muses of the moment

January 31, 2014

Latest Blog Post from Martin Armstrong dated January 29, 2014

Filed under: Taxes, The Federal Reserve, The Financial Crisis, US Government Debt — Tags: — totallygroovygirlfriday @ 1:55 am

Click here for Martin Armstrong’s latest blog post entitled Cycles & Obama’s Tax Free Bonds dated January 29, 2014. Groovygirl thought the creation of new bonds was the big news in Obama’s speech this week.

Martin says:

The selling of new tax-free debt long-term regains sovereignty and
eliminates the need for primary dealers who blackmail government. This
is the game changer. It is starting to recognize that there is a debt
crisis, yet do not reform the system, only further its advance. That is
why we will still crash and burn.

January 22, 2014

Derivatives

Derivatives: “gone, but not forgotten”. Uh, no, that’s “forgotten, but not gone”. In fact, there are more than in 2007.

Click here for a taste of Paul Singer’s speech at Davos this week on the global derivative problem that we still haven’t dealt with. He will offer solutions. gg guesses Mr. Singer doesn’t know that they already have a solution for the next derivative-related contagion: bail in.

Click here for another legal case still going on between JPM and a German transport provider from the last crash.

If only Germany had some physical gold in their possession as a hedge during the next crash. Oh, yes, they asked for it back. gg wonders how that is going…. click here.

January 21, 2014

Prof Black…love him!

Another great video interview with Prof. William Black, economics and banking, on usawatchdog.com. It’s about 30 minutes. Another must-watch!! Click here.

January 14, 2014

Martin Armstrong’s Updated Market Watch January 13, 2014

Click here for Martin Armstrong’s latest Market Watch Charts from 1-13-2014. He covers Global Markets. Make sure to read the “How to Read These Charts” pdf, very important.

January 11, 2014

Latest Blog Post from Martin Armstrong dated January 9, 2014

Click here for Martin Armstrong’s latest blog post entitled What Are We Waiting For in the Markets? dated January 9, 2014.

John Williams with Shadowstats.com

John has released several notes on recent data. Here are some bullet summaries for free. He also released a Hyperinflation Update. He still calls for hyperinflation to begin in 2014. This conflicts with Martin’s thoughts on the dollar continuing to move up (or not decline) as capital flees the Euro and emerging markets.

– Extremely Difficult Circumstances in the Year Ahead: Confluence of Economic and Systemic Crises Should Intensify
-With Global Confidence in Dollar Rattled by Uncontrollable Fiscal and Monetary Excesses, U.S. Government and the Federal       Reserve Have Limited Options to Address Panics
– Heavy Selling of U.S. Dollar Remains Likely Proximal Trigger for Inflation Pick-Up
– Developing Hyperinflation Would Push Ongoing Recession into Deep Depression
– Physical Gold Remains Primary Hedge for Preserving Wealth and Assets

One thing to note. John’s definition of a hyperinflation is an increase in prices/expenses and a decrease in debt availability. There are other factors that can affect prices here in the US. Things that are produced here: US taxes, state taxes, rising health care costs. Things that are imported from emerging markets: rising manufacturing costs in China due to taxes, currency exchange rates, and labor demands. In reviewing gg’s utility cost breakdown for 2013, she noticed that the cost of energy/water was down or stable, but the taxes, admin, and service costs were up again. This has been a trend since she started tracking it. Infrastructure costs, labor costs, and taxes have a major impact on basic living costs. These things don’t have anything to do with the dollar chart. groovygirls says: if your basic living expenses go up 2-3% per year, but your wages are flat or go down, it feels like an inflationary depression to you, personally. Martin’s thoughts on the dollar are invaluable to those able to trade the globe, not just the US economy.

– Jobs Loss or Jobs Gain, Either Is Possible Within the Reporting-Confidence Interval Around December Payrolls
– Revisions Show Headline Unemployment Changes Are Meaningless
December Unemployment: 6.7% (U.3), 13.1% (U.6), 23.3% (ShadowStats)
– Year-to-Year Growth Slows in December M3

– Plunge in Oil Imports Narrowed the Trade Deficit; Data Were Positive for Fourth-Quarter GDP
– November Construction Gain Was Statistically Insignificant, Yet, Earlier Numbers Were Revised Higher
– Revised Headline Unemployment Due on January 10th

December 20, 2013

Audio Interview Martin Armstrong and Glen Downs

Filed under: The Banking Crisis, The Federal Reserve, The Financial Crisis, Unemployment, US Government Debt — Tags: — totallygroovygirlfriday @ 10:50 am

Martin Armstrong and Glen Downs talk on Dec. 19, 2013 about the move by the Fed and other items. Click here.

December 6, 2013

Friday Update

Everyone is very happy about the unemployment data. Groovygirl awaits the revision next year 🙂

The financial talking head today said that the “real stat” could be lower (at least he said it), but it doesn’t matter. Buy stocks and sell gold……is the mantra of the day. This could go on for a while.

Groovygirl is keeping an eye on that 30 year bond. It’s been flirting relentlessly with 4%. Many, many private and public loans (including commercial real estate) that need to be rolled over in the next 3 years are based on that number. Higher rates could turn a profitable investment into a bankrupt investment in one day. The Fed has spent the last 5 years and many billions keeping that rate down for the last roll-over from 2009-2012. That was only buying time, nothing else.

This rate moving higher will also effect the residential housing market.

If you are looking at a 10-year plan for an investment, real estate investment, or company assume this rate goes up. Make sure the forecasted profit will work (or not go negative) in an environment with an interest rate of 6, 8, or even 10%.

November 25, 2013

Another Jim Rogers interview

Boom-Bust on RT interviews Jim Rogers (via zerohedge). Click here. Good interview, Jim starts around 4:30.

Groovygirl just finished Jim Rogers latest book Street Smarts (she got it at the library). She highly recommends it!! Very good. Remember that Jim is a long-term investor. He is always early, and he admits it. There are several fundamental investing practical points worth reading. But pay attention, they are sprinkled throughout the story-telling.

Jim on China’s announcement last week:

10:15 China’s Plenum
“the Chinese are becoming more and more capitalist”… they are
becoming more and more market focused… as opposed to the US where when
there is a problem “the government decides how to fix it… look at
Obamacare” – “the government says “we will figure out the
solution”… “I much prefer the Chinese system of open markets than the
US with the government dictating everything”

Side musing: make sure you watch the entire Boom-Bust show after Jim Rogers. They discuss very important US housing data regarding foreclosures that in gg’s mind supports Martin Armstrong’s real estate cycle (slight uptick through 2015 and then decline). Housing bubble popped in certain areas and then moved toward the center of the US (takes about 18 months to 3 years for that move). The rise in foreclosures in bubble areas lately signal a renewed decline.

They also discuss two important points. The go-between in the housing market doesn’t have the incentive or know-how to do things in the best interested of the homeowner and the investor. Very important! Until this is fixed, we will continue to have long-term problems in housing, regardless of the huge derivative issue that was not covered in this segment. The mortgage forgiveness act is going to expire at the end of the year. That means that homeowners who have their loans reduced (forgiven) must pay regular earned income tax on the forgiven amount. That’s huge. If someone can’t pay their mortgage, they certainly can’t pay the tax. They will have to walk away. Walking away means empty houses, no income for investors, and continued overall depressed housing prices once the banks put them up for sale. More negative feedback loops in US housing and real estate markets. 

Also, pay close attention to that regular earned income tax on debt forgiveness. It will come up again when the student debt bubble pops. First of all, debt is NOT income, so it should not have a regular earned income tax on it. And since the debt is not paid and will never be paid, I don’t know how anyone can call it income in the first place. The IRS is trying to get some money as they are losing money hand over fist because businesses, banks, and investors can write off their losses (the debt they loaned out for housing) as tax deductible. It is another example of corporations (since they are considered people now) having more “individual rights” than actual individuals.

Government policy determines what people and business will do, either by carrot, stick, or indifference. Jim’s interview was a great illustration about how that works well (in China) and is not working well in, say, the US.

November 6, 2013

A Bubble in search of a pin

Great, great interview with Chris Martenson (about 16 min long). A must listen.

http://www.zerohedge.com/news/2013-11-06/exit-strategy%E2%80%A6-what-exit-strategy

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