Tag Archive: Monetary Policy


Diplomatic Disaster: Obama Humiliated By Allies’ Rush To Join China’s New Bank

 

 

 

 

 

” The battle of wills between Beijing and Washington over a China-sponsored development bank for Asia is turning into a rout, and the Obama administration has found itself isolated and embarrassed as its top allies lined up this week to join the proposed Asian Infrastructure Investment Bank.

  In what one analyst dubbed a “diplomatic disaster” for the U.S., Britain became the first major European ally to sign on as a founding member of the Shanghai-based investment bank, joined quickly by France, Germany and Italy, which dismissed public and private warnings from the U.S. about the bank’s potential impact on global lending standards and the competition it could provide to existing institutions such as the U.S.-dominated World Bank.

  Luxembourg, a major global financial center, revealed this week that it would sign up. China is also wooing Australia and South Korea, two of America’s closest Asian allies, to join before the March 31 deadline. A South Korean wire service reported Wednesday that Seoul was “seriously considering” the offer.

   With 32 countries on board and more expected in the coming days, Chinese state media have begun to gloat about the failure of the Obama administration to rally even its closest allies and trading partners to shun the Asian Infrastructure Investment Bank. They noted that U.S. officials have long lectured China, now the world’s second-largest economy, to take a more active “stakeholder” role in global economic affairs, but then tried to undermine the investment bank almost from the time Chinese President Xi Jinping floated the idea of an Asian development fund during a trip to Indonesia in October 2013.”

    We challenge anyone to inform us of even one single thing that the present administration has accomplished that has benefitted the United States . Continue reading about the latest failure of Obama/Clinton “smart diplomacy” here .

A Day Without A National Debt

 

 

 

 

 

” On this day in economic and financial history…

  A nation without a debt seems inconceivable today. The United States currently has more than $16 trillion in public debt, and no sensible proposals exist to bring this massive sum down to a more reasonable level. But there was a day when the U.S. proclaimed itself a debt-free nation: Jan. 8, 1835.

  The brand-new United States emerged from the Revolution with some $75 million in war debts, and this sum grew to $127 million after the War of 1812. After these wars, the young nation embarked on a 20-year period of positive cash flow and debt reduction, which picked up steam after the election of President Andrew Jackson in 1828.”

 

Read more about this historic day …

 

 

Further reading:

 

History Of Debt In The United States – Debt.org

178 Years Ago Today We Had A National Debt Of $0

Andrew Jackson – Wikipedia

Bureau Of The Public Debt: Our History

 

 

    Since that historic day in 1835 , the US government has spent an average of $100 million that it did not have , each and every year .

 

 

 

 

 

 

 

 

Whatever Happened To Inflation?

 

 

 

 

” Since 2008, the Federal Reserve has been trying to stave off economic disaster with an unconventional monetary policy tool known as quantitative easing. By buying financial assets from commercial banks and other institutions, the Fed has massively expanded the money supply-quadrupling it since the practice began.

  Many economists, particularly followers of the Austrian school, deplored the practice and predicted that the unprecedented currency and asset price manipulation would lead to huge and damaging price inflation. Reason was among them, declaring on our October 2009 cover: “Inflation Returns!” A group of free market economists were asked: “Has the time come to stockpile canned goods and pick up a wheelbarrow for transporting currency, or should we be afraid of the opposite-a prolonged contraction that causes prices to crash?”

  Six years later, official consumer price index inflation sits at just 2 percent annually from July 2013 to July 2014, the latest period for which figures are available. This is identical to the rate for the previous year.

  We asked four economists and market analysts to revisit what they originally predicted would happen after quantitative easing and assess whether (and why) they were right. Analyst Peter Schiff sticks to his guns, saying that any “claims of victory over inflation are premature and inaccurate. Inflation is easy to see in our current economy, if you make a genuine attempt to measure it.” Economist Robert Murphy believes we are in a “calm before the storm” and is “confident that a day of price inflation reckoning looms.” Contributing Editor David R. Henderson writes that the “financial crisis has brought such major changes in central banking that uncontrolled inflation from discretionary monetary policy is not as great a danger as it once was,” though he remains critical of the Fed’s growing powers. And economist Scott Sumner claims victory for the “market monetarists,” noting that both Austrians and Keynesians have been proven wrong by events, and urging both sides to “take markets seriously.” “

 

Reason has more

 

 

 

 

 

 

 

 

 

 Why Hillary Clinton Would Be A One-Term President, According To Peter Thiel

 

 

 

 

   The genius behind PayPal , Peter Thiel , speaks with Glenn Beck on the foolish monetary policy bankrupting America and the likelihood of a Clinton presidency being a one term affair .

 

 

 

 

The Death Rattle Of Europe’s Statist Dream

 

 

 

 

 

 

” Europe’s all-too-predictable relapse into recession is gathering force, threatening not only the pipe dream of economic and political unity, but eroding grandiose illusions that have helped prop up the world’s financial house of cards. The unwillingness of France in particular to play by the EU’s — i.e.,  Germany’s — rules appears to have doomed the EU dream. The idea of a borderless Europe bound by a common currency and a shared desire to forever banish war from the Continent was a lofty one, but it was mired from the start in deeply rooted political animosities, grass-roots skepticism and bureaucratic overreach. Now these problems, along with a great many others, have turned the EU project into a Tower of Babel. A million pages of meticulously codified EU rules might as well have been written in cuneiform, so inscrutable and arcane have they become.

  And useless as well. France’s prolonged economic death rattle has been made possible by running annual deficits larger by half than the 3% “allowed” by Brussels. And now, channeling  de Gaulle for what could turn out to be France’s last hurrah, the French have flouted Merckel’s authority, and common sense itself, by proposing to remedy the problem by hiring more government workers and expanding tax breaks.  Portugal, Greece, Spain and the other deadbeat rabble have been cheering them on, and why not? They think they have nothing to lose — that Germany is the only country with any skin in the game. Their folly is about to be laid bare, however, unless Germany gives in and allows Europe’s Central Bank to monetize the collective debts of Europe Fed-style. “

 

Continue reading

 

 

 

 

 

 

 

 

Daily Video 10.20.14

The Fed Lays A Foundation For The Next Round Of QE

 

 

 

 

Published on Oct 10, 2014

 ” Listen to The Peter Schiff Show on http://www.SchiffRadio.com
Buy my newest book at http://www.tinyurl.com/RealCrash
Friend me on http://www.Facebook.com/PeterSchiff
Follow me on http://www.Twitter.com/PeterSchiff “

 

 

 

 

 

 

 

 

 

 

 

Why You Feel Poorer

 

 

costoflivingxpenses-7-1-14

 

 

 

 

” You feel poorer because you are poorer.

  In the last fourteen years, has your income increased over 50%? If you think it has, has it done so after taxes? Even if it has, you likely have not kept up in terms of inflation.

  If you are a retiree, living on fixed income, a pension or bonds, you certainly have become poorer. If you had bought the Dow-Jones on 12/31/1999 you would have entered at about 11,500. It closed last week at less than 17,100. That would have been an appreciation of 6,600, better than 50%. But, of course, that was before taxes.

  As a retiree, you have seen your purchasing power stolen by Fed policies. Whether you invested in fixed income or equities, you lost ground. Anyone in that position has seen their lives become poorer despite a lifetime of successful work and careful financial planning.”

 

 

    As it stands now , no matter how hard you work and save , you’ll never get ahead , not with the present monetary policies put in place at the behest of the Fed and the government . The authorities are systematically destroying all that the American public has worked so hard to attain . The American dream is not being killed by China … It is a victim of filicide

 

 

” For those still working, most are losing purchasing power each year. Wages are not keeping up with inflation, even the understated numbers reported by government. In short, the decline of a once-great economic power is well underway. The country is no longer growing enough to raise everyone’s standard of living.

  Government has killed the golden goose and in an attempt to hide the obvious is debauching the dollars. Government tries to hide their own failure with phony statistics and a welfare state designed to placate the masses. Bread and circuses are deceptions not progress.”

 

 

Read the rest

 

 

 

 

 

 

Your Money In Pictures: The Top 5 Charts Of 2013

 

” As part of our countdown to the new year, here are Heritage’s top five must-see charts of 2013.”

 

 

ShareofDebt600649

 

 

Each American’s Share of Publicly Held Debt

” As Washington lawmakers continue to spend more and pile on debt, each American’s share of public debt has risen to $36,000—about six times more than in 1970—and is set to rise astronomically in coming years. Without reform, the government will have borrowed $135,547 in public debt for each American, or almost three times the current median income, by 2036. This chart shows that serious consequences lie ahead if the government continues on its current path of reckless spending with no reform in sight.”

 

 

 

 

 

 

 

 

 

 

 

 

Boring, But Bad — The Problem Of The Federal Reserve

 

 

 

 

” I’ve always avoided reporting on the Federal Reserve. I know it’s more important than much of the stuff I cover, but it’s so boring. How can I succeed on TV reporting on the Fed? Fed chairs even work at being dull.

Alan Greenspan said he tried to be obscure because he didn’t want to spook markets. He called his obfuscation “Fedspeak.” It’s a far cry from the clarity of his language — and principles — when he was young and a disciple of libertarian Ayn Rand.

Outgoing Fed Chairman Ben Bernanke and his likely successor, Janet Yellen, are almost as boring.

But we should watch what they do. The Fed can destroy your savings and your future. The current crew of Fed bureaucrats has raised the Fed’s balance sheet to a stunning 4 trillion dollars.

As Sen. Rand Paul‘s father, retired congressman Ron Paul, put it, “No secret cabal of government officials should have the authority to create money out of thin air.” “

 

 

 

 

 

 

 

Janet Yellen Is So Rich She Has More Than $100K in Her Checking Account

 

 

 

” Janet Yellen, President Obama’s nominee to lead the Federal Reserve, is a vastly wealthy multimillionaire—which is standard, because only those fully insulated from the effects of economic policies are allowed to make economic policies. Let’s look at Janet Yellen’s personal accounts, shall we?

Here is the financial disclosure form that Janet Yellen has filed, as required by law. Her total wealth is between $5.1 million and $14.4 million. That makes her predecessor Ben Bernanke (assets: $1.1 million- $2.3 million) look like an absolute pauper. Among Janet Yellen’s holdings:  CLICK HERE

Janet Yellen, like just about every other top economic policymaker, is wealthy enough to be just fine no matter what happens to our economy. Always worth remembering.”

Please Share With Everyone You Know

 

 

As we approach the 100 year anniversary of the creation of the Federal Reserve, it is absolutely imperative that we get the American people to understand that the Fed is at the very heart of our economic problems.  It is a system of money that was created by the bankers and that operates for the benefit of the bankers.  The American people like to think that we have a “democratic system”, but there is nothing “democratic” about the Federal Reserve.  Unelected, unaccountable central planners from a private central bank run our financial system and manage our economy.  There is a reason why financial markets respond with a yawn when Barack Obama says something about the economy, but they swing wildly whenever Federal Reserve Chairman Ben Bernanke opens his mouth.  The Federal Reserve has far more power over the U.S. economy than anyone else does by a huge margin.  The Fed is the biggest Ponzi scheme in the history of the world, and if the American people truly understood how it really works, they would be screaming for it to be abolished immediately.  The following are 25 fast facts about the Federal Reserve that everyone should know…

 

#1 The greatest period of economic growth in U.S. history was when there was no central bank.

#2 The United States never had a persistent, ongoing problem with inflation until the Federal Reserve was created.  In the century before the Federal Reserve was created, the average annual rate of inflation was about half a percent.  In the century since the Federal Reserve was created, the average annual rate of inflation has been about 3.5 percent, and it would be even higher than that if the inflation numbers were not being so grossly manipulated.

#3 Even using the official numbers, the value of the U.S. dollar has declined by more than 95 percent since the Federal Reserve was created nearly 100 years ago.

#4 The secret November 1910 gathering at Jekyll Island, Georgia during which the plan for the Federal Reserve was hatched was attended by U.S. Senator Nelson W. Aldrich, Assistant Secretary of the Treasury Department A.P. Andrews and a whole host of representatives from the upper crust of the Wall Street banking establishment.

#5 In 1913, Congress was promised that if the Federal Reserve Act was passed that it would eliminate the business cycle.

#6 The following comes directly from the Fed’s official mission statement: “To provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.”

#7 It was not an accident that a permanent income tax was also introduced the same year when the Federal Reserve system was established.  The whole idea was to transfer wealth from our pockets to the federal government and from the federal government to the bankers.

#8 Within 20 years of the creation of the Federal Reserve, the U.S. economy was plunged into the Great Depression.

#9 If you can believe it, there have been 10 different economic recessions since 1950.  The Federal Reserve created the “dotcom bubble”, the Federal Reserve created the “housing bubble” and now it has created the largest bond bubble in the history of the planet.

#10 According to an official government report, the Federal Reserve made 16.1 trillion dollars in secret loans to the big banks during the last financial crisis.  The following is a list of loan recipients that was taken directly from page 131 of the report…

Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion “

 

 

Read On

 

 

 

 

 

 

 

 

 

Where Are We Now? – A World View

 

 

 

Wondering why the money world got its knickers in a twist last week? The answer is simple: the global economy is breaking apart and its constituent major players are doing face-plants on the downhill slope of a no-longer-cheap-oil way of life.  Let’s look at them case by case.

     The USA slogs deeper into paralysis and decay in a collective mental fog of disbelief that its own exceptionalism can’t overcome the laws of thermodynamics. This general malaise precipitates into a range of specific quandaries. The so-called economy depends on financialization, since it is no longer based on manufacturing things of value. The financialization depends on housing, that is, a particular kind of housing: suburban sprawl housing (and its commercial accessories, the strip malls, the box stores, the burger shacks, etc.). Gasoline is now too expensive to run the suburban living arrangement. It will remain marginally unaffordable. Even if the price of oil goes down, it will be because citizens of the USA will not have enough money to buy it. Lesson: the suburban project is over, along with the economy it drove in on.

     But so is the mega-city project, the giant metroplex of skyscrapers. So, don’t suppose that we can transform the production house-building industry into an apartment-building industry. The end of cheap oil also means we can’t run cities at the 20th century scale. That includes the scale of the buildings as well as the aggregate scale of the whole urban organism. Nobody gets this. For one thing, there will be far fewer jobs in anything connected to financialization because that “industry” is imploding. The recent action around the Federal Reserve illustrates this. When chairman Bernanke’s lips quivered last week, the financial markets had a grand mal seizure. He floated the notion that his organization might “taper” their purchases of US government issued debt and mortgage-backed securities — the latter being mostly bundled debt originated by government-sponsored entities and agencies. That’s the “money” that supports the suburban sprawl industry.”

 

 

 

Read the whole sobering article … if you dare .

 

 

 

 

 

 

 

Stockman: The End Is Near and There’s Nothing We Can Do About It

” I’ve read a lot of doom-and-gloom analysis from financial experts over the last couple of years, but this one by former Reagan OMB Director David Stockman takes first prize for scaring the holy living beejeeses out of me.

A few highlights:

” THE state-wreck ahead is a far cry from the “Great Moderation” proclaimed in 2004 by Mr. Bernanke, who predicted that prosperity would be everlasting because the Fed had tamed the business cycle and, as late as March 2007, testified that the impact of the subprime meltdown “seems likely to be contained.” Instead of moderation, what’s at hand is a Great Deformation, arising from a rogue central bank that has abetted the Wall Street casino, crucified savers on a cross of zero interest rates and fueled a global commodity bubble that erodes Main Street living standards through rising food and energy prices — a form of inflation that the Fed fecklessly disregards in calculating inflation.

These policies have brought America to an end-stage metastasis. The way out would be so radical it can’t happen. It would necessitate a sweeping divorce of the state and the market economy. It would require a renunciation of crony capitalism and its first cousin: Keynesian economics in all its forms. The state would need to get out of the business of imperial hubris, economic uplift and social insurance and shift its focus to managing and financing an effective, affordable, means-tested safety net.”

Wall Street has us by the throat and Washington has us by a body part further south. Stockman’s advice of what to do is both frightening and depressing:

The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse. If this sounds like advice to get out of the markets and hide out in cash, it is.”

 

 

Update : PJTV Video

 

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The Real Hockey Stick Chart: Inflation Since the Birth of the Nation

 

“This is what happens when the dollar is backed by “the full faith and credit of the United States” and not the barbarous relic. Nixon abandons gold in 1971 and inflation launches skyward. It’s hard to believe that for most of the history of the United States inflation was next to 0%.

That the rate of crony capitalism has launched into the stratosphere at a commensurate rate with inflation is no coincidence. Fiat money is the mother’s milk of crony capitalism.”

 

InflationChart

 

 

 

 

Barack Insults My Intelligence II

Welcome To Obamaville 

 

 

” ‘I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” – Ben Bernanke, November 8, 2002.

That was how Federal Reserve chairman Ben Bernanke concluded his remarks at a conference honouring Milton Friedman on his 90th birthday. Anna Schwartz was Friedman’s less famous yet no less significant collaborator; she died in June.

Bernanke refers to Friedman and Schwartz’s A Monetary History of the United States: 1867-1960, published in 1963, as “the leading and most persuasive explanation of the worst economic disaster in American history, the onset of the Great Depression”. Their research, which countered decades of Keynesian orthodoxy on the 1930s, placed the blame for what they dubbed the Great Contraction of 1929 to 1933 squarely at the feet of the Fed.

Bernanke read Monetary History as a graduate student and became a self-described Great Depression buff. Not convinced the 1929 to 1933 contraction of the money supply was sufficient to account for the fall in output, he offered an additional explanation in a 1983 paper, “Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression”.”

   Breitbart

” Just how subservient to Barack Obama is the Fed? We’ll soon find out . The Fed is considering pumping more money into the
economy and inflating the currency by the end of September, just in time to artificially stimulate growth and help Obama’s reelection prospects. Just two weeks ago,
Senator Chuck Schumer told the Fed it should act before the 2012 election. “

  While we seldom share much sentiment with Dennis Kucinich , in this case we stand on common ground .

” Ohio Democratic Rep. Dennis Kucinich thanked Texas Republican Rep. Ron Paul for his “diligence” in advocating for a bill that would
give the Government Accountability Office the authority to fully audit the Federal Reserve, adding that it is “baloney” to suggest Congress
cannot “touch the Fed.”

   The legislation moved through the House Oversight Committee and Government Reform Committee on Wednesday. ”

  
   This is an issue that should have been dealt with ages ago . The FED needs to audited and brought to heel immediately .

”  “When Congress created the Fed in 1913,.Congress delegated specific tasks to it, and Congress remains constitutionally-obligated to conduct oversight over the Fed as a result. The Fed should not be permitted to operate in the dark without oversight by Congress and
accountability to the people.” ”

   Support this bill . Call your congressman . Make some noise .

Take That Mr Enron

 How does one get a job being wrong all the time ? Is that a prerequisite for being a Times columnist ? Oh , I guess pomposity is among the requirements as well . 

 

  “Congressman Ron Paul, in a rare head-to-head broadcast confrontation, went up against the Nobel laureate in economics Paul Krugman in an open debate over monetary policy. It was broadcast on the Bloomberg Television, moderated by Trish Regan. Not to put too fine a point on it, Ron Paul won the exchange, so much so that the cameras and moderators just drifted away from Mr. Krugman without so much as a fare-thee-well and left the field to the hero of the campaign for honest money.”

End The Fed

 I’m not optimistic but it is a start . The time has come to end private control of the monetary system .

“A House subcommittee is scheduled to hold a hearing on proposals to reform or end the Federal Reserve System, Texas Republican Rep. Ron Paul announced last Friday.”