Archive

February 12th, 2014

Tyler Durden's picture

22 Facts About The Coming US Demographic Shock Wave





Today, more than 10,000 Baby Boomers will retire.  This is going to happen day after day, month after month, year after year until 2030.  It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it.  We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep.  Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself.  During the first half of this century, the number of senior citizens in the United States is being projected to more than double.  As a nation, we are already drowning in debtSo where in the world are we going to get the money to take care of all of these elderly people?

 

February 11th

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Guest Post: How To Dismantle The American Empire





U.S. foreign policy is aggressive, reckless, belligerent, and meddling. It sanctions the destabilization and overthrow of governments, the assassination of leaders, the destruction of industry and infrastructure, the backing of military coups, death squads, and drug traffickers, and imperialism under the guise of humanitarianism. It supports corrupt and tyrannical governments and brutal sanctions and embargoes. It results in discord, strife, hatred, and terrorism toward the United States. The question, then, is simply this: Can U.S. foreign policy be fixed? We propose a four-pronged solution from the following perspectives: Founding Fathers, military, congressional, libertarian.

 

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Think China's Credit Crisis Is Over? Don't Look At This Chart





The bailing out of the much-watched 'Credit equals Gold #1' wealth management product and safe liquidity-strewn (CNY375 billion from the PBOC) survival of the lunar new year liquidity crunch has many believing the worst is over. Though we discussed this fallacy in great depth here, the following chart of the total collapse in the largest Chinese coal producers says this is far from over. Trading at or below book values, investors are clearly signaling concerns about the quality of assets summed up perfectly by one local analyst - China's coal industry (whose loans back a massive amount of the wealth management products) is "dead."

 

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Fukushima's Legacy: Understanding The Difference Between Nuclear Radiation & Contamination





Are fish from the Pacific safe to eat?  What about the elevated background radiation readings detected in Japan, and recently in California? Are these harmful levels? Should we be worried? And if so, what should be done about these potential health threats? What steps should we take to protect ourselves? Fukushima-related fears have been both overblown as well as heavily downplayed by parties on each side of the discussion. Much of this stems from ignorance of the underlying science. But some of it, sadly, seems to be purposefully misleading. Again, on both sides. To assess the true risks accurately, you need to know about the difference between radiation and contamination.  The distinction is vital and, unfortunately, one of the most glossed-over and misused facets of the reporting on nuclear energy.

 

 

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Is This Why Gold Prices Are Rising?





While there are numerous reasons why precious metals prices rise and fall - from supply, demand, manipulation, money-printing, and jawboning - it is abundantly clear that as prices drop, Asian demand has risen rather notably. But what is the reason? Why are Asian 'people' and central bankers - most notably China - buying gold now? We suspect the following chart from SocGen provides considerably color when answering that question historically (and more importantly - going forward).

 

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Jim Grant: "Gold Is Nature's Bitcoin"





In less than 30-seconds, the always eloquent founder of the Interest Rate Observer 'translates' Yellen's Fed speak into reality:-

"What we mean to do is continue to nationalize the yield curve... and we would like to enlist the stock market in a program of wealth creation for the security holders of America."

The Fed has manipulated interest rates for 100 years but Grant adds, "never - until now - has it manipulated the stock market as if it were a lever of public policy." His discussion ranges from the bubble in Biotech to holding Gold (which he describes as "nature's bitcoin") because it is "the reciprocal of faith in Central Banks."

 

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Are Animal Spirits Deflating?





Unfortunately many investors, with central banks having slashed deposit rates to de minimis levels, have gone ‘all-in’ with regard to risk assets in the desperate pursuit of yield. Be careful what you wish for. It is quite clear that central banks will do literally anything within their power to attempt to avert deflation – to ensure that “it cannot happen here”. That does not mean they will succeed – but they may end up destroying fiat currencies in the process (one of the reasons we have consistently held gold). It is “quite obvious” what the Fed will ultimately do... Six years into this crisis, and in the words of Lily Tomlin, things are going to get a lot worse before they get worse.

 

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House Passes Clean Debt Ceiling 221-201 With Vast Majority Of Republicans Voting Against





The clean debt ceiling bill has just passed the House where it got the required majority in a 221 to 201 final vote, with just 28 Republicans voting Yea (and 199 voting Nay) - a vote that has made history with the fewest number of votes from a majority on a bill that passed the House since 1991. It also means means that with a Senate passage assured, the US can now spend away until March 15, 2015. The final breakdown:

  • GOP: Yea - 28; Nay -199
  • DEM: Yea - 193; Nay -2
  • Total: Yea - 221; Nay - 201

Considering that the vast majority of Republicans voted against John Boehner's latest "plan" to do the Democrats' work for them, and pass a clean debt ceiling, perhaps it is time to look for a speaker who represents the interests of more than just a tiny fraction of the party... and the Democrats of course.

 

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Japan Machine Orders Crumble At Fastest Pace In 22 Years As BOJ Board Member Warns More QE May Not Be Coming





If you needed another reason to buy stocks, trust in the growth meme, and have your faith in Abenomics confirmed... look away. Japanese Machine orders for December just printed -15.7% in December - the biggest MoM plunge since 1992. This is the biggest miss to expectations since 2006 and what is considerably more problematic for Abe et al. is that YoY expectations of a core machine order rise of 17.4% was hopelessly missed with a small 6.7% gain (and this is data that excludes more volatile orders). While machine orders are completely irrelevant, even if on their own they portend a recession; what would be far more troubling to the Kool aid addicts is if the BOJ were to announce that just like the Fed, it too is tapering its Open-ended QE ambitions. Considering this is precisely what BOJ board member Kiuchi just did, that relentless USDJPY meltup overnight may not be such a slamdunk...

 

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Bitcoin Update: "Your Money May Be 'Tied Up' In Unconfirmed Transactions"





As the torch of responsibility is rapidly handed off from exchange to exchange to the Bitcoin source code, Gavin Andersen (one of Bitcoin's protocol core developers) explains just what is going on - and what it means for the 'wealth' stored in the virtual currency - "Users of the reference implementation who are bitten by this bug may see their bitcoins “tied up” in unconfirmed transactions" - so that's what 'bit' stands for in bitcoin...

 

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Guest Post: The Broken Limb & Burst Pipe Fallacies





We have become a delusional state dependent upon fallacies to convince ourselves our foolhardy beliefs, ludicrous economic policies, corrupt captured political system, and preposterously fraudulent financial system are actually based on sound logic and reason. The fallacy being flogged by government drones and the legacy media about companies not hiring new employees because it has been cold and snowy during the winter is beyond absurd. The other fallacy being pontificated by retail executives in denial, cheerleaders on CNBC and the rest of the propaganda press is weather is to blame for terrible retail sales over the last quarter. Revealing the truth about pitiful employment growth and dreadful retail sales would destroy the fallacy of economic recovery stimulated by the monetary policies of the Federal Reserve and fiscal policies of the Federal government. We have a country built on a Himalayan mountain of fallacies.

 

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There Is "No Evidence" We Encouraged Forex Manipulation, Bank of England Says





In what has to be the most disappointing denial of central bank manipulation of a market in recent history, and probably never, the Bank of England today announced that it "has seen no evidence to back media allegations that it condoned or was aware of manipulation of reference rates in the foreign exchange market." As a reminder, last week we reported, that according to a Bloomberg, "Bank of England officials told currency traders it wasn’t improper to share impending customer orders with counterparts at other firms" or, in other words, the highest monetary authority in England, and the oldest modern central bank, explicitly condoned and encouraged manipulation. Fast forward to today when Andrew Bailey, the Bank's deputy governor and chief executive of the Bank's Prudential Regulation Authority, told parliament's Treasury Select Committee on Tuesday it had no evidence to suggest that bank officials in any sense condoned the manipulation of the rate-setting process. In other words, it very well may have... but there just is no evidence - obviously in keeping with the bank's very strict "smoking manipulation gun document retention policy."

 

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House Voting On Clean Debt Ceiling Increase





Will John Boehner fold - as he always does - with style, or will he fail to whip enough Republicans to where he can't even do the Democrats' "clean debt ceiling hike" bidding for them and round up the required 218 vote majority? Find out momentarily.

 
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