How Bloomberg’s Algo-Writers Serve The Cult Of Keynesian Central Banking

If you ever needed proof that the financial press has been completely indoctrinated in the cult of Keynesian central banking consider the attached Bloomberg note on the recent tiny decline in Chinese industrial company profits. Without breaking for anything more than a comma, its hapless Hong Kong stringer, one Malcolm Scott, conjoined the fact of less profits with the imperative for moar……money.

Industrial profits in China fell the most in two years, underscoring the need for looser monetary conditions as the world’s second-largest economy slows.

Perhaps Bloomberg is no longer using carbon units to post its news stories and has gone straight to algo-writers designed to directly feed algo-readers without the bother or cost of human intercession. But regardless of whether “Malcolm Scott” is carbon or silicon based, the attached is clearly presented as a news story and the above excerpt as a declarative sentence. Accordingly, by the lights of Bloomberg and the rest of the mainstream financial press which it echoes, it is now the job of central banks to print money to ensure that at no point in time do profits—-and therefore their stock market capitalizations—-fall by even so much as 2.1% over prior year. Continue reading

Financial Terrorists On The Road Krugman And Rogoff Peddling Toxic Advice

Here are a couple of reasons why Keynesian economists are truly a menace in today’s bubble ridden and debt-impaled world. It seems that both Harvard’s Kenneth Rogoff and Princeton’s Paul Krugman are on the global advice circuit, peddling what amounts to sheer snake oil to desperate politicians and policy-makers who have already buried themselves—-so far to no avail—-in unprecedented waves of fiscal and monetary “stimulus”.

But never mind. The professors have a three part solution, and its more, more……and moar! To make room for more monetary stimulus after six-years at the zero bound, therefore, Professor Rogoff has a truly juvenile solution. Namely, to abolish cash. That’s right, this Harvard windbag proposes to confiscate your kids’ piggy bank and any green stuff that may  be left in your wallet.

Meanwhile, Krugman has made a quick circuit through Tokyo, where he apparently was instrumental in convincing Japan’s prime minister to cancel the next installment of the consumption tax increase—a move that was utterly necessary in order to stem the nation’s massive flow of red ink. But why not spend a few more years adding to Japan’s staggering debt burden, which is already at 230% of GDP and rising inexorably in a nation that is fast becoming the world’s foremost retirement colony? After all, Professor Rogoff has now perfected a scheme which will allow central banks to monetize all the debt that even the most profligate government can possibly issue. Continue reading

OPEC Presents: QE4 and Deflation

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth


NPC Thanksgiving turkeys for the President Nov 26 1929

Thinking plummeting oil prices are good for the economy is a mistake. They instead, as I said only yesterday in The Price Of Oil Exposes The True State Of The Economy, point out how bad the global economy is doing. QE has been able to inflate stock prices way beyond anything remotely looking fundamental, but energy prices have now deflated instead of stocks. Something had to give at some point. Turns out, central banks weren’t able to inflate oil prices on top of everything else. Stocks and bonds are much easier to artificially inflate than commodities are.

The Fed and ECB and BOJ and PBoC may of course yet try to invest in oil, they’re easily crazy enough to try, but it will be too late even if they did. In that sense, one might argue that OPEC – or rather Saudi Arabia – has gifted us QE4, but the blessings of the ‘low oil price stimulus’ will of necessity be both mixed and short-lived. Because while the lower prices may free some money for consumers, not nearly all of the freed up ‘spending space’ will end up actually being spent. So in the end that’s a net loss as far as spending goes.

The ‘OPEC Q4′ may also keep some companies from going belly up for a while longer due to falling energy costs, but the flipside is many other companies will go bust because of the lower prices, first among them energy industry firms. Moreover, as we’re already seeing, those firms’ market values are certain to plummet. And, see yesterday’s essay linked above, many of eth really large investors, banks, equity funds et al are heavily invested in oil and gas and all that comes with it. And they are about to take some major hits as well. OPEC may have gifted us QE4, but it gave us another present at the same time: deflation in overdrive. Continue reading

Netherlands, Germany Have Euro Disaster Plan – Possible Return to Guilder and Mark

Submitted by Mark O’Byrne  –  Founding Partner of  GoldCore

The Dutch and German governments were preparing emergency plans for a return to their national currencies at the height of the euro crisis it has emerged. These plans remain in place.

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German Gold Deutsche Mark – (Special Edition)

The Dutch finance ministry prepared for a scenario in which the Netherlands could return to its former currency – the guilder. They hosted meetings with a team of legal, economic and foreign affairs experts to discuss the possibility of returning to the Dutch guilder in early 2012.

The Dutch finance minister during the period has confirmed that Germany also discussed such scenarios.

At the time the Euro was in crisis, Greece was on the verge of leaving or being pushed out of the Euro and the debt crisis was hitting Spain and Italy hard. The Greek prime minister Georgios Papandreou and his Italian counterpart Silvio Berlusconi had resigned and there were concerns that the eurozone debt crisis was spinning out of control – leading to contagion and the risk of a systemic collapse.

A TV documentary broke the story last Tuesday. The rumours were confirmed on Thursday by the current Dutch minister of finance, Jeroen Dijsselbloem, and the current President of the Eurogroup of finance ministers in a television interview which was covered by EU Observer and Bloomberg. Continue reading

Russia’s Monetary Solution

Submitted by Alasdair Macleod – FinanceAndEconomics.org

The hypothesis that follows, if carried through, is certain to have a significant effect on gold and the relationship between gold and all government-issued currencies.

The successful remonetisation of gold by a major power such as Russia would draw attention to the fault-lines between fiat currencies issued by governments unable or unwilling to do the same and those that can follow in due course. It would be a schism in the world’s dollar-based monetary order.

Russia has made plain her overriding monetary objective: to do away with the US dollar for all her trade, an ambition she shares with China and their Asian partners. Furthermore, in the short-term the rouble’s weakness is undermining the Russian economy by forcing the Central Bank of Russia (CBR) to impose high interest rates to defend the currency and by increasing the burden of foreign currency debt. There is little doubt that one objective of NATO’s economic sanctions is to harm the Russian economy by undermining the currency, and this policy is working with the rouble having fallen 30% against the US dollar this year so far with the prospect of further falls to come. Continue reading

How Bloomberg’s Algo-Writers Serve The Cult Of Keynesian Central Banking

If you ever needed proof that the financial press has been completely indoctrinated in the cult of Keynesian central banking consider the attached Bloomberg note on the recent tiny decline in Chinese industrial company profits. Without breaking for anything more than a comma, its hapless Hong Kong stringer, one Malcolm Scott, conjoined the fact of less profits with the imperative for moar……money.

Industrial profits in China fell the most in two years, underscoring the need for looser monetary conditions as the world’s second-largest economy slows.

Perhaps Bloomberg is no longer using carbon units to post its news stories and has gone straight to algo-writers designed to directly feed algo-readers without the bother or cost of human intercession. But regardless of whether “Malcolm Scott” is carbon or silicon based, the attached is clearly presented as a news story and the above excerpt as a declarative sentence. Accordingly, by the lights of Bloomberg and the rest of the mainstream financial press which it echoes, it is now the job of central banks to print money to ensure that at no point in time do profits—-and therefore their stock market capitalizations—-fall by even so much as 2.1% over prior year. Continue reading

Swiss Yes Vote Possible – First “Gold Rush” Of 21st Century?

Submitted by Mark O’Byrne  –  Founding Partner of  GoldCore

There are just 3 days left until the“Save Our Swiss Gold” referendum this Sunday. On November 30, voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should back the Swiss franc with gold by increasing its gold holdings to 20% – up from current levels of 7%.

The conservative Swiss People’s party proposed the initiative, called “Save OurSwiss Gold“, with the intention of boosting the security and financial and monetary independence of Switzerland in these  times of financial uncertainty. They believe that a 20% gold holding will protect the Swiss people from currency debasement, currency devaluation and an international monetary crisis.

In the case of a “yes” vote, gold prices are likely to surge. Analysts do not believe a yes vote is possible. However, analysts have got the mood of the people wrong in many referendums both in Switzerland and throughout Europe in recent years.

We believe that the vote will be very close – much closer than many analysts suggest. After a massive, very well funded and highly coordinated campaign by the banking and political establishment in Switzerland, the polls show that the no side is in the lead.

It is worth remembering some of the recent referendums in Switzerland showed the people would vote with the government and establishment political parties in the polls. Subsequently, they did not.

It is worth remembering some of the recent referendums in Europe showed the people would vote with the government and establishment political parties in the polls. Subsequently, they did not. Continue reading

Economic Energy Elation

By Bruno de Landevoisin
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Tis the season for exceptional economic easing.  The entire energy complex and molten base metals are in a fantastic Fall free fall, whilst the juiced stock market apologists and U.S. exceptionalist pompom wavers are out in force emphatically heralding a new found era of unabashed American consumerism.  Undoubtedly, the slick super-sized shale surplus is about to make it all magically materialize.

Apparently, according to these cheerful dreamers, the well documented, severe slowdown of three of the four largest industrial economies on the planet (China, Japan and Germany) has absolutely nothing to do with the careening commodity crash.  Not to mention that the 2nd largest economic bloc on the globe, the Eurozone, is mired in a metastasized morasse of malignant monetary malfunction.  Just last week IMF director Christine Lagarde stated that a diet of high debt, low growth and high unemployment may yet become “the new normal in Europe”.

The world economy is indeed standing at a precipice, and yet, all these wall street country club clowns can think about is the multitude of new iChristmas gifts that will undoubtedly be placed under their terrific twinkling trees.

The incessant equity cheerleading doesn’t stop there.  Evidently, the fabulous frenzied flag waving is also trumpeting the jubilant re-coronation of King Dollar, which will keep the big box superstores sizzling with stupendous sales of cheap Chinese crap all season long.  I suppose, the fact that a substantial portion of the meager U.S. GDP growth over the past 5 years, that has come in large part from a rehabilitated export sector operating under more favorable exchange rates, is totally immaterial, which, by the way, is now fading as fast as green shoots on the vast frozen global economic tundra. Continue reading

Gold “Price” Spikes to $1,467.50/oz on Computer Glitch?

Submitted by Mark O’Byrne  –  Founding Partner of  GoldCore

Gold spiked higher in many price feeds overnight and was $270 higher or more than 22% higher to $1,467.50/oz at one stage in what appears to have been some form of computer glitch.

There was speculation that the price spike which came while the COMEX was closed for 30 minutes was due to a series of charting errors or misprints, a bad price feed or a computer glitch. Another example of how technology is a great enabler but can also be a great disabler.


www.GoldCore.com

Despite a very bullish backdrop of the Swiss gold referendum on Sunday, gold repatriation movements in Europe, Russian central bank gold buying and very robust Indian and Chinese demand, there was no breaking news that would justify such a dramatic uptick in gold. Continue reading

Central Bank “Wealth Effects” Doctrine At Work: Meet The $500K “Crap Shack” In Culver City CA

The purpose of central bank financial repression and ZIRP is to distort and inflate asset prices. Our monetary politburo even admits that it is in the monetary scam business via its self-serving doctrine called “wealth effects”.

The game here is to drive the stock market averages ever higher through massive liquidity injections into the Wall Street dealer markets. This purportedly causes people to feel richer and to spend and invest more, creating a virtuous circle of prosperity, world without end.

We know by now, however, that “wealth effects” money printing does not help the main street economy. And while it does produce awesome financial market gains—–these turn out to be unsustainable bubbles that inexorably crash. Since the turn of the century, most central banks have participated in this scam—either because they have embraced the Keynesian gospel or have joined the money printing party out of defensive necessity to protect against inflation of their own exchange rates. So the resulting financial bubbles have been global in scope. Continue reading

The Only Way to Stop the Empire

Submitted by Dmitry Orlov  –  The ClubOrlov Blog

Dear friends,

The final days of US empire are fast approaching. Perhaps its end will pass slowly and gradually, or perhaps the event will unfold rapidly and catastrophically. Maybe chaos will break loose, or maybe its demise will be organized well and proceed smoothly. This nobody knows, but the end of empire is coming as surely as day follows night and sun follows rain. Overexpansion, overreach and over-indebtedness will take their toll—as all past empires have discovered. Empires are like bacteria in a Petrie dish; unthinking, unseeing, unfeeling, they expand until they run out of food or contaminate their environment with their waste, and then they die. They are automatons, and they just can’t help it: they are programmed to expand or die, expand or die, and, in the end, expand and die.

What does the empire feed on? It feeds on money and fear; your money and your fear, both obtained with your cooperation. It is bigger now than when it faced an actual adversary in the Soviet Union. Russia is no adversary; all it wants is to be a normal country, at peace with the world. But the empire won’t let it, will it? It must create enemies. Who are our enemies? According to the authors of endless war they are North Korea, Iran, Syria, and Islamic terrorists. Are any of them actually capable of threatening the US? Well, yes, but they are all quite easy to deter. But the plan of the authors of endless war is not to deter them; it is to back them into a corner with political instability and sanctions, while whipping up the population on both sides into fear-filled frenzy. Continue reading

THE TAIL OF THE DRAGON

Submitted by JC Collins  –  philosophyofmetrics

China LiquidityIn March of 2009 the People’s Bank of China Governor Zhou Xiaochuan called for a reform of the international monetary system.  Among the initiatives called for by Zhou was the creation of an international reserve currency which would be disconnected from any individual nations currency, and would remain stable by removing the deficiencies inherit in using credit based national currencies.

Other factors called for by Governor Zhou was for part of the official reserves of member countries to come under the centralized management of the International Monetary Fund.  Special Drawing Rights, or SDR’s, of the IMF should be expanded as a means of payment, denomination of securities, commodity denomination, such as oil, and the denomination of the new international reserve currency mentioned above.

Along those lines the PBoC also called for a larger representation within the SDR basket composition for all major economies based on GDP.  This would presumably be a reference to adding the Chinese currency, the renminbi, to the SDR basket. Continue reading