The State of the U.S. Economy

The State of the U.S. Economy

The United State economy is weak, yet the Federal Reserve continues to tout a “solid” economic recovery story while threatening to raise interest rates. Reality will eventually catch up with the Fed and those believing the media’s recitations of U.S. economic recovery narrative.

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JM Bullion

Podcast Summary:

Intro: 0:00-6:58

The Disconnect Between the Media Narrative of Economic and Housing Recoveries and Reality

6:58-9:19 discussion of how consumers and economists often misread (or intentionally misreport) the state of the economy. Discussion of economic cheerleading vs. gloom and doom fear mongering economic reporting.

picture of a wave swell

United States is riding a massive wave swell away from the global economic storm.

The State of U.S. Economy

9:19-10:25 the United States is riding a massive wave swell away from the global economic storm but is not insulated from the potential devastating impacts of lower oil prices (will cause job losses in the U.S. and bankruptcies of U.S. shale oil companies and potential massive derivative losses at U.S. banks), the Swiss abandoning the Franc Euro peg and Greece abandoning austerity and potentially not paying it bonds.

Greek Exit – Not a problem?

10:25-12:03 European leaders are now saying that a Greek Exit would not be a problem- only because it is now a real possibility. The Swiss National Bank lied about defending the Franc/Euro peg just one week before they removed it without warning. Politicians and central banks will lie when its convenient. (i.e. low gas prices are a positive- just like a tax cut- no problems-maybe low gas prices signal a larger program?)

Politicians Appealing to the Middle and Lower Middle Classes

12:03-13:29 politician today appeal more towards the have nots as more people are in that situation and the government seems through its policies to be creating more like them – a good vote getting strategy!

What’s Next For Greece?

13:29-14:54 The Greeks have voted for Tsipras, a socialist who has promised to end austerity. What’s next for Greece is discussed.

The President’s State of the Union Speech

14:54-19:35 Obama’s state of the Union address is discussed. Tax status of U.S.corporation cash overseas is discussed as well as people’s willingness to entrust politicians and central banks that cause problems to solve them.

Marc Faber on CNBC

19:35-22:25 Mark Faber’s recent interview on CNBC is discussed. CNBC’s practice of bringing on guests like Marc Faber, Bill Fleckenstein and Peter Schiff so they can bash them and gold is discussed. People with any intelligence would notice that Messrs. Faber, Fleckenstein and Schiff are right. (but smart people generally don’t watch CNBC).

The Stock Market- The Pillar of the Economic “Recovery”

22:25-24:40 Discussion of the stock market as a false indicator of the health of the economy. Discussion of non profitable companies with multi billion dollar market capitalizations. Discussion of the media’s economic cheerleading headlines, dismissing bad news and touting seemingly good economic reports or misinterpreting them.

24:40-35:15 Discussion of the interpretation of housing data including mortgage applications and existing and new home sales. Discussion of government tactics to sell homes to unqualified home buyers. The Freddie Mac/Fannie Mae 3% down mortgage program.

Presidential Elections 2016 – Clinton or Bush?

35:15-41:00 the prospect of Clinton or Bush being their party’s nominees in 2016 are discussed. Both tarnished name brands have been rehabilitated. The rank and file of either party want neither Bush nor Clinton, yet they will be pushed forward by their parties.

U.S. Government Agencies

41:00-45:49 Discussion of the entrenched government agency political class. The difficulty of getting proper Congressional representation. Capitalists become fascist once they realize they can only stay on top by buying political support and cover.

45:49-53:58 the ECB’s recent decision to engage in quantitative easing is discussed. The Fed will continue to TALK about raising interest rates and eventually stop talking about it when they claim a reason for not being able to raise rates-international events, deflation or a too strong dollar. The Fed can not allow the dollar to go much higher. If it continues its ascent the Fed will cancel a rate hike and start printing dollars again. Raising rates would cause the dollar to go even higher. The Fed has no reason from their perspective to raise rates. Greece is discussed again.

Negative interest rates are discussed. The Fed is “credibility building” by its incessant talk of raising rates to give the Fed cover to do QE4 when the need arises because of “unexpected” developments.

Peter Schiff May Be Wrong about QE4 and Gold

Gold Fell on the Announcement of QE3-the Largest QE Program

53:56 – Peter Schiff believes that the Fed will announce QE4 and it will shock the markets and be the long awaited signal for gold to rise. It might not be, as the markets are now used to QE and gold can always be shorted by unlimited paper contracts to keep the price in line. The Fed can justify a new round of QE as necessary in light of “unexpected” events and note that it “worked” in the past. The markets will probably buy it. QE is now part of central bank “tradition”.

Why Peter Schiff May Be Wrong About QE4 and Gold

Wave photo: CanStockPhoto

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Further Reading:

Silver and Gold Manipulation – Suspected

Swiss abandon Fran Euro peg

A Black Swan Emerges Covered in Cheap Oil

How a Stock Market Crash Will End the Economic Recovery

ECB announces QE

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