This is no time to be complacent. Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine. In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing. Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Just look at what is happening in Europe. The eurozone is now in the midst of the longest recession that it has ever experienced. Just look at what is happening over in Asia. Economic growth in India is the lowest that it has been in a decade and the Japanese financial system is beginning to spin wildly out of control.
One of the only places on the entire planet where serious economic problems have not already erupted is in the United States, and that is only because we have “kicked the can down the road” by recklessly printing money and by borrowing money at an unprecedented rate. Unfortunately, the “sugar high” produced by those foolish measures is starting to wear off. We are going to experience a massive amount of economic pain along with the rest of the world – it is just a matter of time.
But for the moment, there are a lot of skeptics out there. Continue reading
My view is that the US Federal Reserve and the Bank of Japan “caused” the gold crash. The rest is noise. The Fed assault began in February when it published a paper warning that the longer quantitative easing continues, the harder it will be for the bank to extricate itself.
The report was co-written by former Fed governor Frederic Mishkin, often deemed Ben Bernanke’s “alter ego”. It said the Fed’s capital base could be wiped out “several times” once borrowing costs climb. The window will start shutting by 2014, with trouble then compounding at a “dramatic” pace.
This was a shock. It suggested that the Fed has lost its nerve, and will think long and hard before launching a fresh blitz of money if growth falters. Continue reading
BERLIN – Germany’s central bank chief Jens Weidmann has said the eurozone crisis may take ten years to overcome, just as top euro officials claimed their response to the crisis is working.
“Overcoming the crisis and the crisis effects will remain a challenge over the next decade,” Weidmann told Wall Street Journal in an interview published on Wednesday (17 April). Continue reading
The biggest story on global financial markets today is the collapse of gold and silver prices. Gold is down more than $90 an ounce since Friday – a fall of about 7 percent. The price drop comes on top of last week’s 4.7 percent tumble. Silver prices tumbled 8 percent, or $24 an ounce.
Copper is also falling. The reasons for the plunge are linked to the recent rise in the stock market, the slow, steady improvement of the US economy and the recent strength of the dollar. Crude oil futures have tumbled on global markets, down to less than $89 for West Texas crude, the lowest price since December, 2012. Continue reading
Countries in the developing world are drastically reducing their euro holdings as economic instability in Europe leads them elsewhere to stock their currency reserves. Euro holdings are at their lowest level in a decade, according to the International Monetary Fund.
That is the message to be gleaned from the latest installment of the regular International Monetary Fund report on currency reserves held by countries around the world. According to the report, developing economies shed some $45 billion worth of euros in 2012 and have sold close to $90 billion worth of euros since the second quarter of 2011. Continue reading
When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn’t flow evenly into the system. Continue reading
The Reserve Bank of Australia’s computer networks have been repeatedly and successfully hacked in a series of cyber-attacks to infiltrate sensitive internal information, including by Chinese-developed malicious software.
The RBA is sufficiently concerned about these risks that it has had a private security firm carry out “penetration testing”, or authorised hacking, of its computer networks to assess the integrity of its digital defences. Continue reading
#5 A state-appointed review board has determined that there is “no satisfactory plan” to solve Detroit’s financial emergency, and many believe that bankruptcy is imminent. If Detroit does declare bankruptcy, it will be the largest municipal bankruptcy in U.S. history. Continue reading
“This is not a fluke: almost all of the underlying determinants of inflation point to weakness,” writes BofA Merrill Lynch economist Ethan Harris in a note to clients today.
For all of the talk of rising government bond yields and predictions for when the Federal Reserve will taper back its bond buying, Harris says, deflation is still a bigger risk than higher inflation – and disinflation could cause the Fed to actually ramp up QE if it continues. Continue reading
As the article hits out, the only thing propping up the European financial system are politicians — likely the same for the U.S., South American and Asian economies as well. This means they are the last line of defense, armed with nothing more than half-truths and artificial propping of the economies via central banks to keep the citizens nice, happy, calm and in the dark. If this is the case, it shouldn’t be long before a collapse comes. One could say a litmus test for the article would be to watch the reaction of the markets when another scandal breaks out among the said politicians, at home or abroad.
I want to issue a major warning to investors: the EU Crisis is going to get worse in the coming months.
I realize that most investors and analysts believe that the EU Crisis is over. Then think that because the S&P 500 is closing in on its all-time highs that things are fine in the system.
They are wrong.
The only item that held Europe together in 2012 was the credibility of EU politicians and ECB President Mario Draghi. Please note that nothing fundamental improved for the EU’s financial system: EU GDP has since re-entered a recession and EU unemployment has a hit a new record.
Indeed, the only reason things even looked better was because various Government engaged in massive interventions. In the case of Spain, this included raiding 90% of their social security fund to buy Spanish bonds so that yields would fall. Continue reading
Being that the USD is being printed up without end, it’s soon to be worthless as well as everything paper that is valued in Dollars. Bonds fall into this category.
With the Federal Reserve and now Bank of Japan printing massive amounts of money, billionaire investor Jim Rogers told CNBC’s “Closing Bell,” he is shorting U.S. government debt.
“It’s all artificial what’s going on right now,” Rogers said. “The Federal Reserve is printing money as fast as they can. The Bank of Japan said ‘we’re going to print unlimited money.'” Continue reading
Germany strengthens its ties with Australia as its springboard for projection of power in the Pacific.
Students of Bible prophecy are aware that in the latter days a northern power is set to spread its imperial reign “south and east” and ultimately into Jerusalem (Daniel 8:9).
In 1995 Australia and Germany signed the Australia-Germany Partnership 2000 Action Plan. This agreement, vigorously supported by Australia’s prime minister at the time, Paul Keating, and the then German Chancellor Helmut Kohl, mapped out Germany’s future in Australia. Continue reading
In order to avoid financial loss for the clients as well as the business, UBS is now classifying what were once medium-risk investors into high-risk investors. It also doubles as a warning which possibly indicates anticipation of a looming catastrophe.
It really looks like the investment industry is trying to get investors to participate in this “great rotation” from bonds to equities.
According to Charlie Gasparino (via Josh Brown) some clients of UBS are about to get a shocking letter in the mail. Continue reading
Joe Lavorgnia, chief economist at Deutsche Bank, criticized the Fed’s strategy and sees broad “collateral financial damage” once interest rates eventually edge higher.
“They have the pedal pressed so far down, I just think it’s going to end so badly,” said Lavorgnia on CNBC’s “Squawk on the Street” on Friday. He was commenting on the Fed’s strategy of near-zero interest rates. Continue reading
Sasha Cekerevac writes: While many people are aware that the Chinese economy is now the second-largest in the world, China’s currency, the yuan or renminbi, is also moving upward in the world rankings in terms of global transactions.
According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the world’s global payment system, the yuan has moved up from 20th in the rankings in January 2012 to 14th position in December 2012. The Chinese yuan is now above the Danish kroner in terms of global payments. (Source: “RMB Tracker: January 2013,” Society for Worldwide Interbank Financial Telecommunication web site, January 24, 2013.)
Why does this matter to the average American? Continue reading