• Pivotfarm
    04/18/2014 - 12:44
    Peering in from the outside or through the looking glass at what’s going down on the other side is always a distortion of reality. We sit here in the west looking at the development, the changes and...

Reserve Currency

Tyler Durden's picture

Paul Brodsky: "The Fed Is Holding A Burning Match"





The Fed will have to increase QE (not taper it) because systemic debt is compounding faster than production and interest rates are already zero-bound. Lee Quaintance noted many years ago that the Fed was holding a burning match. This remains true today (only it is a bomb with a short fuse). Thirteen years after the over-levered US equity market collapsed, eleven years following Bernanke’s speech, five years after the over-levered housing bubble burst, and four years into the necessary onset of global Zero Interest Rate Policies and Long-Term Refinancing Operations, global monetary authorities seem to have run out of new outlets for credit. In real economic terms, central bank policies have become ineffective. In other words, the US is now producing as much new debt as goods and services.

 


Tyler Durden's picture

China Slams "Peeping Tom" America: "The Trust Fiasco Of America The Eavesdropper"





"The motivation behind America's extensive eavesdropping is unclear. The explanations the White House has been forced to offer are far from explanatory, and the diorthosis President Barack Obama has promised seems all but skin-deep.  The apparent application of a double standard only reinforces the image of a Janus-faced America. In the sunlight, it preaches; in the dark, it pries. On the offensive, it orates; on the defensive, it equivocates. The wayward practice has now backfired, and the damage is increasing...  Trust is the first and foremost casualty. Common sense dictates that trust is a two-way street: One has to trust in order to be trusted. It is particularly true in friendships and alliances. America obviously failed to follow the simple rule.  If Washington did not knit the worldwide wiretapping web just because it could, then its pillage for information unveils an Uncle Sam too deeply entrenched in suspicion and isolation to treat anyone as a real friend. Ironically enough, the bugging undermines the very thing it is supposed to protect -- national security. As America pins its security on alliances, the tapping tale would sour its relationship with allies -- and thus erode its security bedrock -- more than any terrorist would be capable of."

 


Tyler Durden's picture

Guest Post: Don't Worry – The Government Says That The Inflation You See Is Just Your Imagination





If you believe that there is high inflation in the United States, you are just imagining things.  That is the message that the U.S. government and the Federal Reserve would have us to believe. Of course anyone that shops for groceries or that pays bills regularly knows what a load of nonsense the official inflation rate is.  The U.S. government has changed the way that inflation is calculated numerous times since 1978, and each time it has been changed the goal has been to make inflation appear to be even lower. But if the mainstream news actually reported 'the real' number, everyone would be screaming and yelling about getting inflation under control.  Instead, the super low number that gets put out to the public makes it look like the Federal Reserve has plenty of room to do even more reckless money printing.  It is a giant scam, but most Americans are falling for it.

 


Tyler Durden's picture

Where Is The US Labor Market Heading?





When will the U.S. labor market start to accelerate?  That is the single most critical question for global capital markets, for it speaks directly to both economic growth and Federal Reserve monetary policy.  But, as ConvergEx's Nick Colas notes, just as important, however, is the question "Where do people actually want to work?" Nick's key conclusions: there is no evidence of any faster pace of hiring, and the trend of hiring part time labor over full time is both strong (a 3:1 ratio) and accelerating.

 


Sprout Money's picture

“Hey, whatever happened to inflation?”





While the pile of debt keeps growing and monetary intrusion becomes more drastic by the day, there’s almost no talk of inflation. A growing number of investors ask themselves this question.

 


Tyler Durden's picture

An Open Letter To Russell Brand





Russell Brand's excited exchange with stoic Brit Jeremy Paxman this week is a must-see "exchange of new ideas vs old." Among Brand's clearer moments were "stop voting, stop pretending, wake up. Be in reality now, time to be in reality now. Why vote, we know it's not going to make any difference, we know that already." The excellent discourse has prompted this open letter supporting the comedian.. concluding so legitimately nowadays, with Upton Sinclair's infamous quote "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

 


GoldCore's picture

China's Gold Reserves At Least 2.5 Times Higher Than Reported, ‘De-Americanisation’ Continues





Already, the Chinese have stopped accumulating dollars - preferring safer currencies, infrastructure, hard assets and commodities and of course gold. Even a small amount of Chinese selling  could lead to substantial dollar weakness and much higher bond yields plummeting the U.S. into another recession.

 


Tyler Durden's picture

Guest Post: The Growing Rift With Saudi Arabia Threatens To Severely Damage The Petrodollar





The number one American export is U.S. dollars.  It is paper currency that is backed up by absolutely nothing, but the rest of the world has been using it to trade with one another and so there is tremendous global demand for our dollars.  The linchpin of this system is the petrodollar.  For decades, if you have wanted to buy oil virtually anywhere in the world you have had to do so with U.S. dollars.  But if one of the biggest oil exporters on the planet, such as Saudi Arabia, decided to start accepting other currencies as payment for oil, the petrodollar monopoly would disintegrate very rapidly.  For years, everyone assumed that nothing like that would happen any time soon, but now Saudi officials are warning of a "major shift" in relations with the United States.  In fact, the Saudis are so upset at the Obama administration that "all options" are reportedly "on the table".

 

 


Tyler Durden's picture

While Bernanke May Not Understand Gold, It Seems Gold Certainly Understands Bernanke





"We see upside surprise risks on gold and silver in the years ahead," is how UBS commodity strategy team begins a deep dive into a multi-factor valuation perspective of the precious metals. The key to their expectation, intriguingly, that new regulation will put substantial pressure on banks to deleverage – raising the onus on the Fed to reflate much harder in 2014 than markets are pricing in. In this view UBS commodity team is also more cautious on US macro...

 


Tyler Durden's picture

Guest Post: America Held Hostage On The Edge Of Constant Crisis





America, as a nation and a culture, is now being held hostage and tortured into submission on a grand scale using economic terror by the elitist establishment which dominates BOTH major political parties.  The goal?  To push our society to conform completely with the concepts of globalization, bureaucratic micro-management, and greatly reduced living standards.  We are being conditioned to accept defeat and failure, and like children, to cry out for a parental authority to save us in our state of helplessness and fear, even if that authority was the cause of our fear from the very beginning. With so many near misses culminating so close together, it may be wise to consider what could happen in the the next three months while we wait for debt debate theater part deux.  Like a prisoner in Abu Ghraib, America is trapped, waiting for the next humiliation, the next degradation, or the next session of pain.  Are we merely being acclimated to the idea of incessant crisis?  Are we learning to become apathetic at the edge of the chasm?  Or, are we being driven to madness, mass-madness, by a concert of  elitist interrogators seeking our acquiescence? Again, the central purpose of torture is to acquire consent.  Not just extorted consent, but voluntary consent. The globalist establishment wants us to beg them to save us from the tortures they create.  If we never give them this, they will never win.

 


Tyler Durden's picture

Another One Trillion Dollars ($1,000,000,000,000) In Debt





Just one day after the deal in Congress was reached, the U.S. national debt rose by an astounding 328 billion dollars.  In the blink of an eye we shattered the 17 trillion dollar mark with no end in sight.  We are stealing about $100,000,000 from our children and our grandchildren every single hour of every single day.  This goes on 24 hours a day, month after month, year after year without any interruption. The U.S. national debt is now 37 times larger than it was 40 years ago, and we are on pace to accumulate more new debt under the 8 years of the Obama administration than we did under all of the other presidents in U.S. history combined. So what will happen when the rest of the world decides that they don't need to use our dollars or buy our debt any longer? At that point the consequences of decades of incredibly foolish decisions will result in an avalanche of economic pain that the American people are not prepared for.

 

 


Tyler Durden's picture

Fitch's "Reserve Currency" Loophole: 80-90% Debt/GDP Rule Does Not Apply To You





It would appear that French-owned Fitch, following its rating-watch-negative shift on the US credit rating last week, has got a tap on the shoulder from the powers that be. As Hollande complains about Obama's espionage, Fitch has released a statement explaining how the USA can do whatever it wants and not be downgraded. With only the Chinese ratings agency "able" to openly comment on the creditworthiness of the USA, it is no surprise that Fitch gave itself an "out" on the basis of the USDollar's exorbitant previlege.

 


Tyler Durden's picture

This Lack Of Syrian Aggression Will Not Stand, Man: Saudi's Bandar Bin Sultan Furious At US





That Saudi Arabia has been furious at the US for refusing to be the monarchy's puppet Globocop, and in the last minute declining to bomb Syria following Putin's gambit in which World War III seemed a distinctly possible consequence of John Kerry's hamheaded "YouTube-substantiated" false flag campaign, is no secret. However, while the US has largely forgotten this latest foreign policy debacle and the humiliation it brought upon the Department of State, Saudi Arabia is nowhere close to forgetting. Or forgiving. And this time the anger comes from the one man who truly matters, and whom we dubbed several months ago as the puppetmaster behind the Syrian campaign: the man in charge of Saudi intelligence, Prince Bandar Bin Sultan.

 


Tyler Durden's picture

Peter Schiff Asks "Is This The Green Light For Gold?"





It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments.

 


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