RSS

Category Archives: Economy

“Helicopter Money”


Helicopter Money [courtesy Google Images]

Helicopter Money
[courtesy Google Images]

Control of the economy is based on two sets of powers:

.

1) The Federal Reserve wields the monetary powers which include control over interest rate and over the supply of currency.

2) The U.S. government wields the fiscal powers which include raising or lowering taxes, raising or lowering borrowing, and increasing or decreasing government spending on benefits, subsidies and wars.

.

For the past year, we’ve heard the Federal Reserve say repeatedly that:

.

1) The Federal Reserve has exhausted its monetary powers and is no longer capable of using previous, “conventional” monetary strategies like QE (Quantitative Easing; printing and injecting more currency into the economy) and ZIRP (near-Zero Interest Rate Policy) to stimulate the economy back to a “recovery”.

I believe the Federal Reserve’s claims that it’s currently helpless to do much more to “stimulate” the economy with monetary policy are true.

If the Fed’s not fibbing, then only the U.S. government remains to engineer an economic “recovery” by means of its fiscal policy. However,

2) The U.S. government is unwilling or unable use its fiscal powers to raise taxes and/or borrow more currency to provide enough additional “stimulation” to cause an economic recovery.

Read the rest of this entry »

 

Tags: , , , , ,

Janet Yellen: “Not a Bubble Economy”


Ms. Yellen is nervous.  Maybe she’s not used to public speaking.  Maybe she’s intimidated by the presence of Ben Bernanke and Paul Volcker.  Maybe she’s lying and, unlike Obama, has no confidence in her ability to lie convincingly.

The following video is short and fairly dull, but as you’ll read, there’s a point to noticing Ms. Yellen’s repeated claims that the U.S. is not a “bubble economy”.

video  00:02:34

 

Seriously?

The U.S. economy is not a “bubble economy”?

M’thinks Ms. Yellen doth protest too much.

Read the rest of this entry »

 
 

Tags: , ,

30 Year Bear Market


Milton Berg is the founder and CEO of MB Advisers–a Wall Street financial institution.

Mr. Berg is predicting a “30 year bear market” in stocks and bonds.  T-h-i-r-t-y years.

I’m skeptical.  A 30-year bear market in stock and bond markets would almost certainly correspond to a 30-year Greater Depression.

I expect a global depression that will last somewhere between 5 and 10 years.  I could imagine a depression lasting 15 to 20 years.  But I find the prospect of 30 years of global economic depression to be extremely unlikely.

Still, Berg is no dummy and he’s certainly more knowledgeable than I am in such matters.  Therefore, a 30-year bear-market/depression is at least conceivable.

Whatever the duration, consensus is growing that we’re on the verge of a “Greater Depression”.

video    00:05:17

Here’s a link to the same video in a clearer format:

http://www.bloomberg.com/news/videos/2016-05-11/milton-berg-we-re-at-the-cusp-of-a-30-year-bear-market

 

 
5 Comments

Posted by on May 20, 2016 in Economic collapse, Economy, Video

 

Tags: , , ,

Are (Draconian) Capital Controls Coming?


Currency Controls:  "I'll give you one green one for three purple ones." [courtesy Google Images]

Currency Controls: “I’ll give you one green one for three purple ones.”
[courtesy Google Images]

Casey Research recently published an article entitled, “Capital Controls Are Coming”—but are they really?

In fact, some capital controls already exist as restrictions on how much cash you can take out of the country.  These capital controls exist at our physical and financial borders and concern international movement of dollars.

Other capital controls exist domestically.  I.e., you can’t deposit more than $10,000 into bank accounts in the U.S. without causing your bank to send notice to the national government.

Until A.D. 1934, we had $500, $1,000, $5,000, and $10,000 bills in circulation.  Now, the biggest bill we can use is $100.  That’s evidence that currency controls have been with us since A.D. 1934.

Article 1.10.1 of the Constitution of the United States (A.D. 1788) declares that “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts”. That’s a form of “money control” that amounts to “currency control/prohibition”.  Currencies other than gold or silver are prohibited or at least restricted within the States of the Union.

My point is that some form of “currency controls” have been with us for over 200 years.  I doubt that you can find a nation anywhere on earth that hasn’t engaged in some form of “currency controls” over the past century.

Read the rest of this entry »

 

Tags: , ,

Collapse Is [already] Here?


So far as I know, Bill Holter is not a prophet.  He could be wrong.  He might be over-reacting.

But he’s no idiot, he’s well-informed and he’s been studying markets for years.

His opinion deserves your consideration.

I’m posting this video at about 11:55 PM (CST) on Sunday night.   If the Dow continues its decline tomorrow (Monday) and/or Tuesday, and if the Dow falls by at least another 400 points by next Friday (January 22nd), it’ll be evidence that Holter may be roughly correct in claiming that the “Collapse Is [already] Here”.

More, Holter’s warning is based on the idea that world markets are falling–not just those in the US.  Therefore, we’ll not only be watching the Dow this week, we’ll also be watching the Chinese and European markets.  If markets, globally, continue to fall this week, that’ll support Holter’s warning of a major, global, economic collapse.

On the other hand, if The Powers That Be can push the Dow (and foreign markets) upward Monday, Tuesday and over next week, then that would be evidence that Holter’s prediction is premature.  In that case, the “collapse” would still be coming, but it might be several weeks, months or even years before the economy really hits the fan.

Note that Holter is not predicting an instantaneous “collapse” wherein the whole economy stops running as if somebody hit the “off” switch.  Holter is saying that the collapse “process” has begun in the sense that the first snowballs in what will later become an avalanche are starting to roll down hill.  The collapse has started in a way that can’t be reversed, but it’ll probably be something like a slow-motion movie of an avalanche.  It could be months or years before the “avalanche” starts moving at full speed and then hits bottom.

Even if Holter’s warning is premature, I give him credit for daring to make this prediction right now.  He’s taking a chance on appearing to be a darn fool.  He could be wrong, but he’s still seen something that convinces him that the onset of the collapse has already happened or, at least, is close.

We are not yet in a state of panic.  However, the first two weeks of A.D. 2016 have resulted in global market declines.  If we get a third bad week (this week) and even a fourth bad week (next week), we could see the onset of a global panic as early as the 1st of February..

video    00:27:48

 
8 Comments

Posted by on January 17, 2016 in Economic collapse, Economy, Video

 

Tags: ,

A “real” economy vs. an “unreal”?


Market Manipulation by the Federal Reserve [courtesy Google Images]

Market Manipulation by the Federal Reserve
[courtesy Google Images]

Richard Fisher was the president and CEO of the Federal Reserve Bank of Dallas from A.D. 2005 to A.D. 2015 . He’s now a director of PepsiCo and ATT, a senior advisor to Barclays, and a CNBC contributor. The man is accomplished and “connected”.  We he talks, we’d do well to listen closely.

In reaction to the dramatic stock market sell-off during the first week of A.D. 2016, Mr. Fisher “talked” in a recent article entitled “Don’t blame China for the sell-off”:

 

•  Fisher:

 

“Recent volatility and downside slippage in the equity markets has been ascribed to China and the potential for slowing global economic growth. To be sure, these are factors worth watching but they are hardly newsworthy.

“While I would not completely pooh-pooh the effect of developments in China on the rest of the global economy, I believe another factor is of greater importance in pricing the U.S. stock market going forward: the effect of accommodative Federal Reserve policy.”

 

Mr. Fisher is telling us that, contrary to popular opinion, the recent US stock market fall was not triggered by China’s economic problems—it was caused by Federal Reserve policies.

Few would be surprised by Mr. Fisher’s statement.  We all pretty much suspect that the Fed is responsible for the current economic problems.  Still, given that a former president of the Dallas Federal Reserve Bank is making these admissions, they are amazing.

Read the rest of this entry »

 

Tags: , , , ,

Economics: Mostly Math or Mostly Moral?


Institutionalized Injustice:  Fighting Over Unearned Wealth [courtesy Google Images]

Institutionalized Injustice: Fighting Over Unearned Wealth
[courtesy Google Images]

Financial Times:

 

“On Friday [Nov. 6, A.D. 2015] the Bank of Japan [BoJ] revised down its inflation and growth forecasts, and pushed back its expectation of hitting the 2 per cent inflation target to the end of next year. It seems likely, and indeed desirable, that the BoJ will be forced to expand its programme of quantitative easing [QE] before too long.”

QE is intended to cause more borrowing, more spending and more inflation in whichever country/economy that promotes it.  In the case of Japan, continued reliance on QE is strange since they’ve tried to use some version of QE for most of 25 years without much success.

Why does Japan continue to beat that dead horse?  Could it be because that’s the only horse they have?  Financial Times:

Read the rest of this entry »

 

Tags: , ,