Fail

The Fed and other Central Banks not only don’t have a clue how to fix the problem, but that they actually have almost no incentive to do so. 

Today, the last missing piece finally fell into place, after Domenico Scala, the independent chairman of FIFA's audit and compliance committee, told a Swiss newspaper that Russia and Qatar could be stripped of their World Cup hosting rights if evidence emerges of bribery in the bidding process. "If evidence should emerge that the awards to Qatar and Russia only came about thanks to bought votes, then the awards could be invalidated," Scala told SonntagsZeitung in an interview published on Sunday. "This evidence has not yet been brought forth."  It shortly will be.

Our current money system began in 1971. It survived consumer price inflation of almost 14% a year in 1980. But Paul Volcker was already on the job, raising interest rates to bring inflation under control. And it survived the “credit crunch” of 2008-09. Ben Bernanke dropped the price of credit to almost zero, by slashing short-term interest rates and buying trillions of dollars of government bonds. But the next crisis could be very different…

Should a person or group that has never experienced what is known by all as “real life” while simultaneously being seen by many legal standards as not having the full credentials to be recognized as an “adult” have the ability to vote directly for, or vote for candidates responsible in the setting of the nations wage laws, tax laws, business law, national debt, business tax structures, business mandates, international trade policies, monetary policy, or most importantly – whether to send their brethren off to war where people die for real – not in some video game or movie?

If you think the corporate-fascist state is overbearing and oppressive now, you ain’t seen nothing yet.

Memo to the Fed and its media tool Hilsenrath: we're not here to further enrich your already obscenely rich banker and corporate cronies by buying overpriced goods and services we don't need. Our job is not to spend every cent we earn on interest to banks and mostly-garbage corporate goods and services. Our job is to limit the amount we squander on interest and needless spending. Our job is to build the financial security of our families by saving capital and prudently investing it in assets we control (as opposed to letting Wall Street control our assets parked in equity and bond funds).

Central bankers have promised ad nauseum to keep rates low for long periods of time. And they have delivered. Their claim is that this helps the economy recover, but that is just a silly idea. What it does do is help create the illusion of a recovering economy. What we have is the financial system posing as the economy. And a vast majority of people falling for that sleight of hand. Now the central bankers come face to face with Hyman Minsky’s credo that ‘Stability Breeds Instability’. Ultra low rates (ZIRP) are not a natural phenomenon, and that must of necessity mean that they distort economies in ways that are inherently unpredictable. For central bankers, investors, politicians, everyone. That is the essence of what is being consistently denied, all the time.

This would suggest that the bull market in stocks is ending. It’s quite possible that a significant top, and possibly THE top is in for stocks.

"Central bank distortions have forced investors into positions they would not have held otherwise, and forced them to be the ‘same way round’ to a much greater extent than previously... unless fundamentals move so as to justify current valuations, when central banks move towards the exit, investors will too.... The way out may not prove so easy; indeed, we are not sure there is any way out at all."

This same process has likely begun for the markets again… but this time it will be global in nature as the bubble in question is not just in stocks but in bonds, commodities, real estate… indeed in the very Central Banks themselves.

Our general rule of thumb when it comes to legislation is that the more high-sounding the name, the more insidious the law.

Exhibit A: the just-passed USA FREEDOM Act.

With The FBI now reportedly investigating the award of The Soccer World Cup to Qatar and Russia, it appears, as Mises' Lew Rockwell exclaimed, "FIFA has got to change its name, it’s going to have to take out the “I” and put in an “A” for American." This sudden act of imperialism by The US, putting itself in charge of world soccer, as Paul Craig Roberts notes, it "is another Washington-British scam against Russia," adding "law is a weapon that Washington uses to achieve its agenda." What happens next? As we predicted a week ago - following some dramatic procedural changes, Russia loses the hosting of the 2018 World Cup.

Ali and Frazier, Laurel and Hardy, Mayweather and Pacquiao, Liesman and Santelli, and now Schiff and Maloney. Peter and Mike join clash of the titan-like to discuss their investment strategies and expose the charts the government doesn't want you to seeas "people like Bernanke are taken seriously still and the people that did predict [the crisis] are dismissed as lunatics half the time." The wide-reaching conversation covers everything from gold and stocks to The Fed and The Dollar - Bernanke "took the coward’s way out because all he did was exacerbate the problems to postpone the day of reckoning." The air is coming out of the bubble, they warn, "Bernanke and Greenspan have absolutely destroyed America. People don’t realize what is coming..."

Despite all the reassurances by various leaders that any Grexit or Greek bankruptcy would be 'contained', Sigmar Gabriel - vice-chancellor and economic minister of Germany's SPD party - unleashed some uncomfortable truthiness yesterday. With Greek stocks up almost 5% today as hope springs eternal, Gabriel warned of nothing less than “gigantic consequences” for Europe in case of a Greek bankruptcy.