Tag Archives: federal reserve

Larry Summers for Fed Chairman, because the economy isn’t bad enough yet.

larrysummers

Larry Summers, erstwhile Treasury Secretary and President of Harvard University, is in the news again. Ryan Grimm of the Huffington Post is reporting the President is considering Summers for the Federal Reserve’s top job, much to the consternation of virtually everyone outside the hedge fund community. Back in May, I wrote a piece when Summers was rumored to be in the running for the job, and I feel that the piece is even more relevant given the president’s apparent desire to ruin the economy even more by appointing Larry Summers to chair the Fed. After all, when you’ve destroyed your university’s endowment, gambled its cash reserves on derivatives, ensured that derivatives would remain deregulated so your friends could gamble at 40:1 leveraging, why not move on to managing our monetary policy next?  What could possibly go wrong?!

Without further adieu, I give you Larry Summers: Failure will get you everywhere, printed below. The piece originally appeared on dustinstockton.com.  Enjoy!

Gold back in vogue, posts biggest gain since August

(Reuters) – Gold prices were on course for their biggest monthly rise since August on Tuesday, supported by a weaker dollar and raising the possibility of a climb toward last year’s record high of just over $1,900 per ounce.

Sentiment for gold at the end of January compares starkly with late December, when prices dropped by more than 10 percent in their biggest monthly fall since the collapse of Lehman Brothers in an investor dash for cash.

 

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The War for Gold, Silver, and Liberty

by Mike McGill – Kristos Trading

Right now, there is a very heated contest occurring in the precious metals community – a war between the banksters, Wall Street elite, and mainstream news financial pundits over who can make hard money advocates most afraid of owning gold, silver, and mining stocks. These bad boys are working triple overtime to scare precious metals investors that the US dollar will somehow continue to gain in stature and value against other competing investment classes, hard commodities (e.g. precious metals), and foreign currencies.

Those investors whose trading accounts and positions in physical metals have been underwater recently are especially susceptible to the siren song sung by the world’s ruling elite. After all, it is their job to keep the masses heavily invested in their counterfeit, fiat paper currencies while they reap a fortune of trillions from sovereign debt based interest while converting it to physical assets.

With the euro currency in turmoil as a reaction to the European sovereign debt crisis and the attendant threat that it poses for European bank lenders and US investment bank credit default swap issuers who are on the hook to guarantee counter party risk, the US dollar has once again become the temporary life boat darling sent to rescue all the passengers jumping overboard on the euro currency Titanic.

But, how really safe is that US dollar lifeboat? After all, a national currency is only as valid and secure as are its nation’s finances, debt, and banking system. And folks, I’m here to tell you that all of these are in hideous condition here in the good old USA. The Obama Administration is preparing to ask Congress to raise the US borrowing limit by another $1.2 trillion. White House press secretary Jay Carney reported on Tuesday, “I’m confident it will be executed in a matter of days, not weeks.”

Congress will undoubtedly kowtow and comply. With that merciless genuflection, the US national debt will be instantaneously increased by nearly eight percent, from $15.2 to $16.4 trillion. However, it is highly unlikely that this will be enough to pay for the profligate spending of our fearless leaders for the remainder of fiscal 2012. Another trillion or so will undoubtedly be needed by summer (we’ll bet you a bottle of good champagne on this).

Of course, the total debt obligations of the United States, if we take into account the unfunded liability of Social Security, Medicaid, Medicare, and a litany of other government pensions and entitlements, is actually far in excess of $100 trillion, an amount that can NEVER be repaid. Add to this the terrifying reality that the major “too big to fail investment banks” are carrying derivatives trading risk in the hundreds of trillions of dollars that dwarf their capital reserves by many thousands of times. Bank stocks have felt this and are cratering accordingly. The world’s largest bank, Bank of America, has seen its stock plummet in the last five years from over $50 per share to its current price of $6.87.

Please also include a non-reported but raging inflation of commodities in the US. For example, US grocers have reported that the average cost of a Thanksgiving dinner in 2011 increased by over twenty-three percent from last year. Add this to a country that sees over fifty million people having to use food stamps to survive and you have a recipe for a financial Armageddon.

And you are still worried about the viability of gold and silver? You still think the US dollar junkies are going win this end game?

We at Kristos Trading love competition. So, we have decided to enter the gold/silver versus dollar contest. We are going to carry into this great battle just ONE weapon, what we lovingly call the “Ultimate Fear Chart.” Please take a moment to study this chart carefully.

This is the gold chart for the last fourteen years. It reflects the continued waning confidence in paper currencies, especially the US dollar, and the accumulative trust in precious metals as the ultimate safe haven of wealth. There is always a risk in any investment but does this fourteen year chart make you think that gold is going to fall off the graph against the dollar? We don’t think so either.

Life is always a gamble of some sort. Life always entails some risk. There is a war being fought right now between the Bernie Madoff/Jon Corzine type world criminal class against the common people – the wage earners, the small business owners, the savers, and the lovers of freedom and liberty. Recognize that this IS a war and if you are going to have a chance to win this war, you need to get tougher and stronger. Stop worrying and start fighting. In the gold war against the fiat currency Nazis, you have got to be a soldier. Republican candidate Ron Paul has fought this criminal crew for over thirty years and at last, his message is starting to gain traction. The voices for liberty and freedom, with which precious metals resonate so perfectly, are on the rise. The tide against evil and usurpation is beginning to turn.

The fundamentals for gold and silver have never been stronger. They are the only legitimate money recognized by the US Constitution. Now is NOT the time to fear your investments but, rather, it is the time to jump on board the gold and silver express freedom train. Let’s drive the bankster and paper currencies mercenaries out of our sovereign land. Let’s send the paper dollar bugs home in disgrace where they belong. This is not a time to sell your precious metals, it is the time to buy!

To learn more about the rewards of precious metals investing, including how to fund your existing retirement account with gold and silver, call Kristos Trading seven days a week at 888.385.1116. To learn about the very best referral program in the precious metals industry, please visit the Kristos Trading Referral Program.
We will take all the time that you need to go over the specifics with you.

Original article here

New Hampshire: Romney Wins, Paul Second

Former Massachusetts Governor Mitt Romney won the first-in-the-nation New Hampshire primary January 10 with 38 percent of the vote, and Texas Congressman Ron Paul placed a strong second with 23 percent (with 78 percent of the precincts reporting).

“The president has run out of ideas,” Romney said in his victory speech. “Now he’s running out of excuses. And tonight, we’re asking the good people of South Carolina to join the citizens of New Hampshire and make 2012 the year he runs out of time.”

“He had a victory,” Ron Paul said of Romney. Regarding his own second-place showing, Paul said, “We had a victory for the cause of liberty tonight.”

Paul’s speech had a different substance than Romney’s partisan speech. Paul focused upon ideas in his talk. “I sort of have to chuckle when they describe you and me as being dangerous,” Paul told his supporters. “We are dangerous to the status quo in this country. And we will remain a danger to the Federal Reserve system as well.” The mostly young audience broke out in loud chants of “End the Fed! End the Fed!” Paul had predicted the housing and financial crisis as early as 2001, and warned that the United States was currently in the midst of a currency crisis.

Paul stressed his opposition to America’s foreign wars, saying of American soldiers that “it’s the time to bring them home.” Perhaps partly because of his foreign policy stand, Rep. Paul has taken in more donations from those in active duty military than all of the other Republican candidates combined. ………….

Read Article Here…

 

 

CNBC Federal Reserve Secretly Bailing Out Europe

Obama to ask for debt limit hike: Treasury official

(Reuters) – The White House plans to ask Congress by the end of the week for an increase in the government’s debt ceiling to allow the United States to pay its bills on time, according to a senior Treasury Department official on Tuesday. ………

 

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Will this proposal once overlooked, be noticed this time?

Did The Fed Quietly Bail Out A Bank On Tuesday?

Over the past month we have been closely documenting a major funding squeeze in the all important shadow economy – the “synthetic liquidity” conduit which far more than traditional sources of cash, has become all important for proper bank functioning over the past decade. Courtesy of adverse development in Europe, one by one various components of this unregulated funding scheme have become frozen necessitating the first of many central bank interventions on November 30 to provide liquidity to global banks, primarily to offset such shadow conduits as locked up commercial paper, repo and money markets. Logically, as noted over a week ago, European banks scrambled to obtain cheap dollars by borrowing over $50 billion from the Fed, and plug dollar shortfalls. Yet as all band aid measures designed to offset a broken liquidity equilibrium fail eventually, it was only a matter of time before we saw a direct bail out by the Fed of one or more banks in the aftermath of the November 30 global “bail out.” Sure enough, we have our first clue that “something” happened in the week ending Wednesday December 14 that involved an upgrade of the Fed’s indirect (and thus untargeted) bailout of global banks, to a focused, and very much targeted rescue of one (or more) banks. And with some additional diligence, it may be possible to narrow down the date of an actual bank bailout: Tuesday, December 13.

Exhibit A – Reserve Bank Credit

Two years ago, when discussing the transition of the world to one coordinated, centrally-planned regime we said that the only financial statement of any importance, updated weekly, is the Fed’s H.4.1, or the “Factors Affecting Reserve Balances” which traces that flow of “last resort” cash from the Fed to the various organization that make up the reserve bank, primary dealer, and various other financial entities under the Fed’s Lender of Last Resort umbrella. Simply said, anything abnormal in this weekly report of “flow and stock” (a simplistic distinction where the Fed is far more focused on what the absolute level of reserve numbers is, whereas Zero Hedge and the market believe it is the “flow”, or marginal change, that determines, artificially, asset prices) would confirm our speculations that the Fed has stepped into into its now traditional role of bailing out the world.

The first thing that caught our attention was the all important total reserve bank credit – the most important big picture metric announced by the Fed on a weekly basis. As the chart below shows, after having plateaued with the End of QE2, and remaining stable during the duration of the “sterilized” Operation Twist (as it should), in the week ended December 14, total reserve credit soared by a whopping $81 billion or the most since May 27, 2009 when the Fed was actively undergoing the early stages of QE1 damage control.

So what was the reason for this huge jump in reserve credit? Two things – on one hand we had the already long-ago telegraphed increase in Fed liquidity swap lines by over $50 billion, or from $2.3 to $54.3 billion to be exact. However that does not explain the remainder. So where did the other $30 billion in credit expansion come from?

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The Federal Reserve and Santa Claus [Spoiler Alert]

I believed in Santa Claus a little longer than most children do. For some reason, as long as I couldn’t definitely prove that my parents were the ones leaving presents under the Christmas tree, I wasn’t ready to completely reject the possibility that it really was jolly old Saint Nick riding a sleigh pulled by reindeer and magically shrinking himself small enough to slip under the front door or through the key hole and into my house (we didn’t have a chimney).

And my parents were incredibly sneaky. I never once caught them. But when I finally told my dad I didn’t believe in Santa any more, he said, with a sly grin, “Santa doesn’t deliver presents to kids who don’t believe in him,” and I promptly responded, “I believe! I believe!” The matter was settled. I got some awesome Legos that year. ………….

 

The Federal Reserve and Santa Claus [Spoiler Alert]

Gresham’s Law at Work: Pennies and Nickels Are Disappearing

When Kyle Bass defended his decision on BBC Radio Hard Talk on November 17th to purchase 20 million nickels, he was just putting Gresham’s Law into operation. Bass, the founder and principal of the hedge fund Hayman Advisors, did the math and discovered that he could purchase 6.8 cents worth of copper in each nickel for just 5 cents. Nickels are 75 percent copper while pennies (minted between 1909 and 1982) are 95 percent copper and the recent spike in copper’s price simply made it too good a deal for Bass to pass up. ………….

Gresham’s Law at Work: Pennies and Nickels Are Disappearing

 

U.S. Suspends Production of Presidential $1 Coins

If you were the federal government, what would you do if you had a billion unwanted and unused dollar coins? Until today, the answer would have been keep spending millions of dollars making more and more of them.

But the Treasury Department has now ordered that production of presidential dollar coins be suspended.

“Minting $1 coins that ultimately end up sitting in Federal Reserve Bank vaults – and serve no useful purpose for businesses, financial institutions and consumers – is simply not a prudent use of taxpayer resources,”  Treasury Secretary Neal Wolin said…

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