John Williams

The past few years have been a period of relative stability for the U.S. economy.  A lot of people have been lulled into a false sense of security during that time.  These people have become convinced that our problems have been fixed.  But they haven’t been fixed at all.  In fact, our problems are far, far worse than they were just prior to the last financial crisis. Don’t let this next recession take you by surprise.

Banks and insolvent governments desperate for cash likely also dislike safety deposit boxes as they are a means for people to protect and grow wealth and protect themselves from bail-ins and deposit confiscation. A percentage of box holders also store cash and bullion.

It is a centrally-planned "market" and everyone is merely a bystander. Last night, following a dramatic China PMI miss, which as previously reported tumbled to the worst print since early 2014 and is flashing a "hard-landing" warning, the Shanghai Composite first dipped then spiked because all a "hard-landing" means is even more liquidity by the PBOC (which as we suggested a month ago will be the last entrant into the QE party before everyone falls apart). Then, this morning, a surprise beat by the German (and Eurozone) PMI was likewise interpreted by the algos as a catalyst to buy, and at this moment both European stock and US equity futures are their session highs. So, to summarize, for anyone confused: both good and bad data is a green light to buy stocks. In fact, all one needs is a flashing red headline to launch the momentum igniting algos into a buying spasm.

How can the government be telling us that we are nearly at “full employment” when so many people can’t find work? Could it be possible that the government numbers are misleading? It is our contention that the official “unemployment rate” has become so politicized and so manipulated that it is essentially meaningless at this point.

As one wit noted, it appears former White House Press Secretary Jay Carney is moving from one non-profit organization to another. As Politico reports, Carney joins Amazon on Monday as senior vice president for Worldwide Corporate Affairs - reporting directly to Jeff Bezos and topping current veteran PR Chief Paul Misener.

The Tulip Lunacy in the Bond market is just off the charts stupidity at its finest!  The U.S. 2-Year Bond is currently pricing in no rate hike, and in fact, a negative rate of inflation over the next two years.... 

Gold has surged 7.2% already in January, outperforming gold in dollars which is up 4.8%, and building on the 12% gains seen in 2014. Market participants are increasing allocations to gold in order to hedge a ‘Grexit’ and risks posed by euro money printing.

The December FOMC statement revealed a lack of agreement among Fed officials over communication, BofAML explains, as evidenced by the complicated extension of the forward guidance language and the dissents from both sides of the hawk-dove spectrum. While Standard Chartered expects the Minutes to show The Fed in no rush to raise rates, UBS warns the Minutes “could upset market perceptions of what is important to the Fed’s decision-making process."

Every year, David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. "I have not seen a year in which so many risks - some truly existential - piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. It feels like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows..."

When it comes to inflation data, there are two parallel sources: the BLS, and ShadowStats' John Williams, who continues to plough through the underlying "data" using pre-pre-pre-revision protocols, and every month reveals a parallel universe in which something shocking is revealed: the truth. Here is his take on the October "weaker but really stronger than expected" jobs numbers. Here is what really happened.

"... the admissions of financial danger by internationalists, the sharp drop in stocks at the beginning of fall, the reversal of the political theater, and the fact that mainstream investors now recognize the illegitimacy of the markets yet continue with the scam anyway, signals the last gasp of the global economy. I expect increasing market instability from this point on, as well as numerous geopolitical distractions which will be blamed for the fiscal chaos. Needless to say, the coming storm is a deliberately engineered one, meant to achieve very specific goals, including a fearful and panicked populace, easy to manipulate as the system goes off the rails for the last time."

Based on the lessons of history, all empires collapse eventually; thus, the probability that the US empire will collapse can be set at 100% with a great deal of confidence. The question is, When? (Everyone keeps asking that annoying question.)

"I’ll be honest: These speeches get more and more enjoyable as time goes by because the economic outlook keeps getting better and better. Instead of gloom and doom with a scattering of hopeful notes, things are now pretty upbeat, with only a couple of standard economist’s caveats thrown in....  So the message is that things are getting better. We’re on track to end our asset purchases and we’re preparing for the time the economy can sustain an end to accommodation. We’ll want to see improvements in unemployment, wages, and inflation, and we’ll be driven by the data. But all in all, it’s good news—with just a few of those requisite caveats thrown in."

We know low interest rates and QE hasn`t worked, or they wouldn`t have to be re-initiated in the form of additional QE Programs, and we wouldn`t still be having this entire conversation 7 years after ZIRP began.

The head of the San Francisco Federal Reserve Bank on Tuesday said he would be open to another of round asset purchases if inflation trends were to fall significantly short of the U.S. central bank's target. Although he said it would take a big shift in the U.S. economic outlook for the Fed to restart its bond buying, John Williams said the possibility of a new downturn in Europe and other global economic woes pose a risk to the United States. "If we really get a sustained, disinflationary forecast ... then I think moving back to additional asset purchases in a situation like that should be something we should seriously consider," Williams said in an interview with Reuters.