Innocence Is No Excuse

If you now have your money wallowing in some active or inactive manged retirement fund, you are an innocent bystander.

Innocence is attractive as far as it goes, but these are anything but innocent times. See current presidential election campaign. With a rare exception still possible, higher interest rates are on the way. What they'll do to the market, if they happen, really nobody knows for sure.

A short-term selloff and then a big celebratory rally or who knows what. What we do know is the debt level continues to spiral upwards with no relief in sight whoever wins this carnival called an election in what is now proving to be anything but a democracy.

It's no longer what the Fed should've done. It's what they will do. And that's continually make mistakes. If the Fed were any more politicized it would be a huge Hillary campaign button. Now having said that, some wag out there will concluded we must be a Trump person. We didn't say that.
But what you want to be is a survivor.

So here an article for you. Read it and decide for yourselves.
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But, but, but… the Fed’s monetary policies for the past eight years have created the biggest credit bubble in US history, including the biggest junk bond bubble ever, a stock market bubble, housing bubbles in numerous cities around the country that exceed by far the peaks of the prior housing bubbles that imploded so spectacularly, the most gigantic commercial real estate bubble, now according to the Green Street Commercial Property Price Index, 26.5% above its totally crazy bubble peak of August 2007….

wolfstreet.com/2016/10/07/fed-fischer-fed-waiting-for-godot-fourth-mandate

Some of Fischer’s own colleagues have been loudly fretting about asset bubbles – including Boston Fed governor Eric Rosengren, a voting dove of the Federal Open Markets Committee, where monetary policy is decided, who’d zeroed in on the commercial real estate price bubble:

BOJ Will Ease To Hit Goal If

Bank of Japan Governor Haruhiko Kuroda addressed the G20 meeting yesterday, emphasizing the four points below. Some might finds his assertions a bit bewildering, especially his not detecting any strong concerns among fellow G20 members about easy monetary policy.

* No strong concerns over cost of easy policy - BOJ Kuroda

* BOJ will ease if needed to hit price goal - Kuroda

* Japan FinMin Aso warns against excessive pessimism

* Japan firms may shift out of UK due to Brexit - Aso

Here's full article from kitco.com

By Leika Kihara

WASHINGTON, Oct 7 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said it was hard to achieve balanced economic growth with monetary policy alone, adding that G20 nations shared the view fiscal and structural policies must also play a key role in boosting growth.

But he shrugged off the view that global policymakers were becoming increasingly concerned about the rising cost of prolonged ultra-loose monetary policies, signalling that central banks still had the ammunition left to stimulate the economy.

"I don't think there was a strong feeling shared among (G20 nations) that monetary policy was reaching its limits or that an over-reliance on monetary policy was causing big problems," he told a news conference on Friday.

Kuroda said he told a finance leaders' meeting of Group of 20 major economies that the BOJ was ready to expand monetary stimulus if necessary to achieve its 2 percent inflation target.

Japanese Finance Minister Taro Aso also warned policymakers against being overly pessimistic about the global economy, even though various risks loomed on the outlook.

"What's important is to identify the root of the problem and take appropriate measures," Aso told the same news conference, pointing to concerns voiced by some policymakers on sluggish global trade.

"If the slowdown in trade is due to broadening protectionist sentiment, that's a cause for concern so policymakers should act to eliminate barriers against free trade," he added.

Aso said some big Japanese companies may decide to shift their European countries out from London to other cities as Britain proceeds toward exiting the European Union.

That may force smaller Japanese firms operating in Britain to follow suit, he said, adding that policymakers in Tokyo may urge domestic banks to ensure they help such firms in funding any such move.

"It's uncertain how (Brexit) will actually unfold but we can say some Japanese firms may shift their headquarters out from London," Aso said.

Traders Made Me Do It

 
"Heav'n has no Rage, like Love to Hatred turn'd, Nor Hell a Fury, like a Woman scorn'd."
                                                                                                          William Congreve

It is interesting that the Financial Times--no fan of Brexit--would twist the news suggesting that Prime Minister May's tough immigration talk triggered the nasty threats from people like Angela Merkel and others.

The FT, like much of MSM, suffers from a selective, convenient case of amnesia. The threats and nasty talk began way before the votes were counted. In what was a disgraceful attempt to derail Brexit, the President of the United States traveled to the UK and actually threatened "a long wait" to cut any trade deals if Brexit passed.

As an American we can only hope many UK citizens cultivate a long memory not just with the U.S., but those nasty, suffocating EU bullies in Brussels. Anyone who thinks the pound's crash was not orchestrated hasn't been paying attention to the U.S. presidential election.  These folks are the masters of orchestration, making many of those EU fops--the name Juncker should bubble to mind--look like
elementary school kids.

The pound recovered nearly all of it losses faster than even the FT can write the story. Merkel has her own troubles. She has been bamboozling the German citizenry for a long time. Did anyone in the UK think these arrogant, small minded EU bureaucrats were going to make it easy. The louder their screaming and threatening gets proves just how correct and necessary Brexit is.

Of course the FT and others rolled out the excuse that the pound's sudden swan song followed  a week of the earlier steady damage. The UK stock market and the pound have been separating faster from each other than Brad and Angeline. These scaremongers are long on fear and short on patience. What did they possibly think, there would not be any rough spots along the way?

One FT columnist played the scare card about two short sharp shocks to the pound, June 24 and this past week.The first one the day after the vote become a reality and this second one after earlier in the week soon after the date for Breixt was firmly established, something the naysayers were hoping would drag out and eventually lead to either another vote or a change in attitude. Could we just hear another round of Chase CEO Jamie Dimon whining:"There's still time."

This author took a page out f the late 1980s during the Asian Tiger debacle when one official blamed the traders. He pathetically criticizes them on two points: not initially calling the referendum correctly and convincing themselves and others a compromise was in the offing. Sounds like someone put a gun to his head and forced to him listen to the traders.

He then degrades them for being a fairly dispassionate bunch "who look at the data, balance the odds, and make their trade." We don't know about you, but that sounds like the perfect description of two groups of bureaucrats, politicians and central bankers.

And that as pointed out years ago is what this is all about, boys and girls and children of all ages, scorning the elitists status quo and their globalization madness. Nothing more and nothing less.

Catching On

It is interesting how all those staunch Republican conservatives and higher ups all the way to the RNC top are calling for Trump to drop out.

If politics is as dirty as we know it is, this was all known for a long time and decided to be kept secret until now. It is just as interesting that no one in the Democrat hierarchy is calling for a known liar now joined by another proven liar, to drop out. Disrespecting women is one thing, nobody sanctions that, killing people, innocent people, is another. What you have here is a person with 20-plus years of deception and lies who has now been caught in many of those lies, including purposely rigging a primary election in her own party. One could go on about murders, wars and such, but it won't matter.

This indeed is a very healthy election. The healthiest we've ever witnessed.There's a lot more at stake here than all those whinny elites worrying about the possible demise of their precious Golden Goose of globalization. The banking system is rotten, these two candidates are rotten, these two parties are rotten, MSM is rotten, the IMF, the UN, the WB, BIS, FBI, DOJ, IRS, the Supreme Court, the central banks, your grandmother's homemade apple sauce.

The only thing not rotten and the really healthy thing to come out of all this, the masses are finally catching on.Where's Al Gore when you don't need him, still counting dangling chads. He started all this when he invented the Internet. At Harvard no less. Change is coming. It's inevitable. It will not go down easy. It never does. But it will go down.

It's not about populism and never was. It's about catching on. That's the scary part.

The Big Screw

Here is an article from today's Washington G20 meeting.

When you have all these elitists scrambling about saying something needs to be done and directly or indirectly referring to the current presidential race, you know Trump traction is a hell of a lot more than the hatchet job these people have been trying to sell about Trump and his supporters.

As we have said before: leverage is hard to come by. Give it away at your own peril and freedom.
The populist word is getting worked extraordinarily hard these days for a reason--it's resonating. The in-crowd realize the threat they're facing, not globalization. That's just the meme they use to try to protect the status quo, their territory. They want to toss a crumb or two your direction and then return to business as usual without substantially changing what is a rotten banking system to list just one thing. There are a host of others like massive bureaucracies and centralization.

The global economy never included you. The benefits for you were smoke and more smoke. These people are master marketers. To claim ignorance is too coy. They knew who was going to benefit from globalization. And it wasn't you. As globalization and so-called free trade ripped through the world real wages remained stuck in a quagmire. Forget trickle down. This was about trickling up.
And it still is, thus the meter on the fear gauge is all alight.

Screwing the populous is one thing, but when you arrogantly try to screw them without giving them the courtesy of letting them drop their drawers, they're going to pissed off.

Here's a couple points from the article you should note.

1. At the same time, all the officials acknowledged that, as politicians like Trump have been arguing, globalization has hurt certain populations and in some cases exacerbated inequality.

Here's an open admission after all this time of the so-called big benefits of globalization, inequality is not only still around but worse in many cases than ever. So without all the uproar when and what were their plans to do anything?

2.  Meanwhile in New York, negotiators on the Transatlantic Trade and Investment Partnership responded to the political attacks on their talks by saying they were determined to push toward a deal, which would establish the world's largest free trade zone.

It doesn't matter what you think or want. They're going to shove it down your meaningless throat. We know best.
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Washington (AFP) - The G20 warned Friday that populist politicians playing up anti-globalization and anti-free trade sentiments were putting the global economy at risk.

The grouping of 20 economic powers suggested that the forces that have put Republican Donald Trump within reach of the US presidency and led to Britain's vote to leave the European Union could stall already frail global growth.

While not mentioning Trump or other politicians by name, China's Finance Minister Lou Jiwei, speaking on behalf of the G20, identified such voter-luring populism as one of the largest threats to the economy.

"This trend of deep anti-globalization populism has driven politicians to come up with their campaign slogans and try to win the votes and support. That has brought us uncertainty," Lou said after a G20 finance ministers meeting.

"We need to recognize some political risks such as the presidential election in some countries and in major economies," he added during the IMF-World Bank annual meetings in Washington.

- Trump, Brexit in focus -

Lou's comments came as the US presidential race entered its final weeks with upstart Trump wielding potent anti-immigration, anti-free trade rhetoric in his battle with Democratic rival Hillary Clinton.

But also in the background are the populist currents in Europe behind the Brexit vote and those affecting the coming French and German elections.

https://www.yahoo.com/news/g20-warns-rising-risks-global-economy

CNN Bias

Here's a classic example of CNN propaganda. It's really of the elementary school playground variety, but they in their arrogance expect you to believe it.

Most economists believe U3 is a more accurate reflection of unemployment. It's been the accepted measure since the 1930s. 

A U.S. Labor Department official said it has never referred to U6 as the "overall unemployment rate."  

This is from a CNN post, money.cnn.com/2016/10/07/news/economy/donald-trump-unemployment-rate/index.  

 And we know why an unidentified Labor Department official said it has never used the U6 as the "overall unemployment rate."


The official government number is 5.0% unemployment up from August's 4.9%.  We can't have any drops without an explanation in an election years when CNN's master is running for office. Now we want to inject a bit of an uncommon thing today, common sense, into this. What has been one of this administration's main themes--in fact, it's what they ran on leading up to their first term--change. Changes as in the archaic rules and parameters of the past. As in outdated Constitution for one. Or arbitrarily extending executive power for another.

Now this dude wants us to believe U3 is the more accurate of the two because it's been accepted since 1930s. The Constitution has been accepted a lot longer than that. And they want to drastically alter it. 

Trump is saying the real unemployment rate is closer to 10%, not 5%, as in 9.7%.

Here's another of this  playground kid's misinformation.

Since 2014 this administration has created 547,000 waiters and bartenders, and has lost 32,000 manufacturing workers.



 And here's more.
zerohedge.com/news/2016-10-07/where-september-jobs-were-secretaries-waiters-retail-and-social-workers.

 

Want to look up the pay scale on those types of jobs?

The 5% rate -- known as U3 -- includes only unemployed people who were actively looking for a job in the past four weeks.So all those people who gave up looking for a job two years ago don't count. Somehow they're no longer unemployed even if they still haven't found work.

Then there's this beauty:Trump also said in August that there are 93 million Americans "out of work." But this number would include high school students, college students, disabled people and retired citizens. Those are people who aren't working for good or understandable reasons.   
Yea, they're not working for good and understandable reasons alright. They can't find a stinking job.

 This is another of MSM's straw man arguments. We pay a slight tribute but our overall message is correct. Frankly, when it comes to CNN bias, we prefer the more subtle kind like when the Wolfman in the background tilting his champagne glass in glee as Hillary comes out to unleash her acceptance speech at the DNC.

Magic People

Mark Twain noted that there are lies ,damn lies and then there is statistics. Today, that's been modified a bit: There are lies, damn lies and then there is Jean-Claude Juncker.

A couple of more notables belong to that list, but we have already singled them out. Still another version is making the rounds today: lies, damn lies and then there are magic people.This is a story about magic people. Not just any magic people. No, indeed. These are special magic people with special names--central bankers.

Here's a quote.

Observant readers may recall the name Vitas Vasiliauskas from our May story in which we quoted the ECB governing council member as defining not only himself, but his central banking peers, as "magic people." As the portly Lithuanian banker said in a Bloomberg interview then, “markets say the ECB is done, their box is empty, but we are magic people. Each time we take something and give to the markets -- a rabbit out of the hat." What was more disturbing is that he was dead serious when he said it, which is important, because it is finally obvious that central bankers are neither gods, nor magicians, nor even doing "god's work on earth", but plain and simple psychopaths.

They could also be pathological liars, as the WSJ revealed today when it published an interview with Vasiliauskas, in which among other things, covered the topic of Deutsche Bank. To wit:

Struggling German lender Deutsche Bank won’t drive the eurozone economy into the ground, a member of the European Central Bank’s governing council said Thursday, adding a fresh dose of calm into a case that has raised concerns about the continent’s ability to confront the struggles of Germany’s largest lender.

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“I don’t think that problems related with one of the banks somehow can influence overall financial stability,” said Vitas Vasiliauskas, the head of Lithuania’s central bank, in an interview with The Wall Street Journal. The small Baltic state has used the euro since last year and therefore has a voice on the 25-member governing council that sets monetary policy in the currency bloc. The ECB also serves as supervisor of the eurozone’s largest banks. “I don’t think that we face something systemic,” he said on the sidelines of the annual meetings of the International Monetary Fund.

And just in case the punchline is somehow missed, here it is time stamped for posterity.

zerohedge.com/news/2016-10-07/someone-lying

Below is link to entire transcript. You can read it for yourself. Is Deutsche Bank a global threat? That's a pretty pure question. Our guess it is, And that's why there's so much talkng it down, especially before November 8.

wsj.com/articles/transcript-wsj-interview-with-ecbs-vitas-vasiliauskas

Nothing New

Nothing new under the sun.

That's still quite solid advice after all these years. The only thing different is the packaging or, as some might say, the cover-up techniques. By appearing more transparent, they become more opaque. No this is not about our ex-girlfriend. We're talking central banks and, in particular, the Lords of Eccles.
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If there’s a golden rule for central bankers in the 21st century, this is it: Seek clarity and avoid uncertainty. A central bank’s target should be clear. The data it uses should be known. The analysis it conducts on that data should be comprehensible. And, certainly, politics should have nothing to do with its decisions. Yet across the world, central bankers are struggling to live up to these requirements. Instead they’re undercutting their own positions by introducing quite unnecessary confusion into policymaking. – Bloomberg

We are told in this Bloomberg editorial that central bankers must be clear about their goals and objectives so markets will not be “confused.”
It sounds like this is a reasonable objective. But actually, for decades central bankers were not supposed to communicate at all. This was the approach pioneered by Norman Montagu of the Bank of England: “Never explain, never excuse.”

Here from Eustace Mullins’ “Secrets of the Federal Reserve”:
The New York Times … Oct. 17, 1928, describes the conference between the directors of the three great central banks in Europe in July, 1927, “Mr. Norman, Bank of England, Strong of the New York Federal Reserve Bank, and Dr. Hjalmar Schacht of the Reichsbank, their meeting referred to at the time as a meeting of ‘the world’s most exclusive club’. No public reports were ever made of the foreign conferences, which were wholly informal, but which covered many important questions of gold movements, the stability of world trade, and world economy.”

The meetings at which the future of the world’s economy are decided are always reported as being “wholly informal”, off the record, no reports made to the public, and on the rare occasions when outraged Congressmen summon these mystery figures to testify about their activities they merely trace the outline of steps taken, and develop no information about what was really said or decided.

At the Senate Hearings on the Federal Reserve System in 1931, H. Parker Willis, one of the authors and First Secretary of the Federal Reserve Board from 1914 until 1920, pointedly asked Governor George Harrison, Strong’s successor as Governor of the Federal Reserve Bank of New York:
“What is the relationship between the Federal Reserve Bank of New York and the money committee of the Stock Exchange?”
“There is no relationship,” Governor Harrison replied.

Of course Harrison was lying. In fact, the secrecy was meant to keep central banking out of the news as it was controversial then as now. Additionally, the central bankers of the day were concerned that some of their pronouncements would turn out to be wrong of ill-conceived, and this would diminish their credibility.

As can be seen from this Bloomberg editorial, the ideas regarding Fed communication have come full circle. Now the idea is to communicate clearly and rigorously – regarding ways central banks can create and maintain a “normal” monetary environment with “normal” (higher) interest rates.
There are two issues with this emphasis on communication. First, the initial instinct of Montagu and others may have been correct than not … from their perspective. With more communication in the modern era comes more controversy. Justifying central bank decisions is impossible because it is a form of price-fixing and because every pronouncement only reminds people that their monetary universe is run by a handful of unelected academic bureaucrats.

Second, providing a full spectrum of available information only reinforces central banks’ role as the primary mover of the larger monetary system. The more amplified central bank pronouncements become, the less investors and others will pay attention to additional non-central bank factors.
For instance, the Bank of Japan owns a tremendous amount of domestic equity. Given its dominant position, communication from the Bank of Japan becomes a significant, even urgent pronouncement. No additional information may be deemed necessary in this era of “political money” by the average investor.

More: thedailybell.com/news-analysis/central-bank-communication/

Gold Update

Gold is the guest none of the central bankers and the controlling elites want to invite to dinner. A big run-up in the yellow metal prices at this stage will leave a huge pockmark on the phony fiat money based global economy.

If you do some checking you'll see that there is already one court case about manipulation the lustrous metal, a case that apparently in the presence of more than a few trembling hands going forward.



Destroying the myth that these markets are not manipulated for political causes is the swan song for the elitists' own private golden goose.

zerohedge.com/news/2016-10-07/gold-pounded-someone-dumps-over-2-billion-under-minute

Brussels-style Negotiating

A headline in today's Financial Times tells you all you want to know about those arrogant, suffocating, intolerant bureaucrats in the European Union, "Merkel rules of 'comfortable' UK deals."

A quick search of the recent news will produce many more such angry, sour grapes articles from around the "union" that is anything but a union. Recall our now lame duck president going there before the vote was in and threatening them. Brussels-style management is already here. It you want more of Brussels keep on putting your faith in the status quo and the elites.
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mishtalk.com/2016/10/07/eu-doesnt-want-brexit-negotiations-the-eu-wants-blood-revenge

It is becoming increasingly apparent there is actually no reason for the UK to show up at the Brexit “negotiations”.
Judging from EU reactions from the “gang of 27”, and more recently from France and Germany there is no reason at all for the UK to show up.
The EU doesn’t want Brexit “negotiations”, the EU wants “blood revenge”

Please consider Hollande Demands Tough Brexit Negotiations

Britain must suffer the consequences of leaving the EU in order to save the institution from an existential crisis, François Hollande said on Thursday.
“The UK has decided to do a Brexit, I believe even a hard Brexit. Well, then we must go all the way through the UK’s willingness to leave the EU. We have to have this firmness,” President Hollande told 150 guests at the 20th anniversary of Notre Europe, the pro-EU think-tank founded by Jacques Delors, the former EU commission chief.
“If not, we would jeopardise the fundamental principles of the EU. Other countries would want to leave the EU to get the supposed advantages without the obligations.”
The Socialist leader insisted: “There must be a threat, there must be a risk, there must be a price. Otherwise we will be in a negotiation that cannot end well.”

South Side Thugs
Hollande warns “Britain must suffer the consequences of leaving the EU in order to save the institution from an existential crisis. There must be a threat, there must be a risk, there must be a price.”

From my point of view, Hollande sounds just like a gang leader from South side Chicago ghettos, or for that matter, gangs anywhere.
Gangs maintain their control by coercion and force. Once you are in, you are in for life. If you threaten to leave, they will threaten your sister or your mom. If you Join another gang, they will likely kill you.
Brexit Negotiations? Why Bother at All?
There is no point to negotiate anything because there is nothing to negotiate.
The EU wants Brexit “negotiations” much like female mosquitoes want blood.

UK vs. Gang of 27
As noted previously, the Gang of 27 Hits UK with Impossible Demands: EU Seeks “Inferior” Deal for UK, Spain Wants Gibraltar.
My advice to UK prime Minister Theresa May is to politely inform Angela Merkel and Francois Hollande of intent to not show up at the alleged negotiations unless they get their heads out of their asses.
May may choose to be a bit more diplomatic (or not), but in the end, May must let the EU know that the UK cannot and will not show up before a group of blood-sucking parasites whose only mission is extracting revenge.
One possible approach, starting the moment Article 50 is sent, would be a pledge to cut UK corporate income taxes by 1% a month, from 15% to zero, for as long as the EU maintains its bloodsucking attitude.
EU parasites need to understand that fly swatters do indeed exist.
The sad thing about all of this is no one wins in trade disputes. Using trade as a means of coercion is guaranteed to backfire. The EU found that out with foolish sanctions on Russia.
It appears they need a reinforcement lesson.
Free Trade is Always Correct
Free trade is always correct. For further discussion, please see Brexit: How Hard is Hard? Searching for a Soft, Hard-Boiled Egg.
Mike “Mish” Shedlock

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