Archive - Sep 17, 2015

"I don’t expect that we’re going to be in a path of providing additional accommodation. But if the outlook were to change in a way that most of my colleagues and I do not expect, and we found ourselves with a weak economy that needed additional stimulus, we would look at all of our available tools. And that would be something that we would evaluate in that kind of context."

- Janet Yellen.

“Most Texans do not want to break away from the United States. Most Texans consider themselves Americans. But if ever being American means sacrificing our liberties, we will just prefer to be Texans.”

"I do not think there is any need for anybody to panic..."

As we have maintained continuously, rate hike talk from the Fed is just a bluff to disguise its inability to tighten, as even small increases could be sufficient to prick the biggest bubble it has ever inflated. When will these "experts" finally connect the real dots and discover that the monetary medicine that the Fed has doused over the economy since 2008 has only created a weak and utterly dependent economy. A rate hike is supposed to be a signal that the economy has a clean bill of health. But as the patient fails to recover, another dose of QE will be just what the doctor orders.

Despite the approval of various Asian nation officials (e.g. Japan's Amari: "Fed decision appropriate"), it appears non-hawkishness is not enough to keep the dream alive. Japan's Nikkei 225 is down over 600 points from its post-FOMC spike highs, and USDJPY has tumbled over 1 handle - back below 120.00. Chinese stocks are extending losses after last night's late tumble, as ironically, China's securities regulator has uncovered a number of market manipulators who boosted prices of some stocks to sky-high levels during the peak of the bull market, attracting numerous followers who have suffered heavy losses in the recent market crash. The PBOC strengthened the Yuan fix for the 2nd day in a row (by the most in 2 weeks).

Our current monetary system is the root cause of many evils of today. Let’s take war, a topic we discussed in this article, as an example. Without a monetary system that creates currency out of thin air, most of the wars that we have had and still have would simply not be financeable. This system is controlled by a few, who change the rules to their own benefit. And as we have seen they use their privileges to finance wars and to bribe politicians. By holding your wealth in precious metals you are rejecting the current system and also protecting yourself from “financial tyranny”. This includes: capital controls, expropriation, bail-ins, bailouts, negative interest rates, market manipulation on a wide scale and massive paper currency fluctuations.

"There are modern weapons that the regime didn't previously have, be they rocket launchers or air to ground to missiles."

"What scares me, or what worries me, is what the next downturn in the economy looks like, with asset prices where they are and a lesser ability of central banks to ease monetary policy."

The greater the economic freedom, the wealthier and happier the people. States with more libertarian free market policies enjoy better results: greater median incomes, a more equitable distribution, less poverty, greater success for minorities and immigrants, and higher overall levels of happiness and well-being. In the political rhetoric landscape the battle of ideology is fierce and filled with demagoguery; in the real world the difference in results between competing economic policies are strikingly clear.

News That Matters

We previously explained what appeared to be Republican leadership's plan to 'deal with' The Donald's status quo upsetting rise. As the following chart shows, last night's debate, as we noted here, seemed to put that plan into action... but, for now, it did not work.

In today's centrally planned world, the proliferation of NIRP means that nothing is sacred - not even a Swiss bank account...

The gold market seems to have bifurcated: one market for largely paper speculation and high leverage, and another for the purchase and distribution of actual physical bullion. This is a problem because the attitude towards gold among the status quo in the West has become rigidly dogmatic, supported by years of lazy thinking and a determined the campaign of ridicule and propaganda to try and extend the unsustainable. There is going to be a reconciliation of attitudes and realities at some point, and like vast tectonic plates unable to move but building greater and greater pressure, the longer that the status quo and their courtiers try to maintain their modern aristocracy, the more dramatic that change may be when it finally comes.

"There have been a number of studies that have been done recently that have tried to take account of many different ways in which monetary policy acting through different parts of the transmission mechanism affect inequality, and there's a lot of guesswork involved, and different analyses can come up with different things. But a pretty recent paper that's quite comprehensive concludes that the -- that Fed policy has not exacerbated income inequality."