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

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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The Feds are trying to regulate the Bitcoin – good luck

Senators attending this week’s hearing entitled “Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies” being held by the Senate Homeland Security and Governmental Affairs Committee already knew what they were going to hear: the Securities and Exchange Commission (SEC) was going to make the case that

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Former Treasury Secretary Geithner to head up private equity firm Warburg Pincus

Former Treasury Secretary Timothy Geithner announced his plans to join the Wall Street private equity firm Warburg Pincus in March 2014 where he will serve as president and managing director.

Geithner is the proto-typical insider with establishment ties that follow almost exactly

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There is no Debt Ceiling in place under the new Law

A closer look at what actually passed late Wednesday night reveals that the limit on the national debt wasn’t raised, it was eliminated altogether, at least until February 7th. What actually happened is that

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Treasury Refuses to Sell Its Gold Even in the Event of Default

It took more than six months for the Department of the Treasury to answer Utah Republican Senator Orrin Hatch’s questions about how the Treasury would respond to a government shutdown or the failure of the Congress to raise the debt limit. But its response is revealing:

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House Bill Offered to Study “Real World” Effects of Fed Policy

In anticipation of the upcoming 100th anniversary of the Federal Reserve on December 23rd, House member Kevin Brady (R-Texas) and Chairman of the House’s Joint Economic Committee, decided back in March to offer a bill to create a commission to

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Thanks to America’s Fracking Boom and Skilled Labor Force, Re-shoring of Jobs is Accelerating

More than half of 200 US companies with sales greater than $1 billion are moving jobs back to the US, or are planning to, within the next two years. The announcement by Boston Consulting Group (BCG) on Tuesday confirms a subterranean paradigm shift that’s been underway for at least

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Summers is out, Yellen is in, the Fed rolls on

Just when it appeared that Larry Summers had the nomination for the next Fed chair all wrapped up, Summers called the White House on Sunday and told his good friend, President Obama, that he was withdrawing his name from consideration. He then sent a formal withdrawal letter to the president:

I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation’s ongoing economic recovery.

The president dutifully responded with the appropriate accolades:

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Friday’s Jobs Report: There’s Good News, and then…

On the surface Friday’s jobs report from the Bureau of Labor Statistics (BLS) wasn’t so bad: 169,000 jobs were created in August and the unemployment rate dropped slightly, once again, to 7.3%. This was slightly below expectations (180,000) but about in line with the average monthly gains over the past year.

But – and it’s a big but – not everyone is participating, and some of those numbers

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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.