CBO Scores Trump Budget Shrinking US Deficit By Half By 2027

There’s good news.. and bad news. CBO has just released its ‘score’ of President Trump’s proposed budget, noting that the plan would shrink the deficit by a half from their baseline by 2017 (good news). However, even accepting Trump’s dynamic scoring and 5% growth expectations, CBO is unable to balance the budget and Yellen’s recent “US debt is unsustainable” warning seems ever more prescient.
Trump’s budget would shrink notably from the CBO baseline…
According to CBO’s estimates, the deficit would fall from the $693 billion projected for 2017 to $593 billion in 2018 under the President’s proposals. After that, the deficit would generally rise, totaling $720 billion in 2027. The cumulative deficit over the 2018 – 2027 period would total $6.8 trillion. Measured as a percentage of output, the deficit would decline from 3.6 percent of GDP in 2017 to 2.6 percent at the end of the period. The deficit would average 2.9 percent through 2027. (The average deficit over the past 50?years has equaled 2.8 percent of GDP.) Those estimates exclude any macroeconomic feedback effects.
This is still a big deficit, and coming a day after Janet Yellen warned that the US debt situation was unsustainable, it seems more prescient than ever to focus on spending cuts.

This post was published at Zero Hedge on Jul 13, 2017.


GOLD: $1218.30 DOWN $1.50
Silver: $15.75 DOWN 18 cent(s)
Closing access prices:
Gold $1217.50
silver: $15.72
Premium of Shanghai 2nd fix/NY:$10.05
LONDON FIRST GOLD FIX: 5:30 am est $1221.40
For comex gold:
For silver:
250,000 OZ/
Total number of notices filed so far this month:
2807 for 14,035,000 oz

This post was published at Harvey Organ Blog on July 13, 2017.

After Earlier Refusal, Pence Spokesman Denies Any Pre-Election Meetings With Russian Operatives

JUST IN: Pence "had no meetings w/any individuals associated w/the Russian gov't during the campaign or transition," VP spox tells NBC News
— NBC Politics (@NBCPolitics) July 13, 2017

Update: Well, that didn’t take long. After refusing to deny any meetings with Russian operatives in an earlier interview with Fox News, VP Pence’s spokesman has now decided to update the record.
For weeks now, many have speculated that Vice President Pence was trying to create some distance between himself and President Trump amid all the ‘Russian collusion’ news flow. First there were the stories about Pence spending considerable time cultivating big-money Republican donors at small, private events, including hedge fund managers and executives from brokerage houses, chemical giants and defense contractors. As the New York Times noted, the meetings “have fueled speculation among Republican insiders that he is laying the foundation for his own political future, independent from Mr. Trump.”
And then came Pence’s official statement on the latest Trump Jr. scandal which raised even more eyebrows.
“The Vice President is working every day to advance the President’s agenda. He was not aware of the meeting. He is also not focused on stories about the campaign – especially those pertaining to the time before he joined the campaign.”

This post was published at Zero Hedge on Jul 13, 2017.

Stocks and Precious Metals Charts – The Calm Before the Storm

‘In truth, however, nothing is inevitable and very little is new. And tech is no more the root of the problem than are trade or globalization. Many of our most vaunted innovations are simply methods — electronic or otherwise — of pulling off some age-old profit-maximizing maneuver by new and unregulated means.’
Thomas Frank
‘It is my purpose, as one who lived and acted in these days, first to show how easily the tragedy of the Second World War could have been prevented; how the malice of the wicked was reinforced by the weakness of the virtuous.’
Winston S. Churchill, The Gathering Storm
Here is some knowledge.

This post was published at Jesses Crossroads Cafe on 13 JULY 2017.

Jeff Berwick Exposes The Fed & The Entire Matrix Control System on The American Intelligence Report

The following video was published by The Dollar Vigilante on Jul 13, 2017
Jeff is interviewed on The American Intelligence Report, topics include: fiat currency and the Freemasons, the Federal Reserve and the end of the gold standard, the real causes for the US civil war, bypassing the current economic system entirely, gold silver and bitcoin, privacy and crytocurrencies, altcoins, Litecoin, changes to the bitcoin software, Dash and anonymity, Ethereum, the TDV newsletter’s great track record

40% Of The Fed’s Interest On Excess Reserves Is Paid To Foreign Banks

Even as both the Fed and Wall Street are gripped by a raging debate over when, how and how much the Fed should shrink its balance sheet, most appear to be ignoring the $2.1 trillion elephant in the room: the fact that every incremental increase in the Fed Funds rate (also an increase in the Interest On Excess Reserves, or IOER, currently at 1.25%) is a handout to US commercial banks, but that the direct recipient of this explicit Fed subsidy are a substantial number of foreign banks.
Here are the numbers:
as of the week of July 5, there were $2.1 trillion in reserves (of which the vast majority is “excess”), the largest liability by far on the Fed’s $4.5 trillion balance sheet (currency in circulation is the other major component and amounts to $1.5 trillion). as of the latest Fed rate hike, IOER is 1.25% Putting these together, means that as of this moment, assuming no more rate changes, Janet Yellen will pay out $27 billion in interest on reserves parked with the Fed every year.

This post was published at Zero Hedge on Jul 13, 2017.

Alarm Bells Are Going Off Everywhere, The Message, This Economy Cannot Be Sustained – Episode 1331a

The following video was published by X22Report on Jul 13, 2017
Credit card companies begin to make offers to retailers to stop accepting cash and only use debit or credit. CBO says that Trump will not be able to balance the budget because the debt is unsustainable. 40% of the Fed’s balance sheet is interest for foreign banks. We have reached the 1999 stock market bubble, this is not going to end well. Bank of America is reporting that within 3-4 months the entire economy will begin to break apart. The IMF is reporting that Canada might be in trouble after raising interest rates, the housing market might start to implode.

Luxury Bull Market

The wall of worry continues to propel stocks higher as this long plodding economic expansion is assumed to be in the later innings. With low-interest rates and slow growth, many are still waiting for the full-throated recovery to manifest. However, for the luxury and leisure world, the good times just keep rolling. Cruise ships, air travel, luxury car sales, hotels …you name it and it’s delivering consistent sales expansion over the past 6 years. With aging boomers and an economic cycle with room to run there could be more to come from the big spenders and the silver-haired crowd. The global baby boom is transforming into the senior surge who seek more frequent and experiential vacations. As strong as the benchmark S&P 500 Index has been, the Luxury sector has outperformed most stocks.
Travel isn’t just for the senior circuit. In a study looking at the priorities of Millennials, travel came out as a higher priority than buying a home or car or even paying off debt. In China, travel was the highest priority by a wide margin. Floating hotels continue to benefit from appreciating retirement wealth from the rapidly aging 1st World countries. Carnival Cruise Lines stock is up 32% since Trump was elected and 340% since the 2008 bottom.

This post was published at FinancialSense on 07/13/2017.

US Economy Keeps Moving Into Summer Storm

One of the kookiest moments last month came when Fed Chairwoman Yellen spoke about seeing no financial collapse in sight during our lifetimes
‘Would I say there will never ever be another financial crisis? No. Probably that would be going a little too far, but I do think that we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.’ (CNBCPlay video for quote on next crisis.)
That certainly calls to mind the times when Chairman Ben Break-the-banky pontificated about there being no housing bubble and no recession in sight:
Yellen’s predecessor, Ben Bernanke, once famously called problems in the subprime mortgage market ‘contained,’ a statement that would be proven wrong when the collapse of illiquid mortgage-backed securities cascaded through Wall Street and contributed to the worst economic downturn since the Great Depression.
Asked at a recent FOMC meeting about any possible problem with banks still being too big to fail, Yellen only said, ‘I’m not aware of anything concrete to react to.’
Nice to know she’s sound asleep while sugar plums dance in her head, bringing forth prophecies of good times for the rest of everyone’s foreseeable life … or, at least, the rest of hers.

This post was published at GoldSeek on 13 July 2017.

The Striking Reason Why The US Just Spent A Record $429 Billion In One Month

On Thursday morning the CBO released a surprisingly upbeat assessment of Donald Trump’s proposed budget, calculating that it would cut the cumulative US deficit by 30% over the next decade, preventing the US debt from spiraling out of control (even further).
That however. may be an overly optimistic assessment, especially following the release of the latest monthly budget data, which showed that not only did the US deficit surge to $90 billion, far above the $38 billion consensus estimate, and a “NM” compared to the $6.3 billion budget surplus in June of last year, but the US also saw the biggest one month outlay on record, at $429 billion, 33% higher than the $323 billion in outlays one years ago.
What prompted this massive surge in outlays?

This post was published at Zero Hedge on Jul 13, 2017.

Mark Zuckerberg Finally Figured Out Why Trump Won; Hint: It Wasn’t Russia

Mark Zuckerberg, the 30-something billionaire founder of Facebook, hasn’t lived a ‘normal’ life…at least not at any point in the recent past. He grew up in a suburb of New York City and now hobnobs with the elites of Silicon Valley, at least when he’s not enjoying that massive chunk of Kauai that he recently purchased for his own private use.
So what do you do when you’ve become completely disconnected from the ‘foreign’ world that all of middle America calls ‘reality’ and have no idea why you just got massively blindsided by a national election that you thought was a foregone conclusion? Well, you take a trip to Williston, North Dakota.
As Zuckerberg apparently learned for the first time while visiting oil workers in a tiny North Dakota town, there are entire industries that exist outside of Silicon Valley…industries that provide great wages and support thousands of American families. And, as it turns out, those people are sick and tired of having their jobs threatened by their own government and being demonized by Hollywood liberals for their efforts to provide economical access to energy.

This post was published at Zero Hedge on Jul 13, 2017.

Why Middle America Doesn’t Care About The Trump Jr. Narrative: Reuters Explains

For almost a full year now the New York Times, Washington Post, MSNBC and CNN, among others, have teamed up to bring us one Russian collusion story after another. Yet, after all of it, even including the New York Times’ most recent Trump Jr. ‘bombshell’, they are still no closer to actually presenting any tangible evidence that anyone within the Trump administration actually colluded with the Russian government and/or otherwise committed any actual crimes of any type throughout the 2016 campaign.
And while we suspect that these media outlets somehow feel it is their duty to advance the cause of ‘The Resistance’ at all costs, even if it means destroying their own journalistic integrity from time to time with a few fake news reports, we get the feeling that this crusade could end up backfiring ‘bigly’ with the folks of middle America.
As Reuters points out today, absent any tangible evidence to the contrary, the media’s breathless Russian coverage has done little to turn the pro-Trump sections of middle America against the President…if anything, it has only served to bolster their support of the President and further erode their confidence in the media.

This post was published at Zero Hedge on Jul 13, 2017.

JPM ‘Unprecedented Run of Corporate Savings’ Has Been Pushing Stocks Higher

An unprecedented run of elevated corporate savings has been a defining feature of the secular stagnation thesis since the Lehman crisis claims a new report from JP Morgan’s Global Asset Allocation team headed by Nikolaos Panigirtzoglou.
According to the report, G4 non-financial corporate have accumulated more than $2 trillion in cash assets, bringing the total corporate cash pile to $7.7 trillion, since the Lehman crisis as they have prioritized saving over investment.
You may also like MIT’s Andrew Lo on Adaptive Markets, Passive Indexing, and Systemic Shocks
However, while it is widely believed that companies invest their excess cash in interest-bearing securities such as bonds, JP Morgan’s research shows that despite this cash build up, corporate bond holdings have remained unchanged at close to $1.1 trillion over the past decade.

This post was published at FinancialSense on 07/13/2017.

Watch Live: Yellen Testimony Day 2, And Three Questions She Should Answer

Yesterday, Janet Yellen surprised markets again, when after weeks of a hawkish setup, she suggested that the Fed is not only uncertain “about when – and how much – inflation will respond to tightening resource utilization’, warning that the federal funds rate may “not have to rise all that much further to get to a neutral policy stance.” The market was delighted by this dovish turn, and sent the DJIA to new all time highs, while global stocks hit fresh record highs.
Now it’s time for day two, with Yellen appearing before the Senate Banking Committee. While the prepared remarks will be identical, in her speech on Wednesday, Yellen said the U. S. economy should continue to expand over next few years and stressed a gradual approach to tightening as central bank monitors inflation. The attention will be on the Q&A.
And, to help the Senate along, here are 3 questions that the Senate should ask Yellen, courtesy of Rafiki Capital’s Steven Englander.
If GDP, unemployment, consumption etc were exactly the same but inflation was stable at 2%, would the US be better or worse off?
Ask 100 people and 95 would say we are better off at 2% inflation, but being able too expand further without hitting output constraints is better than finding that you have topped out on the growth side. Imagine if we had hit 2% inflation when the unemployment rate was 6%, would we or the Fed be high fiving because we hit our targets? Below target inflation is a problem for the Fed in missing its dual mandates but it means that the economy has more room to grow, more jobs to create, more homes to build etc. However, having more room to expand is unambiguously a good thing from the economic viewpoint -with the caveat that if we are using the wrong tools and we generate asset market instability, there is a case to the contrary. But that is different than saying the new millennium would be here if there was 2% inflation rather than 1.5%, but everything else was the same.

This post was published at Zero Hedge on Jul 13, 2017.


I’m sure you’ve heard that malls are getting killed. Pretty soon there will be no malls. Except for those with a Planet Fitness!
There has been lots of ink (and electrons) spilled over the death of retail.
Everyone knows it is only a matter of time before Amazon puts every department store, every mall, every brick-and-mortar retailer out of business. Amazon gets an infinity market cap and everyone else gets zero. Sound familiar?
That’s the accepted wisdom.
Is Amazon a great business? Yes.
Is a department store a bad business? Probably.
Does Amazon get 100% market share, with department stores getting zero? Probably not.
Amazon has over 80 million Prime subscribers in the US. It’s not quite saturated, but it’s getting close.
I admit to being a Prime member, a late adopter.
It is pretty cool. Stuff shows up on my doorstep in two days, for free. The huge poker chip set I just ordered probably weighs about 40 pounds – free shipping! And I get all the Prime movies and TV shows.

This post was published at Mauldin Economics on JULY 13, 2017.

Bank of America: “The Most Dangerous Moment For Markets Will Come In 3 Or 4 Months”

Two weeks after BofA’s Michael Hartnett previewed (and timed) not only the “Great Fall” of stocks, but also explained that the Fed and global central banks are now in the business of making the “rich poorer“, he is out with a new note which looks at the Fed’s latest U-turn, which has unleashed the latest market buying spree, warning that “further upside in risk assets will create problems later in the year” (for three reasons he lists out), and concludes that “ultimately, we believe the extremely strong performance by equities and bonds in H1 is very unlikely to be repeated in H2.” Hartnett then goes back to his original thesis that the Fed will no longer pursue its primary mandate of pushing stocks (i.e. wealth effect and confidence) higher because it is “now politically unacceptable for the Fed and any other central bank to stoke a bubble on Wall St.”
As a result, “monetary policy will have to tighten to raise volatility, reduce Wall St inflation, and reduce inequality. There are two ways to cure inequality: you can make the poor richer, or you can make the rich poorer. The Fed will reduce its balance sheet in the hope of making Wall St poorer.”

This post was published at Zero Hedge on Jul 13, 2017.

Nomi Prins: Easy Money Policy Allows for Another Crisis

Nomi Prins joined The Foreign Correspondents’ Club of Japan in Tokyo to discuss the banking landscape and state of financial regulations in the Trump era. The central bank historian and financial expert also took a deep dive into the shifting relations between the United States and Japan and what easy money policy has meant for financial markets.
The author began the discussion noting that, ‘A lot of things have happened in the past months in particular within finance and trade alliances amongst countries in the Trump era.’
Speaking on the recent gathering of world leaders Prins’ notes, ‘One of the things that came out of the G20 is whether it is America last in terms of the alliances occurring today. The American first policy is pushing new diplomacy and agreements with countries that have not spoken with one another in the past. This is happening for two reasons. One, from a standpoint of protecting the commonality of the world. It is filling the gap between receding powers versus rising power. Two, it is an anti-protectionist move.’

This post was published at Wall Street Examiner on July 13, 2017.

Decoding Yellen’s Message

‘I know you think you understand what you thought I said, but I’m not sure you realize that what you heard is not what I meant’ – Alan Greenspan
On July 12, 2017 in her semiannual testimony to Congress, Janet Yellen stated the following:
‘The Federal Funds rate would not have to rise all that much further to get to a neutral policy stance.’
Currently the target for the Federal Funds rate is a range of 1.00-1.25%, having been raised four times since December 2015. Despite the increase from the zero level that persisted for seven years following the ‘Great Financial Crisis,’ it is still at microscopic levels as shown below.

This post was published at Zero Hedge on Jul 13, 2017.

Financial-Crisis-Style Carmageddon Descends on Houston

Houston is recovering from the oil bust. Didn’t consumers get the memo?
Auto sales in Houston, whose economy had been battered by the oil bust, should be turning around from their Financial-Crisis-type levels, but they just got worse: New vehicle sales plummeted 26% in June from a year ago, with car sales getting totally crushed and even trucks sales plunging.
For the 12-month period through June, auto dealers sold 284,085 new vehicles, down 16.8% from the same period last year, and down 25% from the levels in late 2015 and early 2016, before the oil bust began clobbering consumers and their desire to buy a new car or truck. Sales are now back to the same level as in January 2009 (chart by the Greater Houston Partnership, red marks added):

This post was published at Wolf Street on Jul 13, 2017.