If you want to get a sense of what’s motivating Donald Trump and Bernie Sanders voters, it’s a desire to take people like Robert Shapiro, remove them from the halls of power, and toss them into a cardboard box on the street. Of course, that won’t be happening any time soon, but that’s what a lot of people want. As we detail below, confirmed recently by Congressman X, Washington is infested by the secretive world of the dark money groups representing mercenary hedge funds in their insatiable quest for more and more money. In many ways, it’s merely a microcosm of America in 2016. A culture in which ethics has become so irrelevant, it isn’t even a nuisance; it simply never factors into the equation.
We have referred to the June 2003 FOMC meeting many times before and we suspect that we will continue to do so long into the future. It was one of those events that should be marked in history, truly relevant to the future developments that became panic and now sustained economic decay. It’s as if the committee members at that time anticipated their current powerlessness – yet did nothing about it. Their preferred course from that moment until August 2007 was relieved ignorance, as Greenspan admitted at the time, " I don’t think we know enough about how the private financial system works under these conditions [sub-1% rates], I don’t believe, that we can construct an effective preemption strategy. Well, we can construct a strategy, but I’m fearful that it would not be very useful."
"My fear is that central banks are now taking this too far through negative interest rates in particular and that they’re going to literally destroy their own banking systems. If they’re actually successful in generating higher inflation, then they’re going to destroy their own bond markets... our government officials, and I will include the Federal Reserve in that, have failed the American people."
Today we look back to the recent past with singleness of purpose. Context and edification for the present economy is what we’re after. We have questions... How come the recovery has been so weak? Why is it that, nearly seven years after the official end of the Great Recession, the economy’s still mired in a soft muddy quagmire? Squinting, focusing, and refocusing, there’s one particular week that rises above all others.
"Money for free! Well not exactly. The Piper that has to be paid will likely be paid for in the form of higher inflation, but that of course is what the central banks claim they want.What they don’t want is to be messed with and to become a government agency by proxy, but that may just be the price they will pay for a civilized society that is quickly becoming less civilized due to robotization. There is a rude end to flying helicopters, but the alternative is an immediate visit to austerity rehab and an extended recession. I suspect politicians and central bankers will choose to fly, instead of die."
The central bank war on savers is rooted in a monumental case of the Big Lie. Here is what a retired worker who managed to save $5,000 per year over a 40 year’s lifetime of toil and sweat in a steel factory now earns in daily interest on a bank CD. To wit, a single cup of cappuccino. Yet the central bankers claim they have absolutely nothing to do with this flaming economic injustice.
If the world’s economies were really out of intensive care, why would ultra-radical monetary policies like helicopter money be increasingly debated at the highest level of governments? Also, how come 70% of Americans believe the US economy is on the wrong course? And why do almost half of US citizens admit they couldn’t come up with $400 to meet an unexpected need? Yes, I know why ask why? And it is what is, and a bunch of other clichés. But this isn’t normal, it isn’t healthy, and - at least in the opinion of this author—it isn’t going to end well.
In Japan, the European Union and Switzerland, where negative nominal interest rates have already been adopted, it was observed that demand for safes and cash increased. At the same time, we learn that negative rates have boosted demand for gold in Japan (sales of gold to Japanese consumers rose to 32.8 metric tonnes in 2015 from 17.9 tonnes a year earlier). According to Takahiro Ito, chief manager at Tanaka Kikinzoku Kogyo K.K.’s store in Tokyo’s Ginza shopping district, “Many customers are wagering that it’s better to turn their savings to gold as a safe asset rather than deposit money at banks that offer low interest rates."
"Not only do the five largest financial institutions in the US have a higher concentration of assets than they did before the financial crisis but it’s the largest concentration ever. So we’ve made the too-big-to-fail-problem worse because we have bigger, more systemically important financial institutions now than we did in 2007 – and nobody seems to know what to do about it... [EU banks] are acting irrationally. They’re not acting that way because they don’t believe it or they don’t understand it. So we’re still all trying to feel around in the dark as to what this means. And that means that the chance of an accident is very high."
James Rickards, economic and monetary expert, joined Bloomberg’s Francine Lacqua on Tuesday to discuss the gold “chart of the decade”, his new book “The New Case for Gold,” why gold is money and why gold is going to $10,000/oz in the coming years.
A new generation of revolutionary central bankers must be called to arms for all of our sake. Their battle cry: We commit to never returning rates to zero or below again, to never let be money be free and forever ensure there is a true cost associated with borrowing. Release the markets to set interest rates now and forever! Will it work? Stranger things have been known to succeed in capitalistic economies with competitive and freely functioning markets.
If nobody is working in one out of every five U.S. families, then how in the world can the unemployment rate be close to 5 percent as the Obama administration keeps insisting? The truth, of course, is that the U.S. economy is in far worse condition than we are being told.
In spite of Ben Bernanke’s assurances to the contrary, it is clear that China still sees gold as money. Along with bolstering their gold holdings, China has reformed its banking system to be friendlier to gold trading.