08/02/2017 - McAlvany Podcast: The Economic System Is Always Changing Faster Than The “Controllers” Can Learn
Richard Bookstaber: People Cannot be Controlled like Automatons thus Crises Repeats
About this week’s show:
-The economic system is always changing faster than the “controllers” can learn
-Fed policy and manipulations today are “so yesterday”!
-Unlike flood insurance, Financial Insurance INCREASES the likelihood of crises
07/31/2017 - Dr. Albert Friedberg: Negative Interest Rates Have Resulted In Malinvestments; Sees Money Continuing To Flow Into Equities Globally
Negative Interest Rates Have Resulted In Malinvestments & Deflation .. Does not see the Federal Reserve increasing interest rates higher than the yield on the U.S. Treasury 10-Year Bond .. Sees money continuing to flow into equities due to their yields being higher than bonds in general .. Sees risk assets doing well globally .. likes Greek banks, Japanese equities, Brazil, U.S. Homebuilders ..
07/31/2017 - John Mauldin: Markets, Trade, Velocity of Money, Pensions Crisis – Sees Long-End Interest Rates Going Lower
07/31/2017 - Chris Whalen: Public Debt Is The Real Driver Behind Central Bank Action
“The indebtedness of the world, especially the public indebtedness of countries, I think is the real driver behind central bank action. The reason is the dropping interest rates has ceased to be an effective way to get economies moving .. I think people have to realize that the weight of debt, and also the posture of all the major central banks, is such that low interest rates are going to be with us for a while. And until you see a change in demand so that treasury auctions are not as successful and yields in fact have to rise to attract investors, I really don’t see that changing.”
Erik Townsend Interviews Chris Whalen:
07/30/2017 - Mish Shedlock: It’s Your Money But You Can’t Have It – EU Proposes Account Freezes to Halt Bank Runs
“If there is a run on the bank, any bank in the EU, you better be among the first to get your money out. Although it’s your money, the EU wants to Freeze Accounts to Prevent Runs at Failing Banks .. The entire European banking system is over-leveraged, under-capitalized, and propped up by QE from the ECB. Simply put, the EU banking system is insolvent .. That the EU has to consider such drastic measures proves the point.”
https://mishtalk.com/2017/07/28/eu-proposes-account-freezes-to-halt-bank-runs/
07/27/2017 - Mish Shedlock Powerpoint Presentation Slides On Misguided Central Bank Policies And Their Consequences “This ridiculous mix is central bank policies stimulate massive wealth inequality fueled by soaring stock prices.”
Click to here to the entire presentation
07/27/2017 - Dr. Lacy Hunt: Federal Reserve Actions Will Create Substantially More Volatility In The Financial Markets
“Investors should expect that the Fed’s actions will create substantially more volatility in the financial markets and particularly so over the short-term. Operating with strategic views and multi-year trends, rather than trying to focus on the Fed-generated noise in many monthly and quarterly indicators, may be a preferred method of generating investor returns. Our economic view for 2017 is unchanged and continues to suggest that long-term Treasury bond yields will work irregularly lower. The latest trends in the reserve, monetary and credit aggregates along with the velocity of money point to 2% nominal GDP growth for the full year, down from 3% in 2016. This would be the third consecutive year of decelerating nominal GDP growth and the lowest since the Great Recession. This suggests that the secular low in bond yields remains well in the future.”
07/23/2017 - Adam Taggart On Financial Repression – Negative Interest Rates And Capital Controls
The All-Out War On Savers (aka Financial Repression)
“As we’ve written about often here at PeakProsperity.com, those running today’s economy are doing their utmost to keep prudent savers like you from keeping their cash safely on the sidelines. They desperately want your savings pushed out into the economy so that their over-leveraged casino can continue operating a little bit longer.
We discuss this in depth in our recent report Less Than Zero: How The Fed Killed Saving, which explains how the Financial Repression playbook is very intentionally designed to transfer the burden of the government’s orgy of debt onto the public. It seeks to do so in a way that is just opaque enough to just enough people that the general public doesn’t catch on to what’s happening.
The key elements of Financial Repression are:
Negative interest rates: These reduce the servicing costs of debt, allowing the system to take on even more. They also destroy any incentive to save, as cash parked in the bank actually loses purchasing power on a real basis. This pushes capital out of savings and into the riskier assets (stocks, bonds, real estate, etc) that all the built-up debt is supporting.
Capital controls: These “ring fence” domestic capital, making it difficult for prudent money to avoid the measures of financial repression. Restrictive legislation on international holdings like FATCA and the higher taxes placed on “safe haven” assets like precious metals are examples of these. Other manifestations are bank bail-ins, banking restrictions on withdrawing more than $10,000 (and oftentimes substantially less), civil asset forfeiture, and outlawing bank notes as part of the “war on cash” and the move to a “less cash” or “cashless” economy — all of these serve to thwart and/or penalize savers who would just rather sit out the current insanity of the markets and accept no return over the risk of substantial loss.
So, with the reckless investors all around us gloating at their returns, with our banks paying us nearly 0.0% on our savings and treating us like criminals if we have the temerity to ask for access to it, and with the government talking about taking it all from us eventually anyways (replacing with Fedcoin, perhaps?) — is it time for us cash savings holders to throw in the towel?”
07/23/2017 - David Rosenberg: Biggest Influence On Financial Markets Will Be Demographics
“‘Nothing is more important than this if you are looking at what will fundamentally influence the financial markets for the next decade-plus’… is demographics.”
07/19/2017 - Macquarie: Central Bank Financial Repression Is Creating “Slaves”
Article: “While central bank interest rate policy has been a relatively muted factor in stock market performance recently – successive rate hikes and hawkish Fed inclinations have mostly been warmly greeted by stock market advances – this pattern is about to change, predicts a July 18 Macquarie research report .. Central bank quantitative interest rate repression, known euphemistically as ‘stimulus,’ has created a mirage of tranquility that is visible, in part, through historically low stock market volatility amid a mostly volatile geopolitical and national situation.”
07/17/2017 - Mark Spitznagel: Artificial Stimulus Will Only Delay The Inevitable Collapse
“Artificial stimulus in an economy is the same: it is easily ignored as a problem in its infancy, but it always develops into a huge problem. Economies and markets are structurally altered and distorted by such stimulus, such that it cannot be removed without breaking those new structures. It must rather be ever increased, though even this will only delay an inevitable collapse.”
07/17/2017 - Dr. Albert Friedberg: The Rate-Rise Phase Engineered By Central Banks Will Not Last Long “Modest or nonexistent inflationary pressures should forestall aggressive tightening of monetary conditions.In due time, reasons will be conjured against reducing central bank balance sheets if and when interest rates threaten to exceed inflation by a wide margin.Very imprecisely, or rather, very impressionistically, Fed funds should not move beyond 2% nor should 10-year Treasurys exceed 3%, barring significant changes to labour costs and/or commodity prices.
Near term, central banks have shown a strong determination to normalize rates. The dramatic rise of stock prices and income-producing real estate, along with the markets’ extreme complacency (as measured by historically low volatility), have reawakened an old central bank nightmare, that of a highly damaging boom-bust cycle. They feel it is better to snuff out boom conditions now by reintroducing fear and a heightened sense of risk, thus disturbing this widespread complacency. Our inflation scenario provides us with the assurance (as assured as we can ever be) that the rate-rise phase engineered by central banks will not last long.”
LINK HERE to the Quarterly Report
07/13/2017 - Should Illinois Be Dissolved As The Solution To Their Crisis?
John Kass of the Chicago Tribune: “Illinois is like Venezuela now, a fiscally broken state that has lost its will to live, although for the moment, we still have enough toilet paper .. But before we run out of the essentials, let’s finally admit that after decade upon decade of taxing and spending and borrowing, Illinois has finally run out of other people’s money.”
Martin Armstrong: “Socialism has really been about government helping themselves to other people’s money for their personal benefit. Their constitution set that government pensions come before everything else. That is helping the poor to paying their debts. The greed of the employees of Illinois has pushed the State to beyond the point of no return. The constitution can only be amended to deny future employees pension. It cannot be altered to deal with the quarter-trillion owed to state employee pension funds. There really is no way out and it becomes questionable if Illinois can even simply go bankrupt when it is constitutionally owed. So Kass’ solution may sound insane, but it is probably the only way to deal with the crisis – tear-up the state as a state and dissolve it entirely.”
Kass: “Dissolve Illinois. Decommission the state, tear up the charter, whatever the legal mumbo-jumbo, just end the whole dang thing. We just disappear. With no pain. That’s right. You heard me. The best thing to do is to break Illinois into pieces right now. Just wipe us off the map. Cut us out of America’s heartland and let neighboring states carve us up and take the best chunks for themselves. The group that will scream the loudest is the state’s political class, who did this to us, and the big bond creditors, who are whispering talk of bankruptcy and asset forfeiture to save their own skins.”
07/13/2017 - McAlvany Podcast: Illinois, New Jersey & Kentucky Pensions Fall Billions Short
Demand For Gold Soars In India – Almost Double Last Year’s Numbers
About this week’s show:
-Where Is My Retirement? Illinois, New Jersey, & Kentucky Pensions Fall Billions Short
-China, India, & Russia Stockpiling Gold Holdings While Western Hedge Funds Reduce
– Yellen, Fischer, & Williams of The Fed […]
07/13/2017 - Nomi Prins: Banking Landscape And Financial Regulations In The Trump Era
07/10/2017 - Mish Shedlock: The Federal Reserve Is Sowing The Seeds Of The Next Financial Crisis
“Time and time again, the Fed sows seeds of the next financial crisis in actions it takes to mitigate the previous financial crisis that it caused .. Does the Fed, in aggregate, believe it blew a bubble? Of course not, even if a couple Fed members believe that may be the current direction .. Is this a transfer of wealth conspiracy theory of some sort, with the Fed actively seeking a transfer of wealth from the poor to the rich .. A simpler explanation, my theory, and the theory that best meets Occam’s Razor is the Fed has no idea what it is doing.”
Rethinking the Fed: More Tightening than Priced In? Next Financial Crisis Coming Up?
07/10/2017 - Thorsten Polleit: “The Artificial Boom Created By Central Banks Must At Some Point Turn Into Bust”
“The artificial boom created by central banks must at some point turn into bust, as the Austrian business cycle theory informs us. The boom turns into bust either by central banks taking away the punchbowl of low interest rates and generous liquidity generation; or the commercial banks, in view of financially overstretched borrowers, stop extending credit; or ever greater quantities of fiat money need be issued by central banks to keep the boom going, inflating prices so that ultimately people start fleeing out of cash. In such an extreme case, the demand for money collapses, and then a Super-Super-Bubble pops.”
07/10/2017 - John Mauldin: A Crisis Of Historic Proportions Is Bearing Down On Us “Think of all the dollar-denominated debt owed by various emerging-market governments and businesses. Higher US rates will strengthen the dollar and make that debt costlier to service, almost certainly causing some defaults. In today’s highly leveraged markets, the pain caused by those defaults will quickly spread to lenders in Europe, Japan, and the US. You might respond that more stringent capital requirements mean today’s banks are better able to withstand such scenarios. That’s partly true. It’s also true that the bank executives hate those requirements and are working assiduously to loosen them. These banks are also far larger than they were in 2008. Yes, they pass the Fed’s stress tests, but the Fed can’t test every possible adverse scenario. Generals always fight the last war. The next crisis probably won’t originate in residential mortgage loans. It will come from somewhere else, and we have no idea whether the banks are actually ready for it. You and I can’t control whether banks are ready, but we can control whether we are ready. I am working on a number of fronts to help you. My brief time away convinced me beyond any doubt that a crisis of historic proportions is once again bearing down on us. We may have little time to prepare. We definitely have no time to waste.”
07/10/2017 - Martin Armstrong Sees Big Move To Equities From Government Bonds With Government Crises In Pensions, Debt, Unfunded Liabilities and With International Capital Flows
07/09/2017 - Dr. Marc Faber Sees The Potential Move To Extreme Socialism Or Fascism In The Western World
LINK HERE to the King World News mp3 Podcast
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