History Repeating

Fed Tapers Another $10 Billion, Expecting Rebound From Grim Q1

"The U.S. economy stalled out in Q1, as GDP rose at a 0.1% annual rate, the Commerce Department said Wednesday. But with other data showing rebounding growth in the spring, the Federal Reserve voted to taper its bond-buys by another $10 billion. The Fed's decision, widely expected, cited ongoing improvement in the economy. But as previously signaled, the central bank left interest rates untouched and pledged to keep policy easy as long as the economy remained shaky. Residential investment fell hard for a second straight quarter, and business fixed investment declined at a 5.5% rate. Both sectors were expected to help lead the economy in 2014." Continue reading →

Continue ReadingFed Tapers Another $10 Billion, Expecting Rebound From Grim Q1

Housing in U.S. Cools as Rate Rise Hits Sales: Mortgages

"After a roller-coaster decade of boom-bust-boom, the U.S. housing market is going downhill just when many economists thought annual sales would be heading up. Sales of previously owned properties in March tumbled 7.5 percent from a year earlier to the slowest pace in 20 months, while purchases of new houses sank 14.5 percent from February, according to reports this week. Mortgage applications to buy homes plunged 19 percent from a year earlier, indicating slowing demand during what is typically the busiest season for deals. Mortgage interest rates are rising from record lows as the central bank withdraws its stimulus, and investors are now retreating." Continue reading →

Continue ReadingHousing in U.S. Cools as Rate Rise Hits Sales: Mortgages

Bank of Japan To Double ETF Purchases in Next Round of Easing

"Japan’s central bank will probably double purchases of exchange-traded funds in a second round of monetary easing under Governor Haruhiko Kuroda anticipated in coming months, a Bloomberg News survey of economists shows. The Bank of Japan, which tomorrow is forecast to leave unchanged a 60 to 70 trillion yen target for yearly expansion of the monetary base, will increase annual ETF buys to 2 trillion yen, according to a survey of 36 analysts. Evidence of budding inflation expectations among Japan’s companies may restrain more ambitious plans, such as open-ended ETF purchases, even as the economy slows because of this month’s sales-tax increase." Continue reading →

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Jim Rogers: Buy Russia & China

"Russia is very, very cheap, and it’s a very neglected stock market with enormous natural resources. I first went to Russia in 1966 and came away negative, and I stayed negative for the next 46 years, so it’s been a long-term bear for me. But in recent months I’ve started changing my views and have started buying shares in Russia. Another one might be Japan. I don’t know if Japan is ignored or not, but it’s down 60-70 percent from its all-time highs, so it’s still neglected to some extent. In 20 years, we’ll look back at Japan, and its death knell will be what Mr. Abe did in 2012-2014. But in the meantime, there are staggering amounts of money and spending, and printing has to go somewhere." Continue reading →

Continue ReadingJim Rogers: Buy Russia & China

Yellen Surprise Suggests Investors Should Go On Defense

"Comments this week from Janet Yellen, who just took over as Fed chair, caught many in the market off guard when she suggested the central bank may be in a position to raise its key interest rate as soon as six months after ending its massive bond-buying stimulus. That could put the first rate hike on the table by the spring of 2015 compared with previous expectations for no sooner than the second half of the year. Indeed, rate futures markets now assign a 52 percent probability to the Fed's April 2015 meeting for the first rate hike versus just a 33 percent chance a month ago. Stocks such as utilities could be an option to steer clear of some of the hotter stocks and sectors of 2013 that are now richly valued." Continue reading →

Continue ReadingYellen Surprise Suggests Investors Should Go On Defense

UK financial official: Monetize state debt when deflation risks persist

"There is no need for central banks’ balance sheets to shrink. They could stay permanently larger; and, for some countries, permanently bigger central-bank balance sheets will help reduce public-debt burdens. Even when permanent monetization occurs — as it almost certainly will in Japan and possibly elsewhere — it may remain forever the policy that dare not speak its name. Such reticence may serve a useful purpose. But it must not blind central banks and governments to the full range of policy tools available to address today’s severe debt overhangs." Continue reading →

Continue ReadingUK financial official: Monetize state debt when deflation risks persist

War Is a Certainty

"Any country that is considering waging war against another country should first consider that the loser is almost always the country that runs out of money first. No venture is more costly than warfare. The EU and the US are bankrupt now. Those presently living in those locales may escape actual duty in the military, but they will unquestionably be expected to pick up the tab through taxation. Those who presently feel that their obligations to their governments are already barely manageable might wish to consider what they will be, both during and after a major war." Continue reading →

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Global Debt Exceeds $100 Trillion as Governments Binge, BIS Says

"The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements. The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period. Borrowing has soared as central banks suppress benchmark interest rates to spur growth. Yields on all types of bonds average about 2 percent, down from more than 4.8 percent in 2007." Continue reading →

Continue ReadingGlobal Debt Exceeds $100 Trillion as Governments Binge, BIS Says

Bill Bonner: The Coming Bull Market in Gold Stocks Is Going to Be BIG

"Most empires were financed on the loot captured from their conquered opponents. But the US Empire depends not on generals, but on bankers. Bernanke – the 'Hero of ’08' – kept the credit flowing at a crucial moment… He kept the empire on schedule… and on target… for its rendezvous with disaster. [..] Debt has its lifecycle. So do empires. Both expand. Then both… without exception… contract. An empire funded by debt is an especially ungainly, grotesque thing. It lurches from one disaster to another – going deeper and deeper into debt each time. But it is not the debt that kills empires. Debt is just a razor conveniently left on the side of the tub." Continue reading →

Continue ReadingBill Bonner: The Coming Bull Market in Gold Stocks Is Going to Be BIG

Truth and Consequences of Fed Money Printing

"Don’t be persuaded by the theory that the dollar is invulnerable … that inflation is dead … or that none of this really matters. Above all, don’t let anyone talk you out of protective investments. Indeed, the same investments that can help shield you from the consequences of the Fed’s folly also have the potential to deliver some of the greatest profit bonanzas of this era. Our editors are continually scouring the globe for the best opportunities at the best time. Today, I want to set the stage by taking you on a tour through time — to help you experience the consequences of central bank money printing … and to see the fortunes that can be lost, or made, as a result." Continue reading →

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