Federal Reserve Is Out of Tools During the Next Recession, Warns Peter Schiff

Thanks to years of easy money policies, veteran market forecaster Peter Schiff thinks the Federal Reserve will be out of options to rescue the economy and stock market during the next downturn.

That’s the assessment from Peter Schiff, CEO of Euro Pacific Capital.

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Dutch Central Bank Warns Of Market Calm Before The Storm

 

With one foot out of the door of Germany’s finance ministry, the former head of the German economy, Wolfgang Schäuble, 75, delivered a fire and brimstone warning over the weekend, telling the FT in an interview that there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets. Schäuble also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans, something we warned about since 2012, and an issue which remains largely unresolved.

Taking a broad swipe at the current financial regime – which he helped design – Schauble warned that the world was in danger of “encouraging new bubbles to form”. Continue reading

Asset prices are high across the board. Is it time to worry?

 

With ultra-loose monetary policy coming to an end, it is best to tread carefully

IN HIS classic, “The Intelligent Investor”, first published in 1949, Benjamin Graham, a Wall Street sage, distilled what he called his secret of sound investment into three words: “margin of safety”. The price paid for a stock or a bond should allow for human error, bad luck or, indeed, many things going wrong at once. In a troubled world of trade tiffs and nuclear braggadocio, such advice should be especially worth heeding. Yet rarely have so many asset classes—from stocks to bonds to property to bitcoins—exhibited such a sense of invulnerability. Continue reading

Austerity and Secession

BERLIN/MADRID (Own report) – The escalating Catalan secessionist conflict is upsetting Spain, a country hard hit by Berlin’s austerity dictate. Spain – occasionally praised in German media as a showcase for an alleged successful austerity policy – is still confronted with enormous social and economic problems, in spite of a modest economic growth. Unemployment and poverty remain at high levels. Crisis policies over the past few years have also increased the economic gap between Spain and the euro zone’s centers of prosperity. One still cannot speak of debt reduction – the official objective of Germany’s austerity policy within the EU. The poor economic situation, the high debt burden level and the distribution of federal and regional debts are fueling Catalonia’s secessionist conflict.

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The US Economy Is Failing — Paul Craig Roberts

Do the Wall Street Journal’s editorial page editors read their own newspaper?

The frontpage headline story for the Labor Day weekend was “Low Wage Growth Challenges Fed.” Despite an alleged 4.4% unemployment rate, which is full employment, there is no real growth in wages. The front page story pointed out correctly that an economy alleged to be expanding at full employment, but absent any wage growth or inflation, is “a puzzle that complicates Federal Reserve policy decisions.” Continue reading

David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge

Please see the source for the video.

 

David Stockman is warning about the Trump administration’s tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off.

Stockman, the Reagan administration’s director of the Office of Management and Budget, isn’t stepping away from his thesis that the 8½-year-old rally is in serious danger.

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2015.75 was Just the Beginning

 

QUESTION: Hello Mr Armstrong

I have not forgotten when I saw the reportage about you on TV when you announced that in October 2015 will start the big economic collapse. do you think that that date was bit early or really there is some thing happened?
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We Are Already In Depression (If Borrowing Money Is Not Income)

The data and chart comes from the Federal Reserve Economic Data base (FRED.) It is Gross domestic Product minus Treasury Debt. If you download them to a spread sheet GDP is expressed in billions so 1,000,000,000 is expressed as 1, while Federal Debt is expressed in millions so 1,000,000,000 is expressed as 1,000. That is why the chart is (Gross Domestic Product * 1000.)

 

Do you consider debt as income? Before you answer that, let’s perform a thought experiment. Imagine that you had taken a long cruise last fall and charged $10,000 to an American Express card. When you did your taxes this year, would have told the IRS that you had $10,000 income from American Express? Of course you wouldn’t. Suppose a major oil company issues $800 million worth of bonds to develop a new old field. Would the company report that as income to the stockholders or the IRS? Of course they wouldn’t. I am sure those sound like silly questions as the answer is a self evident “NO!” We do not consider borrowed money as income. It is a liability that must be paid back. Then why do we count Federal Government debt when measuring national income? I will leave speculation as to the “why” to the readers and focus on the fact that we do count new Treasury Debt as income. Continue reading

America Is Going Broke… and Nobody Cares

(shutterstock)

 

After having sided with the Democrats on the debt ceiling, he went back to the swamp to resolve the “Dreamer” issue — the 800,000 children who arrived in the U.S. as undocumented migrants and were allowed to temporarily stay legally in the country.

Then, over the weekend, it was reported that the administration wanted to get back on the Paris climate change agreement bandwagon.

The White House denies it, but it’s now clear that Mr. Trump aims to be a whole lot less disruptive than he promised to be.

And now, with the floodgates open, the U.S. national debt has surged over $20 trillion.

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“This Is Where The Next Financial Crisis Will Come From” – Deutsche Bank

 

In an extensive, must-read report published on Monday by Deutsche Bank’s Jim Reid, the credit strategist unveiled an extensive analysis of the “Next Financial Crisis”, and specifically what may cause it, when it may happen, and how the world could respond assuming it still has means to counteract the next economic and financial crash.

In our first take on the report yesterday, we showed one key aspect of the “crash” calculus: between bonds and stocks, global asset prices are the most elevated they have ever been. Continue reading

The World Is Creeping Toward De-Dollarization

The issue of when a global reserve currency begins or ends is not an exact science. There are no press releases announcing it, and neither are there big international conferences that end with the signing of treaties and a photo shoot. Nevertheless we can say with confidence that the reign of every world reserve currency has to come to and end at some point in time. During a changeover from one global currency to another, gold (and to a lesser extent silver) has always played a decisive role. Central banks and governments have long been aware that the dollar has a sell-by date as a reserve currency. But it has taken until now for the subject to be discussed openly. The fact that the issue has been on the radar of a powerful bank like JP Morgan for at least five years, should give one pause. Questions regarding the global reserve currency are not exactly discussed on CNBC every day. Most mainstream economists avoid the topic like the plague. The issue is too politically charged. However, that doesn’t make it any less important for investors to look for answers. On the contrary. The following questions need to be asked: What indications are there that the world is turning its back on the US dollar? And what are the clues that gold’s role could be strengthened in a new system? Continue reading

Global Debt Bubble Understated By $13 Trillion Warn BIS

 

– Global debt bubble may be understated by $13 trillion: BIS
– ‘Central banks central bank’ warns enormous liabilities have accrued in FX swaps, currency swaps & ‘forwards’
– Risk of new liquidity crunch and global debt crisis
– “The debt remains obscured from view…” warn BIS

Global debt may be under-reported by around $13 trillion because traditional accounting practices exclude foreign exchange derivatives used to hedge international trade and foreign currency bonds, the BIS said on Sunday. Continue reading

A “Financial H-Bomb” Has Exploded

 

Somebody exploded an H-bomb last week, and it wasn’t North Korea. It was the U.S.

This was not a kinetic H-bomb, the kind that leaves a mushroom cloud.

It was a financial H-bomb. Continue reading

Former BIS Chief Economist Warns “More Dangers Now Than In 2007”

Bloomberg

 

Having warned in the past that “the system is dangerously unacnhored,” former chief economist of the Bank for International Settlements, William White, told Bloomberg TV overnight that the current situation “looks very similar to 2008,” adding that OECD sees “more dangers” today than in 2007. Continue reading

The world’s most powerful bank issues a major warning

 

In 1869, a 48-year old Jewish immigrant from the tiny village of Trappstadt in Germany’s Bavaria region hung a shingle outside of his small office in lower Manhattan to officially launch his new business.

His name was Marcus Goldman, and the business he started, what’s now known as Goldman Sachs, has become the preeminent investment bank in the world with nearly $1 trillion in assets.

They didn’t get there by winning any popularity contests.

Goldman Sachs has been at the heart of nearly every major banking scandal in recent history.

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