Keiser Report: Ukrainian Chicken Moment (E968)

The following video was published by RT on Sep 17, 2016
In this episode of the Keiser Report Max and Stacy discuss the ‘Ukrainian chicken moment’ in the bond market and ‘adorable Uncle’ Warren Buffett’s Berkshire Hathaway subsidiary being sued after allegations of ‘siphoning’ money from bike couriers through complex derivatives masquerading as insurance products. In the second half Max interviews Michael Krieger of about the global extinction level event he sees on the world’s economic horizon.

Gold Is The Ultimate Wealth Preservation Against Reckless Governments

The autumn of 2016 has for some time looked like a period when dark clouds will move in over the world economy. Therefore, it was not surprising to see the first sign of things to come in the next few months. In one day the Dow erased all the gains since early July with an almost 400 point fall. Since the beginning of the year the Dow is now up a pitiful 4%. Almost 8 years of ZERO interest rates have not managed to revive the US economy, nor the world economy. On a longer timeframe the Dow, together with many other markets, looks extremely vulnerable.
Central banks are leading ordinary people to the slaughter
In this century the Dow is up 57% which on the surface appears to be an excellent return over 16 years. But it must be remembered that we have seen an unprecedented period of money printing and credit creation in the last 16 years. In my article last week, I talked about the massive credit creation in the USA. We have seen the same pattern worldwide. China’s debt for example has gone from $1 trillion to $32 trillion in the last 16 years. And Japanese government debt is exploding and has reached 250% of GDP. Japan is now printing half of the government expenditure every month and buying all the bonds that they are issuing. Japan is clearly bankrupt and a default is inevitable. In Europe, the ECB is printing 80 billion every month. But that will of course not suffice to save a bankrupt European financial system. Whether we talk about Greek, Spanish, French, Italian or German banks, their balance sheets are all lumbered with billions of toxic assets with the only buyer being the ECB. This is why the current ECB printing programme will not end in March 2017 but instead accelerate. But as we all know, printed money can never save the financial system. All it will achieve is to increase the debt burden and create hyperinflation.
Clueless investment managers are buying worthless bonds
Negative interest rates in many countries are having no beneficial effect on the world economy. For over $13 trillion of sovereign debt, investors now have to pay governments for the privilege of holding their worthless paper. These clueless investors are not only guaranteed to get less back than they invested due to the negative interest but they are also very unlikely to get the principal back since no government will repay their debt with real money.

This post was published at GoldSwitzerland on September 16th, 2016.

Fed Deluge of Dots and Discord Leaves Global Markets Baffled

The U.S. Federal Reserve’s decision next week on whether to raise interest rates is a vital issue for markets and investors around the world. Problem is, all the speeches, forecasts, meeting minutes, press conferences and media interviews given by Fed officials in the lead up is muddying, not clarifying, the outlook.
Case in point: Boston Fed President Eric Rosengren on Sept. 9 said the economy could overheat if they waited too long to raise interest rates, contributing to a 2.5 percent rout in the S&P 500 Index that was the biggest move since the U.K.’s vote to leave the European Union. Three days later, Fed Governor Lael Brainard argued there’s no rush to tighten, helping lift the S&P 500 by 1.5 percent in the equity benchmark’s biggest one-day reversal since January.
‘To say the Fed is confusing is an understatement,’ said Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong. “The more speeches, the more room for confusion.”
Even though futures markets show expectations of about a one-in-five chance of a September rate increase, a simple suggestion in the Fed’s statement, its forecasts or Chair Janet Yellen’s press conference that rates are going higher soon has the potential to send stocks, bonds and currencies into a tailspin from Brazil to South Korea. Starting Tuesday, Fed officials have entered the traditional self-imposed period of public silence before a policy meeting.

This post was published at bloomberg

Hillary’s ‘Partner in Government’

As a U. S. senator, Hillary Clinton helped arrange for $1.65 billion in low-interest, federally guaranteed ‘Liberty Bonds’ (supposedly earmarked for post-9/11 rebuilding in New York City) to subsidize the construction of Goldman Sachs’ gleaming new headquarters building in Lower Manhattan. During the 2005 groundbreaking ceremony for the project, she affectionately called the firm her ‘partner in government.’ Three years later she supported the $10 billion Federal Reserve bailout of her too-big-to-jail ‘partner.’ In return, Goldman paid her at least $675,000 for three speeches; has donated huge sums to her campaign; and recently prohibited its employees from donating anything to the Trump campaign. Her son-in-law was handed a hedge fund to manage by the CEO of Goldman Sachs (and reportedly lost 90% of the fund’s value).
So it was no surprise that Hillary feigned great offense at Donald Trump’s recent criticism of the Federal Reserve Board’s policy of ‘easy money’ that pushes interest rates close to zero. ‘You should not be commenting on Fed actions when you are either running for president or you are president,’ she indignantly declared.
Hillary Clinton apparently believes that there are four branches of government, not three and that the fourth branch – the Sacred Fed – should never be criticized by any of the other three. It’s OK for President Obama to criticize the Supreme Court during a state-of-the-union address; and for congress and the executive branch to engage in verbal sparring on a daily basis; but no president (let alone a lowly congressman) should ever make a negative comment about the Sacred Fed, according to the Hillary Doctrine.

This post was published at Lew Rockwell on September 17, 2016.

Legitimacy and Self-Government

I have been writing about legitimacy for decades. I recently republished an article I wrote on this in 1997.
Liberty flourishes under this environment: self-government under law. Individuals apply the legal principles to their own situations. The general rule is: “Just say no.”
When self-government declines in any government — church, family, or state — the enforcement arm of the government must devote an increasing quantity of institutional resources to policing. The central government becomes more authoritarian. At some point, if self-government is not restored voluntarily, it is replaced.
To gain voluntary cooperation, the government must be perceived by most participants as legitimate. If the government is seen as illegitimate, people begin to violate the rules at the margin. It may take decades for this to bring down the central government. It took from 1917 to 1991 for the USSR to collapse, but it eventually did.
This brings me to the topic at hand: the Presidential election of 2016. Both candidates are viewed negatively. There has never been a Presidential election that has been conducted on the basis: “The other one is worse.” This really is the lesser of two evils. We talk about it, but this time it’s the real deal. People are thinking: “How bad will it get if the other one wins?”
It is going to get unimaginably bad economically because of central banking, not party politics. The public will not perceive this.

This post was published at Gary North on September 15, 2016.