Tag Archives: liquidity
And we're still at risk of it happening all over again
by Adam Taggart
Saturday, March 30, 2013, 4:42 PM
David Stockman, former director of the OMB under President Reagan, former US Representative, and veteran financier is an insider's insider. Few people understand the ways in which both Washington DC and Wall Street work and intersect better than he does.
In his upcoming book, The Great Deformation, Stockman lays out how we have devolved from a free market economy into a managed one that operates for the benefit of a privileged few. And when trouble arises, these few are bailed out at the expense of the public good.
By manipulating the price of money through sustained and historically low interest rates, Greenspan and Bernanke created an era of asset mis-pricing that inevitably would need to correct. And when market forces attempted to do so in 2008, Paulsen et al hoodwinked the world into believing the repercussions would be so calamitous for all that the institutions responsible for the bad actions that instigated the problem needed to be rescued — in full — at all costs.
Mr. Bernanke goes to Crazytown
by Adam Taggart
Monday, March 25, 2013, 3:29 AM
On a long solo car trip this past weekend, I downloaded several podcasts to listen to as the miles passed. One was a classic: The Invention of Money, originally released by NPR's Planet Money team back in January of 2011. I highly recommend listening (or re-listening) to it in full.
The podcast is a great reminder of how any currency in a monetary system is a fabricated construct. A simpler way to explain this is to say it has value simply because we believe it does.
And if so, what will happen once it's done?
by Adam Taggart
Saturday, February 23, 2013, 2:10 PM
We are well into the financial crisis. Everyone’s trying to keep it together, even though it would appear from the reading of the economy things are not going well at all here. And everyone's ignoring things.
But I think, in their hearts, the Central Bankers must know what they’re doing is totally irresponsible. And the tell of that irresponsibility – which is the debasing of the currencies – is the fact that real things will go up in value. This should be reflected in the price of gold and silver.
So expresses Eric Sprott, CEO and founder of Sprott Asset Management, and one of the most experienced and vocal advocates for owning precious metals.
The past decade has validated Eric's thesis, as gold has risen considerably against all world fiat currencies. But what vexes him is that in recent years, when currency debasement has accelerated to extreme levels, precious metals prices have been clearly suppressed, particularly versus the U.S. dollar.
As the topic of price manipulation is nothing new, Eric finds his focus increasingly drawn to where the precious metals are going at these bargain prices – who is accumulating and who is dishoarding:
Learn to accept market realities & invest accordingly
by Adam Taggart
Friday, September 21, 2012, 10:03 PM
Barry Ritholz has had a long career, both participating in the Wall Street machine operates and opining on how it operates. By any account, few understand the ‘street rules’ of modern investing better than he. And he thinks many investors today, both individual and professional, are letting themselves get dangerously distracted. In a May article…
Prepare for a shift in what 'value' means
Tuesday, August 28, 2012, 3:05 PM
The causal relationship between scarcity, demand, and price is intuitive. Whatever is scarce and in demand will rise in price to its cost basis; whatever is abundant and in low demand will decline in price.
The corollary is somewhat less intuitive, but still solidly sensible: the cure for high prices is high prices, meaning that as the price of a commodity or service reaches a threshold of affordability/pain, suppliers and consumers will seek out alternatives or modify their behaviors to lower consumption.
Sunday, November 7, 2010, 3:00 PM
- Mauldin: Thoughts on Liquidity Traps
- Bernanke Invokes Friedman’s Inflation-Fighting Legacy to Defend Stimulus (at Jekyll Island)
- Number of the Week: $10.2 Trillion in Global Borrowing
- GOP to Use Debt Cap to Push Spending Cuts
- Bank of America Edges Closer to Tipping Point
- How to Get a Pipeline Built
- Arab World to Face Severe Water Scarcity by 2015
Get started building resilience into your life with our ‘What Should I Do?’ guide
One of the themes that I have been strongly promoting in my enrolled member area is the idea that most of what we are seeing in the financial world these days is more of a reflection of the perverse influence of a liquidity flood than anything meaningful. Watching how the markets were instantly recovered from the Dubai Debacle on Friday and today (Monday), and seeing gold and stocks and bonds all floating along despite the crisis is just further confirmation for the idea that the world’s liquidity pumps are set to “maximum power.”
I am truly amazed at what I am seeing out there in the markets these days. I also understand and share the frustration of the many analysts who know what “should” be happening but is not.
What should be happening is massive, self-reinforcing deflation caused by debt destruction and resulting from the housing bust and retreat of consumer borrowing.
These are harrowing figures:
by Chris Martenson
Tuesday, November 10, 2009, 5:41 AM
A new Martenson Report is ready for enrolled members.
Here’s a snippet:
The liquidity flood continues, with money dumped into the markets on a weekly (if not more frequent) basis. Last week the Fed pumped more than $18 billion into the system through its purchase of agency debt and MBS. That’s what we know about. This week we found out that central banks around the world have pumped a quarter of a trillion dollars into Lloyds.
How many other such deals do we not know about? How much of this secret money is reflected on the books for the public to scrutinize? Why does the Fed refuse to be audited?
- Huge Drop in Central Bank Liquidity Swaps (Chart)
- Central Banks Announce Global Coordinated Liquidity Measures (Mish wrote this in September of 2008)
- Can We Inflate Our Way out of this Mess? (Chart on page)
- Are Worries About Rising Federal Debt Misplaced?
- UPDATE 1-Chrysler submits $448 million electric car plan
- Two-Thirds Off on Manhattan Office Space
- Exploding debt threatens America
- How Far From the Bottom? (Video)
- JPMorgan’s $29 Billion windfall
- Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look
- Mental health center closes
- Police officers saved by stimulus may still lose jobs
- Police chief warns of deep cuts
- Toledo police layoffs leading to gun buying
- Americans’ credit scores fall as they struggle to pay bills
- IRS tax revenue falls along with taxpayers’ income