Money For Nothing

Bill Bonner: The Fed Chief America Deserves

"If it were that easy to create real wealth, of course, everybody would be doing it. Real wealth – like everything else that is precious – takes time, patience, and forbearance. You don’t get it by using cheap tricks and economic gimmickry. Instead, you have to pay for it. That is, you have to give something up in the present to gain more prosperity in the future. The feds’ programs promise the opposite: Americans will get something now… and pay (dearly) later. Eventually – sooner or later – Mr. Market will come down hard on investors’ heads, like a murderer armed with a claw hammer." Continue reading →

Continue ReadingBill Bonner: The Fed Chief America Deserves

More on Default

"I fully concede, a default of any kind would be harmful to individuals and institutions holding Treasury bonds in their portfolios. It would cause investors and analysts to rethink the role that T-bills play in the financial system and could cause some painful adjustments. But why should these be the only costs under consideration? What about the cost to the US taxpayer from raising the revenues needed to pay the interest on T-bills? What about the costs to everyone holding assets denominated in depreciating dollars — depreciation that will continue as long as the Fed maintains its policy of monetizing the debt?" Continue reading →

Continue ReadingMore on Default

Ron Paul: New Fed Boss Same as the Old Boss

"The news that Janet Yellen was nominated to become the next Chairman of the Board of Governors of the Federal Reserve System was greeted with joy by financial markets and the financial press. Wall Street saw Yellen's nomination as a harbinger of continued easy money. Contrast this with the hand-wringing that took place when Larry Summers' name was still in the running. Pundits worried that Summers would be too cautious, too hawkish on inflation, or too close to big banks. The reality is that there wouldn't have been a dime's worth of difference between Yellen's and Summers' monetary policy. No matter who is at the top, the conduct of monetary policy will be largely unchanged." Continue reading →

Continue ReadingRon Paul: New Fed Boss Same as the Old Boss

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

Venezuelan Inflation Rate Tops 49 Percent

"Venezuela's Central Bank says prices have risen nearly 50 percent since last September as the country struggles to rein in a quickening rate of inflation and widespread shortages. The country's leftist government has spent heavily on social programs, rapidly increasing the amount of currency in circulation. It also tries to control prices while restricting access to bolivars at the official rate of exchange of 6.3 per dollar. That leads many to pay seven times as much for dollars on the black market. Officials say speculators are to blame for soaring prices and shortages. The inflation rate for 2012 was 20.1 percent." Continue reading →

Continue ReadingVenezuelan Inflation Rate Tops 49 Percent

‘Rejoice: the Yellen Fed will print money forever to create jobs’

"We now know where we stand. Janet Yellen is to take over the US Federal Reserve, the world's monetary hegemon, the master of all our lives. The Fed will be looser for longer. The FOMC will continue to print money until the US economy creates enough jobs to reignite wage pressures and inflation, regardless of asset bubbles, or collateral damage along the way. No Fed chief in history has been better qualified. She has pedigree. Her husband is Nobel laureate George Akerlof, the scourge of efficient markets theory. Her lodestar is the 'non-accelerating inflation rate of unemployment' (NAIRU). When the rate is above NAIRU, she is a dove: when below, she is a hawk." Continue reading →

Continue Reading‘Rejoice: the Yellen Fed will print money forever to create jobs’

Thanks, Bloomberg, for More Nonsense About Gold

"Central bankers from all over the world meet regularly in Switzerland, at the Bank for International Settlements, to 'coordinate' monetary policy. They sit in a big room in front of a fancy table and discuss what they are going to do. Four men control roughly 75% of the entire world money supply: Zhou Xiaochuan, People’s Bank of China, Mario Draghi, European Central Bank, Haruhiko Kuroda, Bank of Japan and Ben Bernanke, US Federal Reserve. Does anyone seriously believe that these four individuals do not operate a common monetary policy? Does anyone believe that any of these individuals have the latitude to go their own way in defiance of the others?" Continue reading →

Continue ReadingThanks, Bloomberg, for More Nonsense About Gold

QE3 is a Huge Subsidy to the Top 10%.

"The Federal Reserve System’s policy known widely as QE3 is a massive subsidy of the rich at the expense of the middle class. This is the conclusion of Stephen Roach, who for years was chief economist for Morgan Stanley. He calls this policy destabilizing. He says this: the FED 'is courting an increasingly treacherous endgame at home and abroad.' The FED’s creation of $85 billion of counterfeit money — euphemistically called 'liquidity' — is based on a theory. The theory is that rich people, who buy most of the stocks and bonds, will feel wealthier, and therefore will buy more stocks and bonds. In short, QE3 is an indirect way to goose the equity markets." Continue reading →

Continue ReadingQE3 is a Huge Subsidy to the Top 10%.

The Larger the Deficit, the Greater the Default

"There will be a day of reckoning, of course. There always is. But a majority of voters at that time will be sure to see to it that previous lenders will suffer the losses. There will be a Great Default. The lenders will cry: 'But you promised.' And the borrowers will cry: 'That’s life in the land of Keynes. In the long run, we’re all dead. You go first.' The big losers will be the suckers who lent Uncle Sam the money. The biggest lenders are those who trust the federal government to pay their retirement bills, including medical bills. Those who believe in the welfare state will be the biggest losers. They have believed in something for nothing. They will get left with a pile of IOUs and a note: 'Sorry, Charlie.'" Continue reading →

Continue ReadingThe Larger the Deficit, the Greater the Default

Peter Schiff Was Right – ‘Taper’ Edition

"When Ben Bernanke announced that the Federal Reserve's Open Market Committee was going to continue its monetary expansion program it calls Quantitative Easing, almost everyone in the financial media was taken by complete surprise. According to the mainstream media, the non-taper 'surprised almost everyone out there.' Well it did not surprise me, nor anyone who had been paying attention to what I had been saying. As I said repeatedly over the past several months, the Fed knows that the appearance of economic health would evaporate if its stimulus were withdrawn, or even diminished." Continue reading →

Continue ReadingPeter Schiff Was Right – ‘Taper’ Edition