Learning from Mistakes

by James E. Miller

 





The old idiom “you can lead a horse to water, but not make him drink” has proven itself true in the course of human learning. Or rather, it would be more accurate to label it man’s inability to learn from mistakes. You can hold a mirror up to grotesque instances of hypocrisy, but most men will remain mules – stubborn in their prejudice and beliefs. The ability to heed lessons from blunders is, often times, a skill unable to be mastered by the mass populace. A child might learn to not touch a searingly hot stove, but adults are apt to accept their condition of intellectual stupor – even when it proves painful.

Microeconomics of Inflation

by Martin Sibileau

A week later and everyone is a bit more nervous, with the speculation that US sovereign debt purchases by the Federal Reserve will wind down and with the Bank of Japan completely cornered.

In anticipation to the debate on the Fed’s bond purchase tapering, on April 28th (see here) I wrote why the Federal Reserve cannot exit Quantitative Easing: Any tightening must be preceded by a change in policy that addresses fiscal deficits. It has absolutely nothing to do with unemployment or activity levels. Furthermore, it will require international coordination. This is also not possible. The Bank of Japan is helplessly facing the collapse of the country’s sovereign debt, the European Monetary Union is anything but what its name indicates, with one of its members under capital controls, and China is improvising as its credit bubble bursts.

Abenomics is nothing new

by FinancialTimesVideos




When shown the magnificent run-up in Japanese equities over the past six months and asked why he is skeptical about the likely success of Abenomics, Mizuho's chief economist simply explains, "because I am not suffering from amnesia," as the rest of the market appears to be. He goes in this brief interview with the FT to explain there is nothing new here. We already saw massive fiscal expenditure in the 1990s (which failed to gain any real economic traction) and as far as quantitative easing, Ueno reminds his interviewer, we saw major QE between 2001 and 2006 (that failed), Furthermore, the so-called growth strategy, "every Japanese cabinet has undertaken such doctrines without any success." The discussion then switches from the dashing of hopes to the risks of the policy. Five minutes well spent this weekend to remind your momentum-driven recency-biased anchored view of the world that there is nothing new under the sun and moar is not always better...

Killing the Currency

by Chris Casey














 

. . . there is no record in the economic history of the whole world, anywhere or at any time, of a serious and prolonged inflation which has not been accompanied and made possible, if not directly caused, by a large increase in the quantity of money.

— Gottfried Haberler, Inflation, Its Causes and Cures (1960)[1]

The phrase “not worth a continental” may be vaguely familiar to Americans as an old and quirky saying, but to Revolutionary War–era Americans it would have been a harsh reminder of a recent nightmare. In order to finance the war, the Continental Congress authorized the issuance of money without rights of redemption in coin or precious metals (unlike other currencies in circulation). In short order, over $225 million Continentals were issued on top of an existing money supply of only $25 million. Initially traded on a one-for-one ratio with paper dollars backed by coin or precious metals, within a mere five years Continental currency had depreciated to worthlessness.[2] It was America’s first major experiment with a fiat currency, and it cost many newly free Americans their livelihood and savings.

Gold And The Fiat End-Game

 by soundmoneycampaign.com



The Fiat End Game: Preparing For A Way Forward, is a our latest micro-documentary focused on solutions to our current economic problems. Our current fiat currency standard is terminal, nations around the world are dropping the U.S. dollar as a medium of exchange, central banks are buying gold, and Americans are seeing price inflation during an economic downturn. In order to avoid a systemic financial crisis here in the U.S., we need to focus on solutions. Please watch this important video and join us in a new financial awakening happening right now all across America.

America’s Bubble Economy Is Going To Become An Economic Black Hole

By Michael

What is going to happen when the greatest economic bubble in the history of the world pops?  The mainstream media never talks about that.  They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to.  And most Americans seem to think that if the Dow keeps setting new all-time highs that everything must be okay.  Sadly, that is not the case at all.  Right now, the U.S. economy is exhibiting all of the classic symptoms of a bubble economy.  You can see this when you step back and take a longer-term view of things.  Over the past decade, we have added more than 10 trillion dollars to the national debt.  But most Americans have shown very little concern as the balance on our national credit card has soared from 6 trillion dollars to nearly 17 trillion dollars.

The Gods Of The Marketplace

by Mark J. Grant, author of Out of the Box,
"It's the lure of easy money. It has a very strong appeal."

                 -Glenn Frey, Smuggler's Blues

 

Investors borrowed $384.4 billion in April, a 1.3% gain from the previous month and a 29% rise from the same month last year. This is an all-time record for margin debt and it exceeds the previous high mark set in June 2007. Some may see this as an increased sign of investor confidence but I am not one of them. To me this is a giant red warning flag blowing in the financial breeze indicating the leveraging of dumb money making very risky bets.

"Every swindle is driven by a desire for easy money; it's the one thing the swindler and the swindled have in common."

                     -Mitchell Zuckoff

Substances based upon some sort of white powder are quite dangerous. They can overcome your good sense and then they it can be quite difficult to extricate yourself from them. The Great Depression was caused, in large part, by massive leverage utilized in the equity markets. This was the white powder of 1929. It took a decade and a World War before America was able to loosen the grip of the stuff.

Abenomics 101 - The 15 Most Frequently Asked Questions

 by Tyler Durden

With the first arrow of Abenomics perhaps hitting its limit, it will be the second and third arrows that need to occur quickly and aggressively to carry this momentum forward (and for the economy to grow into stock valuations). Barclays lays out 15 of its most frequently asked questions below but concerns remain as the BoJ’s planned absorption of nearly 80% of new JGB issuance from the markets this fiscal year has triggered a dramatic change not only in JGB supply/demand and ownership structure but in the JGB market risk profile itself, which has moved from “low carry, low volatility and high liquidity (superior to other assets from perspective of risk-adjusted returns or Sharpe ratio)” to “low carry, high volatility and low liquidity (inferior from same perspective)”. Barclays added that with a wave of major political and policy events ahead, starting with a crucial Upper House election, there was no big change in the basic belief among foreign investors that Japan is likely to be the main source of surprise for the global economy and of volatility in financial markets.

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.