How Germany and China Could Mess Up the Fed’s Taper Plans

JM Bullion

How Germany and China May Throw off the Fed’s Taper Plans

Podcast Summary:

0:00-3:00 Intro

Will The Fed Taper?/Germany’s Gold and Manipulation

3:00-6:54 Will the Fed continue to taper next week? Louis notes that even with another taper the current QE represents a massive increase in the amount of money printed. Louis predicts some sort of financial calamity to come and notes Deutsche Bank’s current fiscal issues that may create a contagion impact on the market. Louis discusses DB’s participation in the gold fixing and their decision to drop out of it after Germany’s top regulator Elke Koenig claimed that the precious metals manipulation was worse than the LIBOR fixing scandal. Louis discusses Germany’s request to have their gold repatriated last year and the lack of progress to date. Louis notes manipulation of all markets is widespread.

Potential Default of the China Credit Trust

6:54-8:10 Discussion of the potential upcoming default of the China Credit Trust issued by Industrial Commerce Bank of China, the largest bank in the world. External events may cause the Fed to discontinue tapering.

8:10-10:00 Discussion of the markets’ reaction to the Fed’s taper and inflation.

Federal Reserve’s Manipulation of Interest Rates, The Money Supply, Gold & Everything Else

10:00-14:50 Discussion of how the Fed manipulates interest rates and interferes with price discovery in most all markets and works in conjunction with the media to create the desired economic narrative. Louis notes that the Fed has the means and the authority to manipulate markets.

14:50:16:30 Discussion of mortgage interest rates and the mortgage industry

Why The Fed Wants Higher Home Prices

16:30:20:24 Discussion of why the housing market is not dependent on mortgages to drive prices higher. The market has been driven higher by low inventory created by the banks not selling foreclosed homes and low builder activity and low interest rates, not higher volume of home sales. The Fed is concerned more about higher home prices than affordability, increasing the home ownership rate or creating a vibrant home market. Discussion of how we have been convinced that higher home prices (when they are not) are a good thing overlooking affordability issues and low sales volume. Because many homeowners are underwater (as a result of the earlier housing bubble engineered by the Fed that burst) they have a vested interest in rising home prices as a form of bailout. Discussion of how rising home prices masks the health of the underlying economy.

Encouraging Spending to Drive the Economy

20:24-25:00 Discussion of how spending and borrowing has become a hallmark of the U.S. economy and how it impacts the cost of education. Discussion of how higher education does not create jobs for graduates. Louis notes many of the famous business leaders who never went to or graduated college.

Who Voted For the NSA?

25:00:31:20 Discussion of how banks encourage young people to borrow money to go to school. Discussion of the lack of political choice. Louis notes that no politician ran on a platform of spying on US citizens or on creating the Obamacare system.

The Political Independence of the Fed

31:20-33:50 Discussion of the Fed’s charter and how Congress has given the Fed increasing more power which has allowed the Fed to engage in just about anytime of financial manipulation it chooses. Discussion of Ron Paul’s efforts to have the Fed audited.

The Introduction of Bailonomics to the United States

33:50-37:25 Discussion of how political solutions will not fix the financial system but rather how a collapse with no interference in the aftermath might bring about a better system. Louis notes that normally people don’t grant the people who botched something the authority to fix it. Review of how the original bailouts of 2008/2009 occurred and how bailonomics has continued. Discussion of the tea party and occupy wall street. Tapering is not some nice thing you do to a suit.

37:25-40:20 Discussion of the public reaction to the Fed’s actions and how dissent is diluted to the point where 70% of the population can be labeled “fringe”. The boiled frog syndrome in reverse.

The Longest Recovery in History

40:25:41:55 How the Fed will continue to claim “recovery” even though it has supposedly been occurring for over five years. Recovery means a temporary transition period between being unwell and being well. If you are disabled for six years, perhaps you are permanently disabled.

Preparing a Home For Sale

41:55- Discussion of how lower comparables impact home sellers; how to prepare and price a home for sale

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