On July 1, 2005, the Chairman of then President George W. Bush’s Council of Economic Advisors told a reporter from CNBC that,
“We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.”
His name was Ben Bernanke. And within a year he would become Chairman of the Federal Reserve.
Of course, we now know that he was dead wrong. Continue reading »
When it comes to the Fed, Congress is mired in hypocrisy. The anti-regulation, de-regulation crowd on Capitol Hill shuts its mouth when it comes to the most powerful regulators of all – you and the Federal Reserve. Meanwhile, Congress goes along with the out-of-control, private government of the Fed—unaccountable to the national legislature. Moreover, your massive monetary injections scarcely led to any jobs on the ground, other than stock and bond processors.
If I had to choose one single institution and one single individual most responsible for the weak, putrid and unbelievably corrupt oligarch-controlled U.S. economy, I would choose the Federal Reserve and Ben Bernanke. Continue reading »
Back in March, the former Fed chairman said that we’re in trouble because “productivity is dead in the water, and real capital investment is way below average because business people are very uncertain about the future.” Greenspan went on to add that entitlement programs are crowding out capital investment, and thus crowding out productivity.”
Alan Greenspan is back delivering more warnings about the state of the global economy, hammering home the same key points made back in March. Continue reading »
There are limits on what the Fed can do when this bubble bursts, as it inevitably will, as surely as night follows day.
It’s no secret that virtually every pension fund is dead man walking, doomed by central banks’ imposition of low yields on safe investments, i.e. Zero Interest Rate Policy (ZIRP).
Given that both The Economist and The Wall Street Journal have covered the impossibility of pension funds achieving their expected returns, this reality cannot be a surprise to anyone in a leadership role.
Public Pension Funds Roll Back Return Targets:Few managers count on returns of 8%-plus a year anymore; governments scramble to make up funding
Here’s problem #1 in a nutshell: the average public pension fund still expects to earn an average annual return of 7.69%, year after year, decade after decade. Continue reading »
The recent resolution of the parliamentary Assembly of the OSCE fully equalizes the role of the Soviet Union and Nazi Germany at the outbreak of the Second World War, except that it had the purely pragmatic purpose of extorting money from Russia on the contents of some of the bankrupt economies, intended to demonize Russia as the successor state to the USSR, and to prepare the legal ground for the deprivation of her right to speak out against revision of results of war.
But if we approach the problem of responsibility for the war, then you first need to answer the key question: who helped the Nazis come to power? Continue reading »
After making over $1 billion in one day last August, and warning that “the markets are overvalued to the tune of 50%,” Mark Spitznagel knows a thing or two about managing tail risk.
The outspoken practitioner of Austrian economic philosophy tells The FT, “Markets don’t have a purpose any more – they just reflect whatever central planners want them to,” confirming his fund-management partner, Nassim Taleb’s perspective that “being protected from fragility in the financial system is a necessity rather than an option.”
“This is the greatest monetary experiment in history. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable.” Continue reading »
“KASHKARI: WE’RE HERE TO SERVE MAIN STREET (ON A PLATTER TO THE ELITES)”
Former Goldmanite, and current Minneapolis Fed president and paradoxical “crusader” against TBTF banks and bank bailouts (such as the one he was instrumental in drafting during the financial crisis) Neil Kashkari, spoke moments ago at the Economic Club of Minnesota, where he delivered a speech titled “The Role and Limitations of Monetary Policy.” Among the otherwise irrelevant things he said the following:
- KASHKARI: WE’RE HERE TO SERVE MAIN STREET
Which is ironic for numerous reasons, among them being what SF Fed president John Wiliams said last week during the Milken Conference when asked what the biggest systemic financial risk is. To be sure, if it was all about “main street”, the Fed’s biggest worry would be deteriorating wages, a collapse in employment, the elimination of pensions, or the collapse of interest on savings. No; instead Williams said the biggest systemic financial risk currently is the possibility that “broad sets of assets are going to see big movements downward” as interest rates rise. “That’s an area that I think is a potential risk.” Continue reading »
The dollar’s recent rapid slide has been accompanied by a constant backdrop of dovish cooing from the Fed. Until this week, SocGen’s Albert Edwards notes that both equity and commodity markets had embraced the weak dollar as the elixir to solve all their ills. That relief, however, has now proved fleeting as fear of weak economic activity has reasserted its influence on investors. The weak dollar, Edwards warns, should be seen as merely a shuffling of deckchairs on the Titanic before the global economy sinks below the icy waves. Continue reading »
Take away Saudi Arabia’s oil and all that’s left are a couple of Islamic shrines and a lot of sand and hot air.
Guest Post by Robert Gore at Straight Line Logic
After three decades of internecine war, Abdul-Aziz bin Saud, allied with the fundamentalist Wahhabist Islamic sect, consolidated the House of Saud’s dominance over Arabia in 1932 with the tacit support of regional imperial power Great Britain. The bedrock of the Saudi Arabian economy, the massive pool of oil in the Al-Hasa region along the Persian Gulf coast, was discovered in 1938 and development began in 1941. Towards the end of World War II, President Roosevelt and Abdul-Aziz reached a handshake deal that has governed relations between the two nations ever since: Saudi Arabia would guarantee the flow of oil to the US at a reasonable price; the US would protect the Saud regime. Continue reading »
In Samuel Eliot Morison’s “The Oxford History of the American People,” there is a single sentence about Harriet Tubman.
“An illiterate field hand, (Tubman) not only escaped herself but returned repeatedly and guided more than 300 slaves to freedom.”
Morison, however, devotes most of five chapters to the greatest soldier-statesman in American history, save Washington, that pivotal figure between the Founding Fathers and the Civil War — Andrew Jackson. Continue reading »
The blog, goldseek.com, recently published a report on a Freedom of Information Act request they recently filed with the US government. They were seeking seven reports from federal audits of the gold at Fort Knox. The government’s response? They can’t find those reports – even though they reference those reports as evidence of the gold stored at Fort Knox in a number of ways.
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I wonder why?
Oh, wait a minute….
“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.”
– Andrew Jackson
“The bold effort the present (central) bank had made to control the government … are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.”
– Andrew Jackson
“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson. “
– A letter written by Franklin D. Roosevelt to Colonel House, November 21st, l933
Anti-slavery crusader Harriet Tubman will become the first African-American to be featured on the face of U.S. paper currency when she replaces President Andrew Jackson on the $20 bill, the U.S. Treasury Department announced on Wednesday.
She will also be the first woman on U.S. paper currency in more than a century.
The redesigned $20 bill will move Jackson to the back of the bill alongside an image of the White House, Treasury officials said. Continue reading »
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Tags: Austria, Bail-ins, Banking, Barack Obama, Bonds, Brazil, Collapse, Debt, Economy, EU, Europe, Fed, Federal Reserve, Global News, Government, Italy, Janet Yellen, Obama administration, Politics, Society, U.S., Venezuela
Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system. Continue reading »
Earlier today, former central bank staffer and Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, said something shocking. “A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as “sensible, pragmatic and nonpartisan.”
With every passing day, the Fed is slowly but surely losing the game.
Only it is not just former (and in some cases current) Fed presidents admitting central banks are increasingly powerless to boost the global economy, even if they still have sway over capital markets. What is far more insidious to the Fed’s waning credibility is when former economists affiliated with the Fed start repeating mantras that until recently were only a prominent feature in the so-called fringe media. Continue reading »
The closed-door meeting between Obama, Biden and Yellen has concluded, and moments ago the White House released the following statement:
“The President and Chair Yellen met this afternoon in the Oval Office as part of an ongoing dialogue on the state of the economy. They discussed both the near and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally. They also discussed the significant progress that has been made through the continued implementation of Wall Street Reform to strengthen our financial system and protect consumers.”
Of course, for the actual transcript of what was said, we will have to rely on some conscientious White House leaker putting it on BitTorrent, but here is our modest attempt at translating what was and what was not said: no market crashes allowed until November.
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Three weeks ago, when the Fed and Janet Yellen shocked markets with their extremely dovish statement in which they admitted the US Federal Reserve no longer is US data dependent, and instead is far more focused on global developments and especially China’s dollar-pegged currency (which makes it impossible for the Fed to be hawkish without causing further FX instability and leading to more Chinese capital flight), CNBC’s Steve Liesman asked Yellen point blank a question which would seem otherwise completely taboo: does the Fed have a credibility problem.
We live in strange economic times, stranger perhaps than at any other point in history. Since 2007-2008, the globally intertwined and dependent fiscal system has suffered considerable declines in every conceivable area. Manufacturing around the world is in a slump, from Japan to China to Europe, with the minimal manufacturing accomplished in the U.S. also fading. Consumption is falling, most notably in petroleum and raw materials. Employment is truly dismal, with the U.S. posting over 94 million people as “non-participants” in the national work force. Continue reading »
H/t reader squodgy:
“I think this man is a Fed spokesman, and thus a Rothschild puppet.
He is programming us for the reset with technical bullshit.
He clearly implies the aim of all this uncertainty is to facilitate a modified relaunch of the status quo after default, and the default will not affect the owners, because they don’t lose anything. They never do.”
Apr 5, 2016
Financial Expert James Rickards says, “The Fed wants inflation . . . . They are not getting it, but they have to have it. What does that mean for policy? That means they are not going to give up . . . . They are going to keep trying until they get inflation, and when that happens, you are going to wish you had your gold.”
How much will gold be in the future? Rickards calculates, “$10,000 per ounce with 40% backing . . . if you had 100% backing (of the dollar), that number would be $50,000 per ounce. The implied non-deflationary price of gold, depending on your assumptions, is between $10,000 and $50,000 per ounce. If you are going to have a gold standard and you want to avoid the blunder of the 1920’s, you are going to have gold at least at $10,000 per ounce and possibly much higher. I explain all this in my book.”
Join Greg Hunter as he goes One-on-One with James Rickards, the best-selling author of the brand new book called “The New Case for Gold.”
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Full article here:
Thanks to the just released February diary of Fed chief Yellen, we now know exactly when she called Bank of England Governor (and former Goldman Sachs employee) Marc Carney and ECB President (and former Goldman Sachs employee) Mario Draghi.
Can you guess when?
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The stock market has regained all of its loses year to date as economic indicators continue to flash red, corporate profits continue to plunge, consumers continue to spend less at retailers, real wages continue to fall, and housing sales continue to decline. The entire dead cat bounce has been generated through corporate stock buybacks, Wall Street lemmings trying to make up for their terrible year to date investing performance, and central bankers who will stop at nothing to verbally manipulate markets higher – since their monetary machinations over the last seven years have been a miserable failure in reviving the real economy.
As John Hussman points out, the market is poised to deliver nothing over the next decade, with a 40% to 55% “dip” in the foreseeable future. I wonder how many barely sentient, iGadget addicted, non-questioning, normalcy bias dependent zombies are prepared for a third Federal Reserve generated market collapse in the last 15 years? Continue reading »
The incredible story behind the cyber heist that resulted in an $81 million loss for the central bank of Bangladesh continues to get more intriguing. Bangladesh is looking to sue the NY Fed for lapses in protocol, while Philippine officials race to untangle a complex web of bad actors and shady go-betweens that looks like it may lead back to one Kim Wong, who 15 years ago was accused of connecting then-Senator Panfilo Lacson to drug lords. Meanwhile, a cyber security expert who spoke to the police and the media was kidnapped from a motorized rickshaw by men in plainclothes who blindfolded him, threw him in a vehicle, and drove away.
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Not too dovish (upgrade uncertainty), not too hawkish (lowered rate hikes), a goldilocks statement, with just a little less inflation and just a little less GDP growth, and just two more quarter of near-ZIRP rates is what it takes for the world to get it all together.
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The story of the theft of $100 million from the Bangladesh central bank – by way of the New York Federal Reserve – is getting more fascinating by the day.
As we reported previously, on February 5, Bill Dudley’s New York Fed was allegedly “penetrated” when “hackers” (of supposed Chinese origin) stole $100 million from accounts belonging to the Bangladesh central bank. The money was then channeled to the Philippines where it was sold on the black market and funneled to “local casinos” (to quote AFP). After the casino laundering, it was sent back to the same black market FX broker who promptly moved it to “overseas accounts within days.”
That was the fund flow in a nutshell. Continue reading »
Someone at the New York Fed messed up.
On February 5, Bill Dudley was “penetrated” when “hackers” (of supposed Chinese origin) stole $100 million from accounts belonging to the Bangladesh central bank.
As we reported on Tuesday, the money was apparently channeled to the Philippines where it was sold on the black market and funneled to “local casinos” (to quote AFP). After the casino laundering, it was sent back to the same black market FX broker who promptly moved it to “overseas accounts within days.”
Obviously, that’s hilarious, not to mention extremely embarrassing for the NY Fed. Here’s what the Fed had to say yesterday about the “mishap”: Continue reading »
You can’t make this up: Chinese hackers stole $100 million from the Bangladesh Central Bank’s account at the New York Fed and then laundered it through Philippine casinos.
Reports indicate that some of the stolen funds were traced to the Philippines, but given what we know about the “Cyber Axis of Evil,” we can only suspect it was Iranians, Chinese, or the criminal/military mastermind Kim Jong-Un who was behind the scam, but whatever the case, someone, somewhere, hacked into Bangladesh’s central bank on February 5.
According to Reuters, “some of the funds” have been recovered, but the bank didn’t initially say how much or how much was initially stolen. We suppose that theoretically it could have been a rather large sum, as the country has around $26 billion in FX reserves on hand:
But just moments ago we learned from the AFP that the amount lost was around $100 million. “Some of the money was then illegally transferred online to the Philippines and Sri Lanka, a central bank official told AFP on condition of anonymity.” Continue reading »
Editor’s note: Can you imagine a world where the government bans Americans from holding cash?
In today’s Weekend Edition, Agora founder Bill Bonner explains why that idea isn’t far-fetched…and why it will be almost impossible to protect yourself.
Bill originally wrote this essay on September 2, 2015 in Bill Bonner’s Diary.
By Bill Bonner, editor, The Bill Bonner Letter
Investors are losing confidence…
They’re probably losing confidence in corporate managers, for instance. Continue reading »