Economists keep claiming economic recovery fulfilled, and yet it is found nowhere other than the BLS... and it is certainly not the view of funding and credit markets. In answering why economists and policymakers would throw out the vast and growing volume of especially market-based contradictions to their preferred labor view, we only have to note that this is an existential question for them.
"The preservation of an insolvent currency system requires that the owners of currency have no way to protect it..."
In the absence of the gold standard, there is no way to prevent confiscation of savings through inflation.
- Alan Greenspan (1966)
Charlie Munger On Trump As President: "Anyone Who Makes Money Running A Casino Isn't Morally Qualified"Submitted by Tyler Durden on 02/10/2016 15:29 -0500
Earlier today Munger, the vice chairman at Berkshire Hathaway Inc., dismissed Republican Donald Trump’s qualifications to be president, during the annual meeting of his Daily Journal Corp. As reported by Bloomberg, Munger, 92, responded to a question whether a person who couldn’t make money in the gaming industry would be a good fit for the top office in the U.S. “Well, he did make money for quite a while,” Munger said. “My attitude is that anybody who makes money running a casino is not morally qualified.”
What we do know is that the eurodollar system is failing and we know how it is failing. From negative swap spreads to the shrunken, depressed money and credit curves, they all spell out the death of the current standard. The money supply, for lack of a more appropriate term in the “dollar’s” universe, is in the long run converging with the shriveled economic baseline. The immediate problem for our current circumstances is that we don’t yet have any idea what that foundation might look like even now- how far is down.
"The Fed doesn't have a clue!" - We allege that not only because the Fed appears to admit as much, but also because our own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower - think what happened in 2000. To understand what's unfolding we need to understand how the Fed is looking at the markets, and how the markets are looking at the Fed.
Many readers would consider this a simple question and perhaps even an obsolete one.
Who really needs a gold standard? We all do, immediately.
When asked that question last year at the New Orleans Investment Conference Greenspan had two words for the interviewer.
Ten years ago this week, Alan Greenspan left his post as head of the US Federal Reserve, facing disgrace among hard money advocates, which largely persists to this day. However gold investors can learn an important lesson from how little influence Greenspan, one of the gold standard’s most eloquent backers, had during his 18-year tenure.
"We learned one thing yesterday: the U.S. Federal Reserve is in the same position as the rest of us when it comes to forecasting the future path of economic growth. Nobody really “Knows” anything right now. Now, there’s enough doubt for everyone: markets, central banks, consumers, governments. Everyone. The best thing we can say about that: if markets accept that the Fed is no better informed than they are, maybe investors will devote more time to stock fundamentals and intrinsic value analysis."
The US has been in a cycle of bubbles, busts, and crashes since at least 1995, and more likely since Alan Greenspan became the Chairman of the Federal Reserve in August, 1987. It has become a machine for transferring income, wealth, ownership, and power to the very top. This is not 'the new normal.' This is financial corruption and the erosion of systemic integrity.
The global economy has had its artificial boom and CapEx frenzy already and years of deflationary liquidation and correction lie ahead. Money printing has failed. Any effort by the central banks to double down on another $20 trillion of bond purchases would blow the world’s financial casinos sky high. Contemporary central bankers function like a team of monetary wranglers, herding the retail cattle toward the asset gathers. At the end of the day, the asset gathers will profoundly regret what they are clamoring for.
“Future Economic Historians” Will Probably Call the Period That Began In 2007 “the L-O-N-G-E-S-T DEPRESSION”Submitted by George Washington on 01/11/2016 16:18 -0500
The Real Economy Is Depressed-er
Having correctly foreseen in September that "China's devaluations are not over yet" it appears Nomura's infamous 'bear' Bob Janjuah has also nailed The Fed's subsequent actions (hiking rates into a fundamentally weakening economy in a desperate bid to "convince markets that strong growth and inflation are on their way back"). In light of this, his latest note today should be worrisome to many as he warns the S&P 500 will trade down around 20% to 25% from current levels in H1, down to the 1500s and for dip-buyers, it's over: "I now feel even more certain that debt-driven asset bubble implosions cannot merely be 'fixed' with even more debt and another round of central bank-driven asset bubbles."