The logic of lowering rates below zero is so boneheaded that only a PhD could believe it. It’s all relative, you see. It’s like standing on a train platform. The train next to you backs up…and you feel you’re moving ahead. Negative interest rates are like backing up. They give borrowers the illusion of forward motion... even if the economy is standing still.
As the crisis develops, our deeply indebted government will act like a giant wounded beast, lashing out in all directions. It will grow more desperate for control. It will grow desperate for money. And just like FDR did in the 1930s, it will confiscate the wealth of private citizens. But Hillary Clinton (or Donald Trump, or whoever wins the election) won’t go after your gold. Nowadays, the gold market is very small compared to the overall economy. Going after gold would be too much work for the government. The government is going to go after YOUR CASH.
Worse than expected is an understatement. Things are not getting better in China as Exports crashed 25.4% YoY (the 3rd largest drop in history), almost double the 14.5% expectation and Imports tumbled 13.8%, the 16th month of YoY decline - the longest ever. Altogether this sent the trade surplus down to $32.6bn (missing expectations of $51bn) to 11-month lows. Stocks are mounting a modest rebound on this terrible data (moar stimulus hopes) but after $1 trillion of new credit in 2 months, is there seriously anyone left who thinks moar will help?
The state most reliant on federal spending is Mississippi where federal spending is equal to 32% of the state's GDP, and the current central banking regime perpetuates the current imbalance between net tax payer states and net tax receiver states by making it more difficult for poorer parts of the country to accumulate wealth and increase productivity.
There were hopes that China would announce a raft of fscal stimulus measures at the much ballyhooed NPC aimed boosting growth and taking some of the pressure off of montary policy. No such luck. The budget deficit came in at just 3%, an expansion from last year's 2.3%, but well below the 4% some analyasts were hoping for.
In patterns, we can often unearth invaluable clues or warnings and then act on our findings ahead of the herd.
The Federal Reserve is a key component of the American Transfer State. Under the guise of “macroeconomic management,” it redistributes vast amounts of wealth on an ongoing basis through inflation. The victims of these transfers are ordinary Americans. The beneficiaries are the government and its elite cronies. It’s all a con, and a cheap one at that. Unfortunately, sometimes the most successful con artists are the ones who keep it simple.
"Let’s be realistic. Those supporting Trump distrust government politicians. They really do not care about his message. I at least would prefer Trump not for any policy, but because any career politician will bring the same line of thinking to the table."
If, and when, a run on physical cash begins, there will be roughly $1 dollar in physical to satisfy $10 dollars in savers' claims, a ratio which drops to 20 cents of "deliverable" cash if the $100 bill is taken out of circulation.
In a world which has long since crossed the monetary twilight zone of negative rates, and which is spiraling ever deeper into NIRP, below we present some quite fascinating observations on debt, NIRP and how the latter leads to the deleveraging of the former, and thus encourages global deflation - something which in retrospect will be (and in many cases already has been) seen as a central bank fatal flaw, and confirmation said central bankers have zero understanding of the process they have unleashed.
The bill for all the fun is yet to be presented in full, but presented it will be.
Global Stocks, Oil Continue Streamrolling Shorts On Last Minute Hopes For G-20 Stimulus AnnouncementSubmitted by Tyler Durden on 02/26/2016 08:00 -0400
With the conclusion of this weekend's G-20 unknown, and many still expecting a major stimulus, the squeeze will likely continue into the close of trading ahead of the weekend when nobody will want to be caught short into what may end up being another global coordinated intervention to prop up markets. “With a lot of policy events coming there is a fair chance of more stimulus plans so the markets can squeeze higher,” said Benno Galliker, a trader at Luzerner Kantonalbank AG. "The big reversal shows that there is some expectation building up into those events."
With the last crash being the almost-terminal Crash of ’08, readers have been warned on many occasions that the Next Crash is scheduled for this year.
When a leading nominee for President gets something exactly right, we should applaud them for it. In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct. Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama. The funny thing is that the Federal Reserve is not even part of the federal government. It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago. It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.
"The property bubble is everything to this economy and the country’s citizens, whether they know it or not, are 'all in'." Those who so to speak 'live inside the bubble' are no longer aware of its dangers. The mentality of Australians is generally well aligned with the country’s great weather – their outlook usually tends to be 'happy-go-lucky' and optimistic; but Australia’s citizens have far greater exposure to the bubble than is immediately obvious.