20121003_grant_0

Our favorite critic of the Federal Reserve, Jim Grant was back on CNBC to provide his perspective on Janet Yellen & the Fed preparing to hike interest rates. 
Grant unleashes another epic rant against the Fed, and ‘the virus of radical monetary policy‘. 
Full must see interview is below: 

Supermario Draghi

You may have heard the news, the European Central Bank have started up the printing press. They are soon to print upwards of €60 Billion a month. The crowds of economic pundits have collectively cheered. Ireland stands to enjoy significant near term benefits, but at what cost?
They speak of lower government borrowing costs for new debt, by lowering funding costs and thus the hurdle that projects must meet to become viable.  They believe our exchange rate will fall and our goods will be come cheaper abroad. US products and services will be flying off the shelves, etc. Well, it is absolute nonsense. 
Yes there will be short term benefits.  Any time you give a liquidity jolt you temporarily relieve pressure.  But the longer term risks are far far greater, now that the act of QE has been taken.  Essentially the technocrats have short circuited the capitalist system which continuously prices risk based on perceived repayment risks and cost of funds.  This is a road to ruin as returns become obscured by official and politically motivated credit flows.

cartel raid
Play

In this week’s Metals & Markets, The Doc & Eric Dubin break down the ECB’s massive €60 billion a month QE announcement Thursday, and discuss whats next for the global markets and gold & silver in particular:

  • Gold & silver’s strong January continues with silver $4 off its lows and gold nearly $200 off its December lows
  • Cartel setting metals up for a Classic Gold & Silver raid on next week’s options expiry and January FOMC statement!
  • Why Fed will soon begin backpedaling on rate hikes, may announce QE4 by Q4!
  • Cartel raid likely won’t last- Why gold is likely to rise by 20% at a minimum in 2015- and COULD DOUBLE!

The SD Weekly Metals & Markets With The Doc & Eric Dubin is below: 

Schiff

In this MUST WATCH Bloomberg interview, Peter Schiff warns that China is poised to follow in the footsteps of the Swiss National Bank, and ditch the dollar peg- resulting in the Yuan soaring and a collapse of the dollar. 
Schiff warns the fallout will be a 10 on the economic Richter scale, and will occur prior to the end of 2015, when the Fed announces QE4- “which will be bigger than QE1, 2, & 3 COMBINED
Schiff’s full MUST WATCH interview is below: 

bernanke

The current set of fiscal and monetary policies pursued by central banks and states are all based on lessons drawn from the Great Depression of the 1930s. The successful (if slow and uneven) “recovery” since the 2008-09 global financial meltdown is being touted as evidence that the key determinants of success drawn from the Great Depression are still valid: the Keynesian (or neo-Keynesian) policies of massive deficit spending by central states and extreme monetary easing policies by central banks.
Are the present-day conditions identical to those of the Great Depression?  If not, then how can anyone conclude that the lessons drawn from that era will be valid in an entirely different set of conditions?
We need only consider Japan’s remarkably unsuccessful 25-year pursuit of these policies to wonder if the outcomes of these sacrosanct monetary and fiscal policies are truly predictable, or whether the key determinants of macro-economic success and failure have yet to be identified.

Swiss-Gold-650x360

If you want to get a glimpse as to what gold will do one day soon just notice what happened to the Swiss Franc which rose 30% today, from 1.20 to the dollar to, at one point, .75 francs to the dollar and settled at .86 to the dollar( and the Euro/Swiss Franc at parity at 1.00.).
Even as the world perceives the Swiss Franc as a safe haven you can just imagine what gold would do and rise even greater than 30% in one day as our ancient metal of kings is the ultimate safe haven ( and ultimate money).

Janet Yellen begins her first FOMC Press Conference as Fed Chairwoman
  • *Update: During Press Conf, Yellen advises no rate hikes for “a couple” FOMC meetings, states “Almost all participants see 2015 rate hike
  • Fed to be “Patient” with interest rate hikes
  • After initial pop, gold & silver selling off on que as Yellen takes the podium…

If the past 6 post-FOMC Statement gold & silver smashes are any indication however, don’t be surprised to see the cartel attempt to smash silver towards a $14 handle and gold towards $1150 by Friday…

Full December FOMC Statement is below: 

gold crash

A few years ago Jim Rickards came out with his book “Currency Wars” which talked about countries engaging in a race to devalue their own currencies to try and pump up sagging domestic economies. As things have unfolded, the currency wars have indeed been intense.
We can kind of think of all these massive QE and stimulus programs like a stock car race to see who can devalue their currency the fastest.  Right now the US has pulled in for a pit stop, but Japan, China, and the EU are still fighting it out on the track. 

Here is the net result of central banks pursuing quantitative easing and zero-interest rates: a massive increase in global risks resulting from the carry trades the money expansion and cheap rates fueled.
The central banks’ “solution” has blown another global bubble of risk that now threatens to destabilize not just the carry trades but the economies and credit systems that have become intertwined with the carry trade.

In effect, the failure to address the structural problems revealed in the Global Financial Meltdown of 2008-2009 have been transferred to the larger foreign-exchange (FX) market, which is connected to virtually everything in the global economy.

Sovereign Man

Miguel de Cervantes’ novel Don Quixote is brilliantly entertaining.  But the modern-day monetary equivalent is not so much.
Central bankers today have an equally delusional view of the world.   Just three months ago, Mario Draghi (President of the European Central Bank) embarked on his own Quixotic folly by taking certain interest rates into NEGATIVE territory.
Draghi convinced himself that he was saving Europe from disaster. And like Don Quixote, everyone else has had to pay the price for his delusions.
On November 1st, the first European bank has passed along these negative interest rates to its retail customers.

QE

Mark October 29th on your calendars.  The Dow is at 16974, the S&P 500 is at 1982 and the NASDAQ is at 4549. 
From this day forward, we will be looking to see how the stock market performs without the monetary heroin that the Federal Reserve has been providing to it. 

QE taper

It is widely expected that the Federal Reserve is going to announce the end of quantitative easing this week. 
Will this represent a major turning point for the stock market? 
As you will see below, since 2008 stocks have risen dramatically throughout every stage of quantitative easing. 
But when the various phases of quantitative easing have ended, stocks have always responded by declining substantially. 
The only thing that caused stocks to eventually start rising again was a new round of quantitative easing. 
Most Americans don’t even understand what derivatives are, but when the next great financial crisis strikes we are going to be hearing a whole lot about them.
The big banks have transformed Wall Street into the biggest casino in the history of the planet, and there is no way that this is going to end well.
A great collapse is coming.  It is just a matter of time.

HarveyOrgan1

Gold & silver were whacked by the cartel in the access market today as Janet Yellen and the Fed announced QE will end at the end of the month. 
Expect gold and silver to be under the weather for the remainder of the week.
Let’s head immediately to see the major data points for today:

panic

Something nasty is going on behind the scenes in the financial system that is not yet apparent.
Treasury futures opened in the early evening and the 10-yr traded down to 2.25%
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Something has the market incredibly spooked and I find it interesting that the U.S. Treasury Secretary and the UK’s equivalent will be running a big bank fail simulation test next week.
The movement in 10-yr Treasury yields AND the blatant smashing of the gold price since mid-July is exactly what occurred in 2008 before Lehman collapsed.

Is another TBTF mega bank on the brink of insolvency??