After a weak first quarter, America’s financials are bloated while the real economy is barely a step away from recession, however, the overall economy is closer to a lengthy stagnation rather than a full-blown demise.
Kristian Rouz – US economy has not fared well in 2015 thus far, staggering and almost nearing a halt in Q1 as the federal government has been gradually reducing its investment in the non-financial sector. Continue reading
The US economy is a house of cards. Every aspect of it is fraudulent, and the illusion of recovery is created with fraudulent statistics.
American capitalism itself is an illusion. All financial markets are rigged. Massive liquidity poured into financial markets by the Federal Reserve’s Quantitative Easing inflates stock and bond prices and drives interest rates, which are supposed to be a measure of the cost of capital, to zero or negative, with the implication that capital is so abundant that its cost is zero and can be had for free. Large enterprises, such as mega-banks and auto manufacturers, that go bankrupt are not permitted to fail. Instead, public debt and money creation are used to cover private losses and keep corporations “too big to fail” afloat at the expense not of shareholders but of people who do not own the shares of the corporations.
…
Capitalism has been transformed by powerful private interests whose control over governments, courts, and regulatory agencies has turned capitalism into a looting mechanism. Wall Street no longer performs any positive function. Wall Street is a looting mechanism, a deadweight loss to society. Wall Street makes profits by front-running trades with fast computers, by selling fraudulent financial instruments that it is betting against as investment grade securities, by leveraging equity to unprecedented heights, making bets that cannot be covered, and by rigging all commodity markets. Continue reading
US officials security specialists warn that Russian hackers may answer new sanctions by attacking computer networks of US banks and large companies.
Officials involved in a White House review of the effects of further penalties on Russia did not respond to questions about whether the study explored the risk of cyberattacks. Even so, two sources said it included revisiting previous classified exercises in which small numbers of computer experts showed they were able to cripple the United States economy in a few days.
Cybersecurity specialists consider Russian hackers among the world’s best at infiltrating networks and say evidence exists that they have already inserted malicious software on computers in the US. Continue reading
We’re could very well be looking at the begining of the end of Pax Americana and a new chapter in the books of world history. If bets were to be placed on who the world’s next superpower would be, look no further than the EU, the world’s largest economy with the German Fourth Reich at the helm. Some say China and Russia, but the world still has major mistrust in both of them.
All the years of warnings were laughed at, but as the saying goes: Today’s jokes are tomorrow’s reality. The United States is about to be hit with One Clenched Fist.
China will re-open the old Silk Road as a new trading route linking Germany, Russia and China
April 08, 2014 “ICH” – Russia has just dropped another bombshell, announcing not only the de-coupling of its trade from the dollar, but also that its hydrocarbon trade will in the future be carried out in rubles and local currencies of its trading partners – no longer in dollars – see Voice of Russia
Russia’s trade in hydrocarbons amounts to about a trillion dollars per year. Other countries, especially the BRICS and BRCIS-associates (BRICSA) may soon follow suit and join forces with Russia, abandoning the ‘petro-dollar’ as trading unit for oil and gas. This could amount to tens of trillions in loss for demand of petro-dollars per year (US GDP about 17 trillion dollars – December 2013) – leaving an important dent in the US economy would be an understatement. Continue reading
World War III may well be underway just as surely as it was on 26 November 1941 when Japanese Admiral Yamamoto set sail for Pearl Harbor two weeks before the formal attack. Then, like now, Americans seemed blissfully unaware that their lives were about to change forever.
Now, it is even worse, as American arrogance assumes we will always be the world’s sole superpower. We tend to look at the world exclusively from our own perspective and that can be very dangerous. A variety of headlines demonstrate this, all of which assume American supremacy. One example, now obvious in hindsight, is when the President’s spokesman Jay Carney warned against buying and actually suggested shorting Russian stocks in light of U.S. sanctions on March 18. From the time of his comments until the end of the month, Russian stocks increased over 6%, far ahead of the U.S. stock market over the same period. Even as the Administration was warning against buying Russian shares, some very successful investors have recommended them. Continue reading
“Absolutely awful” factory figures as new orders suffer worst slump since 1980 recession
Factory orders in the US suffered their steepest fall for 33 years in January and also slowed further in China, raising fresh concerns about the strength of the world’s two biggest economies.
The shock figures set off a renewed flight to safety in New York, where yields on US 10-year Treasuries fell to a three-month low of 2.60pc. The Dow Jones index tumbled 326 points, breaking through crucial technical support levels. Continue reading
As previously mentioned by Marc Farber, if there’s any ‘taper’, it will be largely symbolic and the problem will only resurface sometime soon down the road.
“So at some stage the economy will weaken again, and at that point, the Fed will argue, ‘Well, we haven’t done enough, we have to do more.'”
The Federal Reserve will reduce its $85bn a month in bond purchases by $10bn starting in January
The US Federal Reserve last night announced plans to start weaning America off quantitative easing (QE), in a move which signals the central bank’s confidence in the stability of the US economy.
The central bank said that it will pare its $85bn-a-month bond buying scheme back to $75bn next month, and continue ratcheting it down in “measured steps” if the US economic recovery remains on course. Continue reading
The US Federal Reserve has jumped the gun. It has mishandled its exit strategy from quantitative easing, triggering a global bond rout that it did not anticipate, and is struggling to control.
It has set off an emerging market shock and risks “blowback” from a fresh spasm of the eurozone debt crisis, and it is letting all this happen at the same time, before the US economy is safely out of the woods.
It has violated its own counter-deflation strategy, tightening monetary policy even though core PCE inflation has fallen to the lowest levels in living memory and below levels deemed dangerous enough in the past to warrant a blast of emergency stimulus. It is doing so even though the revival of bank lending has faded.
The entire pivot by the Federal Open Market Committee is mystifying, almost amateurish, and risks repeating the errors made by the Bank of Japan a decade ago, and perhaps repeating a mini-1937 when the Fed lost its nerve and tipped the US economy into a second leg of the Great Depression. “It’s all about tighter policy,” was the lonely lament by St Louis Fed chief James Bullard. Continue reading
The foundation of the Soviet model of trade and investment was centralization under the guise of “universal public ownership”. The entire goal of communism in general was not to give more social and political power to the people, but to extinguish alternative options and focus power into the hands of a select few. The process used to reach this end result can vary, but the goal always remains the same. In most cases, such centralization begins with economic hegemony, and it is in our fiscal structure that we have the means to see the future. Sovietization in our financial life will inevitably lead to sovietization in our political life.
Does the U.S. economy’s path resemble the Soviet template exactly? No. And I’m sure the very suggestion will make the average unaware free market evangelical froth at the mouth. However, as I plan to show, the parallels in our fundamentals are disturbing; the reality is that true free markets in America died a long time ago. 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
The US is “seriously” considering creating a $1 trillion platinum coin to write down part of its debt to stop the world’s largest economy defaulting as early as next month, according to financial analyst Cullen Roche.
…
“I know it’s been spoken about at the White House and a number of prominent people, including congressman [sic], are talking about it,” he said. Continue reading
Led by Berlin, a select group of 10 states has formed to ‘revive the ideal of a united Europe.’
…
Created and led by Germany, the “Berlin Club” met for the first time on March 20 in Berlin. There’s a lot we haven’t been told about Europe’s latest club of elitists. What we do know is that it’s the brainchild of German Foreign Minister Guido Westerwelle, that it is comprised of Europe’s most pro-unification states, and that it exists to reinvigorate the unification of Europe.
Germany is joined in the club by Poland, Belgium, Italy, the Netherlands, Portugal, Austria, Luxemburg, Spain, Denmark and France. The select group is scheduled to meet at least four more times to discuss proposals for closer integration, and plans to publish its conclusions in a final report. The club’s agenda is long, and includes discussions about European security and border control, fiscal and economic government, and ways to stabilize growth.
Yesterday, Presseurop translated an article from the Spanish abc newspaper reporting that “10 countries have formed the ‘Berlin Club’ to revive the European project.” According to the abc article, Berlin’s goal is to “create a kind of ‘club’ committed to developing formulas that, in these times of crisis, will revive the ideal of a united Europe” (emphasis added throughout). Since Europe’s financial crisis began in 2008, the EU has been hit with one crisis after another, with each being reported by many as another nail in the coffin of a United States of Europe.
Full article: Germany Hasn’t Given Up on a United States of Europe (The Trumpet)
There are many who can cite numerous reasons why another severe downturn is in store for our future: with a possible military strike against Iran, another financial crisis (this time a sovereign one), rising oil and gasoline prices, massive tax hikes hitting the U.S. economy in 2013, a run-a-way global printing press, to another weather related event or an act of God. Of the potential risks just mentioned the ones that concern us most are rising energy prices and the massive tax hikes due to take effect next year.
Full article: The Story Nobody Wants to Hear (Financial Sense Online)
When we look at broad measures of jobs and population, then the beginning of 2012 was one of the worst months in US history, with a total of 2.3 million people losing jobs or leaving the workforce in a single month. Yet, the official unemployment rate showed a decline from 8.5% to 8.3% in January – and was such cheering news that it set off a stock rally.
How can there be such a stark contrast between the cheerful surface and an underlying reality that is getting worse?
The true unemployment picture is hidden by essentially splitting jobless Americans up and putting them inside one of three different “boxes”: the official unemployment box, the full unemployment box, and the most obscure box, the workforce participation rate box.
Full article: Making 9 Million Jobless “Vanish”: How The Government Manipulates Unemployment Statistics (Financial Sense Online)
Global Geopolitics 