Propaganda

Peter Schiff: Told You The Fed Was Bluffing On Rate Hikes

I recently highlighted an example of why Jeremy Grantham, the British-born investment strategist and founder/former chairman of Grantham, Mayo, Van Otterloo & Co. (oversees $117 billion in client assets as of June 30), is one of Survival And Prosperity’s “crash prophets.”

The following also exemplifies why Peter Schiff, the CEO and chief global strategist of Euro Pacific Capital, belongs to that small group of individuals whose investment activities/recommendations I track on a regular basis.

From Schiff’s “Groundhog Day at the Fed,” published on the Euro Pacific Capital website last Friday:

Every dictator knows that a continuous state of emergency is the best means to justify tyrannical policies. The trick is to keep the fictitious emergency from breeding so much paranoia that routine activities come to a halt. Many have discovered that its best to make the threat external, intangible and ultimately, unverifiable. In Orwell’s 1984 the preferred mantra was “We’ve always been at war with Eurasia,” even though everyone knew it wasn’t true. In its rate decision this week the Federal Reserve, adopted a similar approach and conjured up an external threat to maintain a policy that is becoming increasingly absurd.

In blaming its continued inaction on “uncertainties abroad” (an excuse never before invoked by the Fed in the current period of zero interest rates), the Fed was able to maintain the pretense of a strong domestic economy, and its desire to lift rates at the earliest appropriate moment while continuing the economic life support of zero percent rates. Unbelievably, the media swallowed the propaganda hook, line, and sinker.

Over the summer it all seemed so certain. In mid-August the Wall Street Journal conducted a poll revealing that 95% of economists expected a rate hike by the end of 2015, with 82% expecting the first move to come in September. On July 29, Marketwatch reported that changes in Fed language were the “smoking gun” that made a September move a certainty. I was one of the few who publicly predicted that all the tough talk from the Fed was a bluff, and that there would be no hike in 2015. For taking that stance, I was largely ignored and ridiculed. In a July 16 interview on CNBC’s Futures Now (I am no longer invited to be on their television broadcasts), pundit Scott Nations took me to task for making the “outlandish” suggestion that the Fed would not raise in 2015, saying (to paraphrase):

“If price is truth and Fed funds futures are the collective wisdom of everybody in the world, and they are absolutely a lock for the Fed to raise rates by the end of the year, why is everybody else wrong and you are right?”

But now, in mid-September, it has all changed, far fewer economists expect a hike this year. However, despite this dramatic reversal, few have downgraded their forecasts or weakened their belief that the Fed remains committed to tighten policy…eventually. In other words, the Fed has achieved a complete communications victory.

Just like it has in prior statements, the Fed painted a picture of a stable and growing economy that was ready for a hike. In fact, in her press conference, Janet Yellen said that the Fed was “impressed” by the strength of the domestic economy. Although such statements began to resemble the film Groundhog Day, no one seems to tire of it.

A cornucopia of metaphors should have come to mind: The Fed’s bite had failed to live up to its bark; its “open mouth” operations wrote a check that its Open Market Committee was unable to cash; the Fed has become Lucy of the comic strip Peanuts, always promising to hold the football for Charlie Brown to kick, but always taking it away before he kicks it. Instead, the dominant theme of the coverage was that the Fed’s understanding of the global economy was just better than the rest of us. It apparently understood that a 25 basis point increase in rates in the U.S. could ripple through to the world markets and could potentially push China’s tottering stock market into the abyss. That was a risk it believed was not worth taking.

To keep the story line going requires that the steady torrent of negative data be ignored (see manufacturing data in September Manufacturing Business Outlook Survey of Philly Fed]. Similar weakness is evident in business investment, productivity, and consumer confidence numbers. Based on those data sets, conventional Keynesian “wisdom” suggests the Fed should be preparing a fresh round of stimulus, not readying its first economic sedative in nine years.

The big news is the introduction of “international developments” as an ongoing input into the Fed’s rate deliberation process. This addition allows the Fed nearly limitless latitude to perpetually kick the can down the road. After all, it is a great big world, and it will always be possible to find a problem somewhere. A Reuters article issued after the decision describes the new reality (9/18/15, Howard Schneider):

“It is a situation that could leave the Fed stranded in its hunt for a rate liftoff until the entire global economy is growing in sync, and the horizon is clear of risks.”

So there you have it. The Fed is no longer just the central bank of the United States, but the central bank of the entire world. As such it will need to consider any possible negative impacts, anywhere, before it pulls the trigger. This isn’t just moving the goalposts; it is dismantling them completely, putting them in crates, and losing them in a government warehouse…much like the Ark of the Covenant at the end of the first Indiana Jones movie.

The height of yesterday’s absurdity came during Janet Yellen’s press conference when Ann Saphir from Reuters asked her about the possibility that interest rates could stay at zero “forever.” While characterizing that likelihood as “extreme,” Yellen incredibly stated that she could not rule out the possibility. Of course the absurd suggestion that American civilization may never see rates above zero did not even raise eyebrows in the mainstream media. But the statement itself raises some interesting questions about Yellen’s actual thinking. First, how can she really be contemplating at 2015 rate hike, if she cannot even rule out the possibility of rates remaining at zero forever? Second, is she really that naïve and arrogant to believe that currency markets would allow the Fed to hold interest rates at zero indefinitely, without creating a dollar crisis, even if the Fed wanted to hold them there?

As I have maintained continuously, rate hike talk from the Fed is just a bluff to disguise its inability to tighten, as even small increases could be sufficient to prick the biggest bubble it has ever inflated. It is no coincidence that the stunning 170% increase in the Dow Jones, that occurred between March 2009 and the end of 2014, happened while the Fed was stimulating the economy almost continuously with QE, and that the rally came to an abrupt end when the QE stopped.

The recent 10% correction on Wall Street confirms to me just how sensitive the markets remain to the prospect of any rates higher than zero. In reality, that sell-off was a much greater factor than China in keeping the Fed quiet. That steep correction occurred at a time when most forecasters believed that a September hike was in the cards. For years, they had known that a rate hike was coming, but they always thought it would arrive when the economy was healthy. But when the big day became a clear and present danger, and the economy was still less than optimal, markets began to panic. It was only when Fed officials came out with publicly dovish statements that the sell-off ended. Despite this obvious connection, the markets are still blaming China, despite the fact that big sell-offs in China had been occurring for much of 2015 without sparking follow on panics in the U.S.

As a result, it should be clear that ongoing Fed decision-making is not just “data dependent” (and now we are talking about international, not just domestic, data), but also “market dependent,” meaning the Fed won’t raise rates if markets sell off sharply on expectations that it will raise. Given these impossible conditions, perhaps a perpetual zero rates are not so outlandish. But the reality is Central banks can’t really control interest rates across the spectrum, just the short end of the curve…when markets really panic, they won’t be able to stop economically devastating interest rate spikes on the long end.

In the meantime, I can only hope that the foreign exchange and commodity markets are finally getting the picture that the Fed appears impotent. The tremendous rally in the dollar over the past 18 months was predicated on the belief that interest rates would be rising in the U.S. just as they were falling everywhere else. Now that that premise is in tatters, the dollar should be giving back its undeserved gains. Recent moves in the foreign exchange market reveal that this is the case.

When the year began, opinion was divided between those who thought the Fed would move in March, and those who thought it wouldn’t happen until June. When June came and went, September became the odds-on favorite. Now those same experts are once again divided between December and sometime in 2016. When will these “experts” finally connect the real dots and discover that the monetary medicine that the Fed has doused over the economy since 2008 has only created a weak and utterly dependent economy. A rate hike is supposed to be a signal that the economy has a clean bill of health. But as the patient fails to recover, another dose of QE will be just what the doctor orders.

Subscribe to Euro Pacific’s Weekly Digest: Receive all commentaries by Peter Schiff, John Browne, and other Euro Pacific commentators delivered to your inbox every Monday!

Sniff, sniff, sniff. I smell another Peter Schiff Was Right YouTube video in the offing…

(Editor’s notes: Permission to publish article granted by Euro Pacific Capital; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags: , , , , , , , , , , , , , ,

Chicago Tribune: ‘Chicagoans Should Consider A Modest Property Tax Increase Inevitable’

Coming on the heels of last Thursday’s post and an earlier one about Chicago-area property/other taxes was an article by Chicago Tribune business columnist Melissa Harris entitled “Chicago isn’t Detroit- and it’s not going bankrupt.”

In the June 20 piece, Harris attempted to argue exactly what the title says (critics are panning it as “Machine”/union propaganda). But what interested me were statements like this:

More revenue will be required soon, most likely in the form of a property tax increase.

Not only is Chicago’s property tax rate lower than those in many suburbs, Chicago’s effective property tax rate ranked 49th out of the 50 largest cities in each state, according to 2009 U.S. Census data…

(Editor’s note: Bold added for emphasis)

And this:

Chicagoans should consider a modest property tax increase inevitable, though how much of an increase it will be could be affected by Moody’s decision, which made it more expensive for Chicago to borrow money…

(Editor’s note: Bold added for emphasis)

If one believes claims the Chicago news media routinely carries Mayor Rahm Emanuel’s water, increased tax hike chatter and growing comparisons of the city to other municipalities by the local press could be sending a strong signal to Chicagoans that they’ll be required to bust out their wallets shortly.

You can read the rest of that column on the Chicago Tribune website here (registration required)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags: , , , , , , , , , , , , , ,

Signs Of The Time, Part 85

Monday at lunch I finally got the chance to read my Sunday paper. From the Chicago Tribune “Perspective” section, in the part entitled, “Voice Of The People”:

Do not allow silencers

I cannot believe that there is serious consideration to permitting gun silencers to be used by gun owners in Illinois. Anyone with an ounce of common sense will recognize that guns with silencers are the weapon of choice for assassins, terrorists and murderers. What would happen if a nut entered a school and starting shooting randomly with such a weapon? No noise to alert the rest of the teachers and children?

Two things came to mind when I saw the above:

1. The author has quite an imagination.

2. Yet another argument leaning heavily on emotion (plea for “common sense” is often a giveaway), but devoid of facts.

Emotionally-driven arguments. Very much a sign of the time.

But now the facts on this subject.

An ABC7 Chicago I-Team Investigation recently looked into suppressors as legislation legalizing such devices has been introduced in the Illinois House (HB0433) and Senate (SB0803). Chuck Goudie reported on the ABC7 website on April 30:

Silencers used by criminals on TV and in movies; this is how most people know of the device.

Sponsors of a bill to make them legal in Illinois say the Hollywood interpretation is pure fiction…

A 2007 study found silencer use in crime is rare…

(Editor’s note: Bold added for emphasis)

“Guns with silencers are the weapon of choice for assassins, terrorists and murderers.”

Whatever you say.

And all those “assassins, terrorists and murderers” will be lining up for silencers if they’re legalized in Illinois, right?

As I blogged back on February 11:

Firearm suppressors (or sound suppressors and silencers as they’re also known) are highly-regulated in the United States. J. Guthrie reported on the Guns & Ammo website back on May 13, 2012:

If you lived in Scotland, they would be required for hunting. If you lived in Finland you could saunter down to the local gun shop and buy one over the counter—one more reason to like Finland. In the U.S., suppressors are regulated by the National Firearms Act and you have to first make sure they are legal in your state, fill out a federal form and send it, a couple of photos and some fingerprints into the BATFE for approval. Once approved—the process can take six or seven months—the BATFE sends you a little stamp and some paperwork and you can take possession of the suppressor from you dealer. There are legal considerations for interstate transportation and transferring the suppressor too…

Just like most felons don’t acquire their firearms lawfully, neither will they be obtaining suppressors legally- particularly in a highly-regulated environment like the one that currently exists.

Fears of a proliferation of legally-manufactured, lawfully-obtained suppressors among the bad guys in the “Land of Lincoln” are unfounded.

As for the “Voice Of The People” on these devices? I sure as hell hope it isn’t.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Goudie, Chuck. “Are Gun Silencers A Threat To Safety?” ABC 7. 30 Apr. 2015. (http://abc7chicago.com/news/are-gun-silencers-a-threat-to-safety/689952/). 18 May 2015.

Tags: , , , , , , , , , , , , , , , , , , , ,

Jim Rogers: ‘The Game Is Getting Close To An End’

GoldSeek.com Radio’s Chris Waltzek recently interviewed well-known investor, author, and financial commentator Jim Rogers. Talking to GoldSeek.com Radio from Switzerland, Rogers discussed a number of topics related to investing. While insightful, it was his “parting words” for listeners that grabbed my attention. The former investing partner of George Soros in the legendary Quantum Fund said in the interview:

My parting words are, be very aware of what’s going on and be careful- be worried and be careful. Sure, I write about it in my books. But more important than my books are- just be prepared, because the next time we have a problem in the world it’s going to be really, really bad.

GoldSeek Radio’s Waltzek asked what type of “safety net” is left, to which Rogers replied:

I mean nothing. They’ve put up a lot of PR. But no- I mean, interest rates are at historical lows. They’ve printed staggering amounts of money. I mean, sure they can just go out and buy stocks or something, and then print even more money. But the game is getting close to an end. We haven’t had a recession or hard times in America and the world in six years. We’re overdue historically. When it comes, because the debt is so, so, so much higher, it’s going to be a mess. I mean, I’m still long stocks. I’m still long stocks, don’t get me wrong. I’m just saying, please be aware of what’s going on, because when it ends, it’s going to be serious.


GoldSeek Radio – May 8, 2015 [JIM ROGERS, PETER ELIADES & DAVID MORGAN]
(Jim Rogers Segment 6:08 to 18:08)
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Tags: ,

Quote For The Week

“Losing an illusion makes you wiser than finding a truth.”

-Ludwig Börne (German political writer and satirist. 1786-1837)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags:

Quote For The Week

“The media’s the most powerful entity on earth. They have the power to make the innocent guilty and to make the guilty innocent, and that’s power. Because they control the minds of the masses.”

-Malcolm X (American Muslim minister and human rights activist. 1925-1965)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags:

Democrats Push ‘New Message’ Of Rebounding U.S. Economy

Big eye roll on my part when I spotted the following on my Internet service provider’s home page this afternoon. Charles Babington of the Associated Press reported Friday:

Democrats’ new message on America’s economic recovery is: We told you so, and we’re going to keep telling you so.

The economy is rebounding on nearly every front, even if the middle class still needs help, and it’s time to tell that story loudly, top Democrats say. That’s the key to reversing their midterm election setbacks, according to a host of House Democrats, President Barack Obama and Vice President Joe Biden, all of whom came to Philadelphia this week for pep talks and strategy sessions.

“Democrats have to stand up, you’ve got to explain what we did,” Biden said to loud applause Friday. “Be proud of it… We can’t let the Republican Party rewrite history.”

Obama said much the same the night before. “The record shows we were right” the president said, referring to the 2009 stimulus, the bank and auto industry bailouts, and other strategies to pull out the great recession of 2008…

(Editor’s note: Bold added for emphasis)

A couple of thoughts here:

1. The true state of the U.S. economy and larger financial system is worrisome, as the “great recession of 2008” was merely “papered over” (I talk about that enough on this blog on a regular basis that I don’t feel the need to go into it today).

The news radio station I listen to most often in Chicago has been going on and on this week about the U.S. economy being on such strong footing these days. It’s almost as if they (like others in the mainstream media?) are carrying out the marching orders of the Democratic spindoctors to promote this “new message.” It’s been so ridiculous that if you didn’t know any better, you might think you were listening to old newsreels laying it on thick with the propaganda of the day:


“Vintage 1930s Inflation Propaganda”
YouTube Video

2. “We can’t let the Republican Party rewrite history.” “The record shows we were right.” Democrats vs. Republicans. Us vs. Them. Liberals vs. Conservatives. Left vs. Right. Coke vs. Pepsi…

Personally, I prefer RC.

And like that situation with the sodas, two choices often aren’t ideal for me. Particularly when it comes to the major U.S. political parties, who I’ve come to see as merely two “heads” belonging to the same monster (special interests of the rich and powerful).

3. Finally, I’ve said this before but it bears repeating:

Use this economic “rebound”- as much of an illusion as it may be- to your advantage.

Is your employment status less than ideal? You may want to consider improving that situation while “the getting’s good.” Need some extra income? You may want to look at taking on a part-time job while they’re available. Looking to purchase some emergency preps? “The shadow of crisis has passed.” President Obama said so in his recent State of the Union speech. Shop around for discounted gear, supplies, and other items while demand isn’t as strong as it has been lately and will be when hard times arrive down the road.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Babington, Charles. “House Democrats’ new message on the economy: We told you so.” Associated Press. 30 Jan. 2015. (http://finance.yahoo.com/news/house-democrats-message-economy-told-183956034.html). 30 Jan. 2015.

Tags: , , , , , , , , , , , , ,

Signs Of The Time, Part 80

A couple of days ago my parents’ XFINITY TV Go (offsite cable TV viewing capability) was being streamed via computer at my home in the Chicago suburbs. Pretty neat stuff.

Imagine my surprise when a commercial for a nearby shop popped up on the TV screen- complete with a map of its location.

This happened again with an entirely different store shortly thereafter.

I have to admit- I was kind of creeped out after witnessing that on my television set.

There was just something “Orwellian” to all of it.

Time to bust out the tin foil hat, right?

I read and saw the movie 1984 back when I was in high school in the eighties. I remember thinking at that time life in America would just suck, suck, SUCK if it ever came to that.

And yet, these days, I feel the country is slowly-but-surely heading there.

The signs are all around. And the so-called “Fourth Estate” isn’t exactly helping:


“Newscasters Agree: A Christmas Present Or Two Or Ten Edition”
YouTube Video

I just hope this disturbing devolution can be reversed before it’s too late.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags: , , , ,

Another Quote For The Week

“We’ve had four months of propaganda starting with the President that everybody should hate the police. I don’t care how you want to describe it- that’s what the protests are all about. The protests are being embraced, the protests are being encouraged. The protests, even the ones that don’t lead to violence- and a lot of them lead to violence- all lead to a conclusion:

The police are bad, the police are racist. That is completely wrong.

Actually, the people who do the most for the black community in America are the police- New York City and elsewhere. They are the ones, not the Al Sharptons, they are the ones putting their lives on the line to save black children.”

-Rudy Giuliani, former mayor of New York City, on FOX News Sunday, December 21, 2014

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags: , , , , , , , , , ,

Sunday, December 21st, 2014 Government, Propaganda, Public Safety, Racism No Comments

Terrorism, Fear, And Tim Allen

Back when “Dubya” was President, I started to suspect a number of terrorism warnings issued by his administration were being done not to inform the American public of some real danger, but rather to instill fear to achieve an objective.

I believe this use of specific alerts with an ulterior motive has carried over into the Obama administration.

That being said, I think there are warnings which are the “real McCoy,” which makes it all the more tougher to figure out which ones are bogus.

Last Friday, I was watching Tim Allen’s Last Man Standing on ABC when the following video log about fear appeared:


“Mike Explains the Power of Fear”
ABC Video

“Let’s stop believing the fearmongers.” Something to ponder. And when it comes to terrorism, consider the source and context from which the alert was issued before changing routines and such.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags: , , ,

Tuesday, November 4th, 2014 Government, Propaganda, Public Safety, Terrorism No Comments
Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
(Memorial Day Weekend 2007-2010)

This Project Dedicated to St. Jude
Patron Saint of Desperate Situations



Please Rate this Blog HERE

happyToSurvive

NEW! Advertising Disclosure HERE
ANY CHARACTER HERE
Buy Gold And Silver Coins BGASC Reviewed HERE. Silver Bars & Coins On Sale! 1 Oz., 10 Oz., 100 Oz., 1 Kilo, Monster Boxes Of 1 Oz. Bars/Coins (500 Ct.)
ANY CHARACTER HERE
BullionVault BullionVault.com Reviewed HERE
ANY CHARACTER HERE
MyPatriotSupply.com Reviewed HERE
ANY CHARACTER HERE
Nitro-Pak--The Emergency Preparedness Leader Nitro-Pak Reviewed HERE. Presidents' Day Sale! Save Up To 41% Off Wise Emergency Foods
ANY CHARACTER HERE
Food Insurance Reviewed HERE. Buy Select 4-Can Case, Get Free Upgrade To 6-Can Case; Freeze-Dried Food Sampler Pack Now Only $35
<link>Free Pistol Case w/ Bag Purchase @Cheif</link> CHIEF Supply Reviewed HERE. 25% Off Propper Jackets (Code Needed) Thru 2/29; Fieldtex Products 20% Off Thru 2/29; Tru-Spec Tactical 9 Side-Zip Boots Only $55.96
ANY CHARACTER HERE
bullet proof vests BulletSafe Reviewed HERE
ANY CHARACTER HERE
Not all airguns preform the same in colder weather. Click to learn more. PyramydAir.com Reviewed HERE.
ANY CHARACTER HERE
Airsoft Megastore Reviewed HERE. 20% Off Any Purchase Over $100 (Code Needed)
ANY CHARACTER HERE
Survival Titles Save 20% Paladin Press Reviewed HERE
 

Categories

Archives

Prepper Website

RSS Chris Hill’s Other Blog: Offshore Safe Deposit Boxes

  • Related Reading: Additional Glasgow Vaults Launch Coverage From The Evening Times
    Another Scottish newspaper has written about the launch of new safe deposit box facility Glasgow Vaults in Scotland’s largest city. Catriona Stewart reported on the Evening Times website Tuesday: SCOTLAND’S first independent safe deposit box service has opened in Glasgow – with owners saying a Hatton Gardens-style heist would be impossible. Opened with a £1 […]
  • Related Reading: Vault Security Article By Metropolitan Safe Deposits Of London
    I really haven’t mentioned London, England-based Metropolitan Safe Deposits much on Offshore Safe Deposit Boxes except in conjunction with talk about “Operation Rize.” However, I recently discovered an insightful article on the website of this major player in the U.K. private vault industry. Chief executive Christopher Barrow published “Security is a process, not a product” […]
  • Related Reading: Glasgow Vaults Launch Covered By The Scotsman
    Back on January 20, I alerted blog readers about the opening of a new private vault- Glasgow Vaults- in Scotland’s largest city. Monday morning, I saw an article about the new non-bank safe deposit box facility on The Scotsman (UK) website. Scott Reid reported: What is being billed as “Scotland’s first independent safe deposit box […]
  • Latest Offshore Safe Deposit Box Promotions
    Here are the latest limited-time specials from offshore safe deposit box facilities listed on this blog’s sister site (link included to web page where each promo is displayed): Asia Malaysia mySAFEBOX (Seri Kembangan, Selangor)- “From Jan 11 to Feb 29. Give & Get RM 300 Cash Rebate.” (1/27/16 Facebook post) Titanium Safe Deposit Box (Kota […]
  • Safe Deposit Federation Launched As ‘Self-Regulating Federation Of Independent Safe Deposit Box Companies’
    Since last spring, I’ve been aware of efforts to construct an international trade association for private, non-bank safe deposit box facilities. As recent as last week I discussed the subject. In a January 26, 2016, follow-up post on that series about the 1980s U.S. private vault boom, I blogged: Something else I came across I […]