Remember last year. Oil went from $60 to $150 in the space of a few months. Why? Because it was no longer profitable to buy CDOs and RMBS, as they were imploding. The money has to go somewhere, and so traders bet in front of what they believed Bernanke would do - crank down interest rates [...]
What began as government social tinkering–with implied threats to banks and mortgage companies to extend to even the most marginal of borrowers–led to a greed-blinded mortgage banking business and the meltdown we are experiencing today. Now we are asked by the same congressional leadership to go along with taxpayer-funded bailouts of the very banksters who, [...]
321Gold.com - The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US [...]
We have been looking for an out-of-the-box move from the Fed, but this was not what we had expected.
The obvious game changing move would have been for the Treasury and the Fed to make an arrangement in which the Fed is able to purchase Treasury debt directly without subjecting it to an auction in the [...]
EuroPac.net - We are being told loudly and repeatedly that the gargantuan mortgage bail-out package is necessary because illiquid mortgage-backed securities are clogging our financial arteries, threatening the economic equivalent of cardiac arrest. The idea of the plan is to transfer these supposedly valuable, but currently unmarketable, assets to the government so that private institutions [...]
Dollar Death Ray, powered by the U.S. Treasury and the Federal Reserve, is aimed at the heart of the U.S. dollar. Forget the U.S. Congress debate of the Bank Bail Out and Congressional Reelection Bill of 2008. The Federal Reserve and U.S. Treasury, without a vote of Congress and support of the voters, has given [...]
EuroPac.net - Just three days ago, after looking at the prospect of bailing a string of distressed financial institution in the country, the government seemingly drew a line in the sand, and refused to bail out Lehman Brothers. The authorities clearly saw Lehman’s demise as a trial balloon to see how the markets would react [...]
CaseyResearch - Sunday, Sept. 14: Secretary Paulson finally makes a brave decision; enough is enough, let Lehman go bust. After all, the federal government shouldn’t be rescuing every financial institution that stumbles… or should it?
Monday, Sept. 15: The financial markets react badly to the news, and the Dow suffers its biggest drop since 9/11/2001.
Tuesday Sept. [...]
EuroPac.net - By nationalizing nearly 80% of AIG for $85 billion, the Fed is doing a lot more than simply flushing taxpayer money down the toilet. The greater wrong is allowing the agency that has the power to print money to take control of a private enterprise, especially without the approval of the company’s shareholders. [...]
We just added a ticker to the right corner of our site to illustrate the national debt of the United States of America. This figure is an approximate and is growing by the second. What is the federal government doing about it? It doesn’t appear to be much of anything, but they do seem more [...]
In America, Uncle Sam spends a lot of money! At the end of this fiscal year (in two months), it is projected that our federal government will spend about $2.8 trillion, but take in only $2.4 trillion in tax revenue. This shortfall will need to be borrowed, and by the fall of 2008 borrowing could [...]
This week the Federal Reserve took a step closer to acknowledging reality. Unfortunately it didnt let that admission move it from a policy course firmly guided by fantasy. In its policy statement, Bernanke & Co. took the important step in noting that inflation expectations had taken hold in the country at large. However, in asserting [...]
EuroPac.net - Last week, Warren Buffet was the latest to describe his encounter with the beast. The world’s most famous investor pronounced that the current economy is in the middle stages of a stagflation episode. Although Mr. Buffet is not typically associated with either bullish or bearish sentiment, he asserted that both the “stag’” and [...]
Freerepublic.com - Probably almost everyone is familiar with the hyperinflationary episode that engulfed Germany after the First World War. That nation’s economy was crippled by monetary problems that resulted in dreadful personal hardships, even though up to that time Germany had achieved one of the highest living standards in the world.
The newly formed German government, [...]
MarketWatch.com - U.S. household finances are deteriorating rapidly under the strain of increased debt and falling home prices, threatening the health of the U.S. economy, according to a new research from Moody’s Economy.com, a division of Moody’s Analytics.
“Household credit quality is rapidly eroding, and overleveraged households are at the heart of the economy’s problems,” said [...]
Like many pragmatic economists I have always warned that rapid expansions of government debt would result in inflation and higher interest rates. The explanation was always simple: rising supply of government debt inflates the money supply and weakens the government’s ability to service its debt through legitimate means. But in recent months, government has flooded [...]