The Argentina MERVAL stock index is down 16.5% since yesterday's news of the resignation of the last voice of reason among Argentina's policy-makers. As we noted previously, "this is not a good sign" and indicates a worrying escalation in the chances of hyperinflation.. This is the MERVAL's worst 2-day drop in 6 years. What some money-printing gives, too much money-printing takes away...
We would like to be able to commiserate with Ukraine's US-muppet regime, we really would, but when Ukraine's PM Argeny Yatseniuk, or Yats as he is known to Victoria Nuland, almost cried in an interview with Reuters yesterday when he pleaded that "[Russia] wants us to freeze... This is the aim and this is another trump card in Russian hands.... So, except military offense, except military operation against Ukraine, they have another trump card, which is energy". we have just two things to say to him: i) he is absolutely correct, about Russia having the trump card that is - something obvious to everyone with half a brain from the start of the conflict, and ii) perhaps Ukraine should finally pay Gazprom not only for the gas they would like to use in the future, but also the gas they have already used and payment for which is overdue and which the IMF, i.e., the US taxpayer, gave Ukraine explicit money to pay for and instead was embezzled by the people in power.
Google "grocery prices last 12 months" and it's post after post beginning with "Consumer prices rise" or "Rising food prices bite." One person who is happy about this is the New York Times’ Paul Krugman, for instead of being like Europe, that is “clearly in the grip of a deflationary vortex,” America only teeters on the edge of a general price plunge. “And there but for the grace of Bernanke go we,” writes the voice of Grey Lady economics wisdom. However, Mr. Krugman shouldn’t declare defeat to the deflationists just yet. Bankers are learning to say ‘yes’ again, and that means velocity and price increases.
This is so completely ridiculous. But it really crystalizes what’s wrong with the entire financial system.
We’re told to keep our money in banks... that banks are safe. But the objective data tells a completely different story.
Were this extreme policy to be implemented it would be a further and deliberate debasement of fiat currencies. Alan Greenspan’s warning of “fiat money in extremis” becomes more real by the day. Were this silly proposal ever to become policy, it would significantly increase the risk of inflation and stagflation. In a worst case scenario, it will lead to currency collapse and hyperinflation.
"Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly.... Central banks, including the U.S. Federal Reserve, have taken aggressive action, consistently lowering interest rates such that today they hover near zero. They have also pumped trillions of dollars’ worth of new money into the financial system. Yet such policies have only fed a damaging cycle of booms and busts, warping incentives and distorting asset prices, and now economic growth is stagnating while inequality gets worse. It’s well past time, then, for U.S. policymakers -- as well as their counterparts in other developed countries -- to consider a version of Friedman’s helicopter drops. In the short term, such cash transfers could jump-start the economy... The transfers wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them"...
Enter the Golden Dragon ... China is moving closer to positioning itself as the physical gold trading hub of the world and the world’s gold price discovery centre. It is a natural progression for the largest economy in the world and for the world’s largest gold buyer, importer and indeed producer. The Shanghai Gold Exchange (SGE) is launching its yuan denominated international bullion trading exchange next month.
With record rental expenses already forcing millions of Americans to have far less disposable income for everything else once the monthly bill for the roof above one's head is paid, here is a breakdown of 25 selected US metropolitan areas, ranked from most to least expensive, how much it costs to rent a two-bedroom apartment (one can only assume the $1,440 price listed for New York is based on some non-GAAP, magical numbers that exclude reality).
Roughly a month ago, we exposed CYNK Technology Corp. The CYNK bubble was, of course, the result of carefully planned deceit and clever promotion by a handful of people who stood to make a lot of money on the trade. But when you think about it, CYNK’s stock wasn’t really any dumber than owning US Treasuries. In the case of CYNK, it only took about a month for the bubble to inflate and burst. The Treasury bubble, on the other hand, was built on credibility earned over decades; but while previous generations earned the world’s trust, modern day politicians have blown through it. Now all they have left is their snake oil sales pitch. And a mountain of obligations that closed July 2014 at a record high $17.69 trillion.
Following this evening's lengthy finger-pointing lecture from Argentina's Kicillof, Argentina formally defaulted. Shortly thereafter the hoped-for private bank bailout deal also failed leaving the default process likely to take a while. So how has Argentina defaulted three times in the last 28 years? Simply put, the problem is not Judge Griesa’s ruling. The problem is that Argentina had decided to once again prefer deficits and unrestrained government spending to paying its obligations.
The following are six of the most prevalent economic myths that appear time and again in the mainstream media...
When it comes to the apocalypse, Krugman likes to have his apocalyptic cake and eat it too. Krugman says that the recent concern about “debts and deficits” was a “false alarm.” He attempts to paint those who were concerned about the debt crisis as scare mongers. He sarcastically says that “the debt apocalypse has been called off.”
More basic suggestions for those who are seeking shelter from the coming storms of global financial crisis and recession (part 1 here).
One of today’s most common economic fallacies is that the soaring stock market is evidence of economic recovery. Nothing could be further from the truth. The Fed’s balance sheet has grown more than fourfold since 2008 — to $4.3 trillion — and was used to prop up the “too big to fails.” That money had to go somewhere. Paper money promotes the “quick buck” syndrome like narcotics peddling and hookers on the streets. In a paper money society, the social order visibly deteriorates. Fiat promotes an illusory reality where non-substance like financial speculation and gambling replaces the substance of industrial production and long-term value.
Financial markets are complex in normal times. When government is actively supporting them, they only become more so and more dangerous. If today’s financial markets were rated like movies, they would be rated “R” (perhaps, “X”). Whether the “R” stands for risky or restricted is immaterial.