Is The Yellen Fed Planning To Sabotage Trump’s Presidency?

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

The Federal Reserve can make or break a president.

Monetary policy influences all financial markets as well as the cycles in the economy. No president wants to have to run for re-election when the stock market and economy are turning down.

Recall that President George H.W. Bush was sitting on sky-high job approval numbers in 1991 and was expected to coast to victory in his 1992 re-election bid. But then the economy swooned toward recession, giving Bill Clinton the opening he needed.

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China’s Belt And Road To Nowhere

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

Moody’s Investors Service downgraded China’s credit rating recently to A1 from Aa3. The rational being that it expects the financial strength of the economy to erode, as GDP growth slows and debt levels continue to pile up. What is Beijing’s response to the slowing economy and intractable debt accumulation that was just underscored by Moody’s: issue a mountain of new debt in order to pave over 60 countries around the globe?

China’s One Belt One Road (OBOR) Initiative seeks to answer the age-old question of what a maniacal communist country does when they have exhausted the building of unproductive assets at home. The answer: China hits the road and attempts to rebuild the ancient trade routes once called the Silk Road; but in a much bigger way. With 52 million new homes built over the last few years that have a 10% occupancy rate, China has truly become masters of the “road to nowhere.”

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The Bargain Of The Century

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

Buy high and sell low is the mantra of many stock market investors. When a stock or a market reaches a new high, the average investor turns even more bullish. That is also the point when the media talk about it and it becomes headline news. This is now the situation for many stock markets worldwide. US, UK, and many European markets are now at all-time highs. But the picture is not rosy everywhere. The Chinese market is 40% lower than the 2015 highs and the French, Italian and Spanish markets are around 20% below the 2015 levels. Yet, few investors in the West worry about these peripheral markets but instead focus on the US and the main European indices.

There are times when there is still upside potential in markets which are making new highs. But a market which has been rising incessantly for almost seven years and which is grossly overvalued on any criteria is certainly not a low risk investment.

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Ireland’s Biggest Bank Charging Depositors Negative Interest Rate Madness

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

Deposits at Bank of Ireland are soon to face charges in the form of negative interest rates after it emerged on Friday that the bank is set to become the first Irish bank to charge customers for placing their cash on deposit with the bank.

This radical move was expected as the European Central Bank began charging large corporates and financial institutions 0.4% in March for depositing cash with them overnight.

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Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse

By Doug Casey – Re-Blogged From International Man

Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse

You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.

This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.

Modern banking emerged from the goldsmithing trade of the Middle Ages. Being a goldsmith required a working inventory of precious metal, and managing that inventory profitably required expertise in buying and selling metal and storing it securely. Those capacities segued easily into the business of lending and borrowing gold, which is to say the business of lending and borrowing money.

Most people today are only dimly aware that until the early 1930s, gold coins were used in everyday commerce by the general public. In addition, gold backed most national currencies at a fixed rate of convertibility. Banks were just another business—nothing special. They were distinguished from other enterprises only by the fact they stored, lent, and borrowed gold coins, not as a sideline but as a primary business. Bankers had become goldsmiths without the hammers.

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Star Wars Economics

By Tho Bihop – Re-Blogged From http://www.lewrockwell.com

Blowing Up the Death Star Didn’t Destroy Economy, Building It Did

A paper written by Zachary Feinstein discussing the economic consequences of blowing up the Death Star has been making the rounds on social media. While I’m a fan of using Star Wars to teach economics, Feinstein makes a very basic economic mistake in his focus on the Death Star’s destruction.

The paper actually starts out strong. Feinstein notes that, “Economics and finance, much like the Force as explained by Jedi Master Obi-Wan Kenobi, is ‘created by all living things. It surrounds us and penetrates us; it binds the galaxy together.’” Unfortunately, the author shifts from looking at the organic economy towards the dark side of economic models and aggregates – in this case Gross Galactic Product. The paper goes on to outline the quintillions that would be spent in the construction of the Death Star, the estimated size of the galactic banking system and the bailout that would be needed to restore financial confidence after the collapse of the Empire.

While some of the points made are interesting, the paper overlooks that the real economic problem with the Death Star is that a genocidal government built it at all.

I would point both Feinstein (and Emperor Palpatine) to Henry Hazlitt’s Economic in One Lesson. In the words of Hazlitt:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

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A Common Currency Is NOT A Cause Of Economic Problems!

By Steve Saville – Re-Blogged From http://www.Silver-Phoenix500.com

A popular view these days is that the euro is a failed experiment because economically and/or politically disparate countries cannot share a currency without eventually bringing on a major crisis. Another way of expressing this conventional wisdom is: a monetary union (a common currency) cannot work without a fiscal union (a common government). This is unadulterated hogwash. Many different countries in completely different parts of the world were able to successfully share the same money for centuries. The money was called gold.

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