Courage to Print

Submitted by Doug Noland – Credit Bubble Bulletin 

Dr. Bernanke has referred to understanding the forces behind the Great Depression as the “Holy Grail of Economics.” I believe understanding the ongoing Bubble period offers the best opportunity to discover the “Grail.” When the Washington establishment believed THE Bubble had burst back in 2000/2001, the leading academic espousing inflationism was beckoned to Washington to provide cover for the Fed’s experimental post-tech reflationary measures. He first served as a member of the Board of Governors of the Federal Reserve System (2002), before being appointed chairman of the President’s Council of Economic Advisors (2005). From the day Ben Bernanke burst onto the scene in 2002, I’ve taken strong exception with his economic doctrine and analysis.

I have yet to read his new memoir. However, I listened attentively this week as he blanketed the airwaves. As I’ve done on occasion for going on 13 years now, I’ll highlight some of Bernanke’s thinking (and provide brief comments).

CNBC’s Steve Liesman: “His new book, ‘The Courage to Act – A memoir of a Crisis and Its Aftermath,’ details what he calls ‘the darkest days of the financial crisis when’ he quote ‘stared into the abyss and the behind the scenes struggle to enact innovative policies that he believed saved the economy’… Are you surprised and are you disappointed that after six years of zero percent interest rates – a four and one-half trillion dollar balance sheet – that this economy still struggles with 2% growth?”

Bernanke: “The low growth is coming not from the recession, per se. We’ve come back quite a bit. Unemployment is down to 5%. So we’ve come pretty close to full employment. The slow growth is coming from slow productivity growth. Output per worker has not been growing quickly, and why that’s happening is not totally understood. I don’t think it has much to do with monetary policy. It has to do with the waves of intervention. We saw slowing of productivity growth even before the crisis. So I think that’s part of it. But clearly one of the issues is that we’ve been relying too much on the Fed. The Fed has been the only game in town. It’s been doing most of the policy heavy lifting for the last few years. We need to see more action from other policymakers.” Continue reading

How Big an Oil Glut is There Really?

Submitted by Pater Tenebrarum  –  The Acting Man Blog

Revisiting Crude Oil

Beginning in late August we have frequently discussed the possibility that a significant low in crude oil prices could be imminent in spite of the “obvious” lousy fundamentals. As blind luck would have it, the first of these articles (entitled Is Crude Oil Close to a Low?”) was posted exactly one trading day before the low to date was actually put in. Well, you know what they say about blind chickens :).

oil-glut-_freshideaImage credit: freshidea – Fotolia

Note here that we are not saying it was the low, although this cannot be ruled out either. It seems very likely though that it was at least a low of medium term significance.

WTIC-with blind chickenFrom a technical perspective, the action in crude oil since late August is so far consistent with a medium term low. The recent advance looks actually somewhat healthier than the previous one, due to the lengthy consolidation after the initial strong rally leg – click to enlarge. Continue reading


Submitted by J.C. Collins  –  philosophyofmetrics

PanThe diametrically opposed mandates of America’s main political parties, the Democrats and the Republicans, are two halves of the same hoof.  This hoof stomps all over domestic and international issues and serves to produce little of value for the American population.  Both parties act as leverage against one another. A sort of political tug-of-war over public opinion, which can be better understood as a balancing of wealth between engineered demographics.

The philosophical question has often been asked if human beings are naturally political.  Is the society in which we toil and participate an artificial one in which we all collectively agree that things remain as they are?

And what if things need to change?  How do you engineering massive change in a civilization?

The monetary reforms which we often discuss here on POM would require such a level of socioeconomic engineering.  Specific regions and demographics would each require unique and varying degrees of this engineering.

The engineering required to rise the monetary awareness of a mass population would be different from what would be required to dampen the monetary awareness of a mass population.  This awareness is defined along the lines of what is necessary to maintain the pre-determined level of balance between the demographics.

Those from whom wealth is taken would be subjected to socioeconomic engineering which is meant to lower monetary awareness.  While those whom accumulate wealth would be subjected to socioeconomic engineering which is meant to increase monetary awareness.

It is important that all readers remember the POM definition of wealth from previous posts. Wealth is the accumulation of human time and labor.  This accumulation requires a method of storage.  The fruits of man’s labors have been systemically taken, stolen, transferred, confiscated, and degraded over centuries.

The manipulation of the method of storage is one of the more important aspects of any monetary framework.  Whether it’s gold, silver, commodities, fiat currency, or some weird combination of all, the storage of wealth is always established as a temporary concept. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

• Deutsche Bank: Tip of the Iceberg for Cutbacks at European Banks? (WSJ) 
• Banks Take Spotlight As Earnings Season Heats Up (Reuters) 
• Standard Chartered ‘To Cut 1,000 Senior Jobs’ (BBC) 
• Margin Debt in Freefall Is Another Reason to Worry About S&P 500 (Bloomberg) 
• China Is Becoming A Big Red Flag For US Stocks (MarketWatch) 
• Buried In The Fed Minutes Is Another Downgrade To The US Economy (MarketWatch) 
• BofA: Here’s The Precise Moment When We Should Have Known QE Went Wrong (BBG) 
• Greek Debt Has Become Highly Unsustainable: IMF (Reuters) 
• ECB Should Focus Asset-Backed Purchases on Periphery: Pimco (Bloomberg) 
• The Hidden Debt Burden of Emerging Markets (Carmen Reinhart) 
• US Hedge Fund Threatens Peru With Lawsuit Over Debt (BBC) 
• Brazil: In A Hole And Still Digging (Ogier) 
• War on Islamic State: A New Cold War Fiction (Nafeez Ahmed) 
• Gene Patents Probably Dead Worldwide Following Australian Court Decision (ArsT) 
• EU Gets Ready To Lock Up, Deport Migrants (CNBC) 
• Greek Islands See Surge In Refugee Arrivals (Kath.) 
• No Place Left To Die On Greece’s Lesbos For Refugees Lost At Sea (Reuters)