Monthly Archives: September 2013

S&P calls US lawsuit retaliation for stripping AAA rating

"Standard & Poor's on Tuesday blasted a $5 billion fraud lawsuit by the U.S. government as retaliation for its 2011 decision to strip the country of its AAA credit rating. The McGraw Hill Financial unit was the only major credit rating agency to take away the United States' top rating and the only one sued by the Department of Justice for allegedly misleading banks and credit unions about the credibility of its ratings before the 2008 financial crisis. In a filing with the U.S. District Court in Santa Ana, Calif., S&P said the lawsuit attempts to punish it for exercising its First Amendment free speech rights under the U.S. Constitution but also seeks 'excessive fines' in violation of the Eighth Amendment." Continue reading →

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America’s Energy Boom and the Rising U.S. Dollar

"The petrodollar regime--that oil is bought and sold globally in U.S. dollars--is easy to understand. It boils down to these two principles: 1. Petroleum is the lifeblood of the global economy. 2. Any nation that can print its own currency and trade the conjured money for oil has an extraordinary advantage over nations that cannot trade freshly created money for oil. This is why many analysts trace much of America's foreign policy back to defending the petrodollar regime. In the normal course of things, anyone printing money in quantity would soon find the conjured currency bought fewer and fewer barrels of oil." Continue reading →

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Upside-Down Economic Reporting: Higher Oil Prices Are Good.

"I see. A war looms. Oil will rise in price. The world will pay more to oil-exporting national governments. This is proof of good times ahead. The rising trade deficit (an excess of imports) is good because it will lead to more exports. 'At the same time, a strengthening U.S. expansion is helping companies in the European Union and China boost sales, which will stabilize global growth and, in turn, improve prospects for American exports.' I see. Rising imports mean rising exports. Later. One of these days. Real Soon Now. And so it goes. Economic education marches forward." Continue reading →

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Bill Bonner: A Personal Appeal to Barack Obama

"We don’t share the common fantasy of central bankers: that they can know better than the market what interest rate, employment rate and inflation rate the country should have. We mention the three because the Fed sets short-term interest rates through its conventional monetary policy. And it tries to keep a lid on long-term Treasury yields through its 'unconventional' QE programs. And it does so, it claims, to adjust two other important rates: employment and inflation. Every candidate for the top post at the Fed – except us – believes it is his right and duty to do these things. Which means none should be allowed anywhere near the Fed." Continue reading →

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A Regional FED President Says the FED Is Not Inflating Enough.

"This statement was Big News. It was such Big News that the Wall Street Journal ran a story on it. Why? Because when a regional Federal Reserve Bank president says the obvious is Big News, it means that he is opposed to tapering. It means that he thinks the counterfeiting of a trillion dollars of digital money a year is for wimps. What should the rate of counterfeiting be? He did not say. They never say. Their lips are sealed. This is what is known at the Federal Reserve as transparency. Opaqueness is when an official says something incoherent, which everyone in the media knows is incoherent, and they dutifully report as meaningful." Continue reading →

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Bill Bonner: It’s a dangerous time of year

"A stream of income – either from a stock or a bond – is a promise. The value of it depends on how much you trust the promisor and his money. That is the problem. As much as we like Ben Bernanke as a human being, we find grave fault in him as a god. Only a god could know more than the sum of all the knowledge held by all people who are active in the world economy. Only a god could select an interest rate better than the one they select for themselves. And only a god-awful economist could claim to do such a thing with a straight face. The galling thing is that he may be able to keep the whole shebang going for many years more." Continue reading →

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Detroit Stopped Issuing Death Certificates After It Ran Out Of Paper

"The city of Detroit was temporarily unable to issue death certificates in July because it had run out of the special embossed paper on which the certificates are printed -- and it didn't have any money left to buy more. After the city declared bankruptcy on July 18, its vendor for embossed death certificate paper demanded to be paid in cash, not credit. The city's funeral directors received this text message from Michigan Select Funeral Directors Association president Wallace Williams in late July, according to the Detroit News: 'FYI, city of Detroit can’t process death certificates because they have no paper and don’t have money to buy any.'" Continue reading →

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Inside Scoop on the Next Fed Chairman

"Davita Vance-Cooks is not a household name. But this will soon change. Not only will Ms. Vance-Cooks be 'the first female and the first African-American' (as The Washington Post would say) to run the central bank, but she will be the first chairman with printing experience outside the Fed itself. She is currently the public printer of the United States — as the head of the U.S. Government Printing Office (or GPO) is officially known. Before that, she had been 'acting public printer.' (The fact that she was acting did not make her less of a real public printer.) Ms. Vance-Cooks’ printing experience will be very useful at the Fed." Continue reading →

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The FEDsters Are Multimillionaires

"The senior officers of the Board of Governors are rich. So are some of the regional FED bank presidents. One of them is worth $50 million. Another owns 7,000 acres of land. He even owns gold. The FED is politically untouchable. Congress will not let the Government Accountability Office audit it. We hear of the need for more equality. The FED could use some. We hear of the need for transparency. Why doesn’t this include an audit? All the chatter inside the Washington Beltway about the role of democracy is great stuff for pulling the wool over the eyes of the voters. The cartel known as the state-licensed banking system has an enforcer. The FED is the enforcer." Continue reading →

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The Fed Can’t Stop Printing Money … or Else

"Several surveys have shown that most people believe they have above-average driving skills. In fact, 93% of student drivers think their driving skills are above average. The law of averages tells us that this can’t possibly be true. It reminds me of that survey that said 84% of Frenchmen think that they are above-average lovers. Wishful thinking. Such high self-regard with respect to personal competence is known as 'overconfidence bias.' People tend to overestimate or exaggerate their abilities. This bias is inherent in all of us. But it reaches an especially high level of intensity in one central banker." Continue reading →

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