Quantitative Easing

What is the real story of energy and the economy? We hear two predominant energy stories. One is the story economists tell: The economy can grow forever; energy shortages will have no impact on the economy. We can simply substitute other forms of energy, or do without. Another version of the energy and the economy story is the view of many who believe in the “Peak Oil” theory. According to this view, oil supply can decrease with only a minor impact on the economy. The economy will continue along as before, except with higher prices. These higher prices encourage the production of alternatives, such wind and solar. At this point, it is not just peak oilers who endorse this view, but many others as well. In our view, the real story of energy and the economy is much less favorable than either of these views.

Stanley Druckenmiller, the man who achieved the impossible 30%+ annualized returns during more than 30-years period active trading career just gave an interview and shared his market views.

Princeton University and former vice chairman of the Federal Reserve Alan Blinder unleashes his self-serving smorgasbord of Fed apologism in today's WSJ Op-Ed. The Fed should be patient-er for longer, he explains; and as far as the "loudly and frequently worried 'impatience crowd'," Blinder states, fears of policy "causing financial-market 'distortions' and bubbles might burst, causing untold damage to our economy," can apparently be ignored because, as he explains "none of the hypothesized financial hazards have surfaced." So - because we haven't crashed yet... policy is right - "This is a time to be patient."

"The policy actions that cause financial repression entail a number of unintended consequences. These include potential asset price bubbles, convergence in asset allocation strategies of otherwise heterogeneous financial market participants and an increase in economic inequality. With regards to the latter, the impact of foregone interest income for households and long-term investors is substantial. At the same time, the equity rally has predominantly benefited society’s wealthiest." The hit to US savers: nearly a half trillion.

The implosion of America serves a very particular purpose. It is not a product of blind coincidence, fate, political stupidity or corporate greed. It is an engineered event meant to clear the way for an even more sinister economic environment designed to establish a final economic empire with the purpose of permanently enslaving us all.

Who’s dumb enough to buy this stuff—10-year debt at negative yields and 100-year debt in a doomed currency?  Institutional investors, of course—large pension funds and the like. You might look at news like that and think, well, that’s crazy, I’d never do that. But the fact is, it’s being done with YOUR MONEY. Just like Winston Churchill commented that it’s false to characterize the fighting at places like the Somme, Verdun etc. in WWI as battles, when they were actually more like prolonged sieges, what’s happening in the financial world today is similar. The financial world today is the same. Billion dollar stimulus packages. Quantitative Easing 1, 2, 3… Negative interest rates. Negative long-term debt yields. Cash withdrawal and transaction controls. Higher taxes. Capital controls...

Massive misallocations of capital stare at us like wild caged animals through the bars of a cage in the zoo!

To the 99%: Choose your poison: death or unemployment.

"The politicians are put there to give you the idea that you have freedom of choice. You don’t. . . . You have owners." - George Carlin, The American Dream

According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America’s political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites.

Yesterday it was only the US that got the full benefit of the market-wide stop hunt that sent the US market soaring on its biggest opening ramp in 2015 following the worst payroll data since 2013, because Europe was closed for Easter Monday. Which means today it was Europe's turn to celebrate atrocious US data (yes, yes, snow - because somehow tremendous January and February jobs data was not impacted by snow), and in the first European trading session of the week, equities have started off on the front-foot.

Stock-market crashes saw the light of day more and more as the world became industrialized. The 19th century saw a rapid increase in their numbers.

The USA set the tone for 21st century magical finance, in which “wealth” was “created” by digital accounting fraud. The effects at home are visible on our landscape of suburban hyperwaste and decrepitating older towns and cities.

"This is not going to be a 1921-style two-year recession that we bounce back from after a little bit of pain and unpleasantness. After a 50-year global economic boon involving what is now a $59 trillion expansion of credit in 50 years, this isn’t going to be a one or two-year hard recession. This is going to be a multi-decade global depression and I’m not sure that anyone alive today would live long enough to see the recovery."

There’s no getting away from it. Banks create money out of nothing when they extend loans and then charge borrowers interest on this newly created capital. The result is an ongoing multi-billion pound/ dollar subsidy breaking the basic rules of capitalism. Galbraith was right. Governments should be more pragmatic. Politicians should stop hiding behind the skirts of ‘the market’ and make some judgement calls. As many have said, we need banking but we don’t need banks, at least not banks like this.