The Italian Job: How Borrowing And Printing Lead To An Economic Dead End

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The Italian Job: How Borrowing And Printing Lead To An Economic Dead End (David Stockman’s Contra Corner, Aug 21, 2014):

Earlier this week Bloomberg published a devastating chart showing real hourly wage growth for the first 60 months of every cycle going back to 1949.  The 11 cycle average gain was 9% and the largest was 19% a half century back.

Fast forward to the 60 months of ZIRP and QE since the Great Recession officially ended in June 2009, however, and you get a drastically different picture: Real hourly wages have risen by just 0.5%, and in the great scheme of things that’s a rounding error.

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Surely the above chart is also flat-out proof that massive money printing doesn’t work. After all, reflating wages, jobs and incomes is what the monetary politburo claims it’s all about. Indeed, the Fed has insouciantly cast a blind eye to the massive bubbles building everywhere in the financial system, and has kept money market rates relentlessly at zero for six years running on the grounds that it is not yet done “stimulating” the labor market.

So why does this abysmally failed and dangerous experiment continue unabated—as Yellen will undoubtedly confirm at Jackson Hole?  Self-evidently, it is irresistibly convenient to both Wall Street and Washington. The former gorges on a massive diet of carry trade gambling windfalls thanks to ZIRP and the Greenspan/Bernanke/Yellen “put”; and the latter gets a fiscal get-out-of-jail-free card owing to the Fed’s massive repression of interest rates. Indeed, with the public debt now topping $17.7 trillion, the implicit (and fraudulent) debt service relief from current ultra-low interest rates amounts to upwards of $500 billion per year.

Read moreThe Italian Job: How Borrowing And Printing Lead To An Economic Dead End

When Asked If The U.S. Is A Capitalist Democracy Or Oligarchy, Janet Yellen Can’t Answer … (Video)

When Asked if the U.S. is a Capitalist Democracy or Oligarchy, Janet Yellen Can’t Answer… (Liberty Blitzkrieg, May 8, 2014):

During yesterday’s Senate hearings, Janet Yellen was asked by Senator Bernie Sanders if the U.S. was a capitalist democracy or has morphed into an oligarchy. While readers of this site already know the answer to this question, which was recently proved empirically by a Princeton and Northwestern academic study, it was still stunning to note her unwillingness to answer the question.

I will give her some credit for not flat out lying about it. She inherently understands that the U.S. is a corrupt, shameful oligarchy, but as head of the institution most responsible for this transformation she simply cannot tell the truth. It is incredible that things have fallen so far that a U.S. Senator felt compelled to ask such a question, and even worse that such a powerful official couldn’t vehemently and decisively deny the claim.

Where I take exception with Sanders, is that he appears to live under some strange sort of hypnosis that makes him think only Republican oligarchs are problematic. Of course no sane person should draw any serious distinction between establishment Democrats or Republicans. Furthermore, he also makes the mistake of focusing on the 1%, when the real problem resides in a far smaller  0.01%, which I described in my post: Where Does the Real Problem Reside? Two Charts Showing the 0.01% vs. the 1%.

See for yourself:

David Einhorn ‘I Asked Bernanke Questions, And The Answers Were Frightening’

David Einhorn “I Asked Bernanke Questions, And The Answers Were Frightening” (ZeroHedge, May 6, 2014):

Ben Bernanke may be gone from the helm of the world’s most centrally planned economy, but his ample cluelessness remains. David Einhorn, president of Greenlight Capital, better known for comparing QE to jelly donuts and who recently confirmed what we have been saying for a long time that the second dotcom bubble is here, spoke with Bloomberg TV covering a wide range of topics, but what caught our attention was his synopsis of a private dinner he had with Chairsatan-emeritus Ben Bernanke, on March 26.

What he found, in his own words, is disturbing.

Read moreDavid Einhorn ‘I Asked Bernanke Questions, And The Answers Were Frightening’

Fed’s Fisher Admits Stocks Are At ‘Eye-Popping Levels’

Fed’s Fisher Admits Stocks Are At “Eye-Popping Levels” /ZeroHedge, March 6, 2014):

While Janet Yellen fell back on the ubiquitous central banker statement that she “would do all that [she] can” it was Dallas Fed’s Richard Fisher who raised the most eyebrows yesterday. In a speech in Mexico City, the central banker said he was concerned about “eye-popping levels” of some stock market metrics warning that the Fed must monitor the signs carefully to ensure bubbles were not forming. While other Fed members have paid lip-service to bubbles, Fisher explicitly discussed stocks in the context of the dot-com boom of the late ’90s warning of “the ghost of ‘irrational exuberance'” and worried about corporate bonds too.

Via Fox,

In his speech in Mexico City, Fisher said some indicators like the price-to-projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP, are at levels not seen since the dot-com boom of the late 1990s.

Read moreFed’s Fisher Admits Stocks Are At ‘Eye-Popping Levels’

No Janet Yellen, The Economy Is NOT ‘Getting Better’

No Janet Yellen, The Economy Is NOT “Getting Better” (Economic Collapse, Feb 11, 2014):

On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that “the economic recovery gained greater traction in the second half of last year” and that “substantial progress has been made in restoring the economy to health”.  This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: “Yellen: Economy is improving at moderate pace“.  Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them.  But it isn’t the truth.  As you will see below, there are all sorts of signs that the economy is taking a turn for the worse.  And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our “leaders” when they told us that everything would be just fine.

It is amazing how deceived people can be.  Just consider the case of 56-year-old Brian Perry.  He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success.  But he says that he is “optimistic” that he will get another job soon because he believes that the economy is recovering:

Read moreNo Janet Yellen, The Economy Is NOT ‘Getting Better’

Gerald Celente & Alex Jones – At Least 20 Dead Bankers! (Video)


YouTube Added: Feb 12, 2014

Description:

Trends Forecaster: Proof the Markets are Rigged. At least five top level bankers have “fallen” to their deaths from high-rises in just the last two weeks. Are the worlds Stock Markets, Currency Exchanges and Interest Rates all rigged? Gerald Celente brings the facts from the news to the table.

May The Farce Be With You – Janet Yellen Compares Bernanke To Obi-Wan Kenobi

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May The Farce Be With You – Janet Yellen Compares Bernanke to Obi-Wan Kenobi (Liberty Blitzkrieg, Jan 31, 2014):

Just in case you had any lingering doubt about how hopelessly screwed the world’s monetary and financial system really is, all you have to do is learn that in a series of ceremonies (because that is so appropriate with a record number Americans on food stamps) celebrating Ben Bernanke in recent days incoming Fed head Janet Yellen likened Bernanke to Obi-Wan Kenobi, the wise, experienced Jedi Knight mentor to his protégé Luke Skywalker in “Star Wars” movies.

There’s nothing that makes you feel more warm and fuzzy inside than the recognition that the soon to be most powerful person in the world thinks that printing trillions of dollars and giving it to criminals at zero interest qualifies as attributes of a intergalactic Jedi Master.

Read moreMay The Farce Be With You – Janet Yellen Compares Bernanke To Obi-Wan Kenobi

Why This Harvard Economist Is Pulling All His Money From Bank Of America

Your money in the bank isn’t really your money.

You have given the bank your money as credit and ‘believe’ that the bank will be able to pay it back to you in the future.

Good luck when the entire financial system finally collapses.


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Why This Harvard Economist Is Pulling All His Money From Bank Of America (ZeroHedge, Jan 31, 2014):

A classicial economist… and Harvard professor… preaching to the world that one’s money is not safe in the US banking system due to Ben Bernanke’s actions? And putting his withdrawal slip where his mouth is and pulling $1 million out of Bank America? Say it isn’t so…

From Terry Burnham, former Harvard economics professor, author of “Mean Genes” and “Mean Markets and Lizard Brains,” provocative poster on this page and long-time critic of the Federal Reserve, argues that the Fed’s efforts to strengthen America’s banks have perversely weakened them. First posted in PBS.

Is your money safe at the bank? An economist says ‘no’ and withdraws his

Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.

Read moreWhy This Harvard Economist Is Pulling All His Money From Bank Of America

Janet Yellen Is Confirmed As Next Fed Chair

Janet Yellen Is Confirmed As Next Fed Chair (ZeroHedge, Jan 6, 2014):

Update: the final vote came out to 56 Yes and 26 No, after supposedly someone moved from the No to the Yes pile. It also seems that quite a few senators missed the final vote due to the weather, which means Bernanke’s record of 30 No votes stands untouched for now.

With the critical 50th Yes vote just being cast, Janet Yellen has officially become the first woman to head the central bank in its 100 years of existence. The vote continues, and the only question now is whether the current tally of 27 No votes will surpass the Bernanke record of 30 objections to the central bank head.

Read moreJanet Yellen Is Confirmed As Next Fed Chair

White House Favors Former Bank Of Israel Governor Stanley Fischer To Be Fed Vice Chair

FYI.


The Markets Should Celebrate Stanley Fischer As Number Two At Fed, A Perfect Ten Strike (Forbes, Dec 11, 2013):

I know and admire the wisdom of Stanley Fischer, apparently to be appointed Vice Chairman of the Federal Reserve Bank. Fischer will add a serious complement of experience to maintain stability of the nation’s monetary policy as he understands only too well the absolute requirement of avoiding another meltdown. This appointment will strengthen the positive attitude of financial markets as Fischer is a strong asset for Yellen, and influential with other local Fed presidents as well as Finance Ministers and Central Bankers around the globe. Just recently, Larry Summers and a passel of other influential economists saluted Fischer with keenly read papers at the IMF to honor his influence in economic circles. And I know that Fischer has a very high regard for the former Treasury Secretary.

I believe his record as MIT Professor supervising Ben Bernanke’s thesis on the depression in 1979, his time at the IMF as chief economist, a few years at Citigroup and then a spectacular success steering the Israeli economy to superior economic growth at the Bank of Israel will be seen as a valuable counterpart to Janet Yellen’s huge challenge of easing us out of quantitative easing.

For No. 2 at Fed, White House Favors Central Banker in the Bernanke Mold (New York Times, Dec 11, 2013):

WASHINGTON — Stanley Fischer, the former governor of the Bank of Israel and a mentor to the Federal Reserve’s chairman, Ben S. Bernanke, is the leading candidate to become vice chairman of the Fed, according to former and current administration officials.

Former Bank of Israel Gov. Fischer near Fed vice chair nomination: Reports (CNBC. Dec 11, 2013):

The White House is close to nominating Stanley Fischer, the former governor of the Bank of Israel, as vice chair of the Federal Reserve, various media outlets reported on Wednesday.

Fischer, 70, headed the Israeli central bank until earlier this year. He is a former head of the economics department at MIT, former number two official at the IMF and former chief economist at the World Bank.

Among his students during his 20-plus years teaching at MIT were outgoing Fed Chairman Ben Bernanke and former presidential advisor Greg Mankiw.

Read moreWhite House Favors Former Bank Of Israel Governor Stanley Fischer To Be Fed Vice Chair

The Fed Now Owns One Third Of The Entire US Bond Market (Chart Of The Day)

Chart Of The Day: The Fed Now Owns One Third Of The Entire US Bond Market (ZeroHedge, Dec 2, 2013):

The most important chart that nobody at the Fed seems to pay any attention to, and certainly none of the economists who urge the Fed to accelerate its monetization of Treasury paper, is shown below: it shows the Fed’s total holdings of the entire bond market expressed in 10 Year equivalents (because as a reminder to the Krugmans and Bullards of the world a 3 Year is not the same as a 30 Year). As we, and the TBAC, have been pounding the table over the past year (here, here and here as a sample), the amount of securities that the Fed can absorb without crushing the liquidity in the “deepest” bond market in the world is rapidly declining, and specifically now that the Fed has refused to taper, it is absorbing over 0.3% of all Ten Year Equivalents, also known as “High Quality Collateral”, from the private sector every week. The total number as per the most recent weekly update is now a whopping 33.18%, up from 32.85% the week before. Or, said otherwise, the Fed now owns a third of the entire US bond market.

Read moreThe Fed Now Owns One Third Of The Entire US Bond Market (Chart Of The Day)

Billionaire Jim Rogers: ‘Own Gold’ Because ‘One Day, Markets Will Stop Playing This Game’

Jim Rogers: “Own Gold” Because “One Day, Markets Will Stop Playing This Game” (ZeroHedge, Nov 19, 2013):

Jim Rogers hope-driven wish is that the politicians were smart enough at some point to say (to the central bankers), “we’ve got to stop this, this is going to be bad.” He adds, on the incoming QEeen, “she’s not going to stop it, first of all she doesn’t believe in stopping it, she thinks printing money is good.” However, Rogers warns in this excellent interview with Birch Gold, “eventually the markets will just say, “We’re not going to play this game anymore”, and we’ll have a serious collapse.” The world is blinded by central bank liquidity, and as Rogers somewhat mockingly notes “if everybody says the sky is blue, I urge you to look out the window and see if it’s blue because I have found that most people won’t even bother to look out the window…” Rogers concludes, “everybody should own some precious metals as an insurance policy,” because as he ominously warns, when ‘it’ collapses, “there will be big change.

Transcript (via Birch Gold Group)

Rachel Mills, Birch Gold Group (BGG): This is Rachel Mills for Birch Gold, and I am very pleased to be joined today by Jim Rogers, legendary investor. Thank you so much Jim for joining me.

Jim Rogers: I am delighted to be here Rachel.

BGG: So today I wanted to talk a little about stock market highs and Quantitative Easing and inflation and a little bit of Federal Reserve and when is the taper is going to happen and currency wars. But there is one question that I don’t have to ask you, which you get asked a lot, I know, and that is what your secret to being so prescient in the marketplace?

“…if everybody says the sky is blue, I at least urge you to go and look out the window and see if it’s blue because I have found that most people won’t even bother to look out the window…”

JR: As far as I know, I’m not quite sure. I do know that I have learned over the years, always, when nearly everybody is thinking the same way that means somebody’s not thinking that means we got to start thinking about it and see if there’s not another way, another approach. Because if everybody says the sky is blue, I at least urge you to go and look out the window and see if it’s blue because I have found that most people won’t even bother to look out the window. If they see on the television or in the newspaper or something that everybody says the sky is blue, I at least urge them to look out the window. I find that most people don’t want to do their homework, that’s the first problem that many people have, is just doing simple homework.

“…no matter what we all know today, it’s not going to be true in 10 or 15 years…”

Read moreBillionaire Jim Rogers: ‘Own Gold’ Because ‘One Day, Markets Will Stop Playing This Game’

Don’t Worry: The U.S. Government Says That The Inflation You See Is Just Your Imagination

Don’t Worry – The Government Says That The Inflation You See Is Just Your Imagination (Economic Collapse, Oct 29, 2013):

If you believe that there is high inflation in the United States, you are just imagining things.  That is the message that the U.S. government and the Federal Reserve would have us to believe.  You might have noticed that the government announced on Wednesday that the cost of living increase for Social Security beneficiaries will only be 1.5 percent next year.  This is one of the smallest cost of living increases that we have ever seen.  The federal government is able to get away with this because the official numbers say that there is hardly any inflation in the U.S. right now.  Of course anyone that shops for groceries or that pays bills regularly knows what a load of nonsense the official inflation rate is.  The U.S. government has changed the way that inflation is calculated numerous times since 1978, and each time it has been changed the goal has been to make inflation appear to be even lower.  According to John Williams of shadowstats.com, if the inflation rate was still calculated the same way that it was back when Jimmy Carter was president, the official rate of inflation would be somewhere between 8 and 10 percent today.  But if the mainstream news actually reported such a number, everyone would be screaming and yelling about getting inflation under control.  Instead, the super low number that gets put out to the public makes it look like the Federal Reserve has plenty of room to do even more reckless money printing.  It is a giant scam, but most Americans are falling for it.

Meanwhile, the prices of the things that most Americans buy on a regular basis just keep going up.  The following are just a few examples of price inflation that we have seen lately:

Read moreDon’t Worry: The U.S. Government Says That The Inflation You See Is Just Your Imagination

Ron Paul: ‘The Longer QE Lasts, The Worse It Will End’

Ron Paul Knows “The Longer QE Lasts, The Worse It Will End” (ZeroHedge, Oct 19, 2013):

In this exclusive interview with Birch Gold Group, former Congressman Ron Paul shares his opinions on a number of topics, including investing in physical gold and silver, the future of the U.S. dollar and the role of the Federal Reserve.

Full audio if the following interview is available here.

Rachel Mills for Birch Gold Group (BGG): This is Rachel Mills for Birch Gold Group. I am speaking with Ron Paul today. How are you, Ron Paul?

Ron Paul (RP): I am doing very well. Nice to talk to you Rachel.

BGG: It’s good to talk to you again, and by the way of information for Birch’s audience, I was your last press secretary on Capitol Hill in Congress and I worked for you for the 5 years. So I may be cheating a little bit because a lot of your answers to my questions I maybe have a pretty good guess at what you might say.

Read moreRon Paul: ‘The Longer QE Lasts, The Worse It Will End’

Federal Reserve Chair Janet Yellen Exposed – The Truth Behind The Myth (Video)

Mike Krieger (Liberty Blitzkrieg) tweets:

Related info:

Peter Schiff Warns Yellen’s Nomination Means Any QE Taper Expectations Are “Delusional”

Janet Yellen: What A Horrifying Choice For Fed Chairman She Would Be


Janet Yellen Exposed – The Truth Behind The Myth (ZeroHedge, Oct 17, 2013):

When President Obama nominated Janet Yellen to be the next Chair of the Federal Reserve Board the praise he offered was similar to what had already poured in from around the country. In their assessments of Ms. Yellen’s long career, Congressman, editors, and academics have underscored how her prescience and caution distinguish her from the reckless overconfidence that have plagued her male colleagues at the Federal Reserve. As proof of her wisdom supporters have pointed to speeches she delivered in 2005 and 2006 in which she supposedly issued clear warnings about the dangers then building in the frothy real estate markets.  Without any attempt at reasonable fact checking, these claims have been parroted by the media.

However, a brief review of the speeches in question reveals that she issued no such warnings at that time.

In a new video, Peter Schiff, the CEO of Euro Pacific Capital and a well-known author and economist, goes over the speeches in question and comes to the easy conclusion that the new leader at the Federal Reserve is just as incapable as her predecessors of recognizing a dangerous asset bubble. Worse yet, as a diehard believer in the power of expansive monetary policy, Ms. Yellen would be much less likely to attack an asset bubble even if she were ever to recognize one before it burst.

Full video below:


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