Reality

The Fed is now - for the first time in adult memory for half the world’s traders and money managers - tightening rather than loosening monetary conditions. A quick look at financial history is all it takes to lead anyone with leveraged money at risk to lighten up. Equally important - and vastly more strange when you think about it - this tightening comes at a time when major parts of the global economy are either grinding to a halt or imploding.

"My minions in the Federal Reserve - such loyal servants! - continue feeding an orgy of leverage and debt, spreading ruination under the false guise of prosperity. What a delicious irony, that the fools doomed to eternal damnation in my Empire believe themselves prosperous as they absorb the poison of exponentially rising leverage and debt."

Al-Qaeda inspired terrorism is a threat to the Western countries but the Islamic countries are encountering a much bigger threat of inter-sectarian conflict. For centuries the Sunni and Shi’a Muslims have coexisted in relative peace throughout the Islamic World but now certain vested interests are deliberately stoking the fire of inter-sectarian strife to distract attention away from the Home Front: that is, the popular movements for democracy and enfranchisement in the Arab World.

In 13 succinct words, Donald Trump summed up reality in American politics...

What happens the next time global GDP takes a nosedive when Central Banks have already used up all of their ammunition?

One would think that the Criminals, themselves, would not have the audacity to use the same Script (with just minor plot variations) every eight years. But here we go, again.

Perhaps the first step in rectifying our situation is to begin to look at the world not as it could be, but how it is. To see things for what they are, to discard the falsehoods, no matter how pleasant they may seem in order to embrace the truth regardless of how painful it may be. And that’s not a theory, that’s a reality.

The Fed pricked the financial bubblethis week as expected. Janet Yellen’s press conference couldn’t have been more perfect as it confirmed that the money printers have come to a stark dead end. The fact is, the global economy is deflating rapidly and the U.S. is sliding into recession. But our Fed chairman is clueless about what’s happening. She and her posse of money printers are going to get bushwhacked by reality in the year ahead.

This was not supposed to happen. Since The Fed raised rates the temporary (one day) stability in high-yield bonds has been obliterated. Across all sectors, HY bonds are being sold; the HY bond ETF is tumbling back to recent lows; and Energy spreads have surged to record highs. In a nutshell, it's not over yet!

Yellen and her cohort have no clue, however, that all of their massive money printing never really left the canyons of Wall Street, but instead inflated the mother of all financial bubbles. So they are fixing to blow-up the joint for the third time this century. That was plain as day when our Keynesian school marm insisted that the Third Avenue credit fund failure this past week was a one-off event - a lone rotten apple in the barrel. Now that is the ultimate in cluelessness.

Despite these economic dynamics that are automatic in any legitimate market, there has been no price discovery in the silver market for three decades.

It is widely assumed that the gold price must decline when the Federal Reserve is hiking interest rates. It seems logical enough: gold has no yield, so if competing investment assets such as bonds or savings deposits do offer a yield, gold will presumably be exchanged for those. There is only a slight problem with this idea. The simple assumption “Fed rate hikes equal a falling gold price” is not supported by even a shred of empirical evidence.

Please meet the “worst economic forecasters” ever. And while the mainstream media quickly laps up the optimistic outlook of the Fed, you might want to consider their own record of forecasts when making long-term investment bets. Based on statistical history combined with the current underpinnings in the market, the outlook really isn’t as bright as Ms. Yellen suggests.

"Once again I find myself shaking my head at the wasteful spending in DC and a flawed process that drops thousands of pages of text on us with 48 hours to “read” and understand... The fact that extremist environmental groups are pleased and that Obama hasn't threatened a veto tells you everything you need to know about this fundamentally-flawed bill."