Feeds:
Posts
Comments

Posts Tagged ‘Money and Banking’

Financial Crisis

A prudent man foresees evil and hides himself, but the simple pass on and are punished.

    Proverbs 22:3

In a recent article titled “The monetary policy endgame,” Rick Rieder argued that central banks have two ways of creating inflation – inflation in this case being defined as rising consumer prices. The first is to create increased consumer demand through demand stimulus (lower interest rates). Secondly, Rieder argues, central banks can engage in monetary debasement. Continuing with his argument, Rieder contends that he believes central banks will turn to monetary debasement to achieve their stated inflation goals.

So what is monetary debasement? As the Investopedia link puts it, “Debasement refers to lowering the value of a currency, particularly one based on a precious metal, by adding metal of inferior value.”

But even though we don’t have a precious metals based monetary system doesn’t mean that governments can’t debase their currencies. As the Investopedia article on debasement goes on to say, “[D]ebasement [in fiat monetary systems] only requires that the government print more money, or since muc hmoney exists only in digital accounts, create more electronically.”

In light of the coming central bank driven currency debasement, Rieder asks the important question, “How should one position for such an endgame?” Rieder’s answer? “[A]ll of this leads one today to consider assets that can participate in an inherent devaluation of the local currency, which is to say, real estate, and even hard assets that have historic value-relevance, such as gold.”

Rieder’s post is remarkable, not just for what he said, but also for who it is that said it. Rieder is not some tin foil hat wearing gold bug, but is a Chief Investment Officer (CIO) at BlackRock, a New York City based investment management firm that is the world’s largest asset manager with $6.84 trillion in assets under management as of June 2019. Put another way, BlackRock is Wall Street royalty. Further, Rieder’s post appeared on BlackRock’s blog, giving his statements the implicit approval of the firm itself.

Given the decades long propaganda campaign of hatred that has been directed at gold and at those who advocate for the return of gold to the financial system, Rieder’s comments are significant indeed.

There’s a lot to unpack in Rieder’s article, more than what can be discussed in this post. Lord willing, I shall return to his post at some point in the future. But I mention in today mainly to let readers know that mainstream financial analysts are quietly warning that the US dollar – and all other fiat currencies – are in trouble and likely to suffer significant devaluation in the not too distant future.

In light of warnings from Rieder and others, the application of Proverbs 22:3 to our current financial circumstances cannot be overstressed. Here we have a highly placed man at a highly respected financial firm going on record to warn us in advance that the Fed is going to debase the dollar. What is more, he provides for us sound advice on strategies savers can use to protect themselves.

In Scripture, we find several examples of men who were given advanced warning by God of coming disasters, and who, in faith, took action to save themselves and others. In last week’s installment, we looked at the case of Noah. This week, we shall continue our look at Biblical case studies in prepping with a review of Lot’s narrow escape from Sodom.

(more…)

Read Full Post »

Happy April Fool’s Day! And good April Fool that I am, I find myself hard at work once again to bring you my weekly blogging awesomeness.

Well, okay. Maybe awesomeness is a little too strong. I’ll settle for weekly blogging not-too-horribleness.

At any rate, I am kinda pumped about this week’s topic, namely the Federal Reserve. In short, I’m fed up with it.

But more than that, there are few things in life that bring joy to my heart more than the thought of dishing out a good beat down to ne’er do well boys and girls at the dear Federal Reserve.

I find it, how shall I say….cathartic. Yes, that’s it! Cathartic! And since it’s been a little while since I’ve dissed the Fed, I expect that it will prove all the more so.

(more…)

Read Full Post »

 

rinkeby-riots

A policeman inspects a burned out vehicle following the riots in Rinkeby, Stockholm.

Some things seem to naturally go together. Peanut butter and jelly come to mind as a natural pairing. Baseball and summertime? I’m in. Even the terms “blowhard” and “politician” evoke a certain warmth of familiarity within me.

 

But riots and Sweden??!! Surely, you jest! Nevertheless, as they say, truth is stranger than fiction…

(more…)

Read Full Post »

Money, so they say, is the root of all evil today.

– Pink Floyd

An email came to my inbox recently claiming that people who hold to the Scriptures think “money is the root of all evil.” The notion that the Bible teaches money is evil is quite common. Pink Floyd referenced this idea in their hit “Money,” and people often repeat this idea in everyday conversation.

goldBut as is the case with other popular ideas ascribed to the Bible – for example, most Americans mistakenly think “God helps those who help themselves” is a Bible verse; and how many times have you heard someone take Jesus’ words “Judge not” as a general prohibition against making necessary ethical distinctions? – this one is also wide of the mark. And it is wide of the mark in at least two ways. First, the quote itself is not accurate. And second, when the quote is presented accurately, the true meaning of this verse is seen to be quite different from what is in the popular mind.

The actual quote is found in 1 Timothy 6:18 and reads, “For the love of money is a root of all kinds of evil” (New King James). The language of the Authorized Version is “For the love of money is the root of all evil.” When comparing either of these two translations with the popular version of the quote, it becomes readily apparent that the big difference is that the Bible identifies, not money itself, but the love of money as the root of all sorts of evil.

(more…)

Read Full Post »

uncle_sam_supplying_federal_reserve_fiat_debt.jpg

Ever since the spring of 2009 when The-Powers-That-Be (TPTB) were out there claiming to see “green shoots” everywhere, the public has been treated to a non-stop propaganda campaign pushing the narrative of economic recovery.

President Obama himself proclaimed his belief in the strength of the American economy, stating for all the world to hear in his 2016 State of the Union Address that anyone who doubted everything was awesome in the main street economy was, to use his words, “peddling fiction.”

And surely Obama couldn’t be wrong. After all, good doctor Ben Bernanke spent several years injecting the US economy with his concoction of Zero Interest Rate Policy (ZIRP) and three rounds of Quantitative Easing (QE). How could anyone doubt but that the wise heads at the Fed have cured what ails us? The stock market just set a new record!

But if you dig down beneath the surface, you’ll find that everything is not awesome. Corporate earnings are down for the fifth quarter in a row. According to the report on Factset, “The second quarter [2016] marks the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.” In other words, corporate earnings haven’t had a losing streak this long since the height of the last financial crisis.

Or take worker productivity, a measure of hourly output per worker, which has declined now for three straight quarters. As the Reuters article pointed out, “U.S. nonfarm productivity unexpectedly fell in the second quarter, pointing to sustained weakness that could raise concerns about corporate profits and companies’ ability to maintain their recent robust pace of hiring.” No kidding.

But why is worker productivity in the US declining? The Reuters article fails to provide a reason. So let me suggest one possibility: businesses are no longer investing in property, plant and equipment, the very things that drive productivity. As Forbes reports, “Corporate executives now shy away from capital spending. Companies are spending money to cut costs – labor cost especially, and also electricity – but few companies are increasing productive capacity.”

So what have executive been spending on if not new productive capacity? Stock buybacks that serve to boost earnings per share and increase bonuses. “Stock buybacks by big American companies are near a historical peak [as of May 2014], but the practice appears to do little to improve their underlying operations and robs them of money for research and future growth. USA Today’s John Waggoner calls stock buybacks a ‘sugar high’,” as John Morgan reports.

Morgan goes on to cite a 1999 quote from Warren Buffett, who said, “Repurchases are all the rage, but are all too often made for an unstated and, in our view, an ignoble reason: to pump or support the stock price.”

Let’s see then, we have stock markets at near record levels, while at the same time corporate earnings are on the decline as worker productivity erodes, which very likely is a consequence of businesses showing greater interest in engineering stock buy-backs rather than in capital spending. Sure sounds like a plan for long-term economic success to me.

I’ve mentioned only a few data points to illustrate that the economy, far from being robust, is in reality quite weak. But for more of the same, consider the following nine ugly charts. Obama’s term in office is highlighted in red.


Things that should be going up in a healthy economy – Labor Force Participation Rate, Median Family Income, Home Ownership – are all going dramatically down. Those items that one would expect to see going down if the economy really were as good as The-Powers-That-Be tell us – Food Stamps, Federal Debt, Money Printing, Healthcare Costs – are going straight up.

These charts tell a very different story from what Obama’s putting out. Maybe he’s the one peddling fiction.

(more…)

Read Full Post »

Please click the link below the story quoting Pippa Malmgren stating “there’s no price discovery anymore” http://www.zerohedge.com/news/2015-02-23/ex-plunge-protection-team-whistleblower-governments-control-markets-there-no-price-d

Please click the following link for Sean Gerety’s article Faith Alive http://www.trinityfoundation.org/latest.php

 

 

Read Full Post »

Crooked Hillary

Hillary Clinton

Fairness. Such an innocent sounding word. So why do I always loath to hear politicians speak of it?

 

Very likely my trepidation has something to do with the way political hacks abuse the English language. Our public discourse has reached what could be called peak dishonesty. Whatever words our public servants use, if you understand the opposite you’re probably pretty close to catching their drift. And so it is with fairness. If some wanna-be office holder starts using that word, think “mega-ripoff” and you won’t go far wrong.

Hillary Clinton, to no one’s surprise, is the latest politician to use the oft-exploited term “fairness” as cover for more theft by government. One need only look at her proposed “fairness” tax to see this principle in operation.

According to the factsheet Investing in America by Restoring Basic Fairness to Our Tax Code,

There is essentially a “private tax system” for the wealthiest Americans that lets them lower their tax bill by billions, while working families play by the rules and pay their fair (sic) share. In 2013, the 400 highest-income taxpayers – those making more than $250 million per year on average – paid an effective tax rate of just 23 percent, in part because of tax gaming and sheltering to reduce their tax bills. Some multi-millionaires can pay lower rates than their employees.

Now there is much here that is true. The US tax code is hopelessly complex and provides ample opportunity for those who can afford top-notch CPAs and tax-lawyers to take advantage of legal loopholes to shelter vast wealth from the tax man. Ordinary Americans, on the other hand, are not so positioned. Most of us dupes on Main Street end up forking it over big-time to the IRS.

(more…)

Read Full Post »

Older Posts »

%d bloggers like this: