QE’s Creeping Communism

Central banks and respective governments are running out of magical tricks to pull out of the hat.

As already done in America [government takeover of the banking industry (government bailout) and health industry (“Obamacare”)], the next step is the nationalization of industries in other developed nations like we’re seeing now in Japan.

This paves the way for communist rule by stealth, but most people don’t see this so long as the shopping malls are remain open and they can still drink their beer while watching the NFL.

 

Despite its much longer experience with monetary stimulus, Japan’s economy remains listless and has continuously flirted with recession. In spite of this failure, Japanese leaders, especially Prime Minister Shinzo Abe (and his ally at the Bank of Japan (BoJ), Haruhiko Kuroda), have recently doubled down on all prior bets. This has meant that the Japanese stimulus is now taking on some ominous dimensions that have yet to be seen here in the U.S. In particular, the Bank of Japan is considering using its Quantitative Easing budget to buy large quantities of shares of publicly traded Japanese corporations.So for those who remain in doubt, Japan is telling us where this giant monetary experiment leads to: Debt, stagnation and nationalization of industry. This is not a destination that any of us, with the possible exception of Bernie Sanders, should be happy about.

Saudis Risk Draining Financial Assets in 5 Years, IMF Says

Such was the price to be paid for King Abdullah’s economic war on America’s oil independence from shale before he passed away. The Saudi-friendly IEA has said America will never take the crown from Saudi Arabia whereas a Saudi prince has mentioned oil will never see under $100 per barrel ever again. The baton has now been passed to King Salman and he will be continuing the attack for an indefinite duration.

In the end, it was a matter of who had more asset reserves: American oil companies or the Saudi coffers built on decades of exports.

In this game of economic chicken it looks like the American oil companies who are already down to the “bare bones” might be the first to blink, however, total destruction on both sides shouldn’t be dismissed.

 

• Estimate based on current fiscal policies amid oil’s slump
• Saudi authorities are already planning spending cuts

Saudi Arabia may run out of financial assets needed to support spending within five years if the government maintains current policies, the International Monetary Fund said, underscoring the need of measures to shore up public finances amid the drop in oil prices.

The same is true of Bahrain and Oman in the six-member Gulf Cooperation Council, the IMF said in a report on Wednesday. Kuwait, Qatar and the United Arab Emirates have relatively more financial assets that could support them for more than 20 years, the Washington-based lender said.

The War On Cash: Why Now?

You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

These limits are broadly called “capital controls.”

50 Russian Jets Fire Live Missiles In Show Of Strength Near Borders With NATO Nations

At least 50 Russian jets, including many of Russia’s advanced Su-34 “Fullback” fighter jets, began aerial combat exercises just miles from Russia’s western borders with NATO nations Estonia, Latvia and Finland — military drills that see the deadly jets firing live ammunition and guided missiles.

The exercises taking place in the skies over Russia’s Western Military District appear designed to show the west that even as the conflict in Ukraine rages on — despite this week’s new ceasefire agreement — the United States and European sanctions have not diminished Russia’s military might.

Four Signs That We’re Back in Dangerous Bubble Territory

The United States is already experiencing a false recovery to begin with. While the Dow Jones might very well be going up, it’s quite a poor indicator of the economy’s overall health. Jobs are still being lost while entire sectors are propped up and subjugated through government bailouts. Meanwhile, the healthcare industry will soon be in shambles under the weight of heavy politics, law and regulation.

The next economic crash will hit harder than the last due to this current false recovery already being a mere sugar high from ‘quantitative easing’ and accounting tricks. Yet, the real crippling crash to worry about is likely to be the tsunami not seen after the markets already received the next hit. This is the one that will make the Geat Depression look like a Sundays picnic. The United States is not untouchable and is one significant event away from a total meltdown.

As the global equity and bond markets grind ever higher, abundant signs exist that we are once again living through an asset bubble – or rather a whole series of bubbles in a variety of markets. This makes this period quite interesting, but also quite dangerous.