Don’t Buy The SPX Hope Rally!

By Chris Vermeulen – Re-Blogged From http://www.Gold-Eagle.com

All bubbles burst; the question is when? Quantitate Easing (QE) is much like an addiction. One needs more and more to get the initial effect. However, this becomes an “asymptotic” result…whereas eventually one needs an infinite amount that will no longer give a positive effect! So, now that QE has failed, I believe there will now be the introduction of “Helicopter Money.”

Global Central Bankers constantly continue to spend their way out of their “contracting economies” which are now resulting in large ‘budget deficits’. The deficits that these policies have produced are “unsustainable” and have now created a new “fiscal crisis” within their countries. A second response has been to expand the Central Banks’ balance sheet as a way of providing liquidity to the private sector. These policies have also sent interest rates into “unprecedented” historical lows.

Continue reading

Advertisements

Japan’s “Helicopter Money” Play: Road To Hyperinflation Or Cure For Debt Deflation?

[I DO NOT agree with the Helicopter Money thesis. Governments’ expansions of their money supplies unrestrictedly were the cause of every Hyperinflation the world has known, as for example in Wiemar Germany and more recently in Zimbabwe. –Bob]

By Ellen Brown – Re-Blogged From http://www.Silver-Phoenix500.com

Fifteen years after embarking on its largely ineffective quantitative easing program, Japan appears poised to try the form recommended by Ben Bernanke in his notorious “helicopter money” speech in 2002. The Japanese test case could finally resolve a longstanding dispute between monetarists and money reformers over the economic effects of government-issued money.

When then-Fed Governor Ben Bernanke gave his famous helicopter money speech to the Japanese in 2002, he was talking about something quite different from the quantitative easing they actually got and other central banks later mimicked. Quoting Milton Friedman, he said the government could reverse a deflation simply by printing money and dropping it from helicopters. A gift of free money with no strings attached, it would find its way into the real economy and trigger the demand needed to power productivity and employment.

Continue reading

Destroying Crude Oil Price Rally – Something Dark Emerges from the Tar Pits and Oil Sands

By David Haggith – Re-Blogged From Great Recession Blog

The crude oil price rally has been completely destroyed, though I’ll admit I was wrong when I predicted crude oil prices would plummet in March or April as the perfect storm developed against oil prices. Instead, they rallied. In spite of that, I continued to believe my error was in timing and not in fact — not in the fact that another harsh fall in oil prices was beating a path to our doors.

Crude oil prices beaten down by a storm still building

So, I continued to write articles about the forces building against oil prices, even in the face of a strong rally, which many believed would set a new position for oil for the remainder of 2016. That storm has, as of today, completely clawed back the post-March rally by taking crude oil prices back to a three month low and to where they stood at the start of the year as well. West Texas Intermediate just struck $42/barrel today.

Continue reading

Electrical Power Consumption & Stock Markets

By Mark Lundeen – Re-Blogged From http://www.Gold-Eagle.com

…. I haven’t covered electrical power consumption (EP) for a few months, making this a good time for an update.  Electrical power consumption is just that, the power required to drive the economy from one day to the next.  EP is an excellent metric for measuring economic growth (or its contraction), as it’s measured in the kilowatt (KW); an engineering unit that cannot be manipulated by Washington’s statisticians at the Labor Department.  The reason for this is simple; calculating EP comes down to a simple law of nature: Ohm’s Law or E=I*R.  Where E is voltage, I is the amperage demanded by the electrical grid, and R is the electrical grid’s resistance to the flow of the amperage.

A simple example of EP is as follows:  E(120 volts) = I(2 amps) * R(60 ohms).  If the demand for electrical power were to double, we would see 120V = 4 amps * 30 ohms.  You see, to maintain 120 volts, the utility would have to double the amps as resistance to the flow would be halved by the utility’s customer base demanding more amps at 120V.  Engineers and electricians understand what most people don’t about electricity; voltage is cheap.  However, to drive current (amperage) down the line you have to burn coal or fuel oil and build infrastructure, and that cost money.

From the stand point of Ohm’s Law, the electrical utility is obligated to maintain the electrical grid’s rated voltage.  The grid’s “load” is 100% determined by the utility’s customers.  Whenever someone turns on a light bulb, or starts a 500HP electrical motor to drive an assembly line, the utility must send additional amperes down the line if it’s to maintain the grid’s rated voltage.  So, it’s easy to understand that when the economy is growing, its demand for EP grows too.  When the economy is contracting, its demand for EP contracts like wise.

Barron’s has published weekly EP consumption statistics since August 1929.  In the chart below the blue plot is the actual weekly data points, the red plot is its 52Wk MA.  Before the 1970s, seasonal factors for heating and air conditioning were minimal.  After 1970 these seasonal factors became significant as residential and commercial air conditioning became a fact of life for most Americans, and to electrical utilities in all fifty states.

From 1929 to the 1960s, weekly variances in EP were insignificant, as EP was primarily used for industrial and commercial purposes.  However after 1970, to filter out the growing seasonal factors in EP, a 52Wk MA is needed to measure actual economic demand; not perfect, but good enough.

Looking at the chart’s red plot (52Wk MA), we see EP’s last all-time high in demand for power occurred eight years ago in August 2008.  Also, peak demand for electrical power was ten years ago in August 2006.  The summer of 2006 must have been a hot one!  Looking at the economy by its demand for electrical power, there has been no economic growth during the entire Obama Presidency.

Below is a Bear’s Eye View of the 52Wk MA for US EP demand (Red Plot above).  Let’s take a look at its upper portion for a historical review.  During the Great Depression demand for EP contracted by brutal 17.32%.  The 1930s also saw a smaller, yet still painful 6.58% economic contraction in 1938.

The next contraction in EP occurred in 1946.  But this 8.21% contraction was a result of shutting down American’s production lines to retool factories for peace time production, as tanks were out and automobiles were back in.  Interestingly, this second largest decline in EP didn’t come from a post war recession, or so said the editors of Barron’s at the time who were a bit amazed at this.

From 1946 to 1980, except on rare occasions, demand for electrical power saw new all-time highs on a weekly basis.  Then a significant contraction in EP occurred during the early years of the Reagan Administration.  In the early 1980s as interest rates soared to double digits, EP contracted by 4.12%.  It may not look like much, but that 4% reduction in EP caught everyone’s attention!

The popping of the high-tech bubble resulted in a 2.45% contraction in EP in 2002, but then things became weird.   Up to this point, all economic contractions in EP formed V shaped declines in the BEV plot.  A last all-time high in EP occurred, economic demand for EP then contracts as the recession develops, which ultimately reached a bottom, where demand for EP once again increased to new all-time highs as the economy recovered.

As you can see below, all that changed in August 2008.  I believe the major cause for this has been the Federal Reserve’s Zero Interest Rate Policy, which began in December 2008, and the three doses of QE the FOMC had injected into the economy.

Had the “policy makers” allowed Mr Bear to take out the trash from the sub-prime mortgage debacle, I suspect we’d have seen an economic contraction in EP of over 10%.  As you see that didn’t happen.  However, since 2008 there hasn’t been a real economic recovery either.

Before Mr Bear and his cleanup crew finally pack up and leave, expect a contraction in the demand for EP to go straight down through Mr. Obama’s photo in the chart below.

The question these charts beg to be asked is; how can Washington’s statisticians report record levels of economic growth?  That’s simple, “economic growth”, as measured by the Labor Department, is measured in dollars, not kilowatts.   And as is painfully evident in the chart below, since August 1971 when the dollar was decoupled from the Bretton Woods $35 gold peg, there has been no shortage of “economic growth” (Red Plot) for Washington’s statisticians to measure.  Though the growth in the economic demand for EP (Blue & Green Plots), has fallen far behind.

As EP has seasonal factors for heating and air conditioning, its data of summer peaks provides us with impartial observations to confirm or refute claims of “global warming.”  In the charts below I’ve plotted the weekly EP data to its 52Wk M/A.  There are two seasonal peaks for EP demand.  The smaller winter peaks occur near the vertical-grid lines (January), while the summer peaks are found between them.  Take a moment to study these charts.  As far as the demand for EP to satisfy summer cooling requirements, the data makes a better case for global cooling than warming.

This season’s peak demand for the summer has yet to pass.  This should happen sometime before mid-September.  Hopefully, the northern hemisphere sees its thermal peak soon, as “scientists” investigating the effects of “global warming” on the Arctic Ocean have gotten stuck in the ice not far north of Murmansk, Russia.

“An expedition to the North Pole intended to measure the effects of global warming ground to a halt this month when the scientist’s ship got blocked by the ice packs near Murmansk, Russia, reports reveal.” – Breitbart / Big Government 21 July 2016

http://www.breitbart.com/big-government/2016/07/21/global-warming-expedition-stuck-in-arctic-sea-because-of-too-much-ice/

This is embarrassing!  And not the first time “scientists” investigating “global warming” have been exposed as gullible dolts.  These people only do this because some governmental bureaucracy is funding their research with tax money, but only if the “scientists” objective is to find data to confirm dubious allegations of global warming.  Global warming skeptics need not apply for the funds.

CONTINUE READING –>

The 3 Big Stories NOT Being Covered (Part 1)

By Andy Sutton & Graham Mehl – Re-Blogged From http://www.Silver-Phoenix500.com

Anyone who has read this publication for any length of time knows that topics range from mainstream to the totally uncovered stories. As we look out not just across the economic landscape, but across the world in general, we are seeing an alarming increase of serious situations that are receiving little or no coverage at all from the western media. Thankfully there are hundreds if not thousands of reliable people who chip in with analysis and stories of their own on some of these topics.

We’ll start out by saying there many, many more uncovered stories, but these are the three we feel could be game changers in the near to medium term. We picked these three themes because, in terms of magnitude, they will have the biggest impact on the world if they continue on their present trajectories. Given the length of each analysis, we are going to break this into a three-part series.

PART 1 – Russia: Tensions, Turmoil and Western Hubris

Continue reading

Japan’s Lemming Syndrome

By Michael Pento – Re-Blogged From http://www.gold-eagle.com

The financial world is buzzing about former Fed chairman Ben Bernanke’s recent trip to Japan, where he advised Japan’s central bank chief Haruhiko Kuroda on how to manage his nation out of multi-decades of stagnant growth. Channeling economist Milton Friedman, Bernanke warned that Japan was vulnerable to perpetual deflation and stagnate growth and that helicopter money–where the government issues non-marketable bonds with no maturity date and the Central Bank buys them with counterfeited credit–was the most useful tool in overcoming this condition.

Bernanke encouraged Japan to carry on with the Abenomics policies that have failed to date by supplementing monetary policy with even more fiscal stimulus—as if Japan’s 230% debt to GDP ratio wasn’t enough. And he assured Abe and his staff that the Bank of Japan (BOJ) has instruments to ease monetary policy yet further.

And in case this village needed another idiot, Nobel laureate Paul Krugman, also chimed in. Arguing that Japan should raise its inflation target to 4 percent and embark on a significant but temporary fiscal stimulus to boost prices in the economy. Speaking at a conference on Thursday in Singapore, Krugman called for “a big burst of government spending and maybe also cash donations.”

Continue reading

John Kerry: Air Conditioners as Big a Threat as ISIS

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

US Secretary of State John Kerry has set his sights on the nation’s air conditioners, claiming that the climate impact of air conditioners are as big a threat to life as the Islamic State terrorist group.

kerry-on-isis-and-air-conditioning

Continue reading