By Dennis Miller: We all share a common goal: to grow our nest eggs and make sure they last over the long haul. Our generation was taught to live off the interest and never touch the principal, but interest rates for CDs and Treasuries no longer allow for that. They don’t even keep up with inflation, so we have to invest our money elsewhere if we want it to last.
Entries in Financial Repression (32)
By Shannara Johnson, Chief Editor, Casey Research: "After listening to the speakers, I made sure to program the number of the suicide hotline into my cell phone," real estate expert Andy Miller joked at the beginning of his speech. Rick Rule, resource investor and chairman of Sprott Holdings, quipped, "Amazing – I actually get to be the positive guy here."
In its report on shadow banking, the New York Fed buried some nuggets: Hedge funds and banks are bailing out of the highest-risk “opaque” but now relatively low-yielding loans – low yielding thanks to the Fed’s repressive monetary policies – by selling them to small investors via harmless-sounding and conservative-appearing mutual funds and ETFs.
By Lee Adler, The Wall Street Examiner: One of the purposes of the Fed's Zero Interest Rate Policy (ZIRP) was ostensibly to allow banks to rebuild their capital through suppressed funding costs and increased profits. Theoretically that would add to their capital. But in this chart, we see that the growth rate of bank capital has fallen to zero.
In this installment from Chapter 25, “DEALS GONE WILD: Rise of the Debt Zombies,” of his bestseller, David Stockman vivisects the LBO craze before the financial crisis, including the insane and largest ever buyout, Texas mega-utility TXU Corporation – now in bankruptcy. And then there is Goldman....
By Dennis Miller, Miller’s Money: When I was a young buck out in the workplace, financial magazines published worksheets for calculating when you had enough money to retire. The process became easier when we got our first PC. For years, financial planners considered four basic numbers to be conservative estimates. But that all blew up in the fall of 2008.
By Dennis Miller, of Miller's Money: Retirees are often more concerned with the return of their money than the return on their money. It's understandable; after our peak earning years have passed, financial safety becomes our primary concern since the opportunity to earn back investment losses is essentially over.
You don't seem to "think Abenomics is working,” a reader wrote, followed by tough questions and a comparison to Kyle Bass, who has been betting on a “full-blown Japan crisis.” It got me thinking. I’m attached to Japan. What started in 1996 has turned into a complex relationship. But now that Abenomics is the religion of salvation, I’m even more worried.
Contributed by John Mauldin, Mauldin Economics: In bond markets around the world, governments are winning, and investors are losing. The Fed is helping the Treasury to borrow cheaply while the government expands its deficit spending and debt accumulation. Using inflation and low bond yields to reduce government debt is called financial repression.
Stability in the Japanese government bond market is “extremely desirable,” said Bank of Japan Governor Haruhiko Kuroda in a sign of just how frazzled he was after the turmoil and craziness that his over-the-edge experimental monetary policy has unleashed. But as stability eludes him, he might resort to ever more desperate measures to just hang on.
In 1969, notes greater than $100, including the cool $10,000 note that would still pay for a lot of things, were retired due to “declining demand.” Prematurely, it turns out. Because demand for cold hard cash, despite plummeting use of it for transactions, has surged. Reason: fear.
I’ve been a fan of David Stockman ever since he got in trouble for speaking the truth as Budget Director under President Reagan. But his new book, The Great Deformation: The Corruption of Capitalism in America—what an awesome romp through the economic, financial, and monetary shenanigans of our times!
Euros entered circulation on January 1, 2002. For six years, they grew on trees in southern Europe. But the bubble got pricked. Since then, the monetary union has been in crisis. Almost half of its existence! Until suddenly, its problems were solved. But now confidence in the monetary union is weaker than ever. With a hue of resignation in Germany.
Contributed by Lee Adler, The Wall Street Examiner. The Fed is growing deposits far faster than banks can deploy them, or than the economy can use them. It is growing them far faster than anybody wants or needs. And so, there are "hundreds of billions of dollars of potential fuel unused." Therein lies the potential for big problems.
“Yellen and Cisco lift US stock futures,” the headline read enticingly in the morning. Priceless. Their pronouncements were driving up the markets. But by the time the markets closed, the manipulative power of Fed Vice Chairman Janet Yellen had dissipated; the DOW was down 1.45%. And across the Atlantic, the German Bundesbank issued a tough warning about the very policies Yellen was propagating.
Contributed by Blankfiend, of Fibs and Waves. In the eye, loss of sensation can cause ulcers of the cornea that can lead to the loss of the eye. In diabetics, loss of sensation in the feet can lead to decubitus ulcers. Healthy individuals could actually do this to themselves through the continuous use of topical or local anesthetics. Turns out, pain mediates the release of a substance that promotes healing. Without it, the healing does not take place. The economy is no exception.
Contributed by G. Edward Griffin. Is the Federal Reserve really doing such a bad job… or does it actually do exactly what it's supposed to do, but the average American is in the dark about what that is? In this explosive video, G. Edward Griffin talks about the Fed's real role in the US economy and why – contrary to common belief – it is not this banking cartel's mission to act in the best interest of the American public.
Dizzying QE gobbledygook is upon us once again. It would restart its big 480-volt money printer, in addition to the desktop machine it had been using recently, the Fed said, in order “to help ensure that inflation, over time, is at the rate most consistent with its dual mandate,” namely “maximum employment and price stability.” Thus, more inflation magically creates more jobs, and “price stability” requires more inflation in order to become more ... stable maybe?
The strongest and toughest creatures out there that no one has been able to subdue yet, the inexplicable American consumers, are digging in their heels though the entire power structure has been pushing them relentlessly to buy more and more with money they don’t have, and borrow against future income they might never make, just so that GDP can edge up for another desperate quarter. But it’s been tough.
It must be infuriating for Mario Draghi, the hapless President of the European Central Bank, to see how masterfully the Fed and the Bank of Japan control their respective credit markets, how they manipulate them for the benefit of the banks, and how they’re allowing their governments to fund huge deficits at near zero cost. Draghi just doesn’t seem to be able to wrap his arms around it.