Would Salvador Dali make a better Federal Reserve Chairman than Janet Yellen or Ben Bernanke before her?
If that seems far-fetched to you, read on to understand the benefits Salvador Dali might provide for the Fed. Yes, Mr. Dali is no longer of this earth so you should feel free to substitute someone with similar skills. The point is that a man with his talents might be a better Fed Chairman than the economic hacks that are appointed.
Few topics are less understood (and more boring) than the mechanics of banking. Anyone who has taken an economics course was exposed to the bank-multiplier effect — how banks can “create” money via lending in a fractional-reserve system. John Kenneth Galbraith, a witty economist (no, that is not an oxymoron), said of money:
NEW YORK (MarketWatch) — The dollar — and currencies in general — have lulled investors to sleep, sticking to tight trading ranges even in the face of growing geopolitical conflict. That might be about to change.
The ICE dollar index DXY, +0.23% which tracks the U.S. currency against a basket of major rivals, quietly pulled off a breakthrough this week, punching to its highest level since September. It traded at 82.03 in recent action.
“There’s a late-summer feel to the weather and a spring in my step as the dollar has finally slipped its moorings and edged up and out of the doldrums,” said Société Générale global macro strategist Kit Juckes, in a note.
A sustained rally could have important implications for U.S. and multinational companies, potentially resounding across the stock market and other asset classes.
We’re all familiar with the so-called reality TV shows, which really push the envelope of believability. But the one reality show that never gets mentioned is the reality of just where the US population is when it comes to their financial position.
[...] On Monday morning one of the first things CNBC was discussing at the 7 am time slot was that a recent poll showed that in the US, 36% of the population had absolutely NO savings for retirement. None. Not a 401K, not a savings account, or even a handful of bonds they got as kids for their birthday.
One might suggest that those 36% are part of the 77 million that are in some form of credit collection situation. But it isn’t just the dismal savings rate that is a problem for us and you all know that. The problems run deep and wide, and they’re covering them over with paper. Literally folks. They’re printing up paper to jam into stocks, to hide the disgusting reality of the average American’s situation.
Dow up another 175 points. Wee! Corrupt money corrupts everything it touches. Do you remember, last year about this time, we saw two guys in electric wheelchairs racing each other down Eutaw Street in Baltimore?
[...] The local liquor store must have been getting ready to close. All over the city you see these motorized wheelchairs. You may wonder how people got around before they were invented. They probably walked. Or powered their wheelchairs with their own arms.
You may also wonder whether eliminating the need to use arms as well as legs is such a good thing. Finally, you may wonder how so many poor people are able to afford such fancy wheels.
Monetary central planning gives rise to economic waste, distortion and deformation because it causes capital to be mis-priced. Nowhere is this more evident than in the massive and destructive level of mergers and acquisitions (M&A) that has become a standard component of bubble finance. Stated simply, ZIRP and financial repression push long-term interest rates to deeply sub-economic levels, causing the value of future cash flows from M&A deals to be grossly and systematically over-estimated.
Sometimes I am convinced it was completely by design, and not a weird little coincidence, that one of Germany’s most sprawling red light districts is just steps away from the European Central Bank.
This fact becomes comically obvious right around happy hour… as self-congratulatory ECB economists and their bureaucratic bank underlings crowd the bars and cafes after work which are simultaneously frequented by pimps, thugs, and other assorted low-lifes.
One would be forgiven for legitimately asking the question: which of these professions has done more damage to humanity?
As rents climb, developers large and small take out their calculators and dreams of wealth blossom: but no, this is not bubble.
The disastrous blowback from inflating housing bubbles is painfully obvious: as housing becomes unaffordable, households impoverish themselves to “get in now before it’s too late;” malinvestment (i.e. McMansions in the middle of nowhere) flourishes as housing becomes a speculative financial vehicle rather than shelter; retirement funds are sold designed-to-default mortgage-backed securities, and when the bubble finally pops, those lured into buying at the top are left underwater, owing more on their mortgage than their house is worth.
But there is one silver lining to housing bubbles: some of the money squandered in the speculative frenzy ends up rehabilitating old buildings or erecting new housing in useful locales.
Having served Washington’s propaganda purposes, the downed Malaysian airliner and the alleged Russian armored column that entered Ukraine and was allegedly destroyed have dropped out of the news even though both stories remain completely and totally unresolved.
Washington’s stooge government in Ukraine has not released the records of communications between Ukrainian air traffic control and Malaysian flight 17, and Washington has not released the photos from its satellite which was directly overhead at the time of the airliner’s demise.
We can safely and conclusively conclude from this purposeful withholding of evidence that the evidence does not support Washington’s and Kiev’s propaganda.
I knew I’d get hate mail and lots of vehement push-back when I wrote my column The Truth About Your Consent; it’s a topic I’ve raised privately with people in the past, and the reaction has always been the same — anger, shock and usually a nasty response.
So I think you should go read it again — and not because I’m trying to break my record for hate email (although it’s already close in that regard.)
No, you should read it again because it’s true, and in addition if we are to ever make progress in this country the people of this nation need to understand the principle in that column and accept responsibility for it.
For the first time ever, the federal government this year introduced a data series that compares price differences among states and metropolitan areas. Those estimates — regional price parities and real personal income — offer something simple and immensely useful for anyone considering making a move: They allow you to compare how far your money goes in each state.
We covered the implications — how you might use the data to compare income or rent in one state with another — when the Bureau of Economic Analysis released the data in April, and today the Tax Foundation published the following map based on the same data to show how far $100 would go in each state.
PHILADELPHIA (CBS) – Over a third of all Americans (36%) have not saved any money for retirement, according to a new Bankrate.com (NYSE: RATE) report. Sixty-nine percent of 18-29 year-olds haven’t saved anything, along with 33% of 30-49 year-olds, 26% of 50-64 year-olds and 14% of people 65 and older.
I would like to take this opportunity to thank my dear mother for insisting that I start putting away money as soon as I got my first job out of college. It certainly has added up over 25+ years and indeed mother knows best.
The good news is that Americans who are saving are starting earlier. Twice as many 30-49 year-olds started saving in their 20s as opposed to their 30s. But 50-64 year-olds were only slightly more likely to have started saving in their 20s than their 30s, and Americans 65 and older were almost evenly split between starting in their 20s, 30s and 40s.
Holders of China’s first corporate bond to default onshore met today in Shanghai, as investors look for clues on how the government will balance market liberalization with steps to maintain stability.
There was difficulty assessing the overseas assets of Shanghai Chaori Solar Energy Science & Technology Co. and no specific restructuring plan emerged from the gathering, according to Wang Xuejun, an investor in attendance. The solar-panel maker will issue a statement by tomorrow at the latest, Vice President Liu Tielong said when reached on his mobile phone after the meeting. More than 10 police cars were on the street in front of the company headquarters today around 2:30 p.m. as the gathering took place.
(Reuters) – President Cristina Fernandez on Tuesday unveiled legislation that seeks to push bondholders to swap defaulted debt for new notes governed by Argentine law, a move aimed at skirting a U.S. ruling that prevented her government from paying its creditors.
Argentina slid into default last month after a New York court blocked an interest payment of $539 million owed to holders of debt issued under U.S. legislation that was restructured after the country’s record 2002 default.
The judge said Argentina could not proceed with that payment until it had also settled on repayment terms with a group of hedge funds that had rejected the restructuring deal and are demanding full payment.
Are you prepared for an “exit”? If the Fed pursues an “exit” from ultra low interest rate policy, are you prepared for an exit from the stock market should things turn South? We discuss how investors prepare, noting the most common mistakes investors make along the way.
[...] Are you prepared for an exit?
No, you are not. We know because we meet investment advisers that have dropped their defensive strategies because they were losing clients. Those we meet that say they are prepared think they can get out at the right time should the markets topple over as the Fed exits; our guess is pigs will learn to fly before many will get that timing right. And those who don’t rely on luck are the first to tell us they don’t think they are fully prepared, as it’s rather difficult to predict how things will unfold.
Arguably London’s most accurate gold forecaster for the past 15 years, Sharps Pixley CEO Ross Norman is warning of single digit gains only for the yellow metal this year, though he has not lost his sights on ‘very much higher prices’ in 2015-16.
His gold forecast last year suggested that 2014 would be a ‘goldilocks’ year – not too hot and not too cold – with rally fade to both the upside and downside as the market reverted to the mean – so far that view appears to have held true.
Speaking from his office in Berkeley Street he told ArabianMoney that gold and silver prices will only really shine again when there is again a perceived serious inflation threat and he just can’t see one on the immediate horizon.
Q: David, there is a writer Bix Weir who you most likely know of and he is of the opinion there is considerably more gold in the world than people think. He references 2 locations of big stashes and maintains the total is in excess of a million ton. For that reason, he is saying silver is far superior to gold in protection. What is your thought?
David Schectman’s Answer:
Personally, I believe silver is a better investment than gold apart from Bix’ argument. His opinion does not reflect the majority view, but with or without the “extra” gold, silver looks better to me. When the price of precious metals start to rapidly rise, gold will be too expensive for most people and it will be easier to spend $100 or $200 an ounce for silver than to spend $3,500 or $5,000 for an ounce of gold. There is very little spare above-ground silver to purchase (most is either used up by industry or it is held by strong hands that will not let go of it) and there is a lot of gold sitting around. The only question with gold is at what price will the owners decide to sell some? With silver, once shortages arise, due to increased investor demand, then industry will jump in an also hoard since they need the silver to keep the doors of their businesses open.
“Stop tax inversion by American corporations” is the latest war cry of American socialists. Obama is infuriated that U.S. corporations want to be American no more and is going to stop it.
Tax inversion is a method whereby a U.S. multinational company takes over a foreign company and creates a new corporate entity that the U.S. “tax inversion” uses to leave U.S. tax jurisdiction (the newly created company re-incorporates overseas). With a single takeover the U.S. corporation is no longer American — it might be British or Irish and subsequently pay a much lower rate of tax.
Inertia has been haunting China ever since it started its program of ambitious economic reform earlier this year. The original plan included reining in domestic debts and overcapacity, cutting red tape and liberalizing the market, all while maintaining a GDP growth rate of 7.5%. Yet the government is having a hard time dealing with rising debt levels and overcapacity, which may potentially stall China’s economic reforms.
According to The Economist, China’s credit-to-GDP ratio broke 200% in July 2014, the highest level since 2002 (see chart below). Some measures put China’s debt-to-GDP ratio at over 250% as of July 2014. The burgeoning credit was facilitated by “a burst of government stimulus” in the second quarter, with eased-up lending from the banks. The government support successfully put the economy back to a growth rate of around 7.5% in the second quarter from a year earlier.
Big Oil has been very successful at developing sophisticated technology to access oil in some pretty remote areas.
Consider the technological skill necessary to drill several miles below the seabed at staggering depths, or the processing equipment needed to transform viscous bitumen into usable fuel – these are impressive feats of engineering and science.
But after years of spending billions of dollars on these challenges, the world’s largest oil companies are running into a serious problem: Many of their projects are not profitable and won’t be anytime soon.
Long time Dollar Vigilante (TDV) readers have probably noticed that TDV is rarely the first to report on non-financial current events. While many including those in the alternative media often jump right on a story and add their views to it we tend to watch, analyze and do more research before putting our view on things out into the ether. This isn’t to say that those who jump immediately on a story aren’t doing good work or add a lot of value but you will always find a more tempered and more analytical view of things here… often days or weeks after an event has begun so as we can take in more of a bigger picture. Now, after a week of watching the events transpire in Ferguson we are prepared to give our vigilante view on what we have seen so far.
Most know the general backstory so we won’t rehash that too much but from our perspective what has happened is that there was a particular event in which a lighter skinned armed individual wearing police gang colors shot six times got into an altercation and killed a local man who had dark skin. Really, the color of the people’s skin is irrelevant for reasons I will explain below.
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