Money For Nothing

Bill Bonner: Is Bad News Good News for US Stocks?

"Everyone knows that even a little cutback in the Fed’s buyback program should mean falling stock and bond prices. A trillion dollars a year is a lot of money – in fact, it’s 7% of GDP. Imagine a corporation with annual revenue of $100 billion. Imagine that it buys back its own shares at the rate of $7 billion a year. Then try to imagine what would happen to the share price when the largest single buyer drops out. It doesn’t take a genius to figure it out. Even Fed economists can see it. That’s why they won’t taper. And everybody knows it. That’s why bad news is now good news. And good news is good news. Everything Is Good News!" Continue reading →

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Revolutionary France’s Road to Hyperinflation

"The current Federal Reserve strategy is apparently to wait for significant price inflation to show up in the consumer price index before tapering. Yet history tells us that you treat inflation like a sunburn. You don’t wait for your skin to turn red to take action. You protect yourself before leaving home. Once inflation really picks up steam, it becomes almost impossible to control as the politics and economics of the situation combine to make the urge to print irresistible. The hyperinflation of 1790s France illustrates inflationary monetary policy becoming unmanageable in an environment of economic stagnation and debt, and in the face of special interests who benefit from, and demand, easy money." Continue reading →

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Your Trip on My Time Machine

"How fast and how far could interest rates rise? How soon would they impact other sectors of the economy? How can you profit from this powerful megatrend? On a quest for the answers, I invite you to a voyage through time: We will visit five critical — and incredible — periods of the past. We will return for a reality check of the even more incredible present-day reality. And then, we will take a quick trip into the future to see, first hand, a scenario that we believe is absolutely unavoidable. Our first stop is over a half century ago." Continue reading →

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Fund Manager Hugh Hendry: I would buy Bitcoin if I could

"'This is the environment where Bitcoin could go to $1m. There is no qualitative reason, but it is trending. If I could own Bitcoin, I would. If I own 3D printing, it is just the same thing,' he said. Hendry added fundamentals do not matter at a time when policy is misaligned, emphasising instead the ‘feedback loops’ created by QE. 'There is no point arguing about the one-way causality we [as an industry] believe determines our processes. That is all about a belief this is rational. We want to believe markets go up because the economy is improving, because corporate cashflows are improving. But when you get monetary disturbances creating loops, it does not really matter.'" Continue reading →

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PBS: It’s No Bubble – Why We Should All Give Bitcoin a Chance

"The long sweep of financial history tells us that many extremely valuable innovations were initially viewed with suspicion. But without them, we'd still be bartering. Bitcoins may well be one of the truly major financial innovations that brings the world together and forces long-needed fiscal and financial reform. Let's give it a chance." Continue reading →

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Central Banking: Sterile as the Grave

"Central banking is a modern religion, a technocratic one. The world's top men, the ones who control banking, want to present central banking as a science. Any sense of spontaneity, gaiety or eccentricity is to be drained from the process. What is left is a dutiful acknowledgement that those minding the money store are the best of the best – and chosen for their fealty to honesty and their honest resoluteness in the face of the temptations of corruption. A straight-shooter, fearless, well-meaning, earnest ... even a bit nebbish. That's how the central banker is basically presented to the world. You don't usually see them in relaxed environments. You hardly ever see them at barbecues." Continue reading →

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ECB Warning: More Directed History

"The idea that the ECB and the Fed are going to begin to quarrel or pursue separate policies is a ludicrous one. Yet we are being asked to believe it. These people never let a good crisis go to waste. Part of the point of the lingering EU credit crunch is to create a necessity for a deeper union, monetarily and politically. ECB pols have said as much. The goal of ECB bureaucrats is to further paste together the fraying EU and its even sicker euro currency. At this point, this policy is being pursued in direct defiance of EU citizens who have voted continuously, when they can, against a deeper union of any sort. There are no rogue central banks. Everyone has a part to play." Continue reading →

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Could We Have Been Correct About the Stock Market?

"Today government – and its central banks – utilize the private sector for policy purposes. Tomorrow, government may see fit to move those levers directly. In the meantime, there can be no doubt – as we have observed – that the plan is to take the stock market a good deal higher. While equity purists shall object that when earnings decouple from prices a crash is near, we would beg to differ. Volatility is certainly headed our way. But not necessarily an earth shattering crash, or not yet anyway. Markets are strange beasts. Pumped up by modern fiat money, they can go higher than one might expect – and then stay down longer, as well, as Japanese markets have." Continue reading →

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Paul Craig Roberts: The Money Changers Serenade – A New Plot Hatches

"At the IMF Research Conference on November 8, 2013, former Treasury Secretary Larry Summers presented a plan to expand the con game. Summers says that it is not enough merely to give the banks interest free money. More should be done for the banks. Instead of being paid interest on their bank deposits, people should be penalized for keeping their money in banks instead of spending it. Summers acknowledges that the problem with his solution is that people would take their money out of banks and hoard it in cash holdings. Summers has a fix for this: eliminate the freedom by imposing a cashless society where the only money is electronic." Continue reading →

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Jim Rogers … Sign of the Times?

"The fiat bull – which is really an unusual equity leg within a larger golden bull, from what we can tell – could run longer, even a lot longer. It could do so, as we have pointed out, with considerable volatility. But if the Fed continues to stuff banks and markets with money, we have a hard time believing that averages could plunge sharply and permanently, or at least not right away. Perhaps Rogers is aware, as we are, that top bankers are seemingly organizing a huge equity blow-off that takes the market a good deal higher before dropping it hard. In such a situation, we think there is certainly a possibility that central banking could be terminally discredited." Continue reading →

Continue ReadingJim Rogers … Sign of the Times?