Playing Taps For The Middle Class

It is not at all a mystery as to the cause of the wealth gap that exists between the very rich and the poor. Central bankers are the primary cause of this chasm that is eroding the foundation of the global middle class. The world’s poor are falling deeper into penury and at a faster pace, while the world’s richest are accelerating further ahead. To this point, the 500 wealthiest billionaires on Earth added $1.2 trillion to their fortunes in 2019, boosting their collective net worth by 25%, to $5.9 trillion.

In fact, Jamie Dimon, CEO of JP Morgan, made a quarter of a billion dollars in stock-based compensation in 2019. As a reminder, shares of JPM were plunging at the end of 2018; that is before the Fed stepped in with a promise to stop normalizing interest rates. And then, soon after, began cutting them and launching a bank-saving QE 4 program and REPO facility on top of it in order to make sure Mr. Dimon’s stock price would soar. Slashing interest rates hurts savers and retirees that rely on an income stream to exist, just as the Fed’s QE pushes up the prices for the things which the middle class relies on the most to exist (food, energy, clothing, shelter, medical and educational expenses).

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Inflation: Dead Or Alive?

By GE Christenson – Re-Blogged From Gold Eagle

Breaking news: Silver briefly reached $18.00 and closed at $17.85. The DOW rose again to 28,645.

Inflation, Deflation, Stagflation, and Hyperinflation? So What?

Inflation: The banking cartel demands inflation of the currency supply. The cartel encourages massive debt and collects the interest and fees. They want inflation because it increases debt and repayment is easier. With global debt at $250 trillion, the cartel is successful.

Governments account for a large percentage of global debt. They spend more, buy votes, feed currency units to cronies, and borrow to cover the revenue shortfall. Inflation makes the debt load easier to tolerate.

Corporations want mild inflation to boost revenues, profits and stock prices.

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Fed’s Fake Stock Markets

By Adam Hamilton – Re-Blogged From Gold Eagle

The US stock markets soared in 2019, blasting to dozens of new all-time-record highs.  Euphoric traders attributed these massive gains to strong corporate fundamentals and US-China trade-war progress.  But the real driver of stocks’ astounding ascent was the Federal Reserve’s epic extreme easing.  A panicking Fed pulled out all the stops to goose and levitate stocks, leaving fake artificially-inflated markets in its wake.

This year’s huge stock-market rally delighted nearly everyone, generating widespread euphoria.  That made Americans feel wealthier, leading them to spend more freely.  That pushed corporate sales and profits higher than they otherwise would’ve been.  Speculators and investors loved the easy largely-one-sided gains.  And stocks’ biggest fan, Trump, reveled in what lofty record stock markets implied about his policies.

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Hello Monetary Madness

By Michael Pento – Re-Blogged From Silver Phoenix

God bless Paul Volcker. He was truly a one of a kind central banker and we probably won’t see another one like him ever again. It took his extreme bravery to crush the inflation caused by the monetary recklessness of Arthur Burns and the fiscal profligacy of Presidents Johnson & Nixon. Raising interest rates to 20% by March 1980 was wildly unpopular at the time. But in the end, it was what the nation needed and paved the way for a long period of economic stability and prosperity.

Back in 1971 the world fully had developed a new monetary “technology”. Governments learned that money need no longer be representative of prior efforts, or energy expended, or previous production, or have any real value whatsoever. It can be just created by a monetary magic wand; and done so without any baneful economic consequences.

This phony fiat money can, in the short-term, cause asset values to increase far above the relationship to underlying economic activity. And now, having fully shed the fettering constraints of paper dollars that are backed by gold, central banks have printed $22 trillion worth of confetti since the Great Recession to keep global asset bubbles in a perpetual bull market. Now, anyone who’s brain has evolved beyond that of a Lemur understands that this can only be a temporary phenomenon–one where the ultimate consequences of delaying reality will be all the more devastating once they arrive.

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The Naughty List and Grizzly Bears

The official US national debt in 1913 was $2.91 billion. In 1971, when President Nixon lied about temporarily disconnecting gold from the dollar, the official national debt was $398 billion.

By 2019 the official national debt has grown to $23,000 billion.

Politicians borrow and spend to reward cronies and buy votes. They also increase their personal wealth. Human nature changes slowly.

From 1913 to 2019 the national debt increased at a compounded rate of 8.8% per year. From 1971 to 2019 the debt also increased at 8.8% per year. This 106-year trend appears stable and likely to continue.

Can you name three congressmen or one lobbyist who advocate spending fewer currency units next year? Nope! Debt will grow exponentially.

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Gold and the Lender of Last Resort

By GE Christenson – Re-Blogged From The Deviant Investor

Investopedia says“In the United States, the Federal Reserve acts as the lender of last resort to institutions that do not have any other means of borrowing, and whose failure to obtain credit would dramatically affect the economy.”

The Fed has created $billions in the past ten weeks (more on the way) and fed those billions into troubled banks, hedge funds, foreign banks and others. Lack of Fed transparency forces us to guess which institutions the Fed helped with $billions of nearly free currency units.

The Fed “Party Line:” We don’t disclose the recipients because it might cause a run on that institution. The Fed is important because it protects the economy from massive and destabilizing failures.

This is like announcing that we ignore graft and corruption in congress because telling the truth about our “leaders” could destabilize trust in congress.

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Repocalypse: The Little Crisis that Roared

That didn’t take long. I just published an article showing how the Fed had responded with a quarter of a trillion dollars to save the economy from what it claimed was a mere blip. Since then, the recession-causing Repocalypse I’ve warned of has roared around the world, forcing the Fed to amplify its response again.

The Fed’s planners just cannot outrun the little monster they created. It is growing as quickly as they increase their running speed. In the article I just alluded to, I also stated,