[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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Front Running – Universal Basic Income

Direct link to episode 4 of Front Running is here.

In this episode, Front Running looks at the signature policy from presidential candidate Andrew Yang. If Wall Street is getting richer thanks to the trillions of dollars the Fed has deployed to bailout the financial system, why shouldn’t the ordinary citizen also get some of this ‘free money?’ Yang is proposing a $1000 per month no questions asked ‘freedom dividend’ for all US citizens. Is this a solution to the problems of globalization?

For this episode of Front Running, Max and Stacy are joined by guests, Sinclair Skinner, an entrepreneur with a background in engineering, Marshall Auerback, a market analyst and a researcher at the Levy Institute, and Josh Crumb, a businessman and former Wall Street banker. They discuss the issue of justice, and how voters feel they have been ripped off by the current political and economic setup, where only some are too big to fail. They also debate whether or not automation or trade deals are the route source of the declining incomes of the working class. Is a universal basic income the right answer? Would Bernie Sanders’ idea for a ‘jobs guarantee’ work better? And what about the ideas from the right rather than the left? F.A. Hayek, the Austrian-British economist, had originally proposed a sort of universal basic income (UBI) policy decades ago, when he suggested that a minimum floor would create a fairer market for jobs, as it would put the employee on a more level playing field with employer. Tune in to learn more about the possibilities and perils of UBI.

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No Matter How Much Money the Fed Prints, We Still Can’t Afford Nice Things

You’d think that with the Federal Reserve printing trillions of dollars since 2008, we’d all be able to afford nice things. But you’d be wrong: after 11 years of Fed money-printing, nice things are even more out of reach for all but the favored few who’ve received the Fed’s bounty of freshly created currency.

The Fed’s trillions were supposed to trickle down into the real economy, but they never did. All those trillions boosted asset prices and the wealth of the $100 million yachts and private jets elite.

Instead costs have soared while wages have stagnated. If this widening gap between wages and costs were accurately presented, there would a political revolt against the Fed and those few who have benefited so immensely from Fed money-printing: the banks, financiers, corporations buying back their own shares, the owners of high-frequency trading computers, etc.

Despite the best efforts of the government’s “suppress all evidence of runaway cost inflation” functionaries, a few facts have slipped through. Let’s start with income from 1980 to the present, as per the Congressional Budget Office (CBO). Note that this is all pre-government-transfer (Social Security, food stamps, etc.) income, both earned (wages) and unearned (investment income).

The top households have done very, very well in the past 20 years of Fed largesse, while the incomes of the bottom 80% have gone nowhere.

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[KR1489] Keiser Report: What Came First, the Chicken or the Fed?

In this episode of Keiser Report, Max and Stacy look at the increasing velocity and quantity of injections by the Fed into the repo markets. They also note that nobody is short the market as nobody dares ‘fight the Fed’. In the second half, Max talks to Craig Hemke of TFMetalsReport.com about the latest in the gold market as Trump renews hostilities in the Middle East and the central bank continues pumping money into markets


Instability Rising: Why 2020 Will Be Different

Economically, the 11 years since the Global Financial Crisis of 2008-09 have been one relatively coherent era of modest growth, rising wealth/income inequality and coordinated central bank stimulus every time a crisis threatened to disrupt the domestic or global economy.

This era will draw to a close in 2020 and a new era of destabilization and uncertainty begins.

Why will all the policies that have worked so well for 11 years stop working in 2020?

All the monetary/fiscal policies of the past decade were simply extreme versions of tried-and-true policies that central banks and governments have used for the past 75 years to restore growth in a recession or financial crisis: lower interest rates, increase credit/liquidity, and ramp up government spending (i.e. deficit spending) to compensate for declining private-sector spending.

These policies were designed to be short-term stimulus programs to jump-start the economy out of a slowdown (recession), which typically lasted between 9 and 18 months.

These policies are now permanent, as the system is now dependent on these policies. Any reduction in central bank stimulus causes a market crash (witness the 20% drop in 2018 as the Fed slowly raised interest rates from near-zero) and any reduction in deficit spending threatens to trigger a recession.

The problem is that these policies create distortions that cannot be fixed with more of what caused the distortions in the first place: more extreme monetary and fiscal stimulus.

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[KR1488] Keiser Report: Capitalism Without Capital

In this episode of Keiser Report, Max and Stacy look at an article from John Authers which basically concurs with Max’s long held thesis that ‘you can’t have capitalism without capital.’ In Authers’ piece, he notes that 40% of the S&P500 are companies with negative tangible book value. In the second half, Max talks to Tone Vays of Unconfiscatable.com about his reservations about the bitcoin bull market, believing a big pullback is still in the cards before prices can aim for a new all-time high.


409Ks, 90% Gains, The Fed and Darth Vader’s Warning

In case you missed it, here’s a snapshot of the most recent Federal Reserve board meeting:

It’s certainly a peculiar moment in history when the President chides everyone who hasn’t gained 90% in their 409K (sic), seemingly unaware that only the top 5% have enough in a 409K to make a difference.

President Trump and the Federal Reserve agree: the “solution” to inequality and malaise is to boost the 409Ks of the top 5%, leaving the rest of the American workforce as glorified servants of the few who benefit from a record-setting stock market.

Note to the Prez and the Fed: goosing the stock market only increases wealth/income inequality. There’s only so many dogs owned by the top 5% the peasantry can walk, only so many Priuses and Teslas to wash, only so many preciously over-scheduled children to tutor, only so many $50 steak dinners to bus, only so many bedpans of the top 5%’s parents to empty. The top 5% who benefit from the stock market’s relentless melt-up can’t generate a tide that raises all ships; all they can do is further enrich themselves on the debt-serfdom of their servants.

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[KR1487] Keiser Report: Permanent War, Permanent Repo

In this episode of Keiser Report, Max and Stacy look at the latest phase of permanent war and how bitcoin, gold, and oil markets responded to the assassination of General Soleimani. They also look at the US central bank seeking ways to make their latest interventions in the repo markets a permanent fixture for bankers.

In the second half, Max talks to Michael Pento of PentoPort.com about his case for gold. Though being not someone who considers himself a ‘goldbug,’ Pento believes there are many things the central banks and governments are doing that warrant a long position in the yellow metal.


Front Running – Green New Deal

In this episode, Front Running looks at the jobs program called the Green New Deal, most associated at the moment with Congresswoman Alexandria Ocasio-Cortez but which has been formulated for quite some years with the ambition to provide an FDR-like jobs program to put Americans to work rebuilding its infrastructure for a post-carbon world.

Two guests join Front Running to discuss the Green New Deal; James (Jim) Howard Kunstler, author of “The Geography of Nowhere” and “The Long Emergency,” and Randy Voller, former mayor of Pittsboro, North Carolina, as well as the former chair of the Democratic Party of North Carolina.

Together they look at the ability of the Green New Deal to be a jobs program of the magnitude that could restore US infrastructure and manufacturing capacity. Kunstler believes that it is a ‘when-you-wish-upon-a-star’ program filled with ‘wishful thinking’ because we can’t keep our fantasy land of suburbia, Walt Disney World, and the US military afloat on alternative energy as these all need an underlying platform built on oil, gas, and coal. Voller has more hope that the Green New Deal can succeed and programs can be implemented locally and immediately for genuine benefit.

You can listen to the podcast of this instead by clicking here.

Transcript is below the fold — >

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Just a Friendly Heads-Up, Bulls: The Fed Just Slashed its Balance Sheet

Just a friendly heads-up to all the Bulls bowing and murmuring prayers to the Golden Idol of the Federal Reserve: the Fed just slashed its balance sheet–yes, reduced its assets. After panic-printing $410 billion in a few months, a $24 billion decline isn’t much, but it does suggest the Fed might finally be worrying about the reckless, insane bubble it inflated:

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