“I don’t think the Fed is going to taper its bond buying. I believe they are going to double it.” - Jim Willey
Dear All,
Regular readers know that a consistent theme of this blog has been that the Federal Reserve is functionally trapped and cannot let up on stimulus ('Cornered' 'Contrived Exits'). Essentially admitting as much in its most recent post-FOMC announcement (although talking heads insisted on alternative interpretations so as to keep the Fed-watching industry healthy) the central bank failed to announce a widely expected reduction or "taper" of its bond purchases. The unbridled pretense with which Fed members make speeches to the contrary (lapped up by Wall Street/media talking heads who pontificate at nauseam about the central bank's intentions) makes for lousy theater. Self-absorbed and impressed with their dissection of non-existent nuance, the plethora of experts weren't even close in their predictions. All the parsing and handicapping meant nothing. Bright guys, most of these suits -- but they live in an insular environment and feed off one another's rhetoric. They are also fighting the last war, believing we are in the midst of just another tough business cycle and that the Fed is in control and will dig us out.
A notable exception to the parade of lemmings appearing on financial broadcasts: Peter Schiff Was Right Part Deux: The “Taper” Edition
Another exception to the drivel from the economics 'profession;' this from a former insider: BIS former chief economist: Global credit excess worse than pre-Lehman
This profile of Pulitzer Prize winner Seymour Hersh in The Guardian is worth reading if only for a nostalgic remembrance of the days when the U.S. had a viable Fourth Estate. An old school practitioner of investigative journalism, Hersh is currently writing a book on national security which includes a chapter on the Navy Seal/Osama Bin Laden raid on which he comments, "[I]t’s one big lie, not one word of it is true.” theGuardian: Seymour Hersh on Obama, NSA and the 'pathetic' American media
And now a civics lesson for Thomas L. Friedman...Putting the entire matter of the government shutdown aside, in this recent column Thomas Friedman displays a shocking (although common) misunderstanding of the type of government the United States founders established, as codified in the Constitution: "What is at stake in this government shutdown forced by a radical Tea Party minority is nothing less than the principle upon which our democracy is based: majority rule."
Mindful
of the perils of a pure democracy and tyranny of the majority, the U.S.
founding fathers were quite deliberate in not establishing the U.S. as a
democracy, forming instead a republic (Remember the Pledge of
Allegiance, Tom?).* The distinction amounts to mob rule vs.
governance by constitution. In fact the word 'democracy' never once
appears in the U.S. Constitution (Article IV Sec. 4 sets forth the
establishment of the republic). Protection from majority rule
('mobocracy') is the reason for the existence of the Senate, where
representation is equal among the states regardless of population. It is
also the rationale, regardless of what one thinks of it, for the
Electoral College system which prevents election of a president by
popular majority. There are other examples. So not only as Friedman
asserts -- is majority rule not "the principle upon which our democracy is based," it is not even a
principle and the country is not a democracy. Benjamin Franklin was
once asked what type of government he had helped found and famously
replied, "A republic, if you can keep it." Back to high school for you, Tom.
If you or I are suspected of arming or funding terrorists we are subject to severe criminal prosectution and freezing of our bank accounts. Barack Obama, not so much: RT: Obama exempts himself from ban on aiding terrorists
off-your-trolley (awf ur tro' lee ) Adj Completely unable to think clearly or
behave in a controlled way, especially because of mental illness; Synonyms: deranged, loopy, crackpot, barking mad, barking, gonzo, doolally, up the pole, not the full shilling, wacko or whacko, berko, off the air, porangi 
Senator John McCain has yet to meet a country he wouldn't invade and will switch allegiances at the drop of a hat if it means he can watch Tomahawk missiles launch from naval vessels. (McCain is 3rd generation U.S. Navy; both his father and grandfather were 4 star admirals). Hoping it would culminate with a strike on Syria the senator cozied up to the boys from Al Nusra Front (pictured below several months back) referring to them as "moderates" (Al-Qaeda and Al-Nusra in Syria may have significant amounts of sarin). In fact, they are controlled by the folks who hit the World Trade Center and Pentagon. His hopes now seemingly dashed on a Syrian strike, look for the senator to embrace another "rebel" group to back somewhere, anywhere.
The Obama administration has claimed that 54 terrorist plots have been foiled by the NSA, justifying its privacy-rape of 300 million Americans:
NSA Chief Admits “Only One or Perhaps Two” Terror Plots Stopped by Spy Program
"The guy has the nerve to say “perhaps.” How do you not know? What a bunch of lying assholes. How the heck does 54 turn into “one or two,” and I’ll tell you something else, I don’t believe the one or two figure for a minute. I mean there’s no way he would say “zero” when he is fighting to keep his petty little Stasi state intact."
WashingtonTimes: NSA chief’s admission of misleading numbers adds to Obama administration blunders
The same holds true for the TSA, the largest toothpaste confiscation entity in the world. If it had any successes in preventing terrorist attacks there would be chest pounding and media PR. The TSA is merely a public employment sinkhole for hygiene-challanged former fast food employees who failed to move up that hierarchy. Travel would be easier, cheaper and no less safe were the TSA to shut down. Besides, it is entirely unnecessary to pass through TSA security in order to blow up an airliner; tarmac security is a joke.
The U.S. has its BLS (Bureau of Labor Statistics); Argentina has INDEC. Both fabricate economic statistics. Let's be grateful for Shadowstats (while we still have it): ABCNews: Argentina is trying again to criminally prosecute people who publish independent inflation data
Two pieces from Matt Taibbi:
"This is the third act in an improbable triple-fucking of ordinary people that Wall Street is seeking to pull off as a shocker epilogue to the crisis era...It's a scam of almost unmatchable balls and cruelty, accomplished with the aid of some singularly spineless politicians."
RollingStone: 16 Major Firms May Have Received Early Data From Thomson Reuters
"[A] whistleblower complaint has been filed to the SEC identifying 16 of the world's biggest banks and hedge funds as the allegedly even-earlier recipients of this key economic data. The complaint alleges that this select group of customers received the data anywhere from 10 minutes to an hour ahead of the rest of the markets."
According to the Federal Reserve, student loans have increased 275% in the last decade with aggregate student loan debt now exceeding total U.S. credit card debt. Roughly two-thirds of all college graduates have student loan debt at this point. Meanwhile, the Dept. of Education is reporting that 11% of all student loans are at least 90 days delinquent and the default rate has close to doubled since 2005. Now consider:
* Over half of all Americans with a bachelor's degree under the age of 25 were either unemployed or underemployed in 2011.
* About half of all recent college graduates are employed in jobs that do not require a college degree, including over 100,000 janitors and 317,000 waiters and waitresses.
Yet the clamor for college degrees, a losing concept encouraged and funded by the same federal government that financed the housing bubble with easy money, shows no let up. U.S. Colleges are over-financed, overrated and dysfunctional organizations delivering an inferior product at an inflated price. The fact that SAT scores for the schools' incoming male freshmen hit a 40 year low last year compounds the futility. You'll want to read Charles Hugh-Smith's analysis of the entrenched "education cartel" whose real focus is perpetuating its gravy train at the expense of its customers; students: Why the Higher Education System Is Unsustainable (i.e. Doomed)
Attention! Effective immediately there will be more room in the overhead compartments for the rest of us...
The United Nations/IPCC released its report on climate change which was promptly mocked by its own members for its grandiose politicization and altering of data to meet its agenda. Perhaps the most noteworthy reaction to the report, which a top MIT scientist referred to as "hilariously' incoherent, came from the Wall Street Journal's loopy weatherman, who upon reading the report tweeted that he was brought to tears and would never fly in an airplane again in order to do his part to reduce carbon emissions. He then added that he has decided not to have children in order to lighten his carbon footprint and is considering having a vasectomy. Seriously, he tweeted this.Forbes: Remember All Those Breathy Predictions About An Ice Free Arctic By 2015? Nevermind...
On to gold and silver...
Please listen to Gregg Hunter's interview with Jim Willey who discusses the 'broken' U.S. Treasury market (and the interest rate derivatives that are subject to breaking the entire financial system altogether) and the desperation and subterfuge behind the scenes: Systems are Breaking in Treasury Bond Market.
The Fed is trapped, my friends. The financial markets are not anticipating any inflation and for the moment money velocity is anemic. This will change suddenly when it becomes apparent that the Fed can no longer support the dollar and the bond market simultaneously. Coinciding with this, the paper gold games will end just as abruptly and physical gold demand will once again be all that matters in making price.
My best,
Jeff ______________________________________
* "Democracies have ever been spectacles of turbulence and contention; have
ever been found incompatible with personal security or the rights of
property; and have in general been as short in their lives as they have
been violent in their deaths..." -- James Madison