[KR1494] Keiser Report: QE 4Ever

In this episode of Keiser Report, Max and Stacy survey the wreckage caused in no small part due to the 199 billionaires who met in Davos the previous week. They ask how is it that the world’s 2,153 billionaires have more wealth than 4.6 billion humans combined. They examine the unfolding disaster at Boeing as the company begs for ten billions in loans after the former engineering powerhouse was turned into a wealth extraction financial instrument which led to death of innocent passengers and destruction of untold capital and future economic growth.

In the second half, Max interviews Mark Yusko of Morgan Creek Capital about QE Forever, too much debt and no demand, buybacks as stealth QE, and how the market has become the economy.

[KR1492] Keiser Report: All Rescue Roads Lead to the Elite

In this episode of Keiser Report, Max and Stacy look at the fact that every crisis is now used as an asset, resource, and wealth grab for the most elite in the economy. Whether it is the mysterious repo market turmoil in which we see the NY Fed throwing tens of billions daily into the coffers of the bankers and yet money velocity continues to collapse as the money disappears into their unspendably huge hoard of wealth. To Haiti, the poorest nation in the Western Hemisphere, where a devastating earthquake ten years ago saw billions donated to the nation only to end up in the pockets of the biggest corporations and most politically connected elite whilst hardly any at all reached the Haitian people.

In the second half, Max talks to Chris Martenson of PeakProsperity.com about the ‘fourth turning,’ mass unrest, excessive money printing from the central bank, and gold markets.

Could the Coronavirus Epidemic Be the Tipping Point in the Supply Chain Leaving China?

While the media naturally focuses on the immediate effects of the coronavirus epidemic, the possible second-order effects receive little attention: first order, every action has a consequence. Second order, every consequence has its own consequence.

So the media’s focus is the first-order consequences: the number of infected people and fatalities, government responses such as quarantines, and so on. The general expectation is these first-order consequences will dissipate shortly and life will return to its pre-epidemic status with virtually no significant changes.

Second-order effects caution: not so fast. Second-order consequences may play out for months or even years even if the epidemic ends as quickly as the consensus expects.

The under-appreciated dynamic here is the tipping point, the imprecise point at which a decision to make fundamental changes tips from “maybe” to “yes.”

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Is the Market Grossly Underestimating the Potential Impact of the Coronavirus Epidemic?

Despite the current drop in stocks (less than 1.5% as this is written), there’s a tremendous reservoir of complacency about the economic and financial impact of the coronavirus epidemic. The zeitgeist reflects an implicit confidence that the coronavirus will blow over like the SARS scare a few years ago and the impact on the global economy will be essentially zero.

Have all the risks already been fully discounted? Here are some of the reasons why the assumption that this will have little effect on the U.S. economy and stock market may be misguided:

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Front Running: Lobbyists

In this episode, FRONT RUNNING looks at the promises of draining the swamp that Trump had made and failed to implement. Lobbyists continue to write legislation and get whatever it is they want often over the will of the people.

For this episode of FRONT RUNNING, Max and Stacy are joined by guests, Tyson Slocum, head of Public Citizen’s Energy Program and Ellen Brown, a public banking activist. They discuss the various swamp draining ideas which have been proposed from some of the candidates for president. Andrew Yang, for example, proposes ‘Democracy Dollars’ — a policy in which every voter would receive the same amount of cash to be used only to support their favored political candidates. If this does, indeed, give the citizen eight times more economic power than corporations and their lobbyists, will this help? Tyson believes that corporations would just up their expenditure on buying political loyalty. Elizabeth Warren proposes a lobbyist tax on ‘bads’ above a certain threshold which would, thus, not harm public interest lobbying groups like Public Citizen, but dissuade corporations from outspending activists by so much. Could this combine with Bernie Sanders’ idea of banning for life any member of Congress from lobbying in the future to finally put an end to corporate influence over our politics? Tune in to learn more about the race to drain the swamp.

Or follow this link to watch on RT

Read the transcript below the fold

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Some Practical Questions about the Coronavirus Epidemic

Like everyone else, I’ve been reading the mainstream media reports on the Coronavirus epidemic. I haven’t found any information about the practicalities that immediately occur to me, such as:

1. When public transportation is halted and commerce grinds to a halt as people avoid public places and gatherings, thousands of employees no longer go to work. Who pays their wages while the city is locked down? The employers? Then who compensates the employers, since their income has also gone to zero?

Does China have a universal unemployment insurance system that can quickly issue payments to all people who are no longer going to work and getting a paycheck from an employer?

What about the thousands of migrant workers who don’t have regular employers? Who pays them? If they’re technically not officially sanctioned residents of the city, they don’t exist in government records.

2. If people idled by the lockdown are supposed to live off savings, what about all the marginal workers with few resources? What are they going to live on once their meager savings are gone?

3. Given the choice of obeying the lockdown rules and starving or slipping out of the city to find paid work somewhere else, how many migrant workers will choose to slip away?

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[KR1493] Keiser Report: The one good thing about the Fed

In this episode of the Keiser Report, Max and Stacy watch in amazement at the epic historical bull run, as American heads into election 2020 with Trump’s stock market charging ahead like there is nothing that can stop it. The price to sales ratio has hit an all-time high, suggesting that investors have zero concern about actual sales. While earnings can be massaged with clever accounting, sales is what the company actually manages to sell and there is no disguising that, and every dollar of sales is now worth a whopping $2.4 in stock market cap. They also discuss how Obamacare high deductible policies are wiping out rural hospitals across the US. In the second half, Max continues his conversation with Chris Martenson of PeakProsperity.com about the death of bug splatter, the rise of evil frog robots, and ‘the one good thing about the Fed.’

Don’t Be Too Sure

If there is anything that characterizes this moment in history, it’s complacency: everyone’s so sure that current trend lines will continue, onward and upward, and risk has been tamed for the foreseeable future.

Don’t be too sure.

1. Don’t be too sure that the coronavirus will blow over and have no effect on global growth.

2. Don’t be too sure that “the Fed has our back” so stocks will always resume their steady climb after every spot of bother.

3. Don’t be too sure that the official Chinese pronouncements that the coronavirus is contained are actually accurate.

4. Don’t be too sure that there won’t be a second and far more lethal advance of the coronavirus once all the overseas Chinese who went home for Lunar New Year return to their jobs in the U.S., Europe, Southeast Asia, etc.

5. Don’t be too sure that people will respond to the natural fears of the coronavirus by rushing out to buy a new iPhone, vehicle, etc.

6. Don’t be too sure that bubbles in over-valued stocks and housing won’t pop.

7. Don’t be too sure that global tourism won’t take a body-blow from the spread of the coronavirus.

8. Don’t be too sure that the risks of the coronavirus spreading can be assessed by anyone with any accuracy.

9. Don’t be too sure that the U.S. economy is bullet-proof and so President Trump is a shoo-in for re-election in November 2020.

10. Don’t be too sure that the citizenry’s tolerance for Fed-driven wealth-income inequality is as limitless as the Fed’s balance sheet.

11. Don’t be too sure that the super-low unemployment rate is a reliable measure of business confidence or the health of millions of small businesses.

12. Don’t be too sure that the Fed’s vaunted “wealth effect” won’t reverse.

13. Don’t be too sure that all risks are known and have been discounted.

14. Don’t be too sure that the global health system is capable of dealing with the spread of the coronavirus.

15. Don’t be too sure that central banks’ lowering interest rates is going to reverse a global recession.

16. Don’t be too sure your favored tech stock won’t crater as over-valuation mania is replaced by fear.

My recent books:

Audiobook edition now available:
Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
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Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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If the Martians Teleported the Davos Crowd to a Distant Moon, Who Would Mourn and Who Would Cheer?

Thought experiment: If the Martians teleported the entire Davos Crowd to a distant moon, who would mourn and who would cheer? Friends and family of the disappeared elites would of course mourn their teleportation to a Martian facility on a distant moon, but who else would mourn, other than the flunkies and apparatchiks in the corporate media?

Who would cheer? Everybody who is tired of the dominance of an elite who skims billions from the rest of us “for our own good.” The Davos Crowd is focusing on climate change because they see it as the latest and greatest opportunity to add more billions to their net worth via the skimming operation known as Carbon Trading and controlling the vast capital flows into New Green Deal boondoggles.

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[KR1491] Keiser Report: Reflexivity & Passive Investing

In this episode of the Keiser Report, Max and Stacy look at ‘reflexivity’ and whether or not higher and higher stock prices are driving prices higher as buyers chase the markets higher without any consideration of fundamentals. On top of that, we have the rise of passive index funds which are the opposite of value investors as passive investors don’t look at any fundamentals but merely buy a basket of the highest performing shares in whichever sector they are investing.

In the second half, Max continues his talk with Egon von Greyerz of GoldSwitzerland.com about value investors like Warren Buffett sitting on huge piles of cash while passive index funds gobble up the market. They also discuss the latest in the gold market.

[KR1490] Keiser Report: Not your settlements layer, not your money

In this episode of the Keiser Report, Max and Stacy look at the latest threat to cut a nation off from the USD based financial grid. This time, in a tweet, of course, Donald Trump threatens to cut Iraq off from their oil revenue held at the NY Fed. They ask if this is the ‘howl of a dying empire.’ In the second half, Max talks to Egon von Greyerz of GoldSwitzerland.com about the decade of fantasy which has just passed and whether or not that illusion will be shattered in the decade ahead. As stock markets continue hitting all time new highs almost daily, they wonder how long markets can stay irrationally pumped up by the Fed.

If Promoting Wealth Inequality and Social Breakdown Is Evil, The Fed Is Evil

President Reagan was widely mocked in America when he declared the Soviet Union an evil empire, but this calling things by their real name had a profound impact in the Eastern Bloc. The mockery stemmed from the secularized American view that there was precious little moral difference between the USSR and the US, that the USSR was a legitimate “alternative system,” and that ramping up Cold war tensions was not just dangerous but useless, as the USSR was as permanent (or more so) than the US.

None of which turned out to be true. While all nation-states harbor multitudes of sins, the Soviet Empire was unique in its mass suppression of basic human rights, its economic failure to better the lives of its imprisoned populations while its military might soared, and the perverse union of a Kafkaesque bureaucracy and an Orwellian propaganda machine epitomized by the old Soviet-era joke that “we pretend to work and they pretend to pay us.”

Fast-forward to today’s USA where soaring wealth and income inequality is making a social breakdown all but inevitable. Wages for the majority of households have gone nowhere for the past two decades, while the incomes of the top 5% have skyrocketed, with the majority of the gains flowing to the top 0.1%. (See charts below.)

History shows that fast-widening gaps between the super-wealthy / top 5% and the rest of the citizenry inevitably generate social disorder and breakdown. This dynamic is already painfully visible in rising homelessness, suicide rates, opioid addictions, burnout, intolerance, etc.

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