Janet Yellen

Since that transition in mid-year, oil prices have again persisted rather than rebounded and of late have turned to new “cycle” lows. Yet, neither transportation nor retailers have traded as if further benefits were accruing in terms of that “stimulus.” This is not to say that stock investors have boarded the recession view, only that there is a clear shift in risk perception that has undoubtedly rebalanced and reprioritized risk parameters. If the left side of the chart below was risks being viewed very favorable in terms of the economic fallout of low oil prices, the right is undoubtedly (much) less certain.

• Global stocks rise but oil, Fed keep investors nervous (Reuters)
• Janet Yellen: An orthodox economist for unorthodox times (Reuters)
• House Democrats Said to Be Open to Lifting Oil Export Ban (BBG)
• Don't Count on an Oil Rally If U.S. Crude Export Ban Is Lifted (BBG)
• Germany welcomes 34-state Islamic military alliance against terrorism (Reuters)
• U.S. soldier Bergdahl may face life sentence in court-martial over desertion (Reuters)

Everybody can see Janet Yellen standing naked in that corner - more like a box canyon - and it’s not a pretty sight. But the mundane truth probably is that events have finally caught up with the structural distortions of a financial world running on illusion. To everything there is a season, turn, turn, turn, and economic winter is finally upon us. All the world ‘round, people borrowed too much to buy stuff and now they’re all borrowed out and stuffed up. Welcome to the successor to the global economy: the yard sale economy, with all the previously-bought stuff going back into circulation on its way to the dump.

"While there might be a few areas where I have concerns, such as deteriorating underwriting standards in leveraged lending, farmland prices, a few things, I don't see those excesses having  developed at this point.... Taking into account a broad range of metrics that bear on financial stability, our overall assessment at this point is that threats are moderate."

Over the last two decades the Fed’s interventionism has created artificial booms and real busts. Their dreadful mistakes are “fixed” by currency debasement, lower interest rates, and money printing – creating even worse mistakes. They have successfully gutted the American economy and left a hollowed out shell. The coming collapse will be three pronged as stocks, bonds, and real estate are all simultaneously overvalued. Junk bonds are the canary in a coalmine. High end real estate in NYC has topped out. New and existing homes sales growth has stalled out. Retailers desperately slash prices to maintain sales, while destroying their profits. Corporate profits are falling. The stock market is teetering on the edge.

The real problem for the Fed will be how foolish it will look if it does raise by 25 basis points and is then forced by a slowing economy to lower rates back to zero soon after liftoff. At that point, the markets should finally understand that the Fed is powerless to get out of the stimulus trap it has created. But it looks like the Fed would rather look foolish later when it's forced to cut rates, than look foolish now by not raising them at all. The Fed’s rocket to nowhere will hover above the launch pad for a considerable period of time before ultimately falling back down to Earth.

Elections are misunderstood. On the surface they are contests between zombies and cronies. The zombies (leftists, socialists, Democrats) want lots of little handouts. The cronies (rightists, Wall Streeters, Republicans) want fewer but bigger ones. All the loot comes from the voters – who willingly give up both their money and their liberty believing that, somehow, they are better off for it. But the real winner is the Deep State. It usually controls the candidates... and continues to gain power and resources, no matter which side wins. But the Deep State is not immune to setbacks.

While the world patiently waits for Janet Yellen to raise interest rates this month, the markets have been unable to decide as of yet whether such an event is good or bad thing.

Earlier this morning we got another glimpse of reality behind the smoke-and-mirrors, mainstream-media-sponsored last-pillar-standing lovefest that is US auto sales when the business sales data showed a disheartening tumble in sales in October. So where are all the sales going that automakers report? The answer is simple... (and painful).

The chart below crystalizes why the Fed is stranded in a monetary no man’s land. By the time of next week’s meeting the federal funds rate will have been pinned at about 10 bps, or effectively zero, for 84 straight months. After one pretension, delusion, head fake and forecasting error after another, the denizens of the Eccles Building have painted themselves into the most dangerous monetary corner in history. They have left themselves no alternative except to provoke a riot in the casino - the very outcome that has filled them with fear and dread all these years.

While much of the financial media and Wall Street analysts continue to ignore the risks of a recession, there are some important warning signs that suggest this might be a bad idea. As Charles Gave noted earlier, "We are swimming in an ocean of ignorance... It seems all the painful economics lessons learned over the last 300 years have been forgotten"

The U.S. is now experiencing the next stage of the great reset. Two pillars were put in place on top of an already existing pillar by the central banks in order to maintain a semblance of stability after the 2008 crash.  This faux stability appears to have been necessary in order to allow time for the conditioning of the masses towards greater acceptance of globalist initiatives, to ensure the debt slavery of future generations through the taxation of government generated long term debts, and to allow for internationalists to safely position their own assets.  The three pillars are now being systematically removed by the same central bankers. Why? They are simply ready to carry on with the next stage of the controlled demolition of the American structure as we know it.

Gold is one of the few investments that every investor should have in their portfolio. We are now at the dangerous end-game period of a very bold but very reckless & disappointing experiment with the world's fiat (unbacked) currencies. If this experiment fails -- and we observe it's in the process of failing -- gold will provide one of the best forms of wealth insurance. But like all insurance products, it only works if you buy it before you need to rely on it.

"The world's central bankers will print until deflation gives way," warns Mike Maloney, "they have the arrogance to just think they can control it." They can't. With Janet Yellen on the verge of what many believe will be a policy error in the face of overwhelmingly weak data (and global turmoil once again), it’s never been more important to understand the limits of how much 'actual' control the central banks have over the economy. There’s one force moving our economy they can not influence, and Maloney explains it in this brief clip...