On The Failure Of Inflation Targeting, The Hubris Of Central Planning, The "Lost Pilot" Effect, And Economist Idiocy

As an ever greater portion of the world succumbs to authoritarian control (whether it is of military disposition, or as we first showed, a small room of economists defining the monetary fate of the future as central banks now hold nearly a third of world GDP within their balance sheets) we can't help but be amazed as the population simply sits idly by on the sidelines as the modern financial system repeats every single mistake of the past century, only this time with stakes so high not even Mars could bail out the world. Unfortunately, with the world having operated under patently false economic models spread by hacks whose only credibility is being endorsed by the same system that created these models over the past century, the only temporary solution to all financial problem is to "try harder." Sadly, the final outcome is well known - a global systematic reset, in which the foundation of all modern democracies - the myth of the welfare state (which at last check, was about $200 trillion underfunded on an NPV basis globally and is thus the most insolvent of all going concern entities in existence) is vaporized (there's that word again) leading to global conflict, misery and war. Sadly that is the price we will end up paying for over a century of flawed economic models, of "borrowing from the future", of ever more encroaching central planning, and of an economic paradigm so flawed that as Bill Buckler puts it, "Keynes’ response to those who questioned the “longer-term” consequences of his advocacy of credit-creation as a basis for money was - “In the long run, we are all dead”. It is difficult to overemphasise the venal arrogance of this remark or the destructiveness of its legacy." Alas, the last thing the central planning "fools" (more on that shortly) will admit is their erroneous hubris, which in the years to come will claims millions of lives. In the meantime, we can merely comfort ourselves with ever more insightful analyses into the heart of the broken system under which we all labor, such as this one by SocGen's Dylan Grice, whose latest letter on Popular Delusions is a call for "honest fools" - "Frequently, when we make mistakes we try to correct them not by changing the flawed thinking which led to the mistake in the first place, but by reapplying the same flawed thinking with even more determination. Behavioural psychologists call it the “lost pilot” effect, after the lost pilot who tried to reassure his passenger: “I have no idea where we’re going, but we’re making good time!” Policy makers on both sides of the Atlantic are treating today’s malaise with the same flaky thinking which created it in the first place. How can that work?" Simple answer: it can't.

 

 

“Legal Tender for All Debts Public and Private”: Bank of America Refuses Cash for Mortgage Payment

Live Feed From Syntagma Square

With Greek politicians on the verge of selling out the population more than ever before only to preserve the country's ability to be an ECB toll stop, where it takes Troika money and promptly pays Greek creditor banks, the time to return to the Syntagma Square webcam has arrived especially since tonight is the night when the population learns if Greece will comply once again with Troika demands for record austerity or finally cut the cord. Because with the latest round of troika http://www.bloomberg.com/news/2012-02-04/eu-imf-insist-on-greek-minimum-...">demands being that "the minimum wage be cut to less than 600 euros ($790) a month and that at least one holiday allowance, the so-called 13th and 14th wages, be abolished, Mega TV said" and that "pensions paid by supplementary funds should be cut by 35 percent" it the local population believes that waving goodbye to one's retirement to fund a bank's bonus is worth it, then it deserves all the bending over it gets.

Ron Paul Is the Real Deal

58% Landslide! Ron Paul Wins Adelson Late-Hour Caucus [More PROOF the Fix is in.]

SEC Allows Some of America's Biggest Wall St. Banks To Continually Flout the Law

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I Like To Buy Neglected Assets

Admin at Marc Faber Blog - 2 hours ago

I like to buy assets that are neglected. In Arizona you can buy a beautiful house for 150,000 USD. This is undervaluation. - *in Bloomberg TV* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Homeland Security Will Use The Excuse Of A Wartime Crisis To Liquidate The Resistance To The Police State

by Saman Mohammadi, InfoWars.com:

“The soul is the perceiver and revealer of truth. We know truth when we see it, let skeptic and scoffer say what they choose. Foolish people ask you, when you have spoken what they do not wish to hear, ‘How do you know it is truth, and not an error of your own?’ We know truth when we see it, from opinion, as we know when we are awake that we are awake. It was a grand sentence of Emanuel Swedenborg, which would alone indicate the greatness of that man’s perception,–”It is no proof of a man’s understanding to be able to affirm whatever he pleases; but to be able to discern that what is true is true, and that what is false is false,–this is the mark and character of intelligence.” In the book I read, the good thought returns to me, as every truth will, the image of the whole soul. To the bad thought which I find in it, the same soul becomes a discerning, separating sword, and lops it away. We are wiser than we know.” – Ralph Waldo Emerson, The Oversoul.

The threat that most unsettles the criminal U.S. ruling class is not the threat of Iran or the threat of terrorism, but the threat of a second American revolution, triggered by the political awakening of the American people.
Read More @ InfoWars.com

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Markets, Murmurations, and Machines

Most have yet to realize it, but we are now in a very strange and different world—”virtually undetectable market manipulation” by thousands upon thousands of coordinated trades generated by server farms fiber-optically connected to the world’s exchanges have figured out a way to use complexity to their advantage and shape the market for brief moments like a flock of starlings reacting to an unseen and invisible force./merr’meuh ray”sheuhn/, n.
1. an act or instance of murmuring.
2. a flock of starlings.
“What makes possible the uncanny coordination of these murmurations, as starling flocks are so beautifully known? Until recently, it was hard to say. Scientists had to wait for the tools of high-powered video analysis and computational modeling. And when these were finally applied to starlings, they revealed patterns known less from biology than cutting-edge physics.”1
Read More @ FinancialSense.com

The Euro Zone and the Crisis of Sovereign Debt

by Bob Chapman, The International Forecaster via MarketOracle.co.uk:
The creation of the euro zone may have given participants one currency, but it created other problems as well. One interest rate was supposed to fit all. Those sovereigns on the financial periphery of the 17 nations found low interest rates too good to be true. As a result, the borrowed funds they shouldn’t have borrowed to finance current debt, was thrown off by the economy. During the 1990s we wrote that one interest rate for all would destroy the euro, but as usual no one wanted to listen. The reason was simple, each nation was and is at a different stage of development and a nation paying 2% rates could now borrow at 4%, which is a giant difference. As debt grew the credit crisis occurred and the rules changed externally. As rates rose sovereigns got into more and more trouble.
European banks were allowed to purchase sovereign bonds leveraged at 40 to one versus their existing capital. Normal prudent leverage is 9 to one. That means any sort of trouble was mega trouble. The result of this is what you are seeing today.
Read More @ MarketOracle.co.uk

Home Foreclosures and Shadow Banking: Why All the “Robo-signing”?

Why the AGs Must Not Settle: Robo-signing Is Just the Tip of the Iceberg
by Ellen Brown, GlobalResearch.ca:
A foreclosure settlement between five major banks guilty of “robo-signing” and the attorneys general of the 50 states is pending for Monday, February 6th; but it is still not clear if all the AGs will sign. California was to get over half of the $25 billion in settlement money, and California AG Kamala Harris has withstood pressure to settle.
That is good. She and the other AGs should not sign until a thorough investigation has been conducted. The evidence to date suggests that “robo-signing” was not a mere technical default or sloppy business practice but was part and parcel of a much larger fraud, the fraud that brought down the whole economy in 2008. It is not just distressed homeowners but the entire economy that has paid the price, resulting in massive unemployment and a shrunken tax base, throwing state and local governments into insolvency and forcing austerity measures and cutbacks in government services across the nation.
The details of the robo-signing scam were spelled out in my last article, here. The robo-signing fraud and its implications are expanded on below.
Read More @ GlobalResearch.ca

David Icke on Terrorism, ‘Totalitarian Tiptoe’ and the Coming Post-Industrial Technocracy

from The Daily Bell:
The Daily Bell is pleased to publish this interview with David Icke.

Introduction: David Vaughan Icke is one of the most controversial and entertaining conspiratorial historians commenting today. Formerly a professional athlete and politician, David Icke underwent a kind of conversion in which he realized he was “a healer who had been placed on Earth for a purpose.” Today, his focus is clearly on “who and what is really controlling the world.” He has written numerous books that, in aggregate, have been dubbed “New Age Conspiracism” and has attracted a worldwide following. He regularly analyzes the setbacks and progress of the elite conspiracy to control the world in all its reptilian glory.You can see a previous interview with him here: David Icke on Earth’s Artificial Moon and Why Humanity, Ultimately, Is One Big, Biological Internet.

Daily Bell: We’ve interviewed you before so now we’ll try to update our readers. But give us some background for those who don’t know.

David Icke: I was born in Leicester, England in 1952. I became a professional soccer player and my career ended at the age of 21, with rheumatoid arthritis. I became a journalist because it was always one of my interests, as well as soccer, since I was a kid, and worked for newspapers and then radio and then television with the BBC. I was a news presenter first of all, and then went into full time sport. While I was at the BBC I became the National Spokesperson for the British Green Party, which allowed me to see politics from the inside, and see that it was going to be an answer to nothing.
I then had some paranormal experiences which started this 22-year path of uncovering what is happening in the world and who’s doing it.

 Daily Bell: What are your main preoccupations?

Read More @ TheDailyBell.com

Greek Debt Talks Flounder Over Labour Laws

Greece’s international creditors and the Greek government have failed to reach a debt deal for a third weekend in succession after final negotiations foundered over the country’s restrictive labour laws.
by Katherine Rushton and Philip Aldrick, Telegraph.co.uk:
Charles Dallara, chairman of the Institute for International Finance (IFF) and the chief negotiator representing Greece’s bondholders, was recalled to Athens on Friday evening to try to finalise seven months of tortuous negotiations.
However, the Greek finance minister Evangelos Venizelos said that, although discussions with the so-called “troika” of the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) were constructive, the country’s stability was still hanging in the balance.
“After 12 hours of tough talks, we solved a lot of issues. There are still open, critical issues related to the future of the country and the Greek people,” he said.
In October, bondholders agreed to take 50pc losses, although eurozone leaders have been pushing for more.
Read More @ Telegraph.co.uk

S.E.C. Is Avoiding Tough Sanctions for Large Banks

by Edward Wyatt, New York Times:
WASHINGTON — Even as the Securities and Exchange Commission has stepped up its investigations of Wall Street in the last decade, the agency has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases.
By granting exemptions to laws and regulations that act as a deterrent to securities fraud, the S.E.C. has let financial giants like JPMorganChase, Goldman Sachs and Bank of America continue to have advantages reserved for the most dependable companies, making it easier for them to raise money from investors, for example, and to avoid liability from lawsuits if their financial forecasts turn out to be wrong.
An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios.
Read More @ NYTimes.com

Eternal Disgrace: US Politicians Display Gross Ignorance

The blunders of U.S. politicians have inspired jokes and parodies for decades. With the Presidential election campaign heating up, there’s a whole new supply of ammunition. But as Marina Portnaya reports, some believe the comments are displays of ignorance and disregard for world affairs … and no laughing matter.

Europe Coughing Up Cash For US Military Gamble in Iran

Europeans should ask why they are to pay for an American-Israeli adventure in Iran during a time of unprecedented austerity, political analyst Chris Bambery told RT. Iran says it will definitely stop oil exports to “certain” European countries, while the decision to cut supplies to further EU states is still in discussion. This comes as Tehran’s response to an EU oil embargo that was set to come into force on July 1.

Competing Paradigms and a Fed President’s Prophecy

by Evan, Dont-Tread-On.Me:

[...] As I surveyed the room, I realized just how entrenched in the current paradigm we as a society are. Men from the Austin, TX area in thousand dollar suits who have invested a lifetime of blood, sweat, toil and tears in the current paradigm gathered to hear a report from the president of the Dallas Federal Reserve, Richard Fisher. A feeling of uncertainty was barely evident as we awaited the oracle who I’m sure some hoped would reveal some actionable prophecy. Everyone there knows that something isn’t right. Most were uncertain of the future–not quite sure who to blame, even less sure of what to expect going forward. Silver had passed $34.30 that day, I doubt anyone else there even noticed.
Mr. Fisher took the podium after an introduction praising him as the most successful of the twelve acting Fed Presidents, lauding his educational achievements, and glorifying his private business and entrepreneurial successes. He is undoubtedly an accomplished man and interestingly enough somewhat of a gold bug, farmland investor, and platinum fan.
Read More @ Dont-Tread-On.Me

As Anger Over Russian Syria Veto Mounts, Putin "Briefly" Leaves Europe In The Cold

Yesterday we presented why when it comes to Syria, the UN Security Council can forget any attempt at "overhauling" a regime that is a cornerstone for Russian naval presence in the Mediterranean and the middle east. Today, in the aftermath of the UN reminder that it is the world's biggest collection of post-facto hypocrites, not to mention, the world's most irrelevant and ineffectual organization, anger at the Russian and Chinese veto has already manifested itself, as protesters have attacked the Russian embassy in Tripoli and tore down the Russian flag, Al Jazeera reported on Sunday. As Itar-Tass reports, "According to Al Jazeera, the riots staged by the Syria opposition involved Libyans as well. No further details are available so far. None of the Russian diplomats has been hurt in an rally stage by the Syrian opposition in front of the Russian embassy in Tripoli on Sunday, an officer from the Russian embassy told Itar-Tass over the phone. “No one has managed to break into the territory of the Russian diplomatic mission, no one of the personnel has been hurt. All are safe and sound. Although the protesters have managed to tear down the Russian flag,” the diplomat said." Still, the wily occupiers of the Kremlin preempted what they perceived as potential 'displeasure' with Russian tactics to protect its own national interests. Because as Zero Hedge has been reminding readers on occasion, Russia has something that is far more valuable to Europe than the Goldman-alum controlled printing press: it has the world's largest natural gas reserves. Which for a continent gripped in one the coldest winters on record, whose heating infrastructure is based primarily on natgas, and where Russian imports account for 25% of total nat gas, Russia has the upper hand in, well, everything. Which it gladly reminded the world of yesterday. According to the AP: Russia's state-controlled Gazprom natural gas giant acknowledged for the first time Saturday that it "had briefly reduced gas supplies to Europe amid a spell of extreme cold."  Oops... Just a fat finger there, nothing to worry about. Oh, and if anyone forgets that in the Eurasian continent it is Russia who increasingly holds all the cards, Gazprom may "briefly" cut all supplies to Europe, -40 C degree temperatures be damned. Briefly...

From the "Greenspan Put" To The "Bernanke Guarantee"

With $US 1 TRILLION plus annual deficits stretching out into the indefinite future, the Fed is certainly not going to “run out of Treasuries to purchase”. On top of that, there is the $US 2.8 TRILLION of maturing Treasury debt which must be rolled over this year. The simple truth of the matter is that ever since they were rescued by QE1 back in March 2009, the markets have become used to the idea that the financial “powers that be” will not let the concept of “risk” return to sully the rewards they now expect. The “Greenspan put” has turned into a “Bernanke guarantee”. Ben Bernanke reminded the world that the government does have such a thing as a “printing press” way back in 2002. Since he became Fed Chairman, he has left world markets in no doubt of that fact. And that is what they are relying on.

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