Hillary’s Scary New Cash Tax

Submitted by Brian Hunt via InternationalMan.com, Have you heard of “negative interest rates”? It’s become a phenomenon with economists and the media. There’s a good chance you’ve read an article about it. We’ve covered it many times in the Dispatch. I’m writing to tell you something about negative interest rates you haven’t heard. You certainly won’t hear about it in the mainstream press. What’s coming at you is a historic event. It’s something our grandchildren will hear stories about…much like the Great Depression or the Cold War. What’s coming could send the price of gold much higher in the coming years…and hand gold stock owners 500%+ gains. If you know what’s coming, it could mean the difference between having lots of free cash in retirement or barely getting by. To understand the gravity of this moment, let’s cover one of the most bizarre ideas in the world… negative interest […] Read More

“The International Buyer Has Been Absent” Unsold Hamptons’ Mansions Pile-Up As Bubble Bursts

Just a few months ago, Hamptons 2nd home-hunting was an elitist’s dream. Home sales were surging (highest sicne 2007’s peak) even as home prices soared (in the face of bad weather and economic angst). But that has all changed. As Bloomberg reports, sales of luxury homes in the are have tumbled 16% YoY in Q3, prices have plunged 18% YoY, and inventories are surging (up 34%). The reason is simple, as one realtor notes, “the international buyer has been absent.” Mid-Summer, The Wall Street Journal could not be more excited about the bubble in Hamptons’ homes…  As the peak spring season for home sales begins, the market across the region is showing considerable strength, especially in the Hamptons, with its deep pool of affluent summer-home buyers. Despite frequent winter storms that snowed in many Hamptons properties on the eastern end of Long Island, the number of sales from January […] Read More

The Definition Of An Unfree Market

Commentary by Guy Haselmann of Scotiabank Unfree A market economy is one based on supply and demand with little or no government control.   Dictionary site ‘Investopedia’ states that “a completely free market is an idealized form of a market economy where buyers and sellers are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.”  Toto, I don’t think we are in Kansas anymore. After the 2008 financial crisis, regulatory banking rules (i.e. macroprudential policies) conspired with zero (or negative) interest rates and asset purchases to exterminate the markets’ ability to freely calibrate clearing market prices based on supply and demand factors.   It is impossible for central banks to sustain controlling influence on market sentiment, investor behavior, correlations, and valuations, simply because effectiveness wanes over time.  As time passes, central bank stimulus stretches financial asset […] Read More

How Banks Create and Destroy Money

The Money Lenders by  Quentin Metsys – 1466 “I’m just a banker do doing God’s work.”  Lloyd Blankfein Much has been said about both the moral hazard of banks being bailed out and people bailing out of mortgages. The major question raised was, would this ‘bailout’ contagion infect the integrity of our economic and political system?  But far more interesting and much less discussed are the mechanics of modern banking and their moral implications. During the housing boom trillions were loaned out in mortgages creating a housing bubble and the eventual collapse of the financial markets. But where did all that money come from? The vast majority of people think that banks borrow money from the Fed or depositors at one rate, lend it at another and make a spread. This concept is completely false. Banks create money, loan it out, make their margin through compound interest, and destroy […] Read More

The Truth About The Monetary Stimulus Illusion

Authored by Tadashi Nakamae of Nakamae International Economic Research, Perhaps economic policymakers, including Federal Reserve Chair Janet Yellen and the Bank for International Settlements, should take a closer look at Japan, China, and yes, the United States, when debating the limits of monetary stimulus and the dangerous nature of financial bubbles. The discussion is happening too late to be anything more than an intellectual exercise. Since its inception in 2008, easy monetary policy has created very few positive effects for the real economy—and has created considerable (and in some cases unforeseen) negative effects as well. The BIS warns of financial bubbles. Quantitative easing has already created asset price bubbles in the United States and elsewhere, and an investment bubble (this includes capital expenditure and real estate) in China and other emerging markets. Meanwhile, this policy has failed to have a positive impact on the real economy partly because central […] Read More

2015: The War On Our Intuition That Something Is Fundamentally Amiss

Submitted by Charles Hugh-Smith of OfTwoMinds blog, What will you accept as real–your intuition that something is deeply amiss in America, or the official propaganda that all is well?   In 1967, the rock group Buffalo Springfield recorded a song titled For What It’s Worth which speaks not just to the late 1960s but to the present. Consider the opening lines:   There’s something happening here   What it is ain’t exactly clear The ambiguity is not coincidental. When the song was recorded in December 1966, America was in the beginning throes of a full-blown national nervous breakdown that would endure for 15 years until 1981.   The fundamental narratives that had sustained the previous 20 years of apparently limitless prosperity and moral certitude were breaking down.The primary narrative of American foreign policy–that the U.S. defended liberty and always won its foreign wars over evil totalitarianism/ fascism/ colonialism was being destroyed on a daily […] Read More

American Middle Class “Wealth” Worse Than Every Nation But Russia & Indonesia

Submitted by Mike Krieger via Liberty Blitzkrieg blog, One of Liberty Blitzkrieg’s most popular posts in 2013 was titled: How Does America’s Middle Class Rank Globally? #27. Here’s an excerpt: We are number 1 right? USA! USA! No one can beat our wealth creation machine, our economic dynamism, our level playing field and our bastions of higher education. We have a middle class that is the envy of the world, right? Well, like so much of the “American dream” we have been force fed for a generation or more, this perception is not based in reality whatsoever. Sure it may have been the case for a couple of decades immediately after World War 2. Before the military-industrial-Wall Street complex fully took over the political process, but it certainly isn’t true any longer. Myths die hard and this one is particularly pernicious because it prevents people from changing things. The data in that […] Read More

Canadian Tycoon’s Opulent Bahamas Estate Poses Grave Environmental Risks

Watchdog groups are taking mogul Peter Nygård to court for illegally expanding his enormous oceanfront resort. Canadian womenswear mogul Peter Nygård never seems to be more than an arm’s length away from controversy. According to a 2010 Forbes article, Nygård has been accused of abusive labor practices, tax evasion, sexual harassment and rape. Punching back hard, he has sued his accusers and intimidated his critics with a small army of lawyers. “No one has ever disobeyed my orders and gotten away with it!” he once raged, according to the testimony of a former business partner. Environmentalists say those who obey his orders include government officials in the Bahamas, where Nygård has been building a massive estate since the mid ’80s. Forbes described his resort as “a 150,000-square-foot Mayan-style resort featuring 12 themed cabanas, volcanic smoking temples, a helipad, disco, casino and a human aquarium (with sharks on one side of the glass)” where he “has hosted the […] Read More

Why One Big Bank Is “Worried That The Market Is Stretched And Could Correct Rapidly”

Aside from a relentless barrage of deteriorating geopolitical updates almost on a daily basis, which have led even the “very serious thinkers” to pull up comparisons to the days just before World War I, it has been smooth sailing for global capital “markets” which merely continue to follow the path of least central bank balance sheet resistance. It is this relentless melt up which has seen what was once a market and is has for the past 5 years become a policy vehicle to boost confidence (for whom, it is unclear: the vast majority of the population no longer cares what rigged stocks do, as for the trickle down wealth effect, 5 years of deteriorating real incomes for the middle class have promptly put an end to that fable) alongside a slow-motion LBO of the entire S&P 500, as companies repurchase trillions of their shares using ultra-cheap credit, bask […] Read More