"The enemy isn't conservatism. The enemy isn't liberalism. The enemy is bulls**t." - Lars-Erik Nelson
The central planners are in a state of fear and panic. They are trying everything and anything to create market validation for their policies, watching with trepidation as their favored economic metrics fail to respond to all of their frenzied efforts. They are so far over the tips of their skis right now that there's nothing they won't do. By the time a central bank is behaving as recklessly as Japan, it's time to edge towards the exit, because the chance of a flash fire in the building has grown uncomfortably high. That is, instead of providing comfort, these most recent moves should invoke greater worry for those of us alert enough to see them for what they are: acts of panic.
At the end of 2008, the U.S. Federal Reserve embarked upon a monetary policy so extreme and so reckless that it had to invent a (new) euphemism for what it was doing, since if it simply used the old euphemism, even the puppet-politicians of the U.S. government would have rebelled at this monetary insanity.
It would appear the blood-red pen of veto will be running dry by the time the President's term is up based on Mitch McConnell and John Boehner's WSJ op-ed explaining "now we can get Congress going." As they begin, "Americans have entrusted Republicans with control of both the House and Senate. We are humbled by this opportunity to help struggling middle-class Americans who are clearly frustrated..."
We’ve been keeping the long lost idea of our long lost society alive by squeezing our own children wherever we can, and telling them that if they only work hard enough, they can be whoever they want to be. But they can’t, that notion is also long lost. When you keep home prices artificially high, homeowners don’t suffer as much, even if they bought at insanely high prices, but the suffering is switched to potential buyers, who remain just that, potential, while they live in their mom’s basements for years. A surefire way to kill a society while everyone’s eagerly awaiting the growth that is just around the corner and will forever remain there. Take it from your kids. Take it from somewhere else in the world. And that’s where we’re now passing a barrier: there’s no-one to take it from anymore.
"In announcing that it will boost purchases of government bonds to a record annual pace of $709 billion, the central bank has just added further fuel to the most obvious bond bubble in modern history -- and helped create a fresh one on stocks. Once the laws of finance, and gravity, reassert themselves, Japan's debt market could crash in ways that make the 2008 collapse of Lehman Brothers look like a warm-up. Worse, because Japan's interest-rate environment is so warped, investors won't have the usual warning signs of market distress. Even before Friday's bond-buying move, Japan had lost its last honest tool of price discovery. When a nation that needs 16 digits in yen terms to express its national debt (it reached 1,000,000,000,000,000 yen in August 2013) sees benchmark yields falling, you've entered the financial Twilight Zone. Good luck fairly pricing corporate, asset-backed or mortgage-backed securities."
Willem Middlekoop, author of The Big Reset – The War On Gold And The Financial Endgame, believes the current international monetary system has entered its last term and is up for a reset. Having predicted the collapse of the real estate market in 2006, (while Ben Bernanke didn't), Middlekoop asks (rhetorically) - can the global credit expansion 'experiment' from 2002 – 2008, which Bernanke completely underestimated, be compared to the global QE 'experiment' from 2008 – present? - the answer is worrisome. In the following presentation he shares his thoughts on the future of the global monetary system; and how gold, the US and China are paramount for its outcome.
“Don’t let anybody tell you it’s corporations and businesses create jobs,” Clinton said to a crowd in Boston, reminding everyone of her views on spending from the past, "The money has to go to the federal government because the federal government will spend that money better than the private sector will spend it."
The US government’s debt is getting close to reaching another round number - $18 trillion. It currently stands at more than $17.9 trillion. But what does that really mean? The Social Security Administration just released data for the average yearly salary in the US in fiscal year that just ended. It stands at $44,888.16. The current debt level of over $17.9 trillion would thus take more than 398 million years of working at the average wage to pay off.
Barack Obama and the Federal Reserve are lying to you. The "economic recovery" that we all keep hearing about is mostly just a mirage... For those out there that still believe that we are doing "just fine", here are 19 more facts about the messed up state of the U.S. economy.
Many nations have gone through periods in the past where they've had very high levels of government debt. There are four traditional ways of dealing with that... decades of austerity, defaulting on government debts, inflating away the value of debt by rapidly destroying the value of currency, and government's favorite - "financial repression" - a process that is complex enough that the average voter never understands how it works, thus allowing governments to use this potent but subtle method of taking vast sums of private wealth, year after year, decade after decade, with almost no political consequences.
Most people that discuss the "economic collapse" focus on what is coming in the future. And without a doubt, we are on the verge of some incredibly hard times. But what often gets neglected is the immense permanent damage that has been done to the U.S. economy by the long-term economic collapse that we are already experiencing. But because unprecedented levels of government debt and reckless money printing by the Federal Reserve have bought us a very short window of relative stability, most Americans don't seem too concerned about our long-term problems. They seem to have faith that our "leaders" will be able to find a way to muddle through whatever challenges are ahead. Hopefully the following 12 charts will be a wake up call.
You show me sustainable growth through monetization and I'll take my bat & ball and go home. Until then, you're blowing hot air up my backside.