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When Yellen says it’s not the Fed’s fault… does anyone actually believe her?

July 3, 2014

We apologize for the mediocre audio quality. I have done my best to clean it up but I though the topics Valentin covered were too important to not post.

Click download link to listen on this device: Download Show

Discussion
48 Comments
    CFS
    Jul 03, 2014 03:46 AM

    Public officials always lie by omission. They never present the whole picture; merely those facts that make them look good. To expect otherwise is foolish.

    Her function, regardless of what she might say, is to conterminously expand the money supply to allow government spending. Where money goes is not controllable, without political action. We have governments , however, that care not about lending; only about being re-elected.

    I wait the revolution, if the public ever wakes up.

      Jul 03, 2014 03:50 AM

      There is a chance that the revolution you talk about will take place where it should and that is the ballot box.

        Jul 03, 2014 03:54 AM

        A sad comment, Al….like the market it’s rigged…wasn’t it Teddy Kennedy who referred to the best government money can buy

          CFS
          Jul 03, 2014 03:23 PM

          Oh man of faith.

          Jul 03, 2014 03:54 PM

          I am not sure if he said that, but it would probably fit.

          Jul 03, 2014 03:57 PM

          “… the best government money can buy”. The esteemed and prescient Mark Twain penned those words.

            Jul 03, 2014 03:16 PM

            Thanks Dallas

        CFS
        Jul 03, 2014 03:22 PM

        h man of faith, Big Al, I, however, don’t see a choice between corrupt Mr. Dumb and corrupt Mr. Dumber, a revolution, absent a miracle.
        And those don’t happen too often.

        Jul 03, 2014 03:56 PM

        Sadly, Al, no it won’t. Take place in the ballot box, that is. Where it will take place is, unfortunately, every city and town, every street and neighbourhood, in the form of The Second American Civil War. Roughly the same confluence that produced the first American Civil War is extant again, and since the only thing humans learn from history is that humans are incapable of learning from history, here we go again. The Second American Civil War will both repeat and rhyme, in that there will be a repeat of the death and devastation of the first, but there will be no re-unification in the aftermath, thus the rhyme. Enjoy this Fourth of July; it could very well be the last one observed by the current United Banana Republic States of America.

          Jul 03, 2014 03:19 PM

          I kind of doubt it MAD. Half the population is on government benefits of one kind or another and tens of millions get food aid. Who is left to rebel? Government employees? Private sector workers? Unwed mothers? Pensioners, farmers, military, police, firefighters or unions? The only time you would get a rebellion is if the boob tube got turned off!

            Jul 03, 2014 03:43 PM

            From remarks you’ve made you’re apparently somewhere outside of the U.S.; lucky you. You’ll get to watch it from a safe distance. That it will happen is a foregone conclusion. And it’s not a question of whom will rebel, because rebellion is not the correct paradigm here. The participants / combatants will be the various groupes you’ve mentioned who, one by one, will get their unearned sustenance removed. Ever watch a log jam or an ice jam break up ? I have, both kinds in fact. At first, nothing seems to be happening, then slowly, inexorably, one log or one ice floe breaks loose, then another, and another, then the “key” log or floe breaks loose and suddenly a torrent is unleashed that nothing can stop, and one best not be in its way. That’s how the Second American Civil War is going to unfold, just as such a breakup. Be thankful you won’t be in the way. I shall be, as well.

          Jul 03, 2014 03:52 PM

          MAD…..I have to agree…Re the 4th , yes sad to say it could be the last.

          Jul 03, 2014 03:19 PM

          I certainly hope not Dallas.

          I realize we live in trying times for some of us.

          My suggestion is to tell others what we believe to be the truth and, in the short term, see what happens.

        Jul 03, 2014 03:49 PM

        AL…With all due respects , it wont be the ballot box…It does not matter who the people vote for things will stay the same…..Read your history , ink doe’s not change things…crude weapons….DO.

          Jul 03, 2014 03:22 PM

          I really believe that there are better ways to deal with the situation.

        Jul 03, 2014 03:51 PM

        This is a rare time when I strongly to not agree with “Big Al”. It’s just tooooo late in the game. The “free stuff” army is waaaay larger than we are and “based on results” control the ballot box. Getting ones hopes up over a small victory from time to time is not a good idea & will slow you down on getting ready………….

          Jul 03, 2014 03:24 PM

          You are probably right. I am not being wishy washy. I am simply stating I that this environment is very unfamiliar to me.

      CFS
      Jul 03, 2014 03:09 PM

      continuously

      Jul 04, 2014 04:45 AM

      You cannot revolt against god. You see it’s god planned you’re living in. Scripted already a hundred years ago.

    Jul 03, 2014 03:19 AM

    AH, NO……….

    Jul 03, 2014 03:31 AM

    Birdman believes her!

      Jul 03, 2014 03:49 AM

      I have my doubts on that, Matthew.

        Jul 03, 2014 03:37 PM

        Well thanks Al. As Valentin pointed out we are awash in bubbles or near bubbles at this time. He mentioned the past housing meltdown and how it was partly driven by low rates as well as bringing up the student debt bubble, the bond bubble and now a stock market bubble.

        He did not mention one of the most worrisome which is the debt bubble itself nor the credit bubble that still haunts us but he did touch on the fact that derivatives are blown wildly out of proportion to everything.

        These are unique days. I am not sure a similar set of circumstances has ever existed nor in such extremes. Take China’s credit expansion as just one example or the impending debt bomb over in Japan. It is a worldwide phenomenon with asset prices in particular being so out of kilter with traditional measures.

        Perhaps there has never been a time when we could so comfortably say that these bubbles are just troubles looking for a pin to pop them. Either that or this time really is different and we will have to rewrite the textbooks on what constitutes excessive valuations.

        I do not however blame the Fed. They are behind the 8-ball on this thing and doing corrective interventions. It is a work in progress and lets face it, we are all in uncharted waters here.

        Unless we are willing to say that somehow the Fed is able to control human behavior all over the planet or that they should be held responsible for fiscal policy in almost every country outside the US then I think it is probably a stretch to fault them when we see bubbles across the globe simultaneously.

        As I pointed out here before, we have housing bubbles in East Africa too and they are in countries that have almost no credit whatsoever. How the hell could the Fed be responsible for that? To me, there is an element of herd behavior taking place here that is worldwide in nature. Maybe it is because of how so many countries are connected through trade agreements or perhaps it is that we have somehow become synchronized due to the media and internet.

        I really don’t know although it is probable interest rates play a starring role.

    Jul 03, 2014 03:56 PM

    BUY SILVER

    CFS
    Jul 03, 2014 03:43 PM

    But, Chris, the takers being in the majority, and voting for largess is not a stable situation. They can keep on voting but ultimately the system collapses. Engineering a new country rising from the ashes is important. Nothing is cast in stone that we HAVE to go through wars and a despot and the route that Alexander Tyler describes as the normal progression. If we can learn from history, just maybe this time can be different.

    Jul 04, 2014 04:32 AM

    Speaking of new countries rising from the ashes I wonder how Ukrainians,Syrians,Libyans,Iraqi’s and Afghani’s are celebrating this fourth of July?

      Jul 04, 2014 04:49 AM

      If they owned GDXJ

      It was a big celebration.

      Of coarse, those who insist stayin in their comatose state
      ended Thursday with more of their own BS on their hands.

        Jul 04, 2014 04:42 PM

        Speaking of BS,GDXJ has gone sideways for the last nine trading days,gold is flat and silver is rolling over.
        It would be silly to suggest any investor should participate in on the rolling top.
        Bobby,unfortunately,America is led by Skull n Bones alumni and CFR devotees.

          Jul 04, 2014 04:02 PM

          You’re a real guru Matt.

          Back in Dec. 2013 you gave me reasons that buying anything was foolish.

          GDXJ is not rolling over in the high 20s right now.

          GDXJ will go up and come down. Its the nature of markets.

          Maybe you should consider graduating from novice to at least
          Amateur. May not hurt, might help.

            Jul 04, 2014 04:07 PM

            You’re right HH, the chart for GDXJ is not what one could call “rolling over.” It’s just the opposite, actually, a picture of strength.

            Jul 05, 2014 05:31 PM

            Looks like Batman ears to me. If it has not already peaked it is damn close.

            Jul 05, 2014 05:28 PM

            Batman lost Robin because he’s just an old flame now.

            Robin sits in higher places as it climbs that wall of worry.

            Anyway, suit yourselves. I recon I will be movin on soon.

            Hope to stay in touch with Matthew other than that…. a person
            has no chance to prosper here. Ameteur hour. Disgusting.
            How I landed here 6 months ago I will never know.
            Good for many laughs though.

          Jul 04, 2014 04:57 PM

          Well Matthew ….lets hope we are right.

          Certainly not looking to be spooked out
          either. Any professional with knowledge
          in the markets knows in postion type
          investing you stay in as I believe we are
          entering stage 2 of a very powerful rally.

          Thanks for the valuable input. Its always
          nice to hear your opinions.

          Funny we got 2 Matts on the opposite side.

          Seems to be a ongoing trend. With me in the middle.

          Well, Matt and myself never agree on anything. It’s been
          like that right from the…. get go.

          Happy 4th…. Matthew. ; )

          And to you too Matt… we just don’t get along. Unfortunately.

    Jul 04, 2014 04:39 AM

    Over 100 years ago the Swiss philosopher Henri Amiel stated our case perfectly: “If liberty is to be saved, it will not be by doubters, men of science, or materialists; it will be by religious conviction, by the faith of the individuals who believe that God wills men to be free.”