Economy

Former ECB Chief Economist: Buy Gold; Economic System is ‘Pure Fiction’

"Jürgen Stark, former vice president of the Bundesbank, and also former chief economist of the ECB, resigned in late 2011 for his outright rejection to the purchase of government bonds by the ECB. The monetary system was saved in 2011 through concerted action by major central banks worldwide. But, according to Stark, the whole system is 'pure fiction'. The problem is the monetary model itself. That is, the printing of paper currency without real backing and the multiplier by which the commercial banks can expand credit-uncontrolled without prior savings. Stark recommended allocating part of this fictional savings to investment in traditional 'safe havens' such as gold or silver." Continue reading →

Continue ReadingFormer ECB Chief Economist: Buy Gold; Economic System is ‘Pure Fiction’

Economy Tanks … and Stocks Soar?

"Negative 1 percent. That’s how much the U.S. economy managed to 'grow' in the first quarter, according to the government’s revised estimate. After more than $800 billion in stimulus spending from Washington. After more than $3 trillion of QE from the Federal Reserve. After six-plus years of record-low interest rates … record levels of monetary intervention in the U.K., Japan and Europe … and the biggest bailouts in the history of the world. It’s much worse than the 0.1 percent gain the Commerce Department originally reported. It was twice as bad as the 0.5 percent decline economists were expecting. And it’s the worst reading since the first quarter of 2011." Continue reading →

Continue ReadingEconomy Tanks … and Stocks Soar?

Bill Bonner: Why I Sued Washington 28 Years Ago

"When the Spanish conquered South America, their encomienda system of slavery typically required only 40 days of work from their victims. The French conquered Madagascar; they forced male Hovas between 16 and 60 to work 50 days a year. The US example is closer to that of Russia – where Emperor Paul I, in 1797, declared that three days a week was enough for serfs to give their lords and masters. That works out to nearly 150 days a year. A 50% tax rate – federal, state and local – is the equivalent of about 125 days of forced labor a year. Pretty steep. But that’s just the beginning. In our system of crony democracy, all the major industries have whips in their hands." Continue reading →

Continue ReadingBill Bonner: Why I Sued Washington 28 Years Ago

Capital Controls Rolling Into High Gear Under FATCA

"It isn't just affecting the most financially restricted people on Earth: US citizens... it is affecting everyone. Take myself, for example. I operate numerous businesses worldwide. I am a Canadian citizen as well as the citizen of a Caribbean country and our business operations are also operated out of a non-tax jurisdiction in the Caribbean. On top of that we hold no bank accounts, whatsoever, in the US... instead, we have bank accounts all over the world. Yet, in the last two months we have had our accounts or transactions frozen, denied or questioned in different jurisdictions at least ten times. And we have had countless other problems over the last two years." Continue reading →

Continue ReadingCapital Controls Rolling Into High Gear Under FATCA

Congrats grads! That’ll be $29,400

"The Class of 2012 graduated with an AVERAGE financial hangover of $29,400. In more expensive parts of the country like the Northeast, four-year degree students owed even more – almost $34,000. We’re not just talking about a handful of students, either. More than 7 in 10 graduates had at least some debt when they got their degrees. The growth in debt is far outpacing the growth in income, too, rising at a rate of about 6 percent per year over the past half-decade. All told, student loan debt now totals around $1.1 TRILLION. That’s almost quadruple the level of a decade earlier. It’s now the single biggest category of consumer debt outside of home mortgages." Continue reading →

Continue ReadingCongrats grads! That’ll be $29,400

Bill Bonner: College is a con

"Gradually, making things in the US became less and less profitable. So, if you wanted to earn a good salary you had to go somewhere else. Finance, administration, accounting, law, education, or health care. The good jobs in these industries required college. That’s why you’re here. But wait, there’s more to the story. Unlimited credit also made it easier to support zombies and parasites. Government connived with industry to create quasi-monopolies, cartels, subsidies, guarantees and price supports. And the feds could add bureaucracy, controls, rules and regulations. For example, the education industry added few teachers, but lots of ‘educators’ and policy coordinators." Continue reading →

Continue ReadingBill Bonner: College is a con

U.S. tax deal jeopardizes Canadians’ privacy

"Imperils the privacy of up to a million Canadians and creates a two-tier level of citizenship in this country, discriminating against citizens based on their ethnic origin. It could include so-called border babies, Canadians whose mothers gave birth across the border for medical reasons; Canadians who have returned after holding green cards for work in the U.S.; Canadian snowbirds who could be deemed 'U.S. persons' based on the length of their stay in the sun; and Canadians born to a U.S. parent who may have never set foot in the U.S. If you are a Canadian holding a joint account with a U.S.-born spouse, your financial information, too, could be headed to the files of the IRS — and perhaps beyond." Continue reading →

Continue ReadingU.S. tax deal jeopardizes Canadians’ privacy

The Shocking Real Reason for FATCA, and What Comes Next

"The central planners at the G20 and OECD devised what they call a new 'global standard' of automatic financial information exchange between governments (i.e., GATCA) modeled on the US’s FATCA. However, GATCA would have never been possible in the first place had the US not cleared the path with FATCA. The G20 and OECD needed the US—the sole financial superpower (for now at least)—to strong-arm and cram down the throats of the rest of the world this privacy-killing measure. There’s no other entity on the planet with the capability to do so. The very big stick the US wielded was access to the US financial system and the world’s premier reserve currency." Continue reading →

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Bill Bonner: This Hugely Popular Investment Is About to Blow Up

"In a normal world, savers have the choice of staying in cash or quasi-cash and receiving a fair rate of interest. No more. The interest they receive on a 10-year Treasury note is barely over 2.5%. But the real rate of consumer price inflation – according to the most exhaustive survey, done by the MIT, the Billion Prices Project – is 3.91%. What kind of world is it where an honest householder loses nearly 1.5% a year on his savings? It is an odd, rigged-up and dangerously windy one. Investors are stretching out their sails to get higher yields. As a result, bond prices have gone up, reducing yields on bonds rated CCC – below investment grade – to the lowest levels ever recorded." Continue reading →

Continue ReadingBill Bonner: This Hugely Popular Investment Is About to Blow Up

Bailout Banks Made Riskier Loans: Study [2011]

"The government bailout made banks appear safer but actually caused them to take on more credit risk, according to a University of Michigan study released Wednesday. According to a working paper by finance professors Ran Duchin and Denis Sosyura of the university of Michigan's Ross School of Business entitled Safer Ratios, Riskier Portfolios: Banks' Response to Government Aid, banks participating in the government's Capital Purchase Program as part of the Troubled Assets Relief Program, or TARP, 'significantly increased their investments in risky securities,' by 10%, 'displacing safer assets, such as Treasury bonds, short-term paper, and cash equivalents.'" Continue reading →

Continue ReadingBailout Banks Made Riskier Loans: Study [2011]