Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Federal Reserve

China Has Its Own Plunge Protection Team

This article was published at The McAlvany Intelligence Advisor on Friday, July 31, 2015: 

China has its own Plunge Protection Team. Its efforts were in evidence last Wednesday as the Shanghai and the Shenzhen indexes, both of which had been flat most of the day, leaped up three percent and four percent, respectively, in the last 30 minutes of the trading session.

Jacky Zhang, an analyst at BOC International, a wholly owned subsidiary of the Bank of China, exclaimed:

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Chinese Plunge Protection Team Failing to Stem Stock Market Declines

This article appeared online at TheNewAmerican.com on Thursday, July 30, 2015:  

A historical chart of the Shanghai (SSE) Compo...

A graph of the Shanghai Index showing the first bubble in 2006-2008

In the last 30 minutes of trading on Wednesday, the Shanghai Composite Index jumped more than three percent, while the smaller Shenzhen Composite (equivalent to the U.S. Nasdaq index) leaped more than four percent. That this was the result of actions taken by China’s unofficial “plunge protection team” was obvious to Jacky Zhang, an analyst at BOC International: “Clearly it is government intervention again.”

China’s plunge protection team (PPT), equivalent to the U.S. stock market’s “Working Group on Financial Markets” set up under President Reagan following Black Monday in October 1987, has moved heaven and earth to keep its stock markets from collapsing. The team, made up of China’s Securities Finance Corporation and the China Securities Regulatory Commission, along with top officials from the country’s 21 largest brokerages and the Chinese central bank, has implemented an entire panoply of measures to stem the tide, including:

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Home Ownership Rate Lowest Since President LBJ

This article appeared online at TheNewAmerican.com on Wednesday, July 29, 2015:  

English: 904 S. 3rd, Mount Vernon, Washington....

According to the Census Bureau, home ownership in the United States has now dropped to the lowest level since 1967, and estimates are that the decline will continue to the lowest level ever recorded. The rate for the second quarter of 2015 was 63.4 percent, the lowest rate since Lyndon Johnson was president. The rate stands a good chance of reaching the all-time low, 63 percent, set in 1965 when the U.S. government began keeping track of such a statistic.

It wasn’t supposed to happen. In 1995 after the rate dipped to a breath-taking, eye-popping 64.7 percent from the previous 50-year average of 65.3 percent, according to the Census Bureau, the Clinton administration issued a call to arms! The government must do something!

When then-President Bill Clinton announced his “National Homeownership Strategy” in May 1995, he said,

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China Stock Market Tumbles Into Bear Market

This article appeared online at TheNewAmerican.com on Friday, July 3, 2015:  

Since June 12 the Shanghai Index of Chinese stocks has lost 30 percent, thanks to losses on Friday of nearly six percent, and 12 percent for the week. That index, reflective of the Chinese stock market in general, exploded between November and June thanks to some 90 million newly minted Chinese investors entering the market for the first time, many of them with borrowed money, hoping to cash in on the rise.

Brokerage houses were only too glad to oblige, with many of them allowing new investors to borrow up to six times their initial equity position. As the market went almost vertical, commentators have been calling it a bubble, with prognosticators predicting its end sometime before 2016.

That may have been too hopeful:

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Chicagoans had to Choose Between Venal and Feckless for Mayor

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, April 8, 2015: 

In Tuesday’s mayoral runoff in Chicago, voters had only two choices: to vote for the venal Rahm Emanuel or the feckless Chuy Garcia. Four years ago Emanuel rode Barack Obama’s coattails to victory, winning in a walk with 55 percent of the vote. In February, Emanuel couldn’t squeeze out a majority, getting only 46 percent of the vote and forcing a runoff with a far-left progressive on the Cook County Board of Commissioners, Jesus “Chuy” Garcia.

With the help of an estimated 100 “friends of Rahm,” Emanuel buried Garcia, raising some $30 million for his campaign, eight times what Garcia was able to raise. On Monday Emanuel held an 18-point lead over Garcia.

Garcia was hoping for a miracle.

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U.S. Government’s Interest Costs to Quadruple in 10 Years

This article first appeared online at TheNewAmerican.com on Thursday, February 5, 2015: 

On Tuesday, the Wall Street Journal reported that the federal government will be paying $800 billion annually just to service the interest on its massive debt by 2025, up from just over $200 billion currently. By 2021, those interest costs will equal what the government is projected to be spending on national defense, and on non-defense (so-called “discretionary” items), and will greatly exceed those two budget items just by 2025. The Journal also noted that “non-discretionary” items (so-called “mandatory” expenditures) will continue their inexorable march upward, from $2 trillion currently to more than $4 trillion by 2025.

Surprisingly, few eyebrows were raised over the announcement,

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Latest CBO Report shows Deficits Approaching $1 Trillion

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, February 4, 2015: 

English:

When the Congressional Budget Office issued its Budget and Economic Outlook 2015 to 2025 in January, few could be bothered to do a serious review of it as it seemed to contradict the present meme of the Goldilocks economy: job growth accelerating, interest rates low, consumer confidence improving, deficits shrinking, and so forth. Even those taking the time to look at it, scoffed at its conclusions. Said the CBO:

The federal budget deficit, which has fallen sharply during the past few years, is projected to hold steady relative to the size of the economy through 2018.

Beyond that point, however, the gap between spending and revenues is expected to grow, further increasing federal debt … which is already historically high.

The CBO explained why:

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Underlying Economic Indicators Confirm Dow’s Record Run

This article first appeared online at TheNewAmerican.com on Wednesday, December 24, 2014:

 

With the Santa Claus rally driving stocks to new all-time highs, the normally restrained Wall Street Journal found itself describing the economy “in a sweet spot of growth, sustained hiring and falling unemployment, stirring optimism that a post-recession breakout has arrived.”

Investopedia explains the cause of the usual rally in stocks toward the end of each year this way:

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Energy Junk Bond Investors Heading for the Exits

This article first appeared online at TheNewAmerican.com on Sunday, December 14, 2014:

English: Oil well An oil rig used for training.

An oil rig used for training.

As crude oil prices continue their breath-taking fall, the ripple effect is beginning to reach far beyond the gas pump. On Friday crude oil dropped below $60 a barrel, causing some experts to predict $55 a barrel the following week and $40 a barrel within a few months.

That is putting pressure on oil producers to service their massive debts — some $550 billion incurred in the last five years — and scaring bond investors who are now looking to sell.

It’s a mania, said Tim Gramatovich of Peritus Asset Management who oversees a bond portfolio of $800 million: “Anything that becomes a mania — ends badly. And this is a mania.”

Bill Gross, who used to run PIMCO’s gigantic bond portfolio and now advises the Janus Capital Group, explained that “there’s very little liquidity” in junk bonds. This is the language a bond fund manager uses to tell people that

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Tax Avoiders Performing a Public Service

This article first appeared at The McAlvany Intelligence Advisor on Monday, November 3, 2014: 

English: Judge Learned Hand, circa 1910. Franç...

Judge Learned Hand, circa 1910.

In his letter to the Washington Post on Saturday, libertarian economist Donald Boudreaux unwittingly exposed the logical fallacy behind the OECD’s (Organization for Economic Co-operation and Development) new “tax evasion” treaty: they really think they can help the little taxpayer by increasing the collection of taxes on the evaders. Wrote Boudreaux:

Consider the U.S.: in 31 of the 67 post-war years from 1946 to 2013, Uncle Sam’s budget deficit rose … when his tax receipts increased.

This fact means that Uncle Sam almost as often as not responds to each dollar of additional tax revenue by increasing his spending by more than a dollar – thus imposing a heavier tax burden on future taxpayers.

In other words, tax avoiders (not evaders) are performing a public service by doing what they can to reduce government revenues which constrain government spending.

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Foreign Affairs: Give Away Free Money!

This article first appeared at the McAlvany Intelligence Advisor on Friday, August 29, 2014:

Foreign Affairs

Foreign Affairs

What happens when a college professor meets up with a graduate student from Oxford University, intending to solve the world’s economic problems? What happens when they consider that the previous attempts to revive the economy have failed and their recommendation is to do more of the same?

The title of their resultant article in Foreign Affairs – the premier publication of the Council on Foreign Relations – explains it all:

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Article in CFR Magazine: Give Away Money to Stimulate Economy

This article first appeared at TheNewAmerican.com on Thursday, August 28, 2014:

 

Los Angeles Police Department (LAPD) Bell 206 ...

Mark Blythe, a professor at Brown University, and Eric Lonergan, a hedge fund manager living in London, have conjured the ultimate solution to a stagnant economy: Central banks should give away free money.

These two authors of a lengthy and allegedly erudite article in the September/October 2014 issue of Foreign Affairs, published by the Council on Foreign Relations (CFR), appear to be living in an alternate universe, as their suggestion, if it were fully implemented, would push the world’s economy back to the Dark Ages.

The article, entitled “Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People,” rests on the false assumption that

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Federal Reserve Notes Soon to Become Irrelevant in Oklahoma

This article first appeared at The McAlvany Intelligence Advisor on Monday, June 9, 2014:

 

Republic of Hawaii Banknote for 20 gold dollar...

Republic of Hawaii Banknote for 20 gold dollars, 1895. (Photo credit: Wikipedia)

Something that the lamestream media missed entirely happened on Wednesday, June 4, in Oklahoma: the governor signed into law a bill affirming what is already guaranteed to each state in the US Constitution: that gold and silver coin are legal tender. Historians looking back may recall that day as the day the Federal Reserve’s hegemony over money ended.

Article I, Section 10, the U.S. Constitution states simply that

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Oklahoma is the next state to Affirm gold and silver as Legal Tender

1907 Double Eagle, Liberty Head, Obverse

1907 Double Eagle, Liberty Head, Obverse (Photo credit: Wikipedia)

On Wednesday, June 4, Oklahoma joined Utah, Texas and Louisiana in affirming that gold and silver coins are (as they always have been under the Constitution) legal tender in the payment of debts in the state. On the surface this seems almost silly: affirming a right that already exists in Article I, Section 10 of the U.S. Constitution. But it is much more than that.

 

Senate Bill 862 which Oklahoma Governor Mary Fallin signed into law this week says:

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ARMs are Costing People their Homes

Subprime Crisis No Barrier to Affordable Housing

Subprime Crisis (Photo credit: woodleywonderworks)

Back in September, the Associated Press took a close look at U.S. census data and learned that the supposed economic recovery was leaving an awful lot of people behind. One segment is homeowners who bought the dream of owning a home using ARMs – adjustable rate mortgages – and who are now finding out how these sub-prime mortgages really work. They are working to

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British Think Tank Predicts Financial Catastrophe for US

Titled “The Government Debt Iceberg”, the latest report from The Institute of Economic Affairs (IEA) in London was meant primarily for British eyes, but there’s enough in there to concern Americans worried about how

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Rosy CBO Report Leaves out Critical Factors

At first reading the latest report on the government budget and the economy released on Tuesday by the Congressional Budget Office (CBO) is all sunshine and roses. In its summary of the 182-page report the CBO noted that deficits this year (from last October to next September) will be even lower than initially estimated, dropping to $514 billion, down from $680 billion last year and $1.1 trillion in 2012. And, in the very short run at least, further declines in deficits are expected through 2015, perhaps touching a low of

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Obama Executive Order to Force Americans to buy Government Bonds

Halfway through his State of the Union message Tuesday night, the president announced he was unilaterally going to fix another perceived problem through an executive order: mandating a requirement that all employers not already offering retirement plans start doing so. Said the president:

Let’s do more to help Americans save for retirement.

Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s.

That’s why, tomorrow, I will direct the Treasury to

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Controversial Harvard Professors predict high inflation and defaults for the US

The two Harvard professors who made themselves famous, and then infamous, are at it again, now predicting that America will soon be forced to

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The Bitcoin and Paris Hilton

This article first appeared in The McAlvany Intelligence Advisor on Wednesday, November 27th, 2013: 

 

In a dismissive article in The New York Times on Monday, the author quoted a Bitcoin skeptic who predicted: “In a matter of months you won’t be hearing about it. It will go the same way of Paris Hilton.” He failed to follow the old rule: keep your words sweet and tender because someday

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.

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