From the Summit of the Moral High Ground

Originally published: 2 December 2011 Original author: Dr. Jim Willie ("The Golden Jackass") Navigation: Part 1 | Part 2 | Part 3 | Part 4 Editor's Note This Archive Edition preserves the original article while improving readability through editorial headings, paragraph spacing and navigation. The author's views and arguments have been preserved. Final Images with Messages Historical Image Notice: The original publication included several images accompanying this section. Where reliable archived copies become available, they should be restored in future editions. Drowning in liquidity, the masters of the American chapter of the Fascist Business Model have created a black hole in the form of a gigantic sinkhole. These images were used by the author as a metaphor for the consequences of excessive liquidity and monetary intervention. The Fate of Fiat Currency "Always keep in mind the true value of the US Dollar. It will revert to the ...

Originally published: 2 December 2011 Original author: Dr. Jim Willie ("The Golden Jackass") Navigation: Part 1 | Part 2 | Part 3 | Part 4 Editor's Note This Archive Edition preserves the original article while improving readability through editorial headings, paragraph spacing and navigation. The author's views and arguments have been preserved. Unintended Consequences Focus on suppressed long-term interest rates and their consequences. They are broad and horrendous. The US captains of the derelict vessel travelling in icy waters filled with icebergs boast that the US economy benefits from ultra-low interest rates. They believe Americans are better off than Europeans who are experiencing rising borrowing costs during a debt crisis. The author argues that suppressing the 10-year bond yield has severe consequences, some of which may be unintended. "Can there be any more drastic attempt at a free lunch than suppressing the market inte...

Hat Trick Letter (Archive Edition) – Part 2: The New Normal of Global QE Originally published: 2 December 2011 Original author: Dr. Jim Willie ("The Golden Jackass") Navigation: Part 1 | Part 2 | Part 3 | Part 4 Editor's Note This Archive Edition preserves the original article while improving readability through editorial headings, paragraph spacing and navigation. The author's views and arguments have been preserved. The New Normal of Global QE "THE ONLY THING THAT CHANGED SINCE JUNE 2011 WAS THE USFED DOES NOT TALK ABOUT THEIR VAST MONEY PRINTING AND DEBT MONETIZATION. THE MASSES WEAR ROSE COLORED GLASSES." The big Euro banks are selling boatloads of bonds. But on the other side of the table, the Euro Central Bank is buying only truckloads. The net is still an exodus, thus rising bond yields. Wondering why sovereign bond yields in Spain, Italy, and even France are still rising if the EuroCB has entered the arena with both hand...

Originally published: 2 December 2011 Original author: Dr. Jim Willie ("The Golden Jackass") Navigation: | Part 1 | Part 2 | Part 3 | Part 4 Editor's Note This Archive Edition preserves the original article while improving readability through editorial headings, paragraph spacing and navigation. The author's views and arguments have been preserved. The Illusion that Quantitative Easing Ended The US Federal Reserve has fooled a lot of people into believing that the grand monetary pump and debt monetization project has been put on hold. The only thing that changed was their talking publicly about it. The money press has been working to the limit, never stopped. The discussion has been kept quiet, but the machinery still operates with vigor. The proof is not statements by central bankers, but the data from the monetary aggregate. The data is compelling. The conclusion to reach is that Quantitative Easing has become the norm, the foundation pol...

What is really going on and when did it happen? Do you want to know? I'm going to try to bring together all the economics posts of the last month and try to paint the picture of what is actually happening. Before you read on I remind you that ignorance is bliss. On the 27th October I postulated that the collapse of Dexia bank was just the first in a series of dominoes which would fall, well we now see the systemic collapse continuing throughout western governments and banks. The death of the monetary system has its main motive in the refusal of governments either to manage finances responsibly or to repay debt in the usual manner. Debt grows faster than the economies. The plan is to swindle via the hidden  inflation  tax in return. Greece and now Italy have tumbled because they are locked in a single currency and cannot unilaterally devalue. The creditors (the people who own the bonds) are not involved in the important decisions to debase the currency. Those decisions ...

Historical Archive This article is preserved as part of the historical record of this blog. It reflects the author's views at the time of publication. The content has not been substantively altered, although the HTML, accessibility and formatting have been updated to meet modern web standards. Since the day after the election, the news has been that things were not as good as they appeared during the campaign and were, in fact, very bad. If you had listened to Dr. Forskitt or me during the campaign, this was exactly what we had been trying to tell people despite the media blackout. As pension monies are withdrawn from the market and paid out, a collapse in share prices is inevitable. Between 2011 and 2016 the baby boomers retire. The latest post-election revelation was that the States Employees' Pension Fund was in deficit. Beneficiaries had already received an increase below inflation and it appeared that below-inflation rises would continue for the foreseeab...

Historical Archive This article is preserved as part of the historical record of this blog. It reflects the author's views at the time of publication. The content has not been substantively altered, although the HTML, accessibility and formatting have been updated to meet modern web standards. Italy's sovereign debt crisis. Flicking through the media coverage of the Italian financial crisis, the first thing I notice is the biased reporting of the facts. These nations have been overspending for years and building up huge debts. The overspending is caused by politicians keen to win votes with government services and benefit payments. Yet the language used by the media places the blame squarely on the "markets", the ultimate denial of culpability because the markets are made up of countless entities, largely the major financial institutions. "The European Central Bank, the only effective bulwark against market attacks, intervened to buy Italian bon...

Historical Archive This article is preserved as part of the historical record of this blog. It was originally written by Dr Willie (The Golden Jackass) and is republished here with permission as part of an ongoing effort to preserve historical economic commentary that has since become unavailable. The content has not been substantively altered, although the HTML, accessibility and formatting have been updated to meet modern web standards. On Monday, the first gold contracts denominated in the Chinese Renminbi (also known informally as "yuan") came to the Hong Kong market. Analysts have been quick to note the implications of a yuan-denominated contract, realising that the new contract could drive nearly three times as much demand as the dollar-denominated contract. Looking at the yuan product from the macro view, a move into gold is about more ...

Twenty Dollar Gold Coin (1 troy ounce fine gold) I was looking at my $20 dollar gold coin the other day. It is amazing how little it has changed since it was minted in 1887, the greatest change being the value of it which has ranged between $1,550 and $1,900 so far this year, which since it was worth $20 until 1933, then $35 until 1971, is a sign that the good times ended a long time ago. But the truth is that if the coin has not changed, if it is the constant, then what has changed? The answer has to be the value of the dollar. Inflation is a hidden tax and, like all taxes, is disproportionately levied on the 'poor'. By 'poor' I don't really mean the poor, who on a global scale are those who earn less than $800 per year; they have nothing anyway, so they have nothing to lose. In fact everyone who lives in Jersey is rich; everyone has an income of at least $7,500 per year. That places them in the top 20% of the world...