Archive - Mar 2015

When I first came across the title to this article, I didn’t think much of it. In fact, I almost didn’t even click the link thinking it was just a repeat of a prior expose I highlighted in the post: Hillary Clinton Exposed Part 2 – Clinton Foundation Took Millions From Countries That Also Fund ISIS. Fortunately, I did decide to take a look and pretty soon my jaw absolutely hit the floor. Although the Wall Street Journal didn’t play up the connection, I was stunned to see that of all the oligarchs connected to foreign governments who donated to the Clinton Foundation while she was Secretary of State, Ukraine was at the very top.

A look ahead at next week.

Sometime after the initially soft Q1 GDP “print” expect a “trial balloon” of more debt monetization [QE4] issued by some FOMC constituent. Naturally this will weaken the dollar and immediately suspend/reverse the Fed’s dollar based concerns articulated earlier in this post. However, this will also serve to “piss” off both Kuroda [BoJ] and Draghi [ECB]…as their heavily depreciated and shorted currencies will, at least initially, sharply reverse course…and the continual game as to which global economic zone can depreciate their currency the fastest is “on”…again.

Adding across the entire Nasdaq Bitoech Index, the market cap is about $1.06 trillion. As for net income: $21.1 billion.  In other words, the NBI now trades with a P/E of 50x, with over 80% of the entire sectort's earnings concentrated in just 5 companies.

And the Fed is trapped in its own system...

If the Fed indeed raises rates in June, we're likely to begin to see periphery sovereign debt defaults

If you believe that ignorance is bliss, you might not want to read this article.

It matters not who is in charge of the Fed or what rules Congress may insist that it adopts. Once money printing, via fiat or fractional reserve credit creation, is seen to be both feasible, justified, and legal nothing and no one can stop it. The political pressure to fund government programs will be irresistible. Everyone knows that the Fed seemingly has the ability to solve their problem by monetizing the federal debt. Should it refuse to do so, we would see riots in the streets similar to what is happening in Europe as protesters target the European Central Bank. The only solution is to destroy the monster that makes it all possible, the Fed.

NATO is in the midst of conducting large scale military maneuvers along the Russian border in a move Russian Foreign Minister Sergey Lavrov says encourages “Kiev to pursue a military solution.” Over the course of 10 days, NATO will parade 120 combat vehicles across the region in an effort to prove how quickly the West can confront perceived Russian aggression.

Something stunning took place earlier this week, and it quietly snuck by, unnoticed by anyone as the "all important" FOMC meeting was looming. That something could have been taken straight out of the playbook of either Cyprus, or Greece, or the USSR "evil empire", or all three.

It was only a matter of time before Germany's peculiar sense of humor struck back to Greek demands for WWII reparations, and sure enough here comes Spiegel with "How Europeans look at the Germans — The German Superiority" or ""The German Übermacht", in which Spiegel decided to send over Merkel coupled with a few nazis right in the middle of the Acropolis.

The correlation between wage growth and consumer spending is now 0.93 according to RBC meaning that the 80% of the labor force who aren't seeing their pay increase will not be driving the US economic engine going forward.

Well that's settled then...

The idea is that savings exceed investment, and that a negative real interest rate is required for bringing savings in line with investment. From the viewpoint of the Austrian school, the notion of a “negative equilibrium real interest rate” doesn’t make sense at all. To show this, let us develop the case step by step. To start with, one should make a distinction between two types of interest rates: There is the market interest rate, and there is the originary interest rate.

Dear Chairman,
 
I would like one member of the FOMC to take the time to tell the American public the truth about the last seven years and monetary policy...