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America’s Oil Boom Is a Fraud
PARIS – We promised to end the week with a bang!
You’ll recall that Fed policy always consists of the same three mistakes… 1) Keeping interest rates too low for too long, resulting in too much debt; 2) Raising interest rates to try to gently deflate the debt bubble; and 3) Cutting rates in a panic when stocks fall and the economy goes into recession.
Well, here comes the Big Bang: Mistake #4 – rarely seen, but always regretted.
Mistake #4 is what the feds do when their backs are to the wall… when they’ve run out of Mistakes 1 through 3.
It’s a typical political trade-off. The future is sacrificed for the present. And the welfare of the public is tossed aside to buy money, power, and influence for the elite.
Apocalypse Now!
Every debt expansion ends in a debt contraction. Stocks crash. Jobs are lost. The economy goes into reverse, correcting the mistakes of the previous boom.
Investors see their money entombed. Householders await foreclosures. The authorities scream: Apocalypse Now!
The more the feds falsify price signals in the boom, the more mistakes there are to correct. For example, this week, a report in The New York Times described the big mistake in the shale oil boom.
You’ll recall that it turned America from a big importer of oil to a major exporter… and revived much of the heartland with big fracking projects in woebegone regions of Texas and North Dakota.
The shale oil boom was even credited with having scuttled the oil market, which dropped from a high of around $130 a barrel in mid-2008 to under $30 in late 2016, thanks to so much new supply.
But guess what? The whole boom was fake. It didn’t add to wealth; it subtracted from it. Accumulated losses over the last five years tote to more than $200 billion, with $36 billion lost in the Bakken shale fields in North Dakota alone.
…click on the above link to read the rest of the article…
The Final Assault in the War on Cash
Before I show you what I’ve learned about a plan to seize control of America’s money, let me make one point clear…
If you value sound money and political freedom… if you value limited government and taxation with representation… and if you value enterprise and privacy… then you’re going to hate the future I’m about to describe.
There is no philosophical or monetary middle ground on the issue.
You’re either with it or against it.
The Chicago Plan
In March 1933, Henry Morgenthau Jr., chairman of the Federal Farm Board, was sent a short memo titled, “Memorandum on Banking Reform.”
It was signed by Frank Knight (the acknowledged author of the memo), Garfield Cox, Aaron Director, Paul Douglas, Lloyd Mints, Henry Schultz, and Henry Simons. All of them were professors at the University of Chicago.
The memorandum advocated for full-reserve banking (FRB) in the U.S. monetary system. U.S. currency would be backed only by government debt, not bank debt (loans issued by commercial banks to private citizens and companies).
It wouldn’t nationalize the U.S. banking system. But it would nationalize the nation’s money supply.
Under this kind of system, banks could no longer “create” money by lending it into existence. Money creation would be the exclusive territory of the government of the United States.
In this system, the key government agencies could not create money through new lending. They would do so through new spending (on priorities determined by elected politicians).
They called it “The Chicago Plan.”
The most radical elements of the plan – which we’ll discuss shortly – were left on the shelf nearly a century ago.
But I believe it’s about to find a resurgence in modern America…
…click on the above link to read the rest of the article…
Ike was right!
POITOU, FRANCE – We wait for the world to fall apart.
The Dow is still more than 1,000 points below its high; so we presume the primary trend is down. Treasury yields – on the 10-year note – are near 3%… twice what they were two years ago. So we presume the primary trend for bonds is down, too.
If we’re right, we are at the beginning of a long slide… down, down, down… into chaos, destitution, and destruction.
Faked Out
Our working hypothesis is that General Eisenhower was right. There were two big temptations to the American Republic of the 1950s; subsequent generations gave in to both of them.
They spent their children’s and grandchildren’s money. Now, the country has a government debt of $21 trillion. That’s up from $288 billion when Ike left the White House.
And they allowed the “unwarranted influence” of the “military/industrial complex” to grow into a monster. No president, no matter how good his intentions, can stop it.
A corollary to our major hypothesis is that the rise of the Deep State (the military/industrial/social welfare/security/prison/medical care/education/bureaucrat/crony complex) was funded by the Fed’s fake-money system.
Now, investors, businesses, households, and the feds themselves have all been “faked out” by a fraudulent money system. None of them can survive a cutback in credit.
For nearly 30 years, central banks have backstopped markets and flooded the world with liquidity.
But last week, the Fed turned the screws a little further. It now targets a 2% Fed Funds Rate and claims to be on the path of “normalization.”
And the European Central Bank (ECB) made it official, too; it hasn’t quite begun tightening, but it’s got its toolbox open. And command of the ECB work crew is set to change hands next year anyway, passing on to a German engineer.
…click on the above link to read the rest of the article…
How the easy money boom ends
How the easy money boom ends
Through the door there came familiar laughter
I saw your face and heard you call my name
Oh, my friend we’re older but no wiser
For in our hearts the dreams are still the same
Those were the days
– “Those Were the Days” by Gene Raskin
POITOU, France – Yes, they were good years… 1980-2015. We laughed. We cried. We got married. We raised children. We bought houses. We made money.Whose life has not been improved since the end of the 1970s?
Reagan’s “Morning in America.” Then the Clinton Years. Finally, George W. Bush’s “Fin de Bubble” era. Who is not older and better off (or at least older) than he was when the era began?
Should we just stop there, happy to have had such a wonderful time together?
Today, the Dow opens at 17,867 points – not far from its all-time high. And about 1,180% higher than it was 35 years ago.
A man would be fool to question his happiness in marriage; would he be so foolish to wonder about the bliss afforded by such a bull run?
Should we merely thank divine providence… or the profane feds… for our granite countertops, our rising stock market portfolios, our families, and our fortunes?
Should we look in the closets and under the rug?
Or maybe – just maybe – should we check the balance sheet?
Vanishing Capital
The press was unanimous as to what happened yesterday: “U.S. Stocks Slip on Yellen’s Testimony.”
What was it about her testimony that caused investors to think that their stocks may be less valuable at 4 p.m. than they had been at 9 a.m.?
“Yellen hints at December rate hike.”
Investors are no dopes. They know the fix is in. The value of a stock is no longer determined by honest commerce. Now, it is a feature of finance – specifically, the rate of interest the Fed pays commercial banks on their excess reserves.
…click on the above link to read the rest of the article…
