Saturday, March 23, 2013

Notice to Trolls

Your right-wing talking points and links to billionaire funded think tank articles devoid of actual facts won't be published as comments to my articles. You have to actually read my article, look up the words in a dictionary, then read a book that explains the concepts. Study the history behind these ideas, how they've previously been applied, and misapplied. Look at the real numbers, and then try to argue with me. Of course if you follow those steps, you'll more or less agree with me. Unless you're being paid not to, that's why I don't publish your comments.

Thursday, March 21, 2013

P2 is Bearish on Magic Beans

Initial Unemployment Claims edged up slightly for the week, but are still near five year lows. Building contractors in some previously depressed areas are finding it impossible to keep up with the demand for new units. This is partly because of the unavailability of existing homes because underwater owners can't sell, and partly it's pent up demand that is being released by the improving economy.

All of a sudden we don't have an immediate debt crisis, at least according to some prominent Republicans in Congress. Basically they're admitting to having lied about the 'debt crisis', literally the day before the new talking points came out, because nothing has changed. A new Continuing Resolution has passed Congress that will take some things off the Sequester chopping block, it still requires the President's signature. Sounds like Obama is a brand new friend to some Republican Congressmen who suddenly don't care about the 'debt crisis!!!', as long as their pet projects get funding. Would this be a good place to insert one of those 'Obama playing chess' metaphors?

The Federal Reserve has announced that they will continue to print 85 Billion in new money to buy up mortgage bonds and US Treasury bonds every month for the indefinite future. Their current balance sheet stands at over 3.2 Trillion. The stated reason for doing so is to keep interest rates low in order to stimulate the economy and create jobs. This is true as far that statement goes, but the real reason is to counter the trillions in cash hoarding that billionaires have been doing offshore. If the Fed didn't put up the cash we would slip into a deflationary spiral that would convert the country in the 'paradise' that the libertarians claim they want. That is if you want to live in Somalia.

I constantly hear from the right who bloviate about the huge debt and the printing of money by the Fed who insist that we're set for hyper-inflation any day. This is simply not going to happen, they've been predicting this will happen 'any day now' for many years. The Fed can start selling its balance sheet holdings off again once the economy recovers to the very people who have been hoarding cash. It's like putting up sand bags to keep the river out of town. Proper planning and regulation would have been smarter, but for the moment we aren't drowning. Just keep the tea baggers away from the sand bags until the river goes down.

The Cypriots may go the Iceland route, throw the bankers out, and print their own currency. They are actually better positioned to do that, and it worked great for Iceland. However they haven't been willing to give up the delusion that they can keep their money laundering business, but they may come to reality at some point. If they don't throw the bankers out, they will have simply given the island away for a handful of Euros, they might as well take magic beans.

Monday, March 18, 2013


The ATMs are empty on Cyprus as people attempt to avoid the 7 to 10% 'tax' on bank deposits announced over the weekend. All banks on Cyprus are closed until at least Thursday while their government attempts to renegotiate with the IMF to steal a lesser amount from small depositors and give a 15% haircut for big depositors. The big ones are mostly Russian money of questionable origin amounting to 50% or more of bank assets. Putin isn't too happy about all this, or maybe that's only his public stance. Most of the money comes from Russia and nearly as much goes back again, it's simply being laundered.

It's rumored that the IMF originally wanted to take 40% which is what they commonly impose on third world countries. This won't be the end of it no matter what numbers are agreed to. The IMF always loots everything that can be carried off and burns the rest. Cyprus is just a tiny island and hardly worth anything, so the larger goal has to be the destabilization of other EU countries like Italy and Spain where there are real assets to steal. Perhaps they are even going after Russia, but they wouldn't be able to actually take the Bear, they would need to have a deal with an inside operator. This incident wouldn't be enough to have any real effect on Russia, but we haven't seen what's coming next.

There is talk of course that US banks will be brought down by this, but for the near future this is just talk. The USD is benefiting from the Euro's decline, so don't go out and buy any right-wing gold offers. US corporations have set yet another record in cash holdings, they're planning to buy assets for pennies on the dollar using dollars. Gold is a commodity, not money, never has been. Even the Romans marked the coins with their value, it wasn't the gold that made the coins 'valuable'.

Your bank deposits here are perfectly safe if you stay under the FDIC insurance limits, provided we can keep the Republicans from taking over the government. This is a long term problem, the current Great Depression started in 2006 (yes 2006) and is many years away from being resolved. Canned goods are still a good investment.