3:50 -9:12 Discussion of Bernanke’s exit from the Fed Chair of the Federal Reserve and the value of the dollar as a safe haven in a crisis (even ones involving the US), emerging markets turmoil and currency wars. The ostensible purpose of QE was to help employment and housing by buying Mortgage Backed Securities and U.S. Treasuries but home ownership is down as is the labor participation rate. Review of bailonomics from the Troubled Assets Relief Program (TARP) in 2008 and the removal of toxic assets from the banks’ balance sheet through successive QE programs that served to further bailout the too big too fail (TBTF) banks. Discussion of how QE helped the rich buy expensive homes. Discussion of how rising home prices have been the measure by which to measure the “housing recovery”. The Fed spent $4 trillion paying their TBTF shareholders and tells us with a straight face it is to help employment and the economy.
9:12 -11:45 What impact will tapering have on the direction of interest rates? The Fed has tapered many times, that is why we have had successive QEs, and notes that even with the taper the QE program is still a massive money printing program and greater than the prior QE’s. Louis predicts that Yellen will request a wait and see approach given that the Fed has now tapered twice.
Fourth Quarter GDP
11:45 -13:00 Discussion of how the decision to taper was made when the economy appeared to be improving as evidenced by the good 4th quarter GDP (which will be revised downwards) which plays into the concept of giving the Fed credibility for “fixing” the economy and then having the sense to “taper” at the right moment. Louis notes that the 4th Qtr GDP was strong supposedly because of good retail sales, yet recent retail reports from Walmart, Sam’s Club, Sears, JC Penny and Best Buy indicate otherwise. When the Fed sees adjusted GDP numbers and other signs that the economy is not doing as well as they has anticipated, they can return to monetary easing.
Economists and Weathermen
13:00 -16:00 discussion of the weather being used an excuse for economists missing their forecasts. Louis suggests that economists should have meteorologists on their staffs. Discussion whether the weather really does impact home buying decisions. Louis notes that bad weather can not explain the drop in pending home sales as the entire country did not have cold weather
16:00 – 18:40 discussion of why have rates dropped even though the Fed has tapered QE. The decline in rates may be temporary or that the Fed is manipulating interest rates in another way. (it could also be emerging market money is returning to the U.S.) When QE 3 started gold and silver would have been expected to rise but they did not and were smacked down and suspects manipulation. Discussion of the employment situation. Louis notes that there are 330-350k new unemployment claims each week and when they go down 5k they media claims it’s improving.
18:40- 19:40 discussion of the volume of home sales and new home sales. Louis notes that homes bought by those taking out mortgages and sales of new homes are dramatically lower than they were five-ten years ago yet the media mantra of housing recovery persists.
23:20 -28:23 Discussion of how a rising stock market is used (falsely) as a barometer for the health of the economy. Discussion of the contradictions in Obama’s State of the Union presentation of his myRA executive order. Louis notes myRA is a way of getting people used to funding the government via the purchase of U.S. Treasuries. Louis notes that myRA is being pitched as being for our benefit rather than admitting the US is broke and needs the money. Discussion of the efficacy of the minimum wage.
Regulating J.P. Morgan
28:23 -34:22 Discussion of the entitlement culture across all demographics. Discussion of government vs. free market solutions. Discussion of how regulatory agencies operate. Louis notes that when J.P. Morgan pays a regulatory find it should be characterized as a related party transaction. Discussion of the role of banking in a society. Louis notes that banking has been raised to a level far more important than food and energy.
34:22- Credit tip of the week.
Get Free Updates From Smaulgld.com
Please visit the Smaulgld Store for a larger selection of recommended Kindles, books, music, movies and other items.
Or you can support Smaulgld.com by making all your Amazon purchases through the search widget below and by ordering your gold and silver by clicking on the JM bullion ads on the site:
DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.
The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.
The information contained herein does not constitute investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.