another site
By EconMatters
The Euro weakened on Mario Draghi speaking regarding Monetary policy for the European Union today. Gold saw some profit taking as a result with the boost to the U.S. Dollar.
© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle
via Zero Hedge http://ift.tt/1Qh7prE EconMatters
Submitted by Howard Kunstler via Kunstler.com,
It ought to be a foregone conclusion that Mr. Obama’s replacement starting January 20, 2017 will preside over conditions of disorder in everyday life and economy never seen before. For the supposedly thinking class in America, the end of reality-optional politics will come as the surprise of their lives.
Where has that hypothetical thinking class been, by the way, the past eight years? Don’t look for it in what used to be called “the newspapers.” The New York Times has become so reality-averse that the editors traded in their blue pencils for Federal Reserve cheerleader pompoms after the Lehman incident of 2008. Every information-dispensing organ has followed their lede: The Recovery Continues! It’s a sturdy plank for promoting the impaired asset known as Hillary.
Don’t look for the thinking class in the universities. They’ve surrendered their traditional duties to a new hybrid persecution campaign that is equal parts Mao Zedong, the Witches of Loudon, and the Asylum at Charenton. For instance the President of Princeton, Mr. Eisgruber, was confronted with a list of demands that included 1) erasure of arch-segregationist Woodrow Wilson’s name from everything on campus, and 2) creation of a new all-black (i.e. segregated) student center. He didn’t blink. Note: nobody in the media asked him about this apparent contradiction. That’s how we roll these days.
Don’t look for the thinking class in business. The C-suites are jammed with people still busy buying back stock in their own companies at outlandish prices with borrowed money. Why? To artificially boost share price and thus their salaries and bonuses. Does it do anything for the fitness of enterprise? No, in fact it makes future failure more likely. Why is their no governance of their insane behavior? Because they’ve also bought and paid for boards of directors composed of a rotating cast of praetorian shills, with fresh recruits entering the scene weekly through the fabled “revolving door” between business and government regulators.
Oh, and then there’s government. Anyone viewing the boasting-and-defamation contests that the cable TV networks call “debates” knows that these spectacles are based on the opposite of thinking. They are not only reality-optional, they’re thought-optional. Hence, it appears for now that America is fixing to elect either a primal screamer or a road-tested grifter to preside over the epochal collapse of our hobbled, exhausted, way of life.
The recent carnage in the stock markets will probably see a retracement after the President’s Day hiatus. They’re bouncing up in other parts of the world today, the triumph of hope over all the available evidence that something fatal has happened out there in Tom Friedman’s supposedly permanent global economy. Some observers suspect that it has something to do with the price of oil, because the oil futures market and the stock indexes seem to go up and down in tandem. But they don’t really get it.
How hard is it to understand that A) that something adverse happens to oil companies when it costs them $70-a-barrel to hoist the product out of the ground and then sell it for $30-a-barrel? And B) that all of the infrastructure of techno-industrial civilization was designed to run on oil under $30-a-barrel and founders when the price goes higher? That’s how it is. That’s your basic reality.
We’ve been trying to work around this vexing problem — the non-linear manifestation of the supposedly bygone predicament called “peak oil” — since the early part of this century. Mainly, we worked around it by borrowing money that wasn’t there. Having created this matrix of borrowed money, we’ve also created an expectation in market obligations that it must be paid back. In fact, the process of paying back money owed is the only thing that supports confidence in a system based on that essential trust — even if that expectation was unreal to begin with. When it is violated, terrible things happen in markets and economies.
Those terrible things are underway. We’re going to be a much-distressed and poorer so-called republic when this year is done with us. The markets will crack and the trade relations that comprise globalism will fall apart as nations and regions of nations struggle to survive. We’ll move inexorably to a very possibly disastrous election. We’ll face the basic choices, as distressed societies always do, of freaking-and-acting-out (usually in the form of war), or opting for a reunion with reality and its mandates. So far, it’s not looking good for the better option.
If you are a thinking person, the months ahead might be your last chance to protect whatever wealth you have and to move to some part of the country where, at least, you can grow some of your own food and become a useful part of a social and economic network that might be called a community.
via Zero Hedge http://ift.tt/1PzQ1eh Tyler Durden
Having bounced 22% off Thursday’s lows, amid endless confidence-inspiring chatter (of buybacks, bailouts, bank CEO buys, and SWFs saving the day), Deutsche Bank closed lower on the day, tumbling over 6% from its opening highs as the reality of the credit markets continues to sink in.
So, no, Deutsche Bank (and its $64 trilion derivatives book) is not “fixed” – far from it…
You Are Here…
via Zero Hedge http://ift.tt/1PzQ1e4 Tyler Durden
Over the weekend, the biggest story in the geopolitical world was Turkey’s escalation in Syria.
With the Sunni-backed opposition on its last legs in Aleppo and under near constant bombardment by Russia from the air and Hezbollah on the ground, Ankara and Riyadh have a decision to make: intervene or allow the rebellion to be crushed.
We’ve spilled quite a bit of digital ink explaining why allowing the rebels to be routed really isn’t an option. It would represent a key victory for Iran at a time when the country is already on a roll. International sanctions have been lifted, oil revenue is set to quintuple by year end, and Tehran’s grip on Iraqis military and politicians is stronger than ever. A victory in Syria would be an embarrassment for the Saudis who have funded and armed the opposition and a win at Aleppo would give the Iranians sectarian bragging rights at a time when tensions between Riyadh and Tehran are already running high thanks to the execution of prominent Shiite cleric Nimr al-Nimr.
And so, with the stakes high, the Saudis sent warplanes to Turkey’s Incirlik air base and Turkey promised an imminent “escalation.” The problem, we said, is this: somehow, Turkey and Saudi Arabia need to figure out how to spin an attack on the YPG and an effort to rescue the opposition at Aleppo as an anti-ISIS operation even though ISIS doesn’t have a large presence in the area.
Well that problem hasn’t been solved, but Turkey doesn’t seem to care. Ankara began shelling YPG positions over the weekend at Menagh air base, which the Kurds seized from Turkey-backed rebels just days ago.
Turkey claims this is about self defense. Erdogan equates the YPG (which is supported overtly by the US) with the PKK, Ankara’s arch enemy that’s recognized by Washington as a “terrorist” group.
The YPG have consolidated gains in northern Syria and are essentially trying to bridge the territory they hold east of the Euphrates with their territory in the west. That, Turkey says, isn’t going to happen. “YPG elements were forced away from around Azaz. If they approach again they will see the harshest reaction,” Turkish PM Ahmet Davutoglu said on Monday. “We will not allow Azaz to fall.”
Of course Azaz already “fell” – to Islamist rebels backed by the Turks who are aiming to usurp the government of a sovereign state.
In any event, more than a dozen civilians were killed in Azaz on Monday when missiles hit a children’s hospital. “At least 14 civilians were killed when missiles hit a children’s hospital, a school and other locations in the rebel-held Syrian town of Azaz near the Turkish border,” Reuters reports. “At least five missiles hit the hospital in the town center and a nearby school, where refugees fleeing a major Syrian army offensive were sheltering [and] another refugee shelter south of the town was also hit by bombs dropped by jets believed to be Russian.”
Yes, the jets are “believed to be Russian,” although Davutoglu just finished explaining how the YPG will face “the harshest reaction” if it advances on the town.
We suppose it’s not at all possible that the Turkish army made a little targeting “mistake” with some mortars.
Also on Monday, another MSF affiliated hospital was destroyed in Idlib. “This appears to be a deliberate attack on a health structure,” Massimiliano Rebaudengo, the Doctors Without Borders head of mission in Syria said. “The destruction of the hospital leaves the local population of around 40,000 people without access to medical services in an active zone of conflict.” Here’s what was left of the building after the strike:
As Reuters goes on to note, “tens of thousands of people have fled to Azaz, the last rebel stronghold before the border with Turkey.”
“We have been moving scores of screaming children from the hospital,” one medic said.
According to Davutoglu, the school and the hospital were hit by “a Russian ballistic missile.” The PM also said Russia and the YPG have closed the “humanitarian border” north of Aleppo. In reality, Russia and Iran have closed Turkey’s supply line to the rebels. It has nothing to do with “humanitarian aid.” Moscow and Tehran have no interest in starving the people of Aleppo. They do, however, have an interest in starving the rebels of guns.
That’s what the weekend’s hostilities were all about. Turkey hasn’t figured out exactly how to intervene at Aleppo without getting into an open confrontation with Russia, but everyone knows Erdogan hates the YPG, so Ankara figured shelling the Syrian Kurds advancing on Azaz from the west would effectively kill two birds with one stone: it would help keep supply lines to the rebels open, and some Kurds would be killed in the process. And no one, Turkey figures, is going to get too bent out of shape about it because let’s face it, Turkey has been shelling the Kurds in Syria for months anyway.
Whoever was responsible for the multiple civilian casualties that unfolded across the country on Monday, it’s not going to deter the Russians from routing the opposition… er… “the terrorists.” “We are fighting with the terrorist groups (Islamic State), Nusra Front, and others linked to al Qaeda,” Russian Deputy Foreign Minister Gennady Gatilov said in an interview with Der Spiegel. “Strikes on terrorist groups will continue in any case, even if a cease-fire is agreed upon in Syria.”
“Moscow’s aim is to leave the international community with just two options in Syria: President Bashar al-Assad or Islamic State,” Davutoglu said on Monday.
Why, one might fairly ask, does the “international community” have a say in this at all? Had Syria been left to handle its own affairs five years ago, we wouldn’t be in this mess and the world wouldn’t be teetering on the edge of a global conflict. Well, at least not over Syria.
via Zero Hedge http://ift.tt/214LJAP Tyler Durden
Virginia is for cronies. A. Barton Hinkle writes about the latest corporate handout in Virginia, which involves handing over taxpayer money to a company looking to get a Pentagon contract, on the condition it wins that contract:
The shipbuilding company would love to win the contract, and if it does, it is going to build the subs—and it will have all the funds necessary to do so from the Pentagon, which is to say from U.S. taxpayers. So why give it another $46 million from state taxpayers to do what it plans to do regardless? That’s like paying a hungry man to eat.
To make matters worse, the subsidy won’t even help NNS land the contract. The Pentagon expects to award it by 2017. The state’s payments to NNS wouldn’t start until 2022.
A representative for NNS says the state money will support “capital investments” to aid building warships “more efficiently and cost effectively.” Sure it will. People are always so much more tight with a dollar when they’re spending somebody else’s money rather than their own, right?
from Hit & Run http://ift.tt/1QDv67C
via IFTTT
The death of Antonin Scalia has shaken the American legal and political system to its core. Since joining the Supreme Court in 1986, Scalia has been at the center of the biggest and most contentious constitutional battles confronting the country, a list that ranges from abortion and gay marriage to the scope of wartime presidential powers and the meaning of the Second Amendment. Scalia’s influence was equally large in the field of constitutional interpretation, where he was a driving force behind the theory of originalism, the idea that the Constitution must be interpreted according to its original meaning. What the Supreme Court is going to look like without Justice Scalia on it is now an open question.
Here at Reason we’ve covered Scalia’s monumental career from all angles. He’s even appeared on the cover of the magazine, albeit in illustrated form. Here’s a brief selection of Reason’s writing from over the years on the late Supreme Court justice.
from Hit & Run http://ift.tt/1SsnScy
via IFTTT
According to financial research firm ICI, total retirement assets in the Land of the Free now exceed $23 trillion.
$7.3 trillion of that is held in Individual Retirement Accounts (IRAs).
That’s an appetizing figure, especially for a government that just passed $19 trillion in debt and is in pressing need of new funding sources.
Even when you account for all federal assets (like national parks and aircraft carriers), the government’s “net financial position” according to its own accounting is negative $17.7 trillion.
And that number doesn’t include unfunded Social Security entitlements, which the government estimates is another $42 trillion.
The US national debt has increased by roughly $1 trillion annually over the past several years.
The Federal Reserve has conjured an astonishing amount of money out of thin air in order to buy a big chunk of that debt.
But even the Fed has limitations. According to its own weekly financial statement, the Fed’s solvency is at precariously low levels (with a capital base of just 0.8% of assets).
And on a mark-to-market basis, the Fed is already insolvent. So it’s foolish to think they can continue to print money forever and bail out the government without consequence.
The Chinese (and other foreigners) own a big slice of US debt as well.
But it’s just as foolish to expect them to continue bailing out America, especially when they have such large economic problems at home.
US taxpayers own the largest share of the debt, mostly through various trust funds of Social Security and Medicare.
But again, given the $42 trillion funding gap in these programs, it’s mathematically impossible for Social Security to continue funding the national debt.
This reality puts the US government in rough spot.
It’s not like government spending is going down anytime soon; it already takes nearly 100% of tax revenue just to pay mandatory entitlements like Social Security, and interest on the debt.
Plus the government itself estimates that the national debt will hit $30 trillion within ten years.
Bottom line, they need more money. Lots of it. And there is perhaps no easier pool of cash to ‘borrow’ than Americans’ retirement savings.
$7.3 trillion in US IRA accounts is too large for them to ignore.
And if you think it’s inconceivable for the government to borrow your retirement savings, just consider the following:
1) Borrowing retirement funds is becoming a popular tactic.
Forced loans have been a common tactic of bankrupt governments throughout history.
Plus there’s recent precedent all over the world; Hungary, France, Ireland, and Poland are among many governments that have resorted to ‘borrowing’ public and private pension funds.
2) The US government has already done this with federal pension funds.
During the multiple debt ceiling fiascos since 2011, the Treasury Department resorted to “extraordinary measures” at least twice in order to continue funding the government.
What exactly were these extraordinary measures?
They dipped into federal retirement funds and borrowed what they needed to tide them over.
In fact, the debt ceiling debacles were only resolved because the Treasury Department had fully depleted available retirement funds.
3) They’ve been paving the way to borrow your retirement savings for a long time.
Two years ago the government launched a new initiative to ‘help Americans save for retirement.’
It’s called MyRA. And the idea is for people to invest retirement savings ‘in the safety and security of US government bonds’.
Since then they’ve gone on a marketing offensive involving the President, Treasury Secretary, and other prominent politicians.
(Most recently Nancy Pelosi published an Op-Ed in the San Francisco Chronicle a few days ago promoting the program.)
They’ve also proposed a number of legislative reforms to ‘encourage’ American businesses to sign their employees up for MyRA.
Just last week, Congress introduced the “Making Your Retirement Accessible”, or MyRA Act, which would charge a penalty to employers whose workers don’t have a retirement account.
The proposed penalty is $100. Per worker. Per day.
Imagine a small business with, say, 10 employees who don’t have retirement accounts. The penalty to Uncle Sam would be a whopping $30,000 PER MONTH.
There’s a word for this. It’s called extortion.
Obviously when facing a $30,000 monthly penalty, an employer will pick the easiest option.
Given the absurd amount of government regulation on the rest of the financial industry, MyRA is the fastest choice.
This isn’t about fear or paranoia. It’s about facts.
And the reality is that the government in the Land of the Free is moving in the direction of borrowing more and more of your retirement savings.
If you still remain skeptical, remember that last year the government stole more from its citizens through Civil Asset Forfeiture than thieves in the private sector.
Or that just 45-days ago a new law went into effect authorizing the government to strip you of your passport if they believe in their sole discretion that you owe them too much tax.
No judge. No jury. No trial. They just confiscate your passport.
This is happening. It’s a reality that rational, thinking people should plan for.
And yes, there are solutions for now.
For example, it’s possible to set up a more robust retirement structure that protects your savings and gives you much greater influence over your funds.
This is something that may make sense no matter what; it may be a good idea regardless to do some long-term financial planning that increases your influence over your own retirement savings and expands your investment options.
And if you want to learn more about the risks and solutions for your retirement savings, click here to access our free black paper.
from Sovereign Man http://ift.tt/20z7Xsi
via IFTTT
Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),
The Dow is down by almost 9% since the start of the year.
“These developments, if they prove persistent, could weigh on the outlook for economic activity…” proffered a nervous-looking Janet Yellen in her testimony on Capitol Hill. She was signaling to investors.
Smoke signals…
“Don’t worry about us,” she may as well have said. “If we can get away with a big U-turn, we’re not going to raise rates anymore.”
On Tuesday, Maersk Group, the world’s largest container shipping company, said it was suffering a “massive deterioration” in its business.
“It is worse than 2008,” its CEO, Nils Andersen, told the Financial Times. But this is not even near the bottom for the world economy. Hedge fund manager Kyle Bass warns that the other shoe is a big one… and it hasn’t dropped yet.
A Maersk container ship…the line is feeling the pinch – the Baltic Dry Index has collapsed to just 291 points (from approx. 11,800 at the 2008 peak) and container shipping rates have declined sharply as well.
China’s economy is heavily dependent on capital investment. It puts its money into building factories, highways, offices, apartment blocks, railroads, ports, and airports. What do all these projects require? Rebar!
Concrete is reinforced with steel bars. As the pace of building slows, the price of rebar goes down. In 2008, a ton of rebar cost about 5,500 renminbi ($836). Now, it costs barely 2,000 renminbi ($304) – the lowest price in at least 15 years.
Shanghai steel rebar futures, weekly in RMB – click to enlarge.
Compared to the size of its economy, China has two to three times the debt the U.S. had in 2008 – a total of $34 trillion, said Bass. As the Chinese economy slows, more steel mills, real estate developers, and manufacturers can’t pay their debts.
Total losses from debt defaults could be four times U.S. losses in the 2008 crisis. And that is just the beginning. Next week, we’ll explain why… and why Trump and Sanders are getting so much of the millennial vote. In the meantime, here’s an essay from the archives…
[Ed. note: Originally published August 2, 2005]
People come to believe whatever they need to believe when they need to believe it. Recent studies of voting patterns confirm the obvious. Zombies vote for higher taxes. Cronies vote for lower taxes. All believe they are voting for matters of principle.
Alan Greenspan believed strongly in gold – until he became a central banker. Then he believed he could do a better job than gold. Or at least he pretended to. It was a job requirement. A priest who didn’t believe in the resurrection would be useless. So would a plumber who didn’t believe in using a wrench.
Things Alan Greenspan said before he became master of the fiat mint…
In public life, people generally believe the dominant myth of the system in which they live. We are all democrats in the U.S. We believe in electing our leaders. But there is no particular reason why this method should be superior to choosing our leaders by lottery or hand-to-hand combat.
Throughout most of history, people believed in other systems. If we lived in a kingdom, we would probably believe strongly in monarchy. If we had a dictator, we’d probably have his name on our bumpers. And if we lived in a theocracy, we would kneel for prayer at the appointed hour.
As libertarian philosopher Stefan Molineux argues, there has always been only one purpose to having rulers, whether they are elected or not: the (tax)-farming of other humans.
Are we so much smarter now? Maybe not. Circumstances change. Ideas change with them. The U.S. became an empire without anyone noticing. But now, Americans believe in empire… So much so that they are willing to spend trillions of dollars to maintain it.
The national debt of the U.S. is $19 trillion. At least $5 trillion of that can be traced to the costs of empire. We have military bases all over the world. We believe we must meet challenges in Iraq, Syria, North Korea – all around the periphery of the empire.
We may just as well leave the poor Iraqis, Syrians, and North Koreans to take care of their own problems… But the thought wouldn’t be compatible with the imperial purple. An empire acts like an empire.
And a rich person acts like a rich person. He cannot get richer and richer forever. So he must find ways to get rid of his money. Trees do not grow to the sky. There is no yin without a yang… no day without night… no boom without bust.
Everything regresses to the mean – including the wealth of an individual or a group. Even our own lives regress. No one was ever born who was not destined to die. The mean is the grave – for which we are all bound.
When a man gets a certain amount of money, he takes up the beliefs of a man who needs to spend it. He believes he needs a bigger house. He believes that more expensive wine is better than the cheap stuff. He may even take a course on wine… and bore his friends and neighbors with his sophisticated palette.
From “tastes like vinegar past its due date”: beverages designed to liberate the wealthy of some of their loot.
He believes a Mercedes-Maybach is superior to a Chevy. He believes he needs a mistress. Or a yacht. Wealth brings duties, as well as advantages. When a man makes some money, he finds himself the subject of attention of what Gloom, Boom & Doom Report publisher Marc Faber calls “the immediate parasites of the affluent class.”
As Faber puts it, these are the “real estate agents, stockbrokers, financial planners, investment bankers, fund managers… economists, derivative traders, salesmen of high-end cars, pleasure boats, and private jets, art dealers, diamond merchants, mistresses, second, third and fourth trophy wives, spoiled children, estate and tax planners, and lawyers.”
Then there are the “secondary parasites.” Faber again… “They include life coaches, cosmetic surgeons, personal trainers, dog walkers and pet sitters, personal assistants, beauty consultants, massage therapists, and wedding planners.”
A rich man’s duty is to believe these people give him some advantage. But all these things come at a price. They are handicaps. When he is engaged in a quarrelsome divorce, a rich man has less time to devote to his business.
He forgets to study his sales figures when he is at wine school. And much of his fortune could be easily separated from him by clever financial planners. He gives himself these handicaps until he is able to get his wealth down to more reasonable levels – closer to the mean, that is.
If he dies before his work is done – while he still has some change in his pockets – he can be sure that the next generation will finish what he began. In a few years, the family will have average wealth rather than extraordinary wealth.
So, too, does a rich society need to give itself handicaps – so that its wealth and power can come back to a meaner level. The U.S. surpassed Britain as the world’s leading economy in the 1890s when Queen Victoria was on the throne and Benjamin Harrison was American president.
Billy’s offers a theory of government
America’s lead gained over the next five decades – greatly aided by two devastating European wars… one of which it helped prolong and make far more disastrous for Europe than it otherwise would have been.
But along with its wealth, America’s handicaps increased. It now spends about as much on its military as the rest of the world combined. After 9/11, it might have put a few more cops on the case… instead, it launched a “War on Terror” – another costly, distracting handicap.
Over the years, the U.S. has also increased its expensive social welfare programs, and the economic freedom that made its economy the leader of the world has given way to a rigged and heavily regulated economy.
GM – once the largest and most profitable business in the world – now has the handicap of having to spend thousands of dollars in health and retirement costs for every car it builds. Its competitors in China have almost none. Eventually, convenient beliefs become inconvenient. Handicaps take too much time and too much money.
Too many zombies. Too many cronies. Too many pointless wars and futile government spending programs. Too many hobbies. Too many trophy wives. Then the rich man, GM, and the empire – all take up more modest roles and more modest beliefs.
via Zero Hedge http://ift.tt/1TlrZHJ Tyler Durden
EURUSD is down over 120 pips this morning and accelerating as Mario Draghi drops all kinds of tapebombs in his Q&A with his Brussels overlords. Most crucially, slamming EURUSD 70 pips and breaking Wednesday lows, was his admission that while The ECB would “not buy” non-performing Italian bank loans, it would (confirmed by Italy’s Treasury) allow the busted deals as repo collateral (how close to par?) allowing Italian banks to kick the can just a little further.
Is EURUSD tumbling from this apparent “easing” or from the incredulity of Draghi’s hubris in destroying any semblance of ECB balance sheet strength? Or both?
In other words, we will buy whatever is falling?
via Zero Hedge http://ift.tt/1QgXNx1 Tyler Durden
Volatility, loss of confidence and central bank impotence stalk the capital markets. Gold pulls back in an expected retrenchment. Equity markets are still digesting what the world looks like. Absence of a strong Chinese domestic economy. A developing economy losing its easy credit. Oil prices adjusting to demand levels indicative of economic activity and, most tragically, the continuing proxy wars fought in the middle east as warmongers continue to slaughter innocent civilians.
Monetarily speaking the markets are just not playing to the script. It must be infuriating for the unelected officials at our all-powerful central banks to have to take steps to remind or tell, nay, instruct the markets what is correct and what is not. By enforcing interest rates on the market, the Fed, and by extension every other central bank, has denied the market its internal risk rebalancing mechanism. They have manhandled the markets into short term submission, created unintended bubbles which inconveniently burst and exposed the sheer madness and short-sightedness of the modern Keynesian-based monetary model.
When the markets do not buy the message, central banks summon their proxies to bid up or smack down the markets for debt, equities and commodities. They write the script, provide insiders sight of their plans and coordinate market manipulation to give the script meaning and the impression of their competence and foresight.
In my view these bad actors are not necessarily evil people in the sense that they wish to harm you or I — no, they are far more dangerous than that. They are well-intentioned economic zealots, entrusted with enormous power and an impossible mandate: to deliver stability and growth steadily now and forevermore. This is where the true absurdity at the heart of the matter lies. Economies and markets are naturally cyclical. Blow-offs followed by busts are as sure as day follows night. This cycle is critical as it allows for trial and error, the creation of anti-fragile networks and system resilience — it is the very reason mankind got this far. Unfortunately, it cannot be modelled in a spreadsheet and thus cannot fit in a box. The markets need space to breathe, contract and grow.
Officialdom has sought to smother this natural process and now they will pay a terrible price — the loss of confidence in the monetary system. This will lead to even more desperate measures as governments turn on each other and competitively devalue their currencies in a vain attempt to placate national interests. Sheer madness.
In my view the most misguided central bank is the Federal Reserve. They have set the tone of this coming collapse since the 1990’s when micro rate management came into vogue under Greenspan. Since then bubbles have been pushed from one place to another and re-inflated time and time again. They have treated the market with a degree of contempt that fails to recognise the human cost of their actions.
The Bank of Japan is in a world of its own. They have systematically eroded their monetary system to a degree no one could have imagined — they are now cancelling bond auctions for lack of interest. They have vastly expanded their monetary base in a futile effort to manufacture a fiscal reality that only Mugabe could aspire too.
By far the title for the most malevolent and anti-democratic institution of them all must be reserved for the ECB. Their policies towards peripheral European countries, in the matter of bond holders and bailouts, has been astonishing. (Review our guide on bail-ins today). They are a transnational organisation with little regard to the social principles that the European Union was established on. They are utterly captive by the economic and industrial interest of central Europe and have been the most divisive entity contributing to the erosion of European integration.
via Zero Hedge http://ift.tt/1ogLjJb GoldCore