"The Netherlands, Berlin's most important ally in pushing for greater budgetary discipline in Europe, has fallen into an economic crisis itself. The once exemplary economy is suffering from huge debts and a burst real estate bubble, which has stalled growth and endangered jobs. No nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books ..." Continue reading →
"Latest report: foreign holdings of U.S. government debt are up by 10%, year over year. China has been buying. It now holds $1.2 trillion. The total comes to $5.66 trillion. Of this, 72% is held by foreign governments and central banks. This policy of inflating the domestic currency and buying U.S. Treasury debt with the new money holds down U.S. interest rates. It helps keep recession away. It also holds down the dollar value of foreign currencies. This is great for American consumers. American consumers are getting subsidies from foreign governments. This is mercantilism in action. American consumers are the great beneficiaries." Continue reading →
"Premium gasoline in Venezuela costs 5.8 U.S. cents a gallon, using the official exchange rate. Every day thousands of taxis, buses and motorcycles freshly loaded with gasoline head into Colombia from Venezuela. Once in Colombia, the fuel is siphoned off by freelancers known as pimpineros who pay them about $2 a gallon and resell the gasoline or diesel to Colombians for a few cents more. Under 14 years of rule by the late President Hugo Chávez, Venezuela kept gasoline prices frozen even as rising government spending spurred robust overall inflation. He made himself enormously popular but damaged long-term prospects for Venezuela's economy." Continue reading →
"I've yet to be convinced that the Keynesians are right, governments of the world have cured what ails the global economy with their virtual printing presses, and the next boom is a done deal. That doesn't mean gold can't or won't go lower – just that if it does, the fundamentals say it's a buying opportunity. I know that some analysts are saying that having retreated more than 20%, gold has entered 'official' bear market territory, and that signals a long wait for recovery, but experience has shown that when gold sells off for the wrong reasons, it usually bounces back. Strongly. Remember the second half of the 1970s gold bull market." Continue reading →
"First, central bank money-printing has lost its impact on the markets. Second, austerity measures in Europe and the United States are also overpowering the inflationary impact of money-printing. Third, and most importantly in my view, the Cyprus confiscation of uninsured depositor money has completely turned the world upside down. Money is no longer safe in a bank in Europe. That, in turn, is causing hundreds of billions of dollars to essentially go into hiding. But not in gold, which is subject to confiscation, real or imagined. Fourth, Japan’s new aggressive policy to devalue its currency is also not bullish for gold." Continue reading →
"Two days ago, former White House Budget Director in the Reagan Administration, David Stockman, dropped some financial bombs in an interview on FOX. He said the Social Security Trust Fund was 'filled with confetti.' Stockman said if the Fed was 'gone fishing' for six weeks (meaning it would stop the $85 billion a month 'open-ended' money printing), 'there would be calamity in the markets.' It seems everybody on both sides of the aisle hates his new book called 'The Great Deformation.' That tells me he’s doing something right." Continue reading →
"For five years now, the US private sector has been trying to deleverage - while the public sector insists that it borrow more. Result: economic stagnation. Also, US consumers have watched their wages and family incomes fall for more than ten years. And adjusted for inflation (however you calculate it) investors are still below where they were in 2000. And now, the world has changed...almost the opposite of 1980, when the big boom began. Today, stocks are expensive, not cheap like they were in 1980. Interest rates are low, not high like they were in 1980. Total debt is now around 350% of GDP, not 150% like it was in 1980." Continue reading →
"The Federal Reserve could pay more than $77 billion a year in interest on the excess cash reserves it holds for commercial banks if rates follow the highest path forecast by Fed policy makers. The central bank already has paid more than $13 billion since 2008 when Congress authorized interest on reserve balances as part of financial-rescue legislation. The Fed earns interest income on its bond holdings and, after covering its operating expenses, returns the profit to the U.S. Treasury. Last year, the Fed remitted $88.4 billion. As the interest payments on reserves rise, this profit could shrink or disappear." Continue reading →
"Is this the end for the bull market in gold? Everybody says so. And this was before gold tumbled on Friday. The fact is, the masses never got anywhere near gold. Not even close. Most people have never seen a gold coin....and few are as reckless as the aforementioned Mr. Norstog. Most are even more reckless! They'll wait gold to hit $2,000...or $3,000 before they buy. Which is why we're nowhere close to the top. Wall Street never marketed gold, deftly...or any other way. Not even in its usual greedy, heavy handed fashion. And the masses never bought it. Just the opposite. As the price of gold rose we saw ads in the paper soliciting people to SELL gold." Continue reading →
"Of countries that have to make something, like the Swiss – the Swiss have got a heap of granite with icing on the top of it and yet they're one of the richest countries in the world. It's the people that do this stuff. It's the people and the leadership and if they believe in something they do it, and the Germans, too. They believe in hard work but what's more, they believe that the hard work of today's citizens should be kept intact so that those hard working people, when they retire, should be able to enjoy the fruits of their labor. The Anglo-Americans say the hell with the future, the hell with children, the hell with grandchildren. We want that money now." Continue reading →