Using Evidence for Decisions

cropped-bob-shapiro.jpg   By Bob Shapiro

Sometimes numbers can give different messages depending on how you look at them. With a Presidential election a month and a half away, this can be a problem.

For example, stats were released on Tuesday for Housing Starts and also for Housing Permits. The Starts number for August was down about 6% from the July figure, while the Permits were down just slightly.

Image result for housing starts

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Fed Credibility Dwindles, Pension Funding Crisis Looms

By Clint Siegner From http://www.MoneyMetals.com

Fed officials jawbone the markets and spread disinformation. They figure it’s part of their job as central planners. It’s not enough to pull the levers and twist the knobs on interest rates, the money supply, and asset prices. They also use propaganda to manage investor psychology. It’s all smoke and mirrors.

Frustrated metals investors wonder just how long officials will maintain their hold over markets when so much of what they say turns out to be garbage and so much of what they do ends in failure.

The answer is perhaps not much longer. There are real cracks emerging in the credibility of Fed banksters. It has taken years, but investors and pundits are finally questioning whether the Fed knows what it’s doing. They have progressed from the blind worship of Alan Greenspan, who engineered first the Dot.com bubble and then the housing bubble that made people feel so wealthy, to wondering if they can believe a word Janet Yellen says.

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The Coming Market Rout

cropped-bob-shapiro.jpg   By Bob Shapiro

Several days ago, IM Vronsky wrote that the big banks are in deep trouble. Since the financial reporting of these companies leave out much of the data necessary to evaluate these companies, he pointed to the price history (and technicals) of several bank stocks.

While stock prices reflect only the collective market sentiment based on the incomplete reporting, it does indicate that all is not well in River City.

Looking at the overall market first, we find that prices peaked about a year ago and since have turned down. Lets look at some factors affecting stock prices.

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National Black Chamber of Commerce Upsets Climate Pundits

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

The National Black Chamber of Commerce has been upsetting climate advocates, by insisting that President Obama’s clean energy plan would hurt the US economy. The response from climate advocates has been nothing short of vitriolic.

For example;

How the polluter-backed National Black Chamber misleads minorities

By Martin Luther King III December 29

Martin Luther King III is co-founder of the Drum Major Institute.

For months now, the National Black Chamber of Commerce has been warning communities of color that the Obama administration’s Clean Power Plan will cause job losses and generate higher energy bills.

In fact, the opposite is true.

The Environmental Protection Agency’s first-ever limits on carbon pollution from power plants will create clean- energy jobs, improve public health, bring greater reliability to our electric power grid, bolster our national security, demonstrate the United States’ resolve to combat climate change and maybe even reduce our utility bills.

By limiting the emission of carbon dioxide, the Clean Power Plan also will slow a main driver of extreme weather, which has inflicted widespread economic damage and human misery, including death.

That’s what the National Black Chamber of Commerce neglects to mention.

Read more: https://www.washingtonpost.com/opinions/how-the-polluter-backed-national-black-chamber-misleads-minorities/2015/12/29/12b1ac3e-ae2f-11e5-b820-eea4d64be2a1_story.html

Unfortunately for Martin Luther King III’s dubious claim about energy bills, it was President Obama himself who explained that his plan will cause energy bills to skyrocket.

https://wattsupwiththat.files.wordpress.com/2014/10/green_money_windmills.jpg

So what has the NBCC done, to provoke such a response? The following is an excerpt from the NBCC report on the 15th December;

3. Congress Alert: Currently, Congress is negotiating the omnibus spending legislation. One concerning provision that they are reportedly trying to slip into this trillion dollars spending package is a provision that would increase funding for the Green Climate Fund by $3B. This money uses Americans’ tax dollars to subsidize projects in foreign countries under the guise of climate change. Please let your congressperson and senators know this is unacceptable before they finish this really pork filled package.

Read more: http://www.nationalbcc.org/news/progress-reports/2561-progress-report-december-15-2015

Back in September the NBCC held a seminar, titled How Climate Policy Hurts the Poor

Regardless of one’s personal opinions on the effect man-made greenhouse emissions have on the climate, the Obama Administration’s proposed Clean Power Plan will exact a high price on Americans and have a negligible impact – if any – on global temperatures. NERA’s economic consultants estimate a temperature reduction of only 0.018 degrees C in 2100 at a cost of hundreds of billions of dollars. In August, the Environmental Protection Agency announced its final rule to achieve a 32% reduction in “carbon pollution” from the electric power production sector by 2030.

Experts estimate a significant impact on the cost of electricity to all consumers and businesses. President Obama has kept his promise that “electricity rates would necessarily skyrocket” as a result of his policy. The poorest and most vulnerable members of society will be disproportionately harmed by these impending spikes in energy prices. Europe is already experiencing “energy poverty” where families and the elderly are being forced to choose between eating and heating. Tens of thousands did in the United Kingdom in several recent winters because they are unable to pay their electricity bills and still buy enough food. Will this happen in America next?

The world’s poorest – the 1.3 billion in developing countries who depend on wood and dried dung as primary cooking and heating fuels, smoke from which kills 4 million and temporarily debilitates hundreds of millions every year – will be condemned to more generations of poverty and its deadly consequences. Instead, developing countries desperately need to replace such primitive and dirty fuels with electricity, the most affordable sources of which are fossil fuels.

Read more: http://www.nationalbcc.org/events/icalrepeat.detail/2015/09/21/120/-/how-climate-policy-hurts-the-poor

Plenty more where that came from – the NBCC website is well worth a read.

I admire that the NBCC has chosen to steadfastly and consistently defend the interests of its members, in the face of what must be substantial political pressure to join President Obama’s climate crusade.

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One Measure of the US Economy

cropped-bob-shapiro.jpg   By Bob Shapiro

I had occasion to view a couple of Cass Trucking Index graphs, both for shipments (the physical volume) and for expenditures. Interestingly, the number of shipments in 2015 is almost dead flat compared to 1999.

Since US population has increased by over 15% during that time, from 279 Million to 322 Million today, I would have expected a similar rise in shipments.

Cass Freight Index Shipments 123115

Of course, 1999 was before the Bubble burst, while today we have anything but a robust Economy. Even so, with our political leaders trumpeting all the strides they have made to get the Economy back on the right track, dead even compared to 15% higher betrays an Economy that still is worse off than 16 years ago.

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US Secular Stagnation?

By Steven H Hanke – Re-Blogged From http://www.Gold-Eagle.com

Stagnationists have been around for centuries. They have embraced many economic theories about what causes economic stagnation. That’s a situation in which total output, or output per capita, is constant, falling slightly, or rising sluggishly. Stagnation can also be characterized by a situation in which unemployment is chronic and growing.

Before we delve into the secular stagnation debate – a debate that has become a hot topic – a few words about current economic developments in the U.S. are in order. What was recently noticed was the Federal Reserve’s increase, for the first time in nearly a decade, of the fed funds interest rate by 0.25 percent. What went unnoticed, but was perhaps more important, was that the money supply, broadly measured by the Center for Financial Stability’s Divisia M4, jumped to a 4.6 percent year-over-year growth rate. This was the largest increase since May 2013.

Since changes in the money supply, broadly determined, cause changes in nominal GDP, which contain real and inflation components, we can anticipate a pick-up in nominal aggregate demand in the U.S. Indeed, if M4 keeps growing at its current rate, nominal aggregate demand, measured by final sales to domestic purchasers, will probably reach its long-run average annual rate of 4.8 percent by mid-2016 (see the accompanying chart). This rate of nominal aggregate demand growth was last reached in 2006, almost ten years ago. So, the current economic news from the U.S. is encouraging.

But what about the secular stagnation debate? The secular stagnation thesis in a Keynesian form was popularized by Harvard University economist Alvin Hansen. In his presidential address to the American Economic Association in 1938, he asserted that the U.S. was a mature economy that was stuck in a rut that it could not escape from. Hansen reasoned that technological innovations had come to an end; that the great American frontier (read: natural resources) was closed; and that population growth was stagnating. So, according to Hansen, investment opportunities would be scarce, and there would be nothing ahead except secular economic stagnation; unless, fiscal policy was used to boost investment via public works projects.

Hansen’s economics were taken apart and discredited by many non-Keynesian economists. But, the scholarly death blow was dealt by George Terborgh in his 1945 classic The Bogey of Economic Maturity. In the real world, talk of stagnation in the U.S. ended abruptly with the post-World War II boom.

It is worth noting that many Keynesians were caught up, at least temporarily, in the secular stagnation fad. Even Paul Samuelson, a leader of the Keynesians – thanks, in part, to his popular textbook — was temporarily entrapped. But, like Houdini, he miraculously escaped. That said, there were things in Economics that Samuelson probably wished he had thrown overboard, too. My favorite from the 13th edition (1989) is: “The Soviet economy is proof that contrary to what many sceptics had earlier believed, a socialist command economy can function and even thrive.”

Today, another Harvard University economist, Larry Summers, is beating the drums for secular stagnation. And Summers isn’t just any Harvard economist. He was formerly the president of Harvard and a U.S. Treasury Secretary. Summers, like Hansen before him, argues that the government must step up to the plate and invest more to fill the gap left by deficiencies in private investment, so that the economy can be pulled out of its stagnation rut. He is preaching the stagnation gospel beyond the ivy-covered halls at Harvard. And, he is picking up followers. For example, Canada’s new Prime Minister, Justin Trudeau, has latched onto Summers and the stagnation thesis. What better way to justify expanding government investments, or should we say white elephants?

For evidence to support Summers’ secular stagnation argument and his calls for more government investment, he points to the anemic private domestic capital expenditures in the U.S. As the accompanying chart shows, gross private domestic business investment, which does not include residential housing investment, has rebounded modestly since the great recession. But, most of this gross investment has been eaten up in the course of replacing capital that has been used up or became obsolete. Indeed, the private capital consumption allowances shown in the chart are huge. While these capital consumption figures are approximate, they are large enough to suggest that there is little left for net private business investment. This means that the total capital stock, after actually shrinking in 2009, has grown very little since then.

If we take a longer look, one starting in 1960, it appears that net private domestic investment as a percent of GDP has trended downward (see the accompanying chart). This is due to the fact that private capital consumption allowances as a percentage of GDP have trended upward. This shouldn’t surprise us. With the increasingly rapid rate of innovation, obsolescence and, therefore, capital consumption have increased. On the surface, these facts appear to give the stagnationists a reed to lean on. But, it’s a weak one.

To understand the troubling net investment picture, we must ask why businesses are so reluctant to invest. After all, it’s investment that fuels productivity and real economic growth. Are the stagnationists on to something? Have we really run out of attractive investment opportunities that require the government to step in and fill the void?

A recent book by Robert Higgs, Taking a Stand: Reflections on Life, Liberty, and the Economy, helps answer these questions. In 1997, Higgs first introduced the concept of “regime uncertainty” to explain the extraordinary duration of the Great Depression of the 1930s. Higgs’ regime uncertainty is, in short, uncertainty about the course of economic policy – the rules of the game concerning taxes and regulations, for example. These rules of the game affect the net benefits and free cash flows investors derived from their property. Indeed, the rules affect the security of their property rights. So, when the degree of regime uncertainty increases, investors’ risk-adjusted discount rates increase and their appetites for making investments diminish.

Since the Great Recession of 2009, regime uncertainty has been elevated. This has been measured by Scott R. Baker of Northwestern University, Nicholas Bloom of Stanford University and Steven J. Davis of the University of Chicago. Their “Economic Policy Uncertainty Index for the U.S.,” which was published by the Cato Institute in Washington, D.C., measures, in one index number, Higgs’ regime uncertainty. In addition, there is a mountain of other evidence that confirms the ratcheting up of regime uncertainty during the tenure of the George W. Bush and Barack Obama administrations. For example, a recent Pew Research Center survey finds that the percent of the public that trusts Washington, D.C. to do the right thing has fallen to all-time lows of around 20 percent.

So, contrary to the stagnationists’ assertions, the government is the problem, not the solution. Secular stagnation in the U.S. is just what it was when Alvin Hansen popularized it in the 1930s: Its bunk. Nothing more than a phony rationale for more government waste.

Welcome To The Currency War, Part 20: Corporate Profits Head South, Stock Prices To Follow?

By John Rubino – Re-Blogged From Dollar Collapse

A too-strong currency is, in theory, supposed to make it harder to sell things to cheap-currency countries, thus crimping corporate profits and by implication pretty much everything else.

The US dollar has been rising against the rest of the world for over a year, so let’s see how we’re doing. From today’s Wall Street Journal:

Falling Corporate Profits Blur U.S. Growth Outlook

Profits at U.S. companies during the third quarter posted their largest annual decline since the recession, underscoring the competitive pressure from a strong dollar and weak global demand that could limit businesses’ ability to support stronger economic growth in the coming months.A comprehensive measure of companies’ profits across the U.S.—earnings adjusted for inventory and depreciation—dropped to $2.1 trillion in the third quarter, down

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The Economic Pie Is Shrinking!

By Bill Holter – Re-Blogged From http://www.Gold-Eagle.com

No matter how you look at it, the global economic pie is shrinking.  One might be able to argue this is not so based on individual statistical reports issued by various nations.  The problem though is this, many reports do not line up with real world reports.  For instance, how can “retail sales” in the U.S. grow when retailer after retailer reports worse than expected and contracting sales?  The answer is what your own eyes, common sense and of course “individual companies” added together tell you.

On a broader scale, we are told the world is in recovery.  Never mind contraction in Europe or bogus reporting in the U.S., China and elsewhere, “we are in recovery dammit!”.  The best way to look at this fallacy for yourself to divine the truth is to look at trade.  Or better, “trade rates”.  I have mentioned this before, the Baltic dry index has been crashing and now is very close to where it was back in the late 1980’s.

http://www.zerohedge.com/news/2015-11-17/baltic-dry-index-crashes-near-record-low

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The Shadow Rate Casts Gloom

By Peter Schiff – Re-Blogged From EuroPacifi Capital

Nearly 92% of economists surveyed this week by the Wall Street Journal expect that our eight-year experiment with unprecedented monetary easing from the Federal Reserve will come to an end at the next Fed meeting in December. Since we have had the monetary wind at our back for so many years, at least a few have begun to question our ability to make economic and financial gains against actual headwinds. But in reality, the tightening cycle that the forecasters are waiting for actually started last year. Sadly, the markets and the economy are already showing an inability to handle it.

While it’s true that we have yet to achieve “lift-off” from zero percent interest rates, rates have not been the only means by which the Fed has provided stimulus. We also have to account for the effects of Quantitative Easing (QE) and forward guidance of the Fed. Changes in those inputs over the past year have already created conditions of monetary tightening.

QE has been the process by which the central bank expands its balance sheet (otherwise known as printing money) to buy government and asset-backed bonds on the longer end of the duration spectrum. In so doing, it is able to help hold down long-term interest rates, a result that it would be difficult to achieve by changes in the federal funds rate. Zero percent interest rates represent a loose monetary policy, but once at the zero lower bound, QE is the way the bank eases even further.

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Payrolls +271,000; Is the Game Changing?

[Recent “Non-Farm” Payrolls were up nicely last month. However, much more than half the rise came from the Business Birth/Death Model, which guesses an adjustment based on a guess of how many new businesses were started as opposed to how many shut their doors. These out-sized make-believe adjustments are one reason that government provided statistics must be taken with a grain (or more) of salt.  -Bob]

By Gary Tanashian – Re-Blogged From http://www.Silver-Phoenix500.com

Given the October Payrolls data, its effect on interest rates and the US dollar we seem to be back to a point similar to where we were 1 year ago when we used a strong USD (and corresponding weak Yen and Euro) to plot bullish trade possibilities in Japan and Europe, and a bearish environment for US exporters.

But first, with the help of the highly recommended Floatingpath.com let’s continue to break down the particulars of the Payrolls report (we reviewed monthly ‘jobs’ growth by industry in a post at nftrh.com): Inside Jobs.

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How Obama’s “Green Legacy” Will Shut Down the Economy

By Mack Stetson – Re-Blogged From http://politicaloutcast.com

The Environmental Protection Agency (EPA), with support from President Obama, is heading up a move that would make the cost of electricity skyrocket and do unprecedented damage to the economy.

President Obama is supporting the EPA’s move as a part of his own plan to leave a “green legacy” when he leaves the White House.  The cost of Obama’s legacy to the country may be worth it to him, but to average Americans who already pay too much for electricity, the prospects of these new policies are frightening!

According to Foxnews.com, the battle to stop the EPA and President Obama is underway:

The legal barrage to halt the Environmental Protection Agency’s radical Clean Power Plan has begun.

A broad coalition of U.S. industry and business, including the U.S. Chamber of Commerce,  the National Association of Manufacturers, and an armada of other business and industry organizations, has  asked the D.C. District of the federal Court of Appeals to prevent any further action on the Plan until the court can decide its overall legal status.

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Numbers Lousy – FED Scared Witless

cropped-bob-shapiro.jpg   By Bob Shapiro

Several statistics were reported this week, and in large measure, they disappointed analysts. Personal Income was up, but Personal Spending was up even more. This means that Americans were adding even more debt to their balance sheets. Since Saving is where the Capital comes from to help grow our Capitalist system, this means negative growth down the road.

PCE Prices were up only 0.1% in August (same as July), but these numbers generally are in the fairy tale category. Looking instead at the CPI, the way it used to be calculated in 1980 (via http://www.ShadowStats.com), inflation is running at around 7½%.

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The Fed’s Alice In Wonderland Economy – What Happens Next?

By Nick Giambruno – Re-Blogged From http://www.Gold-Eagle.com

After the President of the United States, the most powerful person on the planet is the Chairman of the Federal Reserve.

Ask almost anyone on the street for the name of the US president, and you’ll get a quick answer. But if you ask the same person what the Federal Reserve is, you’ll likely get a blank stare.

They don’t know – partly due to the institutions deliberately obscure name – that the Fed is really the third iteration of the country’s central bank. Or that the Fed manipulates the nation’s economic destiny by controlling the money supply.

And that’s just how the Fed likes it. They’d prefer Boobus americanus not understand the king-like power they wield.

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Bear Markets, Recessions and the Bewildered Fed

By Michael Pento – Re-Bloggd from Pento Portfolio Strategies

A popular Wall Street myth is that bear markets are caused by recessions. The contention is as long as the economy isn’t in a recession, stock prices won’t drop by more than 20 percent. And since the cheerleaders who dominate Wall Street never predict a recession, it should come as no surprise they never foresee the bear market that always precedes two negative quarters of GDP growth. The truth is Bear markets and recessions do not occur simultaneously, bear markets both predict and help engender a recession to occur.

Typifying this myth is Capital Economics’ Chief Economist John Higgins as he recently argued, “Major declines in the S&P500 — that is to say, bear markets in which prices drop by at least 20%, which is roughly twice the drop that occurred between 10th and 24th August–have only tended to occur in, and around, recessions…And we doubt very much that one of those is around the corner.”

But the truth is bear markets always precede a recession–those who argue otherwise have it exactly backwards. The stock market is a forward looking indicator: it anticipates economic activity yet to come, it doesn’t report on economic conditions that are occurring.

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This Actually Is Going To Happen Next Year

By John Rubino – Re-Blogged From Dollar Collapse

The intellectual groundwork is being laid for the next stage of the Money Bubble, and it’s going to be epic. Here are excerpts from two articles that appeared over the weekend (and which should be read in their entirety). Both deal with Japan, which went all-in on debt monetization, lost badly, and now needs a new plan.

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New Record In Waiters And Bartenders Masks First Manufacturing Drop In Over 2 Years

By Tyler Durden – Re-Blogged From ZeroHedge.com

In August, the reality of the oil crunch finally caught up with the BLS, when not only did the number of Mining and Logging employees decline again by 10,000 workers to 823K, the lowest since October 2011, an 8-month stretch of consecutive declines last seen during the previous recession driven by the ongoing weakness in the oil patch and the US shale drilling sector…

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What Kind of “Improvement” Does the Fed Want?

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

Over the past few years observing changes in Federal Reserve interest rate policy has been a little like watching paint dry or grass grow…only not as exciting. That’s because the Fed has not changed its benchmark Fed Funds rate since 2008 (Federal Reserve, FOMC). So with nothing else to talk about, Fed observers have focused on the minute changes in language that are included in Fed Policy statements. The minuscule revision in the July statement was the inclusion of the word “additional” to the “labor market improvements” that the Fed wants to see before finally pulling the trigger on its long-awaited rate increases. That should lead to a discussion of what kind of “additional” improvements those could be.

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The Persisting Slump In Factory Orders——‘Escape Velocity’ It Ain’t

While the payroll report commands almost all attention, the view from factory orders is simply much more significant. Even if we accept that payroll growth is steady at something greater than 200k per month, that is still at least two steps removed from actual economic activity as is intended from that same orthodox framework. Jobs are supposed to lead to income which is supposed to drive further spending, so the jobs figures themselves aren’t even the true gain. It is always just assumed that spending goes with jobs without ever dissecting the processes that lay in between.

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Barack Obama Tells Another Whopper—He Did Not Create 12.8 Million Jobs

By David Stockman – Re-Blogged From http://davidstockmanscontracorner.com

America is better off when President Obama is out on the stump bloviating and boasting rather than in Washington actively doing harm. But the whoppers he just told the students at the University of Wisconsin are beyond the pale. Said our spinmeister-in-chief:

 And the unemployment rate is now down to 5.3 percent. (Applause.) Keep in mind, when I came into office it was hovering around 10 percent. All told, we’ve now seen 64 straight months of private sector job growth, which is a new record — (applause) — new record — 12.8 million new jobs all told.

That’s a pack of context-free factoids. There is still such a thing as the business cycle, and only economically illiterate hacks—-like those who work on the White House speech writing staff—-would measure anything from the deep V-shaped but momentary bottom that happened to occur during Obama’s second year in office. What counts is not that we’ve had a bounce after a terrible bust, but where we are now on a trend basis.

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Rates Are Rising For All The Wrong Reasons

By Michael Pento – Re-Blogged From http://www.Silver-Phoenix500.com

Wall Street carnival barkers are relishing in the fantasy that the economy has finally achieved escape velocity. Therefore, they accept with alacrity that this is the primary reason why interest rates have started to rise. However, the fact still remains for the first half of 2015 GDP growth will probably be less than 1%.

GDP contracted by 0.7% in the first quarter of 2015.  The Atlanta Fed, whose GDP Now calculation has been on the money, now sees second quarter growth at 1.9%. Therefore, it is prudent to conclude the most optimistic case for growth in the first half of the year will be about 1%.  Of course, the perpetually upbeat economists on Wall Street are always convinced the economy will skyrocket in the second half of each year. But still, if the Atlanta Fed is correct—and it looks like it will be spot on given the anemic data already released for April and May—annualized GDP for the first two quarters of 2015 will be running at a pace that is less than half of the 2.2% growth averaged since 2010.

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This Financial “Seismograph” Signals A Monetary Earthquake

Re-Blogged From http://secularinvestor.com

Stock markets in the U.S. are trading approximately 2% from their all-time highs, the German DAX has slightly retraced from its all-time highs, the Nikkei index in Japan has almost surpassed its 2000 highs in recent days, the Shanghai stock index used to be a laggard but is making up at an incredible pace (currently trading at 7-year highs). Indeed, it feels like nothing can go wrong.

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War on Cash vs Bail In

cropped-bob-shapiro.jpg   By Bob Shapiro

There is a pair of troubling items which have been appearing repeatedly in the news lately:

  • There is a War on the use of Cash, and

  • Several banks which have been insolvent (bankrupt in fact) are being given the legal go-ahead to Bail In depositors’ money.

In case you’ve missed these items, or if you don’t understand why they are important, let me explain.

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US Economic Headwind

cropped-bob-shapiro.jpg   By Bob Shapiro

Economic numbers released today show the US Economy contracting. But some of these numbers understate the damage.

One of the most important statistic is Unemployment. Government figures show that Initial Claims for Unemployment, and Continuing Claims, both were up – to 320,000 and 2,421,000 respectively. While single week changes certainly can’t demonstrate a trend, there has been a significant increase from just a couple of months ago.

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Calling a Spade a Spade

By Bill Holter – Re-Blogged From http://www.Gold-Eagle.com

Yesterday we looked at the situations in both Ukraine and Greece, and how they are both out of money which makes them potential “flash points” for reality to set in. What I’d like to talk about today are the various “slights of hand” and why a spade can never be called a spade.

Currently in the U.S., some (but certainly not all) of the recent economic numbers are showing an absolutely booming economy.  All you need to do is look at Friday’s unemployment numbers, they were clearly bogus.

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Record Global Oil Demand: Even As The Price Of Oil Declined

Guest Post By SRSrocco From http://www.Silver-Phoenix500.com

There is this notion put forth by the media that a decline in global oil demand caused the huge drop in the price of oil.  Ironically, global oil demand is higher than ever… that is, according to the IEA – International Energy Agency.

Not only did the world consume the most oil it had ever in the third quarter of 2014, it was 600,000 barrels per day more than it did in the same period last year.  In Q3

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Stock Markets & FED Policy

cropped-bob-shapiro.jpg   By Bob Shapiro

Stock markets are one reflection of the health of a country’s Economy. If the Economy is growing, markets tend to go up, and if the Economy is in trouble, markets tend to fall.

Since stocks represent ownership in businesses, the price of the stock is affected by the underlying profits and by how fast profits are growing (or falling). Comparing the price of a stock to the underlying profit per share, the “Price to Earnings Ratio” or more commonly the stock’s PE Ratio, we can get an idea of what people are willing to pay to

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Could An Energy Bust Trigger QE4?

Peter-Schiff   Guest Post By Peter Schiff

In a normal economic times falling energy costs would be considered unadulterated good news. The facts are simple. No one buys a barrel of oil to display above the mantle. No one derives happiness from a lump of coal. Energy is simply a means to do or get the things that we want. We use it to stay warm, to move from Point A to Point B, to transport our goods, to cook our food, and to power our homes, factories, theaters, offices, and stadiums. If we could do all these things without

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Skype Opens America’s Borders

Re-Blogged From: Tea Party economist

Beginning in 2015 and escalating from then on, skilled workers from all over the world will have the digital equivalent of green cards. They will be legal to hire. They will flood into America’s middle-class job markets.

The last major barrier is coming down: the language barrier.

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Why a Strong Economic Base is Important

cropped-bob-shapiro.jpg   By Bob Shapiro

Misguided government policies, going back generations, and from both political parties, have caused America’s industrial base to become hollowed out. These stupid policies are unlikely to go away any time soon.

Where once the US was the world leader in steel, aluminum, electronics, and many other industries, if imports stopped overnight, our country would not have the ability to replace those goods domestically. It would

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2014 Index of Economic Freedom

cropped-bob-shapiro.jpg   By Bob Shapiro

The Heritage Foundation and The Wall Street Journal look at a series of indicators to help them evaluate an Index of Economic Freedom for each country. These indicators include:

  • Business Freedom
  • Trade Freedom
  • Fiscal Freedom
  • Government Spending
  • Monetary Freedom
  • Investment Freedom
  • Financial Freedom
  • Property Rights
  • Freedom From Corruption
  • Labor Freedom

In the 2014 report, top ranked Hong Kong earned a rating of 90.1,

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Austerity as Economic Liberation

By Peter St. Onge  October 31, 2014

(Re-Blogged from Silver Phoenix 500)

George Soros is back in the news telling Germany who to bail out this week. Soros is especially sore at Germans for promoting austerity, so it’s a great time to ask: does austerity grow an economy?

Why do we care? Investors want to know whether austerity is good or bad for an economy; whether it’s likely to boost growth or to hasten a recession.

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