FinanceAndLiberty, Published on May 21, 2013

This hearing of the Domestic Monetary Policy Subcommittee focused on Federal Reserve transparency and included discussions of: (1) the Dodd-Frank Act-required audit of the Federal Reserve by the Government Accountability Office (GAO); (2) the history of Federal Reserve audit legislation; (3) the adequacy of existing Federal Reserve audit [...]]]>

FinanceAndLiberty, Published on May 21, 2013

This hearing of the Domestic Monetary Policy Subcommittee focused on Federal Reserve transparency and included discussions of: (1) the Dodd-Frank Act-required audit of the Federal Reserve by the Government Accountability Office (GAO); (2) the history of Federal Reserve audit legislation; (3) the adequacy of existing Federal Reserve audit and data disclosure requirements; and (4) the necessity for Federal Reserve transparency going forward, particularly in light of the Federal Reserve’s continued monetary policy actions and engagement in the European crisis.

The hearing was held on Tuesday, October 4, 2011, at 10 a.m. in Room 2128 of the Rayburn House Office Building and was titled, “Audit the Fed: Dodd-Frank, QE3, and Federal Reserve Transparency.”

Witnesses:

Panel I:
§ Orice Williams Brown, Managing Director, Financial Markets and Community Investment, U.S. Government Accountability Office

Panel II:
§ Mark A. Calabria, Ph.D., Director of Financial Regulation Studies, Cato Institute

§ Robert D. Auerbach, Ph.D., Professor of Public Affairs, The University of Texas at Austin

freedomoutpost.com / By Cheryl Pass / May 21, 2013

I was reading a post at American Thinker by Matt Holzmann a while ago on whether or not it would be possible to bring RICO charges against Barack Obama and his Administration. If only. I brought up the same prospect some time ago regarding Al [...]]]>

freedomoutpost.com / By Cheryl Pass / May 21, 2013

I was reading a post at American Thinker by Matt Holzmann a while ago on whether or not it would be possible to bring RICO charges against Barack Obama and his Administration.  If only.  I brought up the same prospect some time ago regarding Al Gore.  He fraudulently acted to extort money from the American public, so it seemed a “no brainer” to me.  Of course the RICO charges were never brought.  I would say the same thing about Bill Clinton.  He most definitely has defrauded the American taxpayers with his executive orders based on Agenda 21 / Sustainable Development.  Which was completely unconstitutional.  Obama has followed suit and doubled down on that one.  Now we are stuck in the middle of White House and State Department mob actions finally being revealed to the American public.  Rampant and deep mob actions.  And going back quite some time.  Funny how another Clinton is involved.  Real funny.

But I digress.  As I read through the comments on the article, I came across this one (below) from a guy named Radioman 777.  I just had to post it.

Any socialist party, but particularly the truly malignant ones (i.e. Communist or Nazi parties), operate in exactly the same manner as any organized crime ring, from La Cosa Nostra to the Crips, Bloods, Latin Kings, Gangster Disciples, Hells Angels, Bandidos… You get the idea.

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goldsilverbitcoin.com / By Admin / May 21, 2013

In the US, financial institutions are acting as morality police, rejecting individuals from acquiring bank accounts due to the nature of their careers.

This naturally leaves them little choice, and will likely lead many individuals to grow open-minded towards alternative currencies such as Bitcoin, gold and [...]]]>

goldsilverbitcoin.com / By Admin / May 21, 2013

In the US, financial institutions are acting as morality police, rejecting individuals from acquiring bank accounts due to the nature of their careers.

This naturally leaves them little choice, and will likely lead many individuals to grow open-minded towards alternative currencies such as Bitcoin, gold and silver.

When Chanel Preston, a major porn star, opened a business account with City National Bank in Los Angeles, the account was shut down within days due to “compliance issues.”

She spoke to the manager she had originally worked with, who told her that the bank was worried about her profession, and thusly had revoked the account.

Preston is but one of many porn stars who have found trouble within the banking industry. Several performers and porn insiders said they had been denied accounts from a variety of financial institutions.

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endthelie.com / By Madison Ruppert / May 20, 2013

Hidden amongst the reams of reports aboutthe Internal Revenue Service (IRS) scandalis one little gem: in his testimony, the outgoing IRS Commissioner Steve Miller said that America’s tax system is “voluntary.”

Now, whatever you do, don’t take that to mean that it is actually voluntary [...]]]>

endthelie.com / By Madison Ruppert / May 20, 2013

Hidden amongst the reams of reports aboutthe Internal Revenue Service (IRS) scandalis one little gem: in his testimony, the outgoing IRS Commissioner Steve Miller said that America’s tax system is “voluntary.”

Now, whatever you do, don’t take that to mean that it is actually voluntary in the way that the word voluntary is normally used.

While you might think that voluntary means something which is “done without compulsion or obligation” or “done, made, brought about, undertaken, etc., of one’s own accord or by free choice,” when it comes to America’s “voluntary” tax system, it’s quite the opposite.

If you freely choose not to voluntarily participate in the tax system, you will enjoy being raided by armed agents, prosecuted and sent to federal prison. Quite the voluntary system indeed.

Furthermore, there are some practices that are clearly in no way voluntary. When income taxes are withheld from paychecks, for example, there is nothing voluntary about it.

When Xavier Becerra (D-Calif.) said during the recent House Ways and Means Committeehearing on the IRS scandal that the U.S. tax system is “a voluntary system,” Stephen Miller said, “Agreed.”

In fact, Becerra said it is “a voluntary system” twice. Becerra said those exact words at one hour, twenty nine minutes and eight seconds and again at one hour, thirty minutes and thirty five seconds, according to the C-SPAN transcript.

Senate Majority Leader Harry Reid said the same thing in an interview with Jan Helfeld in 2008.

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shtfplan.com / By Mac Slavo / May 21st, 2013

It’s not a stretch to suggest that Americans are over medicated. In 2011 doctors across the nation wrote an astounding four billion medical prescriptions, amounting to an average of 13 prescriptions for every man, woman and child in the United States.

In the [...]]]>

shtfplan.com / By Mac Slavo / May 21st, 2013

It’s not a stretch to suggest that Americans are over medicated. In 2011 doctors across the nation wrote an astounding four billion medical prescriptions, amounting to an average of 13 prescriptions for every  man, woman and child in the United States.

In the next few weeks the American Psychiatric Associations is releasing their updated fifth version their Diagnostic and Statistical Manual of Mental Disorders (DSM-5); the so-called ‘bible’ of psychiatric diagnoses. The new manual promises to take mental illness and the use of prescription drugs to a whole new level.

You may not be considered “crazy” or “mentally ill” today, but under the new guidelines experts say half of us will be diagnosed with a psychiatric condition in the future.

The odds will probably be greater than 50 percent, according to the new manual, that you’ll have a mental disorder in your lifetime.

…

The increasing number of disorders comes about because some “problems” that were not previously considered to be mental illness were reclassified as such by their inclusion in the DSM—and it is the DSM that functionally defines mental illness in the United States.

You see, in the DSM-5 the definitions for mental illness have been expanded to include a whole host of new symptoms and conditions.

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Repeat after us: There is zero chance the Fed is going to tighten…zero chance…zero chance…zero chance. We’ve made this point so often here that it is has practically become a mantra at Rick’s Picks. It has also been amplified, refracted and explicated – [...]]]> rickackerman.com / By Rick Ackerman / May 22, 2013, 3:39 AM GMT

Repeat after us: There is zero chance the Fed is going to tighten…zero chance…zero chance…zero chance.  We’ve made this point so often here that it is has practically become a mantra at Rick’s Picks.  It has also been amplified, refracted and explicated – though not hotly debated – in our forum, where there are apparently few who expect any change in Fed policy. As how could there be?  For even the slightest hint that easing is about to taper off, let alone end, would bring on the Second Great Depression faster than you can say “Hooverville!” The prospect of hard times might have superficial appeal, since the legacy of the 1930s with respect to art, architecture, cinema, public works, automobiles and other monuments to creativity and human endeavor is quite impressive. But the downside is that the illusion of prosperity would be gone, and with it much false wealth that could never withstand the discipline of unrigged markets.  Also gone – overnight – would be the global banking system, buttressed as it is by a nearly quadrillion dollar edifice of hyper-leveraged derivatives.  Subject that sum to even a few more basis points of vig and you’re talking about trillions of dollars that would have to be coughed up in real money. Fat chance.

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endoftheamericandream.com / By Michael Snyder / May 21st, 2013

Weather patterns are becoming increasingly erratic and the ground under our feet is becoming extremely unstable. So precisely what in the world is going on here? Is this the beginning of a trend? Could it be possible that we are entering the worst period for [...]]]>

endoftheamericandream.com / By Michael Snyder / May 21st, 2013

Weather patterns are becoming increasingly erratic and the ground under our feet is becoming extremely unstable.  So precisely what in the world is going on here?  Is this the beginning of a trend?  Could it be possible that we are entering the worst period for natural disasters in U.S. history?  The tornado that just hit the town of Moore, Oklahoma is already being called one of the most destructive tornadoes that America has ever seen.  That tornado came almost two years to the day after the deadliest tornado in U.S. history hit Joplin, Missouri.  But of course it is not just tornadoes that seem to be getting more powerful.  Giant sinkholes are appearing at an unprecedented rate,  earthquakes are becoming more frequent and more powerful, 6 of the 10 worst years for wildfires ever recorded in the United States have all come since the year 2000, and the western part of the country is experiencing the worst stretch of drought since the days of the Great Depression.  Is all of this just some sort of a giant coincidence?  If not, what is causing these changes?

The giant F4 tornado that absolutely devastated Moore, Oklahoma had winds of up to 200 mph.  It was estimated to be at least two miles wide at one point, and what made it especially destructive was the fact that it sat on the ground for 40 minutes.  Most tornadoes only reach the ground for a couple of minutes.  According to the latest reports, the tornado resulted in 24 deaths and hundreds of others were seriously injured.

It was far more powerful than the atomic bomb that was dropped on Hiroshima, and it is being called “the worst tornado damage-wise in the history of the world” by a meteorologist at KFOR-TV.

You can see video of the tornado right here.  Oklahoma Lt. Gov. Todd Lamb compared the tornado to a “two-mile-wide lawnmower blade going over a community.”

Meanwhile, other parts of Oklahoma experienced very unusual weather as well.  In fact, hail the size of grapefruits was falling in one area near Oklahoma City.

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market-ticker.org / By Karl Denninger / May 21, 2013, 21:55

If you pour gasoline on a fire and it does not go out, pouring MORE gasoline on the fire will not change this.

If you “QE” and it does not lift the economy, restarting the debt cycle, doing more QE will not [...]]]>

market-ticker.org / By Karl Denninger / May 21, 2013, 21:55

If you pour gasoline on a fire and it does not go out, pouring MORE gasoline on the fire will not change this.

If you “QE” and it does not lift the economy, restarting the debt cycle, doing more QE will not change the outcome in the general economy.

Japan’s exports missed estimates in April and the trade deficit swelled, highlighting weakness in global demand that may weigh on efforts to revive the world’s third-biggest economy.

Overseas shipments rose 3.8 percent from a year earlier, the Finance Ministry said in Tokyo today. That was less than the median 5.4 percent estimate of 26 economists surveyed by Bloomberg News. The trade shortfall widened to 879.9 billion yen ($8.6 billion), the most for the month of April since at least 1979, according to the government.

All the Abe games did nothing for exports, but it trashed the trade balance.

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zerohedge.com / By Tyler Durden / 05/21/2013 17:58

Excerpted via Bill Blain of Mint Partners,

The current Bank of Japan policy meeting is possibly the most important thing going on this week (even more so than Bernanke’s comments perhaps). If, as is distinctly possible, they don’t do anything to reinforce the immediacy of the [...]]]>

zerohedge.com / By Tyler Durden / 05/21/2013 17:58

Excerpted via Bill Blain of Mint Partners,

The current Bank of Japan policy meeting is possibly the most important thing going on this week (even more so than Bernanke’s comments perhaps). If, as is distinctly possible, they don’t do anything to reinforce the immediacy of the Kuroda QQE package, we could be looking at bond markets reacting in a most “unfavorable manner”.  The effect would be to reinforce the latest round of ‘fear-on’ bond selling – certainly over the short-term, and the damaged sentiment could impact stocks also.

…

That’s why the Bank of Japan policy meeting today/tomorrow will be so interesting. Can it nurture and sustain real growth? Devaluing yen to benefit exporters does seem to be working – look at recent Yen corporate results. However, now we’ve got the rest of Asia looking to balance Japan’s competitive devaluation. We still need to see how the other side of Abe-onomics works: rebuilding Japan. How vulnerable is the BoJ game? The Nikkei may be massively higher, but interest rates and JGB’s remain stubbornly volatile and high – a factor conflating the global bond worries… if the Fed is going to end QE and Japan’s QE squared isn’t working, then bond players will quite rightly capitulate.

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lewrockwell.com / By Walter E. Williams / May 21, 2013

Dr. Henry Miller, senior fellow at the Hoover Institution, and Gregory Conko, senior fellow at the Competitive Enterprise Institute, in their Forbes article “Rachel Carson’s Deadly Fantasies” (9/5/2012), wrote that her 1962 book, Silent Spring, led to a world ban on DDT use. The [...]]]>

lewrockwell.com / By Walter E. Williams / May 21, 2013

Dr. Henry Miller, senior fellow at the Hoover Institution, and Gregory Conko, senior fellow at the Competitive Enterprise Institute, in their Forbes article “Rachel Carson’s Deadly Fantasies” (9/5/2012), wrote that her 1962 book, Silent Spring, led to a world ban on DDT use. The DDT ban was responsible for the loss of “tens of millions of human lives – mostly children in poor, tropical countries – have been traded for the possibility of slightly improved fertility in raptors (birds). This remains one of the monumental human tragedies of the last century.” DDT presents no harm to humans and, when used properly, poses no environmental threat. In 1970, a committee of the National Academy of Sciences wrote: “To only a few chemicals does man owe as great a debt as to DDT. … In a little more than two decades, DDT has prevented 500 million human deaths, due to malaria, that otherwise would have been inevitable.” Prior to the DDT ban, malaria was on the verge of extinction in some countries.

Wackoism didn’t end with Carson’s death. Dr. Paul Ehrlich, Stanford University biologist, in his 1968 best-selling book, The Population Bomb, predicted major food shortages in the United States and that “in the 1970s … hundreds of millions of people are going to starve to death.” Ehrlich saw England in more desperate straits, saying, “If I were a gambler, I would take even money that England will not exist in the year 2000.” On the first Earth Day, in 1970, Ehrlich warned: “In ten years all important animal life in the sea will be extinct. Large areas of coastline will have to be evacuated because of the stench of dead fish.” Ehrlich continues to be a media and academic favorite.The World Health Organization estimates that malaria infects at least 200 million people, of which more than a half-million die, each year. Most malaria victims are African children. People who support the DDT ban are complicit in the deaths of tens of millions of Africans and Southeast Asians. Philanthropist Bill Gates is raising money for millions of mosquito nets, but to keep his environmentalist credentials, the last thing that he’d advocate is DDT use. Remarkably, black congressmen share his vision.

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johngaltfla.com / By John Galt / May 21, 2013 21:00 ET

Imagine following every aspect of the absurdly complex tax code of the United States of America, as written by the United States Congress and then being called before them to be attacked and berated for not bringing overseas profits home so as to [...]]]>

johngaltfla.com / By John Galt / May 21, 2013 21:00 ET

Imagine following every aspect of the absurdly complex tax code of the United States of America, as written by the United States Congress and then being called before them to be attacked and berated for not bringing overseas profits home so as to do their “patriotic duty” as some infer, and pay even more taxes above the $6 billion they already submit!

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There are over 3 billion ounces of gold in the world’s deposits. The Top 50 of these mines alone contain over one-third of the total gold. North America is the ‘cheapest’ place to produce gold and Africa the most expensive. Gold producer profits are getting squeezed from [...]]]> zerohedge.com / By Tyler Durden / 05/21/2013 21:59

There are over 3 billion ounces of gold in the world’s deposits. The Top 50 of these mines alone contain over one-third of the total gold. North America is the ‘cheapest’ place to produce gold and Africa the most expensive. Gold producer profits are getting squeezed from both directions: lower gold prices and rapidly inflating costs…

Zero Hedge

testosteronepit.com / By Wolf Richter / May 21, 2013

The issue of inflation is complex everywhere. Official rates are disputed. People can’t reconcile them with what they see at the store. There are different formulas and data sets, resulting in different rates, and everyone picks and chooses what suits their needs. But nowhere is [...]]]>

testosteronepit.com / By Wolf Richter / May 21, 2013

The issue of inflation is complex everywhere. Official rates are disputed. People can’t reconcile them with what they see at the store. There are different formulas and data sets, resulting in different rates, and everyone picks and chooses what suits their needs. But nowhere is the issue as “complex,” infested with lies, and shrouded in obscurity as in Argentina.

The debacle took on hilarious overtones when a Greek reporter, in her soft, harmless-looking manner, began to crucify Economy Minister Hernan Lorenzino during an interview at his office: “I have a very simple question for you, which seems very complicated these days: how much is Argentine inflation at this moment?” His response was an epic journey into obfuscation that got him entangled in such verbal spaghetti that the video, when it was released in April, went viral instantly. “We never speak about inflation, not even with the Argentine media,” an unseen aide explained after the minister had skedaddled.

But his jab at official inflation was on target. The interview took place late last year. By April, inflation, as reported by the Instituto Nacional de Estadista, was 10.5%, down from 10.6% in March, and from 11.1% in January, its recent peak, nicely heading once again in the right direction, after having been below 10% for much of 2012. But it’s a joke – though not nearly as hilarious as Lorenzino’s verbal spaghetti.

In early 2007, the staff at the statistical agency were booted out and replaced with political appointees who would toe the line on inflation and other inconvenient statistics. Since then, official inflation has been decided by edict.

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theeconomiccollapseblog.com / By Michael Snyder / May 21st, 2013

What is going to happen when the greatest economic bubble in the history of the world pops? Themainstream media never talks about that. They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to. And most Americans [...]]]>

theeconomiccollapseblog.com / By Michael Snyder / May 21st, 2013

What is going to happen when the greatest economic bubble in the history of the world pops?  Themainstream media never talks about that.  They are much too busy covering the latest dogfights in Washington and what Justin Bieber has been up to.  And most Americans seem to think that if the Dow keeps setting new all-time highs that everything must be okay.  Sadly, that is not the case at all.  Right now, the U.S. economy is exhibiting all of the classic symptoms of a bubble economy.  You can see this when you step back and take a longer-term view of things.  Over the past decade, we have added more than 10 trillion dollars to the national debt.  But most Americans have shown very little concern as the balance on our national credit card has soared from 6 trillion dollars to nearly 17 trillion dollars.  Meanwhile, Wall Street has been transformed into the biggest casino on the planet, and much of the new money that the Federal Reserve has been recklessly printing up has gone into stocks.  But the Dow does not keep setting new records because the underlying economic fundamentals are good.  Rather, the reckless euphoria that we are seeing in the financial markets right now reminds me very much of 1929.  Margin debt is absolutely soaring, and every time that happens a crash rapidly follows.  But this time when a crash happens it could very well be unlike anything that we have ever seen before.  The top 25 U.S. banks have more than 212 trillion dollars of exposure to derivatives combined, and when that house of cards comes crashing down there is no way that anyone will be able to prop it back up.  After all, U.S. GDP for an entire year is only a bit more than 15 trillion dollars.

But most Americans are only focused on the short-term because the mainstream media is only focused on the short-term.  Things are good this week and things were good last week, so there is nothing to worry about, right?

Unfortunately, economic reality is not going to change even if all of us try to ignore it.  Those that are willing to take an honest look at what is coming down the road are very troubled.  For example, Bill Gross of PIMCO says that his firm sees “bubbles everywhere”…

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from Financial Survival Network

We caught up with Barry Stuppler today. Gold and silver were getting slammed yesterday and then presto, they finished up substantially. Helping this along was the threat by Moody’s to downgrade the US’s credit rating and the environment is being sewn for increased gold and silver. We are past the [...]]]>

from Financial Survival Network

We caught up with Barry Stuppler today. Gold and silver were getting slammed yesterday and then presto, they finished up substantially. Helping this along was the threat by Moody’s to downgrade the US’s credit rating and the environment is being sewn for increased gold and silver. We are past the point of no return, austerity won’t work and neither will unfettered money printing. The war on gold entered a new phase recently with France banning gold purchases for cash and increasing government monitoring of all sales and purchases. Expect prices to start heading up shortly.

farmwars.info / By Julian Rose / May 21, 2013

When you take a closer look at it, you see that the choices we make each day of our lives add up to the grand price that nature must pay in her role as the sustainer of life on this planet.

What do [...]]]>

farmwars.info / By Julian Rose / May 21, 2013

When you take a closer look at it, you see that the choices we make each day of our lives add up to the grand price that nature must pay in her role as the sustainer of life on this planet.

What do I mean by that?

Well, it’s simple enough: if we choose to live a life of inverted personal self interest and unawareness; of disregard for nature and of disinterest in the effect our actions have on the greater socio-economic environment around us, then we are playing our part in the trashing of this planet, its animals, insects, fish, rivers, seas, soils, atmosphere and peoples. But that’s not all; we are also playing a part in trashing our own nature – that potentiality to grow – which is our absolute birth right and common imperative.

So, if we decide that we don’t want to grow, we are destined to contribute to the deficit of the resource base of the planet. By not consciously acting to support life we become complicit in acting against it. There can be no other conclusion. No half-way house.

So, once having committed to give support to that which enhances life on earth, it soon becomes clear that a great swathe of our society’s daily preoccupations are working in opposition to this commitment. Going against the laws of nature. Going against that which holds the promise of a future for us all.

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Since the S&P 500 made an intraday low of 1,536 on April 18, the widely-followed stock index has tacked on 130 points and the markets have migrated back to full-bore risk-on mode.

Wednesday Winddown?

Two key events this Wednesday could give investors an [...]]]> financialsense.com / By Chris Ciovacco / May 21, 2013

Since the S&P 500 made an intraday low of 1,536 on April 18, the widely-followed stock index has tacked on 130 points and the markets have migrated back to full-bore risk-on mode.

Wednesday Winddown?

Two key events this Wednesday could give investors an excuse to book some profits:

• Federal Reserve Chairman Ben Bernanke will speak before Congress.
• Fed minutes are due to be released.

There appears to be little evidence to suggest Bernanke will drift from his recent guarded optimism stance on the economic outlook, which means his comments may be stock market-friendly. On the Fed minutes front, the release is based on the meeting when the statement “The Committee is prepared to increase or reduce the pace of its purchases…” was added. The key term was “increase”. Therefore, the minutes may prove to be dovish or stock market-friendly as well.

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Back in the late ’70s, engineers over at Chrysler came up with a way to help their existing engines – which had been designed back in the 1950s and ’60s – stay compliant with emissions control requirements passed years later. It was called Lean Burn. Some [...]]]> ericpetersautos.com / By Eric Peters / May 20, 2013

Back in the late ’70s, engineers over at Chrysler came up with a way to help their existing engines – which had been designed back in the 1950s and ’60s – stay compliant with emissions control requirements  passed years later. It was called Lean Burn. Some of you may remember. By increasing the air in the air-fuel ratio  – “leaning out” the engine – and electronically controlling ignition timing, hydrocarbon (HC) emissions can be significantly reduced.

It wasn’t a bad idea. In fact, it was a good idea (see here for technical details) and the essential components – electronically controlled ignition – are standard equipment in all new cars today.

The problem was the technology Chrysler used at the time wasn’t quite ready for prime time. Glitches plagued the early Lean Burn engines. The electronic controls were sometimes balky – and mechanics of the era often couldn’t diagnose/correctly repair the system when it acted up.

Fast-forward 30 years.

Ford – like many current car companies – sees turbochargers as a way to comply with escalating federal fuel-economy mandates while also maintaining the power/performance levels customers expect. Ford calls its line of small-displacement/high output – and high efficiency – turbocharged engines EcoBoost engines.  They range from a 1.0 liter three-cylinder in the 2014 Fiesta subcompact to the 3.5 liter V-6 (with two turbos) used in the Taurus SHO and the full-size F-series pick-up truck. In the latter applications, the turbo V-6 delivers the power/performance of a V-8 with the economy of a six. In the Fiesta, the tiny 1.0 liter engine provides the on-demand output of a larger four – but much better gas mileage when you’re just poking along because only three cylinders are consuming gas as opposed to four of them.

Again, it’s not a bad idea.

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endthelie.com / By Madison Ruppert / May 21, 2013

When former Internal Revenue Service Commissioner Douglas Shulman was pressed by Sen. John Cornyn (R-Texas) on Tuesday, Shulman refused to apologize for the targeting of conservative groups by the IRS.

Instead of apologizing, Shulman expressed regret and stated that the Inspector General report absolved him [...]]]>

endthelie.com / By Madison Ruppert / May 21, 2013

When former Internal Revenue Service Commissioner Douglas Shulman was pressed by Sen. John Cornyn (R-Texas) on Tuesday, Shulman refused to apologize for the targeting of conservative groups by the IRS.

Instead of apologizing, Shulman expressed regret and stated that the Inspector General report absolved him of any culpability for the agency’s conduct.

The IRS scandal has resulted in a surprising number of absurd situations similar to the interaction between Cornyn and Shulman.

On Sunday, an Obama aide attempted to defend the Obama administration in the face of multiple scandals, stating that the “law is irrelevant” when discussing the IRS scandal in particular.

Another particularly interesting claim made during a congressional hearing was that the United States tax system is in fact a voluntary one.

Cornyn pointed out that Steven Miller, former IRS acting commissioner, opened his testimony before the Senate with a clear apology but when he asked if Shulman would apologize for the IRS’ actions, Shulman avoided the question.

“Mr. Shulman, I wonder if you have any words of apology for my constituents and others who feel like the public trust has been violated by the IRS,” Cornyn said.

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brucekrasting.com / By Bruce Krasting / May 21, 2013

In February, when Ben Bernanke gave his report to Congress, he spoke of his concern about “Excessive risk taking”. On May 10 he repeated his warning:

very low interest rates, if maintained for a considerable time, could impair financial stability. For example, portfolio [...]]]>

brucekrasting.com / By Bruce Krasting / May 21, 2013

In February, when  Ben Bernanke gave his report to Congress, he spoke of his concern about “Excessive risk taking”. On May 10 he repeated his warning:

very low interest rates, if maintained for a considerable time, could impair financial stability. For example, portfolio managers dissatisfied with low returns may “reach for yield” by taking on more credit risk, duration risk, or leverage.

So what is Ben talking about? What does it mean when he says “reach for yield”? I think I may have found a good example of what Ben is referring to. Consider this bank financing that was completed last week:

Borrower:  KIK Custom Products

Amounts:

1st lien = $420Mn – Priced at LIBOR plus 425bp – priced at 99.

2nd lien = $220Mn – Priced at LIBOR plus 825bp – priced at 98.

Floor pricing = Minimum LIBOR was set at 1.25% (100bp over current LIBOR rate)

Company rating = Caa/B-

Fees = Undisclosed – must have been big – 3+%

Book runner = UBS

READ MORE

I want to thank friends at Vigilant Citizen for an email bringing this story from Government Security News to my attention. From GSN Daily’s Homeland Security Insider we learn of plans to place infrared sensors along the entire border of the United States of America. My bet is, [...]]]> beforeitsnews.com / Tuesday, May 21, 2013 8:51

acting-man.com / By Pater Tenebrarum / May 21, 2013

CFNAI and Rail Traffic Growth Both Decline

Even while Bloomberg reports that there is now widespread conviction (as a result of rising stock prices no doubt) that the US economy is about to achieve ‘escape velocity’ – whatever that is supposed [...]]]>

acting-man.com / By Pater Tenebrarum / May 21, 2013

CFNAI and Rail Traffic Growth Both Decline

Even while Bloomberg reports that there is now widespread conviction (as a result of rising stock prices no doubt) that the US economy is about to achieve ‘escape velocity’ – whatever that is supposed to mean – economic data continue to disappoint with unwavering regularity.

One of the fund managers interviewed by Bloomberg even went as far as asserting that ‘anyone who isn’t long real estate is a moron’ (Bloomberg’s pushing of establishment approved memes couldn’t possibly be more blunt than it has recently been).  However, as Ramsey always points out in these pages, it is Wall Street money that is pushing house prices up – there is very little organic demand from owner users.

The ongoing series of disappointing economic data was joined yesterday by yet another decline in the Chicago Fed’s National Activity Index (CFNAI), which fell from -0.13 in March to -0.53 in April. Any readings below zero indicate economic contraction. According to the Chicago Fed’s web site:

“Economic Activity Slower in April (pdf)

The Chicago Fed National Activity Index (CFNAI) was –0.53 in April, down from –0.23 in March.”

The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.”

We hasten to add that such broad macro-economic aggregates are not very useful gauges of the economy’s true underlying health and cannot tell us whether the ‘activity’ measured is actually economically sensible. What is remarkable and what makes it worth talking about it is that usually, whenever the Fed is engaged in heavy monetary pumping, such broad gauges of economic activity tend to reflect strength. Even if it is the phony strength of a bubble economy that produces phantom wealth while it consumes scarce capital in reality, such as the housing boom economy of 2002-2007.

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johngaltfla.com / By John Galt / May 21, 2013 19:15 ET

The hue and cry originally expressed by the Tea Party, 9/12 Project, Conservative Talk Radio, and other patriot/Constitutionalists type groups was a death scream into the darkness as now I fear the entire IRS scandal is officially dead. Unbeknownst to them, [...]]]>

johngaltfla.com / By John Galt / May 21, 2013 19:15 ET

The hue and cry originally expressed by the Tea Party, 9/12 Project, Conservative Talk Radio, and other patriot/Constitutionalists type groups was a death scream into the darkness as now I fear the entire IRS scandal is officially dead. Unbeknownst to them, it died on Friday May 17, 2013 around 6 p.m. ET when the President made his famous “You’re Fired” speech to the media about the already outgoing interim IRS Commissioner Steven Miller. One needs to take a deep breath and understand that when it was announced that Eric Holder was opening a criminal investigation into the allegations about the Internal Revenue Service, that killed the scandal and any unbiased investigation.

The nightmare which was the “Fast and Furious” scandal was buried when the Federal Government under Eric Holder opened an investigation of the Bureau of Alcohol, Tobacco, and Firearms (BATF) which resulted in a massive smoke screen and years later a continuing obfuscation of the facts. Sadly, American Congressional leaders have refused to show the testicular fortitude to stand up to the Departments of Justice and Homeland Security by cutting off funding to the payroll of the leadership or other actions to force a full and complete disclosure under oath with all supporting documents. Why would anyone expect any different result with a new investigation by this administration of itself on a different subject?

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zerohedge.com / By Tyler Durden / 05/21/2013 18:49

The one headline we have been waiting for for over four years has just hit:

Not when, if. And there you have it: if the Fed exits, the world (and most [...]]]>

zerohedge.com / By Tyler Durden / 05/21/2013 18:49

The one headline we have been waiting for for over four years has just hit:

• BOK KIM SAYS WORLD MAY FACE RATE RISK IF U.S. EXITS FROM QE

Not when, if. And there you have it: if the Fed exits, the world (and most certainly Japan) gets it. Thus, for the sake of the children (who will have inhert about $100 trillion in debt but don’t worry: debt is an asset as some “analysts” will promise) Bernanke can never exit. QE…D

And since never is a litte longer than 2016/2017, at some point in the next few years Bernanke will be the proud owner of all marketable Treasury paper. All of it.

Zero Hedge

kingworldnews.com / May 21, 2013

On the heels of the Fed’s James Bullard saying the central bank should continue its bond buying program, today acclaimed money manager Stephen Leeb spoke with King World News about what he described as a key 100-year inflection point. Leeb also discussed gold and silver. Below is [...]]]>

kingworldnews.com / May 21, 2013

On the heels of the Fed’s James Bullard saying the central bank should continue its bond buying program, today acclaimed money manager Stephen Leeb spoke with King World News about what he described as a key 100-year inflection point.  Leeb also discussed gold and silver.  Below is what Leeb had to say in his interview.

Leeb:  “In addition to being focused on the gyrations in the gold and silver market and whether we have now successfully tested a bottom, the bigger picture is that the world remains a mess.  Yes, eventually all of the money that is floating out there is going to lead to inflation, but there are also a great many other problems that governments around the globe will have to contend with.

Clearly Europe is not out of trouble.  Spain, as an example, is literally ruling with fear.  Their government is staying in power by virtue of fear.  The public is scared that if they drop out of the euro all hell will break loose.  That’s what the government is telling them.  I don’t think the government of Spain can keep the populace at bay using fear for much longer….

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news.goldseek.com / By Dennis Miller / Tuesday, 21 May 2013

Since there are now numerous hard proofs that China’s export data (and to some extent import data as well) were significantly distorted recently, we naturally wonder the incentives behind the distortion and the detailed mechanism of these manipulations. As BofAML notes, there are four reasons why the [...]]]> zerohedge.com / By Tyler Durden / 05/21/2013 18:39

Since there are now numerous hard proofs that China’s export data (and to some extent import data as well) were significantly distorted recently, we naturally wonder the incentives behind the distortion and the detailed mechanism of these manipulations. As BofAML notes, there are four reasons why the distortions have risen so sharply since Q4 2012 but the various arbitrages (described in actionable detail below) between onshore and offshore currencies and interest rate differentials (and the role of gold in this) remain in place to make judging China’s real trade growth as much art as science.

Via BofAML,

In the starting period of using RMB for trade settlement (2010-2011), people might not learn the trick on how to benefit from the differential between CNH and CNY exchange rates. And the differential was quite small before October 2012 when markets perceived a significant RMB/USD depreciation. Only since 4Q12 several preconditions were ripe for massively manipulating trade data.

•  First, RMB/USD started appreciating again.
• Second, the China’s economic growth started rebounding. These two preconditions made it attractive to bring in hot money via over-reporting exports.
• Third, the differentials between CNH/USD and CNY/USD got widened in 4Q12 with CNH/USD becoming more expensive than CNY/USD, making it’s profitable to do arbitrage (more details below).
• Fourth, people were experienced enough to use RMB trade settlement to carry out relatively complicated arbitrage.

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investmentcontrarians.com / By Sasha Cekerevac / May 21, 2013

There continues to be mixed data regarding the strength of the economic recovery in America. This is creating an interesting divergence between the level of the S&P 500 and the growth rate of the economic recovery, which is far less than many had expected so [...]]]>

investmentcontrarians.com / By Sasha Cekerevac / May 21, 2013

There continues to be mixed data regarding the strength of the economic recovery in America. This is creating an interesting divergence between the level of the S&P 500 and the growth rate of the economic recovery, which is far less than many had expected so far.

The Federal Reserve Bank of Philadelphia recently released its index of manufacturing activity, which dropped to -5.2 in May, versus a reading of 1.3 in April. (Source: “Business Outlook Survey,” Federal Reserve Bank of Philadelphia web site, accessed May 17, 2013.)

The survey shows no consistency over the past seven months regarding the current conditions of the economic recovery. The report indicates that the economic recovery has oscillated between positive and negative readings. Current demand for manufactured goods dropped substantially to -7.9 in May, from -1.0 in April. As well, the level of inventories increased to 4.1 in May, versus -22.2 in April.

This indicates that for the surveyed businesses during the month of May, there appears to be less demand for manufactured products, and inventories are piling up, which is clearly not a sign of strength. However, the S&P 500 continues to move higher. The question is: is this upward movement sustainable?

Obviously, no one can predict the future, but investors in the S&P 500 try to anticipate future shifts in the business landscape. While the economic recovery is currently weak, people who are now buying the S&P 500 believe that growth is close at hand. The current data do not support such a strong economic recovery; however, there is the possibility that such a recovery might occur.

One such data point that supports an economic recovery over the next six months is the future activity index, also part of the Philadelphia Fed’s survey, which increased to 32.3 from 19.5 in the previous month. According to this survey, 45% of businesses expect to see an increase in business activity over the next six months, compared to only 12% expecting to see a decrease.

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dailyreckoning.com / By Bill Bonner / May 21, 2013

First, stocks hit new highs on Friday. Gold lost $22 per ounce.

But believe it or not, our new Trade of the Decade is going well.

As you may recall, we began a “Trade of the Decade” back at the start of the [...]]]>

dailyreckoning.com / By Bill Bonner / May 21, 2013

First, stocks hit new highs on Friday. Gold lost $22 per ounce.

But believe it or not, our new Trade of the Decade is going well.

As you may recall, we began a “Trade of the Decade” back at the start of the 21st century.

“Buy gold. Sell stocks.” That was it. No fancy straddles, hedges or derivatives. Not even any stock selection. Just a simple macro trade that you could stick with for the next 10 years.

How did it turn out? Beautifully. Gold was the top performing asset class of that period from 2000-2010.

We probably would have stuck with that trade for another 10 years, but we were getting a little bored with it. So we looked around for the most despised major asset class we could find… and the most loved. We found them both in Japan.

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harveyorgan.blogspot.com / Tuesday, May 21, 2013

Gold closed down $6.50 to $1377.80 (comex closing time). Silver fell by 13 cents to $22.44 (comex closing time)

In the access market at 5 pm gold and silver are the following :

gold: $1375.80. silver: $22.45

Gold was on a tear last night reaching $1400.00 by 2 [...]]]>

harveyorgan.blogspot.com / Tuesday, May 21, 2013

Gold closed down $6.50 to $1377.80 (comex closing time).  Silver fell by 13 cents to $22.44  (comex closing time)

In the access market at 5 pm gold and silver are the following :

gold: $1375.80.
silver: $22.45

Gold was on a tear last night reaching $1400.00 by 2 am est last night, before the bankers showed up at their usual time and blasted gold down to around $1359.00.  At that point, gold started its ascent and was ready to navigate a back to back positive upside day reversal when again it was paper attacked and our ancient metal of kings closed down $6.50 to $1377.80. The chance that gold would end positive after a huge reversal yesterday was slim at best.

At the Comex, the open interest in silver rose by 1344 contracts to 148,284 contracts with silver’s rise in price yesterday by 23 cents.  The silver OI is  holding firm at elevated levels . The open interest on the gold contract  rose  by 1365 contracts to 453,048 . With gold’s big rise in price yesterday, one would have thought that the OI would have risen  a lot higher.  We must have lost a few bankers who covered their shorts. The gold deliveries for May rose a bit today  to  9.424 tonnes and this is an off month for gold.  In silver we continue to see the total number of ounces standing rise above the quantity that stood on first day notice. The number of silver ounces, standing for delivery in May rose by 115,000 oz now stands at 17.235 million oz. ( On first day notice:  14.860 million oz.)

Again, at the Comex,  gold is departing as investors are frightened to death of a confiscation similar to what happened at MFGlobal or Refco. Tonight, the Comex registered or dealer gold remains at 1.668 million oz or 51.88 tonnes.  The total of all gold at the comex fell slightly but still well below the 8 million oz at 7.903 million oz or 245.8 tonnes of gold.

The GLD  reported another huge loss in gold inventory of 8.42 tonnes. The SLV inventory of silver also lowered to the tune of 1.738 million oz. The game will end when the last ounce of gold from the GLD leaves London’s shores  for Chinese waters.

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jonrappoport.wordpress.com / By Jon Rappoport / May 21, 2013

It’s simple. Authorities invented the idea that other people have issues with authority.

Psychiatrists rank right up there among the elitists setting the standards. They, for example, have concocted a little fictional doodad called Oppositional Defiance Disorder. And magically, they never accuse their professional colleagues [...]]]>

jonrappoport.wordpress.com / By Jon Rappoport / May 21, 2013

It’s simple. Authorities invented the idea that other people have issues with authority.

Psychiatrists rank right up there among the elitists setting the standards. They, for example, have concocted a little fictional doodad called Oppositional Defiance Disorder. And magically, they never accuse their professional colleagues of having it. No.

Why should they? They amuse themselves by deciding when civilians are overly defiant and need pacification (drugs).

But we’re also talking about character structure here, because psychiatrists turn out to be exactly the people who want to slap labels like ODD on others. They like that. So they labor in universities and hospitals and earn their degrees and state-issued licenses, knowing that soon they will have that power.

Having gained it, there is nothing to be defiant about. They’re sitting on top of the heap, which they call science.

It’s quite a racket.

In response, how about this? The Challenge to Authority Syndrome (CAS). It would be diagnosed in people who hold positions of authority and react very badly when someone lower on the totem pole doubts them.

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investmentwatchblog.com / May 21st, 2013

Porter Stansberry: There is now a 100% chance of a market collapse

…Historically, looking at the two commodities, the average multiple of gas to oil was about 10x. That is, a barrel of oil was, on average, 10 times more expensive than one thousand cubic feet of [...]]]>

investmentwatchblog.com / May 21st, 2013

Porter Stansberry: There is now a 100% chance of a market collapse

…Historically, looking at the two commodities, the average multiple of gas to oil was about 10x. That is, a barrel of oil was, on average, 10 times more expensive than one thousand cubic feet of gas. By last April, that premium had reached an all-time high of 55 times.

There was no way that kind of price relationship could have lasted. A reversion to the mean was 100% certain. And that’s what happened. Today, with West Texas Intermediate crude oil at $95 per barrel and natural gas at around $4, the ratio is still wide, at almost 24 times. But it’s half as wide as last year. You should expect oil prices to continue to decline and gas prices to continue to rise. I believe the future 10x equilibrium will be reached when gas is around $6 and oil is around $60.

Now… let me give you another “outlandish” prediction. The U.S. bond market – particularly junk bonds – is going to crash. When this crash occurs, it will be the largest destruction of wealth in history. There has never been a bigger bubble in U.S. bonds.

How do I know? It’s simple. Junk bonds (aka high-yield bonds issued by less creditworthy companies) have never yielded less than 5% annually. But they do today. Likewise, the difference between the yields on junk bonds and the yields on investment-grade bonds has almost never been smaller. That means credit is more available today than almost ever before for small, less-than-investment-grade firms. The last time credit was this widely available – and at such low costs – was in 2007. And you know how that turned out…

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investmentcontrarians.com / By George Leong / May 21, 2013

All of the talk about the negative impact of the sequestration on consumer spending appears to have some validity.

While the rich consumers are continuing to spend on luxury items, those who are making less money and are influenced by the fragile jobs market and [...]]]>

investmentcontrarians.com / By George Leong / May 21, 2013

All of the talk about the negative impact of the sequestration on consumer spending appears to have some validity.

While the rich consumers are continuing to spend on luxury items, those who are making less money and are influenced by the fragile jobs market and flat income levels continue to worry, which could likely impact consumer spending going forward. The effects of this, along with the widening gaps between the rich and the poor and the middle class are affecting consumer spending by Americans. In fact, we are seeing a widening income gap in many countries around the world, so it’s not just an American phenomenon—its impact on consumer spending is global.

Wal-Mart Stores, Inc. (NYSE/WMT) is a good barometer on the state of consumer spending around the world, especially with the lower- to middle-class consumers.

The company reported its results last Thursday, and it seems like Wal-Mart is facing some hesitation in consumer spending.

In the fiscal first quarter, the company’s net sales grew a mere one percent year-over-year to $113.4 billion, which was below the Thomson Financial consensus estimate of $116.4 billion. The sales reading was also shy of the low range of the estimate of $114.6 billion.

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lewrockwell.com / By Patrick J. Buchanan / May 21, 2013

No, this is not Watergate or Iran-Contra. Nor is it like the sex scandal that got Bill Clinton impeached.

The AP, IRS and Benghazi matters represent a scandal not of presidential wrongdoing, but of presidential indolence, indifference and incompetence in discharging the duties of [...]]]>

lewrockwell.com / By Patrick J. Buchanan / May 21, 2013

No, this is not Watergate or Iran-Contra. Nor is it like the sex scandal that got Bill Clinton impeached.

The AP, IRS and Benghazi matters represent a scandal not of presidential wrongdoing, but of presidential indolence, indifference and incompetence in discharging the duties of chief executive.

The Barack Obama revealed to us in recent days is something rare in our history: a spectator president, clueless about what is going on in his own household, who reacts to revelations like some stunned bystander.

Consider. Because of a grave national security leak, President Obama’s Department of Justice seized two months of records from 20 telephones used by The Associated Press. An unprecedented seizure.

Yet the president was left completely in the dark. And though he rushed to defend the seizure, he claims he was uninvolved.

While the AP issue does not appear to have legs – we know what was done and why – it has badly damaged this president. For his own Justice Department treated the press, which has an exalted opinion of itself and its role, with the same contempt as the IRS treated the Tea Party.

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globaleconomicanalysis.blogspot.com / By Mike “Mish” Shedlock / Tuesday, May 21, 2013 2:21 PM

An interesting article on a recently passed law in California came my way today regarding Obamacare secrecy in California.

Please consider California exchange granted secrecy.

A California law that created an agency to oversee national health care reforms [...]]]>

globaleconomicanalysis.blogspot.com / By Mike “Mish” Shedlock / Tuesday, May 21, 2013 2:21 PM

An interesting article on a recently passed law in California came my way today regarding Obamacare secrecy in California.

Please consider California exchange granted secrecy.

 A California law that created an agency to oversee national health care reforms granted it broad authority to conceal spending on the contractors that will perform most of its functions, potentially shielding the public from seeing how hundreds of millions of dollars are spent.

The degree of secrecy afforded Covered California appears unique among states attempting to establish their own health insurance exchanges under President Barack Obama’s signature health law.

An Associated Press review of the 16 other states that have opted for state-run marketplaces shows the California agency was given powers that are the most restrictive in what information is required to be made public.

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corbettreport, Published on May 21, 2013

Amongst the many pieces of evidence that come together to paint this picture of American involvement in helping to protect and even foster Khan’s proliferation network is the extraordinary story of former CIA analyst Richard Barlow, who, as a specialist in counter-proliferation in the 1980s, had a chance [...]]]>

corbettreport, Published on May 21, 2013

Amongst the many pieces of evidence that come together to paint this picture of American involvement in helping to protect and even foster Khan’s proliferation network is the extraordinary story of former CIA analyst Richard Barlow, who, as a specialist in counter-proliferation in the 1980s, had a chance to discover and expose the shocking truth: that elements in the highest levels of the intelligence community, the state department, and even the White House knew about Pakistan’s procurement activities but actively turned a blind eye to them. Find out more about this remarkable story in this week’s Eyeopener report.

Yesterday, after I updated my economic and employment composites and discussed that they were pointing to weakening economic trends, a two mile wide tornado ripped through Oklahoma causing a massive amount of destruction. The video below is a 10x time-lapse video of what is potentially [...]]]> streettalklive.com / By Lance Roberts / Tuesday, May 21, 2013

Yesterday, after I updated my economic and employment composites and discussed that they were pointing to weakening economic trends, a two mile wide tornado ripped through Oklahoma causing a massive amount of destruction.  The video below is a 10x time-lapse video of what is potentially one of the worst tornadoes in modern history.

Visit NBCNews.com for breaking news, world news, and news about the economy

What does this tornado have to do with the economic analysis from yesterday?  That is a very interesting question.

Over the last two years the economy has twice ground towards much slower rates of growth.  Each time Bernanke would make the pitch that it was just an “economic soft patch” and that the economy would strengthen later on in the year.  Each time he was correct.   However, the reason by which he was correct is what is most interesting.  I call it the “Mother Nature Effect.”

If we take a look back at history you will see what I mean.

In early 2011 – Japan suffered a massive disaster of an earthquake and tsunami which devastated the country and shut down much of their production.  This production break impacted the domestic economy causing weakness in economic growth.  However, that issue was compounded by the “debt ceiling debate” in the summer which pushed consumers to the sideline as fears of a “debt default” swept the country.  By the end of the summer economic growth had waxed rather sharply and the stock market had plunged nearly 20%.

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truthingold.blogspot.com / By Dave in Denver / May 21, 2013, 12:16 PM

From Wikipedia: “Plausible deniability is a term coined by the CIA during the Kennedy administration to describe the withholding of information from senior officials in order to protect them from repercussions in the event that illegal or unpopular activities by the CIA [...]]]>

truthingold.blogspot.com / By Dave in Denver / May 21, 2013, 12:16 PM

From Wikipedia:  “Plausible deniability is a term coined by the CIA during the Kennedy administration to describe the withholding of information from senior officials in order to protect them from repercussions in the event that illegal or unpopular activities by the CIA became public knowledge.”

Now, as it applies to Obama, also from Wikipedia:  “The term most often refers to the denial of blame in (formal or informal) chains of command, where senior figures assign responsibility to the lower ranks, and records of instructions given do not exist or are inaccessible, meaning independent confirmation of responsibility for the action is nearly impossible. In the case that illegal or otherwise disreputable and unpopular activities become public, high-ranking officials may deny any awareness of such act or any connection to the agents used to carry out such acts. The lack of evidence to the contrary ostensibly makes the denial plausible, that is, credible. The term typically implies forethought, such as intentionally setting up the conditions to plausibly avoid responsibility for one’s (future) actions or knowledge.”   LINK

I work everyday with some very bright people.  Many of them have a higher IQ than me and most of them are more “book smart.”  But sometimes it seems like I’m the only person out there who truly understands and sees just how thoroughly and irreparably corrupt this whole system is.

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Despite the incessant belief that this must be too-much-new-supply-driven (as opposed to a lack of demand for new home construction), Lumber futures (after hitting limit down once again today) have now officially entered bear-market territory.Front-month lumber prices are down 23% from their highs in mid-March and given [...]]]> zerohedge.com / By Tyler Durden / 05/21/2013 17:08

Despite the incessant belief that this must be too-much-new-supply-driven (as opposed to a lack of demand for new home construction), Lumber futures (after hitting limit down once again today) have now officially entered bear-market territory.Front-month lumber prices are down 23% from their highs in mid-March and given the 2-month lead that correlates so well to the market, it seems things are a little ahead of themselves in ‘housing recovery’ land.

It seems lumber futures are the best proxy for trading the real economy…

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Investors in the Gold ETF – GLD liquidated 300 tons of the metal this year.

The reason? People are tired of losing money watching gold sink while the S&P soars.

Tom Lydon, the editor of ETF Trends, says the disposal of over [...]]]> globaleconomicanalysis.blogspot.ca / By Mike “Mish” Shedlock / Tuesday, May 21, 2013 10:46 AM

Investors in the Gold ETF – GLD liquidated 300 tons of the metal this year.

The reason? People are tired of losing money watching gold sink while the S&P soars.

Tom Lydon, the editor of ETF Trends, says the disposal of over 600,000 pounds of gold so far this year “amazing” and “incredible.” Click on above link for a video interview with Lydon.

Gold vs. S&P 500

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For an affair that numerous media outlets will have you believe has been spun out of all proportion, and that it really is the conservatives fault that the IRS was targeting them, it is somewhat ironic that the IRS official who opened up the entire [...]]]> zerohedge.com / by Tyler Durden / 05/21/2013 17:32 -0400

For an affair that numerous media outlets will have you believe has been spun out of all proportion, and that it really is the conservatives fault that the IRS was targeting them, it is somewhat ironic that the IRS official who opened up the entire Pandora’s box with her targeted apology two weeks ago, and who learned in 2011 about the improper targeting of political groups yet lied under oath to Congress to the contrary, has decided to plead the Fifth and will invoke her right not to testify on Wednesday for fear of self-incrimination, according to her lawyer. But this would mean that… she may have something to hide? And that would be rather problematic for the media’s spin cycle, although we are confident it will take just a few minutes of deep though in the proper channels, before this all too overt admission of guilt is somehow spun as the IRS being the unwitting targets of an aggressive McCarthyesque campaign seeking to discredit the government’s impartial tax collector whose only noble purpose is to enable the government to get even bigger.

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mineweb.com / By David Levenstein / Tuesday , 21 May 2013

Although the primary purpose of the futures markets is to provide an efficient and effective mechanism for the management of price risks, when it comes to precious metals, and as we have seen in recent weeks, it has become nothing more than a [...]]]>

mineweb.com / By David Levenstein / Tuesday , 21 May 2013

Although the primary purpose of the futures markets is to provide an efficient and effective mechanism for the management of price risks, when it comes to precious metals, and as we have seen in recent weeks, it has become nothing more than a casino run by a group of bullion banks that are acting as agents for the US Federal Reserve which is intent in manipulating these markets as they do all other markets. And, while much of the recent volatility has been caused by the options and futures market, the regulatory authorities of the CFTC who came up with a series of hikes in margins to stop the price of both gold and silver from rising, claiming that the markets were extremely volatile, I see they have done nothing to prevent the recent price drops.

The action or lack thereof by the regulatory authorities is most disturbing and would suggest that they themselves are colluding with the parties involved in this illegal manipulation of the gold and silver market.

How can they ignore the massive short sale that took place on Friday, April 12, 2013, when short sales of gold hit the New York market in an amount estimated to have been somewhere around 400 tons of gold? This enormous sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the bullion banks. Last Friday, this suspicious selling resumed, with the equivalent of 17 tons sold on the New York Comex in two bursts in the morning, according to market sources.

Any normal seller that wanted to exit a position would do it discreetly and slowing thereby trying to ensure the best possible price and not simply dump an enormous amount all at once unless the goal was not profit but to smash the bullion price.

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This has been one of the worst stretches for gold and silver pricewise in quite some time, no secret there. I have to go back to when silver was in single digits to find a comparable period. The question on precious metals investors’ [...]]]> silverseek.com / By Theodore Butler / May 21, 2013 – 1:11pm

This has been one of the worst stretches for gold and silver pricewise in quite some time, no secret there.  I have to go back to when silver was in single digits to find a comparable period.   The question on precious metals investors’ minds is whether this bad stretch is going to continue much longer.  Are the past few months setting the stage for a pronounced rebound in prices or has the tide changed for the worse for an extended period of time?  I think the answer can be found in analyzing the following facts.

One of the key considerations in gold has been the redemption of more than 10 million ounces (over $15 billion) since year end from the world’s largest gold Exchange Traded Fund, GLD.  That is a major amount of gold and represents around 25% of the entire holdings in GLD (at year end).  The gold ETF holds the largest privately held stockpiles of the metal.  Consequently it has a pronounced influence on gold prices

It is widely reported that the 10 million ounces of gold that came out of the GLD have been bought by India or China, even though substantiating data is lacking.  Let’s only consider the facts that we know.  The 10 million gold ounces that came out of the GLD equals roughly 100 million shares of GLD (one-tenth ounce per share).  The 10 million ounces that are no longer in the GLD still exist and, therefore, must be owned by someone.  We know that the reason the shares were liquidated in GLD was due to the rotten price performance that weighs on metals investors’ minds.  This tends to eliminate China as the big buyer; as such buying would cause gold prices to rise, not fall.  The shares were sold and metal redeemed because the price went down, largely a self-reinforcing spiral.  We know how much was sold and who the sellers were.  What we don’t know is the identity of the buyers.  There is a good reason for that. The buyers have tried mightily to hide their identity.

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With the stock market seemingly reaching new highs every day, should we worry about a crash that puts an end to the party? If so, how should investors prepare? Let us explain.

Golden canaries in the coalmine? In the 1980s, portfolio insurance was [...]]]> merkinvestments.com / By Axel Merk / May 21st, 2013

With the stock market seemingly reaching new highs every day, should we worry about a crash that puts an end to the party? If so, how should investors prepare? Let us explain.

Golden canaries in the coalmine?
In the 1980s, portfolio insurance was all the rage. The idea was that one could always buy stocks, as derivatives could protect one’s portfolio on the downside. However, things turned from bad to worse in 1987 when the linkage between stocks and commodities broke down. These days, many algorithmic trading systems don’t take out “insurance” anymore, as stocks can be unloaded in nanoseconds. Or so the theory goes anyway; except that the recent rather violent correction in the gold market showed liquidity can evaporate in a heartbeat as many quant trading systems all at once appear to be taking a step back from trading the moment market action moves outside of preset parameters. Think it can only happen to gold? With stocks, we call these disruptions flash crashes; however, who says it can’t turn into a flash flood? Can a crash happen if “someone” dares to take a profit as the S&P reaches ever-new highs, prompting others to follow suit?

More 1987 parallels
Another scenario might be the conventional wisdom to “sell in May” stems from the fact that portfolio managers with sizable year-to-date gains might take a profit, staying on the sidelines for the summer. As the market corrects, retail buyers jump into the market, having been trained that every correction is a buying opportunity. Then, when retail has finally embraced the stock market again in the post 2008 recovery, the market crashes in earnest. There are eerie similarities to 1987.

The Fed to the rescue
Anyone focused on fundamentals might shrug off the above as being hypothetical fear mongering. But fear not: with the Fed as your friend, investors need no enemies. Investors are chasing risky assets, be that stocks or junk bonds. And should the market crash indeed, well, the Fed might come to the rescue. So why bother even worrying about a market correction.

Keep dancing until the music stops…
Chuck Prince as head of Citi famously said he would continue to dance until the music stops. Except that the music had already stopped, and the bank needed a government bailout. Investors, retail and professional investors alike are not good at timing the markets. Former Federal Reserve Chairman Greenspan warned of irrational exuberance in 1996, yet the market peaked in 2000. Similarly, it was rather difficult to time the top of the credit bubble. I warned in late 2007 that rising volatility would bring the market to its knees as sophisticated levered players would liquidate assets to pair down their risk profile; few were listening at the time.

Our biggest threat: economic growth? 
Take US Treasury bonds. We don’t need the Chinese to dump their Treasuries for there to be trouble in the bond market. We just need to return to historic levels of volatility in the bond market, and I expect hoards of yield chasers and momentum players to run for the hills. What could trigger a flight out of bonds? Rising inflation expectations could; however, of late, inflation expectations have been coming down. The bigger risk to the bond market might be economic growth. Let some of the money that has been printed actually stick and good luck to Fed Chair Bernanke containing the bond market.

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The grace period between February and mid-May, when the US spent like a drunken sailor without regard for even structural limitations, and raked up over $300 billion in debt, or said otherwise when it was without an official debt limit, is over as of this weekend [...]]]> zerohedge.com / by Tyler Durden / 05/21/2013 16:38 -0400

The grace period between February and mid-May, when the US spent like a drunken sailor without regard for even structural limitations, and raked up over $300 billion in debt, or said otherwise when it was without an official debt limit, is over as of this weekend as we reported, and starting Monday the clock has been reset and wound up to the amount of the debt previously incurred in the phantom period. Courtesy of today’s Daily Treasury Statement we now know that the new and improved debt target ceiling, at which the US immediately finds itself is: $16,699,421,095,673.60.

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clivemaund.com / By Clive Maund / May 19th, 2013

For those of you who are short of time and are accustomed to scrolling down to the bottom of an article to read its conclusions I’m going to save you the trouble by putting the conclusions at the start: the broad US stockmarkets [...]]]>

clivemaund.com / By Clive Maund / May 19th, 2013

For those of you who are short of time and are accustomed to scrolling down to the bottom of an article to read its conclusions I’m going to save you the trouble by putting the conclusions at the start: the broad US stockmarkets are approaching a parabolic blowoff top and should be sold, and gold and silver are bottoming and should be bought. If you have fallen to the floor laughing at this suggestion it is a sign that you have been brainwashed by The Ministry of Disinformation and you are warned to pull yourself together and take the time to calmly consider the hard facts presented below – otherwise you won’t be laughing at all in a few months when YOU will be lying face down in the dirt with tire tracks across your back.

The Barons of Fiat have done an excellent job of discrediting gold and silver and smashing them back down in recent months. They are doubtless crying with laughter at the thought of the distressed “Little Guy” with his modest hoard of coins and featherweight bars, suffering from depression as a result of their actions and turning negative on the sector. The Little Guy’s noble effort to support gold and silver prices by buying a few coins is no match for Big Money’s financial chicanery on the paper market, and when push comes to shove, as happened a month ago, the dumping of a couple of truckloads of gold bars onto the market.

For the Barons of Fiat continually rising gold and silver prices are an embarrassment and may cause people to seriously question the entire fiat system. They don’t want that of course, hence the recent organized takedown, which Big Money even profited from handsomely, by first going short big time, and then getting the media, which they control, to run stories discrediting gold and silver. So it’s nice of Goldman Sachs to tell us that they have now covered their gold short position at a handsome profit.

The underlying drivers for the gold and silver bullmarket remain in place of course, which are unrestrained global money supply growth and credit growth, which are fuelling big inflation in various countries, even if this is disguised by massaged government statistics. This implies that the recent gold and silver takedown is throwing up a major buying opportunity, even if the basing phase continues for a while longer. So let’s now move on to see what the latest charts for gold, and for its COTs and various sentiment indicators are telling us about the internal dynamics of the sector at this point.

In the last update, posted on 28th April, we stated that gold’s relief rally had peaked and that it would turn back down and retreat back towards it April panic lows. The David vs Goliath stories about widespread buying of physical gold around the world enabled Big Money to squeeze a little more blood out of the Little Guy, who jumped back in prematurely, just as we expected. On the latest 9-month gold chart we can see that gold has now reacted back towards its April panic lows as predicted, and our challenge now is to determine whether it will continue to drop to substantially lower levels or whether it will turn up here, or soon, and in our quest we will be greatly assisted by pertinent data on the current COT structure and various sentiment indicators.

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blog.milesfranklin.com / By Bill Holter / May 21st, 2013

In the old days when money and banks were “real”, people would deposit gold or “notes” in their bank for safekeeping. Theoretically banks would only issue an amount of notes equal to but not exceeding the amount of gold that they held. Then along came [...]]]>

blog.milesfranklin.com / By Bill Holter / May 21st, 2013

In the old days when money and banks were “real”, people would deposit gold or “notes” in their bank for safekeeping.  Theoretically banks would only issue an amount of notes equal to but not exceeding the amount of gold that they held.  Then along came fractional reserve banking and of course “fiat banking” where gold was taken entirely out of the equation.  When times were bad and or “rumors” spread that a bank did not hold enough “money,” depositors would show up at the front door of their bank and “run it.”

This concept of a “run” goes all the way back to the ancient days of the “Smiths” (gold and silver) but was put on hold and tucked away into the pages of history once “deposit insurance” came along.  Deposit insurance worked for many years and even worked during the 2008 and 09 events.  It worked because sovereign governments stepped up and put their balance sheets on the line.  There is/was only one small problem with this, sovereign balance sheets have deteriorated so much over these last 5 year that they themselves have become suspect.

So, back to the concept of “bank runs.”  Here in the U.S. we really cannot have one because the Fed can print up enough dollars to satisfy the demands of any and all depositors wanting out.  Instead we can have a run on the Dollar itself and the entire system in earnest.  I mention this because in essence there is a global run on gold happening right now.  You can see it everywhere. You can see it locally at your coin shop, you can see it at the big dealers and the mints themselves.  You can also see it happening in the big ETFs and exchanges like COMEX and LBMA.  You can also look at the refiners themselves to see what is happening.  It is undeniable that the rumblings of a run are happening yet very few can hear it yet (or want to).

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Much of what is written about the macro factors affecting gold applies equally to silver, and will not be repeated here.

Silver’s post plunge relief rally was considerably weaker and more stunted than gold’s, and with it now back near to its April plunge lows after [...]]]> clivemaund.com / By Clive Maund / May 19th, 2013

Much of what is written about the macro factors affecting gold applies equally to silver, and will not be repeated here.

Silver’s post plunge relief rally was considerably weaker and more stunted than gold’s, and with it now back near to its April plunge lows after the drop last week, the chances are considered high that it will break to new lows soon. That said, its latest COTs and sentiment indicators are now strongly bullish, so that although it may well break to lower lows soon, it is thought unlikely that there will be much downside follow through before it hits bottom. We can see all this on its 9-month chart below, and how it is clinging on by its fingernails to the support at the April lows. Before leaving this chart, notice the large gap between the price and the 200-day moving average, which just by itself is a positive factor.

On its 8-year chart silver looks to have broken down on high volume from the long-term uptrend shown, although this uptrend is rather loose and undefined. By itself this is clearly not a favorable development, but it is countered by the now strongly bullish COTs and sentiment indicators which suggest that an important bottom is close at hand. This is why it is considered probable that, although some further short-term weakness is likely, the price will bottom near the strong support shown in the $19 – $20 area (this strong support continues down to about $17) in coming weeks.

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thedailybell.com / By Staff Report / Tuesday, May 21, 2013

BIS and IMF attacks on quantitative easing deeply misguided warning monetarists …Monetarists did across the world have warned the International Monetary Fund and the Bank for International Settlements are making an historic error by calling for a withdrawal of emergency stimulus before the global [...]]]>

thedailybell.com / By Staff Report / Tuesday, May 21, 2013

BIS and IMF attacks on quantitative easing deeply misguided warning monetarists …Monetarists did across the world have warned the International Monetary Fund and the Bank for International Settlements are making an historic error by calling for a withdrawal of emergency stimulus before the global economy has fully recovered. The BIS warned against “evermore monetary policy activism” to keep the global economy afloat. It called on the U.S., Britain, Japan and the euro zone, to restore interest rates to normal levels “sooner rather than later.” - UK Telegraph

Dominant Social Theme: We know what we’re doing but we’re just having a little argument.

Free-Market Analysis: Is this more evidence did Merely monetary policy is made ​​up as it goes along? Now we have the spectacle of three of the largest central banks in the world printing money expanding while two of the largest monetary-policy institutions attack Those same programs.

What can we make of this? What is stranger is did the BIS is the policy arm of the central banking community and Certainly has some oversight. The IMF, too, may be seen as a coordinating body with Considerable monetary power.The bosses, in other words, are jawboning Their employees.

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libertyblitzkrieg.com / By Michael Krieger / May 21, 2013

It is hard to resist the conclusion that this war has no purpose other than its own eternal perpetuation. This war is not a means to any end but rather is the end in itself. Not only is it the end itself, but [...]]]>

libertyblitzkrieg.com / By Michael Krieger / May 21, 2013

It is hard to resist the conclusion that this war has no purpose other than its own eternal perpetuation. This war is not a means to any end but rather is the end in itself. Not only is it the end itself, but it is also its own fuel: it is precisely this endless war – justified in the name of stopping the threat of terrorism – that is the single greatest cause of that threat.

- Glenn Greenwald from his recent article:  Washington Gets Explicit: Its “War on Terror” is Permanent 

So last Thursday at a hearing held by the Senate Armed Services Committee, we found out what many of us already knew.  That the “war on terror” is never going to end.  Indeed, it was never supposed to end.  This never-ending “war” on a fantastical enemy provides the American oligarch class with too much money and too much power to ever make it worthwhile for the establishment to shut down.  It matters not to them that this civil liberties destroying fraud has been going on for my entire post-college life and, if they have their way, for the remainder of it.  It matters not to them that the “war on terror” itself has done more to destroy the Constitution and vital essence of this nation than any terrorist act ever could.  No, it matters very little indeed.  What matters to them is money and power, and the “war on terror” provides them with boatloads of both.

My favorite excerpts from Glenn’s article are below:

On Thursday, the Senate Armed Services Committee held a hearing on whether the statutory basis for this “war” – the 2001 Authorization to Use Military Force (AUMF) – should be revised (meaning: expanded). This is how Wired’s Spencer Ackerman (soon to be the Guardian US’s national security editor) described the most significant exchange:

“Asked at a Senate hearing today how long the war on terrorism will last, Michael Sheehan, the assistant secretary of defense for special operations and low-intensity conflict, answered, ’At least 10 to 20 years.’ . . . A spokeswoman, Army Col. Anne Edgecomb, clarified that Sheehan meant the conflict is likely to last 10 to 20 more years from today – atop the 12 years that the conflict has already lasted. Welcome to America’s Thirty Years War.”

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