Free Republic

Ambrose Evans-Pritchard, The Telegraph (UK) January 1, 2015America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015. Tightening by the US Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity. Yields on 2-year US Treasuries have surged from 0.31pc to 0.74pc since October, and this is the driver of currency markets. Since the New Year ritual of predictions is a time to throw darts, here we go: the dollar will...

In a normal economic times falling energy costs would be considered unadulterated good news. The facts are simple. No one buys a barrel of oil to display above the mantle. No one derives happiness from a lump of coal. Energy is simply a means to do or get the things that we want. We use it to stay warm, to move from Point A to Point B, to transport our goods, to cook our food, and to power our homes, factories, theaters, offices, and stadiums. If we could do all these things without energy, we would happily never drill a...

The most powerful woman in the world, without an army, just propelled the Dow Jones to a two-day 700-point spike by saying “patience.”  Janet Yellen said the Federal Reserve, the quasi-agency that neither is “federal” nor has any “reserves," can be “patient” in their rate hikes in 2015. She was quick, and clumsy by other accounts, to confuse the rate hike issue, with language suggesting that it might not happen at all.  In the vein of the famous watering hole sign, “free beer tomorrow,” Yellen essentially gave the message that rates would go up in 2015, but they might...

U.S. stocks surged on Thursday, extending Wall Street's best day of the year, after the Federal Reserve said it would be patient in increasing interest rates. "The reality is markets were hit with we're not sure what's happening and why, as oil has been acting as something akin to a global interest rate. The good news is the Fed is aware of what is going on, and they want to be friendly, so people are hopefully in better cheer," said Jack Caffrey, equity portfolio manager at J.P. Morgan.

Nick at Sharelynx Gold, also known as Gold Charts "R" Us emailed an interesting chart last week showing gold drain at the New York Fed. Earmarked gold dropped 42 tonnes for the month of October as foreign countries repatriate their gold home. Here's a link to Earmarked Gold with a second chart that shows all Fed holdings. Gold Charts "R" Us has 1,000's of pages and over 10,000 charts on a subscription basis, but you can check out the site for free until December 14. Click on the first link at the top for a look. Where's the Gold Going?...

From the dawn of history, elites have always attempted to enslave humanity.  Yes, there have certainly been times when those in power have slaughtered vast numbers of people, but normally those in power find it much more beneficial to profit from the labor of those that they are able to subjugate.  If you are forced to build a pyramid, or pay a third of your crops in tribute, or hand over nearly half of your paycheck in taxes, that enriches those in power at your expense.  You become a “human resource” that is being exploited to serve the interests of...

John MauldinOctober 4, 2014“The significant problems that we have created cannot be solved at the level of thinking we were at when we created them.” – Albert Einstein “Generals are notorious for their tendency to ‘fight the last war’ – by using the strategies and tactics of the past to achieve victory in the present. Indeed, we all do this to some extent. Life's lessons are hard won, and we like to apply them – even when they don't apply. Sadly enough, fighting the last war is often a losing proposition. Conditions change. Objectives change. Strategies change. And you must...

Fed decides to keep near-zero interest rate for 'considerable time' after ending QE 2014/10/30 04:26 WASHINGTON, Oct. 29 (Yonhap) -- The U.S. Federal Reserve announced Wednesday it will keep its near-zero interest rate policy "for a considerable time" even as it puts an end to its bond-purchasing program aimed at stimulating the economy through low rates. The announcement corroborates views that the Fed is unlikely to raise the key rate before the middle of next year. A possible U.S. rate hike after the end of the bond-buying program, known as "quantitative easing," has been feared to lead to a capital...

By Michael Snyder October 26th, 2014 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. So what will happen this time? That is a very good question....

Recently Janet Yellen expressed both concern and puzzlement over the rising wealth inequality in America. I found her speech to be disingenuous and disturbing. Why? Because it is the Fed’s very own policies that are driving the expansion of the wealth gap. Read Yellen’s speech. Either Yellen thinks we cannot be trusted with the truth (worrisome), or the Fed is clueless as to how its own policies operate (scarier). SNIP In a speech at the Federal Reserve Bank of Boston, Yellen said steady growth in inequality over the past several decades represents the most sustained rise since the 19th century....

WASHINGTON (AP) — Just how healthy is the U.S. job market? Despite steady hiring and falling unemployment, the question has provoked sharp debate and considerable uncertainty on the eve of the September jobs report. Will millions without jobs who aren't looking for one eventually start looking? Why aren't companies filling more of their openings? Why can many people find only part-time work? Much of the uncertainty flows from a big question: Does today's 6.1 percent unemployment rate, far below the 10 percent it hit in 2009, mean the job market is near full health? Or does the unemployment rate overstate...

For years, many people have suspected that the New York Fed is more or less controlled by the "too big to fail" banks. Well, now we have smoking gun evidence that this is indeed the case. A very brave lawyer named Carmen Segarra made a series of audio recordings while she was working for the New York Fed. The 46 hours of meetings and conversations that she recorded are being called "the Ray Rice video for the financial sector" because of the explosive content that they contain. What these recordings reveal are regulators that are deeply afraid to do anything...

Even after the Dow and the S&P 500 closed at new all-time highs, closely followed contrarian Marc Faber keeps sounding the alarm. "We have a bubble in everything, everywhere," the publisher of The Gloom, Boom & Doom Report told CNBC's "Squawk Box" on Friday. Faber has long argued that the Federal Reserve's massive asset purchasing programs and near-zero interest rates have inflated stock prices. The catalyst for a market decline, as he sees it, could be a "raise in interest rates, not engineered by the Fed," referring an increase in bond yields.

If, when in February Victoria Nuland infamously launched a (not so) covert campaign to replace the ruling Ukraine president oblivious to the human casualties, resulting in a civil war in east Ukraine, NATO encroachment along the borders of Russia, and a near-terminal escalation in hostilities between Ukraine, Russian, and various regional NATO members, the US intention was to provoke the Kremlin so hard that the nation with the world's largest reserves of mineral and energy resources would jettison the US Dollar and in the process begin the unraveling of the USD reserve currency status (as much as Jared Bernstein desires...

A toxic brew is bubbling in the housing market that will lead to a mortgage crisis by winter, banking analyst Dick Bove said. Now that the Federal Reserve is nearly done with its monthly bond-buying program, which includes mortgage-backed securities, and Washington continues on its quest to unwind Fannie Mae and Freddie Mac, conditions could get dicey in the home loan market. Bove envisions a scenario in which long-term financing, like the ubiquitous 30-year mortgage, that has come with fixed interest rates is endangered as mortgage buyers dry up. As part of its quantitative easing program, the Fed had been...

The FDIC and the Office of the Comptroller of the Currency are set to release new liquidity rules today. The rules will redefine the types of liquid assets giant Wall Street banks must hold to meet the new Basel III Liquidity Coverage Rule. The Federal regulators are expected to emphasize banks holding short-term U.S. Treasury securities in order to meet a bank run or credit crunch lasting 30 days. The state treasurers’ panic over the rule is justified. According to press reports, the Federal regulators may exclude municipal bonds issued by states, counties, cities and school districts from the category...

If the Obama administration used federal prosecutors to exact vengeance on Standard and Poor’s for downgrading the rating of federal debt, that would be a serious crime, an impeachable offense if it could be traced to the Attorney General or the President (not that anyone other than Democrats is interested in impeachment).  It would be evidence of thug government, where the rule of law has been replaced with the law of the jungle, using prosecutorial power as an instrument of political intimidation, as in Travis County, Texas. That’s why a recent court filing by Standard and Poor’s may lead to...

There's a lot of economic anxiety in America today, so it's no surprise that the Federal Reserve has discovered substantial pessimism about Americans' own personal financial situation. The Feds most recent survey shows that 1/3 of Americans believe themselves to be worse off 5 years after the recession ended.Wall Street Journal: More American households say they are worse off  rather than better five years after the recession, a new Federal Reserve survey found. The report, released for the first time on Thursday, found 34% of households said they were “somewhat worse” or “much worse” financially in 2013 compared to 2008....

US banks are steeling themselves for the possibility of losing as much as $1tn in deposits as the Federal Reserve reverses its emergency economic policies and raises interest rates. JPMorgan Chase, the biggest US bank by deposits, has estimated that money funds may withdraw $100bn in deposits in the second half of next year as the Fed uses a new tool to help wind down its asset purchase programme and normalise rates. Other banks including Citigroup, Bank of New York Mellon and PNC Financial Services have also said they are trying to gauge the potential effect of the Fed's exit...

The Federal Reserve created a monster $4.3 trillion balance sheet, up by $3 trillion from 2008, through quantitative easing. QE ends this fall. Now the Fed is trying to figure out what to do with this monster. Their thinking seems to be that they can maintain control over it by paying banks more money to not make loans. So let's get this right. Households and businesses are attempting to borrow money from banks. But the Federal Reserve may eventually pay banks $100 billion per year not to lend to Main Street. Politicians will have a field day with that. The...