Europe’s Hail Mary Pass

By Rick Ackerman – Re-Blogged From Silver Phoenix

Europe took competition to a new level last week in the global currency-devaluation olympiad. Nominating the politically-minded IMF chief Christine Lagarde rather than a blue-blooded financier to run the ECB is akin to making Trump chairman of the Federal Reserve. No longer can we pretend that the staid protocols of old-school banking still obtain in the financial realm. Instead, there is a strong whiff of desperation as Europe readies a last-ditch attempt to stimulate itself out of a liquidity trap with the ECB’s deposit rate already at minus 0.4%.

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The Danger Of Eliminating Cash

By Alasdair Macleod – Re-Blogged From

In the early days of central banking, one primary objective of the new system was to take ownership of the public’s gold, so that in a crisis the public would be unable to withdraw it. Gold was to be replaced by fiat cash which could be issued by the central bank at will. This removed from the public the power to bring a bank down by withdrawing their property. A primary, if unspoken, objective of modern central banking is to do the same with fiat cash itself.

There are of course other reasons for this course of action. Governments insist that they need to be able to trace all private sector transactions to ensure that criminals do not pursue illegal activities outside the banking system, and that tax is not evaded. For the government, knowledge of everything individuals do is necessary control. However, in the monetary sense, anti-money laundering and tax evasion are not the principal concern. Central banks are fully aware that the financial system is fragile and could face a new crisis at any time. That’s why cash in their view must be phased out.

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The Warren Buffett Economy——Why Its Days Are Numbered (Part 4)

By David Stockman – Re-Blogged From

….As reviewed in Part 3, the very idea that 12 people sitting on the FOMC can adroitly manipulate an economic ether called “aggregate demand” by means of falsifying market interest rates is a bad joke when in it comes to that part of “potential GDP” comprised of goods production capacity. In today’s world of open trade and massive excess industrial capacity, the Fed can do exactly nothing to cause the domestic steel industry’s capacity utilization rate to be 90% or 65%.

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Unsound Banking: Why Most Of The World’s Banks Are Headed For Collapse

By Doug Casey – Re-Blogged From

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.

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America’s Standard of Living

cropped-bob-shapiro.jpg   By Bob Shapiro

How does the Standard of Living in an Economy grow?

During the Dark and Middle Ages, there was very little innovation. There was very little effort expended to find new ways of doing things – of finding ways to create more while using the same amount of effort.

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Fed Statement: Not Dovish, Not Hawkish—-Just Gibberish

David Stockman   By David Stockman – Re-Blogged From

Call it 529 words of gibberish and be done!

All of the FOMC’s platitudes about the economy “expanding at a solid pace”, labor market conditions which have “improved further”, household spending which is “rising moderately” and business fixed investment which is “expanding” are not simply untruthful nonsense; they are a smokescreen for the Fed’s actual intention. Namely, to keep the Wall Street gamblers in free money in the delusional hope that ever rising stock prices will generate a trickle down of “wealth effects” in the main street economy.

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ECB Head Calls for More Inflation in Europe

In the “Stupid is as Stupid does” category, the European Central Bank President, Mario Draghi, says that Inflation is too low in Europe. He says it’s critical that the ECB act quickly and decisively to raise Inflation.

Forest Gump

I would expect that he didn’t bother asking Europeans buying groceries, and all else they need from their local retail stores, if they agreed that prices should rise more quickly than they have been rising.

This would be funny, except that we Americans are suffering from the same kind of insanity coming out of our Central Bank, the Federal Reserve (FED).

Stock & Metals Market Commentary

(Reposted in Part from “GOLD: Will Bulls Or Bears Prevail?” By Ed Bugos, Nov 6, on

The Volcker Fed abandoned the Keynesian ideology that drove Fed policy in the sixties and seventies.  In doing so, interest rates found their market level, malinvestments liquidated, resources reallocated toward productive ends; the rot built up in previous booms was finally allowed to liquidate.  Those are the main factors that led to a somewhat sustainable financial climate for a while.

Importantly, Volcker’s policy was neither a tapering nor a typical tightening. It was far more than that.

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Using GDP as a Tool of Policy

cropped-bob-shapiro.jpg   By Bob Shapiro

The Bureau of Economic Analysis (of the Commerce Department) calls the creation of the Gross Domestic Product (GDP) “One of the Greatest Inventions of the 20th Century.” I do not share their enthusiasm.

The concept of GDP was created due to the Great Depression, so that economists could see just how bad things were, allowing them to tinker with the US Economy even more than they already did.

Of course, the Depression was the result of the creation of the Federal Reserve (FED) and their easy money policy, which created the artificial

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