2014 Will Move Us Closer To The End

Originally posted at Monty Pelerin’s World blog,

The fraud that has been the US government and its effects on the Potemkin economy should be obvious by now. Yet our politicians continue to pretend the economy is growing and recovering. It is not. It is in a death spiral that their interventions caused and continue to feed.

The presentation below is another one from Gordon T. Long. This one includes Charles Hugh Smith as his guest. Both are worthwhile listening to, especially in this presentation.

 

What is discussed is expectations for 2014. The problems that may surface this coming year have their roots decades before. Each problem results from prior government attempts to stop normal economic corrections. Each was designed to stimulate the economy to avoid the necessary adjustments. Their effectiveness short-term was politically acceptable and was achieved by distorting prices, interest rates and lending standards. The intent was to send false signals to economic actors, to encourage them to behave in ways that helped short-term results but were harmful long-term.

For years short-run corrections were avoided or mitigated by this falsifying of economic signals. The cost was to make the economy weaker and less efficient. It also was to burden the economy and its participants with record levels of debt. This economic debauchery produced immediate good feelings in the same manner that excessive drinking does. It makes you feel good during the binge, but the next day is hangover time.

The economy has been wasted. These short-term highs have place it in grave danger. John Maynard Keynes replied to objections to his short-term remedies with the statement that “in the long-run we are all dead.” Keynes is long dead. Perhaps he was thinking only in terms of his lifespan. The rest of us are facing the consequences of such irresponsible policy.

Whether enough of the negatives hit in 2014 to sink the country is doubtful but not impossible. The saddest part about what is happening is that there is no political will to even recognize the path that we are on. From a political standpoint, no one wants to admit we are in trouble. As a result, there are no attempts to remedy our economic and social spiral to ruin, (and probably no way) to reverse the march to collapse.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/cAUlvNlIZLA/story01.htm Tyler Durden

Will China’s Moon Landing Restart the Space Race in a Good Way?

Glenn Reynolds of Instapundit hopes so. He writes in

USA Today
:

The 1960s
space race
 between the United States and the old Soviet
Union saw rapid progress in space technology. We went from being
unable to put people in Earth orbit, to landing men on the moon and
returning them safely to earth, repeatedly, in less than a decade.
It happened so fast because each nation was afraid the other would
get there first.

The 1967 Outer Space Treaty, in fact, was basically a deal to
throw the contest out. Each nation was more afraid of being beaten
than it was, really, anxious to win itself. As soon as the ink on
the treaty was dry, space efforts began to dry up, too. That’s one
reason why no one has had a soft landing on the moon in almost 40
years — and why it’s been 41 years almost to the day since the
last man, astronaut Eugene
Cernan
, stood on the moon.

If, like me, you’d like to see a gold
rush on the moon
 — or, at least, a Helium-3 rush — then
a Chinese claim might be just the thing to get it started.


Read the whole thing.

Reason on Space.

from Hit & Run http://reason.com/blog/2013/12/17/will-chinas-moon-landing-restart-the-spa
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Will China's Moon Landing Restart the Space Race in a Good Way?

Glenn Reynolds of Instapundit hopes so. He writes in

USA Today
:

The 1960s
space race
 between the United States and the old Soviet
Union saw rapid progress in space technology. We went from being
unable to put people in Earth orbit, to landing men on the moon and
returning them safely to earth, repeatedly, in less than a decade.
It happened so fast because each nation was afraid the other would
get there first.

The 1967 Outer Space Treaty, in fact, was basically a deal to
throw the contest out. Each nation was more afraid of being beaten
than it was, really, anxious to win itself. As soon as the ink on
the treaty was dry, space efforts began to dry up, too. That’s one
reason why no one has had a soft landing on the moon in almost 40
years — and why it’s been 41 years almost to the day since the
last man, astronaut Eugene
Cernan
, stood on the moon.

If, like me, you’d like to see a gold
rush on the moon
 — or, at least, a Helium-3 rush — then
a Chinese claim might be just the thing to get it started.


Read the whole thing.

Reason on Space.

from Hit & Run http://reason.com/blog/2013/12/17/will-chinas-moon-landing-restart-the-spa
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Spokane Still Waiting For Police to Agree to Independent Oversight Overwhelmingly Approved by Voters in February

not the empire state buildingIt’s going to take Spokane,
Washington at least a year to put into effect the
independent oversight
of the police department voters approved
by a more than two to one margin last February. The city council

voted
to postpone until next February consideration of a new
labor agreement between the town and the police. The oversight
required by the voter-approved ordinance has to be implemented via
the police union contract because labor regulations consider
matters like oversight workplace issues subject to bargaining. The
police, so far, have not agreed to terms supporters of oversight
consider sufficient, while the mayor, along with the police chief,
have been pushing to leave the disciplinary portion of independent
oversight in their (by definition non-independent) hands.


Via the Spokesman-Review
:

Under the latest plan, ombudsman would participate in
internal investigations and subsequently report findings to an
unpaid citizen board appointed by the mayor and Spokane City
Council. If the board finds the internal investigation was
insufficient, the board can call for additional investigation or
the introduction of a third party to conduct a separate
investigation.

In November, the council rejected the proposed police contract
because it did not allow for enough independence by the
ombudsman.

[Police chief Frank] Straub warned that rejecting the proposed
contract would send negotiations to a state arbitrator, who could
order larger salary increases than the 2 percent annual increases
called for in the proposed agreement.

Collective bargaining privileges shouldn’t be a suicide pact for
cities, and certainly shouldn’t trump the “democratic process.”

from Hit & Run http://reason.com/blog/2013/12/17/spokane-still-waiting-for-police-to-agre
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Gold To Rally Year End As Traders Close Some Of Record Short Positions

Today’s AM fix was USD 1,237.25, EUR 898.71 and GBP 759.42 per ounce.
Yesterday’s AM fix was USD 1,229.50, EUR 892.62 and GBP 754.57 per ounce.

Gold rose $3.10 or 0.25% yesterday, closing at $1,240.70/oz. Silver climbed $0.26 or 1.32% closing at $19.96/oz. Platinum fell $3.24, or 0.2%, to $1,358.25/oz and palladium rose $0.25 or 0%, to $715.90/oz.


Gold in U.S. Dollars, 30 Days – (Bloomberg)

Gold is marginally lower today after two days of gains as the Fed’s two day policy meeting begins. More positive than expected U.S. data and continuing SPDR outflows may have led to weakness.

Gold’s gains in recent days are likely partly due to a short covering rally. Nervous traders may be closing some of their record short positions ahead of a Federal Reserve policy decision on whether to begin tapering its equity and bond friendly debt monetisation measures.

Most economists believe the Fed will not begin tapering till March of next year, which could be prompt traders to further cover their short positions.

Short positions are at multi year highs and if the Fed does not taper tomorrow we will likely see a large short covering rally going into the New Year as shorts close out positions and balance books at year end.

Bearish bets by hedge funds and money managers in U.S. gold futures and options are close to a 7-1/2 year high, according to data from the Commodity Futures Trading Commission (CFTC).
   
SPDR Gold Trust, the world’s largest gold ETF, said its holdings fell 8.70 tonnes to 818.90 tonnes on Monday – its biggest outflow since Oct 21.
 
Holdings are at their lowest since January 2009 after more than 450 tonnes of outflows this year caused by traders and more speculative investors channelling money towards riskier assets such as equities and bonds which are at record highs in many countries.

Importantly, and little reported on is the fact that the ETF flows have been matched and greatly surpassed by physical gold in China and imports from Hong Kong into China alone.   

Gold has lost 25% of its value this year after 12 years of gains. There are credible allegations that the market was subject to price manipulation with banks manipulating prices lower through massive concentrated selling at times of low liquidity. Allegations that Chinese entities may be manipulating paper gold prices lower in order to buy physical gold on the cheap are gaining credence.

Whatever, the reasons for gold’s price fall it is a healthy development as it has led to the speculative hot money and weak hands being washed out of the market. Gold is on a much more sustainable footing now and is very much in strong hands now, which bodes well for gold in 2014 and 2015.

Download Protecting your Savings In The Coming Bail-In Era (11 pages)

Download From Bail-Outs to Bail-Ins: Risks and Ramifications –  Includes 60 Safest Banks In World  (51 pages)


    



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Jim Grant Slams Steve Liesman “The Fed Can Change How Things Look, But Not What They Are”

"I got up this early to talk, not to listen," Jim Grant berates Fed-apologist Steve Liesman as the two go head-to-head over the fallacy that QE has been a success. "The Fed can change how things look, it cannot change what things are," is the single-sentence summation of the mirage that the Fed's "dangerous monetary manipulation" has created.

Arguing that Grant is wrong because, as we saw this morning with CPI, there is no inflation, Grant blasts back pointing to the massive inflation in asset prices, art, farmland, ferraris as indicative of who the Fed's policies have helped. Grant adds to the list of obvious bubbles and even Joe Kiernan jumps in on his side against Liesman's insistence that the Fed is omnipotent (because the currency hasn't crashed… yet).

150 seconds of perfect disequilibrium at the pretense of central planning…
 

And, as we noted previously, here's why"The Rich Hold Assets, The Poor Have Debt"

This chart from Citi's Matt King pretty much sums it up (and contrary to what Magic Money Tree growers will tell you, debt is not wealth).

Why is it important? Simple – contrary to the Fed's flawed DSGE models, it is the poor who are more likely to consume. And logically with their purchasing power being funneled to the rich with every $85 billion in monthly debt monetization, they purchase less and less. As the slow but steady contraction in the economy over the past five years has proven beyond a reasonable doubt.

But hey: at least Hamptons' houses have never been more expensive and the Russell2000 keeps on hitting daily all time highs. Thank you "wealth effect."


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Y8u5DZGHlmU/story01.htm Tyler Durden

Jim Grant Slams Steve Liesman "The Fed Can Change How Things Look, But Not What They Are"

"I got up this early to talk, not to listen," Jim Grant berates Fed-apologist Steve Liesman as the two go head-to-head over the fallacy that QE has been a success. "The Fed can change how things look, it cannot change what things are," is the single-sentence summation of the mirage that the Fed's "dangerous monetary manipulation" has created.

Arguing that Grant is wrong because, as we saw this morning with CPI, there is no inflation, Grant blasts back pointing to the massive inflation in asset prices, art, farmland, ferraris as indicative of who the Fed's policies have helped. Grant adds to the list of obvious bubbles and even Joe Kiernan jumps in on his side against Liesman's insistence that the Fed is omnipotent (because the currency hasn't crashed… yet).

150 seconds of perfect disequilibrium at the pretense of central planning…
 

And, as we noted previously, here's why"The Rich Hold Assets, The Poor Have Debt"

This chart from Citi's Matt King pretty much sums it up (and contrary to what Magic Money Tree growers will tell you, debt is not wealth).

Why is it important? Simple – contrary to the Fed's flawed DSGE models, it is the poor who are more likely to consume. And logically with their purchasing power being funneled to the rich with every $85 billion in monthly debt monetization, they purchase less and less. As the slow but steady contraction in the economy over the past five years has proven beyond a reasonable doubt.

But hey: at least Hamptons' houses have never been more expensive and the Russell2000 keeps on hitting daily all time highs. Thank you "wealth effect."


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Y8u5DZGHlmU/story01.htm Tyler Durden

Headline November Inflation Unchanged, Below Consensus; Core Inflation Higher Than Expected

As we noted earlier today, if there was one piece of news that could tip the scales away from a December taper announcement, it was a November inflation number that came in below expectations. Which it did: the headline November inflation print came in unchanged, on expectations of a 0.1% increase for the month, and up 1.2% for the year, below the 1.3% expected. However, before you BTFATH, note that core inflation – the Fed’s preferred metric – actually was higher than expected, with prices ex food and gas, rising 0.2% in November on expectations of a 0.1% increase. Indeed, looking at the components, the headline inflation number was dragged down by gasoline prices which dipped 1.6% in November and overall Energy costs which fell 1.0%. Also notable: apparel inflation was -0.4% in November – the third consecutive month of declines. However, back to the core number, annual inflation was up 1.7% Y/Y just shy of the Fed’s target, while core service inflation is up 2.4%.

 

Breakdown by component:

The breakdown of the key components from the report:

Food

 

The food index rose 0.1 percent in November, the same increase as in October. The index for food at home was unchanged, with major grocery store food groups mixed. The index for fruits and vegetables declined in November, falling 0.7 percent after rising in October. The indexes for meats, poultry, fish, and eggs and for nonalcoholic beverages also declined in November, each falling 0.2 percent. The index for cereals and bakery products, which declined in October, was unchanged in November. The index for other food at home rose in November, increasing 0.5 percent, and the index for dairy and related products rose 0.4 percent in November after falling in October. The food at home index has risen 0.6 percent over the last 12 months, the smallest 12-month increase since June 2010. The index for meats, poultry, fish, and eggs has posted the largest increase of the six major grocery store food groups over the last year, rising 2.8 percent. The index for nonalcoholic beverages has declined the most, falling 1.8 percent. The index for food away from home rose 0.3 percent in November, its largest increase since
April, and has risen 2.1 percent over the last year. 

 

Energy

 

The energy index declined 1.0 percent in November after falling 1.7 percent in October. The gasoline index, which fell 2.9 percent in October, declined 1.6 percent in November. (Before seasonal adjustment, gasoline prices fell 3.3 percent in November.) The index for natural gas also declined, falling 1.8 percent in November; this was its fifth decline in the last 6 months. Other energy indexes increased, however. The electricity index rose 0.3 percent in November, its third consecutive  increase. The index for fuel oil rose 0.4 percent in November after declining in October. The energy index has declined 2.4 percent over the last year, with the gasoline index down 5.8 percent and the index for fuel oil decreasing 4.1 percent. The electricity index has risen 2.9 percent over the last year, and the index for natural gas has increased 1.0 percent.

 

All items less food and energy

 

The index for all items less food and energy rose 0.2 percent in November after rising 0.1 percent in each of the 3 previous months. The shelter index rose 0.3 percent in November after a 0.1 percent increase in October. The rent index increased 0.2 percent, while the index for owners’ equivalent rent increased 0.3 percent. The index for lodging away from home rose 2.9 percent in November after declining 3.1 percent in October. The index for airline fares continued to rise, advancing 2.6 percent in November after a 3.6 percent increase in October. The recreation index rose 0.2 percent, and the index for used cars and trucks advanced 0.1 percent. The index for medical care was unchanged in November, with both the medical care commodities and medical care services components unchanged. The apparel index continued to decrease, falling 0.4 percent, its third consecutive decline. The index for household furnishings and operations fell 0.2 percent in November, as did the tobacco index. The index for new vehicles declined 0.1 percent for the second consecutive month.

 

The index for all items less food and energy increased 1.7 percent for the 12 months ending November. Indexes that have increased at a faster rate include airline fares (4.2 percent), shelter (2.4 percent), and medical care (2.2 percent). Indexes that increased more slowly or declined include household furnishings and operations (-1.4 percent), apparel (-0.1 percent), and new vehicles (0.6 percent).

So to summarize: if one looks at the headline CPI number, which the Fed has repeatedly said it does not, Taper may be delayed. If one looks at the Fed’s preferred core number, however, the Taper may still be very much on for December.


    

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/d4FxlnFFhXc/story01.htm Tyler Durden

A.M. Links: Snowden Says NSA Ruling “the First of Many” Victories, Japan Approves Plan For Increased Defense Spending, Support For Obamacare Falling

  • NSA whistleblower
    Edward Snowden
    has said that yesterday’s ruling that the NSA’s
    metadata collection program is likely unconstitutional is “the
    first of many” victories.
  • Former Massachusetts Senator
    Scott Brown
    is moving to New Hampshire, where he may seek the
    Senate seat currently occupied by Sen. Jeanne Shaheen (D-N.H.) in
    2014.
  • Opposition to
    Obamacare
    has dropped. A new ABC News/Washington Post poll
    shows that 49 percent of Americans now oppose the law, down
    from 57 percent last month. 
  • Researchers claim that there is evidence
    Neanderthals
     may have practiced intentional burials.

  • North Koreans
    are marking the second anniversary of Kim
    Jong-il’s death.
  • It is unlikely that the
    Yemeni parliament’s
    vote banning drone strikes will change U.S.
    policy. Shocker.
  • Japan has approved a plan for
    increased defense spending
    .

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from Hit & Run http://reason.com/blog/2013/12/17/am-links-snowden-says-nsa-ruling-the-fir
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Dr. Jeffrey A. Singer on Vaccination and Free Choice

SyringeIn the 2002 sci-fi noir film Minority
Report
, PreCrime, a specialized police agency,
apprehends people who are forecast to commit crimes. No trial is
necessary because the not-yet-committed crime is considered a
vision of the future and thus a matter of fact. The film’s plot
challenges viewers to consider the issue of free will vs.
determinism, and consequently, the morality of punishing someone
for a crime not yet committed. It serves as a useful metaphor for
the argument against coercive vaccination, writes Dr. Jeffrey A.
Singer. That’s because, while some argue that unvaccinated people
will endanger the life and health of innocent bystanders, such a
position requires infallible precognition.

View this article.

from Hit & Run http://reason.com/blog/2013/12/17/dr-jeffrey-a-singer-on-vaccination-and-f
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