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It is important to keep in mind that the dollar’s attacks on gold always end the same way – in a painful knockout for the dollar. There have been no exceptions to this rule throughout monetary history, nor will there be this time. Hence the well-known market rule: “Any maximum of the gold price is not the last one.” It would be naive to believe that this golden rule is unknown to that grandmaster of patience, Vladimir Putin, and to Xi Jinping. By systematically increasing their gold reserves, Russia and China are relentlessly moving forward to strip the US dollar of its status as a global reserve currency. America’s standard military solution won’t work in this situation.

Greenspan’s phony disinflation success led to the Fed’s embrace of fully mobilized and massively intrusive monetary policy in the guise of the Great Moderation and the wealth effects theory of financial asset levitation. In due course, Greenspan’s self-aggrandizing but purely experimental forays of massive central bank intrusion in the financial markets were supplanted by the hard-core Keynesian model of Bernanke and Yellen. Alas, they operated under the grand illusion that a domestic wage and price spiral would tell them when the domestic GDP bathtub was filled to the full employment brim, and therefore when to lift their foot from the monetary accelerator. It never happened, and they never did. The era of Lite Touch monetary policy was by now ancient history.

U.S. stock investors may be complacent regarding the ability of the stock market to withstand higher interest rates. Their confidence may come from the fact that, historically, markets have not peaked until 12-24 months after the Fed begins to tighten. This assumes the tightening cycle begins with the first official rate hike. But if it really began with the increase in the Shadow Rate, then a December rate hike will already be 19 months into the tightening cycle! Plus, given how overvalued stocks may currently be, and the amount of corporate debt accumulated to finance share buybacks, this bull market may be far more vulnerable than most to higher interest rates.

Trump, for all his contradictions, gives voice to the “isolationist” populism that Rubio and his neocon confederates despise, and which is implanted so deeply in the American consciousness. Why us? Why are we paying everybody’s bills? Why are we fighting everybody else’s wars? It’s a bad deal! This is why the neocons hate Trump’s guts even more than they hate Paul.

The world of Bubble Finance economies created by the Fed and other central banks is fundamentally different than that prevailing under the “Lite Touch” monetary policies which preceded the Greenspan era. The problem today is that the PhDs running the Fed have an economic model which is a relic of the Lite Touch era. It is not only utterly irrelevant in today’s casino driven system, but is actually tantamount to a blindfold. It causes them to look at a dashboard full of lagging indicators like jobs and GDP components, while ignoring the explosive leading indicators starring them in the face on CNBC. The clueless inhabitants of the Eccles Building do not recognize that they have created a world in which Wall Street supersedes main street.

In the latest attempt by Washington to prove that the US isn't entirely useless in the fight against terrorism, The Pentagon cliams an MQ-9 reaper drone strike likely killed "Jihadi John," the Kuwaiti-born Brit who became the early face of ISIS after appearing in a series of beheading videos depicting the death of Westerners. 

On the heels of Washington's move to send a guided missile destroyer to The South China Sea to counter Chinese "aggression," the US reportedly flew two B-52 strategic bombers "near" Beijing's man-made islands last weekend. There are competing accounts as to what took place, but this certainly looks like the latest escalation in an increasingly dangerous game of chicken.

The incentive structure throughout government, Wall Street, and big business generally is that “crime pays,” which is exactly why we’re seeing more and more of it. It will only get worse, until we grow up as a culture and demand accountability.

America’s next president will inherit more than a bitterly divided nation teetering on the brink of financial catastrophe when he or she assumes office. He will also inherit a shadow government, one that is fully operational and staffed by unelected officials who are, in essence, running the country. To be precise, however, the future president will actually inherit not one but two shadow governments.

"The Department disagrees with the Fifth Circuit’s adverse ruling and intends to seek further review from the Supreme Court of the United States."

Free speech is not something that people would normally see as a realm of economics, but in many ways, an economic understanding of the support and opposition to free speech can shed a lot of light on what’s happening now in the West.

"Overnight if we were to eliminate tariffs on imports, we would likely see the dairy sector in Canada, and perhaps the poultry and egg sectors, collapse overnight."

20...!

"Defeated isn’t the right word. The right word is annihilated.”

"I am thinking that you are going to see something out of Congress, because we, as Americans, are embarrassed by this – this is an embarrassing situation. Obama is embarrassed, the State Department sounded quite embarrassed when they briefed Congress. I think we are looking at somebody taking some action."