Tag Archives: Pretense Of Knowledge

What happens when a central bank goes bust?

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“Four men control roughly 75% of the entire world money supply:  Zhou Xiaochuan, People’s Bank of China; Mario Draghi, European Central Bank; Haruhiko Kuroda, Bank of Japan; Ben Bernanke, US Federal Reserve.  Four guys. And they control the livelihoods of billions of people around the world.  So, how are they doing?  Each of these major central banks in ‘rich’ Western countries is essentially at, or below, the level of capital that Lehman Brothers had when they went under.”

http://www.sovereignman.com/finance/heres-what-happens-when-a-central-bank-goes-bust-12440/

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The Fed in Danger

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“The danger stems from a growing sense in Congress that the Fed has, with its program of quantitative easing and ultra-low interest rates, lengthened the Great Recession.  The Federal Reserve has just expanded its balance sheet by trillions of dollars. It is now holding trillions of Treasury notes and bonds that it ostensibly acquired on the open market but that represent, nonetheless, loans to the federal government from its own bank. These bonds were issued by the same Treasury Department with which Mrs. Yellen has been meeting with more or less weekly.  If Congress has a right to know what agreements have been made, what about the rest of us?”

http://www.nysun.com/editorials/the-fed-in-danger/88785/

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Moody’s, Goldman, feds fight the last war on financial excess

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“During the current five-year surge in stocks, confidence that a crash isn’t likely has remained below 40% among individual investors. During the comparable span of 2004 to early 2007, confidence was never as low as 40%, and peaked near 50%. ‘Twice bitten, thrice shy’ seems to be the prevailing attitude, after the market was cut in half twice in eight years’ time. This persistent mood of suspicion probably creates its own check against too much giddiness infusing the markets too quickly. But it doesn’t provide much protection against a whole new, unexpected financial bug coming to bite us from a place we haven’t thought to look.”

http://finance.yahoo.com/news/moody-s–goldman–feds-fight-the-last-war-on-financial-excess–are-we-safer-181328063.html

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Fed’s Zero Interest Rate Cost Savers A Trillion Dollars

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“While there is a lot of support for low interest rates – from stock market investors, home buyers, business borrowers, etc. – it has not been a cost-free policy.  While bank savings rates have traditionally been able to earn savers a little more than inflation, they have consistently lagged behind inflation during this era of extraordinarily low interest rates. That means that depositors in CDs, savings accounts and money market accounts have been losing purchasing power. This lost purchasing power is the hidden cost of the Fed’s policies.  The question is, what has this three-quarters of a trillion dollars in lost purchasing power bought us?”

http://www.investorsinsight.com/blogs/forecasts_trends/archive/2014/05/13/fed-s-zero-interest-rate-cost-savers-a-trillion-dollars.aspx

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Hungry Judges Less Likely to Grant Parole [2011]

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“The United States judicial system is ostensibly built on laws and hard facts. But new research lends weight to the trope that ‘justice is what the judge ate for breakfast.’  A judge’s willingness to grant a prisoner parole wanes with time after a lunch or snack break, according to an observational study.  Researchers from Columbia University and Ben Gurion University of the Negev in Israel analyzed more than 1,000 parole decisions made during 50 days by eight experienced judges in Israel. The proportion of favorable rulings fell from about 65 percent to nearly zero during each session separated by the two food breaks, leaping back to 65 percent immediately after the breaks.”

http://abcnews.go.com/Health/MindMoodNews/hungry-judges-grant-parole/story?id=13347415&singlePage=true

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Bill Bonner: The God-Like Vanity of Central Planners

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“Large-scale central planning can be effective, but only by pulverizing the delicate fabric of evolved civilized life.  It is a future that practically no one wants, because it means destroying the many different futures already in the works – marriages, businesses, babies, baptisms, hunting trips, shopping, investments and all the other activities of normal life.  Not all central planning produces calamities on that scale, of course. But all, to the extent they are effective, are repulsive. The more they achieve the planners’ goals, the more they interfere with private goals, and the more they retard or destroy the progress of the human race.”

http://www.bonnerandpartners.com/the-god-like-vanity-of-central-planners/

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Bill Bonner: The Fed’s Next Move

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“Janet Yellen is being pushed into a corner by the Fed’s own pronunciamientos. It has been threatening to raise interest rates when its inflation and employment targets are hit. And hit they have been. So what’s she gonna do?  Our guess is she means what she says. She is a smart woman. But she is not smart enough to see that she has been talking claptrap… and not courageous enough to admit that her career is built on it.  If she sees any sign the ‘recovery’ has been put in danger by her attempts to normalize interest rates… she will back up. That is the history of the last seven years of Fed policy… and it is probably the best guide to the months ahead.”

http://www.bonnerandpartners.com/the-feds-next-move/

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Bill Bonner: The Dumbest Investment Mistake You Can Make

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“There could be a 15-day cooling off period… which could be extended by the Fed, in the interest of market stability.  Economists don’t know what will work because no one can know what the future will bring. But we all know what won’t work: central financial planning. Likewise, investors can’t consistently choose good investments; because they don’t really know the future. All they can know is what isn’t true and, knowing that, avoid bad investments.  That’s why investing is often called a ‘loser’s game.’ You don’t win by choosing winning investments; you win by not losing. You don’t win by pretending to know what is true; you win by knowing what is false.”

http://www.bonnerandpartners.com/the-dumbest-investment-mistake-you-can-make/

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The Logical Conclusion of the Modern, Monetary Argument

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“One of the most terrible things about the globalization of finance, money and industry is that it homogenizes booms and busts. There is literally nowhere to go. As economic centralization continues, these cycles will only worsen. These days in the West – and certainly in Washington – Republicans are sure they can mandate a technocratic interest-rate rule that will restrain the Fed from doing inordinate damage to the economy. Ironically, Democrats argue for more flexibility and less government interference regarding money. This would be admirable from a free-market standpoint except that they are arguing on behalf of a MONOPOLY facility. As usual, both parties get it wrong.”

http://www.thedailybell.com/news-analysis/35494/The-Logical-Conclusion-of-the-Modern-Monetary-Argument/

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The Fed Chairs Have a Habit of Hazing

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“Paul Volcker took over as Chair of the Fed in August 1979. A recession officially began five months later.  This was the worst recession since the Great Depression.  In August 1987 Alan Greenspan took over the Fed. Two months later ‘Black Monday’ occurred on October 19, 1987, when the Dow dropped 22.6% that day alone–the worst one-day crash in history.  In February 2006 Ben Bernanke became Fed chair. The worst recession since the Great Depression officially began in December 2007, and you may recall there was some trouble in the financial markets in September 2008…  In January 2014 Janet Yellen became Fed chair.”

http://consultingbyrpm.com/blog/2014/07/the-fed-chairs-have-a-habit-of-hazing.html

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