Tuesday, September 25, 2012

QE4? The Big Wall Street Banks Are Already Complaining That QE3 Is Not Enough


QE3 has barely even started and some folks on Wall Street are already clamoring for QE4.  In fact, as you will read below, one equity strategist at Morgan Stanley says that he would not be "surprised" if the Federal Reserve announced another new round of money printing by the end of the year.  But this is what tends to happen when a financial system starts becoming addicted to easy money.  There is always a deep hunger for another "hit" of "currency meth".  Federal Reserve Chairman Ben Bernanke was probably hoping that QE3 would satisfy the wolves on Wall Street for a while.  His promise to recklessly print 40 billion dollars a month and use it to buy mortgage-backed securities is being called "QEInfinity" by detractors.  During QE3, nearly half a trillion dollars a year will be added to the financial system until the Fed decides that it is time to stop.  This is so crazy that even former Federal Reserve officials are speaking out against it.  For example, former Federal Reserve chairman Paul Volcker says that QE3 is the "most extreme easing of monetary policy" that he could ever remember.  But the big Wall Street banks are never going to be satisfied.  If QE4 is announced, they will start calling for QE5.  Quantitative easing tends to pump up the prices of financial assets such as stocks and commodities, and that is very good for Wall Street bankers.  So of course they want more quantitative easing.  They always want bigger profits and bigger bonus checks at the end of the year.
Whatever shreds of credibility the Fed had left are being washed away by a flood of newly printed money.
Those running the Fed have essentially used up all of their bullets and the next great financial crisis has not even fully erupted yet.
So what is the Fed going to do if the stock market crashes and the credit market freezes up like we saw back in 2008?
How much more extreme can the Fed go?
"We are going to print so much money that we'll make Zimbabwe and the Weimar Republic look like wimps!"
Sadly, the truth is that money printing is not a "quick fix" and it never has been.  Just look at Japan.  The Bank of Japan is on round 8 of their quantitative easing strategy, and yet things in Japan continue to get even worse.
But that is not going to stop the folks on Wall Street from calling for even more quantitative easing...

Sunday, September 23, 2012

'Revolution' Depicts America After an EMP Blast: But Is It Plausible?

Rogue nations like North Korea and Iran continue to develop capabilities that would allow them to launch an EMP attack from a variety of delivery systems. As the Washington Times reported in July: “North Korea has always planned to develop small-scale nuclear warheads,” the article said. “On this foundation, they could develop electromagnetic pulse (EMP) bombs in order to paralyze the weapons systems of the South Korean military — most of which involve electronic equipment — when necessary.” In fact, Chinese analysts believe North Korea is working on small nuclear warheads that could produce “super-EMP bombs,” the report said. “Once North Korea achieves the actual war deployment of EMP weapons, the power of its special forces would doubtlessly be redoubled,” the report said. The EMP Commission urges policymakers to focus the nation’s efforts on infrastructure hardening, response and recovery coordination, the hardening of space and defense systems, and perhaps most importantly, missile defense. Yet, as Eric Hannis notes “very few of the Commission’s recommendations have been implemented.” Perhaps we will make improvements in these areas as awareness and understanding of our vulnerability continues to spread amongst policymakers. Sadly, the Obama administration has taken a step in the wrong direction by cutting missile defense, a critical component in protecting against an EMP attack. So, will we be living in a Revolution-style world if we do suffer an EMP incident or attack? Maybe. Which is why sustained research and public attention to the threat is necessary. While an EMP incident or attack has the potential to bring about a future like that featured in Revolution, such a result is by no means a forgone conclusion. Recovery would depend on both the scale of the attack or incident, as well as our ability to coordinate a response in a timely fashion. All factors that can be influenced by planning, protection, and prevention efforts. But, as the Commission warns “There is a point in time at which the shortage or exhaustion of sustaining backup systems, including emergency power supplies, batteries, standby fuel supplies, communications, and manpower resources that can be mobilized, coordinated, and dispatched, together lead to a continuing degradation of critical infrastructures for a prolonged period of time.” In other words, preparation alone may not be enough, prevention is also necessary. In the face of a sufficiently powerful EMP incident or attack, there is a possibility that the fantasies of Revolution might become our new reality. Gregory S. McNeal

Monday, September 17, 2012

Militia is NOT a dirty word... It preserves Freedom from Tyranny

During the Congressional debates, James Madison discussed how a militia could help defend liberty against tyranny and oppression: The highest number to which a standing army can be carried in any country does not exceed one hundredth part of the souls, or one twenty-fifth part of the number able to bear arms. This portion would not yield, in the United States, an army of more than twenty-five or thirty thousand men. To these would be opposed a militia amounting to near half a million citizens with arms in their hands, officered by men chosen from among themselves, fighting for their common liberties and united and conducted by governments possessing their affections and confidence. It may well be doubted whether a militia thus circumstanced could ever be conquered by such a proportion of regular troops. Besides the advantage of being armed, it forms a barrier against the enterprises of ambition, more insurmountable than any which a simple government of any form can admit of. The governments of Europe are afraid to trust the people with arms. If they did, the people would surely shake off the yoke of tyranny, as America did. Let us not insult the free and gallant citizens of America with the suspicion that they would be less able to defend the rights of which they would be in actual possession than the debased subjects of arbitrary power would be to rescue theirs from the hands of their oppressors."- (Source I Annals of Congress 434, June 8, 1789)

Sunday, September 16, 2012

People Are Getting Ready...

You don't need to take my word for it. Call up all of your local gun dealers and ask them if they are having trouble getting the guns and ammo that they have ordered. Believe me or not. We are in the calm before the storm. Something really, really big is about to happen. Your focus needs to be on four main priorities. 1. Your job or your business. While you are still employed or self employed, you have money coming in. Keep working hard, tighten your spending habits, and focus on the next three priorities. 2. Buy guns and ammo. It's getting really hard to get already and you don't want to be caught without it. It will be your main defense when things get really rough. 3. Buy lots and lots of canned goods. Meats, vegetables, soups, etc. You can focus on other foods too, but don't buy anything that is quickly perishable. Don't get anything that must be frozen or refrigerated before or after opening. 4. Decide where you will go if it gets too rough where you are. Have a second or third option as well. Have a way to get you and your stuff there too. Plan ahead. There are many other things to consider, but if you have not been getting ready before today, you are way behind. Focusing on these priorities will help you stay focused and help you catch up and prepare for what is surely to come. The governments of the world will be able to manipulate their economies in an effort to postpone it, but they can't stop it. And the longer they kick the can down the road, the harder the economy will fall.

Economic Collapse: This Bubble Is Going To Burst No Matter Which Political Party Wins

Michael Snyder: Most people just assume that since things have always been a certain way that they will always be that way in the future. Most people just have blind faith that the people running our government and our financial system know exactly what they are doing and that they are doing their best to take care of us. In fact, once upon a time I was fully convinced of that. When I was a kid I quickly realized that my elementary school teachers really didn’t have the answers, but I had total faith that those running society at the highest levels were “experts” that were looking out for our best interests. As time went on I kept progressing in my education, and by the time I was finished with law school I came to understand that none of our “experts” really know what they are doing, and they are definitely not looking out for our best interests. The blind are leading the blind and we all need to finally admit that the emperor is not wearing any clothes. Unfortunately, most Americans will repeat the mantra of “if that was true I would have heard about it on the news” until it is way too late. Most people are waiting for the “authorities” to tell them what to do instead of thinking for themselves. Sadly, time is rapidly running out and a lot of people are going to end up getting totally blindsided by what is coming. The man in charge of our financial system, Federal Reserve Chairman Ben Bernanke, is not going to save our economy. He didn’t see the last financial crisis coming, and even after things started falling apart he continued to insist that housing prices would not go down and that we would not have a recession. Well, it turned out that we had the worst housing crash and the worst recession since the Great Depression of the 1930s. The Euro’s Demise Has Been Set in Motion: Are you protected? "Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors." But still millions of Americans are trusting him to save us this time around. It isn’t going to happen. The truth is that the design of the Federal Reserve system itself is fundamentally flawed. The biggest reason why the U.S. government is 16 trillion dollars in debt is because the system is designed to create gigantic amounts of government debt. Yes, without a doubt the vast majority of our politicians are corrupt and/or incompetent, but even if we replaced every single one of them our economic problems would still persist until the underlying structural problems were addressed. Most Americans are pinning their hopes for an economic turnaround on the upcoming election, but the truth is that neither Obama or Romney has a plan that will fix things. That statement is going to upset a lot of people on both sides of the political spectrum, but it is true. Over the past 40 years the total amount of all debt in the United States has gone from less than 2 trillion dollars to almost 55 trillion dollars. This bubble is going to burst no matter which political party is in power. Obama and the Democrats have tried to kick the can down the road and extend the party by spending 5.3 trillion borrowed dollars over the past 4 years, but by doing so they have made our long-term problems far worse. The next wave of the economic crisis is fast approaching and people need to get prepared. So what do I mean by that? Well, “preparation” is going to look different for each family, but there are some general principles that apply to almost everyone. For example, during an economic collapse hard assets are preferable to paper assets.