SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  For example, here is how to disable FireFox ad content blocking while on Silicon Investor.

   Strategies & Market TrendsThe coming US dollar crisis


Previous 10 Next 10 
From: ggersh3/27/2019 7:40:42 PM
1 Recommendation   of 62644
 
For any who might care


Share RecommendKeepReplyMark as Last Read


From: bruiser983/28/2019 1:56:25 PM
1 Recommendation   of 62644
 
The Problem With "Modern Monetary Theory" Is That It's True

forbes.com

Share RecommendKeepReplyMark as Last Read


From: ggersh4/2/2019 8:26:12 AM
   of 62644
 
That these 3 clowns are in control is all we
need to know as to how fucked we are

Jesses sidebar

thegreatrecession.info

The Two Stooges of Finance: Larry and Moore
Laughable Larry Kudlow, as high priest of the Laffer Curve, has long been servant of “King Dollar,” as Larry has often reverently referred to US currency. The Laffer Curve is the central creed of trickle-down economics. It’s a bell-curve that demonstrates how lowering tax rates actually increases tax revenue to a certain point by stimulating the economy and then, beyond that point, lowering taxes lowers tax revenue. (If the latter were not true, the highest tax revenue would come in at a tax rate of zero, which is ludicrous. So, logically, you know at some point tax-rate reductions start to result in diminishing returns for revenue.)

Where there is room for disagreement is in determining where the high point for the revenue curve lies on that continuum between a 100% income tax and 0%. Larry places it a lot closer to a 0% tax rate than I would or than Larry’s former boss, David Stockman (head of Reagan’s budgeting office) places it. That’s because Larry lusts over tax rates that fill his own pockets, not rates that optimize the balance between government revenue and economic stimulus. (Just part of the voodoo in Voodoo Economics.)

Larry and his sidekick Stephen Moore are now on a journey to cajole the Fed into doing everything Larry has ever said the Fed should not do — dethrone King Dollar. Laffable Larry’s change of heart has come about because it is now unavoidable fact that the tax plan he concocted with Stephen Moore, based on Larry’s beliefs about the Laffer Curve, is not only failing to pay for its own tax breaks as Larry & Moore assured the world it would, but also not doing a whole heck of a lot to stimulate the economy any more.

Larry & Mo’s tax plan boosted the stock market … for awhile … but GDP got only one boost in the second quarter of last year and has been falling ever since.



This quarter, GDP growth is expected to come in well below where it was when Larry & Mo’s plan became law (diving to somewhere around 1%). And that is why Team Trump — the Trickle-down Trio of Larry, Mo, and Surly (the orange one) — is working the Fed to get some monetary salvation for their damned tax plan.

(I’m using the word literally because it is a tax plan from hell that is breaking the government financially, failing to stimulate the economy anywhere near as much as promised, and that ought to be damned because it is making the 1% wealthier at a faster clip than they have ever known while Larry is running at an even faster fast clip to the Federal Reserve for financial salvation in the form of more nearly free money.)

The White House pressure on the Federal Reserve heated up again on Friday after President Trump’s adviser Larry Kudlow said he wanted the U.S. central bank to “immediately” cut its benchmark interest rate by 50 basis points.

MarketWatch“Immediately” doesn’t sound like there is any great need, and Kudlow has often assured us the economy is going to come in like gangbusters.

The Fed, on the other hand, is only interested in holding interest rates right where they are now for the indefinite future, though numerous prognosticators, including those far more bullish than myself, are betting the Fed cannot. All the while, Chairman Powell insists he is paying no attention to the White House.

Krazy Kudlow’s prayerful petition to the Fed
The Eccles Building, Temple of the Federal Reserve
King Dollar is the divine ruler in whom Larry Trusts. That is why the dollar has “In God We Trust” inscribed upon it. It is Larry’s god. It is many people’s god, but Larry is now beseeching the Temple of the Dollar, otherwise known as the Eccles Building (or the Fed’s HQ), to diminish the value of his god by dropping interest rates by the largest change in one drop the Fed has made in a long, long time.

Larry is begging. Never mind that only a few months ago Larry was pontificating about the superior health of the American economy. If you believed him then (in November) and now (when he blames economic decline on the Fed going to far with interest increases), then you are forced to believe a mere quarter-percent raise in the Fed’s target rate (in December) snuffed out a vibrant and potent economic expansion!

Right now Larry claims the economy needs the devotion of the Fed to greater stimulus to the tune of dropping its interest target half a percent. (Consider that, for the past seven years, the Fed hasn’t moved more than a quarter of a percent at a time.)

Axios reports that Kudlow “would love to see” such a downward move, adding that the central bank shouldn’t have ever set overnight interest rates past 2%…. The problem for Kudlow in calling for this immediate rate-cut is this – the last three recessions all saw a Fed rate-cut three months before they started.

Zero HedgeSo, the economy that Larry has repeatedly said is doing admirably well under his plan cannot survive a Fed benchmark interest rate above a “highly accommodative” (as the Fed likes to call its relaxed monetary policy) 2%. What is Larry so worried about? Normally, the Fed has never dropped its prime lending rate down to 2% unless the nation is already deep in a recession.

You can see in the following Fed graph that a rate of 2% never happens outside of efforts to recover from recessionary times. In fact, a rate that low rarely happens at all. Moreover, as Zero Hedge noted above, the first drop in interest from any level after an extended period of rate increases almost always happens shortly before a recession. Never has a reversal from a protracted period of raising the Fed Funds rate to dropping that rate happened when the Fed’s rate is already this low:

Larry is imploring the Fed to do something it has never done before! How desperate is that?

Why the desperation?

Sven Henrich of Northman Trader calls out the obvious regarding Larry’s laughable claim that the economy is great but needs major stimulus:

My take here: The budget is blowing up in their face and they know it. The tax cuts did not pay for themselves and deficits are ballooning, federal spending is the highest in 10 years as tax receipts have been slowing. It’s a receipe for budget disaster. Don’t give me this two faced nonsense: “I don’t think the underlying economy is slowing” when everyone with a brain and basic understanding of data knows it is. It’s cheerleading and playing the confidence game, while at the same time demanding a 50bp rate cut by the Fed, an utterly ridiculous suggestion especially in light of the earlier statement.

Northman TraderAs Sven goes on to argue, you have to be really “worried about a lot of things” in order to utter such a request out of one side of your mouth while you are praising the strength of the economy under your tax cuts out of the other side. You have to know that is going to look stupid and irreconcilable, so you have to be desperate to hope that somehow you can pull it off.

Trump wants Moore, Moore wants moreThe Fed already acquiesced to President Donald Trump’s efforts to humiliate Powell into stopping the Fed’s plan of raising interest rates and downsizing its balance sheet (methods of tightening the monetary system). The Fed learned a harsh lesson that the economy (fake as the recovery has been) cannot survive any more tightening so it abruptly curtailed its plans to continue down that path just as The Donald required.

Desisting from damaging the effete economy, however, was not enough capitulation to the president’s requests. So, now the president is appointing a henchman to infiltrate the Fed and cajole it internally into re-relaxing monetary policy. One might well say that, according to Larry, the nearly flatlining economy already needs a major shot of adrenaline to lift it back into the land of the living.

Stockman warned, as did I, that there was never a snowflake’s chance in a modern university (I mean hell) that the Trump Tax Cuts would ever pay for themselves or that the economy would ever survive a move back to normal monetary policy by the Fed. Yet, the government is even ramping up its deficit spending. It has spent more in the first five months of Fiscal 2019 than it did in any five-month period since 2009 during the Great Recession. (At the same time, federal tax revenue has hit a four-year low.)

Remember that was a time the Washington Post billed as “what may be the biggest government bailout in American history,” after the biggest economic downturn in modern history. That same fiscal year 2009 included the Obama stimulus package, which Obama called “the most sweeping financial legislation enacted in the nation’s history.” For further perspective consider that, at the time, the government believed the net longterm cost of its recovery programs would come to “increase federal budget deficits by … $787 billion over the 2009-2019 period.”

Hah! The federal government is now running at almost that deficit level every year now just to maintain normal annual operations. Its budget is a sea of red ink as far as the eye can see. Yet, the Trump government believes it needs to maintain that spending in order to get re-elected because … well, imagine how much worse the economy would be doing if all that fiscal stimulus ground to halt, stalling the great military-industrial complex and all the jobs created by creating all those weapons of mass uncreation.

So, it is no wonder that the Trickle-down Triumvirate is demanding more stimulus. More, more, Moore! Since Powell claims he is paying no attention to the White House, some infiltration was necessary that would put the Trump tax planners directly at the Fed’s cerebral cortex. Thus, Trump has anointed Stephen Moore to fill one of the empty posts on the Federal Reserve’s Board of Governors. (In the three-headed team’s defense, it is not as if they can make the Fed hydra any more of a monstrosity than it already is.)

To reassure us all that the White House is not staging a Fed coup, Larry said of Powell,

He’s our chairman. We’re not going to displace him

MarketWatchOur chairman?” As if he’s wholly owned by the White House?

“Not going to displace him?” As if they believe they even can?

Moore has assured us all that his monetary policy is a perfect match to President Trump’s monetary policy. That assurance should not leave us thinking that Trump is trying to implement his own monetary policy for his own political reasons via an inside operator. To assuage our concerns, “Growth Hawk” Moore, as he calls himself, says repeatedly in the embedded video below that he believes in his own independence (though he says nothing about Fed independence, which must, therefore, be less important).

Am I distrustful of human sincerity or contemptuous or distrustful to think Moore is being embedded in the Fed to steer it by his own independent actions toward more economic stimulus throughout this laborious presidential election cycle? What incumbent president would want to do that? According to Trump’s endorsement, Moore is joining the Fed because he is “a very respected economist.” (Not by me. Moore is an economist from the trickle-down Heritage Foundation, and I find him as dizzy as Lunatic Larry.)

Federal Reserve nominee Stephen Moore called the Fed’s December interest-rate hike “a very substantial mistake” while adding that he looks forward to working with Chairman Jerome Powell to help ensure the U.S. economy continues to expand.

BloombergSure he does because the plan he and Larry concocted certainly isn’t doing the trick! So, they need to get into the Fed to “help” make it happen there.

“I really believe we can have 3 to 4 percent growth for next five to six years.”

That’s what he said last time, and the Fed’s plans to keep raising rates and to start reducing its balance sheet were already widely known.

I’m glad, however, to hear all the president’s men declare the Fed’s monetary tightening was a “very substantial mistake.” I’ve said for years that the Fed will come to realize its tightening is a substantial mistake but will realize it too late. (Actually, the mistake was starting down the path to recovery that the Fed chose in the first place, but my point has been there is no exit that doesn’t crash this fake recovery, which is why I call it fake. It is dependent forever upon huge fiscal and monetary stimulus that is not sustainable, and THAT is what we are now seeing.)

With the president scurrying to insert his own tax planner into the Fed and Larry crying in public for the Fed to cut its interest rate target half a percentage point (a 20% reduction of the 2.5% rate), I’d say it sounds like they all believe the Fed learned too late and went too far.

Moore said that Powell and others members of the Fed board “should be thrown out for economic malpractice’’ after raising rates….



The Fed’s attempt to return to normal, not only killed its recovery (which was totally predictable) and cropped the stock market by 20% last fall, but it zapped all of the mojo out of the great Trump Tax Cuts. So, this is damage control by Team Trump — “substantial mistake” recovery time.

“I’m worried more on the deflation side right now than the inflation side,’’ [Moore] said

But, hold it, deflation increases the value of King Dollar, and Larry has always said he loves a strong dollar. So, why are they trying to create inflation with interest-rate reductions when that reduces the value of King Dollar?

These luminaries of irreconcilable interests and beliefs are our brilliant planners!

Share RecommendKeepReplyMark as Last Read


From: bruiser984/24/2019 2:58:41 PM
2 Recommendations   of 62644
 
The FED's Dirtiest Bailout



wallstreetonparade.com

Share RecommendKeepReplyMark as Last ReadRead Replies (2)


To: bruiser98 who wrote (62545)4/24/2019 4:47:03 PM
From: ggersh
   of 62644
 
Investment Style: WTF bot them BSC puts?

Share RecommendKeepReplyMark as Last Read


From: ggersh4/28/2019 7:35:55 PM
1 Recommendation   of 62644
 
He got it right at first HFT would cannibalize trading

Jesse sidebar

jessescrossroadscafe.blogspot.com

Former U.S. CFTC Commissioner Bart Chilton Dies at Age 58By
Hailey Waller
and
Nick Baker

April 28, 2019, 12:16 PM CDT Updated on April 28, 2019, 3:41 PM CDT


He critiqued some high-speed trading practices while at CFTC

Chilton brought individual style to conservative Washington




Bart Chilton Photographer: Brendan Hoffman/Bloomberg

LISTEN TO ARTICLE

3:36

SHARE THIS ARTICLE


Share



Tweet



Post



Email


In this article


1241493D
MODERN MARKETS INITIATIVE
Private Company


CME
CME GROUP INC
179.01
USD
+1.00+0.56%


Bart Chilton, the former U.S. Commodity Futures Trading Commission official who called for tighter regulation of swaps and derivatives, and was known for his long blond hair that stood out in buttoned-down Washington, has died.

The TV channel RT America, for which Chilton hosted the show “Boom Bust,” announced the death late Saturday, citing an unspecified “sudden illness.” He was 58.

CFTC Chairman Chris Giancarlo tweeted that Chilton’s death was “sad news for all of us.” Terry Duffy, chief executive officer of CME Group Inc., one of the major futures exchanges regulated by the CFTC, said the former commissioner was “an enthusiastic advocate for the futures industry where he made many significant contributions during his tenure. Beyond that, he was a friend and colleague who will be missed greatly.”

Chilton, whose signature look included lengthy hair and, often, cowboy boots, was a critic of high-frequency trading, calling the firms “ cheetahs” for their speed in markets. He cited some of the same risks Michael Lewis laid out in his book “Flash Boys” -- namely that high-frequency traders take advantage of other investors.

After leaving the CFTC he ended up advising high-frequency traders while working for the Modern Markets Initiative, a lobbying group founded in 2013 by four HFT firms.

Indiana to WashingtonChilton, born in Delaware and raised in Indiana, studied political science at Purdue University before working in various government roles starting with the Clinton administration, and on Capitol Hill.

He served as a senior adviser to Tom Daschle, the Democratic leader in the Senate; deputy chief of staff to U.S. Agriculture Secretary Dan Glickman; and as chief of staff at the National Farmers Union, which represents family farmers, according to his CFTC biography.

“I am heartbroken at the loss of one my closest friends, confidants, and colleagues at USDA,” Glickman said in a statement. Chilton, he said, was a “rural America advocate, golfing buddy, and the best conversationalist I have ever met. Always upbeat and always looking to solutions to challenges and problems.”

Bush NomineeChilton was first nominated by President George W. Bush to one of the Democratic positions on the CFTC, and renominated by President Barack Obama. He served at the regulator from 2007 to 2014.

He chaired the commission’s Energy and Environmental Advisory and the Global Markets Advisory panels. Chilton was known to use song lyrics and other popular culture references to explain the impact of derivatives and commodity trading.

After leaving the CFTC he worked as a senior adviser at the law firm DLA Piper, counseling on regulatory and public policy matters and ultimately praising the “benefits of high-frequency trading” and advocating for the “right type of constructive regulation.”

Chilton most recently wrote for Forbes magazine about cryptocurrencies, regulation and other topics. True to form, a January article about crypto used an extended analogy to the 1960s Clint Eastwood movie “The Good, the Bad and the Ugly.” He also hosted the financial and business show on RT America, which is part of the RT network funded by the Russian government.

“We remember his intelligence, his compassion, his joyful laughter. With his passing, nothing could fill the void in our newsroom, nor the space Bart held in our hearts,” Mikhail Solodovnikov, RT America’s news director, wrote on the network’s website.

Kirsten Wegner, chief executive officer of the Modern Markets Initiative, said of Chilton, “He was a force for good and for fairness -- and certainly one of a kind. Our thoughts are with his family on this sad day.”

Share RecommendKeepReplyMark as Last Read


From: ggersh5/11/2019 10:06:41 AM
   of 62644
 
kitco.com

Gold Price Not Going Back To $1,900, It’s Going To $3,000 Or Higher - Expert

Share RecommendKeepReplyMark as Last Read


To: TobagoJack who wrote (57936)5/29/2019 11:17:28 AM
From: elmatador
2 Recommendations   of 62644
 
Between a Rock and a Hard Place
Can Hong Kong Retain its USD Peg?
seekingalpha.com

Share RecommendKeepReplyMark as Last Read


From: marcher6/1/2019 11:28:33 AM
2 Recommendations   of 62644
 
neoliberals create wealth inequity...and early death.
via jesse:

--... regarded as a poster child for the promise of free-market individualism, America today has
higher inequality and less upward social mobility than most other developed countries.

...After rising for a century, average life expectancy in the U.S. is now declining. And for those in

the bottom 90% of the income distribution, real (inflation-adjusted) wages have stagnated: the
income of a typical male worker today is around where it was 40 years ago.

...Meanwhile, many European countries have sought to emulate America, and those that
succeeded... are now suffering similar political and social consequences... When the 2008
financial crisis and subsequent euro crisis erupted, the European countries with the strongest
welfare states, particularly the Scandinavian countries, fared the best.

...figure out what went wrong and chart a new course forward, by embracing progressive
capitalism, which, while acknowledging the virtues of the market, also recognizes its
limitations and ensures that the economy works for the benefit of everyone.

...Progressive capitalism means forging a new social contract between voters and elected
officials, workers and corporations, rich and poor... markets must serve society, rather than
vice versa....The true and sustainable wealth of nations comes not from exploiting countries,
natural resources, and people, but from human ingenuity and cooperation, often facilitated
by governments and civil-society institutions.

... Individuals and corporations can become rich by relying on market power, price
discrimination, and other forms of exploitation. But that does not mean they have made any
contribution to the wealth of society.. On the contrary, such behavior often leaves everyone
else worse off overall. Economists refer to these wealth snatchers, who seek to grab a larger
share of the economic pie than they create, as rent-seekers... With the help of new
technologies, they can — and do — engage in mass discrimination, such that prices are set
not by the market (finding the single price that equates demand and supply), but by
algorithmic determinations of the maximum each customer is willing to pay.

...The rise of China and technological change have been felt everywhere, but the U.S.
has significantly higher inequality and less social mobility than many other countries, such as
Norway....Some countries facing these same global forces have adopted policies that have
led to dynamic economies in which ordinary citizens have prospered.

... regulation often improves efficiency. Anyone living in a city knows that without stoplights —
a simple “regulation” governing the flow of cars through an intersection — we would live in
perpetual gridlock.... With the first wave of deregulation came the savings and loan crisis,
followed by more deregulation and the dot-com bubble in the 1990s, and then the global

financial crisis in 2008. At that point, countries around the world tried to rewrite the rules to

prevent a recurrence.

...banking... is focused on taking advantage of others...

...the government has proved to be more efficient than the private sector. Social Security’s
administrative costs are a fraction of those for private retirement plans, and Social Security
covers a broader array of risks, such as those associated with inflation.But they are not
sufficient. What we need is a new twenty-first-century social contract to ensure that all
citizens are guaranteed access to health care, education, security in retirement, affordable
housing, and a decent job with decent pay. Many countries have already shown that
discrete elements of this social contract are achievable.

...From a progressive-capitalist perspective, the key to delivering a new social contract is
through a public option for services that are essential to well being. Public options expand
consumer choice and spur competition. Competition, in turn, will lead to lower prices and
more innovation. Beyond health care, the U.S. also needs a public option for retirement
accounts, mortgages, and student loans. The government could start offering a conventional
20% down 30-year mortgage to anyone who has paid taxes for five years, at a rate just a little
above the rate at which it borrows money.

...the economic reforms we need will face serious political challenges because of the
influence of vested interests. That’s the problem with severe economic inequality: it
inevitably gives rise to and reinforces political and social inequality.

... an economy built around a core of amoral (if not immoral) materialism and profit-seeking
has created a generation that embraces those values. It doesn’t have to be this way. We can
have a more compassionate and caring economy, built around cooperatives and other
alternatives to for-profit enterprise. We can design better systems of corporate governance,
where more than just short-run profit matters. We can and should expect better behavior from
our profit-maximizing firms — and proper regulation will take away some of the temptations to
misbehave.

We have conducted a 40-year experiment with neoliberalism. The evidence is in, and by any
measure, it has failed. And by the most important measure — the well being of ordinary
citizens — it has failed miserably. --

marketwatch.com

Share RecommendKeepReplyMark as Last Read


To: bruiser98 who wrote (62545)6/3/2019 4:18:54 AM
From: elmatador
1 Recommendation   of 62644
 
Negative Yield Debt Now 20 Percent of Entire Market
central banks buy bonds to drive economic growth and that they continue doing so even in the event of a negative yield.

Question: Would that be the reason, for example this seek for economic growth, results on Elon Musk raising money for all his proejcts?
By: Chris Gaetano

Published Date: Mar 26, 2019

One fifth of all investment-grade debt in the world is now at a below-zero yield, meaning those who buy it are guaranteed to lose money on it, according to Bloomberg. This encompasses everything, from Treasury notes to corporate issues to emerging market bonds.

Bloomberg said that recent moves by the Federal Reserve, as well as weak European data, have caused many investors to shift from looking for growth opportunities to just safe places where they can store money, which sparked demand for save-haven assets.

This development in turn caused the U.S. yield curve to invert last week, which has itself caused market fears in other areas. The end result has been $10 trillion worth of negative-yield bonds, the highest levels since 2017.
One might wonder why, if such bonds are guaranteed to lose money, people even buy them. There are a couple of reasons why there was, and still is, to some degree, demand for such bonds.

One is that central banks buy bonds to drive economic growth and that they continue doing so even in the event of a negative yield.

Similarly, certain large institutional investors will also keep buying them because they're bound by their charters to do so even if the yield slips into the negative territory.

On a small scale, individual investors might choose to buy them on the belief that the currency they're denominated in will rise in value to the point where the increased worth cancels out the negative yield, at which point it can still generate profit.

Along these same lines, they may also be bought on the belief that the currency might fall in value, in which case the bond, while a guaranteed money-loser, will still retain more value than actual cash.

Share RecommendKeepReplyMark as Last Read
Previous 10 Next 10