Money For Nothing

Bill Bonner: America’s faith-based economy

"Did Mary really ascend to Heaven on this day? Was she really a virgin? Did she really give birth to the son of God? You need faith to believe such things. Likewise, you need faith to believe that a piece of green paper is ‘money’. You are also supposed to believe that its managers will make sure this ‘money’ holds its purchasing power even as they do their damnedest to undermine it. But to believe that you need more than faith. You need a full frontal lobotomy." Continue reading →

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Is Slowing M2 Money Supply Signalling Another Stock Market Crash?

"According to Austrian Business Cycle Theory, when a central bank slows its money printing that has fueled a manipulated stock market boom, the stock market is very vulnerable to a crash. Murray Rothbard in his book America's Great Depression explained how it occurred before the October 1929 crash. The money supplied slowed before the October 1987 crash. It slowed before the 2008 September Financial Crisis. And it is slowing again now." Continue reading →

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Doug French: So Where’s the Hyperinflation Already?

"The industry has shrunk to only about 7,000 institutions from 18,000 in 1985. The numbers won’t be growing as the FDIC is not issuing new bank charters. Proposed capital and regulatory requirements are forcing small to mid-sized banks to sell. Larger banks can’t grow organically so they are ready to buy. Lashley believes the industry will shrink further to 3,000 banks. While Lashley insists the industry is in much better shape than people think, a full five years after the financial crisis there are still 612 banks on the FDIC’s 'problem bank' list. None of this is bullish for increased lending." Continue reading →

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The Tax-Evaders Who Never Make The News

"You'll never hear peep about another group of tax evaders. This group flies under the radar every time. You see, when The Federal Reserve cranks out fresh copies of Bernanke Bucks, someone always gets their hands on the money first. These are the evaders of the insidious 'Inflation Tax'. Think Wall Street, The Defense War-Making Industry, and the multitude of crony companies that receive government subsidies. They take their hot-off-the-press Bernanke Bucks and start spending them (bidding up prices). These are the lucky 'winners.' For they have found a way to evade the Inflation Tax. The rest of us suckers get stuck with the bill." Continue reading →

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The FED’s Money Trap

"The Federal Reserve, and therefore the economy, is caught on the horns of a dilemma of our own making. ZIRP (zero interest rate policy) and the aggressive pumping of money (upwards of $85 billion a month) into the financial system have tripled our money supply. Housing is perhaps the canary in the coal mine telling us that things are not going well and danger is close by. Even with 3% 30-year mortgages and no money down, we have to go back to 1997 to see such such low levels of home ownership in America." Continue reading →

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Bill Bonner: The Bottom Is Still Ahead for This Bear Market

"The last top in Treasury prices (and a bottom for yields) occurred in 1946. Yields rose for the next 34 years. Now the Treasury market appears to be topping out again… and is headed for a new high in yields… which may not arrive until 2047. It may be a long way off… or right around the corner. Either way, it will be hell getting there. The Detroit pension disaster is just the first of many. Wait until long-term interest rates hit 5%… or 10%. How many companies, cities and pension funds will still be solvent? We’ll see! But wait. You don’t think the Fed will sit on its hands and let the markets take over, do you? Taper off? Forget it." Continue reading →

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Why Are Your Children Buying Houses for Ben Bernanke?

"The Fed sells all those bonds to investors – who will, of course, want their money back, with interest. So, where will the money for paying off those bonds come from? From taxes, of course. When a government sells a bond, they are selling a right to their tax receipts. And that means your kids will be taxed to pay it all off. The Fed will keep the houses, of course, but hidden behind paragraphs of confusing financial and accounting terminology. Home ownership in America is falling off a cliff, as you can see in this graph. So, Mr. and Ms. America, get ready to meet your new landlords: Benny and the Banks." Continue reading →

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Janet Yellen: “A Wise and Humane Policy Is Occasionally to Let Inflation Rise”

"Yellen comes out of the economic school of thought that holds the view that printing money can somehow boost the economy. In essence, she holds the thought that the economy can somehow at times get stuck, that prices at such time don't adjust to supply and demand and that thus money needs to be printed by the Fed via Wall Street cronies to distort prices via monetary and price inflation and fool the public into doing transactions they wouldn't do without the distortions. This is what is held these days as 'utterly unquestioned credentials.'" Continue reading →

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Marc Faber: The Fed Will Increase QE

"Marc Faber was characteristically pessimistic during his interview with Sprott Money late last month. 'I don’t think they will end QE. I rather think they will have to increase it, because as you print money or as you purchase assets, from a central banking point of view, it loses its impact over time. In order to keep the impact going, you have to essentially increase it. I believe that the dovish members of the Fed will print more money. Especially after the resignation of Mr. Bernanke early next year, when he will be replaced, there will be even more dovish members.'" Continue reading →

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