The Central Bank Crisis on the Immediate Horizon

 

While the majority keep bashing the Federal Reserve, other central banks seem to escape any criticism. The European Central Bank under Mario Draghi has engaged in what history will call the Great Monetary Experiment of the 21st Century – the daring experiment of negative interest rates. A look behind the scenes reveals that this experiment has been not just a failure, it has undermined the entire global economic structure. Continue reading

Make-Believe America

Americans live a never-never-land existance. The politicians and presstitutes make sure of that.

Consider something as simple as the unemployment rate. The US is said to have full employment with a January 2018 unemployment rate of 4.1 percent, down from 9.8 percent in January 2010. https://data.bls.gov/timeseries/LNS14000000

However, the low rate of unemployment is contradicted by the long-term decline in the labor force participation rate. After a long rise during the Reagan 1980s, the labor force participation rate peaked in January 1990 at 66.8 percent, more or less holding to that rate for another decade until 2001 when decline set in accelerating in September 2008. https://fred.stlouisfed.org/series/CIVPART/

Today the labor force participation rate is the lowest since February 1978, reversing all of the gains of the Reagan years. Continue reading

The Secret Force Behind Today’s Rigged Markets

 

Markets were up again big today and volatility was down. But we haven’t seen the last of rising volatility, nor of the central banks’ attempts to thwart it.

This week, new Fed Chair Jerome Powell will be giving his first congressional testimony, and you can be sure that markets are waiting on his words with bated breath.

Before his testimony, the Fed will be releasing its Monetary Policy Report, which will also give an indication to the direction of Fed policy. Continue reading

The Federal Reserve May Secretly Want to Sink the Record-Breaking Stock Market

A big Federal Reserve meeting is coming up. Here is one thing that could happen if the Fed gets too aggressive.

Despite its independence, the Federal Reserve may quietly want a bear market that takes down a president that loves tweeting about the stock market. Continue reading

The Fed’s Built a Financial “Maginot Line”

 

Over the coming months, I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown. That’s right: I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown

Circumstances lead me to believe it could play out like the meltdown I experienced in 1998 after Long Term Capital Management (LTCM) failed.

This time, however, there will be several crucial differences that will leave investors and regulators unprepared.

In the national defense community, military commanders are known for fighting the last war. They study their prior failures in preparation for the next conflict. The problem is that each war inevitably involves new tactics for which they’re completely unprepared.

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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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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

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

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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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

Trump Now Owns the Fed

 

Donald Trump has the opportunity to appoint a higher percentage of the Board of Governors of the Federal Reserve system at one time than any president since Woodrow Wilson.

President Wilson signed the Federal Reserve Act during the creation of the Fed in 1913 when they had a vacant board. At that time, the law said the secretary of the Treasury and the comptroller of the currency were automatically on the Fed’s board of governors. But besides that, President Wilson selected all five of the other participating members.

Now Trump has the opportunity to fill more seats on the Fed’s Board of Governors than any president since then.

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Japan’s Shifting Power Alliances

 

I’ve just wrapped up a long trip to Japan. And I’ve taken away one lesson from all of my conversations, speeches and research: The rise of nationalism in the U.S. will cause massive shifts in global trade alliances.

One of the main beneficiaries will be Japan. Now, Japan might not be on your radar, day-to-day, but it’s about to play a very important role in the world of Donald Trump.

Here’s what I mean… Continue reading

Don’t Be Fooled – The Federal Reserve Will Continue Rate Hikes Despite Crisis

 

Though stock markets in general are meaningless and indicate nothing in terms of the health of the economy they still function as a form of hypnosis, or a kind of Pavlovian mechanism; a tool that central bankers can use to keep a population servile and salivating at the ring of a bell. As I have mentioned in the past, the only two elements of the economy that the average person pays attention to in the slightest are the unemployment rate and the Dow. As long as the first is down and the second is up, they aren’t going to take a second look at the health of our financial system. Continue reading

Have Bundesbank Agents Infiltrated the Fed?

Chart 1

 

Germany’s central bank is the Bundesbank. Prior to the commencement of trading of the euro in January 1999, the Bundesbank conducted Germany’s monetary policy. The Bundesbank has a reputation for pursuing general price-level stability above all else. You might say that the Bundesbank has inflation phobia. The reason for this Bundesbank inflation phobia is the remembrance of the hyperinflation Germany experienced between World Wars I and II. Given the US central bank’s recent actions, it would almost seem that the Fed has developed inflation phobia too. Continue reading

Bank of America: “The Most Dangerous Moment For Markets Will Come In 3 Or 4 Months”

 

Two weeks after BofA’s Michael Hartnett previewed (and timed) not only the “Great Fall” of stocks, but also explained that the Fed and global central banks are now in the business of making the “rich poorer“, he is out with a new note which looks at the Fed’s latest U-turn, which has unleashed the latest market buying spree, warning that “further upside in risk assets will create problems later in the year” (for three reasons he lists out), and concludes that “ultimately, we believe the extremely strong performance by equities and bonds in H1 is very unlikely to be repeated in H2.” Hartnett then goes back to his original thesis that the Fed will no longer pursue its primary mandate of pushing stocks (i.e. wealth effect and confidence) higher because it is “now politically unacceptable for the Fed and any other central bank to stoke a bubble on Wall St.”

As a result, “monetary policy will have to tighten to raise volatility, reduce Wall St inflation, and reduce inequality. There are two ways to cure inequality: you can make the poor richer, or you can make the rich poorer. The Fed will reduce its balance sheet in the hope of making Wall St poorer.

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