"Part of my advantage, is that my strength is economic forecasting, but that only works in free markets, when markets are smarter than people. That’s how I started. I watched the stock market, how equities reacted to change in levels of economic activity and I could understand how price signals worked and how to forecast them. Today, all these price signals are compromised and I’m seriously questioning whether I have any competitive advantage left. Ten years ago, if the stock market had done what it has just done now, I could practically guarantee you that growth was going to accelerate. Now, it's a possibility, but I would rather say that the market is rigged and people are chasing these assets, without growth necessarily backing confidence. It's not predicting anything the way it used to and that really makes me reconsider my ability to generate superior returns. If the most important price in the most important economy in the world is being rigged, and everything else is priced off it, what am I supposed to read into other price movements?" - Stanley Druckenmiller
"First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you."
The days of reasonable economic forecasting are over. Today, an economic forecast is more like the analysis of a criminal mind than the evaluation of economic data. The dominating role of government overpowers markets intentionally. In the short-term that will continue. Reactions to Federal Reserve minutes referencing continuation, alteration or cessation of quantitative easing cause stock markets to move by over 100 points. Other markets are affected by government interventions, just not so noticeably. Long term, markets will overpower government. Welfare states can no longer maintain their level of spending, services and welfare. However, they dare not stop lest civil unrest and violence break out. The bind they are in has no solution. Governments around the world are doing whatever is necessary to survive. Lying, stealing and outright confiscation will begin in order to support their bankruptcies. Cyprus was a minor precursor of what is coming.
Establishment politicians from both major political parties are rushing to defend the NSA and condemn whistleblower Edward Snowden. They are attempting to portray Edward Snowden as a "traitor" and the spooks over at the NSA that are snooping on all of us as "heroes". In fact, many of the exact same politicians that once railed against government spying during the Bush years are now staunchly defending it now that Obama is in the White House. But it isn't just Democrats that are acting shamefully. Large numbers of Republican politicians that love to give speeches about "freedom" and "liberty" are attempting to eviscerate the Fourth Amendment to the U.S. Constitution. The government is not supposed to invade our privacy and investigate us unless there is probable cause to do so. Apparently many of our politicians misunderstood when they read the novel 1984 by George Orwell. It wasn't supposed to be an instruction manual.
In America today there is a great rushing storm, a swirling hurricane of clashing opinions and ideologies that defy coherent organization and classification. This social tempest has been triggered by certain revelations among the general public on issues which we in the Liberty Movement have long been aware. The fact that our government is bought and paid for by international corporate interests, the fact that our government has positioned itself to spy on ALL Americans without warrant and without probable cause, the fact that our government is instituting policy initiatives that target common citizens as enemy combatants, the fact that every one of our Constitutional rights is being deliberately torn away; these things are not news to us, but to many once ignorant people, they are a shock to the system. Open corruption on the part of a criminal establishment has a funny way of politicizing everyone, even those people who go out of their way to avoid the bigger picture. In the end, no man or woman gets a pass. Whether you like it or not, one day soon, you will have to choose a side; freedom or tyranny. There is no middle ground.
The New Deal social insurance philosophers thus struck a Faustian bargain... To get government funded pensions and unemployment benefits for the most needy, they eschewed a means test and, instead, agreed to generous wage replacement on a universal basis. To fund the massive cost of these universal benefits they agreed to a regressive payroll tax by disguising it as an insurance premium. Yet the long run results could not have been more perverse. The payroll tax has become an anti-jobs monster, but under the banner of a universal entitlement organized labor tenaciously defends what should be its nemesis. The puzzling thing is that 75 years later - with all the terrible facts fully known - the doctrinaire conviction abides on the Left that social insurance is the New Deal’s crowning achievement. In fact, it is its costliest mistake.
The last time we encountered the name Stephane Richard, CEO of France Telecom Orange, he was deflecting poor iPhone sales on frugal customers. While we don't know if French customers have become less frugal in the past two months, we do know that Mr. Richard has bigger problems on his hands than declining top and bottom lines: such as suddenly being embroiled in the Bernard Tapie corruption scandal that previously focused on Christine Lagarde, and which this morning led to the CEO being held for questioning over his role in a 2008 arbitration process that resulted in a large pay-out to businessman Bernard Tapie, a judicial source said. "Richard was at the time head of cabinet to Christine Lagarde, who was finance minister to conservative former president Nicolas Sarkozy before she became head of the International Monetary Fund."
Emerging markets have tanked but some of the reasons for their underperformance will prove overblown, providing opportunities for long-term investors.
If we are to believe what they said, then this is the year. 2013! It’s going to happen.. The stock-market is ready to crash yet again this year and this time it’s going to be a big one. Let’s take a look at what was said, when, why and by whom.
And Other Stunning Facts I Learned Last Night ...
Here's the challenge the Status Quo monetary and fiscal authorities faced in the 2008 global financial meltdown: how do we maintain the power structure and keep the masses passive while masking the fact that the Status Quo is broken? The solution: sell bonds to fund benefits to the masses, lower interest rates to zero to keep the explosive rise in fiscal deficits affordable, and rapidly inflate new bubbles in assets that painlessly enrich the top 25% of households who then increase their borrowing and spending, i.e. the "wealth effect." The political calculus is simple: the bottom half of households don't vote, don't contribute to political campaigns and don't have enough income to borrow huge sums of money to enrich the banks. They are thus non-entities in the fiscal-monetary project of maintaining the power structure of the Status Quo. All the Status Quo needs to do is borrow enough money to fund social programs that keep the masses passive and silent: food stamps, Section 8 housing vouchers, Medicaid, Medicare, Social Security, SSI permanent disability, unemployment, etc. Unfortunately for the Powers That Be, the cost of placating the rapidly increasing marginalized populace is rising much faster than tax revenues.
There are countless examples of rampant criminality and corruption as well as blatant evidence of a two-tier system of justice in America today. Too many to note or write about, but in this case we want to focus on this concept of “money laundering” in light of the recent shutdown of Liberty Reserve. The crackdown on Liberty Reserve has nothing to do with “money laundering.” It’s about a cartel of “too big to jail” banks and the fraud financial system they operate eliminating any players that try to encroach on their turf. That isn’t capitalism, or socialism and it certainly isn’t anything close to freedom. It is a parasitic, oligarch created feudalistic structure that must be done away with. We often hear people say “we never learn from our mistakes.” Incorrect. People learn from their mistakes when there are consequences to their actions. Of course criminals don’t learn from their mistakes when there are no serious consequences to their crimes.
The Neo-Cons and the Neo-Libs have the same objective, total centralization and the dissolution of U.S. sovereignty. Both parties are merely continuing the perpetual game of good-cop vs. bad-cop, switching roles every decade or so to keep the public confused and dependent on the system rather than enforcing their own solutions. Barack Obama is nothing more than a fulcrum point - a useful piece of leverage meant to push Americans from one fake initiative to the next, or to divide us completely. Our fight is not with Obama, it is with ALL globalists who obstruct our liberty, regardless of what party they are affiliated with. If we allow the debate, and the battle, to be framed around the superficial Obama presidency, then we have allowed ourselves to be co-opted, and any revolutionary action we take afterwards will end exactly like the fabricated Bolshevik rebellion; it won’t mean a damn thing.
One of the problems with QE is that the Fed is forcing people to buy riskier investments than they otherwise would have. The immorality of their actions aside, they create a significant psychological mismatch between assets and their holders. Stocks are in weak hands, insuring one great stampede for the chairs when the music stops.