Eric Sprott: "We Are Now Paying For The Funeral Of Keynesian Theory"

Pimco Dumps Treasuries In July, Boosts Holdings Of 3-10 Year Securities In Another Example Of Fed "Anticipation" Rosenberg Interview: "If You Don't Believe In A Double Dip, It's Because The First Recession Never Ended"   JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS  SPECIAL NOTICE — August 13, 2010 Retail Sales Hint at Third-Quarter GDP Contraction BRIEF OBSERVATIONS ON TODAY’S DATA.  As noted below, posting of the full Commentary planned for today has been  pushed into this weekend. Nonetheless, here are a couple of  observations on this morning’s CPI and retail sales reporting, which respectively were slightly stronger and weaker than  consensus estimates.July’s rebounding seasonally-adjusted  month-to-month 0.31% CPI-U inflation (versus down 0.14%  in June) and July’s unadjusted year-to-year 1.24% gain  (versus 1.05% in June), partially reflected a swing in seasonal factors that now will be boosting  adjusted gasoline prices for several months.  The SGS alternativeestimates for July annual  inflation are 5.4% (1990-base, Pre-Clinton), 8.6% — 8.57% to the second digit — (1980-base).The 0.41% seasonally-adjusted  monthly gain reported for July Retail Sales was statistically  indistinguishable from zero growth.  After inflation adjustment, the  real monthly gain was 0.10% percent.  Even with some upside  revision to prior periods, the inflation-adjusted July number was  below the average for second-quarter2010.  That opens up a fair chance of real third-quarter retail sales  contracting versus the  second-quarter, with a suggestion that third-quarter GDP could  show an outright quarterly contraction, even as reported by the  government.  Full details will follow in the Commentary. Best wishes to all, John Williams www.shadowstats.com   Debts Rise, and Go Unpaid, as Bust Erodes Home Equity CIGA Eric During the great housing boom, homeowners nationwide  borrowed a trillion dollars from banks, using the soaring  value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back. The delinquency rate on home equity loans is higher than  all other types of consumer loans, including auto loans,  boat loans, personal loans and even bank cards like Visa and MasterCard, according to the American Bankers Association. Deep within the finger point phase (either borrower’s or lender’s fault) of the debt crisis, it is clear that an increasing number of borrowers cannot or will not pay. Also, the inability to define direct ownership loans as a result of securitization  only perpetuates the cycle of inaction described below. “I am not going to be a slave to the bank,” said Shawn Schlegel, a real estate agent who is in default on a $94,873 home equity loan. His lender obtained a court order garnishing his wages, but that was 18 months ago. Mr. Schlegel, 38, has  not heard from the lender since. “The case is sitting stagnant,” he said. “Maybe it will just go away.” Who is a greater fool? The person (and institution) that borrowed and loaned recklessly based on an illusion, or the individual that lived within their means but continues to pay their debts while  others do not? Society’s answer will influence confidence in a monetary system formed this question. Source: nytimes.com More… Rick Santelli Goes Nuts In A "Top 3" Rant Protesting (What Else) Endless Subsidies And Fed Meddling

Rosenberg Interview: "If You Don't Believe In A Double Dip, It's Because The First Recession Never Ended"

 

Is A Market Crash Coming? The WSJ Ponders...

 

Inflationary Depression Forecast Revisited... We are Half-Way There 

On Quantitative Easing

Artist's Rendering Of Barack Obama's Desktop

 

Alexis De Tocqueville, author of Democracy in America, which was published that year,
seemed to warn of this day when he wrote: "The American Republic will endure until the
day Congress discovers that it can bribe the public with the public's money."