Purchasing Power

Now Begins The Greatest Heist Since Bernanke Bailed Out Wall Street In September 2008

There is virtually nothing which is on the level in today’s financial markets. According to the Fed’s PR firm, Hilsenramp & Blackstone, one quarter of the $7 trillion in bonds issued by euro zone government are trading at negative yields. And this drastic financial repression prevails across the yield curve, not just on the short end. Yes, the juxtaposition is entirely reasonable that a state drifting toward insolvency and/or ruinous taxation should be able to borrow 10-year money at 0.70%. That is, when the fix is in, the central bank printing press is open to buy, the apparatchiks are terrified and one of history’s greatest monetary charlatans is in charge - the speculators have nothing to do but harvest their haul. So now begins the greatest heist since Bernanke bailed out Wall Street in September 2008.

The Truth About The Monetary Stimulus Illusion

Since its inception in 2008, easy monetary policy has created very few positive effects for the real economy — and has created considerable (and in some cases unforeseen) negative effects as well. The BIS warns of financial bubbles. While economic policymakers should take a closer look at Japan, China, and yes, the United States, when debating the limits of monetary stimulus and the dangerous nature of financial bubbles; sadly, the discussion is happening too late to be anything more than an intellectual exercise.

America's Ultra Luxury Housing Bubble Has Burst: "Deals Have Slowed To A Trickle"

As we further showed, the bulk of foreign demand for New York's most expensive properties, originated in China, Russia and various other oligarch-controlled nations, where the impetus to launder illegally obtained hot money meant an impulse to buy US real estate sight unseen and virtually at any price. And all of it, of course, all cash. No mortgages.  That onslaught of foreign oligarch demand is ending, and with it so is the bubble that luxurious New York real estate found itself in on the back of some $12 trillion in central bank liquidity created out of thin air in the past 6 years. Business Week cites Manhattan real estate agent Lisa Gustin who listed a four-bedroom Tribeca loft for $7.45 million in October, expecting a quick sale. Instead, she cut the price this month by $550,000. “I thought for sure a foreign buyer would come in"... They didn't.

The "Deflationary Vortex": Global Dollar Economy Suffers Biggest Plunge Since Lehman, Down $4 Trillion

One of the macroeconomic observations that has gotten absolutely no mention in recent months is the curious fact that while global economic growth has not imploded in recent quarters, it is because GDP has been represented, as is customary, in local currency terms. Of course, this comes as a time when local currencies (at least those which are not the USD) have been plunging against the greenback on the back of the expectations that the Fed will hike rates some time in the summer or later in 2015. Which also means that in "dollar economy" terms, i.e., converted in USD, things are not nearly as good.  In fact, as the chart below shows, the global dollar economy is not only shrinking fast, but it is doing so at the fastest pace since the Lehman collapse, having lost a whopping $4 trillion, or a whopping 5% drop,  in just the last 6 months! 

Chinese GDP Beats And Misses - Slowest Growth Since 1990's Tiannanmen Square Sanctions Hit

China's broad stock indices were flip-flopping between gains and losses from the open (although securities firms continued to get monkey-hammered on more tightening by regulators) heading into the avalanche of data that hit at 2100ET. GDP growth - which was estimated at sub-7% based on real-time hard-date - was released/leaked 10mins early - rising 7.3% YoY in Q4 (just beating expectations of a 7.2% rise) but grew only 1.5% QoQ (missing the 1.7% expectation). Then came Retail Sales - beating by the most since May 2014 with a 11.9% YoY gain (against 11.7% expectations). Industrial Production grew at 7.9% YoY (beating expectations of 7.4% by the most since July 2013). Of course the fact that Chinese GDP growth of 7.4% YoY was the weakest since 1990 was entirely ignored as the immediate reaction was Yuan and Chinese equity strength.

Ron Paul: If The Fed Has Nothing To Hide, It Has Nothing To Fear

Since the creation of the Federal Reserve in 1913, the dollar has lost over 97 percent of its purchasing power, the US economy has been subjected to a series of painful Federal Reserve-created recessions and depressions, and government has grown to dangerous levels thanks to the Fed’s policy of monetizing the debt. Yet the Federal Reserve still operates under a congressionally-created shroud of secrecy. No wonder almost 75 percent of the American public supports legislation to audit the Federal Reserve.

Peter Schiff: Swiss Surrender Wins Currency War

By ending its three year currency peg to the weakening euro Switzerland has become the first major economy to surrender in the international currency war, and in so doing has given a long-delayed victory to the Swiss people. Contrary to the indignant reaction by the media and financial establishment, the decision is not a disaster for Switzerland, but may be looked at in the future as the first significant counter-attack against our current global system of monetary insanity.

The Achilles Heel Of The Global Status Quo: Deflation

That the global Status Quo is terrified of deflation is the background of every policy decision and official PR sound-bite. The reason behind this unremitting terror: deflation is the Achilles Heel of the global Status Quo. Rather than being the Monster Under the Bed in central bank nightmares, deflation is the natural result of a competitive economy experiencing productivity gains.

Price Discovery And Emerging Markets

... things like a 50%+ drop in oil prices happen. Which at some point will lead more people to wonder what the real numbers are. For emerging nations, those numbers will not be pretty for 2015. They’re going to feel like they’re being thrown right back into the Stone Age. And they’re not going to like that one bit, and look for ways to express their frustration. Volatility is not just on the rise in the world of finance. It also is in the real world that finance fails to reflect. At some point, the two will meet again, and Wall Street will mirror Main Street. It will make neither any happier. But it’ll be honest.

Money, Gold And Liberty In 2015 & Beyond

If we review the events of 2014, it seems the situation has intensified: governments are still overwhelmed with debt, our fiat money system is unsupported, our central banks insist on accumulating debt and making money valueless. Will someone realize we have to pull the plug? And when we do, because it will happen whether we want it or not, how can we hedge against the damage that we will all be exposed to? Owning physical precious metals stored outside the banking system is a proven and essential form of monetary insurance against the uncertainties and negative surprises we see in our world today.

Europe's Monetary Madness

If you want to know where the global experiment in massive money printing is heading - just take a look at the monetary madhouse in Europe. And that particular phrase has full resonance once again as it becomes more apparent by the hour that Europe and the Euro were not fixed at all. Indeed, beneath the surface of Draghi’s “whatever it takes” time out, the crisis has been metastasizing into ever more virulent deformations.

2015 - Life In The Breakdown Lane

“Don’t look back - something might be gaining on you,” Satchel Paige famously warned. For connoisseurs of civilizational collapse, 2014 was merely annoying, a continued pile-up of over-investments in complexity with mounting diminishing returns, metastasizing fragility, and no satisfying resolution. So we enter 2015 with greater tensions than ever before and therefore the likelihood that the inevitable breakdown will release more destructive energy and be that much harder to recover from.