200 Years Of Dollar Debasement

Everyone has seen the 100-year US Dollar destruction chart; so here is the 200-year… a century without The Fed and a century with… which would you prefer?

 

Via Ralph Dillon of Global Financial Data,

Newton’s 3rd law states: To every action there is always an equal and opposite reaction. Sounds pretty simple right?

Except in Government, where for every action, the reaction seems to produce catastrophic consequences for such action. Yet inexplicably, the answer these days to everything seems to be more Government intervention and meddling. You would think that at this point we would have learned from our prior mistakes. Yet the meddling goes on and on and on….because it works so well.

Have you ever considered the true cost of all of this intervention? Think about it. Since the creation of the Federal Reserve in 1913, we have been in perpetual warfare, we introduced the New Deal which birthed Government programs, we eliminated the gold standard, we flooded the market with massive credit expansion, we accumulated massive amounts of debt and have now seen the Government take over 20% of our economy through healthcare. As if all of the prior interventions were not enough, in just the last 5 years, we have had shovel ready, bank bailouts, trillion dollar stimulus, QE 1,2,3,4, operation twist, unemployment benefits extended, car bailouts and crony capitalism that threw good money after bad. What we have gotten is more of the same. More debt, more political posturing and the complete destruction of the dollar and the purchasing power of it. With it, no one is accountable. Not the Government, not the banks, not the private companies but the citizens whose burden it has become to fund all of this intervention.

With the backdrop of other Governement ventures like the USPS and Social Security Administration, what can possibly go wrong with our latest intervention Obamacare? Whether you are for or against it, you have to recognize that this is and will be the mother of all Government interventions. With a horrific rollout, low enthusiasm and a general public that is either unaware or just ignorant to what is truly coming down the pipe, we can only hope that this time it will be different. But consider, that for every word that defines Obamacare, there are 30 more words that enforce it. With 109 new regulations and counting, you have to wonder if this monstrosity of intervention will finally be the straw that breaks the proverbial camel’s back. It surely has the making for it because we have never seen anything like it.

Cost since 1913? Well, the dollar has lost nearly 90% of its value and the purchasing power of that dollar has been eroded considerably.

Below is a chart that demonstrates the destructive quality of Government intervention to 1819:

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/93QXl9UpPpY/story01.htm Tyler Durden

How The “QE Economy” Works (And Why It Doesn’t) In One Giant Flowchart

From liquidity-driven perception to the Keynesian endpoint economic reality… just follow the arrows…

(click image for large legible version)

 

Or, as Bridgewater notes,

The effectiveness of quantitative easing is a function of the dollars spent and what those people do with that money.

 

If the dollars get spent on an asset that is very interchangeable with cash, then you don’t get much of an impact. You don’t get a multiplier from that.

 

If the dollar is spent on an asset that’s risky and very different from cash, then that money goes into other assets and into the real economy.

 

That’s really how you see the impact of quantitative easing.

 

Source: $hane Obata @sobata416


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Upe7K2J1YLw/story01.htm Tyler Durden

How The "QE Economy" Works (And Why It Doesn't) In One Giant Flowchart

From liquidity-driven perception to the Keynesian endpoint economic reality… just follow the arrows…

(click image for large legible version)

 

Or, as Bridgewater notes,

The effectiveness of quantitative easing is a function of the dollars spent and what those people do with that money.

 

If the dollars get spent on an asset that is very interchangeable with cash, then you don’t get much of an impact. You don’t get a multiplier from that.

 

If the dollar is spent on an asset that’s risky and very different from cash, then that money goes into other assets and into the real economy.

 

That’s really how you see the impact of quantitative easing.

 

Source: $hane Obata @sobata416


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Upe7K2J1YLw/story01.htm Tyler Durden

USD Bid As Bonds, Bullion And Stock Bulls Battered

US equities close weak for the 4th day in a row – echoing last week but without some earth-moving data to save them tomorrow as NFP did last Friday. Bonds and gold were also hit hard and the USD was well bid on the day. The USD is now unchanged on the week though (with AUD down 2%) and 30Y bonds are also practically unchanged (though 5Y is +5bps on the week). JPY crosses were unable to get any traction in stocks before Europe closed but this afternoon saw them recouple and lift stocks back to unch on the day – only to disconnect into the close as stocks tumbled once again. The Russell 2000 ended back below its 50DMA (2nd day in a row) despite a ramp to try and save it. New 52-week lows spike to near 4-month highs. MOMO names rescued NASDAQ a little.

 

New 52-Week Lows are surging…

 

The S&P managed to get back to green on the day but then fell back into the close…

 

JPY carry was disconnected early, regained some afte Europe closed, but then fell apart into the close – something has changed…

 

As the indices fade back sharply…

 

Oddly – look at gold, silver, and oil on the week…

 

As Treasuries are sold…

 

FX markets have seen the USD back to unchanged on the week also… (as AUD and JPy weaken)

 

Seems like the smell of taper in the morning is in the air… which credit has apparently been considerably more anxious about for a while…

 

Charts: Bloomberg


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5hxdURe16BY/story01.htm Tyler Durden

Thursday Humor: Spellcare.gov

Because every nation deserves the spelling skills of its elected leaders. Courtesy of the White House, which has to write it, to find out how it’s spelled:

* * *

“If you like your piece, you can keep your piece”


    



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

White House in Obamacare Panic Mode? Administration Announces Steps to Maintain Insurance Coverage as Worries About Disruptions Mount

How anxious is the Obama
administration about the health care law’s effects on insurance
coverage? For the last few days, speculation has increased about
the possibility that the law could actually result in a net loss of
coverage at the beginning of next year—with more people losing
existing insurance as a result of cancelations than have signed up
for new insurance plans under the law. An announcement this
afternoon strongly suggests that the administration is more than a
little bit concerned about this possibility as well.

The Department of Health and Human Services said this afternoon
that it will
extend coverage
options for individuals currently enrolled in
the law’s temporary high-risk pool program through the end of
January, instead of allowing the program to end on December 31 as
originally planned.  It will also require private insurers
selling policies in the law’s insurance exchanges to accept payment
up until December 31 of this year for coverage than begins January
1. 

In addition, HHS said it would “strongly encourage” insurers to
take other “transitional” steps over the next month as well—steps
like accepting partial pre-payment for coverage that begins on
January 1 as a “down payment” in lieu of full payment prior to the
start of coverage and allowing people who sign up after the
December 23 deadline to begin coverage on January 1. HHS also said
it hoped insurers would accept out of network providers as
in-network for “acute episodes” or in cases in which a provider was
listed in an insurer’s enrollment directory but dropped out after
an individual’s enrollment date.

On an afternoon conference call about the changes, the
administration even suggested that insurers should consider
accepting as enrolled anyone who has signed up for a plan by
December 23—even if the person in question has not paid the first
month’s premium at all. Payments could be made after January 1, and
after coverage kicked in. 

What does it mean to “strongly encourage” insurers to take these
steps? It’s difficult to say for sure. But probably it means that
the administration is worried about what’s coming, and plans to
blame insurers who don’t take the administration’s encouragement
when the bad news arrives.

It’s clear from the announcement that federal officials are
worried, even panicked, about what comes next. Asked on the
conference call whether the administration was confident that more
people will gain coverage than lose it come the beginning of next
year, a spokeswoman for the Centers for Medicare and Medicaid
Services dodged the question—responding that it’s important to
remember that there are still three more months in the open
enrollment period, and that the real goal is to ensure a viable
demographic mix of enrollees on a market by market basis. In other
words, the administration isn’t saying that more people will lose
coverage than gain it comes January 1. But they’re not saying that
won’t happen either.

HHS Secretary began today;s call by calmly asserting that for
millions of people, the “security of health coverage is finally
within reach,” which in the upside-down world of the administration
is as telling a sign as any that it isn’t. The administration is
trying to put a happy face on its desperation, but the lack of
confidence implied by today’s announcement is not what anyone would
call strongly encouraging.   

from Hit & Run http://reason.com/blog/2013/12/12/white-house-in-obamacare-panic-mode-admi
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Airstrike Kills Wedding Party in Yemen, Boehner Complains About Budget Complainers, California vs. Hot Sauce: P.M. Links

  • "A toast to the survivors!"Fifteen people in a
    wedding party in Yemen
    were accidentally killed in an airstrike
    (reportedly a drone) because they were mistaken for an al Qaeda
    convoy. No doubt somebody will get a stern talking to about this
    somewhere.
  • The Hawaiian health official who
    validated President Barack Obama’s birth certificate
    has died
    in a plane crash. Or did she?
  • Apparently California wants riots in the streets. Regulators
    have
    halted shipments of Sriracha
    until January. What next? Banning
    avocados and cilantro?
  • The United States is
    threatening to impose sanctions
    on Ukraine because of its use
    of riot police to crack down on protesters. Despite citizens’
    apparent desires to build ties to the European Union, Vladimir
    Putin is still trying to
    woo Ukraine
    to Russia’s side.
  • Rep. John Boehner says that conservative groups criticizing the
    budget compromise have
    “lost all credibility.”
    He would certainly know from lost
    credibility, am I right, folks?
  • The
    6-year-old Colorado boy
    suspended and accused of “sexual
    harassment” for kissing a girl at school has had his “crime”
    downgraded to misconduct in his school records.  

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from Hit & Run http://reason.com/blog/2013/12/12/airstrike-kills-wedding-party-in-yemen-b
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Matthew Feeney on the Top 5 Foreign Policy Takeaways of 2013

This year may have provided the
Obama administration with plenty of lessons on website building and
fiscal fiscos, but 2013 has also highlighted trends, developments,
and lessons that will impact America’s foreign policy for the rest
of Obama’s presidency and beyond. Reason’s Matthew Feeney outlines
how the past year has brought attention to the different sort of
interventions undertaken to address Islamism, the moral hypocrisy
of the United States’ foreign aid policy, the growth of the drone
club, Africa’s role in the War on Terror, and the effect American
snooping can have on relations abroad.  

View this article.

from Hit & Run http://reason.com/blog/2013/12/12/matthew-feeney-on-the-top-5-foreign-poli
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NSA Chief: “No Other Way” But To Keep Up Massive Surveillance

At
a congressional hearing yesterday, National Security Agency Director
Gen. Keith Alexander offered his views about the role of massive
domestic surveillance in a free society. Unsurprisingly, he voiced
support for keeping up with the controversial and
rights-compromising
work conducted by his agency.

The four-star general came before the Senate Judiciary
Committee, which was discussing the
USA FREEDOM Act
. The bill aims to end bulk meta-data collection
and establish checks on the Foreign Intelligence Surveillance
(FISA) court. Alexander issued grave warnings about the dangers
such a law would pose to America, and even attempted to elicit some
sympathy for the NSA’s methods. USA Today
reports
:

“There is no other way to connect the dots,” Alexander told the
Senate Judiciary Committee in a renewed defense of NSA surveillance
programs whose details were disclosed this year by former NSA
contractor Edward Snowden. “We cannot go back to a pre-9/11
moment.”

Alexander said the national security threat has been mounting in
recent months, and the “crisis in the Middle East is growing.”

“Taking these programs off the table is not the thing to do,”
Alexander said.

It isn’t Alexander’s first time defending the agency’s domestic
spying. But it is interesting, because for
years
 he made many public claims (some of which have been

called into question
to
give the impression
that no such surveillance of American
citizens happened on his watch. 

Deputy Attorney General James Cole also testified. He expressed
doubt about whether the bill would have any impact. Significantly,
The Guardian
points out
that this “was the first time the NSA or its allies
have suggested that its dragnets on American phone data might not
be stopped even if Leahy’s bill… passes through Congress.”

Several senators criticized the NSA’s action during the hearing.
Judiciary Committee Chairman and sponsor of the USA FREEDOM Act,
Patrick Leahy (D-Vt.),
questioned
, “Do we really need to collect so much data on
Americans? Just simply because you can do something, does it make
sense to do it?”

Sen. Chuck Grassley (R-Iowa) said recent disclosures about the
scope of the NSA’s data collection “call into serious question
whether the law and other safeguards currently in place strike the
right balance between protecting our civil liberties and our
national security.”

Legislators aren’t the only ones pushing for greater constraint
on the NSA. As Reason‘s Ronald Bailey
highlights
, major internet companies recently wrote an open
letter to President Obama calling for reforms.  

from Hit & Run http://reason.com/blog/2013/12/12/nsa-chief-no-other-way-but-to-keep-up-ma
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WTF Charts Of The Day: Good, Bad, & Ugly

Sometimes you just have to laugh…

 

The Good – faith in this chart as being in anyway sustainable seems to beggar belief…

 

The Bad – especially as markets are already well into the ‘Euphoric’ stage of the cycle…

 

The Ugly – but firms have never (ever ever ever) been so downbeat in their guidance for the future…

 

So – you BTAFTH? The Shell game continues…

 

Source: Tobias Levkovich of Citi


    



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