; “It’s Contained” Promises Fed (ZeroHedge, Aug 20, 2014):
The auto loan subprime bubble may be the latest to burst (after student loans) as the rate of car repossessions jumped 70.2 percent in the second quarter, with much of that increase coming from finance companies not run by automakers, banks or credit unions. “The number of delinquencies and repossessions rising is what we would expect as the auto industry sells more vehicles,” “But this slight uptick is one to keep an eye on.” The surge in delinquencies and repossessions is being driven primarily by borrowers with subprime and deep subprime credit scores.
- 14 Reasons Why The U.S. Economy’s Bubble Of False Prosperity May Be About To Burst (Economic Collapse, Aug 14, 2014):
Did you know that a major event just happened in the financial markets that we have not seen since the financial crisis of 2008? If you rely on the mainstream media for your news, you probably didn’t even hear about it. Just prior to the last stock market crash, a massive amount of money was pulled out of junk bonds. Now it is happening again. In fact, as you will read about below, the market for high yield bonds just experienced “a 6-sigma event”. But this is not the only indication that the U.S. economy could be on the verge of very hard times. Retail sales are extremely disappointing, mortgage applications are at a 14 year low and growing geopolitical storms around the world have investors spooked. For a long time now, we have been enjoying a period of relative economic stability even though our underlying economic fundamentals continue to get even worse. Unfortunately, there are now a bunch of signs that this period of relative stability is about to end.
The following are 14 reasons why the U.S. economy’s bubble of false prosperity may be about to burst: Continue reading »
- Three Chart Alarm: The Fed Has Set-Up The Corporate Bond Market For A Big Fall (David Stockman’s Contra Corner, Aug 5, 2014):
The three charts below, which appeared in this morning’s Wall Street Journal, are still another reminder that the Fed’s heedless fueling of the third financial bubble this century has done enormous damage to the internals of financial markets. In this case, investors and savers being brutally punished by ZIRP were herded into bonds funds in a desperate scramble for yield. Accordingly, bond fund assets soared from $1.6 trillion at the time of the financial crisis to $4.1 trillion today.
Yet the market’s structural liquidity condition has gone in the opposite direction. Dealer inventories of corporate bonds have plummeted by nearly 75% from pre-crash levels, meaning that the ratio of dealer inventories to bond fund assets has virtually been vaporized. In 2008 that ratio stood at 15%, but presently it is only 1.5%. Likewise, daily trading volumes have been cut in half since the crisis.
The implication is no mystery. When the financial markets eventually succumb to a “risk-off” selling panic, the corporate bond market will gap down violently. As one astute analyst put it:
“Everyone is hoping to be first through the exit,” said Matt King, global head of credit strategy at Citigroup in London. “By definition, that’s not possible.”
Stated differently, the Fed’s explicit campaign to force grandpa out of CDs and into corporate bond funds has caused a vast mis-pricing of liquidity. In a healthy free market, bond fund yields would carry a significant discount for illiquidity, and issuers of riskier corporate credits would face far higher yield spreads vs. the 10-year treasury benchmark.
So once again, the serial bubble machine in the Eccles Building has generated a huge unnatural market deformation that is inherently unstable and increasingly fragile. When the break comes, years worth of “extra” yield will be wiped-out in a traumatic drop in bond prices caused by a panic at the exit ramp.
Published on Aug 3, 2014
Full description and discussion at: http://www.peakprosperity.com/podcast…
David Stockman, former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier is an insider’s insider. Few people understand the ways in which Washington DC, The Fed, and Wall Street work and intersect better than he does.
He’s extremely concerned by the “perfect storm” he sees of concurrent failures in US policy across foreign, monetary, economic, and fiscal fronts.
- Deutsche Bank “Raises The Warning Flag”: What The Most Important Chart For The Market Reveals (ZeroHedge, Aug, 4, 2014):
“The risk sell-off we’ve seen in recent weeks frustrates us a little as the chart we’ve published most this year has pretty much predicted that tougher times would come around July. We’ve been paying it a lot of attention for over a year now but decided to wait until the autumn before we raised the warning flags. The chart in question (included in today’s pdf) is the one showing the Fed balance sheet and the S&P 500 (as a proxy for risk generally). As you can see, since the Fed balance sheet was used as an aggressive policy tool post-GFC, the graph suggests that the S&P 500 is well correlated with the size of the Fed balance sheet… This is important as virtually all of the mega rally in the last 5 years has come in the Fed balance sheet expansion periods.” – Deutsche Bank
- Ron Paul: Stocks are in a bubble and will crash (CNBC, July 29, 2014):
Ron Paul, the former U.S. representative from Texas and perhaps America’s most popular libertarian voice, has long said that the nation’s monetary and fiscal policies would result in massive inflation. According to the common measures of inflation, this has not yet occurred. But Paul maintains that the inflation he has warned of has indeed come to fruition in asset prices, and that once it unravels, a market crash will ensue. Continue reading »
- The Rot Within, Part II: Inflation Is Not “Growth” (OfTwoMinds, July 22, 2014):
Just as the Federal Reserve cannot directly force you to stick the needle of monetary heroin (debt) into your arm, it also can’t force employers to pay employees more.
The official policy of the Central Bank (Federal Reserve)/government is: inflation is necessary for “growth,” i.e. economic expansion. The unstated reason for this official support of inflation is that it’s easier for borrowers to service their debts as their income inflates.
- The Coming Crash Is Simply the Normalization of a Mispriced Market (OfTwoMinds, July 17, 2014):
The correlation between the Fed’s monetary heroin production and the stock market will break down as the market normalizes.
In the spirit of calling things what they are, longtime correspondent Harun I. explains that market crashes are simply distorted/mispriced economies attempting to normalize.
Here’s Harun’s commentary:
- If This Keeps Up, They Will Have To Start Putting Armed Guards On Food Trucks (Economic Collapse, July 16, 2014):
The basic necessities in life just keep getting more expensive. On Tuesday, Hershey announced that the price of all of their chocolate bars is going to go up by about 8 percent. That is particularly distressing to me, because I am known to love chocolate. But if it was just chocolate that was becoming significantly more expensive perhaps that would be okay. Last month, it was coffee. J.M. Smucker, one of the largest coffee producers in the United States, announced that it planned to raise coffee prices by about 9 percent. And Starbucks has announced a bunch of price increases across the board on their coffee products. Of course we could all survive without chocolate and coffee, but as you will see below just about every food category is becoming more expensive. If this keeps up, could we eventually see armed guards in grocery stores and on food trucks? Continue reading »
- Why We’re Doomed: Interest and Debt (Washington’s Blog, July 15, 2014):
Even if the economy were growing at a faster pace, it wouldn’t come close to offsetting the interest payments on our ever-expanding debt.
If you want to know why the Status Quo is unsustainable, just look at interest and debt. These are not difficult to understand: debt is a loan that must be paid back or discharged/written off and the loss absorbed by the lender. Interest is paid on the debt to compensate the owner of the money for the risk of loaning it to a borrower.
It’s easy to see what’s happening with debt and the real economy (as measured by GDP, gross domestic product): debt is skyrocketing while real growth is stagnant. Put another way–we have to create a ton of debt to get a pound of growth.
There is no other way to interpret this chart.
source: Acting Man
The Status Quo has only survived this crushing expansion of debt by dropping interest rates to historic lows. This is a chart of the yield on the 10-year Treasury bond, which reflects the extraordinary decline in interest rates over the past two decades. Continue reading »
- “Waiting For Armageddon” – Say It Isn’t So? (Zerohedge, July 11, 2014):
Brent Johnson, of Santiago Capital, provides a brief but broad overview of the state of the state in the world’s precious metals markets (and monetary policy implications). Often accused of “waiting for Armageddon”, Johnson is quick to note that he would love to be wrong… “If I thought it possible to carry out the next 40 years the same as the last – by sticking to the status quo – I’d do it.” But it’s not… and no matter how many “say it isn’t so” you hear from the mainstream, it is inevitable (when not if). Simply put, he warns, if you do have to have capital markets exposure – make sure you have insurance – you need it now more than ever.
Full presentation below…
Watch the presentation HERE.
H/t reader squodgy:
“Like I said…all banksters are in it together to look after each other.
The crunch is imminent, no doubt.”
There is neither real criticism from German politicians, nor any visible efforts to return German gold held in the US, so it seems that US controls Germany, economic analyst Michael Mross told RT.
In one of its recent reports Bloomberg claimed that Germany decided not to repatriate its gold reserves from the US, instead the Bundesbank issued an official statement that underscores it’s “trust” in its American partners. According to Bloomberg, Germany gave up after repatriating just 5 tons of gold, though earlier it was told that it would get all the German gold back by 2020.
RT: What’s really behind Germany’s efforts to get its gold reserves back?
Michael Mross: These German efforts to get back gold reserves are not really there. They are talking about it but it is only a simple and ridiculous theatre in my opinion. I cannot see any effort to do it. What we have is lack to re-transport or take back, 300 tons before 2020, but also this is ridiculous – last year they took back only 37 tons. At the end of the day, it is to make the public calm, but it is not really an effort to take back the gold. Continue reading »
H/t reader M.G.:
“You need to read to the last sentence to get what I have been saying for months. Less than half the world international transactions are now completed in US dollars……..”
- Stiglitz: I’m ‘very uncomfortable’ with current stock levels (CNBC, July 7, 2014):
Nobel Prize-winning economist Joseph Stiglitz said on Monday he is “very uncomfortable” with current stock market levels, arguing they do not equal a strong economic recovery in the United States.
The Dow breached 17,000 points on Thursday before the U.S. markets closed for the long July Fourth weekend. The jump came after the U.S. government reported the economy created a better-than-expected 288,000 jobs in June and the unemployment rate fell to 6.1 percent.
“The reason the stock market is high, in part, is that interest rates are low, wages are low and the emerging markets are still growing much faster than the U.S. economy, let alone Europe,” Stiglitz said. He pointed to the fact that many U.S.-listed multinationals are increasingly getting a large chunk of their profits from emerging markets. Continue reading »
H/t reader M.G.:
“How they are white washing rate hikes”
“Suddenly, higher interest rates are a good thing. Rubbish about hiring, the way they twist the numbers is criminal………..
This is what I have been worried about, greedy bankers are going after the higher level of the remaining middle class. These are the folks sitting on multiple properties which they owe more on than they are currently worth……still waiting for that so-called recovery that just isn’t happening.
The FED is a privately held bank, and they serve the greedy, not the nation. They are now digging in their tentacles more deeply. The US has no control of the FED. The worst thing, as my friend who has infinite unknown has said again and again, is the creation of such a monster.“
From the article:
“Continued labor market improvements alongside a pickup in second-half growth …”
And yes, you really can’t make this stuff up!
- Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)
And as I’ve said before …
‘Recovery’ is the ‘Greatest Depression’
The U.S. will simply not be able to pay for higher interest rates on its debt (and the Fed will sooner or later go back into high gear quantitative easing mode).
Prepare for collapse … and chaos!
- Why things could be about to change for the dollar (CNBC, July 7, 2014):
After a weekend of celebrating America’s birthday, traders could come back to the desks Monday and buy its currency, with the stage set for a U.S. dollar breakout in the second half of the year.
Strategists and traders have been predicting it for months: 2014 was supposed to be the year of the dollar, where the Federal Reserve’s tapering of quantitative easing and an improving economy would boost the greenback’s value against other currencies, where central banks are easing or dealing with economic or geopolitical challenges.
But they’ve been wrong. Continue reading »
Like Bernanke, Yellen is NOT wrong, just evil.
- Yellen Is Flat-Out Wrong: Financial Bubbles Are Caused By The Fed, Not The Market (ZeroHedge, July 5, 2014):
More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to global ripples of crisis in credit, funding and currencies, was the opposite of flexibility. Perhaps a better definition of the word would be a place to start.
But her meaning was a bit different, in that it is clear (from this speech and prior assertions, wrong as they were, about the mid-2000’s housing bubble) she sees bubbles as “market” events in which the central bank’s role is primarily shock absorption. In other words, idiot investors wholly of their own accord create bubbles and it’s the job of the munificent and enlightened Federal Reserve to help ensure that such “market” madness is “contained” without further economic destruction.
- The Delusion Of Perpetual Motion; Bob Shiller Warns “I’m Definitely Concerned” (ZeroHedge, June 29, 2014):
“I am definitely concerned. When was [the cyclically adjusted P/E ratio or CAPE] higher than it is now? I can tell you: 1929, 2000 and 2007;” warned Bob Shiller this week, adding that “it’s likely to turn down again, just like it did the last two times.”
As John Hussman explains,
The central thesis among investors at present is that they are “forced” to hold stocks, given the alternative of zero short-term interest rates and long-term interest rates well below the level of recent decades (though yields were regularly at or below current levels prior to the 1960s, which didn’t stop equities from being regularly priced to achieve long-term returns well above 10% annually). The corollary is that investors seem to believe that as long as interest rates are held near zero, stocks will continue to advance at a positive or even average or above-average rate. Continue reading »
- Former Governor Warsh Slams Fed’s “Reverse Robin Hood” Policies (ZeroHedge, June 26, 2014):
Isn’t it odd that when ‘officials’ are no longer part of the status-quo-sustainers, how the truthiness flows… As former Fed Governor Kevin Warsh explained this morning, “on the fairness point – if you have access to credit, if you’ve got a big balance sheet, the Fed has made you richer,” concluding rather too honestly for some people’s liking, “I would say [Fed policy] has been in some sense Reverse Robin Hood.” The bottom line, he chides, “this is a way to make the well to do more well to do because that’s all the Federal Reserve can do.”
- Germany’s “End The Fed” Protest Organizer Gets Car Fire-Bombed (ZeroHedge, June 26, 2014):
Anyone saying “the Fedeal Reserve Act is bad” in Germany is, according to Lars Maehrholz, looked upon by the mainstream as being a Nazi. The organizer of the widespread “End The Fed” rallies that we discussed previously, explained that he is not only under attack by the main stream media and political system in Germany but also physical threats that resulted in a car he was in getting fire bombed by an anonymous perp.
Lars received threats that this would happen online and now his friends car that he was in, was set on fire.
The police say that the car caught on fire by itself and are not investigating the case. Luckily Lars and his friend were not in the car when it was set on fire.
In this video Luke Rudkowski talks to Lars Maehrholz a skydiver that became the main organizer of the massive Monday peace vigils in Berlin.
The Monday peace vigil is an autonomous fully independent movement that gained massive popularity in Berlin that is against the U.S Federal Reserve.
- Stone Cold Proof That Government Economic Numbers Are Being Highly Manipulated (Economic Collapse, June 25, 2014):
How in the world does the government expect us to trust the economic numbers that they give us anymore? For a long time, many have suspected that they were being manipulated, and as you will see below we now have stone cold proof that this is indeed the case. But first, let’s talk about the revised GDP number for the first quarter of 2014 that was just released. Initially, they told us that the U.S. economy only shrank by 0.1 percent in Q1. Then that was revised down to a 1.0 percent contraction, and now we are being informed that the economy actually contracted by a whopping 2.9 percent during the first quarter. So what are we actually supposed to believe? Sometimes I almost get the feeling that government bureaucrats are just throwing darts at a dartboard in order to get these numbers. Of course that is not actually true, but how do we know that we can actually trust the numbers that they give to us?
Over at shadowstats.com, John Williams publishes alternative economic statistics that he believes are much more realistic than the government numbers. According to his figures, the U.S. economy has actually been continually contracting since 2005. That would mean that we have been in a recession for the last nine years.
Could it be possible that he is right and the bureaucrats in Washington D.C. are wrong? Continue reading »
- The State Of The Union: A Friendly Reminder Where We Stand Now (ZeroHedge, June 25, 2014):
Spend more than a few minutes watching CNBC (yes all 2,000 of you) and you will be told how great things are, how great things will be, and how (no matter how bad the immediate ‘event’ is) the hockey-stick of future exceptionalism will always be there. In the interests of full disclosure, that is wrong and these four charts show why… a friendly reminder of the state of the union…
…But then there is all this wonderful wealth creation… Continue reading »
Aaaand it’s gone …
This, by the way, is post no. 26,000!!!
- Germany Gives Up On Trying To Repatriate Its Gold, Will Leave It In The Fed’s “Safe Hands” (ZeroHedge, June 23, 2014):
Several months after it was revealed that Germany was able to only recover a miserable 5 tons of its gold in all of 2013 (under 10% of the 84 tons it was scheduled to repatriate), Germany appears to have given up entirely in its attempt to recover gold which simply is not there, and as Michael Krieger reports, citing Bloomberg, has decided to keep “it” (by “it” we don’t mean the gold since that clearly has not been at the Fed for decades, but merely the paper promises of ownership: for more see China’s gold rehypothecation scandal and how the unwind works) at the NY Fed after all. That is to say, in the “safe hands” of former Goldmanite Bill Dudley.
Just last week, I published a post titled, Video of the Day – “End the Fed” Rallies are Exploding Throughout Germany, which subsequently went viral. Interestingly, only a few days later we find out that Germany’s very own criminal political class has decided it will continue to store the nation’s gold in New York rather than bring it back home as had been the intention. It’s quite ironic that just as protests against the fascist Federal Reserve are spreading throughout the land, the political class officially decides to keep Germany’s treasure across the Atlantic, in care of none other than The Fed itself. Continue reading »
- “End The Fed” Rallies Are Exploding Throughout Germany (Liberty Blitzkrieg, June 19, 2014):
This is a fascinating development and one that I had no idea was happening until today. It seems that rallies are spreading throughout Germany protesting the corrupt and dying global status quo. One of the key targets of these groups is the U.S. Federal Reserve system, which as I and many others have maintained, is the core cancer infecting the entire planet.
As I tweeted earlier today:
As I have said many times before, future generations will look back at Central Banking as we look back at slavery.
— Michael Krieger (@LibertyBlitz) June 19, 2014
According to the organizer of these rallies, they have now spread to up to 100 cities and have a combined attendee base of around 20,000. What is also interesting, is that the mainstream media in Germany is calling them Nazis. In Germany, if you don’t support Central Banking, this apparently means you are a Nazi. What a joke. Just more proof mainstream media everywhere is complete and total propaganda. It is also a good sign, since it shows the desperate lengths to which the power structure will go to keep their criminal ponzi alive.
Do these folks seem like Nazis to you?
Quantitative easing = printing money = creating money out of thin air = increasing the money supply = inflation = hidden tax on monetary assets = theft!
“When a country embarks on deficit financing (Obamanomics) and inflationism (Quantitative easing) you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”
- Ron Paul
“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.”
- Ron Paul
- Inflation? Only If You Look At Food, Water, Gas, Electricity And Everything Else (Economic Collapse, June 19, 2014):
Have you noticed that prices are going up rapidly? If so, you are certainly not alone. But Federal Reserve chair Janet Yellen, the Obama administration and the mainstream media would have us believe that inflation is completely under control and exactly where it should be. Perhaps if the highly manipulated numbers that they quote us were real, everything would be fine. But of course the way that the inflation rate is calculated has been changed more than 20 times since the 1970s, and at this point it bears so little relation to reality that it is essentially meaningless. Anyone that has to regularly pay for food, water, gas, electricity or anything else knows that inflation is too high. In fact, if inflation was calculated the same way that it was back in 1980, the inflation rate would be close to 10 percent right now.
But you would never know that listening to Federal Reserve chair Janet Yellen. In the video posted below, you can listen to her telling the media that there is absolutely nothing to be concerned about…
And it is really hard to get too upset with Janet Yellen. Continue reading »