“Earlier this week the Federal Reserve ignited a firestorm in the global markets by admitting that the U.S. economy is facing downside risks. Although it continues to sugar coat the unpleasant reality, never has such a stunningly obvious statement resulted in so much turmoil.
Once again we are seeing the knee-jerk market reaction to seek refuge in the perceived safety of the U.S. dollar and U.S. Treasuries. However I expect investors will soon discover that such assets are firmly in the eye of the storm. As the tempest moves on, those enjoying the dollar’s current stability may soon find themselves battered by a category five monster.
Market disappointment was compounded when the Fed failed to follow up its dire outlook with a new round of quantitative easing (QE). Instead, through a policy entitled “Operation Twist” the Fed promised to sell $400 billion of short-term Treasuries and use the proceeds to buy an equivalent amount of long-term Treasuries. The markets evidently perceived this “balance sheet neutral” policy as too timid.”
Via Schiff Radio
“[Editor's note: Simon is still out in the jungle and should be back on Monday. Meanwhile, we wanted to pass along a note he wrote over a year ago warning that governments would go back in time to pass retroactive tax hikes and regulatory changes. He was right. Since this letter last summer-
* The US government passed a retroactive estate tax hike
* The Spanish government passed a retroactive wealth tax
* The state of Illinois passed a 66% income retroactive tax hike
* The US Financial Crimes Enforcement Network issued offshore reporting guidance retroactive to 2010
The list goes on...]“
Via Sovereign Man
“The financial world is officially going crazy. Can you believe what is going on out there right now? Financial markets have been jumping up and down like crazy for months and this is creating a lot of fear. Other than during the financial crisis of 2008, in the post-World War II era have we ever experienced as much financial instability as we are seeing right now? Should we just accept that massive financial instability is going to be part of “the new normal” in the financial world? The wild swings that we are witnessing in the global financial marketplace are making a whole lot of people very nervous right at the moment. When markets go up, they tend to do it slowly and steadily. When markets go down, a lot of times it can happen very rapidly. Also, as I have mentioned before, more major stock market crashes happen during the fall than during any other time of the year. The last major financial crisis happened during the fall of 2008, and things are starting to look a little bit more like 2008 with each passing day. The last thing the global economy needs right now is another major financial meltdown, but that may be exactly what we are about to get.”
“Is the U.S. government stockpiling huge amounts of food and supplies in anticipation that something bad is about to happen? Is something about to cause a major economic crisis that will require large quantities of emergency food? For a while, I have been hearing things about the government storing food through the grapevine and I have not been sure what to think about those rumors. Well, today I received a phone call that blew me away. I debated for quite a while before I decided whether or not to share this information with you all. Normally I do not like to talk about anything unless I am able to prove it by pointing to an article in the mainstream media. But the source of the information that I am about to share with you is rock solid. I cannot reveal his name, so you will just have to trust me on that. Hopefully the following information will be one more “dot” as we all try to connect the dots about what is really going on out there.”
“The creators and managers of the Obama campaign web site “ATTACK WATCH” have not Tweeted since September 14, and the last “Attack File” was posted September 12. Perhaps they realized that they couldn’t top themselves after making Mark Steyn look sinister and demonic.”
Via National Review
“New Jersey Gov. Chris Christie is reconsidering his decision not to enter the 2012 presidential race — and he says he will let top Republican donors know within days about his plans, Newsmax has learned.
During the past few weeks, several leading Republican donors and fundraisers have been urging the popular Republican governor to reconsider his decision not to run and to enter the GOP primary.
These Christie supporters note that significant GOP support has remained on the sidelines of the primary fight. Many leading fundraisers have yet to commit to any current primary contender, including frontrunners Rick Perry and Mitt Romney.”
Via News Max
Obama Administration to Ban Asthma Inhalers Over Environmental Concerns
“Remember how Obama recently waived new ozone regulations at the EPA because they were too costly? Well, it seems that the Obama administration is would rather make people with Asthma cough up money than let them make a surely inconsequential contribution to depleting the ozone layer:”
“But the switch to a greener inhaler will cost consumers more. Epinephrine inhalers are available via online retailers for around $20, whereas the alternatives, which contain the drug albuterol, range from $30 to $60″
Via Weekly Standard
“All the claims of “financial engineering” are in fact lies. None of them actually do work because they can’t work. It is mathematically impossible over the longer term.
Look, go back to Excel. In cell A1 put in “10″ and in cell B1 put in “10″. This will represent 10 units of GDP and 10 units of debt (pick your units, billions, trillions, euros, dollars, whatever)
In cell A2 put in “=A1 * 1.04″ That’s 4% GDP growth. Now extend that downward 100 rows (CTRL-C on cell A2, then click cell A3 and drag it down to A100, then hit CTRL-V)
In cell B2 put in “=B1 * 1.07″ That’s 7% debt growth in the economy as a whole. Now extend that downward 100 rows too just as above.
Take the range of A and B and graph them.
That’s what we tried to do. These are not hypothetical numbers – the approximately 3% spread has existed since the 1950s and it is mathematically impossible for it to work in the long term. When this became apparent in the 1980s we stomped on the accelerator with more and more scams to keep the illusion alive.”
Via Market Ticker