Are Term Limits A Solution?

In an American society increasingly polarized over politics, one uniting belief is that there is something very wrong with our government. While this is true, there is an unfortunate tendency – on both sides – to try to identify simple, easy to recite reforms to fix our woes.
On the left, for example, the cries are usually for ‘getting money out of politics,’ with various organizations pushing to ‘repeal’ the Citizens United ruling. On the right, it is common to see calls for a Federal balanced-budget amendment and term limits. While there’s certainly no harm in preventing the Federal government from running up deficits – though the issue is more complicated than many realize – the call for term limits is every bit as misguided as the left’s call for restricting campaign funds. It misidentifies the underlying issue, and would actually manage to make the Federal government even more immune from voter accountability.
One point in term limits favor is that they are popular. Polling in recent years indicates that term limits aresupported by up to 75% of the country, which explains why they were included in the platforms of various presidential candidates including Rand Paul, Ted Cruz, Mike Huckabee, and Gary Johnson. The popularity can probably be chalked up both to its simplicity, and to the fact that few groups are hated quite as much as the US Congress has been in recent history.
There is certainly something said for ‘throwing the bums out,’ but failing to address the more fundamental problems with the Federal government would likely find voters similarly dissatisfied in short order. This is the main fallacy of term limits: it presumes the problem is the people in government, and not the government itself.

This post was published at Ludwig von Mises Institute on Oct. 5, 2016.

An Open Letter to Elizabeth Warren on Gold Fraud

The letter posted below is from Stewart Dougherty. Elizabeth Warren on the surface purports to represent middle class interests by associating herself with the erection of the Consumer Financial Protection Bureau. But she has turned out to be another faux populist who panders to the public in order to generate voter support and, in reality, sides with the rest of her cronies and looks other way while Corporate America steals our wealth.
The Consumer Financial Protection Bureau is a Trojan horse device which superficially appears to protect the public from Wall Street but in reality does nothing more than provide a false sense of security. It’s another useless bureaucratic mechanism which serves no purpose other than to create another Government department that vacuums up taxpayer money and employs people who are otherwise unemployable in the private sector.
I ask you this, dear Elizabeth, if your Consumer Financial Protection Financial Bureau serves any purpose, how on earth did Wells Fargo’s billions in checking account fraud go undetected. I suspect another person with ‘Warren’ in their name had a hand in encouraging you to leave Wells Fargo alone.
And speaking of Wells Fargo, the show you put on the other day verbally ‘pistol-whipping’ Wells Fargo CEO, John Stumpf, was highly entertaining. But unfortunately, your words are tougher than your actions. Based on the financial regulations (see FINRA, please) that are in place to punish those caught committing financial market illegalities, Stumpf can be held legally responsible for the actions of those below him – his ‘agents’ is the technical term in case you’ve never studied financial regulations.

This post was published at Investment Research Dynamics on October 5, 2016.

The Education Bubble: Is A Harvard MBA Worth $500,000?

College students are back at their desks this month facing bleak prospects. With tightening job markets leaving kids with no place else to go, universities continue to jack up fees.
The upshot is growing signs that America is in the midst of an ‘education bubble,’ just as big as those in stock, bond, and real estate markets.
Case in point: four years at Harvard University now costs nearly $250,000 [1]. If you want an MBA, add another $200,000 [2].
That doesn’t include the expenses related to running around with colleagues from millionaire homes, which brings the total costs of the two degrees to well over $500,000. A family with two kids needs a cool $1 million to put them through the Harvard undergrad and MBA programs.
That’s a lot of money for a program whose most famous graduate is former President George W. Bush, a man who oversaw the largest financial bubble and worst foreign policy disaster in US history.
‘Big academia’ jacking up costs

Harvard isn’t alone in squeezing students. According to World Bank data, US spending on education rose from 4.8% to 5.2% of GDP between 1999 and 2011.
Mark Perry, a researcher at the American Enterprise Institute, calculates that college tuition and textbook prices have increased by 200% since 1996, compared to just 55% for the all-items consumer price index [1].

This post was published at GoldSeek on October 5, 2016.

Here’s some compelling data about the next recession

In the modern history of the US economy over the past seven decades, the longest period of time the country has gone without a recession was 10 years.
Since the end of World War II there have been 11 recessions in the United States of America, so the average time in between recessions is 6 years and 5 months.
The average length of recession was 336 days; the longest recession in modern history was 18 months in 2008-2009, and the shortest was 6 months in 1980.
And whenever a recession hits, the all-knowing, all-powerful Federal Reserve attempts to stimulate the economy by cutting interest rates, typically multiple times.
The smallest interest rate cut was 2.03% during the 1990-1991 recession.
The largest interest rate cut during a recession was 9.84% during the 1981-1982 recession.
The average interest rate cut during a recession is 4.03% based on sixty years of Federal Reserve data.

This post was published at Sovereign Man on October 5, 2016.

Central Banks Want The Rules Changed To Save The Banks & Control More Of The Economy – Episode 1093a

The following video was published by X22Report on Oct 5, 2016
Euro zone growth has lost momentum. ADP reports that jobs gains are slowing, manufacturing jobs slump continues. ISM services jumps, the last time this happened the economy crashed. Factory orders decline for 22 months in a row. World debt hits 152 trillion dollars. Duetsche bank, HSBC and other were caught manipulating the precious metals market and now a judge is allowing investors to pursue antitrust and manipulation claims. The IMF wants to change the rules so banks can get rid of bad loans and to allow the central banks to take even more control over the economy.

Gold Daily and Silver Weekly Charts – Oversold

Gold and silver remained under pressure from the early New York open today, falling to the hard support trendlines, and then bouncing back a bit into the close.
There was an intraday commentary that takes a look at the basic metals technical indicators which you can see here.
Gold deliveries on the Comex continued to be robust yesterday, with 757,100 ounces ‘delivered’ so far this month. Silver is sleepy on the Comex in October, but I have included that clearing report for you to see.
Gold and silver are obviously undergoing a ‘flush’ designed to knock down the number of longs in the open interest.
The reason for this is open for discussion, but as I have said it appears that the pressures on the physical market are bringing additional attention to the paper markets, with an eye towards discouraging a rush to take down bullion out of a highly leveraged market. And the holiday in China makes this all the more opportunistic now, rather than later.
Whatever the reasons for these things, gold and silver are both deeply oversold in the short term.
Non-Farm Payrolls Report on Friday, heading into a three day weekend in the States.

This post was published at Jesses Crossroads Cafe on 05 OCTOBER 2016.

The IMF Sounds An Alarm As Global Debt Hits A Record $152 Trillion Or 225% Of World GDP

Another record for the history books.
In addition to reporting on the dangers facing global banks as a result of declining profits in the current low rate environment, today the IMF also released its latest Fiscal Monitor report which sounded a loud alarm when it revealed something disturbing: at 225 percent of world GDP, the global debt of the nonfinancial sector, comprising the general government, households, and nonfinancial firms, is currently at an all-time high of $152 trillion.

This post was published at Zero Hedge on Oct 5, 2016.

Central Banks Sheepish as Savers Keep Saving

How to Get a Higher Return for Savers and Find a Path Toward Higher Investment
The rise in the personal saving rate following the Great Recession was an unexpected development in light of the Federal Reserve’s effort to foster stronger consumer spending via ultra-accommodative monetary policies. From the perspective of some policymakers, a higher saving rate exerts downward pressure on the ‘neutral interest rate’ (i.e., a short-term real rate r* where monetary policy is neither contractionary nor expansionary) and increases the risk of secular stagnation.
Concerned over prolonged low growth and below-target inflation despite years of policy stimulus, recent proposals have advocated aggressive measures to boost demand, such as raising the Fed’s inflation objective above 2%, or to discourage saving via fiscal measures.
However, there are growing signs that higher saving is not an economic anomaly but a product of the very policies designed to spur growth and inflation. That is, higher saving is a product of the public’s response to an arduous path toward saving goals with rates near the zero lower bound. From this perspective, future policies should be mindful of the low rates’ diminishing returns. Instead of forcing a reluctant public to spend on the premise of substitution effect, a more normal rates regime would likely be effective to induce higher investment by aligning policy with the public’s interest to meet future obligations.

This post was published at Ludwig von Mises Institute on Oct 4, 2016.

Rothbard on the glorious effects of falling prices

Deflation has a bad name among today’s economists, and this should be your first clue that it might be something good. These educated Keynesians, as we’ve seen, can’t see a bubble until it explodes in their faces, at which time their zombie economy starts to wobble and nightmare possibilities abound, the worst being ‘it’ might happen, as it did in the 1930s. They immediately turn to god (the FED chair) and pray that he or she will do what is right. As we know, Ben Bernanke built his reputation making sure “it” doesn’t happen here.
In a speech delivered in circa 1976 and reprinted in The Rothbard Reader, Murray Rothbard gives us a different view of deflation. First, what is it? Deflation is falling prices, he says, veering for the sake of discussion from the usual Austrian school definition as a contraction in the supply of money. Even Bernanke could accept deflation defined as falling prices. What he doesn’t accept is another assertion of Rothbard’s: The trend in an unhampered free market economy is usually a falling price level. It’s the unhampered part Bernanke can’t digest. Unhampered would mean no FED, no FDIC, freedom of people to choose the money they wish to use – the usual unthinkable conditions for Keynesians.
Rothbard could think of those things quite naturally. Falling prices are ‘glorious effects’ of a robust free market, ‘even in the face of our general inflationary trend.’

This post was published at GoldSeek on 5 October 2016.

“It Cannot Be Allowed To Fail”: Germany Pursuing “Discrete Talks” With The US Over Deutsche Bank

So much for last week’s rumor of an imminent reduction in the DOJ $14 billion settlement, which sent the price of DB soaring, and propelled the global stock market higher.
Moments ago, Reuters reported that the German government is pursuing “discreet talks” with U. S. authorities to help Deutsche Bank secure a swift settlement over the sale of toxic mortgage bonds.
German officials have, until now, played down their role in the standoff, saying it is up to Deutsche to work out a deal with the DOJ, which is demanding $14 billion to settle RMBS misselling claims. But now it has been confirmed that Berlin government officials are hoping to “facilitate a quick deal that would buy Deutsche Bank time to regain its footing.”
One senior government official told Reuters there was “contact at all levels” between German and American officials. Another source said Finance Minister Wolfgang Schaeuble was not planning to meet DOJ officials during a trip to Washington this week for International Monetary Fund meetings, but added: “You can hold talks. It doesn’t have to be the minister.”

This post was published at Zero Hedge on Oct 5, 2016.

World Gone Mad, Part 1: ‘Huge Demand’ To Lend Italy Money For 50 Years

You read that right. Not only is Italy selling 50-year bonds, but people are lining up buy them.
Italy’s first 50-year bond sale had huge demand (Reuters) – Italy sold its first 50-year bond on Tuesday as some investors bet the European Central Bank may soon add ultra-long debt to its asset-purchase stimulus scheme. About 16.5 billion euros of orders were placed for the bond – 5-1/2 times the expected sale amount, despite concerns over Italy’s banks and an upcoming referendum that could unseat its prime minister.
Many of the fund managers who lend to Italy – and those who have already bought 50-year bonds from France, Belgium and Spain this year – may not live to see it paid back. Those who signed up to Ireland’s 100-year bond in March almost certainly won’t.
But they could make quick gains if the ECB extends the maturity limit on its bond-buying scheme later this year, in an attempt to prolong its 1.7 trillion euro programme.

This post was published at DollarCollapse on OCTOBER 5, 2016.

In Major Victory For Gold And Silver Traders, Manipulation Lawsuit Against Gold-Fixing Banks Ordered To Proceed

Back in April, precious metal traders felt vindicated when Deutsche Bank agreed to settle a July 2014 lawsuitalleging precious metal manipulation by a consortium of banks. As a reminder, In July 2014 we reported that a group of silver bullion banks including Deutsche Bank, Bank of Nova Scotia and HSBC (later UBS was also added to the defendants) were accused of manipulating prices in the multi-billion dollar market. The lawsuit, which was originally filed in a New York district court by veteran litigator J. Scott Nicholson, a resident of Washington DC, alleged that the banks, which oversee the century-old silver fix manipulated the physical and COMEX futures market since January 2007. The lawsuit subsequently received class-action status. It was the first case to target the silver fix.
The alleged conspiracy started by 1999, suppressed prices on roughly $30 billion of silver and silver financial instruments traded each year, and enabled the banks to pocket returns that could top 100 percent annualized, the plaintiffs said.
Many expected that this case would never go anywhere and that the defendant banks would stonewall indefinitely: after all their legal budgets were far greater than the plaintiffs.

This post was published at Zero Hedge on Oct 5, 2016.

Black Swans: 9 Recent Events That Changed Finance Forever

Almost every market participant out there has at least one horrific war story on a crash that profoundly affected their portfolio or world view.
For example, one unnamed stock broker I know had himself and his clients in a soaring gold stock called Bre-X in 1997. There was way less connectivity at this time, and this person was on a trip to Vegas for some sun and fun. Staying at Caesar’s Palace, he went out for a short while as the stock was trading near its highs of $286.50 per share.
When he got back to the hotel, he found out that news had already spread quickly: during a due diligence test, mining company Freeport had twinned seven drill holes, finding not even a trace of economic gold. The deposit was not real, and panic swept the market. His hotel phone had been ringing off the hook for three hours but he missed all the calls. Shares plummeted 83% that day, but he was already too late to get out of the stock.
It’s easy to rationalize the series of events that led to the fall of Bre-X in hindsight, but at the time many traders and experts like this broker were caught by surprise. A company worth around $4.5 billion basically went to zero almost overnight as its claim of 70 million ounces of gold vanished into thin air. That’s a ‘black swan’, and this one in particular changed the mining and finance industries forever.
Black Swans: 9 Recent Events That Changed Finance Forever
The following infographic comes to us from Call Levels, and it highlights nine other recent ‘black swan’ events that will have a lasting impact on how investors approach markets.

This post was published at GoldSeek on 5 October 2016.

NY AG Admits Clinton Foundation Failed To Provide 3 Years Of Tax Forms On “Donors And Contributors”

Just 1 day after slapping the Trump Foundation with a cease-and-desist letter, the New York Attorney General’s office has confirmed that the Clinton Foundation failed to file 3 years worth of supplemental tax forms related to the required disclosure of “donors and contributors” to the New York State Charities Bureau. Of course, the attorney general’s office went to great lengths to quietly explain to CNN that the whole thing was just another honest mistake resulting from the overwhelming complexity of the Clinton Foundation.
Late Tuesday, a spokesman for the New York attorney general’s office acknowledged some of those financial statements had been missing. The confusion arose, the spokesman said, because of a merger between the foundation and the Clinton Global Initiative, an annual conference which had its final session in New York City last month.

This post was published at Zero Hedge on Oct 5, 2016.

CNN Goes “Full Reuters” – Attempts To Rig VP Debate Poll With Too Many Dems In Sample

Last week we pointed out that Reuters “tweaked” its polling data by including 11% more democrats in its sample than republicans. Of course, we thoroughly proved that while their may be slightly more registered democrats than republicans it is no where near an 11-point spread. Needless to say, however, Reuters achieved in their “goal-seeking” mission to show a 6-point national “lead” for Hillary.
Now, just 1 week later, CNN is apparently also convinced that democrats hold an 11-point registration advantage versus republicans. Last night after the VP debate, CNN released a Poll that, like Reuters, included 11% more democrats than republicans. Unfortunately for CNN, even the bogus 11-point spread wasn’t enough to tilt the results toward interrupting Kaine.
Here are a couple of the key takeaways from the CNN VP Debate Poll:
The CNN polling sample included 41% democrats versus only 30% republicans.

This post was published at Zero Hedge on Oct 5, 2016.

Millennial Student Loan Debt Tanks Housing Market

There are currently about 54 million millennials entering the workforce in the US, and for many of them, the idea of buying a home isn’t an immediate goal. That’s because the majority (70%) are under an enormous amount of student debt. Large school loans are motivating many millennials to put off their first home purchase until they pay down some or all of their education expenses. The delay is having an immediate impact on the housing markets.
Currently, student loan debt has reached $1.3 trillion, which is about $3,800 for every person in the US, according to an article in the Boston Globe. Education loans are now the next largest source of consumer debt, second only to mortgages.

This post was published at Schiffgold on OCTOBER 5, 2016.

SP 500 and NDX Futures Daily Charts – Great System, Except For the Users

As you can see on the stock charts below, the two major indices are still winding within a fairly narrow range, with big tech a little more perky than the broader SP 500.
Stocks rallied on the ISM Services number this morning which came in much higher than expected.
On the other hand, the ADP jobs added came in much lighter than expected.
The economy would be great if there weren’t so many members who are not in the upper crust ruling elite. Why is the public cluttering up our magnificent system?
It reminds me of an anecdote from my days as a boy programmer, when the systems guys had the IBM 370 stable and exactly where they wanted it. And one of them seriously said, ‘It is working great now. If only we could keep all those users off of it.’
The states have a three day holiday weekend coming up.
Non-Farm Payrolls on Friday.

This post was published at Jesses Crossroads Cafe on 5 OCTOBER 2016.

Brexit Mastermind Farage Resumes Leadership Of UKIP As Replacement Quits After 18 Days

Just 18 days after she took the mantle of running the UK Independence Party, Diane James has stepped down – citing personal reasons for her decision – leaving Nigel Farage stepping back in as ‘acting leader’. But, as SkyNews reports, MEP Farage ruled out re-applying on a permanent basis for what he called a “rotten job”.
Diane James, who had promised to help get UKIP ‘race ready’ for the election, became the party’s first female leader on 16 September after a landslide victory in the leadership contest.

In a statement, she said it was with “great regret” and the decision was down to “personal and professional reasons”.

This post was published at Zero Hedge on Oct 5, 2016.