Investment/Trends

When We Will Celebrate the End of QE, and Why

"Central bank money is disseminated through the banking system. And the banking system over years funnels it into investable facilities like the stock market. It is a criminal system, predicated on rigorous control of money stock. If bankers really wanted to benefit the middle class, they'd pump it directly into bank accounts. But they won't, for that would reveal the essential phoniness of the system and it would also generate vast price inflation. But price inflation they will have nonetheless. By the time bubbles are visible, as they are, it is way too late for the economy to contain the damage. And thus they pretend to cut. Or trim the advance. But markets, especially stock markets, will continue to rise." Continue reading →

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My Fed Forecast Was Right on Target — What to Look for Next

"Outgoing Fed Chairman Ben Bernanke sounded a much more confident tone on the economy in his post-meeting press conference. And he indicated that the incoming chairman, Janet Yellen, fully supported the day’s action. Furthermore, he said that barring some economic catastrophe, the $10 billion reduction in the QE program we’ll get in January is just the first of many steps. It should be followed by cuts of roughly an equivalent size — or more — at every single meeting in 2014. That, in turn, sets the stage for the next major surprise. (At least to the Wall Street crowd.) I’m talking about the first actual short-term interest-rate hike in 2014." Continue reading →

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What Happened to the Fed’s Trillions? Back on Deposit…at the Fed!

"So you can understand why they wanted to have the tool. Now the question is whether or not this tool as it was implemented throughout this financial crisis, and aftermath, has exacerbated the problems with the credit channel. A bank can decide, 'Do I want to give a three-year loan to a risky borrower, or do I want to get 25 basis points at the Federal Reserve? I'm really risk averse right now. I don't really want to lend to anybody so I'd rather take my 25 basis points.' So I believe that at the margin, this has affected the credit channel, the effectiveness of the credit channel." Continue reading →

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David Stockman: Lunatic Fed Engineering Global Collapse

"Yellen has been part of this Fed system since the 1990s. Just start with the year 2000: The balance sheet of the Fed was $500 billion. Today it’s pushing $4 trillion. That’s an eight-fold increase just in this century. She’s been part of it all along, and if that isn’t monetizing the debt, (then) I don’t know what the word means. It is only the top 1% that has experienced a huge windfall from the serial bubbles that the Fed has created. So, if you go right to the core of what this is all about -- what the Fed’s mission is, what the new chairman of the Fed will be doing and saying, I think we had a pretty good indication that she’s going to take this lunatic policy that we’ve had for years now right over the edge." Continue reading →

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The FED’s New Normal: $900 Billion a Year . . . Indefinitely

"This is the Federal Reserve System at 100 years. The economy is now addicted to an emergency monetary policy. The FOMC has made it clear: the bubble conditions of the financial markets will not deliberately be popped by a return to 2007. This is the new normal -- endless addiction to monetary expansion. Meanwhile, the banks refuse to lend into the economy. They pile up excess reserves. The FOMC clearly does not expect this to cease. That is why $900 billion a year is the new normal." Continue reading →

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Bitcoin Value Sinks After Chinese Exchange Blocked

"China’s biggest Bitcoin exchange was forced to stop accepting deposits in the Chinese currency on Wednesday, sending the price of the virtual money tumbling in one of its biggest markets globally. The development comes less than two weeks after China’s central bank and four other government agencies that regulate finance and technology issued a joint announcement banning Chinese financial institutions from dealing in the virtual currency. By Wednesday evening, the Shanghai-based BTC was quoting Bitcoins at about 2,300 renminbi, or about $380, apiece. That was nearly 40 percent lower than where they had traded on Tuesday." Continue reading →

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Denmark’s Authorities: Bitcoin is Not Regulated Here

"Denmark’s Financial Supervisory Authority (FSA) today issued an official statement on the use of virtual currency in the country – and surprisingly, it’s not all bad news. The statement highlights that virtual currency isn’t covered by Denmark’s existing regulatory framework. Thus, cryptocurrencies cannot be subjected to the country’s standard financial regulation. According to the FSA, doing business with bitcoin and other cryptocurrencies does not qualify as issuance of electronic money, currency exchanges, brokerages or deposit services. As a result, bitcoin entrepreneurs who want to build businesses and establish exchanges in the country will not need government approval." Continue reading →

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How to Build a Huge Bonus in Your Portfolio

"Some commentators are betting that the Fed will begin to taper now, though the big money says tapering will start in March. Tapering, whenever it happens, is not tightening. Tightening is pulling money out of the system. Tapering is simply slowing an out-of-control train to 135 miles per hour from 150. There’s a pileup in the offing either way. No matter what comes of tapering talk this week, one fact will remain unchanged: The Fed will maintain interest rates at or near 0%. And even if tapering does happen this week, the Fed will accompany the move with commentary promising to extend the period in which rates remain excessively low." Continue reading →

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Bill Bonner: The Real Numbers Behind America’s Phony Recovery

"What kind of economy is it that reduces a man’s wages over a 43-year period? We don’t know. But it’s not likely to win any prizes. But why, with so many strikes against it, does the US economy still have the bat in its hands? It’s partly because the Fed has pumped up stock, bond and house prices – not to mention net corporate profit margins and consumer spending . So, the averages look pretty good… and they mask the ugliness beneath them. The bottom 90% of the population – people in 9 houses out of 10 – have 10% less income than they had 10 years ago. This is not a success story. It’s a disaster. And not one that tempts us into an overvalued US stock market." Continue reading →

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Cognitive Dissonance of Ben Bernanke?

"The aggrandizement of 'leaders' who preside over massive price-fixing facilities such as central banks and legislatures ought to be identified as the hype that it is. There is no possible way that even the most sophisticated analysis of previous indicators can yield up legitimate and accurate projections. Those internationalists who have constructed the current system know that. Hence, the almost obsessive concentration on academic degrees and 'expert' appellations. The idea is to fool people into believing the 'best-of-the-best' have 'expert' powers that allow them to peer into the future using the indicators at hand. But they can't any more than you can." Continue reading →

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