Thursday, August 25, 2016

The Chimera Of 'Stable' Money
The purchasing power of money is determined, like most things in a capitalist system, by supply and demand. Changes in the demand for money (think of shifts in the curve) are caused essentially by two forces .. Sound money is a medium of exchange that enables absolute and relative prices to function the most efficiently in allocating goods and resources that best meet society’s most urgent needs. Its purchasing power is determined by markets, independent of governments and political parties. Sound money does not need, and should not be expected, to be stable. To be perfect, it should be exclusively determined by factors influencing the demand for money .. The gold standard is the closest we have come to sound money .. A monetary reform to sound money would significantly boost growth, as well as significantly alter and diminish the roles of government and banks in our economy. Stable money was a chimera. It did not bring stability to the world economy. It did not counter the instability emanating from deposit banking. It actually added to the severity of booms and busts. To function efficiently, capitalism needs a foundation of sound money, not stable money."
- Frank Hollenbeck
LINK HERE to the essay
The Federal Reserve 
Plans $4 Trillion Of New QE?
Dr. Ron Paul* report .. reaction to reports that the Federal Reserve is drawing up plans for another $4 trillion injection of cash via quantitative easing .. over 20 minutes total program
WHO CONTROLS THE BANK OF JAPAN?
WHOEVER IT IS, THEY ARE GAINING CONTROL OF THE JAPANESE PEOPLE'S WEALTH WITH MONEY THEY CREATED FROM THIN AIR. THIS IS SOMETHING THAT SHOULD FRIGHTEN EVERYONE, BUT NO ONE SEEMS TO UNDERSTAND THE IMPLICATIONS OF WHAT IS HAPPENING. THIS ARTICLE, LIKE SO MANY OTHERS, TREATS THIS PROCESS AS IF IT IS OK. PEOPLE WHO WORK & SAVE & CAN'T CREATE MONEY FROM THIN AIR ARE BEING SCREWED. THOSE WHO CONTROL THE APPARATUS THAT CREATES MONEY FROM NOTHING ARE SCREWING EVERYONE ELSE. WHO ARE THEY?
Monetary Policy Has Nationalized 
Japan's Stock Market
Japan's central bank is distorting the Japanese stock market - they have instituted an exchange-traded fund buying program .. "The BOJ said it would increase its ETF purchases so that their amount outstanding will rise at an annual pace of 6 trillion yen ($56.7 billion), from 3.3 trillion yen previously."
LINK HERE to the article
Not Enough Inflation?
Federal Reserve Will Double 
Its Balance Sheet By 4 Trillion?!
Wall Street For Main St discussion on how delusional the Federal Reserve is becoming with its Facebook page & a recent report the Federal Reserve released about doubling its balance sheet by $4 trillion to over $8 trillion when the next financial crisis comes! Also, San Francisco Federal Bank President John Williams is talking about inflation targeting .. 10 minutes
click to enlarge
Mish Shedlock* & James Grant*:
Gold Is Timely Now
"Please pay particular attention to Grant’s final interview statement: 'But to me, gold is a very timely way to invest in monetary disorder.' .. That has been my position for decades."
LINK HERE to the interview & commentary
Economist Joseph Stiglitz: 
Eurozone Structure Doomed The Euro
Stiglitz discusses his views on the European Union & the euro currency .. 5 minutes
China Is Caught In A  

'Dead Money Trap' 

As Their Central Bank Pleads For Fiscal Stimulus
Ambrose Evans-Pritchard article highlights how China is at mounting risk of a Japanese-style "liquidity trap" as monetary policy loses traction & the economy approaches credit exhaustion, forcing a shift towards Keynesian fiscal stimulus .. "Officials at the Chinese People’s Bank (PBOC) have begun to call for a fundamental change in strategy, warning that interest rate cuts have become an increasingly blunt tool .. The financial system is clearly out of kilter. The outstanding stock of mortgages has jumped by 30% over the last year alone to $2.5 trillion, crowding out the credit market. Net new loans to businesses contracted in June for the first time in eleven years .. The Chinese authorities have to walk a tightrope since capital outflows crept up to $42bn in July, the highest since the panic earlier this year. Capital Economics estimates that the central bank had to sell $29bn of foreign bonds to support yuan last month."
LINK HERE to the article
The Federal Reserve's 
Facebook Disaster
Mike Maloney .. This week the Fed launched a disastrous PR campaign - their very own Facebook page. THE JIG IS UP .. 4 minutes
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Rickards Says You Should Hedge
(Like China Is Doing)
"China knows the U.S. historically has devalued the currency through inflation to get out from under the debt. So China is highly vulnerable to inflation because it owns so many US dollar-denominated securities. Why doesn’t China simply dump them? The answer is that it can’t. The U.S. Treasury market is not that deep. It’s not very liquid. China can’t dump that quantity of Treasury securities even in the market we have. And the President could actually stop them if they tried to do it. So the Chinese are stuck holding that paper. They want a strong dollar but fear that we’re going to inflate the dollar. And they’re probably right about that. Since they can’t dump the Treasuries, they’re buying gold as a hedge. If the dollar is steady, the securities retain their value. The gold may not increase much. But if we inflate the dollar and it loses value, they’ll lose on the paper side. But they’ll make it up on the gold they own. The price of gold is going to soar. So they’re creating a hedge position. Again, they prefer a strong dollar. But with their gold purchases, they’re ready for a weak dollar. My advice to you as an investor is this: If it’s good enough for China, it’s also good enough for you."
- Jim Rickards*
LINK HERE to the article
Laurence Kotlikoff Interview
Kotlikoff is Professor of Economics at Boston University .. he has probably the best insight into America's unfunded liabilities challenges, especially relating to social security .. 33 minutes
Look At This Shocking Undervaluation 
In The Gold & Silver Markets
"Relative to the gold price, the gold stocks in the Gold Bugs Index are at the same level as in 2001, when the gold bull market began. This is by itself strong evidence that gold mining stocks are cheap relative to gold .. The gold mining industry has gone through a process of creative destruction and fundamental restructuring. As a result of this, we expect that in coming years, mining stocks will once again become the kind of leveraged bet on gold that investors crave."
- Ronald-Peter Stoeferle
link here to the analysis