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Former Assistant Treasury Secretary on Capital Account

24 May

This is one of the few “insiders” who has come out to expose what is really going on in the Government/Financial complex of America. Lauren Lyster’s intelligent questions bring out a panoply of interesting responses from Fmr. Asst. Treasury Secretary Paul Craig Roberts. Those who watched the PBS documentary on the financial crisis will immediately understand the context of Roberts’ remarks.


Don’t Get Caught Up

12 May

JPMorgan Chase's offices in San Francisco - JPMorgan Chase's offices in San Francisco

As the massive losses of JPM begin to show up, people are clamoring to arrive at conclusions about what is going on. I am not. This is not a shock to me and many others who have simply tried to understand the fundamentals of the present financial system.

The first thing my mind reverts to is something I’ve wondered a long time about: the JPM/Silver ratio. For a long time, I’ve noticed an interesting correlation of silver to the stock price of JPM. No, it doesn’t particularly matter that they both move around the 30-40 range lately. What matters is that, since JPM has a massive short position, suppressing the price of silver, the value of their stock must reflect the way they engage silver over the long term. They must take a loss if they are to dump their own money into bets that go wrong. When they do well in this short position, this too is reflected. I encourage you to look into this for yourself. It’s interesting, if nothing else. I wonder what a $2 billion flub will do to silver. I wonder what silver going through the roof last year was like for JPM. There’s a correlation there.

I also wonder about the nature of the ensuing cover up. This $2 billion blunder must certainly be the tip of the iceberg, as many have called it. And yet anyone who is familiar with the complex web of support between major banks and central banks knows that this kind of problem need not have instantaneous backlash if the right steps are taken to paper over the problem. It’s bad for reputation, but when a bank can borrow money for free, how much of this is just perception? How much will it really affect the ability of a bank to just continue doing what it’s doing? What seems certain is that nothing will really unravel until the paper money of major central banks is one day ignored for what it really is: an increasingly irrelevant form of manipulation.

Mostly, I simply realize that patience is all I need right now. I can’t tell you how many times I’ve grown tired with the panic-mode reaction of other people who are interested in silver and gold as a hedge against inflation. Instead of just dwelling on the low price of precious metals at the moment, think about this: do you think it’s just a coincidence that JPM has come forward with massive problems right in the middle of a sell-off in precious metals?

I don’t have all the answers. But I don’t need them right now. Things make plenty of sense if you step back from the moment. Volatility is simply the outcome of the psychological warfare that is taking place for the minds of the financial world. Common sense is prevailing, but it takes time. Normalcy bias seems like such an apt substitute for common sense to many people. But as people have their hopes dashed over and over, they will first be jaded, then cynical, then they will begin to look for alternative theories to explain what  they thought they have taken for granted for so long. Then you will see a massive shift.

Unfortunately, when there’s a massive shift away from paper to precious metals, who will want to sell to those people? That’s a question worth thinking about. Undoubtedly, with the impending rise of precious metals, you will see massive shortages, and some people will be willing to part with their metal if only in order to survive. It won’t be a ‘trade’. It will be an exchange of necessities. So much ‘wealth’ we be erased.

So for now, do the right thing. Mostly, that means being patient.


Ron Paul Demolishes CNBC for an Hour

30 Apr

This show is unbelievable. At least 6 different people offer the most complex questions they can throw at the aging-yet-energetic congressman, Ron Paul. Calling his views “extreme”, bringing on multiple economists, and implying that he has no chance of victory are just a few of the games they played with him. But Congressman Paul rose far above the fray.

No one can watch this video and deny his competence and commend him for such excellent answers. Furthermore, Paul is extremely patient, dignified, and nuanced in all his assessments and responses. This appearance is flawless as it gets.

And yet, one gets the sense that, in spite of his ability to comprehensively speak to all types of issues, these people will simply continue obfuscate and misrepresent such ideas in the future.

But man, what an incredible performance from Ron Paul. Go Ron!


Brazil’s President Nails It

21 Apr

Start the link at 17:35 to get the good stuff.

President Dilma Rousseff of Brazil recently came to Washington to meet with President Obama to discuss a variety of issues, most of which dealt in the economic realm. While they met with the press, President Rouseff unleashed a scathing attack on the expansionist monetary policies of the U.S.

Her most poignant criticism focused on the way in which the U.S. spending programs drive U.S. monetary expansion (i.e. inflation) that gives the U.S. an unfair trade advantage especially against developing nations, including Brazil.

Note this moment: 18:20. Her translator mistakenly said “[The US expansionist monetary policies] lead to a depreciation of emerging currencies.” At this point she corrects him and he says, “Rather…a depreciation of  developed currencies.” What that means is simple: when we print more dollars, our dollars are worth less. Thus, our exports are cheaper for other countries to buy. Thus, our products sell and other countries who cannot depreciate their currency as much as we can, simply are stuck with having equal goods which artificially become more expensive to purchase.

Few politicians know economics as well as she.

This is exactly the point we’ve been talking about for the two months we’ve run this site. Because America owns a major (some might say THE major) world currency, we can print out our own money to buy from other countries. Think of all the massive programs like SNAP where America hands out free money to the masses to buy essential goods at places like grocery stores. Those are the fiscal policies that enable so much monetary expansion. Inflation not only kills the middle and working classes, it viciously attacks smaller countries by causing massive trade disadvantages.

President Rousseff is a courageous woman who clearly has done her homework. She is absolutely right to criticize Obama in this way. It is no disrespect to speak the truth like she is doing.


Condensed Crash Course

18 Apr

One of the reasons young people are having attention deficit issues is that there are few people worth paying attention to any more. Chris Martenson is one of the people you need to pay attention to. And it isn’t hard to. This condensed version of the much longer 3+ hour version “Crash Course” (also equally worth your time) is an excellent way to get to know what Chris has to offer.

Why should you listen to Chris?

In short, because he has a very holistic view of the world. I don’t agree with everything he says, but there is very little he ignores when he says what he does, and that’s important. One of the main priorities I have in this blog is to incorporate what God says into as much of what I think about economics as I can. Chris has helped me to do that.


Blythe Masters Shows her Hand in New Interview

6 Apr

Throughout the blogosphere, especially ZeroHedge, there has been major news due to a rare appearance from the head of JP Morgan’s Head of Global Commodities: Blythe Masters. The vitriol poured out on her in the comments at zerohedge is unbelievably bad. Some comments should not be read, let alone written.

Let’s shift away from the smut and point out a few things no one has yet said: Blythe should be congratulated on such a great performance. While she starts out looking quite pensive, her overall demeanor is composed, she made eye-contact continuously, and she generally engaged in very few lying “tells”. But also note how her attire itself (today and, to some extent, the 2009 interview) is almost militant. Most women try to look strong in a competitive business world. But Masters seems to wear clothing that appears particularly secure and defensive.

Second, this interview is highly scripted. CNBC camera crews don’t just hang out at UC Boulder waiting for executives to drop by. This is a coveted exclusive interview with a reclusive voice from the financial center of the world. And just judging from the interviewer’s incidental remarks, they had an extensive pre-interview talking about silver already. Blythe has been extensively prepped by the interviewer. You think they do that for Peter Schiff? You think they’re going to cut her off when she filibusters? Not a chance.

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Why War is Not Good for the Economy

4 Apr

Created by

Haven’t you heard that what got America out of the Great Depression was _________ _____ __ ? If you can’t fill in the blank you were probably not raised in the American public school system. It is almost essential to our public mindset that either FDR’s domestic programs (those which weren’t struck down by the Supreme Court) or his foreign policy (entering into World War 2) caused us to grow as an economy.

It’s just not true