Not so long ago, the major US political parties had very different views on monetary policy. Democrats, representing labor, wanted high government spending, low interest rates and generally easy money to create as many jobs as possible. Republicans, representing capital, wanted relatively small government, low debt and tight money to give entrepreneurs a predictable future […]
Top Ten Videos — May 1
Rick Rule: The macro environment is pretty constructive for gold … Kyle Bass: China’s house is on fire; if you have money invested in Asia I would seriously rethink that … Charles Hugh Smith: Debt continues to rise faster than income … Danielle DiMartino Booth: Why do central bank counterfeiters like gold? … David Morgan: […]
Negative-Yield Bonds Are Back In Style. Why That’s A Bad Thing
Paying someone in order to lend them money seems kind of pointless. Yet the practice of stashing wealth in places where it yields nothing (and maybe even costs a bit for storage) is more common than you might think. Chinese, Russians, and Brazilians, for instance, buy US and Canadian condos and leave them empty as […]
Michael Pento: Here’s How You Know The Market Is Overvalued
There’s a lively debate out there over the size of the Everything Bubble. In the following excerpt, money manager Michael Pento concludes that this bubble both histocially huge and soon to be popped. When Overvalued And Dangerous Markets Meet Stagflation To put into perspective how overvalued and dangerous the US market has become; I often […]
The Lesson Of Argentina: You Can’t Stabilize A Bankrupt Economy
So the U.S. puts Republicans (the party of small government) in charge, and gets… trillion dollar deficits as far as the eye can see AND a revival of socialism among Democrats. Scary as this may seem, the real (and even scarier) lesson is that it’s all inevitable: Beyond a certain level of indebtedness, even pro-business, […]
We Give Up! Part 6: Federal Reserve “Resigned” To Blowing Bubbles
After raising interest rates and getting slapped around by the markets last year, the Fed now appears to accept that future monetary policy can only be easy, even at the cost of ever larger and more destabilizing financial bubbles. On one hand this is a truly epochal change. On the other hand it’s just a […]
Gold: Seasonality Bearish, Futures Turning Bullish
Early 2019 looked like a great set-up for gold, but failed to live up to its billing. A nice December-through-March run took the price back to the $1,350 resistance that had repelled it four times in the past five years. And that was that. No penetration and fast spike into the $1,500s. Just another failed […]
China’s Fake Numbers And The Risk They Pose For The Rest Of The World
Not so long ago, London Telegraph’s Ambrose Evans-Pritchard was one of the handful of must-read financial journalists. He probably still is, but since he disappeared behind the Telegraph’s pay wall his work is invisible to non-subscribers, only emerging when a free outlet runs one of his stories. That happened this morning when the Sydney Morning […]
Central Banks Soften Us Up For Higher Inflation
There was a time when “price stability” – that is, money that buys the same amount of stuff every year – was considered a good thing. But as debts began to pile up around the world, it became clear to policymakers that managing that debt required money that got a little less valuable over time, […]
Things That Seem Normal But Definitely Aren’t, Part 1: Soaring Chinese Debt
The era of fiat currencies and central bank printing presses has desensitized us to massive leverage and its implications. So when it is reported, for instance, that China‘s private sector borrowing has risen to levels that are unprecedented in financial history, this is greeted with a collective yawn. It shouldn’t be, though, because no society […]
Stuff We Can’t Afford, Part 1: Paying People To Live On Flood Plains
Everyone has been there: Times are good for a while and it starts to seem reasonable to buy – or agree to – things you want but don’t need. Later on, when money gets a little tighter, you start prioritizing and realize you really didn’t need the leased Mercedes or the McMansion with all those […]
What Went Wrong With Pensions — And Why The Whole World Should Be Worried
The past decade was a uniquely smooth stretch of financial highway. Pretty much every major asset class – stocks, bonds, real estate, fine art, you name it – did well, making it hard for conventional investors to lose money and easy for them to earn outsized returns. So why then are US public sector pensions […]
The End Of The Bull Market, In Three Charts
Stocks have completely recovered from their flash bear market of late 2018. But now they face a hard question: Can already record high prices continue to rise in the face of falling corporate profits? Let’s start with the “falling corporate profits” part: A business generates improving profits when the things it sells rise in price […]
Maybe Politics Matters After All
Looking strictly at the numbers it’s hard to work up much interest in whether Republicans or Democrats are in charge after 2020. Either way, trillion-dollar deficits and extremely easy money are guaranteed, which means the US – along with most of the rest of the world – will fall off a financial cliff shortly. After […]
If You Thought It Couldn’t Get Any Worse For Chicago …
This is the second post in a week on Chicago’s epic financial train wreck. That’s a lot of attention and it probably won’t happen again, given the target-rich world we live in. But jeeze, talk about not learning from past mistakes. This latest chapter begins with the Chicago mayoral race and the two candidates’ stances […]
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