Quantitative easing is dead — and good riddance to it.
The Federal Reserve on Wednesday announced that it was finished with quantitative easing, a dangerous and experimental money-printing operation started in November 2008 when Washington was convincing itself and the nation that the banking system was on the verge of collapse.
During the past six years the Fed “printed” more than $4 trillion in extra money and used that digital dough to purchase Treasury bonds and mortgage-backed securities. The result has been artificially low interest rates which helped create an ebullient stock market that has blown itself into another bubble.
QE also has created conditions for a lot of possible unintended and unforeseen consequences. ...
The country expanded its stockpile by 37.2 metric tons in September, according to data on the IMF's website.
Author: Nicholas Larkin (Bloomberg) Posted: Wednesday , 29 Oct 2014
Russia boosted gold reserves by the most since defaulting on local debt in 1998, driving its bullion holdings to the largest in at least two decades.
The country expanded its stockpile, the world’s fifth- biggest, by 37.2 metric tons in September to 1,149.8 tons, according to data on the International Monetary Fund’s website. The increase, valued at about $1.5 billion, was the biggest since November 1998. Russian reserves, which overtook those of Switzerland and China this year, almost tripled since the end of 2005 and are at the highest since at least 1993, the data show. ...
What in the world could Russia want with all that gold? ;-)
“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”
The federal government does…
The topic of civil asset forfeiture has been high on our agenda recently as federal ‘agents’ discover how to steal Americans’ hard-earned cash with zero repercussions, and decide unilaterally how much cash a ‘common man’ is allowed to carry.
But as The NY Times reports, the escalation to the IRS brings a whole new world of possibilities with regard asset confiscation based on no actual crime being proved…
This news item is growing and I've heard a number of people talking about it of late. Even my mechanic. It raises again a distant issue that I didn't think we'd see again, the seizing of gold, ie gold confiscation.
But I may have to reconsider that with this new power the government is wielding.
Submitted by Julian Adorney via the Ludwig von Mises Institute,
Most defenders of the state assume that government services help the poor. And, sometimes, some poor people do benefit financially from government programs. But there’s a hidden cost: taxation and mandatory programs (Social Security, for instance) that hurt the needy by restricting their choices. Government taxes away income that low-income households could invest in improving their lives. At the same time, state-sponsored benefits create incentives that keep the poor trapped in poverty.
Many assume that government barely taxes the poor, but the reality is otherwise. The poorest fifth of Americans pay 16 percent of their incomes in taxes (including federal, state, and local). One in six dollars they earn goes straight to the government. For a family living at the margin, those taxes can be the difference between food on the table and hungry children.
Admittedly, a big chunk of government expenses is for programs designed to help the poor. But even when this money actually helps — and it rarely does — it’s important to note the pernicious effects of taxation. Consider: every dollar of taxes is one dollar that a worker must give to the government first, regardless of whether that dollar could help him feed his family or improve his livelihood. If a poor man is faced with the choice of paying taxes or starting a business, he had best choose the former, otherwise he’ll go to jail.
Despite the sharp recovery in the stock indices, strength in the US dollar and increase in bond yields, precious metals ended last week mostly flat in anticipation of the FOMC meeting this week. Physical market tightness supports Gold
Thru today (Oct 28) the U.S. mint has sold 4,365,000 silver eagles. This is by far the highest total for October on record, with 3 business days left in the month. It remains to be seen if 2014′s yearly total will exceed last year’s 42,675,000. But if November and December continue at the September/October 4 million-plus rate, 2014 will smash last year’s record. Either way, the U.S. mint is selling more ounces of silver than all U.S. mines combined produce annually.
As most of you know the roughly 93% of the physical silver inventory – 1,062 tonnes has been removed this year from the Shanghai Futures Exchange ...
The latest statistics released by the Gems and Jewellery Export Promotion Council (GJEPC) suggests notable rise in Silver bar imports by the country during the month of September this year. India's Silver bar imports surged 36% in Sep '14: GJEPC
The Gems and Jewelry Export Promotion Council (GJEPC) has released the details of imports of raw materials for gems and jewelry for the month of September 2014. Gold Bar Imports surged 36% in India during September
In reality I think we are approaching the end of yet another epic failed experiment with fiat currency, except this time it is many magnitudes of anything that has ever occurred in all of history. This is due to the financial innovation facilitated by the staggering computing power.
The combination of unfathomable amounts of derivatives, algorithm programs, high-frequency trading, etc., has led to a degree of leverage in the system which has never been remotely approached in all of human history.
Financial analyst Andy Hoffman says the real global economy is in deep trouble, which is much to the chagrin of the Fed. Hoffman explains, “Recall last April, they started smashing gold and started with the ‘taper’ talk. The Fed figured by about this time, they’d be ready to start hiking rates. The fact is the global economy has collapsed. Our real economy has collapsed. Forget the fake PMI numbers or their ridiculous employment numbers. The economy of the world is getting worse and worse and worse. No matter how hard they try to say yes, there is a recovery and we are tapering. Interest rates keep falling and falling. There are plunging rates despite all their talk of recovery and tapering.” Hoffman, who also has deep Wall Street experience, points to the recent sell-off in the stock market and the Fed’s reaction. Hoffman contends, “The Dow Jones propaganda average fell a whopping 9% from its all-time highs. The Fed absolutely freaked out. Within minutes, they had the Plunge Protection Team (PPT) running it back up, and no less than six Fed Governors in the space of three days came out and called for extension of QE and extension of zero-percent-interest-rates (ZERP). That’s how terrified they are, and remember, next week is when QE is supposed to end.”
We're being hit with a double-whammy: Wages are under deflationary pressure, and almost everything else is exposed to inflationary pressure.
As correspondent Mark G. observed in Globalization = Permanent Instability, it's impossible to understand inflation and deflation now except in a global context.
Now that prices for commodities such as oil and grain are set on the global market, local surpluses don't push prices down. If North America has record harvests of grain, on a national basis we'd expect prices to fall as local supply exceeds local demand.
But since grain is tradable, i.e. it can be shipped to other markets where demand and thus prices are much higher, the price in North America reflects supply and demand everywhere on the planet, not just in North America. ...
In the aftermath of the Fed announcement that they are officially ending the asset-backed purchase program know as QE, today King World News spoke with the man the Fed called on to execute QE1 and who also set up the Fed’s massive trading room, former Fed member and former Managing Director at Morgan Stanley, Andrew Huszar. What he had to say will surprise KWN readers around the world. Below is what Huszar had to say in this powerful interview.
Andrew Huszar: “What happened today with the Fed was expected. The Fed has been angling for the end of QE for quite some time. The reality is that they are not entirely ending QE. As I mentioned to you previously, the Fed is committed to maintaining the current size of its portfolio. As some of their bonds mature, the Fed will be going out and buying bonds to replace them. So we will still see the Fed buying hundreds of billions of dollars of bonds each year....
Although China’s growth has slipped the Asian dragon remains the key driver for metals and minerals prices and trade.
Author: Lawrence Williams Posted: Wednesday , 29 Oct 2014
LONDON (MINEWEB) -
Consensus opinion at last week’s Bloomberg East meets West seminar in London was that the latest growth figures from China, which have been considerably lower than those of the previous few years, are indeed the ‘new normal’ rather than just a downwards blip.
Government policy now seems to have abandoned the growth-at-any-costs scenario, which saw double digit GDP growth, to a more sustainable level which seems more likely to encompass annual growth figures of between 5% and 8%. ...
We just learned that the homeownership rate in the United States has fallen to the lowest level in 19 years. But of course this is not a new trend. As you will see in this article, the homeownership rate in the United States has been in a continual decline for more than 7 years. Obviously this is not a sign of a healthy economy. Traditionally, homeownership has been one of the key indicators that you belong to the middle class. When people define "the American Dream", it is usually one of the first things mentioned. So if the percentage of Americans that own a home has been steadily going down for 7 years in a row, what does that tell us about the health of the middle class in this country?
People want to know the answer to the all-important question: Have we seen the bottom in gold and silver? To help answer this major question, below are two important charts which cover two of the largest gold and silver producers in the world. The first one features Barrick Gold. The stock has fallen back to an extremely important support level dating back to 1998. Since then, Barrick has never traded below this
Globalization continually creates imbalances that fuel a perpetual instability that gradually impoverishes every sector other than global capital.
Globalization has two guaranteed consequences: permanent instability and endless boom-and-bust cycles. As noted in Forget "Free Trade"--Focus on Capital Flows, the key engine of globalization is mobile capital: capital that can borrow money for next to nothing in one nation and then move that capital to other nations where yields are higher and opportunities for exploitation riper.
“The world situation is as complicated as I’ve ever seen it. So let’s try to make it simple. The world is in a state of deleveraging and deflation. Europe is close to recession. Germany, the engine of the European economy, is stalling. China, now arguably the world’s largest economy, is running out of gas. Brazil is slumping, as is Japan. The only economy in the world that appears to have a strong heartbeat is the US. The great fear today is that the world may sink into a downward spiral of deflation. The Central Bank of Europe would like to join the Fed in Quantitative Easing. But Germany, which is terrified of inflation, will not stand for QE.
Thus it falls on the Federal Reserve to save the world from the terror of deflation. Will the Fed shut down QE as it claims? Or will it reverse its schedule of ending QE by the end of this month? The Fed has already bought nearly $4 trillion of bonds in its QE operations, and it hesitates to buy more.
The Fed meets tomorrow and Wednesday, after which we will discover what it intends to do. As matters stand now, the stock market is almost motionless as it awaits the Fed’s decision. Gold bullion has backed off slightly, but the gold mining stocks have been hit hard. The gold miners are cheap, hated and showing signs of stabilizing. Many speculators feel that the gold mining stocks are selling like perpetual warrants and can be bought as long-term holdings. I think the stock market’s constructive action will encourage the Fed to shut down QE as promised. But it is only after QE is actually shut down that we will know the rest of the story.
A new electronic gold price mechanism is expected to be in operation early in the first quarter of 2015, replacing the century-old gold benchmark. New London gold benchmark to go live in early Q1 2015 -LBMA
The additional sets of problems added as "solutions" only guarantee that the third and final crash of asset bubbles just ahead will be far more devastating than the crashes of 2000 and 2009.
The conventional view tacitly assumes the global economy is dealing with one problem: recovering from the Global Financial Meltdown of 2008-09. Stimulating a "recovery" has been the focus of central banks and states everywhere.
Short-sighted political expediency is a hallmark of the modern state's reaction to crisis, but political expediency isn't the only flaw in the central banks/states' obsessive focus on "recovery;" it's not even the primary flaw.
The real flaw is the central banks/states don't even recognize that we face three interlocking sets of problems, not one. ...
Though there is some debate over the exact income a middle class household brings in, we do have an idea of who the middle class are — most working class people. Today’s bourgeoisie is composed of laborers and skilled workers, white collar and blue collar workers, many of whom face financial challenges. Bill Maher reminded us a few months back that 50 years ago, the largest employer was General Motors, where workers earned an equivalent of $50 per hour (in today’s money). Today, the largest employer — Walmart — pays around $8 per hour.
The middle class has certainly changed. We’ve ranked a list of things the middle class can no longer really afford. We’re not talking about lavish luxuries, like private jets and yachts. The items on this list are a bit more basic, and some of them are even necessities. The ranking of this list is based on affordability and necessity. Therefore, items that are necessity ranked higher, as did items that a larger percentage of people have trouble paying for.