A Can Too Big For The Fed And ECB

There are lies, damned lies, and economists. Whether these economists work for the government or a bank, they spend all their time on the computer extrapolating current trends with minor adjustments.

If you want to understand the future, don’t spend your life preparing and constantly revising an Excel sheet with masses of economic data. Collective human behaviour is extremely predictable. But not by spreadsheet analysis but by studying history.

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Do Jobless Claims Point To Sluggish Recovery

By Arkadiusz Sieroń – Re-Blogged From Gold Eagle

Jobless claims paint a much grimmer picture than other pieces of economic data. So, the Fed (and other central banks) will remain dovish for years, which should support gold prices.

More and more economic reports show the beginning of the economic recovery in the U.S. Following the retail sales earlier last week, the Philly Fed Manufacturing Index turned from negative 43.1 in May to positive 27.5 in June, the first positive reading since February. And the Leading Economic Index rose 2.8 percent in May, after a record plunge in the two prior months.

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Silver Is Going To Have A Sudden, Massive Move To $50 That Everyone Will Be Surprised Over

By Mike Gleason – Re-Blogged From Silver Phoenix

Mike Gleason: It is my privilege now to welcome back Michael Pento president and founder of Pento Portfolio Services. Michael is a well-known money manager, market commentator, and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. He’s been a regular guest with us over the years, and it’s always a pleasure to have him on with us.

Well, Michael, it’s been a few months since we’ve had you on last and just a little bit has been going on in the world. COVID-19 has hit the states to say the least and caused major disruptions in the economy. Governors have instituted stay-home orders. Tens of millions of people have filed for unemployment. Now we’re seeing major rioting and social unrest in many cities throughout the country over the police killing of a black man in Minnesota last week.

And in the face of all that, the markets are seemingly doing just fine. Stocks are still rallying and it doesn’t seem like Wall Street is all that concerned about any of this. So, let’s get your take on what’s going on there, Michael, because it’s pretty hard to connect the dots between Wall Street and Main Street these days. Help us out there.

Michael Pento: Yeah. So nothing is going on that much this year at all, right? It’s been pretty boring. </sarc>  The divide between the rich and the poor, which was already humongous coming into this year has grown exponentially. And you have to ask yourself the question, gee, if GDP, according to the Atlanta Fed is going to drop in the second quarter by over 52%, that is a seasonally adjusted annual rate, Mike. GDP is going to be cut in more than half during the second quarter of 2020, how in God’s name could it be possible that stocks are close to all-time record highs? And by evaluation metric at all-time record highs. There are about over 150% of GDP.

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Financial System Is Rotten

By Egon von Greyerz – Re-Blogged From Silver Phoenix 

Something is rotten in the state of Denmark the world (from Shakespeare’s Hamlet).

In a world that cannot survive without incessant deficit spending, money printing and negative interest rates, there is clearly something very rotten. It is not only rotten but it stinks! Yes it stinks of lies, deceit and moral decadence.

So why doesn’t anyone stand up to tell the world where we are heading. Well, for the simple reason that no politician can tell the truth. Because if they did, they wouldn’t be elected. The principal purpose of any politician is to buy votes and to get votes you can never speak the truth.

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Currencies Will Be ‘Flushed Down The Toilet’

By Mike Gleason – Re-Blogged From http://www.Gold-Eagle.com

Mike Gleason: It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies, and author of the book The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market.

Michael is a well-known money manager and a fantastic market commentator, and over the past few years has been a wonderful guest and one of our favorite interviews here on the Money Metals Podcast and we always enjoy getting his Austrian economist viewpoint.

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Money Keeps Pouring In

By John Rubino – Re-Blogged From Dollar Collapse

Someday, stock, bond and real estate valuations will matter again. And the mechanism by which this return to sanity is achieved will probably be the torrent of money now flowing in from people who, for various reasons, don’t care about (or understand) the prices they’re paying.

Millennials, for instance, seem to have reached the “beginners’ mistakes” phase of their financial lives. They’re major buyers of recreational vehicles – see The Perfect Crash Indicator Is Flashing Red — and are now opening stock brokerage accounts at a startling pace:

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The Death of Abenomics; the Rise of Interest Rates

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

Job approval numbers for Japan’s Prime Minister Shinzo Abe are in freefall. Abe’s support has now fallen below 30%, and his Liberal Democratic Party recently suffered heavy losses stemming from a slew of scandals revolving around illegal subsidies received by a close associate of his wife.

But as we have seen back on this side of the hemisphere, the public’s interest in these political scandals can be easily overlooked if the underlying economic conditions are favorable. For instance, voters were apathetic when the House introduced impeachment proceedings at the end of 1998 against Bill Clinton for perjury and abuse of power. And Clinton’s perjury scandal was indefensible upon discovery of that infamous Blue Dress. The average citizen, then busily counting their chips from the dot-com casino, were disinterested in Clinton’s wrongdoings because the 1998 economy was booming. Clinton remained in office, and his Democratic party gained seats in the 1998 mid-term elections.

Therefore, Abe’s scandal is more likely a referendum on the public’s frustration with the failure of Abenomics.

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The Elephant In The Room: Debt

By David Chapman – Re-Blogged From http://www.Gold-Eagle.com

It’s the elephant in the room; the guest no one wants to talk to—debt! Total global debt is estimated to be about $217 trillion and some believe it could be as high as $230 trillion. In 2008, when the global financial system almost collapsed global debt stood at roughly $142 trillion. The growth since then has been astounding. Instead of the world de-leveraging, the world has instead leveraged up. While global debt has been growing at about 5% annually, global nominal GDP has been averaging only about 3% annually (all measured in US$). World debt to GDP is estimated at about 325% (that is all debt—governments, corporations, individuals). In some countries such as the United Kingdom, it exceeds 600%. It has taken upwards of $4 in new debt to purchase $1 of GDP since the 2008 financial crisis. Many have studied and reported on the massive growth of debt including McKinsey & Company www.mickinsey.com, the International Monetary Fund (IMF) www.imf.org, and the World Bank www.worldbank.org.

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Exploding Debt, Inverted Yield Curve, and Then “Economic Armageddon”

By Mike Gleason – Re-Blogged From http://www.PentoPort.com

Listen to the Podcast Audio: Click Here

Mike Gleason: Michael, how are you today? Welcome back.

Michael Pento:  I’m doing fine, Mike. Thanks for having me back.

Mike Gleason:  When we had you on last you commented that you believed the market was pricing in President Trump getting virtually all of his policy agenda pushed through Congress, the tax cuts, repealing Obamacare, and so forth. To say Trump has encountered some resistance in Washington would be a major understatement. The establishment of the right doesn’t seem to like him. The left and the mainstream media of course hate him. So, Michael before we get into the effects this will have on the markets here, first off, handicap for us the chances of Trump, based on what’s been transpiring in recent weeks, miraculously gaining enough allies in Congress in order to get his initiatives passed.

Michael Pento:  I did say that the market was pricing in the imminent effect of a massive tax cut — and I meant tax cut, not a tax reform package. In other words, cutting the rate from 30% to 15% or even 20%, but certainly not offset by any spending cuts or an elimination of deductions. The market is still pricing in a lot of that hope and hype, in my opinion. But I had said and warned from the beginning, this was back right after the election, I did say that the Trump “stimulus” package — and I’ll put “stimulus” in quotes and I’ll explain why in a second — I said that the Trump “stimulus” plan would be both diluted and delayed.

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Markets Should Fear Central Banks More Than Trump

By Michael Pento – Re-Blogged From Pento Portfolio Strategies

Trump’s economic agenda has become further delayed by what seems like daily leaks from the White House. This may finally bring about the long-awaited equity market pullback of at least 5 percent. However, what will prove to be far more troubling than Trump’s ongoing feuds with the DOJ and the press, is the upcoming market collapse due to the removal of the bids from global central banks.

The markets have been feeding off artificial interest rates from our Federal Reserve and that of the European Central Bank and the Bank of Japan for years. In addition, the global economy has been stimulated further by a tremendous amount of new debt generated from China that was underwritten by the PBOC. After it reached the saturation point of empty cities, China is now building out its “Belt and Road Initiative” that could add trillions of dollars to the debt-fueled stimulus scheme that has been spewed out over the world-wide economy.

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Business Cycles Are Credit Cycles

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

This article gets to the heart of why central banks’ monetary policy will never succeed. The fundamental error is to regard economic cycles as originating in the private sector, when they are the consequence of fluctuations in credit. It draws on the author’s submission of evidence to the UK Parliament Treasury Committee’s enquiry into the failure of monetary policy in the wake of the 2008 crisis.

Summary

  • It is incorrectly assumed that business cycles arise out of free markets. Instead, they are the consequence of the expansion and contraction of unsound money and credit.
  • Monetary inflation transfers wealth from savers and those on fixed incomes to the banking sector’s favoured customers. It has become a major cause of increasing disparities between the wealthy and the poor.

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Catalyst For Chaos

By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com

Up until very recently, stocks had been humming along without so much as a minor speedbump and volatility was becoming a distant memory. However, it now seems prudent to once again remind investors that this extremely overvalued market is headed for an epic crash. The Cassandras, myself included, have been wrong about this warning for what seems like a long time. Nevertheless, much like those who warned of a housing bubble a few years before the bottom completely fell out, reality is destined to slam into the current triumvirate of asset bubbles, and those sounding the alarm will be proven correct again.

The governments’ massive interest rate manipulation and record amount of new debt accumulation have engendered unprecedented equity, real estate and fixed income bubbles across the globe.

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International Flows Of Funds

By Don Swenson – Re-Blogged From http://www.Silver-Phoenix500.com

The evolution of money has entered a new paradigm where our money flows are now mostly within cyberspace. This new paradigm is now becoming global and ubiquitous as metal and paper money is being eliminated from circulation gradually and relentlessly. Historical monies like paper notes and fiat units of account tied or backed to a commodity (gold/silver) have mostly been replaced with fiat cyber/digital currencies which ‘flow’ and ‘circulate’ within our computer screens. Cyberspace is now a reality for currency ‘flows’. Let’s briefly describe this historical evolution:

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The Serfs Have Rebelled…Europe Next?

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

Hayek’s The Road to Serfdom described how personal freedoms are progressively eroded by the state in the name of the common good. His warning is more associated with totalitarianism and dictatorships, than modern democracies, but the statist attitudes he warned about still apply today and lead to the same loss of personal freedom and increase of state control. In the main, the serfs are patient and tolerant of their masters, but in a democracy, the establishment behind the state risks being challenged. And that has happened twice this year, first with Brexit and now with Trump in America.

We can be certain that the establishment in Britain and America will reinvent itself. Theresa May is not out to change the world, but is adapting to the new realities. Donald Trump is still mostly an unknown quantity, but the initial impression is one of appalling economic ignorance, dressed up as the new Reaganomics. He proposes substantial tax cuts and state-directed infrastructure spending “to make America great again”. But unless tax cuts and infrastructure commitments are made in lock-step with reductions in government spending, which seems extremely unlikely, the outcome will be to stimulate latent price inflation to a surprising degree.

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We’re All Hedge Funds Now, Part 4

By John Rubino – Re-Blogged From Dollar Collapse

Central Banks Become World’s Biggest Stock Speculators

At first, the idea of central banks intervening in the equity markets was probably seen even by its fans as a temporary measure. But that’s not how government power grabs work. Control once acquired is hard for politicians and their bureaucrats to give up. Which means recent events are completely predictable:

SNB’s U.S. Stock Holdings Hit $62.4 Billion

(Bloomberg) – The value of the Swiss National Bank’s portfolio of U.S. equities rose nearly 1 percent to a record in the three months through September on the back of rallying share prices.

The holdings increased to $62.4 billion from $61.8 billion at the end of June, according to calculations by Bloomberg based on the central bank’s regulatory filing to the U.S. Securities and Exchange Commission and published on Monday.

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Q3 GDP Growth was Hogwash

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

Since most everyone is focused on the upcoming US elections, many investors may not have had the time to peel back the onion on the third quarter US GDP report. So, if you just glanced at the headline GDP number of a 2.9% annualized growth rate, you may have concluded that the US economy was finally on its way to sustainable growth.

That 2.9% read was the biggest in the last two years…and it also beat the median forecast of 2.6%. However, to put that number in perspective, average GDP growth over the past four quarters was only 1.5%, and the average for first three-quarters of 2016 is just 1.7%.

So before you get out your party hats and declare this economic malaise over, there were a few notable concerns in that Q3 GDP report.

First off, consumer spending, which accounts for more than two-thirds of U.S. economic activity and just under 70% of GDP growth, fell significantly during the quarter to an annualized rate of 2.1%. That 2.1% is a little bit over half the level of spending posted in the previous quarter. Also, spending on durable goods fell three-fold from Q2 levels.

Third-quarter growth was also flattered by a buildup in business inventories, as re-stocking shelves added 0.61 percentage points to GDP.

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The Vexed Question Of The US Dollar

By Alasdair Macleod – Re-Blogged From http://www.Gold-Eagle.com

There is little doubt that the rapid expansion of both dollar-denominated debt and monetary quantities since the financial crisis will lead us into a currency crisis. We just don’t know when, and the dollar is not alone. All the major paper currencies have been massively inflated in recent years. With the dollar acting as the world’s reserve currency, where the dollar goes, so do all the other fiat monies.

Until that cataclysmic event, we watch currencies behave in increasingly unexpected, seemingly irrational ways. The fundamentals for Japan are not good, yet the yen remains the strongest currency of the big four. The Eurozone risks a systemic collapse, overwhelmed by political and financial headwinds, yet the euro’s exchange rate has proved relatively impervious to this deep uncertainty. The British economy is strongest, yet sterling is the weakest of the four majors.

If nothing else, today’s foreign exchanges are evidence that subjectivity triumphs over macroeconomic thinking. Mackay’s Extraordinary Popular Delusions and the Madness of Crowds beats computer modelling every time. Furthermore, any official attempt to establish a rate for the dollar has to address two separate questions: the value of the dollar relative to other currencies, and its purchasing power for goods and services.

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Government Stimulus is an Oxymoron

By Michael Pento – Re-Blogged From PentoPort

The accumulation of Debt, at its very essence, is simply borrowing consumption from the future. And this is true on any level of debt, be it either public or private. Just as savings is deferred consumption, the exact opposite is true for debt. Therefore, it can only be beneficial in the long-term if it leads to an expansion of productivity in the present. If the funds borrowed do not improve output per unit of labor it is much more difficult to pay back that debt and any perceived benefit ends up being nothing more than an ephemeral illusion.

This is the reason why public debt is the most pernicious variety. The problem with government spending is that it mostly amounts to little more than hole-digging and filling. Borrowing money to pay people to empty the ocean onto the beach may temporarily increase employment and demand in the economy. But since this is merely state directed busy work, it does not grow the economy and expand productivity. Thus, the result is a rise in the debt to GDP ratio.

The 2008 financial crisis led to the passage of the Troubled Asset Relief Program, referred to as TARP, the American Recovery and Reinvestment Act and a rapid increase in government transfer payments, which produced multiple years of record deficits. The accumulation of those deficits sent the U.S. National debt to GDP ratio leaping from 64% in 2007, to over 104% today.

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Risks Posed By The War On Cash

By Mark O’Byrne & Jan Skoyles – Re-Blogged From http://www.Gold-Eagle.com

Cash is the new “barbarous relic” according to many central banks and regulators. Moreover, some economists believe there is a strong, concerted push for a ‘cashless society’.

Developments in recent days and weeks have highlighted the risks posed by the war on cash and the cashless society.

The Presidential campaign has been dominated for months and again this week by the power of information that has been gathered through unconventional means – whether due to email hacks, leaked microphone tapes or even late-night twitter rants.

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NUCLEAR Levels of QE Are Coming

By Graham Summers – Re-Blogged From Gains Pains & Capital

The Central Banks are going to go absolutely nuclear within the next 18 months.

In the last few weeks we’ve seen the Bank of Japan, the Bank of England, the European Central and the US Federal Reserve all push for fiscal stimulus instead of monetary stimulus.

What this means is that Central Banks are collectively saying, “We have reached the end of what QE and rate cuts can do, it’s now the Government’s responsibility to juice the system.”

Everyone believes this to signal that the Central Banks are done with monetary policy. They are… but only until the next major problem hits.

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The Three Wise Men

By Egon Von Greyerz – Re-Blogged From http://www.Gold-Eagle.com

Two millennia ago according to the bible, three wise men came to offer Jesus the gifts of gold, frankincense and myrrh. The peak of the Roman Empire is considered to be at the time Jesus was born although it took until 476 AD until the Western Empire finally fell.

Today, just over 2000 years later, we might be standing at another historical peak in the global economy. There are certainly many similarities like deficits, debts and decadence. Just like the Roman Emperors, current leaders have illusions of grandeur of a magnitude that the world has never seen before.

So let’s look at the modern version of the three wise men. What gifts are they bringing the world? As in the illustration below I have picked three central individuals in the world today; Draghi – head of the ECB, Li Keqiang – Premier of China and Abe – Prime minister of Japan. In themselves they are not that important but the country or region they represent is.

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Free Market Always Prevails

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

The global securities market got a surprise recently when US core consumer price inflation crept up to 2.3% year over year in the month of August. This closely followed core measure, which strips out the more volatile food and energy costs, increased 0.3%; this was the biggest rise in core CPI since February.

According to the government, while the costs associated with food and energy decreased, price increases came primarily from medical care commodities and medical care services. According to the Bureau of Labor Statistics (BLS), the prices for medicine, doctor appointments, and health insurance rose the most since 1984.

Unfortunately, it doesn’t appear that consumers will have any relief from the rising cost of health care. According to Freedom Partners the average state increase for health insurance premiums under the Affordable Care Act was 15.1% from 2015, as the promised premium reductions from Obamacare circles the drain.

The rise in health care costs stands as another glaring example of the negative consequence of supplanting free-markets with government control. Demonstrating once again how flawed Keynesian economic policies inevitably lead to stagflation.

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Japan’s New Framework Of Hyperinflationary Failure

By Andrew Hoffman – Re-Blogged From http://www.Silver-Phoenix500.com

Am I allowed to start with Deutsche Bank?  Or do I have to defer to the Bank of Japan’s Keystone Kops; who once again laid a giant goose egg?  Who, beyond a shadow of a doubt, proved they have not a clue what they are doing – in dramatically accelerating the pace at which the “Land of the Setting Sun” plunges to “second world” status, en route to becoming the first “Western Power” to experience 21st Century hyperinflation.

Hmmm, what to do?  As sadly, I could easily write entire articles on countless other topics as well – such as the Bank of International Settlements issuing a dire warning about the massively over leveraged Chinese banking sector; Donald Trump’s surging popularity; Wells Fargo’s “crime of a lifetime”; the exploding worldwide pension crisis;  OPEC’s Secretary General all but confirming “no deal” at next week’s “all-important” crude oil producers meeting; and the U.S. national debt – and budget deficit – expanding at the fastest rate since the 2008-09 financial crisis.  And the answer is, I’m starting with Deutsche Bank – as unquestionably, it poses the greatest near-term risk to global political, economic, social, and monetary stability.

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Why The Greater Recession Will Be Dollar Bearish

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

The Great Recession of 2008 provided markets with an interesting irony: As the US economy was collapsing under the weight of crumbling home prices, investors curiously flocked to the US dollar under the guise of “The Safety Trade.”

But the truth is that investors weren’t running into the dollar for safety, what they were actually doing was unwinding a carry trade. In a carry trade an investor borrows a depreciating currency that offers a relatively low interest rate and uses those funds to purchase an appreciating currency that offers the potential for higher returns on its sovereign debt and stock market. The trade’s objective is to capture the difference between rates, while also benefitting from the currency that is rising in value against the borrowed (shorted) funds.

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Attack The Fed’s War On Savers, Workers And The Unborn (Taxpayers)

By David Stockman – Re-Blogged From Stockman’s Contra Corner

The central banks have gone so far off the deep-end with financial price manipulation that it is only a matter of time before some astute politician comes after them with all barrels blasting. As a matter of fact, that appears to be exactly what Donald Trump unloaded on bubble vision this morning:

By keeping interest rates low, the Fed has created a “false stock market,” Donald Trump argued in a wide-ranging CNBC interview, exclaiming that Fed Chair Janet Yellen and central bank policymakers are very political, and should be “ashamed” of what they’re doing to the country…

He’s completely correct. After all, they are crushing real wages with their 2% inflation targeting; destroying savers with NIRP and sub-zero rates; and burying unborn taxpayers in monumental debts that today’s politicians are pleased to issue with reckless abandon because the short-run carry cost is nil.

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Negative Rates Will Kill Growth

By Peter Schiff – Re-Blogged From http://www.europac.com

For years I have argued that ultra-low interest rates act more as an economic sedative than a stimulant. This idea has elicited laughter from the economic establishment. But it is becoming clearer that rates set by central banks that are far below the levels that free markets would have otherwise determined have dragged the world into the economic mud. The simple proof is currently arising in Europe where negative interest rates are now transforming companies from agents of growth, production, and employment into financial sloths that exist solely to borrow money.

In a September 7 front page article, the Wall Street Journal reported that as of September 5,  706 billion worth of investment-grade European corporate debt, or roughly 30% of the market, according to trading platform Tradeweb, was trading at negative yields, an increase from just 5% in January. These negative yields were the result of intense activism on the part of the European Central Bank (ECB).

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Fed’s Interest Rate Conundrum

By Alasdair Macleod – Re-Blogged From http://www.Gold-Eagle.com

Two weeks ago I pointed out that the Fed is seemingly unaware of early signs of price inflation (see On being an FOMC member). The Fed is clearly ignoring the coincidental rise in USD LIBOR and the growth in bank lending, and is still prevaricating over interest rates, despite its full employment and price inflation conditions more or less being met.

My earlier article was an economic analysis. The purpose of this article is to point out other factors that impede a return to interest rate and monetary normality, and it concludes that a rise in US interest rates would probably be accompanied by more quantitative easing, perhaps on a discretionary basis.

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Stagflation & Bond Collapse

By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com

Mike Gleason, Money Metals Exchange: It is my privilege now to be joined by Michael Pento, president and founder of Pento Portfolio Strategies and author of the book The Coming Bond Market Collapse: How to Survive the Demise of the US Debt Market. Michael is a money manager who ascribes to the Austrian school of economics and has been a regular guest on CNBC, Bloomberg, and Fox Business News, among others.

Michael, it’s good to talk to you again. Thanks very much for joining us today and welcome back.

Michael Pento, Pento Portfolio Strategies: Thanks for having me back on.

Mike Gleason: Well to start off here, Michael, I want to get your thoughts on some of the economic data we’re seeing out there and maybe you can explain some of the market action to us because there seems to be a lot of confusion. Now as you pointed out in an article you wrote earlier this week, we have a big disconnect between what the payroll reports and the employment numbers are showing compared to the tax receipts the Treasury Department is collecting. Talk about that if you would and also let us know what conclusions you’re drawing from these numbers.

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Jackson Hole Saturday, When the Real Hyperinflationary Fireworks Occurred

By Andrew Hoffman – Re-Blogged From http://www.milesfranklin.com/

Pardon me if this article starts out a bit disjointed, as I accidentally erased the notes I took last night, amidst the 155th “Sunday Night Sentiment” attack of the past 161 weekends.  And afterwards, the 689th “2:15 AM” raid of the past 793 trading days, which I was able to document in real-time because someone called me at 3:00 AM, acting surprised that I wasn’t on “European time.”  I mean, do I have a French, German, or British accent?

Thankfully, the amount of notes was minimal, as amidst the “summer doldrums,” trading volumes are exceptionally low – with “volatility” at 20-year lows, care of the most maniacal, relentless market manipulation in global history.  Which, of course, is occurring because the global political, economic, and monetary situation has never been uglier.  Not to mention, the powers that be MUST maintain the status quo to enable a Hillary Clinton victory – as if Trump wins, their ability to staunch the bleeding, and control the future, will be dramatically weakened.  For what it’s worth, I strongly believe Trump will win – as like the “surprise” Brexit result, I believe Americans’ actual political leaning is far different than the propagandized “strong Clinton lead.”  Frankly, it strains credibility that anyone would believe this to be true, given the historically horrible economy, the e-mail server scandal, and all out criminality of the Clinton Foundation.

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The Ugliest Economic Data I’ve Ever Seen (Part 2)

By Andrew Hoffman – Re-Blogged From http://www.Gold-Eagle.com

It’s Thursday morning – and there are nearly a dozen “PM bullish, everything-else-bearish” headlines worthy of distinct articles.  Such as…

1. This shocking, and hilarious, segment of the John Oliver show, depicting how subprime auto lending has officially reached the destructive lunacy of the 2007-08 subprime mortgage market. Not to mention, subprime student lending, as a whopping 37% of the $1+ trillion, government-underwritten student loan “market” is now delinquent.

2. Obamacare is literally on the brink of collapse, with insurers losing $2 billion in 2015 alone, and pulling out of the program en masse

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Central Banks Are Choking Productivity

By Peter Schiff – Re-Blogged From Euro Pacific Capital

If the Economy were a car, productivity would be the engine. Heated seats, on-demand 4-wheel drive and light-sensitive tinted windshields, are all very nice. But they mean little if the engine doesn’t turn and the car just sits in the driveway. The latest productivity data from the Commerce Department confirms that our economic engine is sputtering.

If you strip away all the bells and whistles of economic analysis, the simple truth is that the increased living standards that have taken us from the stone age to the digital age happened because we increased our productivity. Better plows, windmills, bulldozers, factories and, more recently, better software, technology and automation, have allowed economies to produce more output with less human effort. This means there are more goods and services for more people to share and workers can work less to acquire those goodies. When productivity stops increasing, no amount of financial gimmickry can compensate.

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Why The US Benefits From Global Financial Crisis

By Cliff Droke – Re-Blogged From http://www.Gold-Eagle.com

Let’s turn our attention to the global economy. Last week the Bank of England said it would buy 60 billion pounds of government debt in order to cushion the economy against the impact of the recent Brexit vote.  England and the European Union are emulating the quantitative easing (QE) policies of the US Federal Reserve but so far without any measurable success.

Meanwhile the Bank of Japan (BoJ) has begun a massive stimulus program which may already be having an effect on Japan’s bond yields.  There has also been talk of Japan initiating a “helicopter money” scheme whereby the BoJ would directly finance fiscal spending.

Loose money policies in England, China and Japan are indeed all the talk right now among investors. The attempts by the ECB, BoJ and People’s Bank at stimulating their way out of deflation have yet to show appreciable results, but this won’t stop them from trying.

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Saving The Monetary System

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

We are told Monetary Policy is all about staving off recession and stimulating economic growth. However, not only is monetary debasement in any form counterproductive and destroys the personal wealth of the masses, but the economists who devised today’s monetarism have completely lost their way.

This article addresses the confusion surrounding this subject, and concludes the real reason for today’s global monetary policies is an ultimately futile attempt to prevent a systemic and economic crisis.

Wrong Tools For Wrong Targets

Central banks set themselves targets, such as unemployment that is deemed to be “full” – i.e. the optimal low rate that will not lead to a pick-up in price inflation. CPI is the second target, typically set at 2% per annum. The hope is that these targets will lead to sustainable growth in GDP.

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Central Banks “All In” Attempting To Halt The Looming Global Recession

By Gordon T Long – Re-Blogged From http://www.Gold-Eagle.com

Central Bankers Fighting An Unprecedented Global Slowdown  

The mainstream news sources seem determined to ignore the extent of the global slowdown in trade. Whether exports, imports, industrial production or whatever your preferred metric, the facts are undeniable. Nevertheless, the mainstream media chooses to refuse to cover it. It begs an obvious question of – why?

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Corrupt Or Just Stupid? Markets Hand Corporations An Unlimited Credit Card

By John Rubino – Re-Blogged From Dollar Collapse

In the sound money community it’s generally understood that abandoning the last vestige of the gold standard in 1971 gave major countries effectively-unlimited credit cards – which corrupted them irredeemably.

Now – with government bonds yielding either next to or less than nothing – that corruption has begun to spread to corporations, whose bonds are being snapped up by yield-deprived investors. For example:

Japan stock investors learn to love corporate debt

(Nikkei) — A shift is taking place in the Japanese stock market. Companies that take risks rather than playing it safe and transform themselves to seize growth opportunities are the new darlings among investors.

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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.

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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.

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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.”

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Don’t Get Sucked Back Into The Stock Market

By Justin Spittler – Re-Blogged From http://www.Gold-Eagle.com

The S&P500 hit a new all-time high. It topped 2,130 for the first time since May 2015. The benchmark index is now up 6.9% over the past two weeks.

All good, right?

It might seem that way…if we were only analyzing US stocks.

The thing is, in nearly every other market, stocks are still headed lower:

  • The Japanese Nikkei 225 is down 15% this year. It’s down 28% since last June.
  • The STOXX Europe 600, which tracks 600 large European stocks, is down 9% this year. It’s fallen 20% since April 2015.
  • The FTSE 100, Great Britain’s version of the S&P500, is down 6% since last April.

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The “Mystery” Of Who Is Pushing Stocks To All Time Highs Has Been Solved

By Tyler Durden – Re-Blogged From http://www.ZeroHedge.com

One conundrum stumping investors in recent months has been how, with investors pulling money out of equity funds (at last check for 17 consecutive weeks) at a pace that suggests a full-on flight to safety, as can be seen in the chart below which shows record fund outflows in the first half of the year – the fastest pace of withdrawals for any first half on record…

… are these same markets trading at all time highs?  We now have the answer.

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ECB And BOJ Now Trapped In Endless Counterfeiting

By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com

The Fed was able to end its massive $3.7 trillion series of Quantitative Easing campaigns without the stock market and economy falling apart. The end of QE 3, in October of 2014, did cause temporary turmoil in the major averages; but all in all, it did not lead to a protracted market decline, nor did it immediately send the economy into a recession.

The consensus view then became that the Fed’s strategy of unprecedented interest rate and monetary manipulations was a huge success, and it would be able to slowly raise the Fed Funds rate with impunity.

Perhaps it was this assurance that gave Ben Bernanke’s successor, Janet Yellen, the temerity to begin liftoff in December of 2015. However, when the Fed commenced its first rate hike, it led to the worst beginning of a year in stock market history, as the Dow Jones industrial average lost more than 10% of its value between January 1st and Feb. 11th. Therefore, while the markets seem to have become somewhat comfortable with the end of QE (at least for now), they have also reached the consensus that a protracted tightening cycle is a completely untenable position for the Fed to hold.

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Tough Day For Tech Stocks — Tough Year For The Rest Of The Market?

By John Rubino – Re-Blogged From Dollar Collapse

Coming into this corporate earnings season, everyone seemed to expect disappointment. But they thought it would come from the energy sector and the banks that had lent that sector way too much money (see Goldman Sachs is a flattened slug).

Technology was, as always, thought to be immune to the vagaries of the Old Economy. But apparently what’s bad for Exxon and Caterpillar is also bad for Google and Microsoft. Here’s what Big Tech is doing this morning:

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ECB And Shadow Banking

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

Markets have fully adjusted to a financial world which reflects the leadership and management of money by central banks and are increasingly frightened of any prospect of their control failing. Every time the system stumbles, the response has been for central banks to force greater control and regulation of the monetary system to the detriment of free markets. It is the financial version of the Road to Serfdom. Central banks have become ill-equipped to allow markets to price risk, and in the case of the ECB, it is downright hostile to market-determined prices.

The ECB is a creature of the EU. The EU super-state has legal primacy over the consumer in determining consumer, market and monetary affairs. I was alerted to the full implications of this fact when I recently chaired a presentation of a remarkable paper written by a barrister, Ben Wrench, sponsored by the Institute for Direct Democracy in Europe. Wrench’s paper is worth reading to appreciate its full implications, and it can be found on the IDDE’s website.

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Marc Faber On Cashless Society Insanity And Why Wall Street Hates Gold

By Mike Gleason – Re-Blogged From http://www.Silver-Phoenix500.com

Mike Gleason: It is my privilege now to be joined by a man who needs little introduction, Marc Faber; editor and publisher of The Gloom, Boom & Doom Report. Dr. Faber has frequently appeared on financial shows across the globe and he’s a well-known Austrian school economist, and an investment adviser. It’s a real honor to have him on with us today. Dr. Faber, thank you so much for joining us.

Marc Faber: It’s my pleasure, thank you very much.

Mike Gleason: Well, I want to start out by asking you about the current state of the financial world here in the early part of 2016. We’ve got the global equities markets continuing to roll over. Meanwhile, the metals are doing quite well and acting as a bit of a safe haven. What do you make of the market action here, so far this year?

Marc Faber: Well, basically, the financial markets have been sick for quite some time. Emerging markets either never made a new high above the 2006, 2007 highs, or they peaked out in 2011, or some even later in 2014. Basically after about February/March 2015, they started to drift. And in the U.S., the indices were strong, but the average stock was down substantially in 2015. This is called weakness beneath the surface of the indices because an index, theoretically, could have 500 stocks and 499 decline, but one stock goes up a lot and drives up the index. So this happened last year, to some extent, in the U.S… you have the strong stocks, Facebook, Amazon, Netflix, Google, and maybe another 20 stocks that were going up. And at the same time, you have thousands of stocks that were acting badly and going down, which accounts for actually a horrible performance for most investors. Now in January, reality set in with the strong stocks, they’re all down 20, 30, and sometimes even more percentages.

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One Big Reason a Global Stock Market Crash in 2016 Is More Likely Than Ever

By David Zeiler – Re-Blogged From http://www.wallstreetexaminer.com

With each passing day, the irresponsible behavior of the world’s central banks brings us closer to a full-blown global stock market crash in 2016.

We’re already in a bear market. On Thursday, the MSCI All-Country World Index fell 1.3%, giving it a 20% decline since last May.

Issues such as slowing economic growth in China, $5 trillion of emerging market debt, and rock-bottom oil prices have made investors increasingly skittish.

But now the world’s central banks have started to toss gasoline on the fire in the form of negative interest rates. The lower they go, the more likely they are to trigger a global stock market crash in 2016.

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