Get Ready For The Death Of The Petrodollar - By Brandon Smith (22/8/13) PDF Print E-mail
Brandon Smith   
Thursday, 22 August 2013 09:44

Download PDF



Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! JoomlaVote! Google! Live! Facebook! StumbleUpon! Yahoo! Free social bookmarking plugins and extensions for Joomla! websites!
 
Inflation - Deflation Confusion, Financial Reality Hidden By Commonly Used Theory And Jargon - By Daniel Amerman (22/8/13) PDF Print E-mail
Daniel Amerman   
Thursday, 22 August 2013 09:40

Download PDF



Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! JoomlaVote! Google! Live! Facebook! StumbleUpon! Yahoo! Free social bookmarking plugins and extensions for Joomla! websites!
 
Get Ready For The Next Financial Crisis - By Ronald R Cooke (21/8/13) PDF Print E-mail
Ronald R Cooke   
Wednesday, 21 August 2013 08:04

The Cultural Economist /321gold.com

Economic forecasting is loaded with risk. There are too many variables that can derail the best of prognostic intentions. But just as I was confident 2007 would produce an economic meltdown, I am now confident we are again entering a period of economic chaos. It would appear 2014 will not be a good year for the world economy. There are far too many unanswered economic and cultural questions to assume the world economy will somehow escape a market crash – followed by a terrible recession.

Cheap yens and dollars are being used to fund the appreciation of paper and real assets, including bonds, stocks, gold, and so on. Investment funds can borrow yens and dollars for virtually no cost and reinvest the borrowed funds in other assets. But the yen to dollar trade has become irrational (speculative). On October 1, 2012, the yen was valued at 78 per dollar. By May 23, 2013, it took 32% more yen to buy a dollar (103 yen). Then the value of the yen abruptly increased to ~94 per dollar by June 17, 2013, and just as abruptly decreased in value to 101 per dollar by July 8, 2013. These are massive speculative moves in the yen/dollar trade. Can investors rely on a continuing devaluation of the yen against the dollar? Will the dollar devalue against the yen? Or will both currencies devalue? Since July 8 when it traded at 101 per dollar, the Yen has actually strengthened reaching 96.7 yen per dollar on August 12, 2013.

The Bank of Japan has announced it will not expand its monetary injections (which would deflate the value of the Yen). In the meantime, the U.S. Federal Reserve has begun to vacillate about its $85 billion per month Quantitative Easing program (which devalues the dollar). The Fed’s purchase of treasury paper which would otherwise be used as high quality collateral in the lending markets has also reduced the liquidity of paper assets like bonds and stocks. A shortage of high quality treasury paper may force the United States Federal Reserve to taper whether it wants to or not. Since global asset speculation has been chiefly financed by cheap dollars and Yen, these moves suggest a looming liquidity crisis.



Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! JoomlaVote! Google! Live! Facebook! StumbleUpon! Yahoo! Free social bookmarking plugins and extensions for Joomla! websites!
Read more...
 
$2,001,093,000,000: Fed’s Ownership Of U.S. Debt Breaks $2T For First Time - By Terence P. Jeffrey (21/8/13) PDF Print E-mail
Terence P. Jeffrey   
Wednesday, 21 August 2013 08:01

CNSN News

The Federal Reserve’s holdings of publicly traded U.S. Treasury securities—federal government debt—pushed above $2 trillion for the first time last week, hitting approximately $2,001,093,000,000 as of Aug. 14, according to the Fed’s latest weekly accounting.

The Fed’s accounting for the previous week showed that it had owned approximately $1,993,375,000,000 in U.S. Treasury securities as of Aug. 7. Back on Dec. 31, 2008, before the Fed began its strategy of “Quantitative Easing," the Fed owned only $475.9 billion in U.S. Treasury securities. Since then, the Fed’s holdings of U.S. government debt have more than quadrupled.

Launched in 2009, the Fed's Quantitative Easing (QE) efforts have attempted to stimulate the economy. “Under QE,” explains a February 2013 Congressional Research Service report, “the Fed attempts to lower long-term Treasury and MBS [mortgage-backed security] yields directly through purchases that drive down their yields, in the hope that lower Treasury and MBS yields will indirectly filter through to reductions in other private long-term yields. (Lower Treasury yields do not directly stimulate economic activity—they are only stimulative if other yields fall as a result.) This could occur because Treasury securities are considered a ‘benchmark’ against which other private securities are priced, so that other securities are automatically repriced when Treasuries are repriced (although the change is unlikely to be one-to-one).” (In its latest weekly accounting, the Fed also said that as of Aug. 14, it owned approximately $1.299831 trillion in mortgage-backed securities that had been issued by Fannie Mae, Freddie Mac and Ginnie Mae.

Back on Jan. 14, 2009, the Fed owned only $5.6 billion in mortgage-backed securities.) By law, the Fed is not permitted to buy U.S. Treasury securities directly from the Treasury. Instead it buys them in the secondary market. However, when the Fed buys U.S. government debt even on the secondary market it creates a closed circle: The Treasury pays the Fed the interest owed on that part of the federal government’s debt, and almost all of that interest--considered “profit” by the Fed--is paid back to the Treasury. “Monetizing the deficit refers to financing the budget deficit through money creation rather than by selling bonds to private investors,” said the CRS. “Hyperinflation in foreign countries has consistently resulted from governments’ decision to monetize large deficits. “According to this definition, the deficit has not been monetized,” said CRS. “Section 14 of the Federal Reserve Act legally forbids the Fed from buying newly issued securities directly from the Treasury, and all Treasury securities purchased by the Fed to date have been purchased on the secondary market from private investors.” “Nonetheless," said CRS, "the effect of the Fed’s purchase of Treasury securities on the federal budget is similar to monetization whether the Fed buys the securities on the secondary market or directly from the Treasury.

When the Fed holds Treasury securities, Treasury must pay interest to the Fed, just as it would pay interest to a private investor. These interest payments, after expenses, become profits of the Fed. The Fed, in turn, remits about 95 percent of its profits to the Treasury, where they are added to general revenues. In essence, the Fed has made an interest-free loan to the Treasury, because almost all of the interest paid by Treasury to the Fed is subsequently sent back to Treasury. “The Fed could increase its profits and remittances to Treasury,” said CRS, “by printing more money to purchase more Treasury bonds (or any other asset)." As of Aug. 15, according to the Bureau of the Public Debt, the total value of Treasury securities held by the public was $11,952,073,953,024.85. (The rest of the federal government’s debt is “intragovernmental” debt—n.b. money that the Treasury owes to federal trust funds, such as the Social Security trust fund.) The $2,001,093,000,000 in Treasury securities now owned by the Fed equals 16.7 percent of the U.S.

government’s debt held by the public. Another $5.6006 trillion in U.S. Treasury securities is owned by foreign entities, according to the Treasury's latest report on foreign holders of U.S. debt. The combined $7,601,693,000,000 in U.S. Treasury securities owned the Fed and foreign entities equals about 64 percent of all extant U.S. Treasury securities. After the Fed, entities on Mainland China are the largest owners of U.S. government debt, holding $1.2758 trillion as of the end of June.

- See more at:
http://cnsnews.com/news/article/2001093000000-fed-s-ownership-us-debt-breaks-2t-first-time#sthash.PfZUAMl2.dpuf



Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! JoomlaVote! Google! Live! Facebook! StumbleUpon! Yahoo! Free social bookmarking plugins and extensions for Joomla! websites!
Last Updated on Wednesday, 21 August 2013 08:11
 
Get Ready - The Great Transfer Of Wealth In Gold & Silver Is Coming - By Steve St Angelo (21/8/13) PDF Print E-mail
Steve St Angelo   
Wednesday, 21 August 2013 07:59

Download PDF



Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! JoomlaVote! Google! Live! Facebook! StumbleUpon! Yahoo! Free social bookmarking plugins and extensions for Joomla! websites!
 
<< Start < Prev 341 342 343 344 345 346 347 348 349 350 Next > End >>

Page 342 of 875