The problem with the “inflation” number runs deeper than just statistical legerdemain. It concerns the definition of inflation itself.
Does the word refer only to the rise in consumer prices? Or to the increase in the supply of money? The distinction has huge consequences.
In the years following the ’08–’09 crisis, it was the absence of the former that permitted central banks to add so much to the latter. In other words, their measurement of “inflation” not only had far-ranging consequences for bondholders, investors, retirees, and so forth, it also created a huge distortion in the entire planet’s monetary system. ...
By Greg Hunter’s USAWatchdog.com Real Estate expert Fabian Calvo says boom bust housing crisis is on the way. Calvo explains, “There are a lot of outlier indicators that show the run-up to another big boom in housing prices. If you look back and consider my theory of the‘pump and dump’ in March of 2012, when I said housing prices would shoot through the roof, housing prices are up over 26%.
We are entering one of the most dangerous periods of the housing market with the manipulated, Ponzi style booms similar to what we say in Dow Jones and the stock market.” Calvo goes on to say, “I am often surprised that ...
In the aftermath of the Fed’s decision to taper another $10 billion, 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 stun KWN readers around the world. He warned stocks will collapse if the Fed continues on the current course, and he also stated that what the Fed is doing is “quite shocking” and it may very well end in disaster. Below is what Huszard had to say in this remarkable interview.
Eric King: “Andrew, you are a former Federal Reserve executive and you were called upon to execute QE1. You also set up the Fed’s massive trading room. When you see the Fed cut another $10 billion of QE and you look at where we’ve been and where we are headed, what are your thoughts?”
Huszar: “When I look back to 2008, I never thought we would be where we are today. I thought QE was an emergency program to stabilize markets. But I never thought we would see more than $5 trillion of bond purchases at this point, or a Fed balance sheet that’s at $4.4 trillion, compared to $800 billion pre-financial crisis. So this is really uncharted territory that I find quite shocking....
Funny how so many of us made this claim as the QE was first rolling out and that the FED and gov would treat the QE like cocaine. One wonders just what made Andrew Huszar just now realize this.
In their infinity wisdom the Fed thinks they have rescued the economy by inflating asset prices and creating a so called "wealth affect". In reality they have created the conditions for the next Great Depression. Over the last two years the Fed has increasingly intervened in the market to prevent normal corrective moves. As you can see in the chart below this has allowed the stock market to transition from what could've been a normal bull market into a gigantic parabolic bubble. ...
"So there are an awful lot of reasons to be nervous, and yet complacency is still the biggest bubble. If you look at the VIX, it’s creeping higher. The VIX is up 8 or 9 percent this month. This is happening even as the possibility for a severe miscalculation somewhere is ratcheting up every day. ..."
This is not the same market that we dealt with a year ago. That was a market that lived on buys and sells of the public. Today's market is run by the hedge funds. This morning my old broker from E.F. Hutton came over to talk to me. He told me that the quickest way to lose a customer is to keep them out of a rising market. The public will stomach a loss, but will not forgive you if you keep them out of an advancing market.
That applies to today's action. Hedge funds and money managers must be in this market; they cannot afford to be out. The money managers ignore bad news and above all they remain in the market. As a result, the stock market continues to rise regardless of the Ukraine, Gaza, or any other negative news. The question is, how high will the tree grow? ...
"Are there any significant discrepancies between the numbers in the GLD trade settlement spreadsheet and the GLD bar list?"
Here are the two documents we're talking about:
GLD Trade Settlement Spreadsheet (CSV): This document contains information about the funds Net Asset Value, and has records going back to the start of the fund in 2004. http://www.spdrgoldshares.com/usa/historical-data/ (direct link) "This file is updated between 6.00 a.m. and 6.30 a.m NYT the following day after trading." For the record - although the spreadsheet gets updated every day, the inventory number may not necessarily change. This document is also the source for @BurningFiat's inventory tweets. ...
As the curtain rose on the economic stage, it revealed politicians and central bankers hand-in-hand, ready to act out a farce.
A June 23rd article in Bloomberg constituted the first review. It opened, “Germany has decided its gold is safe in American hands.” The gold in question is the massive German reserve that is allegedly stored at the Federal Reserve Bank of New York (NY Fed). On January 16, 2013 Germany’s central bank, the Bundesbank – or BuBa to its critics -- announced an intention to repatriate a sizable portion of its gold from the NY Fed by 2020. But, now, the government's budget spokesman Norbert Barthle declared, “The Americans are taking good care of our gold. Objectively, there’s absolutely no reason for mistrust.”
Objectively, there's no reason for trust. The repatriation was requested precisely because popular opposition leaders areconvinced the NY vaults are either deficient or empty. The German people agree with the opposition and they loudly demanded to see the proof. Moreover, the German government itself has displayed a deep distrust of America. For example, Germany recently declined to renew its contract with the telecom giant Verizon. Tobias Plate, a spokesman for the German Interior Ministry, explained, "There are indications that Verizon is legally required to provide certain things to the NSA." Specifically, the government suspects Verizon will monitor the communications of top officials in the same manner that Chancellor Angela Merkel was “intercepted” by the NSA. ...
Click through for the rest of the article. Good read.
Use what analogy you will: a car, a clock, a chemistry experiment... the point remains that the Fed believes it can control the economy. Indeed the Fed will stop at nothing to realize the goals of its dual mandate" to maximize job growth and maintain price stability. But, as Jim Rickards expalins, that conceit always ends in disaster. Read on...
The Fed's substitution of debt for income has only doomed the nation to a deeper, more painful realignment of real income and expenses.
The economic "recovery" has been based on a simple premise: debt can be substituted for income with no ill effects. As real household incomes have declined, the legitimate foundation of additional spending--more income--has eroded for the bottom 90%.
Even the ephemeral foundation of additional debt-based spending--the Fed's beloved wealth effect--has eroded for all but the thin layer at the very top of the wealth pyramid.
To replace this diminished income, the Status Quo has substituted debt as the source of additional spending: household debt, corporate debt and government debt. ...
The Labor Department is putting the screws to the folks who are cheating on the unemployment and inflation surveys.
Sources tell me the Bureau of Labor Statistics is forcing the Census Bureau to change the way it fact-checks the surveys that produce some of the most important economic statistics compiled by the government.
And that tells me the Labor Department must believe there are substantial irregularities in the numbers.
Following last week's "seasonal volatility"-driven plunge in claims to new cycle lows, this week saw a 32k rise to 302k, missing expectations for the first time in 4 weeks. However, what is more worrisome for bullish equity market investors is the surge in employment costs. The Employment Cost Index jumped 0.7% (beating expectations of a 0.5% rise) - its biggest jump since Sept 2008. ...
Click through for the rest and the full size charts.
The magic of compound interest is well known. What is lesser known is the magic of the gold/silver ratio, not as a measure as it is mostly viewed, but as an application for increasing one’s holdings substantially, over time. What is so great here is that no magic is involved, rather simply utilizing the market to more than double your holdings.
So-called “Gold Bugs” are considered ardent supporters of the PM [Precious Metal]. Silver stackers are just as avid. Then there are those willing to buy either or both. The chart below is the gold/silver ratio going back 15 years, and this is a hindsight analysis brought forth to the present tense for future consideration that can greatly increase net holdings at almost no cost, those being transaction costs from a dealer.
Consider three investors: 1. a gold-only buyer who loves gold. 2. a silver-only buyer who loves stacking. 3. A buyer of either or both and who wants to maximize what he [she] owns. [Transaction costs are not considered, and some rounding off may occur]. ...
Right now, we are setting a firm foundation for the global crisis that is to come. You must have an open mind about this, because for the most part it will be a type of crisis none of us has lived through, so our perception is distorted. Europe is an absolute mess, and is poised ...
Click through for the full post. Good read. Short.
"The central bank imposed interest rates are the source of global financial instability now and in the future," warns Grant's Interest Rate Observer's Jim Grant, adding that "The Fed... has manipulated us into a period of quite eerie stability and measured volatility." Grant believes, given the values (and aware of the risks) that Russian "stocks stand to do very well," and also likes mining stocks as he warns credit markets are overvalued (especially sovereign debt). His conclusion, own gold as "it stands to benefit from the demonstrated, as opposed the theoretically likely, crack up of the [current] monetary arrangements."
To demonstrate it hasn't failed, the Fed must taper/withdraw its monetary heroin.
That the Federal Reserve's policies have failed is now so painfully evident that even the political class is awakening to this truth. Rather than re-ignite broad-based, self-sustaining economic growth, the Fed's loose-money policies (zero-interest rate policy a.k.a. ZIRP, and quantitative easing a.k.a. QE or free money for financiers), have perversely distorted the economy and widened wealth and income inequality.
After six long years of unprecedented monetary expansion and intervention--more than enough time to have succeeded in its stated purpose of restarting the real economy-- political and financial blowback is forcing the Fed to withdraw its monetary heroin.
Unfortunately for the nation, the Fed's monetary heroin has addicted the economy to ZIRP, loose credit and free money for financiers. As a result, withdrawal will be painful, financially and politically. ...
Click through for the rest.
This is why I believe gold is going to hold it's own and only move up over time. Hopefully, not dramatically overnight, or in the breath of a high frequency trading bot, but stair step up.
If it does happen dramatically in one fell swoop then the engine fell out of the car and then the wheels. Hopefully all before going over the cliff.
Silver prices have increased but in a disorderly manner. Rather than focus on details, examine the big picture - 43 years of monthly price data in one chart - and divide that 43 year period into four "megaphone" shaped patterns on a ...
Before you buy another ticket for the Bull market bandwagon of "don't fight the Fed," perhaps you should take a look at the quality of the debt the Fed has enabled and the diminishing returns on all that debt.
The mainstream media is delighted to highlight positive economic data, but nobody ever asks about the quality of the borrowers who are behind the rosy numbers. Behind the rosy numbers, sales and profits are increasingly dependent on marginal buyers and borrowers: those buying on credit who would not qualify to borrow money in a system ruled by prudent risk-management.
These marginal borrower/buyers are last on, first off: they qualify for loans at the end of a credit expansion, when lenders throw caution to the winds to reap the profits from issuing new mortgages, auto loans, student loans, credit cards, etc. to marginal borrowers.
These marginal borrowers are the first to default, ...
New guest Erik Townsend is a successful software entrepreneur who is now a hedge fund manager. Eric discusses his short-term and long-term outlook for Gold as well as the factors driving current and future trends. Follow Erik’s work at his website.
The three banks have been accused of fixing the price of trillions of dollars worth of silver.
by Cecilia Jamasmie:
The Bank of Nova Scotia, Deutsche Bank and HSBC have been accused of fixing the price of trillions of dollars worth of silver, an allegation similar to earlier suits involving the London gold fix.
In a court case filed in New York's southern district Monday, investor J. Scott Nicholson filed suit against the three banks for allegedly manipulating the price of silver and in the process, making money at the expense of smaller players. ...