Did you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt? Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year. Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either.
Since QE programs have not been effective at creating organic economic growth, the only effective monetary policy tool of the Fed to stave off the effects of a recessionary drag, lowering interest rates, is not available. This is why, despite weak economic growth, little inflation and a large amount of labor slack in the economy, the Fed has consistently hinted that they will likely raise the overnight lending rates in June. Therefore, since the Fed is "data dependent," a boost to GDP, via the recalculation of the numbers, would be vastly supportive in justifying that increase. However, is economic growth really stronger than currently reported? We can look at some alternative measures of the economy to answer that question.
This psychology of mass delusion now dominates housing, stocks and bonds: not only is this not a bubble, the expansion will continue forever. History, however, suggests otherwise: all bubbles burst, period.
The rising risk to the housing recovery story lies in the Fed's ability to continue to keep interest rates suppressed. It is important to remember that individuals "buy payments" rather than houses. With each tick higher in mortgage rates so goes the monthly mortgage payment. With wages remaining suppressed, 1 out of 3 Americans no longer counted as part of the work force or drawing on a Federal subsidy, the pool of potential buyers remains tightly constrained. While there are many hopes pinned on the housing recovery as a "driver" of economic growth in 2015 and beyond - the lack of recovery in the home ownership data suggests otherwise.
Having dipped and missing by the most on record in April, Markit's US Manufacturing PMI printed 53.8 (against expectations of 54.5). This comes on the heels of weakness in European PMIs (especially Germany - but but but lower EUR... exports, growth, etc...) and Chinese PMIs. This is the lowest US Manufacuring PMI since Jan 2014 (in the middle of the polar vortex). May saw the slowest rise in new orders since Jan 2014 - but the post-weather rebound? - and input costs rrise for the first time in 2015. Markis now carefully noting that "the survey is likely to encourage policymakers to err on the side of caution."
Sentiment towards gold is as bad as we have seen it since the 2003/2004 period. Bitcoin is the more sexy thing. People want to talk about bitcoin and anything with “bit” in the name seems to be doing very well. Whereas gold is very much less sexy ... for now ...
Militarization Is More Than Tanks & Rifles: It’s a Cultural Disease, Acclimating Citizens To Life In A Police StateSubmitted by Tyler Durden on 05/20/2015 22:00 -0400
The problems we’re grappling with have been building for more than 40 years. They’re not going to go away overnight, and they certainly will not be resolved by a report that instructs the police to simply adopt different tactics to accomplish the same results - i.e., maintain the government’s power, control and wealth at all costs. This is the sad reality of life in the American police state.
The consequences of economic stagnation are not limited to finance: stagnation is causing a social depression.
We have all read the latest crop of media articles challenging gold’s investment relevance. The typical approach to bearish gold analysis is to attribute hypothetical fears to gold investors, and then point out these concerns have failed to materialize. Sprott believes the investment thesis for gold is a bit more complex than simplistic motivations commonly cited in financial press. We would suggest gold’s relatively methodical advance since the turn of the millennium has had less to do with investor fears of hyperinflation or U.S. dollar collapse than it has with persistent desire to allocate a small portion of global wealth away from traditional financial assets and the fiat currencies in which they are priced.
GDP purports to measure economic activity while largely divorcing itself from the quality, profitability, depth, breadth, improvement, advancement, and rationalization of goods and services provided. Stated alternatively, GDP fails to accurately assess the value of goods and services provided or estimate a society’s standard of living. It is a ruler with irregular hash marks and a clock with erratic ticks. Simply put, GDP is designed to advance the Keynesian agenda... no matter what.
Whenever secret or confidential information or documents are leaked to the press, the first question should always be who leaked it and why. That’s often more important than the contents of what has been leaked. And since there’s been a lot of hullabaloo about a leaked document the past two days, here’s a closer look.
There’s an old saying that “numbers don’t lie.” However, when we apply simple common sense to the way we hear numbers spun across the financial media what doesn’t add up is precisely that: the numbers.
Fraud is endemic in the financial system today. We know that the currency, stock, bond, and even commodity markets have ALL been manipulated by Investment Banks or Central Banks.
The costs and consequences of Greece exiting the Eurozone may well dwarf the financial losses triggered by Greece's default.