Will U.S. Infrastructure Bonds Be The Next Stimulus?

U.S. Infrastructure Bonds

If the President can’t get his tax increases through Congress to pay for infrastructure improvements, are infrastructure bonds an option?

Will a bridge collapse prompt demand for infrastructure bonds?

Buy Gold Online

JM Bullion

Podcast Summary:

Introduction: 0:00-3:00

How Will the Fed Push off Raising Rates and Re-introduce QE?

3:00-12:35 discussion of what excuses the Fed will use to put off rates hikes and to eventually restart quantitative easing (QE)- ex: ECB is doing QE, BOJ is printing trillions of Yen, the dollar is soaring, or there is deflation. The Fed continues to talk up the dollar and threaten to raise rates so that when they have to do an about face the dollar falls from a higher peak. The possibility of doing one rate hike for “credibility” is discussed.

Had the Fed said in 2009 that they were going to embark on a six year multi trillion dollar money printing program the dollar would have collapsed. Because the Fed started and stopped QE the dollar actually became stronger when it “ended” QE3. By spacing out QE programs the Fed can claim they worked and therefore can always return to QE as viable monetary policy. QE is now part of all central banks’ options. The Fed needs to appear as if QE is not a perpetual program, but one rather that they resort to only when they have to.

U.S. GDP growth since 2009 has been LESS than the amount of the QE programs, so stopping QE will cause a deceleration of the economy.

4th Quarter GDP/Consumer Spending

12:35-16:03 the week’s economic numbers are discussed and the spin that the media lays on them. Discussion of food costs and the CPI. Poorer people don’t have cars, so lower gas prices don’t help nor do rising stock prices as they don’t own stocks either. Poorer people who receive inflation adjusted benefits are dicsussed. If there is deflation, they may have their benefits cut.

Real Estate

16:03-25:10 Low pending home sales are discussed despite record low interest rates. Discussion of the persistent housing recovery narrative despite a plunging home ownership rate and decades low new home sales. The housing “recovery” has been in price alone. Rising home prices are bad for the housing market as they make homes unaffordable and dampen sales. Manipulating the real estate market is a lot harder than rigging the stock or precious metals markets.

Discussion of new home sales and new home construction impact on the existing home market.

St. Louis Fed President James Bullard and The Fed’s View on the Economy

25:10-27:35 Discussion of the Fed’s interpretation of the supposed improvement in the labor market. Discussion of the media’s incessant use of the word “solid” when describing the economy. Indeed the most recent Fed minutes also contained the word “solid”. If the economy is solid it can withstand a rate increase. People will eventually realize that the economy is not solid.

Housing Recovery

Discussion of the slowing of the rise in home prices and new programs designed to boost home sales. The 3% down mortgage program will most likely result in increased foreclosures. QE has only boosted the prices of existing assets (existing homes and stocks through stock buybacks), it has not engendered new assets (lagging new home sales) and new production.

25:10-36:00 Discussion of the Fed’s interpretation of the supposed improvement in the labor market. Discussion of the false signal that home builders received that perhaps caused them to over build.

Impact of Lower Gas Prices on Consumers

36:00 – 40:00 Discussion of the lack of consumer spending on consumer goods and homes, despite low interest rates and low gas prices. New car sales, however, have been strong. Low gas prices are a warning that there is a massive distortion in the economy and lower demand and will lead to job, bond and derivative losses. The supposed positive of more money for consumers to spend has not materialized in the consumer spending numbers.

Swiss Francs, Danish Krone and Greece

40:00-41:50 the Swiss and Danish central bank .actions are discussed. A potential Greek default is also discussed. The impact of these actions is discussed. If Greece gets a deal done, the other countries will line up for their debt relief. If QE extends to buying distressed Greece and other sovereign bonds, the Fed won’t be able to raise rates.

Fed and Infrastructure? Central Bank Interventions

41:50- discussion of the possibility of the Fed buying U.S. infrastructure bonds. Discussion of what would happen if the Fed and other central banks stopped stimulus and market interventions. Collapse in certain stocks and assets and reallocation of capital to profitable endeavors.

Anti- Gold and Silver Propaganda

45:35- discussion of the discrediting of gold and silver and price manipulation. Discussion of low American Gold Eagle sales vs. soaring sales of gold on the Shanghai Gold Exchange.

American Gold Eagles January 2015 vs. Shanghai Gold Exchange First Three Weeks of January 2015

The Fed has stopped QE and markets forget that the United States has an $18 trillion deficit and hundreds of trillions of dolllar in unfunded liabilities. The dollar has gone higher because the Fed is talking about raising interest rates.

Will a bridge collapse prompt demand for infrastructure bonds?

Discussion of reckless borrowing patterns and their justifications. Speculation on future housing programs. Lending public housing residents money to purchase their homes or simply handing them the deeds.

The potential impact of QE4 is discussed-higher stock market prices and gold prices smashed down. Gold is not popular in the United States. There is no CNBC equivalent for precious metals investors. People who want to hold precious metals do not generally trade gold and silver paper contracts on Comex.

Subscribe to Smaulgld.com to receive free updates on the economy, gold and silver.

Are U.S. Infrastructure Bonds The Next Stimulus

Get Free Updates From Smaulgld.com

Subscribe to Smaulgld.com and get the free In Case You Missed Itweekly email as well as updates and analysis on gold, silver, real estate and the economy.

Also get the free report “Twelve Key Differences Between Gold and Silver” when you subscribe.

Further Reading:

The Dark Side of Rising Home Prices

Increase in New Home Starts and New Home Permits – A False Signal?

QE discourages hiring

New car sales vs. new home sales

Denmark the Euro and Gold

Bank of Switzerland Drops the Euro Peg

Please visit the Smaulgld Store for a large 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, BGASC, Golden Eagle Coin, Perth and Royal Canadian Mint 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.

Chart Disclaimer: Information presented here has been obtained from a third party and is presented for information purposes only. Smaulgld can not and does not guarantee the accuracy or timeliness of the data displayed on this site and therefor the data provided should not be used to make actual investment decisions. You should always consult a professional investment adviser before investing in precious metals or any type of investment. You acknowledge that Smaulgld assumes no responsibility for the integrity of data 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.

Post Navigation