Money For Nothing

U.S. Dollar on the brink of 13-month lows: the long-term consequences

"While the stock market has been rising, the U.S. dollar has been sinking. It’s on the verge of breaking major 13-month lows. It’s not far from reversing everything it gained against a sinking euro during the recent European debt crisis. And once those barriers are breached, it could crash to its lowest level in history. But Washington doesn’t care, and few investors seem to give a damn. They celebrate the fact that, in the near term, a falling dollar helps make U.S. exports more competitive overseas. Plus, they like the fact that a dollar decline temporarily drives global investors away from safety and into risky investments, including U.S. stocks." Continue reading →

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Bloated Fed Balance Sheet Propelling Market Rally

"Like preceding surges, the rally's latest chapter is disconnected from the real economy's fundamentals. Instead, what we are witnessing is the direct result of an unprecedented expansion of the Fed's balance sheet. Recently, it has become clear just how addicted the stock market is to easy money policies, as even the slightest hint of the Fed tapering its asset-purchasing program sends the markets into a frenzy. When the Fed might actually rein in its money printing is anyone's guess, but if the chart above is any indication, there's only one direction the market is headed once its life support is yanked away." Continue reading →

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Marc Faber: Bond Burglars to Bring Bears Out of Hibernation

"The probability that we have embarked on permanent asset purchases by the Fed is very high (until QE99 — or at least until the system breaks down, as just outlined). To Mr. Bernanke’s credit, and to be fair to him, I need to point out that his economic sophism is shared by most central bankers around the world. We can see that the global monetary base has exploded more than fourfold since 2003. These universally common monetary policies are, of course, applauded by fund managers, bankers and the investment community, all of which benefit (including myself) from rising asset prices." Continue reading →

Continue ReadingMarc Faber: Bond Burglars to Bring Bears Out of Hibernation

Alan Greenspan Sees ‘Double Digit’ Inflation Ahead

"Alan Greenspan, the former Federal Reserve chairman, has largely avoided public comment on the Fed’s efforts to stimulate the economy, but he has said enough to make it clear that he is not a fan. It’s been a long time since anyone accurately predicted higher inflation. Instead, inflation has sagged to the lowest levels on record. But here’s why Mr. Greenspan is worried. Each time the Fed buys a bond, it pays the bank that sells the bond by creating money and putting it into an account that the bank keeps at the Fed. Mr. Greenspan’s inflation prediction is based on his estimation of the consequences as that money flows out into the economy." Continue reading →

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Faber: Fed could up QE to $1 trillion a month

"Marc Faber, publisher of The Gloom, Boom & Doom Report, told CNBC on Monday that investors are asking the wrong question about when the Federal Reserve will taper its massive bond-buying program. They should be asking when the central bank will be increasing it, he argued. 'The question is not tapering. The question is at what point will they increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month,' Faber said in a 'Squawk Box' interview. Faber has been predicting so-called 'QE infinity' because 'every government program that is introduced under urgency and as a temporary measure is always permanent.'" Continue reading →

Continue ReadingFaber: Fed could up QE to $1 trillion a month

Federal Reserve Policy Failures Are Mounting

"One possible reason why the Fed have consistently erred on the high side in their growth forecasts is that they assume higher stock prices will lead to higher spending via the so-called wealth effect. The Fed's ad hoc analysis on this subject has been wrong and is in conflict with econometric studies. The studies suggest that when wealth rises or falls, consumer spending does not generally respond, or if it does respond, it does so feebly. During the run-up of stock and home prices over the past three years, the year-over-year growth in consumer spending has actually slowed sharply from over 5% in early 2011 to just 2.9% in the four quarters ending Q2." Continue reading →

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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 →

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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 →

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The Biggest Scam In The History Of Mankind (Debt Ceiling Truth)

"You are about to learn one of the biggest secrets in the history of the world...it's a secret that has huge effects for everyone who lives on this planet. Most people can feel deep down that something isn't quite right with the world economy, but few know what it is. Gone are the days where a family can survive on just one paycheck...every day it seems that things are more and more out of control, yet only one in a million understand why. You are about to discover the system that is ultimately responsible for most of the inequality in our world today. The powers that be DO NOT want you to know about this, as this system is what has kept them at the top of the financial food-chain." Continue reading →

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