Fed exit strategy: the mother of all head fakes

by Goldmoney

“Exit strategy” is the current buzz phrase among market watchers, with the dollar rallying in recent days and weeks on expectations that all is well with the US economy again, and that the Fed can now start thinking about ways of selling assets and “exiting” from its current commitment to perpetual quantitative easing.
Given this growing narrative and the fact that US stocks continue to race higher, gold and silver remain under pressure – with a “sell the rallies” mentality continuing to predominate trading in these metals. This could change though, depending on what Fed chairman Bernanke says in congressional testimony later today (if he sounds more dovish on monetary policy and pessimistic about the economy than expected, this should support the metals; in the opposite case, the metals could go lower).
From a longer-term perspective, it really doesn’t matter what Bernanke says. Talk from Fed officials about “exit strategies” is nothing more than a head fake: a way of convincing the markets that central banks are still in control, and that there’s nothing to worry about. The central planners have it all under control.

Keiser Report: Narcissists' Rally

In this episode of the Keiser Report, Max Keiser and Stacy Herbert have a look at the narcissists' rally as we drown in central banking their currency wars and their quantitative easing without wealth creation. In the second half, Max talks to Jim Rickards, author of Currency Wars, about why we don't need to worry about a recession - because we're in a depression! They discuss US Federal Chairman, Ben Bernanke's, plan to not Beggar Thy Neighbor, but Enrich They Neighbor by jumping out of the printing plane together with simultaneous devaluations. And, in terms of gold, Keiser and Rickards suggest maybe it's the Chinese manipulating the price of gold . . . and not the US Federal Reserve.

by RussiaToday

Will It Be Inflation Or Deflation? The Answer May Surprise You

By Michael

Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts. So what is the truth? Well, for the reasons listed below, I believe that we will see both. The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis. This will happen so quickly that many will get "financial whiplash" as they try to figure out what to do with their money. We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.

So why will we see deflation first? The following are some of the major deflationary forces that are affecting our economy right now...

Keynesian Europe Will Not Muddle Through, Says German Economist

by Gary North

Europe is the poster child of Keynesianism. The southern countries ran huge government deficits for a decade. There was a boom. But that boom has ended. Mediterranean nations are in depressions. These depressions are getting worse.

Hans-Werner Sinn is a German economist. He is known as one of the most pessimistic economists in Europe. But, compared to what is facing Europe, he is a raging optimist.

He spoke at the Peterson Institute. That organization is closer to economic reality than other Establishment think tanks. It allows some bad news to be discussed. Not statistically inevitable bad news, but some bad news.

Banks Win Big as Regulators Refuse to Rein in $700 Trillion Derivatives

by The Real News





 Bill Black: Weakness of financial regulators shows you can not "tame the scorpion"

No Bear Market In Gold — Paul Craig Roberts

by Paul Craig Roberts

You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.

Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.

Why I'm Praying for Government Incompetence

by Bill Bonner



"You Americans don't understand anything. You have to come to Argentina and live here for a few years. Then you'll understand America."

We had to ask, "Huh?"

"When you're here, you can see more clearly how things really work... and don't work. You see the real nature of things... especially government. Believe me, you Americans have all sorts of delusions.

"A government 'by, for and of the people'? Or, as Hillary Clinton put it, 'The government is all of us.' Not quite. And when you've been here for a while, you'll see your own institutions more clearly."

Our Man in Argentina

The speaker was a friend of ours. An American from Alabama who has lived in Argentina for 30 years. He lived through the hyperinflation of the 1980s... the boom of the 1990s... and the crash of the 2000s.

Gangster Stato America - Paul Craig Roberts

by paulcraigroberts.org



There are many signs of gangster state America. One is the collusion between federal authorities and banksters in a criminal conspiracy to rig the markets for gold and silver.

My explanation that the sudden appearance of an unprecedented 400 ton short sale of gold on the COMEX in April was a manipulation designed to protect the dollar from the Federal Reserve’s quantitative easing policy has found acceptance among gold investors and hedge fund managers.

The sale was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery. No one but the Federal Reserve could have placed such an order, and the order came from one of the Fed’s bullion banks, one of the entities “too big to fail.”

Bill Kaye of the Greater Asian Hedge Fund in Hong Kong and Dave Kranzler of Golden Returns Capital have filled in the details of how the manipulation worked. Being sophisticated investors of many years of experience, both Kaye and Kranzler understand that the financial press runs with the authorized story planted to serve the agenda that has been put into play.

Economics and Armchair Psychology

By John Kozy

“Economics is haunted by more fallacies than any other study known to man.”― Henry Hazlitt

Over millennia, numerous enterprises have sought the status of science. Few have succeeded because they have failed to discover anything that stood up to scrutiny as knowledge. No body of beliefs, no matter how widely accepted or how extensive in scope, can ever be scientific.

In the Ptolemaic system of astronomy, the epicycle is a geometric model of the solar system and planetary motion. It was first proposed by Apollonius of Perga at the end of the 3rd century BCE and its development continued until Kepler came up with a better model in the 17th century, and the geocentric model of the solar system was replaced by Copernican heliocentrism. In spite of some very good approximations to the problems of planetary motion, the system of epicycles could never get anything right.

US Dollar Collapse and Japan’s Sham Currency War: The Hidden Agenda Behind Japan’s Kamikaze Quantitative Easing

By John Kozy

US$ dollars have been flooding the financial markets ever since Bernanke launched quantitative easing allegedly to turnaround the US economy. These huge amounts of US$ toilet paper are mainly in financial markets (and in central banks) outside of the United States. A huge chunk is represented as reserves in central banks led by China and Japan.

If truth be told, the real value of the US$ would not be more than a dime and I am being really generous here, as even toilet paper has a value.

That the US dollar is still accepted in the financial markets (specifically by central banks) has nothing to do with it being a reserve currency, but rather that the US$ is backed/supported by the armed might and nuclear blackmail of the US Military-Industrial Complex. The nuclear blackmail of Iran is the best example following Iran’s decision to trade her crude in other currencies and gold instead of the US$ toilet paper.

Regulating Banks the Austrian Way

by David Howden

Most people — from young to old and from all ends of the political spectrum — are united by a common bond. The idea that banks are deserving of taxpayer support is viewed as morally repugnant to them. Business owners see bank bailouts as an unfair advantage that is not extended to all businesses. Those typically on the political left see it as support for the establishment, and a slap in the faces of the little people. Those more at home on the political right see it as just another form of welfare: a wealth redistribution from the hard working segment of the population to the reckless gambling class of banksters.
Despite this common disdain for bankers, there is considerable disagreement on how to deal with them. One group sees less regulation as the solution — letting market forces work will allow the virtues of prudence and industry to prevail. This formulation sees these same market forces as limiting firm size naturally to evade the “too big to fail” issue, through many of the same incentives that foment competitive economic advancement.

Jim Rogers: The EU goes down the tube as politicians spend cash they don't have

 by rt.com/on-air


Switzerland's cherished banking secrecy is under threat. In the ongoing battle against tax evasion, EU finance ministers have agreed to put pressure on the non-member nation to share its banking data with the Union. Investor Jim Rogers told RT that instead of trying to crack tax havens, EU leaders should address the real problems - like their own unchecked spending habits.

The S&P 500 is Now a Gambler's Paradise With 76.9% Up Days in May So Far

by peakprosperity.com

Everyone knows the odds of winning in a casino are worse than 50% (often much worse depending on the game played). So who wouldn't rush to a casino where, instead, the odds were overwhelmingly in the gambler's favor?
That's the promise of today's stock market, which has been experiencing an aberrantly high percentage of up days all year. Toss your money into the market and on any given day, you're much likelier to make money than not.
So far, May 2013 has been a gambler's paradise, in which a whopping 76.9% of the trading days for the S&P 500 have been up: 

Bank Of Japan Head:"No Bubble Here" As Nikkei Rises 45% In 2013

by Tyler Durden

Take a good look at the chart of the Nikkei below:


Supposedly this is the same chart that the new BOJ head, Haruhiko Kuroda, was looking at when he was responding to Japanese lawmakers during a session of the upper-house budget committee, where he flatly rejected an opposition-party member's argument that the recent rapid rise in the Tokyo stock market is out of line with Japan's real economy. "At this moment I do not think they are in a bubble," Kuroda said. And everyone believes him, just Because central bankers are so good at objectively observing how contained subrpime is big the asset bubbles their ruinous policies create.
Incidentally, all this happens as the Nikkei225 closed at 15096, and is up 45% in 2013 alone! It will easily surpass the Dow Jones Industrial Average in absolute terms once tonight's trading session begins, considering the ongoing pounding the Yen is sustaining in today's session. From the WSJ: 

Gold Demand In One Chart: Physical vs ETF

 by Tyler Durden 
 

 















China's demand for gold jumped 20% to 294 tonnes in the first quarter of 2013, while global gold demand overall slid 13% thanks to the dramatic rotation of demand from paper to physical. Chinese demand in gold bars and coins grew to 109.5 tonnes - more than double the five-year quarterly average of 43.8 tonnes. Central banks added 109.2 tonnes of gold to their reserves in Q1 2013, the ninth consecutive quarter of net purchases. But it was the Q1 ETF outflows of 176.9 tonnes, equating to a 7% decline in total gold ETF holdings that obscured the strong rise in investment for gold bars and coins at the retail level. In the face of the huge 'paper' gold ETF outflows, 'physical' gold demand surged to its highest in 18 months...

by crisishq.com

 

America is quickly approaching a catastrophic economic collapse. Before you dismiss this as hype or paranoia, take a few minutes to review the facts outlined on this page. The numbers don’t lie. At this point, the dollar crash is unavoidable… far from an exaggeration this is a mathematical certainty. As repelling as that sounds, it’s in your own best interest to learn just how bad the situation is.

 

According to the talking heads of mainstream press the economy is slowly recovering and the financial crisis is all but behind us. But we need a reality check. It’s time to stop being naive and start being more discerning. Instead of more false hope, we need the truth as bitter as it might sound… and the truth is, from our local municipalities, to our states to our federal government, we are broke… the truth is we can’t payback our debt without getting into even more debt… the truth is the housing crash of 2008 was just a small preview of what’s to come.

America is drowning in debt. The government’s liabilities are now growing at an exponential rate. Our national debt is on a vicious downward spiral.
To our detriment, our government continues to pretend that we can borrow our way out of debt and only a handful of our politicians are willing to admit that our nation is now bankrupt.
Contrary to rhetoric coming out of Washington, no tax hike or budget cut will get us out of this mess. The kinds of measures that would actually bring about meaningful change to curb the financial collapse are deemed too severe to be even considered.
Examine the evidence outlined below. Connect the dots and think for yourself.

The Recovery That Never Happened...

by Bill Bonner

Gold seemed to be stabilizing at the end of last week. Commodities remained weak. Steel has fallen 31% this year. Brent crude is off 17% since early February. And copper is down 15%.
Copper is the metal you need to make almost anything – houses, cars, electronics. When it goes down, it generally means the world economy is getting soft.
At the start of last week, the conventional analysis of the gold sell-off was that the central banks' efforts to revive global growth were working. The feds had the situation under control. So who needed gold?
By the end of the week, it appeared that gold – and commodities – had sold off for the opposite reason: because central banks' money printing wasn't working and the world was slipping further into a period of slow growth and barely contained depression. From Business Insider:

Recent U.S. economic data has been disappointing, especially in the realm of housing, which is what the US bull case is all about.
In Germany, dubbed the strong arm of Europe, economic sentiment just fell.

Where's the Growth?

And growth has begun to slow in China –

10 Scenes From The Economic Collapse That Is Sweeping Across The Planet

by Michael 

When is the economic collapse going to happen?  Just open up your eyes and take a look around the globe.  The next wave of the economic collapse may not have reached Wall Street yet, but it is already deeply affecting billions of lives all over the planet.  Much of Europe has already descended into a deep economic depression, very disturbing economic data is coming out of the second and third largest economies on the globe (China and Japan), and in most of the world economic inequality is growing even though 80 percent of the global population already lives on less than $10 a day.  Just because the Dow has been setting brand new all-time records lately does not mean that everything is okay.  Remember, a bubble is always the biggest right before it bursts.  The next major wave of the economic collapse is already sweeping across Europe and Asia and it is going to devastate the United States as well.  I hope that you are ready.
The following are 10 scenes from the economic collapse that is sweeping across the planet... 

#1    27 Percent Unemployment/60 Percent Youth Unemployment In Greece
The economic depression in Europe just continues to get worse with each passing month.  According to the Daily Mail, the unemployment rate in Greece has nearly tripled since 2009...

India Gaining on China as World's Leading Importer of Gold

by GoldSilver.com - Douglas May

Gold imports to India have surged, topping 100 metric tons in April, and they are expected to again exceed 100 metric tons in May. China gold imports also are up, a market response to a dramatic drop in gold prices, a trend not expected to end any time soon.

“It’s a great opportunity to invest in gold now – and being in India, gold can never go to waste,” writes financial analyst Hamsini Amritha.

For reference, China imported an incredible 223 metric tons of gold during the month of March, topping the previous monthly record of just over 100mt.

The escalation of gold imports in India can also be attributed to threats of new taxes on gold imports, pushing traders and jewelers to “beat central bank curbs on overseas bullion purchases by banks.”

Stable Prices, Unstable Markets

by Frank Shostak

 

According to European Central Bank Governing Council member Ewald Nowotny, Federal Reserve Chairman Ben Bernanke sees no risk of inflation in the United States. According to Nowotny, Bernanke had given a “very optimistic” portrayal of the US outlook.
“They see absolutely no danger of an expansion in inflation,” Nowotny said. Bernanke had said US inflation should be 1.3 percent this year.
Fed forecasts put inflation by the end of this year in a range of 1.3 to 1.7 percent. The yearly rate of growth of the consumer price index (CPI) stood at 1.5 percent in March against 2 percent in February and 2.7 percent in March last year.
Also the growth momentum of the core CPI (the CPI less food and energy) has eased in March from the month before. Year-on-year the rate of growth has softened to 1.9 percent from 2 percent in February and 2.3 percent in March last year.