Jan 23

- Peter Schiff Destroys The “Deflation Is An Ogre” Myth (ZeroHedge, Jan 22, 2014):

Submitted by Peter Schiff via Euro Pacific Capital,

Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble (which you can find more on in my latest newsletter). Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare. Instead they are warning about the horror that could result from falling prices, otherwise known as deflation. Get the kids into the basement Mom… they just marked down Cheerios! Continue reading »

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Jan 21

- The $23 Trillion Credit Bubble In China Is Starting To Collapse – Global Financial Crisis Next? (Economic Collapse, Jan 20, 2014):

Did you know that financial institutions all over the world are warning that we could see a “mega default” on a very prominent high-yield investment product in China on January 31st?  We are being told that this could lead to a cascading collapse of the shadow banking system in China which could potentially result in “sky-high interest rates” and “a precipitous plunge in credit“.  In other words, it could be a “Lehman Brothers moment” for Asia.  And since the global financial system is more interconnected today than ever before, that would be very bad news for the United States as well.  Since Lehman Brothers collapsed in 2008, the level of private domestic credit in China has risen from $9 trillion to an astounding $23 trillion.  That is an increase of $14 trillion in just a little bit more than 5 years.  Much of that “hot money” has flowed into stocks, bonds and real estate in the United States.  So what do you think is going to happen when that bubble collapses?

Continue reading »

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Jul 01

- The Federal Reserve Is Paying Banks NOT To Lend 1.8 Trillion Dollars To The American People (Economic Collapse, July 1, 2013):

Did you know that U.S. banks have more than 1.8 trillion dollars parked at the Federal Reserve and that the Fed is actually paying them not to lend that money to us?  We were always told that the goal of quantitative easing was to “help the economy”, but the truth is that the vast majority of the money that the Fed has created through quantitative easing has not even gotten into the system.  Instead, most of it is sitting at the Fed slowly earning interest for the bankers.  Back in October 2008, just as the last financial crisis was starting, Federal Reserve Chairman Ben Bernanke announced that the Federal Reserve would start paying interest on the reserves that banks keep at the Fed.  This caused an absolute explosion in the size of these reserves.  Back in 2008, U.S. banks had less than 2 billion dollars of excess reserves parked at the Fed.  Today, they have more than 1.8 trillion.  In less than five years, the pile of excess reserves has gotten nearly 1,000 times larger.  This is utter insanity, and it will have very serious consequences down the road.

Posted below is a chart that shows the explosive growth of these excess reserves in recent years… Continue reading »

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Apr 28


YouTube

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Feb 10

- “China Accounts For Nearly Half Of World’s New Money Supply” (ZeroHedge, Feb 8, 2013):

When it comes to the creation of money in China, and specifically the asset side of the ledger, or loans, there is much more confusion than consensus, primarily because nobody knows who it is that is creating the money: private or public entities, SOEs, the PBOC, regional banks, shadow banks, or your next door neighbor.Another thing that is largely misreported: what the actual assets pledged as collateral to new loans are. Because while it is well-known that corporate debt in China is now greater as a percentage of GDP than in any other country, the comprehensive picture is still confusing (albeit GMO did a fantastic summary recently of what is known) as reporting standards are still non-existent, and the government flat out lies about its balance sheet.

Yet one very simple shortcut to get a sense of what is truly happening in monetary China is to peek at the liability side of the consolidated balance sheet, and one line in particular, namely deposits. Because unlike in the US, where the vibrant equity Ponzi scheme has rarely been stronger, in China it is still all about the cash and as a result the bulk of the newly created money once again return back to the banking sector in the form of a deposit. Ironically, that is what banking should be about (instead of the entire industry being a glorified hedge fund) although in China even this practice has gone on way too far, and like in Europe, has long passed the point where there is real collateral value backing up the new money created (which explains the emergence of various letters of credit collateralized by copper still not dug out of the ground which reappear every time Chinese inflation spikes above 5%).

So how do deposits look when comparing the US and China? Well, after having less than half the total US deposits back in 2005, China has pumped enough cash into the economy using various public and private conduits to make even Ben Bernanke blush: between January 2005 and January 2013, Chinese bank deposits have soared by a whopping $11 trillion, rising from $4 trillion to $15 trillion! We have no idea what the real Chinese GDP number is but this expansion alone is anywhere between 200 and 300% of the real GDP as it stands now. Continue reading »

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Dec 28

- Top Ten Reasons Why Fiat Currency Is Superior To Gold (Or Silver) Money (The Daily Capitalist, Dec 27, 2012):

By John Butler, on December 27th, 2012

In the spirit of the holidays and hope for a more prosperous 2013, I thought my readers might appreciate a little humour to partially offset the relentless doom and gloom associated with the Amphora Report. So please, don’t take this edition too seriously. But if you happen to stumble across a ‘paperbug’ or two over the holidays, perhaps you could share some of the points made here. Humour sometimes helps people realise just how hopelessly misguided they are. Cheers!


Number 10: There Is Not Enough Gold (Or Silver) In The World To Serve As Money

Let’s begin with the obvious. We know that central banks the world over have printed money at exponentially growing rates for years. There is now so much paper and electronic money floating around the world that gold (or silver) can not possibly be expected to keep up. You can’t print gold, after all, you need to find it, dig it out of the ground, refine it, etc, a hugely expensive and time-consuming process which practically ensures a stable rather than exponentially growing supply of the stuff. Continue reading »

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Sep 10

- The Bill Clinton Myth (ZeroHedge, Sep 9, 2012):

Earlier this week, former U.S. president Bill Clinton gave the keynote address to the Democractic National Convention in an effort to lend some of his popularity to Barack Obama.  With the unemployment rate still stubbornly high at 8.1%, Obama has lost many of the enthused voters who put him into the Oval Office in 2008.  Clinton was tapped to deliver the speech not only because of his image of a wonkish pragmatist but because of his presiding over the booming economy of the late 1990s.  Like a prized mule, Clinton was dragged out to give Democrats someone to point to and say that his policies were the hallmark of smart governance. Continue reading »

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Feb 07

- Fed’s Record Setting Money Supply Splurge Spurs Gold’s Rally (ZeroHedge, Feb. 7, 2012):


Fed’s Record Setting Money Supply Splurge Spurs Gold’s Rally

The surge in the U.S. money supply in recent years has sent gold into a series of new record nominal highs.

Money supply surged again in 2011 sending gold to new record nominal highs.

Money supply has grown again, by more than 35% on an annualized basis, and this is contributing to gold’s consolidation and strong gains in January.

The Federal Reserve’s latest weekly money supply report from last Thursday shows seasonally adjusted M1 rose $13.2 billion to $2.233 trillion, while M2 rose $4.5 billion to $9.768 trillion.

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Dec 14


YouTube Added: 22.11.2011

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Feb 14

See also:

- Rep. Ron Paul: Next US Crash Will Be Comparable To That Of Soviet Union, QE2 Is A ‘Total Failure’ And The Fed Is A ‘Central Planning Cartel’

- Silver Is Already In Extreme Backwardation! If The Same Happens With Gold, Then The End Game For The US Dollar With Hyperinflation Is Near


The One Chart Von Bernankestein Will Never Admit To Seeing


Charting Austrian Money Supply, the Fed’s outright security holdings, and commodity prices. Any questions?

(no snow was abused as a strawman excuse for the Fed’s mandate of “price stability” in the making of this chart)

(Click on image to enlarge.)

Submitted by Tyler Durden on 02/12/2011 19:27 -0500

Source: ZeroHedge


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Oct 23

“When the people find they can vote themselves money, that will herald the end of the republic.”
– Benjamin Franklin


Added: 22. October 2009

Fall Of The Republic documents how an offshore corporate cartel is bankrupting the US economy by design. Leaders are now declaring that world government has arrived and that the dollar will be replaced by a new global currency.

President Obama has brazenly violated Article 1 Section 9 of the US Constitution by seating himself at the head of United Nations’ Security Council, thus becoming the first US president to chair the world body.

A scientific dictatorship is in its final stages of completion, and laws protecting basic human rights are being abolished worldwide; an iron curtain of high-tech tyranny is now descending over the planet.

A worldwide regime controlled by an unelected corporate elite is implementing a planetary carbon tax system that will dominate all human activity and establish a system of neo-feudal slavery.

Continue reading »

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Sep 16

Hyperinflation Nation starring Peter Schiff, Ron Paul, Jim Rogers, Marc Faber, Tom Woods, Gerald Celente, and others.

Prepare now before the US dollar is worthless.

Part 1 :

Continue reading »

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Jun 10

monetary-base

Rahm Emanuel was only giving voice to widespread political wisdom when he said that a crisis should never be “wasted.” Crises enable vastly accelerated political agendas and initiatives scarcely conceivable under calmer circumstances. So it goes now.

Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers’ expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base — which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash — by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position.

The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base — which prior to the expansion had comprised 95% of the monetary base — has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base. Yikes!

Continue reading »

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Jun 05


Source: YouTube

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May 01

The Federal Reserve has announced that it has cut the Fed Funds rate by 25 basis points to 2.0%.

This is the 7th cut in the target fed funds rate since September 18, 2007. It has resulted in annualized money supply growth of 12.6%. Before the current round of rate cuts started, the target rate stood at 5.25%.

Source: NationalEconomist

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Apr 14

(AXcess News) – Gas pumps in the United States tell the same story as rice prices in Thailand: Inflation is a global phenomenon this year.

Oil hit a record $112 per barrel this week, and a United Nations official warned of continued pressure on food prices, which by one index are up 45 percent in the past year.

The challenges are worst in developing nations, where raw materials account for a larger share of consumer spending. But another factor – the sagging value of the US dollar – means that imports cost more in America and other nations that peg their currencies to the dollar.

Still, regardless of this currency phenomenon, several broad forces are pushing prices up.

After years of strong global economic growth, prices of oil, grains, and some metals have spiked. Investors are adding fuel to that fire by buying up hard assets like commodities, which are viewed as a hedge against inflation.

More fundamentally, many nations have been relatively loose in the creation of money supply. For all the news about interest-rate cuts by the Federal Reserve, this trend goes well beyond US shores. Continue reading »

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Mar 14

Cleaning up the mess that Mr Greenspan left behind was never going to be easy. Banks and brokers around the world face more than half-trillion dollars in write-offs as a consequence of the US sub-prime mortgage crisis, which is spreading from the US property market and roiling global stock markets. It’s toppled the US economy into a recession and the tremors are also rattling Asian stock markets.

Roughly $7 trillion has been wiped from world stock markets since the beginning of the year amid fears of a severe US economic recession and financial institutions reporting more mega losses. “The market crisis will preoccupy us well into 2008,” he said German Finance Minister Peer Steinbrueck on Feb 15th. “The financial risks securitized by banks contained packaged explosives,” and he accused rating agencies of having a conflict of interest in the role they played in the process.

So far, the Bernanke Federal Reserve has pumped more than half-a-trillion dollars into the markets with open market operations and special emergency lending schemes, to help cushion the blow to the US economy and stock markets. However, there’s evidence that the Fed’s prescription for dealing with the sub-prime debt crisis, is actually making matters much worse, and leading to “Stagflation.” Continue reading »

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