The Obama Legacy: ‘Crippling Debt, Massive Unemployment, Welfare-based Society, Deteriorated Infrastructure, Massive Inflation, And A Worthless Fiat Currency’

Rapacity performed by an outgoing Democratic president is intentionally downplayed or simply ignored by the mainstream media. We saw such unbridled rapacity in the atavistic way the Clintons left the White House when they departed in 2000. They stole and/or vandalized furniture and furnishings of the White House and left it in a deplorable state. From a perspective of his official actions, Bill Clinton did things such as pardon Tommy Rich and closed a few loopholes to ensure his Clinton Foundation deals did not fall apart after he surrendered the Oval Office.
The Obamas are not following suit in the manner of the Clintons with pillaging the White House for three reasons. Firstly, although he committed dozens of offenses that would have merited it, Obama was not impeached, whereas Clinton was. For those who may hold askance with the conditions of impeachment for Obama, let us remember that under the parameters of the National Defense Authorization Act and the tenets of more than half a dozen overlapping executive orders, the United States (and the world) were ‘redefined’ as a ‘battlefield’ in the war on terror. The emergency status has never been lifted: that status was affirmed and inculcated under the Bush administration shortly after 9/11 that categorized us as being in a state of war (against terrorism) and a continuous state of emergency.
Under such ‘wartime’ conditions, the words of Obama in 2012 were clearly treasonous and constituted an impeachable offense.

This post was published at shtfplan on December 30th, 2016.

TO REALLY ‘MAKE AMERICA GREAT AGAIN,’ END THE FED!

Former Dallas Federal Reserve Bank President Richard Fisher recently gave a speech identifying the Federal Reserve’s easy money/low interest rate policies as a source of the public anger that propelled Donald Trump into the White House. Mr. Fisher is certainly correct that the Fed’s policies have ‘skewered’ the middle class. However, the problem is not specific Fed policies, but the very system of fiat currency managed by a secretive central bank.
Federal Reserve-generated increases in money supply cause economic inequality. This is because, when the Fed acts to increase the money supply, well-to-do investors and other crony capitalists are the first recipients of the new money. These economic elites enjoy an increase in purchasing power before the Fed’s inflationary policies lead to mass price increases. This gives them a boost in their standard of living.
By the time the increased money supply trickles down to middle- and working-class Americans, the economy is already beset by inflation. So most average Americans see their standard of living decline as a result of Fed-engendered money supply increases.

This post was published at The Daily Sheeple on DECEMBER 2, 2016.

Here’s what happened when ancient Romans tried to drain the swamp

In late January of the year 98 AD, after decades of turmoil, instability, inflation, and war, Romans welcomed a prominent solider named Trajan as their new Emperor.
Prior to Trajan, Romans had suffered immeasurably, from the madness of Nero to the ruthless autocracy of Domitian, to the chaos of 68-69 AD when, in the span of twelve months, Rome saw four separate emperors.
Trajan was welcome relief and was generally considered by his contemporaries to be among the finest emperors in Roman history.
Trajan’s successors included Hadrian and Marcus Aurelius, both of whom were also were also reputed as highly effective rulers.
But that was pretty much the end of Rome’s good luck.
The Roman Empire’s enlightened rulers may have been able to make some positive changes and delay the inevitable, but they could not prevent it.
Rome still had far too many systemic problems.
The cost of administering such a vast empire was simply too great. There were so many different layers of governments – imperial, provincial, local – and the upkeep was debilitating.
Rome had also installed costly infrastructure and created expensive social welfare programs like the alimenta, which provided free grain to the poor.
Not to mention, endless wars had taken their toll on public finances.
Romans were no longer fighting conventional enemies like Carthage, and its famed General Hannibal bringing elephants across the Alps.
Instead, Rome’s greatest threat had become the Germanic barbarian tribes, peoples viewed as violent and uncivilized who would stop at nothing to destroy Roman way of life.
Corruption and destructive bureaucracy were increasingly rampant.
And the worse imperial finances became, the more the government tried to ‘fix’ everything by passing debilitating regulation and debasing the currency.

This post was published at Sovereign Man on November 25, 2016.

Perilous government finances

President-elect Trump stated in his victory speech that he intends to make America great again by infrastructure spending.
Unfortunately, he is unlikely to have the room for manoeuvre to achieve this ambition as well as his intended tax cuts, because the Government’s finances are already in a perilous state.
It is also becoming increasingly likely that the next fiscal year will be characterised by growing price inflation and belated increases in interest rates, against a background of rising raw material prices. That being the case, public finances are not only already fragile, but they are likely to become more so from now on, without any extra spending on infrastructure or fiscal stimulus. So far, most informed commentaries on the prospects for inflation have concentrated on the negative effects of an expansionary monetary policy on the private sector. With the pending appointment of a new President with ideas of his own, this article turns our attention to the effects on government finances.
Government outlays are already set to increase, due to price inflation, more than the GDP deflator would suggest. The deflator is always a dumbed-down estimate of price inflation. At the same time, tax receipts will tend to lag behind any uplift from price inflation. Furthermore, the wealth-transfer effect of monetary inflation over a prolonged period reduces the ability of the non-financial private sector to pay the taxes necessary to compensate for the lower purchasing power of an inflating currency.
Trump is a businessman. Such people often think that running a country’s economy is merely a scaled-up business project. Not so. Countries can be regarded as not-for-profit organisations, and democratic ones are driven by the consensus of diverse vested interests. The only sustainable approach is to stand back and give individuals the freedom to run their own affairs, and to discretely discourage the business of lobbying. President Calvin Coolidge expressed this best: ‘Perhaps one of the most important accomplishments of my administration has been minding my own business’.

This post was published at GoldMoney on NOVEMBER 10, 2016.

Doug Noland: The Upshot of Inflationism

This election cycle has been a national disgrace. It finally comes to an end Tuesday, when a deeply divided nation heads to the polls. I recall having a tinge of hope eight years ago that there was a commitment to more inter-party cooperation and less partisan vitriol. There’s not even lip service this time around. As an optimist, I would like to believe that a period of healing commences Wednesday. The analyst inside knows things will continue to worsen before they get better.
Our nation and the world are paying a very heavy price for a failed experiment in Inflationism. At this point, economic stagnation, wealth redistribution and inequality, financial insecurity and corruption are rather obvious consequences. ‘Money’ and Credit have inflated, right along with government, securities markets, financial institutions, corporate influence and greed.
Along the way, there have been many subtle effects. To this day the majority still cling to the view that central bankers are essential to the solution – rather than the problem. But they are at the very root of disturbing national and international, economic, financial, societal and geopolitical degeneration.
For close to 30 years now, central bank policies have nurtured serial inflationary booms and busts. It’s a backdrop that has repeatedly forced investors, homebuyers and others into serious harm’s way. Buy or you’ll be left behind. Get aboard before it’s too late. It’s a system that systematically targets the unsophisticated and less affluent to take on a tenuous debt position to buy homes, cars and things in the name of promoting economic growth. It’s a system that devalues the wealth of savers. Somehow it’s regressed to a system with a policy objective to coerce savers and the risk averse, to ensure their buying power instead inflates the value of risky securities market assets

This post was published at Credit Bubble Bulletin

Former Treasury Secretary Summers Calls For End Of Fed Independence

At an event in Davos, Switzerland earlier today, Former U. S. Treasury Secretary, Larry Summers, argued that Central Bank independence from national governments should be scrapped in favor of a coordinated effort between politicians, central bankers and treasury to engineer inflation. Seems reasonable, right?…what could possibly go wrong?
According to Market Watch, Summers argued that Central Bank independence came from “an understanding of the macroeconomic policy problem that is not relevant to current times.” Ironically, he argued that Central Bank “insulation” was required in the 70s/80s when the “White House” and “Congress” could not be trusted to fight inflation.
So does this indicate that Summers’ baseline assumption is that politicians today are more trustworthy than in the 70s/80s? Perhaps Summers is the one that is “insulated” from reality? Is it possible that he’s completely missed the fact that one of our presidential candidates is currently under multiple investigations by the FBI for various allegations of corruption and fraud? Meanwhile, both presidential candidates are polling at among the lowest rates ever experienced for “trustworthiness” while the job approval rating of Congress has never been lower…but sure, we should grant them even more power to wreak havoc on the U. S. economy for political gain…why not?
Central bank independence ‘comes from an understanding of the macroeconomic policy problem that is not relevant to current times,’ Summers said in a speech at the International Monetary Fund.

This post was published at Zero Hedge on Nov 4, 2016.

Here’s What’s Booming: $6.6 Billion Plowed into 2016 Election

Who are the top 10 donor families? ‘Familiar names…’ For the most cynical among us, democracy in the US is just a codified peaceful way of swapping out the figureheads at the top. For the less cynical, there is a lot more at stake, and they’re willing to plow huge amounts of money into these elections so that this money will help them accomplish their goals afterwards.
Putting money to work in politics is easy in the US. It’s considered a legitimate investment with some sort of return. You have to be really careless, totally uninformed, and completely devoid of common sense to commit illegal acts of corruption because there are a million ways to do this legally. And the amounts changing hands are enormous.
Nearly $6.6 billion: that’s how much candidates, parties, and outside groups are raising and spending in trying to move things their way in the 2016 election cycle, the Center for Responsive Politics estimates on its website, OpenSecrets.org. It’s a new record. It’s up by $86.5 million, adjusted for inflation, from the 2012 presidential cycle, which had also been a record.

This post was published at Wolf Street on October 30, 2016.

What We’ll Get: the Best Politicians $6.6 Billion Can Buy

Money Boom: Record Amounts Plowed into 2016 Election
For the most cynical among us, democracy in the US is just a codified peaceful way of swapping out the figureheads at the top. For the less cynical, there is a lot more at stake, and they’re willing to plow huge amounts of money into these elections so that this money will help them accomplish their goals afterwards.
Putting money to work in politics is easy in the US. It’s considered a legitimate investment with some sort of return. You have to be really careless, totally uninformed, and completely devoid of common sense to commit illegal acts of corruption because there are a million ways to do this legally. And the amounts changing hands are enormous.
Nearly $6.6 billion: that’s how much candidates, parties, and outside groups are raising and spending in trying to move things their way in the 2016 election cycle, the Center for Responsive Politics estimates on its website, OpenSecrets.org. It’s a new record. It’s up by $86.5 million, adjusted for inflation, from the 2012 presidential cycle, which had also been a record.
Alas, it’s not over, and the Federal Elections Commission (FEC) hasn’t reported all the data yet, and some money doesn’t get reported at all. We’ll get to that in a moment. Hence the report: ‘The cost could be much higher – this is a conservative estimate.’

This post was published at Wolf Street by Wolf Richter ‘ October 30, 2016.

Could Venezuela Become The Next Syria?

Speaking of poor policymaking, hyperinflation and violence – Venezuela is sliding closer and closer to the brink of collapse, with some sobering consequences.
This was among the topics of conversation this week at the Mining & Investment Latin America Summit in Lima, Peru. While there, I had dinner with a couple of Canadian lawyers who represented a few Latin American oil producers, some of them based in Venezuela.
Things have gone from bad to worse, they informed me. Since 2013, when Nicols Maduro took power after the death of Hugo Chvez, the socialist country has struggled with skyrocketing inflation, food and medicine shortages, a shrinking economy and rising violence and corruption. (Its capital city of Caracas recently overtook San Pedro Sula, Honduras, for having the world’s highest homicide rate.)
These have only intensified since oil prices fell by half more than two years ago, as oil accounts for 95 percent of Venezuela’s export earnings.

This post was published at Zero Hedge by Frank Holmes, originally posted ValueWalk.com Oct 30, 2016.

Monetary Pollution

Some climate scientists, concerned with the warming impact of rising levels of carbon dioxide and other greenhouse gases in the atmosphere, have proposed that to keep temperatures cool what is needed is more pollution. More specifically, they suggest that more particulate pollution in the upper reaches of the atmosphere would reflect the sun’s radiation back into space and thereby have a cooling effect, as has been demonstrated in the past when large volcanic eruptions have led to years without summers. In a similar way, policymakers across much of the developed world, concerned about rising inequality, are recommending the introduction of a guaranteed minimum income. However, just as it appears senseless to send soot into the air to correct the atmospheric damage wrought by over a hundred years of fossil fuel burning, so too is it senseless to expect easy money for the poor to correct the damage caused by over 30 years of easy money for the banking system and the rich. The creation of money by central banks and the banking system has predictable consequences. As the economic thinker Henry Hazlitt wrote in his 1965 book, ‘What You Should Know about Inflation’ (keeping in mind that for Hazlitt, inflation refers not to an increase in prices but rather to an increase in the quantity of money): ‘Inflation makes it possible for some people to get rich by speculation and windfall instead of by hard work. It rewards gambling and penalizes thrift. It conceals and encourages waste and inefficiency in production. It finally tends to demoralize the whole community. It promotes speculation, gambling, squandering, luxury, envy, resentment, discontent, corruption, crime, and increasing drift toward more intervention which may end in dictatorship.’ From the early 1970s onwards, the ability of central banks and the banking system to create money from nothing has distorted the incentives upon which healthy market economies depend. While the reasons for expanding the quantity of money in circulation always seem benign, be they ‘to avoid a financial crisis’ or ‘to reduce unemployment’ the truth is that every dollar so created increases inequality while simultaneously sapping productivity.

This post was published at Mises Canada on OCTOBER 19, 2016.

A Realistic Decomposition Of Rates, Or At Least A Realistic Interpretation Of It

Last April, former Fed Chairman Ben Bernanke wrote a series of blog posts for Brookings that was intended to explain one of the biggest contradictions of his legacy. If quantitative easing had actually worked as he to this day suggests that it did, why wasn’t the bond market in clear agreement? In order to try to reconcile the huge discrepancy, Bernanke offered several possibilities, even titling his effort ‘Why Are Interest Rates So Low?’ to further emphasize the difficulty.
The fourth part of his series treated with ‘term premiums’, an element of Fisherian rate decomposition that economists use to try to understand bondholders and their motivations. In many ways, however, ‘term premiums’ are a plugline, a leftover after considering the other perhaps more visible (this is a relative designation, as we always need to keep in mind that nothing presented here or that is discussed in policy or mainstream circles about these ideas is visible) parts of rate decomposition – expected path of real short-term interest rates and inflation compensation.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 28, 2016.

Get Ready For The Mother Of All Stock Market Corrections Once Central Banks Cease Their Money Printing

Undue tightening by the US Federal Reserve could set off a perfect storm of recessionary effects
Global stock and bond markets have been all over the place of late. Rarely have investors been so lacking in conviction. Confusion as to future direction reigns, and with good reason after the spectacular returns of recent years.
For how much longer can stock markets keep delivering? Is there another recession on the way, or to the contrary, is growth likely to surprise positively, underpinning current valuations? Economic turning points are never easy to spot, but right now it’s proving harder than ever.
The immediate cause of all this uncertainty is, however, fairly obvious. It’s the US Federal Reserve again, and quite how far it is prepared to go with the present tightening cycle. Few expect policy makers to act at this week’s meeting of the Federal Open Market Committee.
Even so, a number of its members have once again been making hawkish noises, and another rise in rates by the end of the year is widely anticipated.
Indeed, it is on the face of it quite hard to see how the Fed can avoid such action. Already at 2.3pc, core inflation in the US is trending higher. The US labour market continues to tighten, and money growth, for some a key lead indicator, is strong.

This post was published at David Stockmans Contra Corner By JEREMY WARNER, The Telegraph ‘ September 22, 2016.

The Biggest Washington Whopper Yet

You can’t find lazier people than in the mainstream financial press, but their exuberant cheerleading about the purported 5.2% gain in the real median household income in 2015 surely was a new high in mendacity. And we are not talking about the junior varsity here: The Washington Post was typical with a headline of superlatives followed by even more exuberance in the text:
U. S. household incomes soared in 2015, recording biggest gain in decades……… The data represents the clearest evidence to date that the nation’s long, slow and topsy-turvy economic recovery has finally begun to deliver prosperity for wide swaths of workers.
The self-evident fact is that the median household couldn’t have had an after-inflation income gain of 5.2% in 2015. There is not a single data point in the mountains of ‘incoming’ economic data that is consistent with that proposition. Yet nothing in the Post story, or any other mainstream coverage, even hints that the Census Bureau’s whopper isn’t on the level.

This post was published at David Stockmans Contra Corner by David Stockman ‘ September 20, 2016.

A Messaging Tip For The Donald: It’s The Fed, Stupid!

The Fed’s core policies of 2% inflation and 0% interest rates are kicking the economic stuffings out of Flyover America. They are based on the specious academic theory that financial gambling fuels economic growth and that all economic classes prosper from inflation and march in lockstep together as prices and wages ascend on the Fed’s appointed path.
Au contraire! Those propositions are the most economically destructive and wantonly unjust notions ever embraced by an agency of the state. They clobber the middle- and lower-end of the income ladder while showering the top tier of financial asset owners with stupendous windfalls of unearned gain.
So the nation’s rogue central bank is essentially a reverse Robin Hood on steroids. If Donald Trump wants to hit the ball out of the park next Monday evening, therefore, he needs to quickly skip over his dog-eared income tax cut plan and put the wood good and hard to the Fed, Janet Yellen, and our unelected financial rulers.
They are killing wages, off-shoring jobs, trashing savers, subsidizing the banks, gifting Wall Street speculators with endless financial bubbles and rigging the markets to insure that the Democrats win.

This post was published at David Stockmans Contra Corner on September 19, 2016.

The Folly Of Economists: Negative Interest Rates

Bernanke, the person nicknamed ‘Helicopter Ben’ because he said it would be easy to fight deflation even if it had to be done by throwing money out of helicopters, gave us ‘ZIRP,’ which means ‘zero interest rate policy.’ Now he seems to be leaning toward ‘NIRP,’ ‘negative interest rate policy.’ He is an economics professor now. We can only hope that his students do some outside reading, like Ludwig von Mises.
Jeff Cox and Katie Kramer of CNBC wrote this:
Former Fed Chairman Ben Bernanke thinks policymakers should give serious thought to implementing negative rates.
‘Since that can’t be assured, and since the current low-interest-rate environment may persist, there are good reasons for the Fed and other central bankers to consider changes in their policy frameworks,’ he added. ‘The option of raising the inflation target should be part of that discussion. But … it is premature to rule out alternative or potentially complementary approaches, including the possibility of using negative interest rates.’

This post was published at David Stockmans Contra Corner By Bert Dohmen, Forbes ‘ September 19, 2016.

Will the Bank of Japan cause a Global Bond Tantrum?

As investors anxiously await the key monetary policy decisions from the Federal Reserve and the Bank of Japan next week, there have been signs that the powerful rally in bond markets, unleashed last year by the threat of global deflation, may be starting to reverse. There has been talk of a major bond tantrum, similar to the one that followed Ben Bernanke’s tapering of bond purchases in 2013.
This time, however, the Fed seems unlikely to be at the centre of the tantrum. Even if the FOMC surprises the market by raising US interest rates by 25 basis points next week, this will probably be tempered by another reduction in its expected path for rates in the medium term.
Instead, the Bank of Japan has become the centre of global market attention. The results of its comprehensive review of monetary policy, to be announced next week, are shrouded in uncertainty. So far this year, both the content and the communication of the monetary announcements by BoJ governor Haruhiko Kuroda have been less than impressive, and the market’s response has been repeatedly in the opposite direction to that intended by the central bank.
As a result, the inflation credibility of the BoJ has sunk to a new low, and the policy board badly needs to restore confidence in the 2 per cent inflation target. But the board is reported to be split, and the direction of policy is unclear. With the JGB market now having a major impact on yields in the US, that could be the recipe for an accident in the global bond market.

This post was published at David Stockmans Contra Corner By Gavyn Davies, Financial Times ‘ September 19, 2016.

More Data For The ‘Data Dependent’ Fed To Ignore

The University of Michigan released its September update for their surveys of consumers. The overall index of consumer ‘sentiment’ was unchanged from August at 89.8, and up just 3% from last September. This ‘confidence’ index peaked in January 2015 at 98.1 and has been sideways to lower ever since. Most of the internals were practically unchanged throughout, leading Chief Economist Richard Curtin to note:
…modest gains in the outlook for the national economy have been offset by small declines in income prospects as well as buying plans
Not everything in the surveys was so uninteresting. Inflation expectations dropped yet again, as both short-term and intermediate consumer projections for the rate of prices changes continue to sink. The surveyed result for the inflation rate next year fell to 2.3%, the lowest since September 2010 just prior to the start of QE2. Straight away, it would appear that consumers are no longer so convinced that ‘money printing’ actually accomplishes what money printing is supposed to.
Since the data is made up of surveys of American consumers we are really talking about perceptions, and thus this reduction in expected inflation has been shaped by recent (money, not monetary policy) events. The peak outlook, the one most faithful to the myth of ‘money printing’, was reached not surprisingly in early 2011. Since then, shorter-term expectations were as inflation breakevens in the TIPS part of UST trading; seemingly stable but only as a matter of being unconvinced about policy efficacy, primarily QE.

This post was published at David Stockmans Contra Corner on September 16, 2016.

Trump’s Economic Plan – -A Dog’s Breakfast Of Some Decent Ideas And A Lot Of Really Bad Fiscal Math

Donald Trump’s speech at the New York Economic Club on Thursday was quite brilliant, powerfully delivered and even laced with the kind of soaring ‘capitalist prosperity’ rhetoric that has not been heard from GOP politicians since Jack Kemp.
I was all set to say as much this morning at 7AM on CNN’s ‘New Day’ show. But the segment host, Alisyn Camerota, averred that first there was some more important business pending. That is, what did I think about Donald Trump’s ‘birther’ views, and wasn’t that just as important as his economic speech?
That’s right. We have an economy that is on death’s door after 30-years of economic mis-governance by the Wall Street/Washington elites, but cable news was obsessed by the possibility that the Donald’s uuge comb-over might be hiding a tin foil hat!
So I thought it pertinent to observe that Barack Obama was born somewhere, had been elected President, served eight years and was on the way out – -but that he had left behind an even bigger economic mess than he inherited. In fact, the millions of families in Flyover America who have lost good jobs or seen their wages eroded by inflation or have had their savings crushed on the Fed’s zero bound do not care a whit about where our 44th President was born, but they most surely are interested in what is going to be done to change the current ruinous regime.

This post was published at David Stockmans Contra Corner on September 16, 2016.

Guess The Last Country Which Still Has Positive Real Interest Rates – – Russia!

Russia’s central banker, Elvira Nabiullina, continues to be the most impressive central banker in the world. It appears she has completely rejected Keynesian money pumping orthodoxy and its strange new view that a little price inflation is good. She holds the heroic view that it is investment and increasing efficiencies that boost growth in an economy.
Reports Bloomberg: Nabiullina has a message for Russian businesses that may be finding it difficult to adapt to positive real interest rates: get used to it.

This post was published at David Stockmans Contra Corner on September 17, 2016.

Tuesday Was A Warm-Up – – The Real Brainard Bloodbath Beckons

The robo-machines and reflexive dip-buyers who took Fed governor Lael Brainard’s word for it on Monday got kicked in the teeth pretty hard on Tuesday. But then again, why would even a silicon-based trader take her word for anything?
Brainard is absolutely clueless about the manner in which the Fed and other central banks have booby-trapped the world’s financial markets with incendiary bubbles and FEDs (financial explosive devices).
After all, she has never set foot in any precinct of the capitalist economy since moving out of her dorm room at Wesleyan University in 1983. Instead, she’s been traveling the beltway apparatchik route every step of the way – – including stints at the White House, Brookings and the US Treasury before her arrival at the Eccles Building.
That was surely reflected in the fatuous speech she gave Monday afternoon explaining the five ‘key features’ of the ‘New Normal’ that are ‘the major reasons for caution’ in raising rates off the zero bound.
Not surprisingly, the first of these was that ‘Inflation has been undershooting’, and presumably that means falling below the Fed’s vaunted 2.00% target.

This post was published at David Stockmans Contra Corner on September 14, 2016.