Economics

Investors Say: “Mises Was Right!”

"Bernanke made a comment about the possibility of changing this policy later in 2013, but only if the economy continues to grow. The financial media headlined this statement. Stock markets immediately tanked. Why? Because investors believe that the world’s economic recovery is dependent on the $1 trillion counterfeiting operation, no matter what the general economic statistical indicators say. They do not trust the FOMC’s judgment in assessing these indicators. They do not trust anything except counterfeit money. In short, they are becoming implicit Austrian School economists. They see that mass monetary inflation has rigged the capital markets." Continue reading →

Continue ReadingInvestors Say: “Mises Was Right!”

Bill Bonner: All Hell Breaks Loose!

"The Dow fell -353 points. Gold lost $87 an ounce. What does this tell us? It shouts a warning: Ben Bernanke is losing control. He desperately wants inflation. He's getting deflation instead. He wants low interest rates; yet rates are rising. Bernanke is now getting the worst kind of deflation – sluggish price increases against a backdrop of rising interest rates. This is the exact opposite of what the Fed wants... and needs. Its strategy is to hold interest rates down while it pushes up consumer and asset prices. Instead, the debt gets heavier as yields rise. Backs ache. Legs buckle. Nerves crack." Continue reading →

Continue ReadingBill Bonner: All Hell Breaks Loose!

Welcome to the Real World

"Bond holders were rudely awakened, but other sources of yields took major hits as well, such as REITs and utilities, which have been down over 10% in the last two months. Higher rates are doing those investors a favor – this is officially fair warning of things to come. I'd rather take a 10% loss on bonds or a utility stock now than take an even bigger loss when the Fed pulls rates higher. If you haven't already gravitated to shorter-term maturity bonds, it's time to seriously consider it. The party isn't quite over yet for long-maturity bonds, but the bartender is making the last call. It's time to get out of the bar before you get kicked out." Continue reading →

Continue ReadingWelcome to the Real World

This Graph Shows How Bad the Fed is at Predicting the Future

"Ben Bernanke and the Fed are out with their latest happy talk economic projections. They project the economy will grow by 2.3 to 2.6 percent, in real terms, in the fourth quarter of 2013 relative to the fourth quarter of 2012. That speeds up to 3.0 to 3.5 percent in 2014 and 2.9 to 3.6 percent in 2015. Unemployment also is projected to fall, hitting 5.8 to 6.2 percent in 2015, all while inflation stays below 2 percent. The chart put together by WaPo shows how abysmal the Fed's actual forecasts have been (and this is not counting the Fed missing the housing crash or the overall financial crisis)." Continue reading →

Continue ReadingThis Graph Shows How Bad the Fed is at Predicting the Future

Ron Paul’s Choice for Fed Chairman James Grant on Gold & Silver’s Latest Sell-Off

"As gold & silver prices tumble to 2.5-year lows in a wake of panic selling following a disappointing Fed Outlook & statement by Bernanke, as well as less-than-ideal Chinese economic data, Kitco News speaks with James Grant, editor of "Grant's Interest Rate Observer" about the carnage in gold & silver markets. In a previous interview, (then U.S. Congressman) Dr. Ron Paul told Kitco News that he would appoint Grant as Fed chairman; hear what Grant would do differently than Bernanke to help the US economy. Kitco News, June 20, 2013." Continue reading →

Continue ReadingRon Paul’s Choice for Fed Chairman James Grant on Gold & Silver’s Latest Sell-Off

Erik Voorhees: financial independence through gold and Bitcoin

"Félix Moreno talks to Erik Voorhees about Bitcoin, gold and the nature of money. They discuss the properties that make good or bad money and how both Bitcoin and precious metals are decentralised (a plus), while fiat money systems are centrally planned. They talk about free speech, property rights and liberty, and the role that money plays in these." Continue reading →

Continue ReadingErik Voorhees: financial independence through gold and Bitcoin

India: Emerging from Poverty or Stuck in the Past?

"India's problems are a result of the country's collectivist system, which detaches people from the consequences of their actions. Economic feedback in India is warped – costs are socialized, while benefits are not. Trickery and heavy-handedness are the norm in India, and they work. Real wealth creation feels unnecessary. From an individual's point of view, time and capital are better spent making political connections and offering bribes, both of which are more lucrative and efficient than making an honest living. India has been like this for forever. There has been nothing to shake India from its philosophical slumber and force its citizens to re-evaluate outdated precepts." Continue reading →

Continue ReadingIndia: Emerging from Poverty or Stuck in the Past?

Rotting, Decaying And Bankrupt – If You Want To See The Future Of America Just Look At Detroit

"Detroit Emergency Manager Kevyn Orr has submitted a proposal that would pay unsecured creditors about 10 cents on the dollar. Similar haircuts would be made to underfunded pension and health benefits for retirees. Orr concedes that there is still a '50-50 chance' that the city of Detroit will be forced to formally file for bankruptcy. But what Detroit is facing is not really that unique. In fact, Detroit is a perfect example of what the future of America is going to look like. We live in a nation that is rotting, decaying, drowning in debt and racing toward insolvency. So don't look down on Detroit. They just got there before the rest of us." Continue reading →

Continue ReadingRotting, Decaying And Bankrupt – If You Want To See The Future Of America Just Look At Detroit

Bond bubble threatens financial system, Bank of England director warns

"A key Bank of England policymaker has warned of the risks to global financial stability when 'the biggest bond bubble in history' bursts. In a wide-ranging testimony to MPs, Andy Haldane, Bank of England director of financial stability, admitted the central bank's new financial policy committee is taking too long to force banks to hold more capital and appeared to criticise the bank's culture under outgoing governor Sir Mervyn King. Haldane told the Treasury select committee that the bursting of the bond bubble – created by central banks forcing down bond yields by pumping electronic money into the economy – was a risk 'I feel acutely right now'." Continue reading →

Continue ReadingBond bubble threatens financial system, Bank of England director warns

The World’s Greatest Investor is Dead Wrong

"Contrary to the wisdom spouted by people like Mr. Buffett, gold’s movements are not about the economy. They’re not about geopolitical tensions. They’re not about inflation (and they’ve never been about inflation— a fact that four decades of correlation statistics handily prove). They’re not about what central banks are or are not buying. They are, instead, entirely about the direction of the U.S. dollar as a reflection of the U.S. fiscal situation. And as the last four decades have proven, the dollar will go down as America’s finances worsen. And that makes gold a buy." Continue reading →

Continue ReadingThe World’s Greatest Investor is Dead Wrong