Archive for August 4, 2011
Peter Schiff, the CEO of Euro Pacific Capital, isn’t one of those guests Nesto and I have to badger for opinions. Ask him a question and the long-time bear will tell you exactly what he thinks with vigor, even when he has an aching throat. Schiff thinks the U.S. is headed not just for a recession but rather a full-blown depression. On the upside, he believes the coming economic situation will look familiar.
“The Depression [in the wake of the financial crisis] was temporarily interrupted by a bunch of stimulus which ultimately weakened the economy further,” says Schiff. He adds the government’s likely knee-jerk response of stimulating is, “probably going to be the fatal dose, the lethal dose” prior to “a complete economic collapse.”
Which is precisely why Schiff wasn’t among those expecting a debt deal relief rally last Monday morning. The attention paid to the deal was a “massive victory for propaganda that would have done Goebbels proud” (yes, this Goebbels). Schiff believes the real crisis wasn’t the debt ceiling but spending and debt, both of which were effectively worsened by the deal.
“The reckless thing to do was to raise the debt ceiling” he says. Exacerbating matters Schiff thinks the ceiling is going to have to be raised yet again before President Obama leaves office. Not that the chance for DC to spend more freely will help the economy. “The reason we can’t grow the economy is because the government is in the way… There’s no jobs because there’s no recovery.”
By way of a cheery goodbye Schiff concludes, “We’re on a collision course for disaster. All we can do, all your viewers can do is brace for impact…Buy gold. Buy silver… Get as far away as you can from U.S. currency and the U.S. economy.”
The clip itself is must viewing, at least for those not given to panic.
I found this quite interesting showing the various perspective views to the same scenario, I find it interesting having no mention of announcements out of the EU.Also, I have heard “jobs” mentioned constantly but no real plan to create them and revive the manufacturing sectors of this economy that we once depended on, prior to NAFTA and such. We see bogus unemployment numbers presented as if factual. We know the stats in real life are close to double and depending when you fell in the ranks of the unemployed you received, based on real life studies, 93 to 26 weeks unemployment benefits, the lower being the latter. Just a thought, maybe we could improve unemployment by taking an un-Constitutional census every 6 months, as the census workers are the only real job creation we have seen?
Also, before throwing stones and pointing fingers let’s remember that every problem has a root cause. Do not look at today and find a problem, look at how we got to today’s condition and there you will find the root cause that needs to be addressed.
Source: http://www.theatlanticwire.com see no mention of statements coming out of the EU today. Also not hearing any
U.S. stocks were decimated today and the country’s financial experts are trying to assign blame as they digest the day’s massive losses. To run through the carnage, the Dow dropped 512 points, or 4.3 percent, the Nasdaq shed 136 points, or 5.1 percent, and the S&P 500 lost 60 points, or 4.8 percent, which makes for the ninth largest single day point loss in history. Scary, we know. Like with any stomach-sinking market plunge, there are a number of different ways to slice this. Here’s who you can blame:
It’s all our fault MSNBC host Dylan Ratigan chooses to blame us, or rather, our Washington-based political system. He says investors are spooked because they saw the inability of Congress to solve basic problems during the debt ceiling fiasco. “Look at what we have received in the past two weeks from our government,” he says. “The debt ceiling debate was the American lawmakers, President and Congress putting on an illustration for the world about how they intend to solve problems as a group. They expos validated and endorsed recovery plan ed their lack of integrity and that fundamental evidence is so repugnant to the investment community. So what the market cares about is not moral judgment…. what they do care about is the inability of the government to solve problems in any context.”
It’s not our fault At a press briefing, White House press secretary Jay Carney said markets “go up and down” and largely noted a number of global issues in light of the crisis. “There is no question that we have — this economy has faced headwinds this year, a variety of them including the earthquake and tsunami in Japan, the increase in oil prices, energy prices that resulted from the unrest in the Arab world and the situation in Europe.” On MSNBC, Bill Fleckenstein of Fleckenstein Capital largely agreed that outside factors were to blame. “Folks need to take a step back and realize that this reaction that happened today was not a reaction to the debt ceiling,” he said. “We’ve done that dance many times before. This was, as you said — we have broken financial system, and capitalism has been broken in this country for some time. Now what’s happening is — it’s a sovereign debt problem.”
We don’t know whose fault it is “If anybody tries to tell you we’re seeing ‘fears of a double-dip recession,’ or somesuch, ignore them,” writes Felix Salmon at Reuters. He emphasized the importance of not assigning blame or listening to those who were.
Fears of a double-dip recession do not appear overnight, and do not send markets down 3.5% in the course of a morning. When vague “fears” are cited as the prime reason for a sell-off, you can be sure that in fact there’s no reason at all. Markets are volatile things, and sometimes this kind of thing happens. If you can’t stand it, you shouldn’t be invested in stocks in the first place…
In general, I’m not a fan of extrapolating broad macroeconomic hopes and fears from the first derivative of the S&P 500. We’re at 1,220 right now: that’s low compared to the 1,350 of a few weeks ago, but it’s high compared to the 1,120 we saw a year ago — and certainly compared to the 735 we saw at the depths of the sell-off in 2009. If you look at levels rather than deltas, there doesn’t seem to be any big reason to worry — the stock market is showing a reasonably healthy optimism about future long-term growth
The government will report the numbers tomorrow, and the U.S. economy is forecast to have tacked on 57,000 jobs last month, helping the unemployment rate hold steady at 9.2% on the heels of a dismal June when the economy added less than 20,000 jobs.
However, a bout of disappointing economic data released recently “has begun to prompt questions about the risk of recession,” Goldman said in a note to clients, and has led some market participants to brace for a downside surprise.
Indeed, the investment bank estimates that if the jobless rate unexpectedly climbs 0.1 percentage point to 9.3% in July, and remains unchanged or increases in August, “the economy has either entered recession already, or will do so within six months.”
The finding relies on what Goldman calls a “statistical regularity,” meaning it is more of a rule of thumb than a complex statistical model. Starting after the end of the Second World War, a 0.3% to 0.4% increase from the recent trough in the three-month average unemployment rate foreshadowed an economy that has not been in recession for 18-months falling into recession within a six-month period 63% of the time. The increase as of June was 0.17%.
This phenomenon is due to an economic snowball effect: higher unemployment leads to lower household income, which, in turn, reduces consumer spending, causing even more deterioration in the labor markets.
To me this is the feel good story of the day, just wanted to share
Jose Espinosa was in the financial services industry for almost 30 years. He dabbled in acting, sharing the screen with Glenn Close and Mariska Hargitay, and he is a tournament chess player. He attended Bronx Community College and the John Jay College of Criminal Justice.
The fact that he just won an international journalism award might not sound far-fetched, except for the fact that he did it as a homeless man in Philadelphia.
“I’m not the typical homeless person,” said Espinosa, 58. “I’m a very well-rounded individual.”
Espinosa was recently awarded with the honor of Best Interview from the International Network of Street Papers for a profile he wrote of another homeless man.
That man was Matthew Saad Muhammad, the light-heavyweight boxing champion of the world from 1977 to 1980. Muhammad entered the shelter in 2010.
The article, called “Fighting Back,” and was published in the July 2010 issue of One Step Away, a newspaper whose reporting staff and editorial board is made up almost entirely of homeless people. The paper is published by RHD Ridge Center, Philadelphia’s largest homeless shelter.
Seven startling things most people still don’t know about the national debt, banking and the money supply0
Most people, even smart people, know surprisingly little about the way money really works in Big Government. With the debt ceiling fiasco suddenly raising awareness of the possibility of a total global financial blowout, now seems like a good time to remind people of seven disturbing facts about money that are almost never acknowledge in the old media.
Fact #1 – There is no FDIC insurance fund.
The money at your bank is insured against loss by the FDIC’s insurance fund, right? Nope. That’s total fiction. There is no actual money in the fund. The FDIC insurance money has already been looted by the U.S. Treasury which has simply replaced the money with a bunch of IOUs.
Why does this matter? Because it means that if the U.S. government goes into default, so will the FDIC! And that means all your bank funds have zero insurance. That’s gonna be a big shock for tens of millions of people when they finally figure this out one day…
Fact #2 – There are no social security funds, either.
When you pay social security taxes, all that money goes into a trust fund that’s held for safekeeping until the day it pays you back, right?
Ha! That’s the “sucker’s view” of social security that only ignorant people believe. In reality, there is no money in the social security trust fund because it too has all been looted by the U.S. Treasury and spent. In truth, social security is already broke. Can’t wait for people to wake up and figure this one out, either…
Fact #3 – The U.S. Treasury is stealing money from you every day, even if you pay no taxes!
Here’s a mind-boggling truth that most people just can’t seem to get their heads around: The U.S. Treasury is stealing money from you every single day by the simple fact that they keep creating new money and handing it out to wealthy banksters. Well, technically this is being done by the Federal Reserve, which isn’t even part of the federal government. But it’s all done in cahoots with the Treasury, which is eroding the value of your money through these money creation and distribution actions.
That’s why prices keep going up all around you, folks: Food isn’t suddenly worth more money; the truth is that your money is worth less! That’s how the Treasury and the Federal Reserve steal from you without even breaking into your home.
Probably 99.9% of the population has no understanding of this phenomenon — the erosion of currency valuation through the centralized government printing of more currency. And yet it is a government scam that has been carried out against citizens of the world time and time again, spanning millennia! As history has clearly shown, every nation that goes down the path of printing more currency to pay its bills eventually ends up in a runaway hyperinflation scenario followed by economic collapse. The USA will be no different.