Ron Paul: "What The Federal Reserve Still Fails To Realize Is That Intervention In The Economy Is Always Harmful"

As part of yesterday's hearing with Ben Bernanke before the House Financial Services Committee, Ron Paul provided the following statement in which he blasts the Fed's ever-increasing cluelessness over monetary policy and its disastrous Catch 22 implications: "the Fed only sees what is seen, the superficial results of its policies, and not what is unseen, the effects of its monetary intervention throughout the economy. Monetary inflation leads to malinvestment and causes the boom phase of the business cycle. Once the malinvestment is realized the bust phase occurs, and these malinvested resources need to be liquidated in order for the economy to recover. But the Fed actively works to prevent this liquidation and does everything in its power to continue inflating in order to prolong the boom. The first act of intervention begets the second and subsequent interventions, each bigger than the first, as each economic bust gets larger and more severe." As the only thing that currently matters for the economy, for LBO rumors, and for stock picking in general is the overabundance of liquidity, one wonders to what rabbit holes the Fed's push for central planning of the US economy will eventually lead us: "The Soviet Union's economy failed because of its central planning, and the United States economy will suffer the same fate if we continue down the path toward more centralized control."

NYSE Already Broken And Market Is Not Even Down Yet

Final Q4 GDP Revision Comes In At 5.6%, Total Real Debt To GDP 130.6%

"The third estimate of the fourth-quarter increase in real GDP is 0.3 percentage point, or $11.6 billion, lower than the second estimate issued last month, primarily reflecting downward revisions to nonresidential fixed investment, to private inventory investment, and to PCE." In the meantime, total current dollar GDP is $14,453.8 billion. As the total debt is $12.606 trillion, the debt to GDP is 87.2%. Adding $6.264 trillion in GSE debt which is explicitly backed and should be on the Treasury's book, the total debt is $18.87 trillion and the Total Adjusted Debt to GDP is 130.6%.

Goldman Sees 5.9% GDP Revision Dropping To As Low As 2.2%

Shortly we are going to see what will be almost certainly a downward revision to the revised 5.9% Q4 GDP number. How big will it be? According to Goldman's Jan Hatzius the real number, which will be based on an "income side" calculation of GDP as opposed to an expenditure, will be about 2.2%, a more than 50% drop from the expected revision of 5.8%. Will the government allow such a GDP indication? Of course not as that would completely kill the stock market rally which is the only thing the administration has going for it. Yet the numbers don't like. As Rosenberg demonstrated Q3's GDP was about -7% absent the government's stimulus. Even with it, it appears at the economy, when all is said and done, will have managed to eek out just a barely positive number. Take that out and you are again left with a mid single digit negative number. And this is the basis for a sustainable rebound? What it certainly will be the basis for, is another percent or two on the S&P as the last remaining short capitlate as State Street recalls whatever shares are outstanding to allow Citi smooth sailing after the government sells several tens of billions of worthless Citi stock.

RANsquawk 26th March Morning Briefing - Stocks, Bonds, FX etc.

RANsquawk 26th March Morning Briefing - Stocks, Bonds, FX etc.

US Fixed Income Update

As indicated this morning, the market is getting pretty close to some key support levels in Fixed Income. We first highlight the 30Y future support we tested today at 114-26. If we bypass this level we have potential to sell off down to 111-24 which is the next key support, and would trigger a massive bond bear market if actually triggered. But we should expect a bounce here.

ECU Group's Philip Manduca "We Are At A Tipping Point" And The Only Thing That May Save The Euro Is A Collapse Of The US

For once, some actually good insight from a CNBC guest. Philip Manduca, Head of Investment of the ECU Group, discusses Greece and the very severe implications of what the final outcome will look like. "Trichet said the Greeks are crooks, and they've been lying about the numbers. There is a deeply embedded corruption within the Eurozone. Combined with the endemic European socialism and there is just no way you are going to get spending cuts and tax raises and maintain a GDP that makes any sense of the percentage aspect of debt to GDP. So the whole show is wrong. This is an intractable situation, this is going to continue on and on. The onle hope for the Eurozone, and the Euro as a currency, is that sameone takes the spotlight soon, and that may be the United States." Watch the rest as Philip's perspective is spot on... Not to mention that he sees gold as the only alternative to the fiat bonfire soon to engulf the western world.