The Retail Death Rattle

A stunning, must-read dose of economic reality entitled, The Retail Death Rattle, is posted over at The Burning Platform.

Excerpt: The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.

Read the entire post at The Burning Platform.

Glenn Beck on Germany’s [Rehypothecated] Gold

Glenn Beck reviews Germany’s early 2013 request to repatriate 300 tonnes of gold held by the Federal Reserve Bank of New York and then asks why the Fed responded with a pledge to return the gold in 7 years.  If the gold exists, it should be a simple matter of shipping logistics.  But 7 years?  Beck goes on to logically speculate that the gold doesn’t, in fact, exist.  The gold that the Fed has so far returned, is not the original bars first delivered to the US from Germany some 70 years ago. They are newly recast bars.  Could it be that the original gold was long ago rehypothecated, in order to maintain the illusion of a strong dollar?  Beck believes it’s even worse – that the Fed and other western central banks of the world have not only rehypothecated each other’s gold, but have even sold or transferred the physical gold to new owners.

One note of error: Beck says at one point in the video that the Fed reports holding about 6,700 tonnes of Germany’s gold. But this would be larger than Germany’s known gold reserves. As this chart shows, the Fed is only holding some 1,500 tonnes of Germany’s gold.

Jim Kunstler’s 2014 Forecast

Over at ZeroHedge, Jim Kunstler’s latest post on his forecast for 2014 is a MUST READ!!  Readers should greatly benefit from his astonishingly honest take on everything from the shale oil sham to last year’s gold slam.  He even gets into Obamacare, Bitcoin the Euro crisis and the middle east.

Excerpt: Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical “recovery” and the “shale gas miracle” on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations.

Read the entire article at ZeroHedge.

Peter Schiff: Fed Induced Phony Recovery is Bullish for Gold

Here’s Peter Schiff of Euro Pacific Capital pointing out that the recent positive GDP numbers indicate that America is spending money – money that is just created by the Fed.  The GDP “is goosed.”   If the Fed decides to take all that easy money away, the propped up markets – stocks, housing, etc. – will collapse.  This, combined with the fact that most people don’t see the value of gold in this environment, makes Schiff even more bullish on the metal.

The Coming Reset & the Petrodollar System

Here are a few interesting videos by YouTube’s belangp. The first one shows how the US economy is not getting better as the government’s massaged statistics try to portray.  Instead, it’s so bad that only the Fed is left to buy up US debt as other nations are backing away.  Are the elite preparing for a global reset?

The second video explains how the petrodollar system is actually backed by gold.

And this third video explains further how gold flows between oil producers, bullion banks and miners. It also gives a great discussion regarding GOFO (Gold-Forward) rates and what they mean to the gold investor.

Jim Rickards: 2014 Expectations

In this audio clip from Physical Gold Fund, James Rickards of Tangent Capital talks about the Fed’s alternatives in 2014 and how they may carry out their tapering plans.  Rickards reviews the Fed’s actions, and how they’ve been unable to attain their specific goals, the forces of deflation versus inflation, as well as affects of nominal GDP growth in lieu of real GDP growth.  He also discusses gold and gives some interesting comments regarding why he holds it, how much of it should be a part of any investment portfolio, and its current trading environment  (specifically, that the current set-up could yield a major short-squeeze opportunity).  Listen to mp3 audio.

And in the following Bloomberg interview, Rickards talks more about gold and how even though 2013 has seen a bad year for the metal in paper terms, there is still major demand for obtaining gold in physical form.  Physical gold has been leaving the GLD ETF and going straight to China.  That the central banks have to drain the ETF in order to get the physical metal shows that there is very little of the stuff available elsewhere.  This is a must watch interview with James Rickards.

Happy Anniversary, Federal Reserve!

100 years ago today, President Woodrow Wilson signed the Federal Reserve Act into law.  (How the institution’s framework was actually put together is revealed in Griffin’s Creature from Jekyll Island and is a must read.)  In the previous post, James Rickards gave his critique of the Fed’s recent performance, but in the following video, Consuelo Mack gives a brief history of the Federal Reserve’s ascension to power and interviews James Grant and Richard Sylla to get their views on what ‘the Creature’ has accomplished over the past century.

Then & Now – Hitler & Obama

So dictatorship didn’t happen overnight.  It took 5 years, gradually, little by little to escalate to a dictatorship,” Katie Worthman, a survivor of the Natzi regime stated about the coming to power of Adolf Hitler.  She explains how people became so desperate for change, that they elected and then turned over all control to the man who spoke so eloquently and promised a better life for those who had been oppressed.  But the state would eventually take complete control via centralization.  The political, economic, religious, education, healthcare, agricultural and communication systems became state-controlled bureaucracies.  There are so many parallels between what happened in Germany in the 1930’s and what has been happening in America over the past decade – even the purpose and installation of Germany’s Gestapo can be lined up with The U.S. Homeland Security initiatives.

Take a few steps back and look objectively at the situation!

When the people fear the government – that’s tyranny!
But when the government fears the people, that’s liberty!

Catch 22 for the Gold Cartel Will Result in a Perfect Storm for Gold

The following video from explains how the gold price suppression schemes executed by the Gold Cartel (central banks) have succeeded in destroying the profitability of the miners, which means they will soon be closing down their projects and future gold supplies are at risk.  This is a catch-22 situation that can only mean much higher gold prices as remaining supplies are diminished.

Fed Has No Choice But to Expand QE

Mike Maloney reviews chart data from the St. Louis Fed and shows the great currency expansion that has ensued since Richard Nixon took the dollar off the international gold standard in 1971.  The data also shows how the velocity of money has not increased, which is why we are not getting much inflation yet (as Jim Rickards has pointed out numerous times on this site already).  Instead, this money expansion has only benefited the banks and the elite, who are buying up real assets with all this printed money, leaving the rest of us with pure debt.

Side note: It might be an interesting exercise to compare what happened during the fall of the USSR when government cronies were able to buy up all the nation’s assets on the cheap, while everyone else suffered.  The fall of the US is similar – the assets might not be so cheap, but the money they’re using to buy them with is easy to get if you’re a banker or an elite crony.

The Latest Budget Deal is a Joke

CNBC’s Rick Santelli and former director of the US Office of Management & Budget, David Stockman discuss the latest budget deal and how it’s beyond any sense of fiscal responsibility.

  • Eliminates caps – No ceilings to contend with for at least 2 years
  • Adds $70 billion in spending for 2013 and another $70 billion for 2014
  • Avoids most of the sequestered military & discretionary spending

Talk about kicking the can!

View at CNBC site
Providing yet more commentary on the budget deal and background on our national debt, BrotherJohnF explains the numbers behind this fiasco and shows why the US government is already bankrupt.  If it weren’t for the phony numbers being expressed by government agencies, it would be too obvious. (See US Debt Clock here.)

Grant Williams: Wizened in Oz

Grant Williams, author of the newsletter, Things That Make You Go Hmmm, reviews the results of the last decade of Central Bank activity – namely: Bubbles.  Bubbles are everywhere…. stocks, bonds, commodities, real estate.  But Williams goes on to explain how the central bankers are stuck.  There is no way out of this mess without severe pain.  They (the central bankers) have found themselves in a position where they can only talk about halting the easy money policies, but cannot actually do it without completely crashing the system.  He notes that Janet Yellen may indeed try to taper from $85 to $65 billion per month, but soon would have to re-engage more QE because the US economy is not strong enough on its own.

So what to do?  Williams recommends holding a lot of cash right now in order to take advantage of the situation coming after the crash.

Comedians Show Us The Truth

What is it about a comedian that gives him that uncanny ability to put the shocking and sad truths right in front of our eyes, and yet make us laugh at them?  First up is Jon Stewart showing how the main-stream media has wavered on its reporting stance of JP Morgan’s takeover of Bear Stearns in 2008 and its recent $13 billion settlement with the Justice Department over ‘alleged’ financial misdeeds.

The Daily Show
Get More: Daily Show Full Episodes,The Daily Show on Facebook

And then there’s the slightly more serious delivery of the reality of our socioeconomic conditions in the western world by Russell Brand in this BBC interview by Jeremy Paxman.

While the comedian usually does a good job of showing us the issues, their ideas on how to solve society’s problems can be questionable.   Peter Schiff takes up the opposition to Brand’s socialist remedy in the following video.

Those Controlling the World Admit: The United States Can’t Borrow Indefinitely

Speaking from the center of control over world policies, the Council on Foreign Relations, the CEO of one of the most powerful banks in the world, Jamie Dimon of JP Morgan, admits, “It’s virtually assured, the question is when and how.”  That was his immediate response to the question put to him regarding the possibility of the international bond market moving against the US because of its inability to get its fiscal house in order.

What the crazy conspiracy theorists have been saying for years, the conspirators are now admitting openly.  Does this mean the end-game is fast approaching?  Maybe.  According to CNN, the Treasury Department has said the U.S. government must raise the amount of money it can borrow or else it would be unable to pay its bills.  When you get into a situation where you need to perpetually borrow in order to pay off the debt and keep the game running, you’re following in the footsteps of Charles Ponzi.  And as ZeroHedge has noted, Ponzi Finance is the policy being followed at this point, which is likely a precursor to the end-game.

Jim Rickards: The Fed’s Using the Wrong Models

James Rickards, author of Currency Wars, gave the following presentation at The Future of Money 2.0 in Bratislava, Slovakia on September 26, 2013.  A week later, Rickards gave the same presentation, though significantly abbreviated, at the Casey Research Summit in Tucson, Arizona.  In the presentation, he covers:

  • US Defense Department’s exercises in financial warfare.
  • Historical currency devaluations by countries to gain trade advantages.
  • Historical examples of re-establishing a gold standard after a currency collapse.
  • The current situation of Inflationary and Deflationary forces working against each other – an unstable situation.
  • Irving Fisher’s (and later Milton Friedman) theory of economics (Quantity Theory of Money … M x V = P x Q).
  • QE, Operation Twist, etc. have had no affect because money velocity is not responding.  2014 may bring efforts to put money directly into the hands of the people (e.i. Tax Cuts).
  • Complexity Theory may provide a better model for the Fed, as it shows that the economic system has become increasingly more interconnected across sectors.  It actually predicted the 2008 collapse and, unfortunately the model is even more densely integrated today, indicating a worse crash ahead.
  • The potential remedies the Fed or the IMF might enforce in response to the next collapse.