Back in June, the world was speechless when Goldman's head of the ECB, Mario Draghi, stunned the world when he took Bernanke's ZIRP and raised him one better by announcing the ECB would send deposit rates into negative territory, in the process launching the Neutron bomb known as N(egative)IRP and pushing European monetary policy into the "twilight zone", forcing savers to pay (!) for the privilege of keeping the product of their labor in the form of fiat currency instead of invested in a global ponzi scheme built on capital market so broken even the BIS can no longer contain its shocked amazement. Well, the US economy may be "decoupling" (just as it did right before Lehman) and one pundit after another are once again (incorrectly) predicting that the Fed may raise rates, but when it comes to the true "value" of money, US banks have just shown that when it comes to spread between reality and the economic outlook, the schism has never been deeper.
Enter US NIRP.
PBOC Tries To Pop Equity Bubble, Tightens FX & Slashes Collateral/Margin Availability; Yuan Crashes Most Since 2008Submitted by Tyler Durden on 12/08/2014 22:29 -0500
Unlike the Federal Reserve - which openly encourages speculative wealth creation/redistribution and has never seen an equity bubble it didn't believe was contained - the PBOC appears, by its actions tonight, to be concerned that things have got a little overheated in its corporate bond and stock markets as hot money ripped into the nation's capital markets on hints of further easing and QE-lite a few months ago. In a show of force, the PBOC simultaneously fixed CNY significantly stronger (implicit tightening) and enforced considerably stricter collateral rules on short-term loans/repos. With Chinese stocks concentrated is even fewer hands than in the US (and recently fearful of the surge in margin trading), it appears the PBOC is trying to stall the acceleration is as careful manner as possible. The result, as Bloomberg notes, is a major squeeze in CNY (biggest drop since Dec 2008), interest-rate swaps ripped higher along with corporate bond yields, and most Chinese stocks sold off (with two down for every one up) though the latter is stabilizing now.
As investors we are all trapped within a horrifying bubble. We must play the hand we’ve been dealt, however bad it is. But there are now growing signs of end-of-bubble instability. The system does not appear remotely sound. You can be for gold, or you can be for paper, but you cannot possibly be for both. It may soon be time to take a stand. Beware appearances in an unhinged financial system, because they can be dangerously deceptive.
Germans can’t get their gold reserves. Do how did the Dutch get their 122 tonnes of gold?
Is Germany being prevented from holding gold to prevent independent foreign policy action?
Despite the utter exuberance at Friday's payrolls data -which 'everyone' saw as nothing but indicative of escape velocity and utopia in America's near future - the Fed's new multifactor model of the US jobs market shows growth sliding to just 2.9% MoM. This is the almost the slowest growth since Aug 2012.
Precious metals investors (and even precious metals commentators) have a tendency to put the cart before the horse. We familiarize ourselves with the dramatic economic fundamentals which have an enormous impact on the value of precious metals (and the prices for all hard assets). We study the parameters of supply and demand for gold and silver. But we frequently omit learning about the intrinsic properties of these amazing metals.
Fraud generates risk, and risk eventually breaks out in the "safest" parts of the financial plumbing, the ones nobody gives a second thought to because they're "low risk." Using unspeakable powers to generate global fraud is not as sustainable as punters imagine. Those who don't believe in risk can alternatively ponder karma as a guide to the future.
"The highly abnormal is becoming uncomfortably normal... There is something vaguely troubling when the unthinkable becomes routine."
"My Helicopters Are Ready. You Will All Be Trillionaires." Must see chart of gold in German marks from 1918 to 1923. The Fed - "Silently robbing your purchasing power since 1913 ... "
Currently there is probably no other great divide in opinions than the current state of oil and all it entails. Not only do many not remember the early 80’s when U.S. oil producers went haywire, but they seem to have forgotten just how quickly in the sheer speed of panic, bankruptcies, and more that took place in the southern regions of the U.S. and Texas in-particular.
A dispassionate look at the week ahead.
Much has been said about Goldman's control over the most important Federal Reserve of all, that of New York, where the all important Markets Group is located, which does as the name implies, "influences" markets.And while it is very clear by now that nothing will change under the current corrupt and compromised executive, legislative and judicial system, because at the end of the day, Goldman has indirect control over all three branches of government , here is the one anecdote which, in a non banana republic, would be the straw that finally broke the camel's back.
The best option, the only option when faced with a conundrum like Ferguson, is for residents to kick government out of the picture completely. Whatever problems might be encountered during such a transition would be a happy trade over the constant crisis wrought by political “mismanagement” or manipulation. In the end, corrupt government will never go away unless we stop handing our responsibilities over to them — and this includes security. We must stop trying to change the system by following the rules that perpetually benefit the system. If we are ever going to get rid of elitist control, we have to step outside the false paradigm and play our own game by our own rules.
Do you ever feel like you are living in a “Bizarro World”?