Charles Is Featured in a Graphic Novel!
Lost in the announcement that the FederalReserve would not slow the rate of its $85 billion a month bond-buying, money printing, was the fact that the Open Market Committee lowered its growth forecast for the eighth time.
For four years the Fed has been expecting GDP growth to accelerate to at least 3 percent.
The Fed, by Bernanke’s own admission has not understood the full measure of the harm the financial crisis and the recession have done to the economy.
The Fed is not to be faulted for not having perfect – or even very good – vision of conditions to come. But it is to be faulted for the conceit that it can interfere with the meaningful and information-laden signals of real interest rates in the marketplace, replacing them with contrived and therefore misleading rates.
The Fed thereby forestalls the real adjustments the economy needs to restore its resilience. At the same time it continues to deceive actors in the economy about the real conditions of consumer well-being and the capital markets. The malinvestments resulting from these bogus signals will themselves eventually need to be liquidated at great cost, no less than the malinvestments of the dot.com bubble or the real estate bubble.
This gives them a huge incentive to promote laws that restrict the investment choices available to Americans to “U.S. only.”
Foreign banks, brokers, and trust companies are falling head over heels in their rush to get rid of as many U.S. clients as possible.
It’s no surprise why, either. Federal laws like the Foreign Account Tax Compliance Act (FATCA) have literally made Americans financial outcasts worldwide. It’s far easier for foreign firms to fire their U.S. clients than to try to comply with ever-increasing demands from the IRS and other three-letter agencies…
As we’re now finding out, many foreign firms won’t bother, and as a result, our ability to use safer, more stable and potentially more lucrative options offshore is reduced.
In a sense, it’s just another example of the government telling you what you can and cannot do…
– Mark Nestmann More HERE
by Mencken’s Ghost
Let’s begin with three questions:
1. What do you call someone who makes a compelling case that both the Left and Right are responsible for today’s economic mess and national decline?
2. What do you call someone who makes a compelling case that the culprits include FDR, the New Deal, John Maynard Keynes, Milton Friedman, Lyndon Johnson, Richard Nixon, Ronald Reagan, Alan Greenspan, George W. Bush, and Ben Bernanke?
3. What do you call someone who makes a compelling case that both crony capitalism and crony socialism are equally harmful?
Grantham is co-founder and chief investment strategist for GMO, a large Boston asset manager.
Grantham has a well-deserved reputation for calling out asset bubbles, from Japan’s stock market bubble in the 80’s, to the dot com bubble and the mortgage meltdown.
What does he see right now among the prevailing bond and stocks bubbles?
He makes a case similar to The Dollar Meltdown:
… own stock in the ground, own great resources, reserves of phosphorous, potash, oil, copper, tin, zinc—you name it. I’d be less enthusiastic about aluminum and iron ore just because there is so much….
… and the most important of all is food. The pressures on food are worse than anything else… everything is overpriced today, once again, courtesy of incredibly low interest rates that push people into investing. A wicked plot of the Federal Reserve.