Posts Tagged ‘savings rate’

Michael Pento Asks If The Fed Ultimately Controls Interest Rates

Michael Pento Asks If The Fed Ultimately Controls Interest Rates

Courtesy of Tyler Durden

NEW YORK - APRIL 28: A trader on the New York Stock Exchange walks by a monitor displaying the federal funds rate made at an afternoon announcement by the Federal Reserve on April 28, 2010 in New York, New York. Following a two day meeting, Fed Chairman Ben Bernanke held the fed funds rate at historic lows near zero in order to keep the economy growing. (Photo by Spencer Platt/Getty Images)

By Michael Pento of Euro Pacific Capital

Does the Fed Ultimately Control Interest Rates?

In forecasting the consequences of current economic policy, many pundits are downplaying the risks associated with the surging national debt and the rapid expansion of marketable Treasury securities. Their comfort stems from the belief that a staggering debt burden will be manageable as long as interest rates remain extremely low; and, as they believe the Fed is in complete control of setting rates across the yield curve, they see no danger of rates ever rising past the point of comfort. Those who subscribe to this fairy tale forget that, in real life, there are many more hands on the interest rate steering wheel.

The Congressional Budget Office estimates that the 2010 deficit will exceed $1.3 trillion and total US debt now stands at $13.4 trillion (92% of GDP). That’s a lot of debt that needs floating. Yet, the 10-year note is yielding 2.8%-- which is 4.5 points below its 40-year average of 7.3%! Experience teaches that even moderately long-term investors should be expecting rising rates. Regardless of the extreme and obvious misalignment of fundamentals and bond prices, the mantra from the dollar shills remains firm: “The US dollar will always be the world’s reserve currency, and the US bond market will always be regarded as the safe-haven depository for global savings.”

With interest rates having been so low for so long, it’s understandable that many people have forgotten that central banks are not ultimately in control of interest rates. It is true that the Fed can be highly influential across the yield curve and can be especially effective in controlling the short end. But, in the end, the free market has the last word on the cost of money.

Although the Fed has certainly created enough new dollars to send prices higher, recessionary forces are, for now, disguising the evidence of runaway inflation. But when inflation finally erupts into the daylight, it will be impossible for borrowing costs to stay low. No one can realistically be expected to loan money below the rate of inflation. To attract buyers, the Treasury will have to offer a real rate of return.

Since our publicly traded debt level is increasing while our personal saving rate is not, we must inevitably…
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Zero Hedge

2019 Is 5th Consecutive Year With No Operating Profit Growth

Courtesy of ZeroHedge View original post here.

Submitted by Joe Carson, former Chief Economist & Director of Global Economic Research for Alliance Bernstein

2019 operating profits will show no growth for the 5th consecutive year. That would mark the longest stretch of no earnings growth since the late 1990s. Prospects for 2020-profit growth look slim as well given consensus GDP growth estimates of around 2%, slow global growth and rising costs pressure from labor.

Operating Profits

Q4 GDP and the full year 2019 operating profit numbers will not be released until March, but one...



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Phil's Favorites

Goldman Sachs: The Vampire Squid's Alum Control Two Fed Banks, the U.S. Treasury, the European Central Bank and the Bank of England

Courtesy of Pam Martens

Protester Wears a Swamp Creature Costume Outside Goldman Sachs Headquarters, January 17, 2017

The head of the Federal Reserve Bank of Dallas (Robert S. Kaplan), the head of the Federal Reserve Bank of Minneapolis (Neel Kashkari), the Secretary of the U.S. Treasury (Steve Mnuchin), the President of the European Central Bank (Mario Draghi) and the head of the Bank of England (Mark Carney) all have two things in common: they sit atop vast amounts of money and they are all alums of Goldman Sachs. In addition, the immed...



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Kimble Charting Solutions

Bull Case For Stocks, Testing Critical Breakout Level, Says The Inspector!

Courtesy of Chris Kimble

Some price points lend themselves to potential turning points. Is the S&P at one of those price points? The inspector suggests it is!

This chart looks at the S&P 500 over the past couple of years. Fibonacci was applied to the 2018 highs and 2018 lows.

The rally off the December 2018 lows, has the S&P testing its 161% extension level at (1).

While at this extension level, momentum is the 2nd highest in the past 5-years.

The Fibonacci extension level becomes a price point where some stock market bulls need/want to see...



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Insider Scoop

11 Communication Services Stocks Moving In Thursday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Pareteum, Inc. (NASDAQ: TEUM) stock moved upwards by 4.5% to $0.87 during Thursday's pre-market session.
  • Comcast, Inc. (NASDAQ: CMCSA) shares rose 2.0% to $48.40. The most recent rating by Wells Fargo, on January 16, is at Overweight, with a price target of $51.00.
  • Vodafone Group, Inc. (NASDAQ: VOD) shares moved upwards by 1.4% to $20.22.
Losers
  • Genius Brands Intl, Inc. ...


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The Technical Traders

TRADING STRATEGIES FOR GDXJ, SPY, BONDS, AND NATURAL GAS

Courtesy of Technical Traders

Chris Vermeulen joins me today to shares his trading strategy for 4 different markets. While most of these markets are not correlated he has reasons for why he is long in each. Pick and choose where you want to deploy your capital.

Get Chris’ Trade Signals Today – Click Here

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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Monday, 16 September 2019, 05:22:48 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This chart says SP500 should go back to 2016 levels (overshoot will occur of course)



Date Found: Tuesday, 17 September 2019, 01:53:30 AM

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Comment: This would be HUGE...got gold!


...

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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

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