History Repeating

A Propaganda War

"We’ve long imagined that only the state and its central bankers can issue money. The Bitcoin protocol directly challenges that notion. Most importantly, unlike similar inventions before it, Bitcoin can only be stifled. It can never be stopped. Its importance is unequivocal. As Bitcoin continues to spread globally, we, as a community, must grapple with a very challenging and unsettling question of principle: should Bitcoin actively engage the apparatus of state? Bitcoin is getting political. Parties are forming. unSystem, through its Dark Wallet, has ostensibly drawn a line in the sand. There is much at stake. A battle is now on for the protocol and the hearts and minds of we, the 99%." Continue reading →

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Lonely Jeremiahs

"Like last time, it’s only now — after the first cracks in the market have begun to show themselves — that other prominent experts are joining his camp. Eight years ago, the epicenter of the bust was the American home market. Now, it’s every bond market on the planet. And ultimately, bonds are more vital and pivotal in the global economy than homes. Why? Because a global bond-price collapse automatically comes with a global interest-rate surge; and sharply higher interest rates directly impact every consumer, every corporation or every government that borrows money. How prominent are the voices now joining Larson’s once-lonely chorus? Judge for yourself." Continue reading →

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Bill Bonner: A Barbarous Fed…

"Barbaric people used force and violence to get what they wanted; civilized transactions are based on mutual consent and cooperation. We know that the economy of the Soviet Union, driven by brute force, was a disaster. How do you think the economy of the US – heavily persuaded by the padded force of the Yellen-led Fed – will fare? Is today’s Fed a modern, civilized institution? Or an archaic throw-back to the past? And what about the dollar itself? Is it a form of modern money… or a barbarous relic, depending on the police power of the state to give it value?" Continue reading →

Continue ReadingBill Bonner: A Barbarous Fed…

Guy Who Predicted Lehman Brothers’ Fall Sees Big Trouble for China

"The next financial crisis will not come from the United States. All of my systemic risk indicators are clearly pointing at Asia. Asia is back where we were in 2007; they have a trillion dollars of toxic assets off the balance sheets -- hidden. If you look at interbank lending, we meticulously measure every day how much banks trust each other, and that is a phenomenal leading indicator. If you take summer 2011, the S&P dropped 20 percent in about 35-45 days. And sure enough, right before that, the interbank trust in Europe in May and June was completely breaking down because some banks in Europe, France and Germany own a lot of Greek bonds and the Greek bonds were in flames." Continue reading →

Continue ReadingGuy Who Predicted Lehman Brothers’ Fall Sees Big Trouble for China

Barack Obama’s Nixonian Fed Pick

"As a result of the Fed’s Quantitative Easing programs, banks are now sitting on more than $2.2 trillion in excess reserves. How the Fed eliminates these excess reserves before they produce an explosive growth in the money supply and surging inflation should be more of a concern to the next Fed Chair than an unemployment rate that is more the product of uncertainties associated with deficit spending and business fears about Obamacare than any lack of liquidity caused by the Fed. Yellen’s defenders say there’s nothing to worry about. As Georgetown University professor Henry Holzer put it, Yellen is fully aware of inflation and not a 'mindless stimulator.' Others aren’t so sure." Continue reading →

Continue ReadingBarack Obama’s Nixonian Fed Pick

War in Washington: Two Shocking Forecasts

"The bond investor rebellion we’re forecasting is not unprecedented. It has happened before — in 1980, under the Carter administration. Back then, the federal budget deficit was huge, although not nearly as large as today’s. Consumer inflation was taking off due to years of aggressive easy money by the Fed, although not nearly as aggressive as the Fed’s massive money printing and bond buying of the past five years. There was fear of a hotter cold war, although not nearly as intense as today’s fears. In response, bond buyers went on strike. It was virtually impossible for the United States government to sell its bonds at virtually any price. My forecast was — and is — that this will happen again." Continue reading →

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Janet Yellen: An Insane Choice for a Debt-Crazed Economy

"I have no idea if she is competent. Competence in an economist is hard to measure, like knowing whether your auto mechanic is really any good. As for vital attributes, the Times did get one right. 'She represents continuity,' the Times wrote. That pretty much says it all. Janet Yellen is establishment all the way. She won’t wobble the canoe. She’s not a Paul Volcker coming in to break things up. And that’s all you need to know about Yellen. She’s got the same playbook in her pocket as Bernanke. If anything, there are hints she’ll be even more aggressive in printing money than Bernanke." Continue reading →

Continue ReadingJanet Yellen: An Insane Choice for a Debt-Crazed Economy

The Most Qualified Fed Chair Since Arthur Burns

"It is not possible for any one human to have the knowledge needed to accomplish the goals established for the Federal Reserve. No person can assure Mr. Wolfers’ daughter her economic future will be bright. Ironically, that might only happen if Yellen took the job but then stepped aside to let the market determine interest rates and the flow of capital. Given Yellen’s views and experience, best case, the professor’s daughter can look forward to a world of no-growth punctuated with the occasional banking crisis. In the worst case, Ms. Yellen will conjure up the memory of Arthur Burns." Continue reading →

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It’s back with a vengeance: Private debt

"As Washington is struggling with debt and all its political ramifications, American companies and consumers are embracing it, running up record amounts in 2013. Consumer credit, for instance, surged past the $3 trillion mark in the second quarter of 2013 and continues on an upward trajectory, according to the most recent numbers from the Federal Reserve. At $3.04 trillion, the total is up 22 percent over the past three years. Student loans are up a whopping 61 percent. Total household debt, according to the Fed's flow of funds report, is at $13 trillion, nearly back to its pre-crisis level in 2007 and a shade below government debt of $15 trillion." Continue reading →

Continue ReadingIt’s back with a vengeance: Private debt

Families hoard cash 5 yrs after crisis

"An Associated Press analysis of households in the 10 biggest economies shows that families continue to spend cautiously and have pulled hundreds of billions of dollars out of stocks, cut borrowing for the first time in decades and poured money into savings and bonds that offer puny interest payments, often too low to keep up with inflation. A flight to safety on such a global scale is unprecedented since the end of World War II. The growth of cash is remarkable because millions more were unemployed, wages grew slowly and people diverted billions to pay down their debts. They also poured money into bank accounts knowing they would earn little interest on their deposits." Continue reading →

Continue ReadingFamilies hoard cash 5 yrs after crisis