By: Jim Willie CB, GoldenJackass.com
-- Posted Wednesday, 30 November 2011 | Share this article | Source: GoldSeek.com
[snippet]
The US Federal Reserve has fooled a lot of people into believing that the grand monetary pump and debt monetization project has been put on hold. The only thing that changed was their talking publicly about it. The money press has been working to the limit, never stopped. The discussion has been kept quiet, but the machinery still makes a lot of shrill noise. The proof is not movement of lips by central bankers, but the data from the monetary aggregate. The data is compelling in calling them out.
The conclusion to reach is that Quantitative Easing has become the norm, the foundation policy, the emergency action to prevent implosion of the US banking system. Hyper monetary inflation is the New Normal. The sinkholes are so broad and dispersed that even run of the mill analysts are beginning to see the light. They are concluding more and more than the credit-based system is collapsing. Never does the Jackass rely upon central bankers to inform of events, policies, and actions. They have been dedicated lately to deceptions much like turning off smoke alarms, killing the electricity on fire station monitors, laying off the working firemen, and hoping the public does not notice the raging fires which have been accompanied by grand larceny looting to hide the flames.-- Posted Wednesday, 30 November 2011 | Share this article | Source: GoldSeek.com
[snippet]
The US Federal Reserve has fooled a lot of people into believing that the grand monetary pump and debt monetization project has been put on hold. The only thing that changed was their talking publicly about it. The money press has been working to the limit, never stopped. The discussion has been kept quiet, but the machinery still makes a lot of shrill noise. The proof is not movement of lips by central bankers, but the data from the monetary aggregate. The data is compelling in calling them out.
Always trust Ludwig, our reliable patron saint of money whose epistles combat the evil forces of fiat money. VonMises said that inflation always has been a matter of money growth. It always will be. Notice in the yearly monetary aggregate chart, where ticks are full years, that the 2010 and 2011 years show a steady linear growth. The money supply never stopped growing in summer 2011. The June deadline came and went, and nothing changed, only the words from the increasingly desperate central bankers, led by the hack economist professor Ben Bernanke. If the public were ever to glimpse at what passes for Economics Dept research at universities, they would vomit at its abstruce uselessness. Phony money not only produces phony wealth, but phony faculty research and phony integrity of financial systems. Over one third of all university professors with chaired posts are funded by the USFed, if truth be known. They perpetuate their mental muck. Heck, the Jackass had the pleasure to observe some Statistics Dept research back in the day. Half was as we enlightened students called FLUFF, like new statistical measures that had value only in a strange world where the researcher defined the criterion for good. The fluff merchants stunk as professors too. Two come to mind from my Carnegie Mellon University years. But at CMU the majority of professors were utterly outstanding, brilliant, great teachers, grounded in reality, and having produced reams of highly useful work. Two fine professors remain my friends, being on first name basis since adults. They go along with the notion of the Jackass being adult, wondering the definition of a Jackass in bemused reaction.
The money supply is still growing. The data contradicts the premise that the QE program was terminated. Easily explained. The initiative turned global to produce Global QE. The USFed has been accommodating the Europeans and Wall Street banks, so that the broken insolvent big Euro banks can be propped with more phony money. The Euro Central Bank is printing money heavily or else borrowing in heavy volume from the USFed Dollar Swap Facility. Without bond market buyers, the EuroCB has reluctantly filled the void and has been buying the Italian Govt Bonds. Recall that big Euro banks are huge sellers of sovereign bonds. The USFed never stopped printing money to buy USTreasury Bonds, which ramps up each month as USGovt debt piles up each month. Recall that foreign creditors are net sellers of USTBonds. The USTBond auctions have not failed, and for a reason. The USFed is buyer of last resort. Where the bids came from has been kept quite secretive. It is the USFed, which never stopped QE. In fact, Global QE is the mainline policy nowadays, and it has turned into hyper-inflation under the sleepy eyes of both investors and the financial press. Why the investment community relies upon the central bank liars and the financial press dimwits is proof of national stupidity in my view. Intelligent people are wondering if QE3 will emerge when QE never ended!!
THE ONLY THING THAT CHANGED SINCE JUNE 2011 WAS THE USFED DOES NOT TALK ABOUT THEIR VAST MONEY PRINTING AND DEBT MONETIZATION. THE DULL MENTAL CAPACITY OF THE MASSES IS ASTONISHING.
Pretty clever, huh?? The end result is the investment community is dominated by truly moronic questions about when the USFed will print money again. They never stopped. Jim Rogers in a recent interview had to chastise the financial press nitwit in control of the conversation, to urge a quick view of the money supply. He showed patience though. The interviewer seemed not to understand the concept of money supply even after three instances of veiled insults. It is like asking a liar if the weather outside is rainy. TAKE A LOOK. THEY NEVER STOPPED PRINTING MONEY. The Operation Twist was a USTBond redemption plan built around QE3 designed to buy all what foreign central banks sold. They sold it as a pause in the pattern. Dull witless people bought the notion. The Jackass called it for what it was from the start, a smokescreen to cover for foreign bond sales. Foreign creditors were big net sellers of USTBonds. It is right there in the data published by the same liars at the USFed and USDept Treasury. TAKE A LOOK. THEY NEVER STOPPED PRINTING. My respect for the American financial sector has never been lower, and that includes the investment community. For three years, the Jackass has been advising to remove funds from the system, which would be at risk of pilferage. The MFGlobal event has sealed both the reputation of the US financial sector and the outcome of the implosion.
The big Euro banks are selling boatloads of bonds. But on the other side of the table, the Euro Central Bank is buying only truckloads. The net is still an exodus, thus rising bond yields. A few emails from clients came in the last week wondering why sovereign bond yields in Spain, Italy, and even France are still rising if the EuroCB has entered the arena with both hands buying the bonds, however reluctantly. Remember the initial pronouncements by the new Head Draghi (aka Euro Dragon), that he did not want to buy government bonds. The European Govt Bond market is in freefall. The only way to stop it is vast recapitalization of the entire US & London and European banks at a cost of $4 to $5 trillion. When the Powerz and Technocrat generals flip the switch and make the decisions, Gold will then go to $3000 then rest, then go to $5000 later on. Similar for silver, going to $80 then rest, then go to $150. In the interim, the objective is to beat down Gold & Silver by whatever deception.
DERIVATIVE SPURT HIDES INSTABILITY
The money supply is still growing. The data contradicts the premise that the QE program was terminated. Easily explained. The initiative turned global to produce Global QE. The USFed has been accommodating the Europeans and Wall Street banks, so that the broken insolvent big Euro banks can be propped with more phony money. The Euro Central Bank is printing money heavily or else borrowing in heavy volume from the USFed Dollar Swap Facility. Without bond market buyers, the EuroCB has reluctantly filled the void and has been buying the Italian Govt Bonds. Recall that big Euro banks are huge sellers of sovereign bonds. The USFed never stopped printing money to buy USTreasury Bonds, which ramps up each month as USGovt debt piles up each month. Recall that foreign creditors are net sellers of USTBonds. The USTBond auctions have not failed, and for a reason. The USFed is buyer of last resort. Where the bids came from has been kept quite secretive. It is the USFed, which never stopped QE. In fact, Global QE is the mainline policy nowadays, and it has turned into hyper-inflation under the sleepy eyes of both investors and the financial press. Why the investment community relies upon the central bank liars and the financial press dimwits is proof of national stupidity in my view. Intelligent people are wondering if QE3 will emerge when QE never ended!!
THE ONLY THING THAT CHANGED SINCE JUNE 2011 WAS THE USFED DOES NOT TALK ABOUT THEIR VAST MONEY PRINTING AND DEBT MONETIZATION. THE DULL MENTAL CAPACITY OF THE MASSES IS ASTONISHING.
Pretty clever, huh?? The end result is the investment community is dominated by truly moronic questions about when the USFed will print money again. They never stopped. Jim Rogers in a recent interview had to chastise the financial press nitwit in control of the conversation, to urge a quick view of the money supply. He showed patience though. The interviewer seemed not to understand the concept of money supply even after three instances of veiled insults. It is like asking a liar if the weather outside is rainy. TAKE A LOOK. THEY NEVER STOPPED PRINTING MONEY. The Operation Twist was a USTBond redemption plan built around QE3 designed to buy all what foreign central banks sold. They sold it as a pause in the pattern. Dull witless people bought the notion. The Jackass called it for what it was from the start, a smokescreen to cover for foreign bond sales. Foreign creditors were big net sellers of USTBonds. It is right there in the data published by the same liars at the USFed and USDept Treasury. TAKE A LOOK. THEY NEVER STOPPED PRINTING. My respect for the American financial sector has never been lower, and that includes the investment community. For three years, the Jackass has been advising to remove funds from the system, which would be at risk of pilferage. The MFGlobal event has sealed both the reputation of the US financial sector and the outcome of the implosion.
The big Euro banks are selling boatloads of bonds. But on the other side of the table, the Euro Central Bank is buying only truckloads. The net is still an exodus, thus rising bond yields. A few emails from clients came in the last week wondering why sovereign bond yields in Spain, Italy, and even France are still rising if the EuroCB has entered the arena with both hands buying the bonds, however reluctantly. Remember the initial pronouncements by the new Head Draghi (aka Euro Dragon), that he did not want to buy government bonds. The European Govt Bond market is in freefall. The only way to stop it is vast recapitalization of the entire US & London and European banks at a cost of $4 to $5 trillion. When the Powerz and Technocrat generals flip the switch and make the decisions, Gold will then go to $3000 then rest, then go to $5000 later on. Similar for silver, going to $80 then rest, then go to $150. In the interim, the objective is to beat down Gold & Silver by whatever deception.
DERIVATIVE SPURT HIDES INSTABILITY
The tremendous growth of derivatives has in the last six months helped to prevent a rise in USTreasury Bond yields. Actually, it has prevented a collapse in the Western banking system. Recall back in the spring and summer months, when the USGovt debt was downgraded, the ballyhoo was all about the contradiction by the bond market. It rallied in the face of the debt downgrade. Yields went down, not up. But they did so with the strong tide of $9 trillion in Morgan Stanley derivative notional value. Curious that the financial press did not notice, or never reads the Comptroller of the Currency reports. Really simple math, too simple for hack US economists. Notice the surge in outstanding derivatives in the last six months. Regard it as skotch tape and bailing wire holding together the US financial structure.
BAD ECONOMIC POLICY PERPETUATES RUIN
Ever since the Jackass articles in 2004 about ass-backwards economic policy and principles, my work has been detailed and critical. Most feedback from out there has been extremely positive, in appreciation of plain talk and common sense backed by firm arguments. In the summer, two doctrines were mentioned in pure derogatory tone. The Parasite Doctrine promotes the banker welfare, based upon sustenance of their bonus rewards for producing ruin, ample channeled funds to alleviate (not cure) their insolvency, and cooperative slush funds to hide the black holes they produce. The Panhandle Doctrine promotes the consumer welfare, based upon putting money in their pockets by whatever means, expecting them to consume the economy into a healthy state, even if it means eating their children and furniture. What corrupt thought on the former doctrine and empty thought on the latter. These two pillars are the basis of official economic policy, sadly enough.
Bad economic policy perpetuates the Panhandle Doctrine, which is actively pursued by really bad economists running the White House and USCongress. To think they occupy Stanford University and the University of Chicago and Harvard University is a national tragedy and travesty. Look at what their policies encourage and work towards. The centerpiece of USGovt policy on the economy is laughable. It calls for jobless insurance extension. That is a patch job, rather than job creation. It calls for programs to put money in consumer pockets, in futility to follow up the gems like clunker car incentives, and home buyer incentives. Talk of job creation without comprehension or effective action is like a mental sink hole but without the opportunity to see it. The holiday shopping displayed more futility, even desperation. Ramped up holiday shopping, even if online using webpages, cannot lift the USEconomy. Credit card extensions to fund consumer purchases seem celebrated, although empty. A payroll tax cut extension makes sense, as any tax cut is a very positive event for the USEconomy. It is seen as a sacrifice rather than a necessity. Few chaired Economics professors have stepped forward to declare that lower tax rates produce more tax revenue, the opposite to the widely accepted backward notion.
The holiday shopping inspection fully ignores the source of funds, like credit cards. The home equity ATM went away, replaced by the credit card, which never went away. The only change is the banks, whose credit card business is shattered. They engage in restraint of trade to limit the automatic transactions, with impunity. Then there is the supposed falsely named stimulus projects that stimulates foreign exporters. See the California high speed rail project and the Chinese participation. The solar projects reveal even more lunacy, or rather direct nepotism. Few realize that President Obama has huge personal investments in green energy, not fully disclosed. It is hard to stimulate the USEconomy when it lacks a critical industrial mass. Unless and until the USGovt with a powerful initiative set forth by the USCongress works to return a significant portion of its forfeited factory and industrial base, this recovery is forever doomed and a bit of a rancid joke. The lower USDollar is supposed to encourage exports. The chief US exports however are bond fraud, unwanted packaged debt, fast food fat globules, movies, music, and arrogance, but not the protected computer technology, and protected military weapons. Most stimulus programs merely push sales to the present, and rob the future. The abject eyesores are the Food Stamp program that flourishes, and the labor skill mismatch from a generation of poor public edumacation.
The USEconomy depended upon the housing and mortgage bubbles too much several years ago. It bears repeating until blue in the face. The dumkopf US economists called it the Macro Asset Economy, which sounds better than an accurate description of an inflated asset dependent economy without industry. They gave it blessing. The housing market still has a gigantic hidden inventory held by banks, from the foreclosures. It continues to grow if truth be known. Very few US economist acknowledge that bank held (REO) home inventory prevents the home prices from falling more than already seen. Maybe they expect Fannie Mae to acquire the entire toxic kit & kaboodle. Release the bank inventory and watch home prices decline another 15% to 20%, but it would start the bottoming process. The Case Shiller housing index came out yesterday, again telling a wretched story. Metro home prices are down by 1.0% in the last two months. The home ATM machine is gone. Without a cleared housing market, expect no bottom in home prices. This is basic. Without a housing market in recovery, the USEconomy will languish, falter, and continue its deterioration. The dullard economic analysts still point to new home sales as a barometer, when it is a reverse indicator. The new constructions must halt for five straight years, so as to alleviate the over-supply. This is all utterly basic economics.
