US Federal Government Disrespects Its People; $2 Trillion To Wall Street While Citizens Wait for Checks

At 8:30 am ET Thursday morning, April 9, 2020, the Labor Department announced that 6.6 million people applied for unemployment benefits last week. That's in addition to the nearly 10 million who applied for benefits the prior two weeks.

Have you received your $1200 check from the government yet?

Didn't think so. You are aware that Wall Street had access to $2 trillion weeks ago, right?

That's the number TWO (2) with twelve zeroes behind it. Like this: $2,000,000,000,000.

Bear in mind, the corporate money is coming to corporations via the Federal Reserve, which is not part of the federal government. It is and always has been a private bank, so there's really nothing "federal" about it. As far as the "reserve" portion of their name, they have no money in reserve. They have a balance sheet of nearly $6 trillion, all in various bonds or notes or obligations, otherwise known as debt. Much of it is not worth the paper its printed on or the electrons holding it in cyberspace.

There's no "reserves" at the Federal Reserve. They whip up currency out of thin air. A few keystrokes on their computer and viola! currency at their pleasure. The currency is represented by Federal Reserve Notes, or those pieces of paper some people carry around with pictures of dead presidents on them. Those are the ones, fives, 10s, 20s, 50s and 100-dollar bills floating around in the economy. There is only $1.75 trillion in actual printed currency according to the Federal Reserve. That's a little less than $6000 for every man, woman, and child in America.

The rest of the currency is in electronic form. The currency in your bank account is not really there. Try going to a bank branch and asking for $40,000 in cash, even if you have $100,000 in your account. First, you'd have to fill out IRS form 8300, because any transaction of $10,000 or more, the federal government wants to know about it. They think you might be a drug dealer, human trafficker, money launderer, or maybe a terrorist. It's all part of the Bank Secrecy Act, officially known as the Currency and Foreign Transactions Reporting Act. Then, after you've filled out the form, the bank's branch manager will likely tell you that they don't have that much money on hand. After that, you might have to come back on a later date to get some of it, make multiple trips, and go through a lot of hassle to get your hands on your currency.

This seems an appropriate place to explain the difference between money and currency. Here's Mike Maloney (an expert on the subject) to explain in less than three minutes:



The great financier, J.P. Morgan, put it in even simpler terms: Gold is money. Everything else is credit.

With that out of the way, have you received your $1200 yet?

No. Of course not. But Wall Street has already gotten theirs, and probably already spent it too. The stock market has been mostly up lately, the Dow Jones Industrial Average having risen from a close of 18,591.93 on March 23 to close at 23,433.57 Wednesday.

On March 17, Treasury Secretary Steven Mnuchin said President Trump would like to get money into the hands of people within two weeks. That was more than three weeks ago. Now, Mnuchin says the first direct deposits will be going out some time next week.

In other words, continue to wait. The government will be here to help in moments, er, days, er, weeks, maybe.

While Wall Street is open for business as usual, millions of Americans - roughly three quarters of the country - is under some form of stay-at-home or lockdown restriction. Ordinary people can't go to work, send their kids to school (they're closed), or venture beyond the boundaries of their own homes without some express, immediate need, like getting groceries, or picking up a prescription drug.

It's a shame. It's also likely unconstitutional. Americans are supposed to have the right to freely assemble. It's in the Bill of Rights, the First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

So, not only does the federal government not want you to have any money, they also don't want you going anywhere or associating with other citizens. Because of COVID-19, the government has "suggested" people congregate at distances of six feet apart. Many states have outlawed meetings or congregations of 10 or more people, some, five or more. They don't want you to get together with your fellow citizens, either.

As you wait for your money from the government, ask yourself if $1200 is worth having your first amendment rights taken away. As with anything else that sounds too good to be true, like free money from the government, there are strings attached.

And, while you're pondering that, how about those small business loans that are supposed to help businesses that have been forced to close so that the coronavirus doesn't spread. Those non-essential businesses are getting the run-around from the very same banks (JP Morgan Chase, Citi, Bank of America, Wells Fargo) that were bailed out in 2009, continued to get favors from the Federal Reserve and the federal government since then, and have been getting oodles of cash over the past six months, even before the COVID-19 crisis.

Those loans are full of boondoggles and conditions that limit how much a business qualifies for and what they have to do in order to receive a loan and more conditions for loan forgiveness. It's likely that most small businesses would be better off not taking the loans, toughing it out, filing for reorganization under bankruptcy laws and moving forward without inept government assistance.

The American public is being conned and abused by the very people they voted into office along with the media, the banks, and the Federal Reserve. State and local governments are only marginally less disrespectful. It all stinks to high heaven.

They don't respect you. They don't care about you. They want to control you. That should be obvious to everybody by now.

At the Close, Wednesday, April 8, 2020:
Dow Jones Industrial Average: 23,433.57, +779.71 (+3.44%)
NASDAQ: 8,090.90, +203.64 (+2.58%)
S&P 500: 2,749.98, +90.57 (+3.41%)
NYSE: 10,902.59, +365.54 (+3.47%)

Money, Currency, Value, Elusive, Changing, Unequal

This being the final posting for 2019, a divergence...

It's December 31. Do you know where your money is? Better, do you know what your money is?

To the unwashed, money is the crumpled pieces of paper in your pocket with pictures of dead presidents on them and some funny neo-Latin phrases and pulpy words like trust, debt, public, private, America.

It's not. Those papers are currency. Money is different. Gold is money. Silver is money. Diamonds and other precious gems are money. The paper is a convenience, a value identifier. In and of themselves, the papers with 10s or 20s or 100s on them are worth roughly the paper and ink, nothing more. But, in the minds of the unwashed, this is all there is. To them it is money. It is not money. It is currency.

The things we crave: food, shelter, cars, jewelry, these things have value. Words and numbers on paper, or digits on a computer or smartphone screen have only perceived value inasmuch as they can purchase the things we want or need, two wholly different things.

It is the thing itself that has value. The house, who some say is "worth" $450,000, others may see as worth less or as a massive misallocation of value. The house is shelter, an environment, a place of safeness, a sanctuary. It's value is derived from the joy or comfort it bestows upon the occupant(s), the safety it provides from threats of other men, from weather which we cannot control, form animal invaders. It's value, while it may be measured by a currency, is subjective. One man's 30,000 square foot castle may be no more comforting or safe than another man's cardboard box on a city sidewalk. It's a matter of perspective.

Further out, beyond the pointlessness of printed currencies, the anonymity of digitized value-measures, the sheer madness of crypto-currencies, are the certificates of ownership, of stocks, bonds, debentures, options, derivatives. Have these any intrinsic value? Not in the least. It is all perception and judgement of crowds. Often judgements are incorrect, inaccurate, altruistic, nonsensical, amusing, boring, tired, obsolete or otherwise jaded.

Like a horse race, the public gets to choose upon which favoritism is bequeathed. One horse may be valued at odds of eight-to-five. Another, sixty-to-one. They are both horses. They both run. Who is to say which horse is better on any given day? The judgement of crowds is more often wrong than right. The eight-to-five stallion does not always win the race. In fact, in practice, public favorites win only a third of the time. Imagine the same measure applied to value? A painting which sold for $300,000 in 2005, may sell for $2 million in 2020, and $45,000 in 2030. Such is the nature of value and currency. None of the numbers are correct indefinitely, but rather, acceptable in a given time, at a given place. Both value and currency are in constant flux and struggle against reality.

There is no real value in a painting.

A painting can neither feed nor clothe you, shelter you (perhaps from a rainstorm for a short period, but it would ruin the colors), but it can provide joy, prestige of ownership, emotion.

There's a number for all of that; it's elusive and always changing.

But, it's not money.

For auld lang syne, my dear
For auld lang syne,
We’ll tak a cup o’ kindness yet
For auld lang syne!

-- Robert Burns, 1788

At the Close, Monday, December 30, 2019:
Dow Jones Industrial Average: 28,462.14, -183.12 (-0.64%)
NASDAQ: 8,945.99, -60.62 (-0.67%)
S&P 500: 3,221.29, -18.73 (-0.58%)
NYSE Composite: 13,876.15, -67.99 (-0.49%)

Weekend Wrap: Financial Warfare

When Mario Draghi announced on Thursday that the European Central Bank (ECB) would cut overnight lending rates an additional 10 basis points - to 0.50% - and another round of QE, markets responded with a bit of a yawn as the news had already been largely leaked and played upon.

Such are financial markets these days, wherein nobody is supposed to feel even the slightest degree of pain or anguish and central banks telegraph their every move. There's no feel to markets, especially stocks, other than that of a rigged game. Analysis is useless in the face of dovish banking motives, all coordinated and supposedly well-intentioned.

Truth of the matter is that there is a fierce financial war on over money, finance, and trade, with competition among unbacked currencies (all of them) terrific and without wane. The Europeans want to beat the US and Japan, Japan wishes to devalue against the Euro. China, clearly the world's leader in discounted exporting, parlays its wobbly currency against everybody.

Not only are nations and regions waging financial war, governments continue to stick their grubby hands into the pockets of domestic populations at an increasingly torrid pace. The level of regulations, rules, taxes, fees and tariffs has risen substantially over the past ten years, as political forces get in on the action which inflation has long forwarded. Now, deflation threatens to skew the balance more toward government confiscation of labor's remuneration. Wages have stagnated and may slow further, but the tax load will only increase, making discretionary spending for many no longer a choice, but a command imperative.

As money (more accurately, currency) becomes less available and devalued on a widespread basis, after government comes the corporate grab of every last consumer penny. Regulation in developed nations has stifled small business creation to the point of near-extinction. Instead of choice, say, along a road from a variety of local food purveyors, Americans are offered only fast foods from giant companies. It's a Big Mac, Whopper, or Wendy's or nothing.

Locally-owned and operated retail stores are being killed at an alarming rate, and with it goes choice, and with choice goes freedom. The global financial war is threatening not to just the major players, but to individuals, increasingly squeezed by forces well beyond their control.

The cartel-like Amazon-ification of retail feels the same when it comes to nearly every segment of consumer goods and services. Cell phones? Not much choice of carriers there. Data, ditto. Clothing, all the same from China, Cambodia, or other SW Asian countries where labor is cheap. Investments? If you haven't been in stocks, you're a loser, and that game will continue to separate money from former savers and younger people who delay household-making because it seems fruitless and beyond budget.

Tariffs, and Donald Trump's imposition of them, are actually a symptom of the problem, which is loosely described as crony capitalism with a hint of nationalism and monetary monopolism.

The choices for regular citizens are stark and scary. Divert funds away government (federal, state, and local) and mega-corporations, and towards friends and neighbors, barter, frugality. In developed nations, the fruits of labor are being scooped up at a rapacious rate, by big business and government, much of it before it is even in the hands of the laborer.

When more than half of your income goes to taxes, and another third to basis household costs, there isn't much left over for either saving or discretion. It's a problem that's been building since Nixon took the US off the gold standard, it's global, and it's unstoppable.

At the Close, Friday, September 13, 2019:
Dow Jones Industrial Average: 27,219.52, +37.07 (+0.14%)
NASDAQ: 8,176.71, -17.75 (-0.22%)
S&P 500: 3,007.39, -2.18 (-0.07%)
NYSE Composite: 13,124.34, +8.29 (+0.06%)

For the week:
Dow: +442.06 (+1.57%)
NASDAQ: +73.64 (+0.91%)
S&P 500: +28.68 (+0.96%)
NYSE Composite: +190.96 (+1.48%)

Stocks Bounce As Germany Sells First Negative-Yielding 30-Year Bond

The "scary" thing - mentioned here yesterday - that sent traders rushing for the exits on Tuesday in major markets from Germany, to France, to the United States, was probably anxiety and anticipation of Germany pricing the first 30-year bond at a negative interest rate.

Germany was looking to sell $2 billion of the bonds, but managed to only sell $965 million of the debt, which eventually priced out at a yield of -0.11%. So, essentially, it was a failed auction, with the Bundesbank scooping up the rest, allegedly to be sold later on to other suckers, er, investors.

Now, that may not sound like a big deal at the outset, but losing a little more than a tenth of one percent on your money over 30 years can add right up. On $1 million, in the first year, it would be $1,100 that you'd just let go. Each year, the amount you'd lose would be lower, but it would still be 0.11%.

Just rounding it off, you'd lose about $30,000 of your money, leaving $970,000. If there was inflation during that period of time, the money would be worth much less in buying power at maturity in 2050.

There are some very bad implications surrounding negative interest rates. First, they are money destroyers. In the fiat money, fractional reserve banking system now in play worldwide, all money is debt. The Fed or other central banks create money (more accurately, "currency") by floating bonds, selling them to interested parties, at interest, creating a debt. The primary dealers, who are the principal buyers of the Fed's bonds (treasuries), create more debt by reselling the bonds or loaning money to companies or individuals.

However, bonds with negative interest rates cause negative debt, or, rather, a surplus, to the Fed, but this money extinguishes debt rather than creating it. If the supply of negative interest-bearing bonds becomes too large, it will cause a contraction in the money supply, which is what is happening in Germany and most of Europe presently. All of Germany's sovereign bonds are yielding negative returns, as are most of Europe's.

The continuation of such a program, especially if it catches on and sends yields further into the red, like one, two, or even three percent, would have the effect of choking off the money supply completely, destroying, once and for all, that currency.

The math is straightforward. If you have a million dollar bond with a -3.00% yield, you lose $30,000 the first year, and smaller amounts each consecutive year, since your principal is getting smaller year-over-year.

If that bond is for 10 years, it's going to lose somewhere in the neighborhood of 25% of its value, leaving you with $750,000 of your original million dollars. At three percent for 30 years, the result is the loss of up to 90% of your original investment, if the bond (at par), continues to pay -3% on one million dollars.

I may not have that exactly right, but the principle is correct and the money supply will be shrunk by negative yielding bonds. This is a very dangerous situation which bears close scrutiny because it very well may be the signal that global central banks are on the verge of forcing all sovereigns into default, destroying the money supply of many nations, and replacing national currencies with a worldwide unit of exchange.

It is, as the conspiracy theorists contend, what the globalists have had in mind for many years. With negative interest rates, they can slowly kill off the yen first, then the euro, then the US dollar. What will happen with the Chinese yuan or Russian ruble and other not-so-mainstream currencies remains to be seen, but a calamity of this proportion is likely to leave most other countries begging for some kind of solution, which the central banks will gladly supply.

At the Close, Wednesday, August 21, 2019:
Dow Jones Industrial Average: 26,202.73, +240.29 (+0.93%)
NASDAQ: 8,020.21, +71.65 (+0.90%)
S&P 500: 2,924.43, +23.92 (+0.82%)
NYSE Composite: 12,697.01, +97.61 (+0.77%)


Just for fun, somebody posted this on Zero Hedge the other day:
Nostradamus: (Cent. 8 Quat. 28)

Les simulacres d'or & argent enflez,
Qu'apres le rapt au lac furent gettez
Au desouvert estaincts tous & troublez.
Au marbre script prescript intergetez.

Translates as:

The copies of gold and silver inflated,
which after the theft were thrown into the lake,
at the discovery that all is exhausted and dissipated by the debt.
All scripts and bonds will be wiped out.

or,

The simulacra of gold and silver swell,
After the lake rapture were gone
At the open all are overcome & trouble.
At the marble script prescript intergetez.

Far From Ordinary Times For National Economies

Empires rise and fall. Nations traverse through periods of feast and famine, disputes with other nations, sometimes wars, and economic booms and busts. History is rife with stories detailing the life and times of nations and their leaders.

The vast majority of nations today face conditions that are far from normal.

There are at least three major migrations taking place, Africans to Europe, Chinese to Africa, and South Americans to North America. These are disruptive events, not only for the individuals involved but for the entire populations of the nations affected. Changes are gradual, mostly, but the mundane can be cracked by atrocities, absurdities and maladjustments committed by migrants in the clash of cultures.

Such conditions are prevalent in Europe and the United States, with migration reaching epidemic proportions. Indeed, President Trump himself calls the illegal immigration at the southern US border an "invasion." He is not wrong. The United States was built on the back of immigrants - legal ones - whose individual efforts and respect for their fellows built the greatest nation on Earth.

Illegal immigration is challenging the normative behavior of well-established citizens. According to certain left-leaning politicians and a corrupted media, illegal immigrants should receive free health care, free schooling, and largely, freedom from gainful employment. Ordinary, established US citizens do not receive such largesse, nor should they. Nor should the illegal entrants, who have violated our borders, broken our laws and flaunted the lifestyles and even the national flags of whence they came.

Such activity is largely disruptive to the fine working condition of a nation and the United States has been building to this state of affairs for more than 40 years. Estimates of people living in the US illegally range from 11 million to as many as 60 million people. The higher end of that range is probably closest to the truth, which is why immigrants - mostly the illegal ones - disrespect US laws, commit crimes, and take advantage of an overly generous social framework and increasingly undisciplined judicial process.

The condition in many European countries is far worse, where theft, rape, and other human crimes are committed with impunity. Often, if an immigrant is accused of crime, there exists no punishment. The system feeds upon itself and eventually fails to protect the national culture.

That is not all. Every nation on earth is controlled economically by an unelected elite, otherwise know as a central bank. In Europe, where the financial condition is dire, all nations on the continent are controlled by one central bank, the ECB. Nations have usurped their right to issue currency, having been overwhelmed by the collectivist desires of the European Union. The ECB issues fiat currency, in the form of a counterfeit euro, bolstered most recently by negative interest rates because the system is a fraud and it imploded over 10 years ago, during the Great Financial Crisis. The global central banks added untold amounts of liquidity, but it will never be enough because the crisis is one not of liquidity, but of solvency. All central banks create currency out of thin air, charge interest for its use, and, via the magic of fractional reserve lending, multiply the amount of currency in circulation by ghastly amounts.

The system is broken and will remain broken until it is completely rejected by the various populaces which employ it. That moment in time is unknowable, but it is inevitable.

There is more.

Great Britain, wise enough to keep their currency - the pound - national in nature, is attempting to exit the EU, but has been met with resistance three years since a national referendum preferred exiting, or, in common parlance, Brexit.

This is a further disruption to the status quo, and the elites will have none of it.

President Donald J. Trump, of the United States, foments more radical departures, not the least of which being his penchant for fair trade via tariffs. For three decades, the globalists have promulgated their "free trade" jingoism, which is commonly broken, cheated upon, corrupted, deceitful, unequal, and decrepit. Global trade should well collapse, and if President Trump's tariffs are the agent of change, all the better.

Thus, these days are far from normal. Superficially, people go about their business as if nothing is brewing beneath the casual calm. There will be a shock, probably multiple shocks, similar to, and many of them larger than the events of 2007-2009.

How long the politicians, bankers, and the media can keep a lid on the calamity that is bubbling up below, is anyone's guess, but their time is running short. Currencies will collapse, nations will fall, there will be wars.

It would pay to keep a sharp eye on one's assets, hard and soft. Anything that is not well-protected can be stolen away in a flash. Consider the number of security breaches at financial institutions as warnings. The money is unsafe. Hard assets are safer, but must be protected, defended.

All of this is frighteningly real and happening at breakneck speed. The usual media sources will not tell you the truth. You must find it on your own.

Ten years is a long time for the central banks and their friends to keep the spinning plates of a corrupt, defunct global financial construct from experiencing inertia and crashing to the floor, shattering into millions of tiny, unrecoverable pieces.

The spinning will end. Everything will change.

At the Close, Monday, August 12, 2019:
Dow Jones Industrial Average: 25,897.71, -389.73 (-1.48%)
NASDAQ: 7,863.41, -95.73 (-1.20%)
S&P 500: 2,883.09, -35.56 (-1.22%)
NYSE Composite: 12,586.24, -162.18 (-1.27%)

Dow Lower Again As Investors Ponder Fed Wisdom

Well, if you're content with having a bunch of highly-paid academics controlling your finances, you're in luck. The Federal Reserve has been hard at work for over 100 years to guarantee that they get a cut of everybody's money, mostly because they create it themselves, out of thin air, with no backing with tangible assets, like gold, or silver, or anything like that.

As it says on their debt instruments, full faith and credit.

Therein lies the problem. Most people, if they understood how the Federal Reserve operates - mostly in secret, and outside the boundaries of government (it is a private banking system, after all. Shhh!) - would pine for foregone days when gold and silver were the coin of the realm, so to speak, when people and businesses weren't amortized and taxed to the bare bones of their existence.

Full faith is something the Fed takes for granted, assuming that 99% of the public has no idea how money works. Credit is their life blood. Every dollar created by the Fed is a debt, which is why the so called "national debt" can never be repaid. If it was, there would be no money. Everybody would be broke.

Is that what is occupying the minds of the great investors and traders of Wall Street and their bankers, brokers, cronies and insiders? Probably not. They're more interested in getting and keeping as much of the Federal Reserve money they can, investing it in more stocks, bonds, debentures, options, futures and maybe along the way, some real assets like real estate, gold, silver, art, vehicles, machinery.

Almost nobody really cares about how the Fed or other central banks operate. It's a fact. Most people are caught up in the matrix of jobs, bills, rents, taxes, and debt. They don't have time to study the intricate workings of central banks, which, of course, is how the central bankers wish. The less scrutiny on them, the more they and their member banks (all the big ones) make, unaudited and without interference.

What the traders on the exchanges today were contemplating was whether or not the Fed will actually raise the federal funds rate (the rate banks charge each other for overnight loans) to 2.00-2.25% tomorrow at 2:00 pm EDT when the FOMC policy rate decision is announced.

The simple answer is that they almost certainly will. The market has priced this in. At the least, the 10-year treasury note has gotten the memo. It's holding pretty steady at 3.10% yield, anticipating the Fed's very well-telegraphed interest rate ploy.

To many of the top traders and investors, the Fed's bold actions, in the face of a somewhat gradual economic improvement, are already too much and too soon. Some analysts are suggesting that with the 10-year note over three percent, big money will forego the risks inherent in the stock market and shift more money into bonds. The 10-year is a benchmark. Better returns can be made in corporate debt offerings, junk bonds, shorter term offerings, or munis, all of which carry more risk, but not significantly so.

Thus, the market will tell everybody, including the wizened old men and women at the Fed, what the federal funds rate should be by voting with their feet. If stocks continue to rise, it gives the Fed a free pass to increase rates another 25 basis points in December. If the market declines, the Fed will be on its own.

The Fed has raised rates at a very steady pace since December 2016, adding 0.25% every quarter, in March, June, September, and December. They may be nearing a point at which they need to take a break.

The questions are whether or not they will see it, understand it, and how they will act upon it.

Dow Jones Industrial Average September Scorecard:

Date	Close	Gain/Loss	Cum. G/L
9/4/18	25,952.48	-12.34	-12.34
9/5/18	25,974.99	+22.51	+10.17
9/6/18	25,995.87	+20.88	+31.05
9/7/18	25,916.54	-79.33	-48.28
9/10/18	25,857.07	-59.47	-107.75
9/11/18	25,971.06	+113.99	+6.24
9/12/18	25,998.92	+27.86	+34.10
9/13/18	26,145.99	+147.07	+181.17
9/14/18	26,154.67	+8.68	+189.85
9/17/18	26,062.12	-92.55	+97.30
9/18/18	26,246.96	+184.84	+282.14
9/19/18	26,405.76	+158.80	+440.94
9/20/18	26,656.98	+251.22	+692.16
9/21/18	26,743.50	+86.52	+778.68
9/24/18	26,562.05	-181.45	+597.23
9/25/18	26,492.21	-69.84	+527.39

At the Close, Tuesday, September 25, 2018:
Dow Jones Industrial Average: 26,492.21, -69.84 (-0.26%)
NASDAQ: 8,007.47, +14.22 (+0.18%)
S&P 500: 2,915.56, -3.81 (-0.13%)
NYSE Composite: 13,161.64, -0.42 (0.00%)

Fittingly, Bitcoin Nears $10,000 on Cyber Monday

Catching a ten-bagger is a noteworthy event in any trader's history, but believers in Bitcoin - the original and most prominent cryptocurrency on the planet - are enjoying their days in the sun as the currency heads for $10,000, currently trading for more than $9900 per digital coin.

Bitcoin ended 2016 at a mere $970.17, but it's gone completely bonkers in 2017 as more and more people adopt the digital currency as a hedge against the faults of fiat currencies of central bankers that are based on nothing but faith.

While bitcoin is similarly faith-based, it has properties that traditional currencies do not. It is anonymous, and also not subject to excessive printing of fresh fiat out of thin air. The number of bitcoins mined is capped at 21 million. There are only four million left to be mined. After that, there can be no more Bitcoins ever created, so the currency has an inflation governor that is rivaled only by gold, silver and other precious metals.

This advantage is not lost on holders and speculators in Bitcoin. As acceptance and adoption grows, the number of bitcoin holders naturally ratchets up the price. As of this writing, Bitcoin's market cap is higher than many major corporations, making the digital currency something that keeps central bankers on their toes.

Widespread acceptance of Bitcoin threatens the central bank stranglehold on global forex, currencies and commerce. While this speculative phase is phenomenal for early adopters (some who bought into the Bitcoin mania before it was even priced in triple digits), the long-term implications are other-worldly. If Bitcoin - or some other form of cryptocurrency continues to be established globally - it could conceivably rival currencies such as the US dollar, the euro, Japanese yen or China's yuan.

Just as gold and silver have been recognized as money, currency and stores of value for thousands of years, so too, Bitcoin has emerged as a potentially viable alternative for the 21st century.

At the Close, Monday, November 27, 2017:
Dow: 23,580.78, +22.79 (+0.10%)
NASDAQ: 6,878.52, -10.64 (-0.15%)
S&P 500: 2,601.42, -1.00 (-0.04%)
NYSE Composite: 12,390.78, -31.15 (-0.25%)

Stocks Rock No Matter The News As Long As Central Banks Spend

Proof that you can't fight people who print their own money...

Courtesy of Bloomberg and various central banks, the correlation between central banks sucking up trillions in assets and gains in global stocks is remarkable.

So, anybody thinking they're a stock-picking genius over the past eight years really needs therapy for an over bloated ego, just as the bloat in central bank balance sheets gently guides shares of all companies higher.

The frightening parts of this scenario - shown without doubt in the chart - are what happens when these central banks begin unloading assets, and what will be the timing and nature of this asset disposal sale? Will they all sell at once, or will be it be of the Chinese water torture variety, with a slow, drip, drip, drip as equities reach for fair value, far below where they reside today.

What are the consequences of this massive liquidity injection, since it's clearly already established policy and responsible for massive gains over the past eight years.

The most obvious solution for people with plenty of paper wealth would be to convert it to real assets, in the form of real estate, machinery, gemstones, precious metals, art, collectibles, and, realistically, staples, like food and water.

If the wheels come off the global Ponzi, people will starve. Look no further than Venezuela for proof that economic implosion causes severe social repercussions.

Of course, the vast majority of people living on planet Earth will be unprepared, duped into trading worthless paper and empty promises for more worthless paper and even emptier promises. Peer into underfunded pension plans - like Detroit's public plans, for instance, or many corporate plans that went belly up - for proof of what exactly that looks like.

At the end of this grand experiment called "global fiat money" for lack of a better term, what will become of the global economy, the ECB, the World Bank, the IMF, the Federal Reserve, the most massive control frauds ever foisted upon an unsuspecting public? They, and their governors, directors, and executives will try to "save us" from the financial blight, when it is they themselves causing it.

And people will continue to be duped into lives of slavish devotion to false gods.

At The Close, 7/25/17:
Dow: 21,613.43, +100.26 (0.47%)
NASDAQ: 6,412.17, +1.37 (0.02%)
S&P 500: 2,477.13, +7.22 (0.29%)
NYSE Composite: 11,965.72, +61.01 (0.51%)

Target Zero: NASDAQ Unlucky in Lift-Off Sell-Off (Pump and Dump)

It wasn't a very pretty day for the moneychangers traders of paper stocks.

Nor was it particularly pleasing for goldbugs to see the precious metals smashed down around 4:00 am ET, but, then again, when it comes to gold manipulation, it's best to do it when most people are sleeping.

Theses manipulated markets are nearing the end of their central bank lifelines, though it is difficult to comprehend how the Fed, ECB, SNB, BOJ and others would pull the proverbial rug out all at the same time.

Therefore, a crash probably isn't in the cards, unless one is playing the political angle. In that scenario, we have the media and Democrats losing their war against President Donald J. Trump, who continues to steamroll over the Washington insider elite as though they ceased to matter after January 20th of this year.

In some ways, the Donald is right. Washington insiders and the mainstream media don't matter in the grand scheme of things, most of which revolves around MONEY.

Regarding that, stocks ramped pre-market, then sold off throughout the session. Oil finished flat. Gold and silver were hammered, as mentioned above, in a pre-dawn raid of the phony futures market, but mostly recovered. The major equity indices finished flat on the main, except for the NASDAQ, which took on some water.

Macro data had US durable goods orders down 1.1% in May after a 0.9% loss in April. That, in part, spurred the sell-off after lift-off in stocks.

Stocks are certainly being kept afloat by central banks and crony commercial banks. There's nothing even remotely normal about how stocks have been behaving since the great recession off 2008-09, but just in case anybody asks, the spread on treasuries - 2s and 30s - tumbled again to 134bps - marking the flattest treasury yield curve since late 2007.

Recession is overdue, which means the US economy is probably already in one. Pension holders and 401k dreamers will be the last ones to know.

At The Close, 6/26/17:
Dow: 21,409.55, +14.79 (0.07%)
NASDAQ 6,247.15, -18.10 (-0.29%)
S&P 500 2,439.07, +0.77 (0.03%)
NYSE Composite: 11,758.86, +25.66 (0.22%)

Wealth Building Suggestions In The Age Of Idiocy

Here are some pretty simple ideas for building and preserving wealth. When it comes to debt, not all is bad, though excessive debt is a non-starter for most people. Manage debt wisely. Any business will tell you they needed a loan or an equity partner to make money; people aren't very different.

Here are a few suggestions:
1. Buy silver (dollar cost average; buy a certain amount, be it $20 or $2000, per month, regardless of price.
2. Hide silver (self-explanatory) and don't touch it. This is your secret stash, outside the govenment's hands.
3. Find a business you can operate from home, even if it's a little more than just a hobby. Deduct all allowable expenses. I've been telling people to do this for years and the number who have listened and done it approaches ZERO. The tax code makes it easy to deduct substantial portions of your expenses.
4. Read "The Richest Man In Babylon." Follow the book's advice. Here's's a PDF online.
5. Never buy prepared foods at a grocery. Total junk, and a huge ripoff. Cook meals at home.
6. Have a garden. Even a 6x6 garden can produce a significant amount of produce.
7. Never stop learning. Knowledge is power.
8. Spend money like you don't have much. Always ask for a discount or deal.
9. Never, ever hire an investment advisor. If you think you don't know enough about investing, see #7 and educate yourself. The fact that you are reading this post makes you a candidate for being your own investment advisor and money manager.
10. Be a Boy Scout. Their motto is "Be Prepared."
11. Never panic, in either buying or selling situations. Trust your gut.

There are many more...

As far as the markets are concerned, Thursday was a repeat performance (by agents of central bankers) of Wednesday, with early losses rapidly erased and the major averages making a diagonal line from lower left to upper right on the charts.

Truly disturbing behavior from some exceptionally disturbed people.

Viola!
S&P 500: 2,105.26, +5.93 (0.28%)
Dow: 17,838.56, +48.89 (0.27%)
NASDAQ: 4,971.36, +19.11 (0.39%)

Crude Oil 49.15 -0.04% Gold 1,213.10 +0.04% EUR/USD 1.1149 -0.04% 10-Yr Bond 1.81 -1.90% Corn 414.75 -0.12% Copper 2.07 +0.17% Silver 16.00 -0.16% Natural Gas 2.78 0.00% Russell 2000 1,170.58 +0.65% VIX 13.63 -4.01% BATS 1000 20,677.17 0.00% GBP/USD 1.4405 -0.10% USD/JPY 108.9500 +0.08%

Chinks In The Global Ponzi Armor

What the central banks have constructed today as a "global economy" would make Bernie Madoff blush for all its arrogance and chutzpah.

The Fed buys Treasury bills, notes and bonds from the US government, the French government, Japan, Germany, UK, Australia, China, and the central banks of those countries do likewise. In essence, they are all borrowing from each other, and all of them, in the aggregate - and often enough singularly - are insolvent. It's the world's largest kiting scheme, being played on a global scale with money created out of thin air, backed by debt, most of which will never be repaid.

This kind of scam is typically known as a pyramid scheme, an airplane game, or, a Ponzi scheme, in which the creators and early adopters receive the bulk of the benefit, and those last in are left whining about promises made and unkept, with a loss of their investment and great remorse.

When one views the global economic structure from outside, it's clear that the creators of the Ponzi are the central banks, the early adopters are governments, and the vast majority of losers are savers, investors, retirees and, eventually, the young and future generations, who will inherit literally, a world of hurt, where the assets have been stripped away, wealth belongs to an upper, upper echelon of self-annoited masters, and social mobility is largely a myth.

Already, in the United States - the wealthiest nation in the world - there is evidence that the next generation to retire beyond he baby boomers, will be less well off than the previous one. Baby boomers have been retiring steadily, but their wealth has been neutered by the Zero Interest Rate Policy (ZIRP) of the Fed (soon to become NIRP), the COLAs (Cost of Living Adjustment) has been likewise zeroed out due to recalibration of how inflation is measured by the government, and taxes will take care of the rest. And that's just the Social Security end of it.

The Federal government has already put in place methods and scenarios in which they can confiscate the holdings of retirees, in 401k confiscations, wealth extraction taxes and "national emergency" legislation. In fact, senior debt holders (derivatives) would already have priority over depositors in an orderly liquidation of a major bank.

There's only one way to win at this game, and that's to not play. If possible, one would work outside the system, avoiding all taxation and contributions to unemployment insurance, social (in)security, worker's compensation theft, and the latest money extraction scheme, the ACA, otherwise known as Obamacare. Savings would likewise have to be outside the system, acquiring and holding everything from undeveloped land to precious metals, gems, to canned food, tools and machinery of trades.

It's a tough game to play, though, as the global Ponzi scheme continues to unravel in front of our very eyes, one which must be given consideration, even as a partial remedy to outright wealth confiscation through inflation, taxation or fiat.

Today's notch in the Ponzi wood:
S&P 500: 1,917.83, -8.99 (0.47%)
Dow: 16,413.43, -40.40 (0.25%)
NASDAQ: 4,487.54, -46.53 (1.03%)

Crude Oil 32.73 -0.76% Gold 1,231.30 +1.64% EUR/USD 1.1112 -0.12% 10-Yr Bond 1.76 -3.30% Corn 366.25 -0.27% Copper 2.07 -0.22% Silver 15.42 +0.28% Natural Gas 1.85 -4.63% Russell 2000 1,004.71 -0.64% VIX 21.64 -3.00% BATS 1000 20,682.61 -0.29% GBP/USD 1.4338 +0.34% USD/JPY 113.2550 -0.74%

Phantom GDP, Deflationary QE and Releasing the Consumer Kraken

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

OK, this is a little mind exercise for the new year.

Capital consists of money, labor, and resources (land, materials, machinery, buildings, infrastructure).

The Fed has control of just one of these three essential tenets of economy: money.

They make it out of nothing (to be more succinct, they create money from government debt - the Mandrake Mechanism, well-explained by G. Edward Griffin, in his expose of the Federal Reserve, The Creature from Jekyll Island - there are PDFs of this book available, or, buy it from Amazon or eBay, just go look.)

GDP growth is a canard, which the Fed and government can - and do - conspire to adjust according to their whims, wants, needs.

Unless somebody's building something that wasn't there beforehand, or there are more people building things (population growth, which is, after all, potential capital) or being more productive (technology), the only way to increase GDP is through money creation, i.e., inflation, which, in its most strict definition is an increase in the money supply, and, that is the essence of QE.

So, why hasn't there been inflation? In addition to the various reasons offered in this article, allow these meager observations:

• Money is moved off-shore
• Money is wasted
• Money goes into non-productive assets (stocks, especially stock buybacks, the most unproductive of all, actually deflationary)
• but, fewer people are working (unemployment)
• the amount of land in the US (and the world) is fixed
• a building burns, becomes dilapidated (impaired asset) or is vacant (lots of homes like that in the US thanks to the banks), becomes less-valued, non-productive, heading towards zero value, and that is deflation on a grand scale.

So, the people who want programs to improve the infrastructure in the US (roads, bridges, power grid, etc.) are correct in assuming that such programs would improve the economy. More jobs, more income, more velocity of money, and, most importantly, better, more efficient, more productive infrastructure, which leads to better manufacturing, agriculture, i.e., a virtuous cycle.

What we have today is a nearly closed-loop of money creation and destruction. Government issues bonds, Fed (or one of their many conduits, or other central banks) buys them with newly-created-out-of-thin-air money. That money goes to banks, which buy stocks or hoard as reserves, adding nothing to the general economy. GDP stagnates. Any little that may trickle out as loans to businesses or mortgages, is actually productive, but the banks, being the arbiters of money and controllers of credit, don't trust the public, and, additionally, have a hard time making a profit at 2, 3, or 4%. The problem for the Fed is the massive oversupply in everything from existing homes to corn to cheap junk from China, to now, oil and gas.

You want inflation, raise interest rates, because the pent-up demand will be filled by banks which can make money at 5, 6, or 7%.

My conclusion is that either the Fed doesn't understand this process (unlikely), or they actually want stagnation and/or disinflation or deflation (very likely). Remember, the dollar was getting weak up until 2009 and beyond, but look what's happened, the dollar is strengthening, and people want more of those dollars (the 10-year yield at 2.15% is magnitudes better than the German bund or the Bank of Japan's 10-year yield.). The Fed, as usual, has been lying through their teeth about everything from the virtues of quantitative easing (QE, i.e., free money) to the strength of the global economy (fact: it's weak.). There's a long history of the Fed saying one thing and knowing that the complete opposite - or nearly so - is actually true. That's how they get everyone to go along with their schemes of booms, busts, inflations, depressions, recessions... they and their crony, member banks, front-running everything.

The past few years have been good years for investing (ask anyone with a 401k or stocks), but it's not going to last. Maybe a few more years, because, once the banks start lending again in earnest, the inflation spigot will be wide open and the Fed knows this.

The Fed knows exactly what it is doing, and they're doing it slowly, as to avoid shocks. Anybody who hasn't been able to prosper (as in paying down debt, cutting expenditures, improving existing infrastructure - remodel your house, add solar panels, buy a better vehicle, increase acreage of productive land, learn new skills or improve existing ones) has missed the boat.

Point in fact: In 2005,6,7,8, I could not get a credit card with less than 22% interest. In 2009, I got a 4% home equity line of credit for roughly 50% of the value of my property (owned free and clear) from a local credit union (thank God for them). That one valued asset (my home) has, along with the meager line of credit, in five years time, allowed me to pay off all my existing credit card debt, buy inventory for my business, buy other assets (mostly silver) then get deals from various banks (yes, the very ones which caused the near-catastrophe of 2008), which now has me in this most unusual predicament: I have 0% credit - some of it guaranteed through June, 2016 - in an amount which far exceeds my original 4% home equity line, much of which I have already paid back.

My trick, if I can pull it off, will be to use the 0% credit as ready cash as part of a down payment on a better property for my home and business. With interest rates so low, it's almost foolish NOT to make this move.

The only risk, as far as I can tell, is if my income nosedives (not likely) and I'm unable to service my debt. In that case, I pay the mortgage (and taxes, the government always get theirs, don't they?) first, and let the banks figure out what to do with the defaulted CC debt. Long story short, I could then file for bankruptcy protection, and, even though the CC debt would not be fully discharged, I could get restructured and/or some forebearance/forgiveness and, keep my home, which, in the long run, is all that matters, the REAL, productive, improvable capital.

Seriously, I've been stacking silver, hoarding cash and business inventory for four years, and it's about time to unleash the Kraken!

Banksters beware! You've enabled your own worst nightmare. More adventures in high finance are sure to follow.

Today's advice: Pay attention and stay liquid. Interest rates keep going lower, meaning there's still another two years of embraceable low interest rates to be had.

America's Economy - and Society - is Grinding to a Halt

What a mess!

Stocks were down for the fifth consecutive session on Wednesday as congress fails to grasp the seriousness of any situation, be it the budget (substitue a continuing resolution), Obamacare (possibly the worst law ever passed) or the debt ceiling (due to run out of extraordinary measures by October 17, according to Treasury Secretary Jack Lew).

Meanwhile, the country does a slow burn; jobs aren't being created, business is stuck between bad choices and worse choices; governments - federal, state and local - can't make their budgets work.

Deflation has been taking hold in a rather large way, despite the best (wosrt) efforts by the Fed, through QE, to stimulate through inflation (another bad idea). There isn't any growth in manufacturing, the lifeblood of any economy, in the United States for thirty years. Our debts keep soaring. The Fed - and most other institutions - are failing the American people. Only the top 1% or maybe as little as 1/10 of the top 1% or as much as the top 10% are benefiting from centrally-planned economics.

There is no stock market, no price discovery mechanisms which can be reliably trusted, since the Fed now dominates all markets, from stocks to gold, silver, commodities, stocks and most especially, bonds, where the Federal Reserve is not only the buyer of last resort, they are also the first in line.

Obvious to anybody with an eye for such things, the recovery economics engineered over the past five years since the collapse of Freddie Mac, Fannie Mae, Lehman Brothers and assorted collateral damages, are simply not working, yet the government, in cahoots with the Fed, continues to support and maintain the same policies.

Maybe it's time for a reset, a revolution, some kind of change, but the NSA monitors every movement of the American public, keeping public protest to an absolute minimum, in shades strangely reminiscent of pre-war Germany in the late 1930s. we are all at risk, from the poorest to the richest, yet the richest feel secure that they are entitled to, and thus, have more, enough to sustain themselves through any crisis.

They are wrong, as history calmly reassures; the fall of the Roman empire, the French Revolution being only the two most prominent examples of mass chaos.

In five more days the federal government faces a shutdown of "non-essential" services. In two weeks after that, without authority for more borrowing, the US government will legally default on some of its obligations. Of course, those less-well-connected will feel the pinch first, the insiders, later, though by forces beyond the ken of their limited imaginations.

Here at Money Daily, we do not espouse default, disorder and carnage because it is damaging to everyone, but especially to those least able to protect themselves against it, which would include probably 90% of the population. Take a look around. How many of your neighbors can manage their own gardens, feed themselves, grow from seed, if necessary? How about you, yourself?

Sadly, the American public is so poorly educated in basic survival skills such as farming, gardening, water and fuel management, health and safety that a catastrophic condition renders most of the population at very high risk of disease and death.

Is this the kind of world we imagined to leave to the next generation? The human race is so deficient in so many aspects that survival of the entire species is questionable. The problems are enormous, but most will go back to their TV sets and TV dinners, ignoring the threats which are all around them, hoping beyond hope that government - the same one that caused and foments many of the issues and problems we face - will be there to support them and save them.

Readers of this blog may call us alarmists, but the signs of collapse of the system - of all systems - are abundant, though normalcy bias and cognitive dissonance prevent most from any meaningful understanding.

We could be days away from a complete tearing of the social fabric. Are you prepared? Do you even care?

The race to the bottom is accelerating, and there are no winners.

Here's the latest edition of the Keiser Report, for a glimpse into the kind of world in which we live:



Dow 15,273.26, -61.33 (0.40%)
Nasdaq 3,761.10, -7.16 (0.19%)
S&P 500 1,692.77, -4.65 (0.27%)
10-Yr Bond 2.61%, -0.04
NYSE Volume 3,403,673,000
Nasdaq Volume 1,791,265,125
Combined NYSE & NASDAQ Advance - Decline: 3174-3322
Combined NYSE & NASDAQ New highs - New lows: 258-38
WTI crude oil: 102.66, -0.47
Gold: 1,336.20, +19.90
Silver: 21.89, +0.30

Dow Runs at 13,000, Relents, as Oil Tops $106/Barrel; Gold, Silver Rocket Higher

On the heels of a three-day weekend and a late-night session of EU finance ministers which apparently (maybe, sort of, kinda) came to a conclusion on funding for the failed state of Greece, the Dow Jones Industrials were poised to exceed 13,000, a number not seen since May of 2008.

While the Eurocrats dithered, wrangled and finally agreed to a very messy agreement to stave off the imminent default of the Republic of Greece, most Americans were sleeping, though the conditions of the Greek people continued to worsen, seemingly by the hour.

Nonetheless, stocks opened with the usual ebullience afforded the opening of a new week of stock profit pursuits and quickly came within a whisker of the magic 13,000 level, before falling quickly backward at 10:00 am, as the Euro plunged.

Undiscouraged, the monkey algos, which amount for more than 70% of all trades, turned around as the Euro resumed gaining value against the US dollar and the Dow eventually broke through the haloed mark, though just briefly, on three different occasions during the session.

Meanwhile, the price of a barrel of WTI crude oil surpassed $105/barrel and just after 2:30, rang up $106. At that, the market had had enough and the day's rally was quickly over, the Dow - and all of the major averages - falling into the red before recovering slightly into the close for a split finish.

While there is still some guarded optimism over the Greek "deal" struck by the EU ministers, there are more than just a few doubters that the country will ever recover from the depression caused by decades of overspending, cheating on taxes (it's a Greek - and exceedingly a global - way of life) and an overhang of debt that would make even mighty Atlas himself shy from the task of holding aloft the birthplace of democracy.

Stock profiteers aside, there's ample reason to believe that Greece's ongoing tragedy will help pull down the rest of the Eurozone, and with it the global economy, fiat money and eventually, governments. The major economies of the world are playing with fire, printing without remorse nor sufficient moral appreciation of what the aftermath of global inflation will bring.

Today's skittish market turnaround may have been the first chapter in what could be "the great unraveling." Too little has been done - here in the US, in Europe, China and Japan - to address the underlying issues of the great recession, with the economists of the world having come up with no answer other than to simply pile more debt on top of the already enormous mountain of unpayable debts built up during the go-go 90s and moribund 2000s.

If there's any wonder why gold and silver took off today like they were launched out of cannons, the chart below may explain why the now-12-year bull run of the precious metals may just be getting started.

Dow 13,000 may be a pretty number and cause for celebration in some board rooms and on certain stock desks, but it has little to do with the overall health of the economy of any nation. Relentless printing of money, backed by "full faith and credit" has become the norm and we will all be the poorer for it in time and the price of oil is merely the tip of the spear that will pierce all the misconceptions and hopeful tones emanating from Wall Street, the City of London, Shanghai and Tokyo.

Dow 12,965.69, +15.82 (0.12%)
NASDAQ 2,948.57, -3.21 (0.11%)
S&P 500 1,362.21, +0.98 (0.07%)
NYSE Composite 8,115.42, +0.91 (0.01%)
NASDAQ Volume 1,815,109,000
NYSE Volume 3,766,193,750
Combined NYSE & NASDAQ Advance - Decline: 2490-3168
Combined NYSE & NASDAQ New highs - New lows: 260-16 (ridiculous)
WTI crude oil: 105.84, +2.60
Gold: 1,758.50, +32.60
Silver: 34.43, +1.21

Choosing the Right Money Market Account

With interest rates at historic lows, individuals and funds which are primarily risk-averse or on fixed incomes need to carefully choose their preferred investment vehicles, because inflation is going to eat into most of what's earned in either dividend-producing or fixed-rate investments.

Nonetheless, there are options which can be investigated in search of the best interest rates on money market accounts, where the goal is not growth nor income, but, rather, preservation of capital against the ravages of inflation, which is running at an annual rate of three to six percent, depending upon the source and one's own individual lifestyle choices.

Among the more flexible choices for investors these days are money market accounts, which, unlike certificates of deposit or US Treasury bonds, doesn't tie up an investor's capital for months or years at a time. Modern money market accounts can be found within offerings from brokerage accounts, through banks, credit unions or other lending or financial institutions, and the benefits of holding one's money in one are myriad, from limited tax liability to some which offer checking accounts upon which one can draw out funds or even debit cards tied to the account, which makes certain money market accounts not only wise investments, but useful choices in today's fast-paced environment.

Due to regulations and requirements under Regulation Q, which defines and governs money market accounts, most institutions limit the amount of money one can withdraw in a given time frame (usually monthly) or the number of transactions one can make within a money market account without incurring fees or penalties. Thus it makes good sense to investigate some of the literally thousands of web sites which offer comparisons or informational links concerning personal investing in money market accounts. Since money market accounts are regulated under the auspices of the US Treasury, understanding the rules and tax implications is a good first step to learning which funds or accounts fit best with your individual situation.

Once a decision is made to open such an account, a search for the best interest rates on money market accounts should be the next undertaking, though it pays to read the fine print, because, like all investment or financial accounts, there are multiple choices that may or may not be beneficial to your particular goals.

At worst, money market accounts are useful tools for keeping the money you do have, especially if you're concerned about volatility or risk in other markets, such as stocks, bonds, or derivatives, the most risky of all investments. Most money markets are government guaranteed against default, so any funds committed to them are as safe, if not safer, than money in a bank.

Flexibility is key, so choose a money market account that meets your established needs, offers a fair interest rate without onerous restrictions, and you'll sleep well at night, knowing your money is in a sound and secure environment.

Battling the Kleptocracy - Part 1

Editor's Note: In an effort to provide some clarity for regular people (working types or entrepreneurs, with incomes under $100,000, often well under) on the rigors of the modern economy, this blog will devote itself in part to coverage of markets (stocks, bonds, commodities), but more to an understanding of how the US economy, since the 1980s, has become unfair to the middle class, biased against wage earners and how it promotes a gross inequality of class, income and privilege, favoring the ultra-wealthy.

It is the intent of the author to offer constructive advice to millions of Americans who unknowingly and unwittingly submit to this poorly-conceived construct of economy and methods and practices to thwart and escape the clutched of a debt-driven fiat money environment.

The "Battling the Kleptocracy" series shall be composed of posts containing two parts: first, an overview of the day's events on the markets; second, an informational section of practical ideas to help foster a counter-cultural movement away from the status quo.

The Markets

Despite the usual non-eventful numbers from the ADP private employment report (+91,000 for August, on expectations of 100K) and another downward drift in the Chicago Purchasing Managers' Report (PMI) reading of 56.5, from 58.8, stocks blew out in the morning and drifted lower throughout the day. Only a desperate, late rally saved the major indices from posting negative returns on the session.

Dow 11,613.53, +53.58 (0.46%)
NASDAQ 2,579.46, +3.35 (0.13%)
S&P 500 1,218.89, +5.97 (0.49%)
NYSE Composite 7,528.39, +64.39 (0.86%)
Combined NYSE/NASDAQ advance-decline: 3936-2651
Combined NYSE/NASDAQ new highs - new lows: 66-19
NASDAQ Volume 1,986,423,750
NYSE Volume 5,188,927,500
WTI crude oil futures: 88.85 -0.05
Gold: 1824.50 -10.60
Silver: 41.58 +0.23

Comment: Blah. The usual churn in the face of overwhelming debt pressure and stagnation in developed nations.

Idea: Get your money out of Bank of America

There once was a time when banks were trusted pillars of society, mostly local and involved in the communities they served. With the advent of computerization, globalization and the rise of a mendacious class of ultra-wealthy supra-nationalists, circa 1980, the repeal of Glass-Steagall (1999) and the overwhelming force of mass media and central bank control (Federal Reserve Act of 1913), the common notion that banks served communities was no longer valid.

Not to put too fine a point on it, but banks have probably always been rooted in deception and money-grubbing, but banking and legislative activity of the past 30 years provides an excellent background to the root evil of the Kleptocracy, which, loosely defined, is a societal/economic system which routinely skims wealth from those who least can afford it, to the benefit of those who need it the least.

In 2008, Bank of America, under the guidance of the since-discredited Ken Lewis, purchased Countrywide Financial Corporation, at the time the largest originator of residential mortgages in the United States.

Guided mainly by greed and without proper due diligence, Bank of America blundered into (or possibly under influence and threats from the Federal Reserve) what will go down in history as one of the worst corporate deals of all time. The purchase price for Countrywide was reported at $4.0 billion, though some analysts, notably those employed by Bloomberg, put the figure at $2.5 billion, as BofA was already carrying some of Countrywide's portfolio. The bank also purchased once-heralded brokerage firm, Merrill-Lynch, in another bad deal, at the height of the financial collapse of 2008, though that purchase is a topic for another time.

Countywide's portfolio of mortgages turned out to be so rotten, loaded with no-doc loans, NINJA (No Income No Job Application) loans and other variable-rate and exotic mortgage flavors that BofA soon had a mess on their hands, though the executives of the bank were loathe to mention that fact to shareholders. Thus, we experienced the sub-prime meltdown, the financial crisis and more, that continues to this day.

Bank of America was insolvent and only was salvaged via underhanded loans, guarantees and bond repurchases from the Federal Reserve. Their losses on soured mortgages are so deep and so broad, that even these infusions cannot and will not prevent Bank of America from falling into deep default at some point (probably already happened a few times already) and eventually being broken up or forced into bankruptcy.

The bank is the largest in the United States as measured by deposits, but the costs of litigation from the Countrywide deal will eventually sink it. The following are stories from just the past three days, with more to come.

It is advisable to pull all funds from Bank of America as quickly and as quietly as possible. They do not abide by any laws, much as a cornered wild animal might act in rash and irrational manners. They are doomed, and with them, other financial institutions will be ruined or significantly impaired. You do not have to face ruin along with them. Put your money in a local credit union or sound local or regional bank. Avoid other mega-banks like JP Morgan Chase, Wells-Fargo and Citi. They are part of the counterparty risk which will be destroyed when Bank of America falls off the shelf.

Bank of America hid the potential of an AIG lawsuit from regulators and investors, knowing about the possibility of an extensive and expensive legal undertaking, as far back as January of 2011.

CEO Brian Moynihan is selling off parts of the bank piecemeal in order to raise cash.

On Tuesday, Bank of America announced plans to shed another piece of its mortgage business.

The $8.5 billion settlement which the bank secured in federal court is being challenged on a number of fronts, including the FDIC, FHFA, a homeowner's group, the NY state Attorney General and even Goldman Sachs. The settlement was supposed to put to rest claims on over $170 billion in bad loans, but has since fallen apart due to these and other objections. Litigation, which BofA hoped to have settled in one fell swoop, will likely take years and add billions to the bank's continuing mortgage miasma.

Additionally, a 2008 ruling is being challenged by the state of Nevada which would void an agreement on loan modifications which Nevada officials say the bank did not honor.

And, just today, US Bancorp sued Bank of America for $1.75 billion over loans it purchased in 2005, citing faulty underwriting.

Keeping your budget in order is easier on the web

With so much focus on money, finances and personal accountability, individuals need sphisticated ways to manage both their money and their time. From online brokerage accounts to credit cards and bank accounts, retirement accounts, 401Ks and the like, keeping track of where your is coming from and going to is a necessity.

The old fashioned paper budget and ledger has gone the way of the pocket calculator and slide rule. More and more people are turning to tools on the web to track and quantify their cash and investments.

One such web tool is a site called Mint, which is a free online service which allows you to add all of your important financial information into your own secure, customizable platform.

Users enter their bank account information, plus information on loans, credit cards, home equity lines, and other regularly-used accounts, such as a stock account.

Then, once it's all set up, the software pulls all the information together and keeps it updated, employing bank-level security so your information doesn't fall into the wrong hands.

The site offers a high level of reliability and a one-click experience to see where and how your money is being employed. There are additional tools, such as auto-generated charts of where your money is being spent, and a budget app that can be adjusted to suit a personal preference.

Spending too much on gas, or clothes? Set up the budget to limit those expenses and put more money into other areas.

Mint is a great free solution designed to assist everyone in managing their finances.

WELCOME! Money Daily is now LIVE!

Unlike many blogs, this one is all about money, investing, saving and having enough to live a full and rewarding life.

Most people spend their entire lives worrying about money and never do what it takes to have the money they really need. The middle class, especially in America and Western European countries, has been marginalized by major corporations, governments and a monstrosity of media which keeps the middle class not in the middle, but near the bottom of the social hierarchy.

But the world is changing. Individuals are being empowered to take back control of their lives, get off the 9-5 (or longer) treadmill, turn away debt and act responsibly - something corporations, the media and politicians do not.

Change, however, is gradual, incremental and often barely noticeable. People are always looking for the grand gesture, the sweeping movement, the revolutionary idea, though that is seldom the way things work. Every day the government-corporate-media (Govcordia) tells us that this-or-that cause will produce this-or-that effect, as though the world can be filtered down into easily-digestible chunks of data by which we can plan our lives.

Nothing could be further than the truth. What Govcordia wants is to keep the middle class in a constant struggle, and they've done a great job of it over the years. Rare is the case of people rising from modest means to the top of the heap. What's common is for people to remain working for 45 years at some job or other, accumulate assets - and a boatload of debt - and retire quietly.

If that's how you want to live your life, then stop right here... this is not for you. But, if you want to live a rewarding and meaningful life and reject the ordinary and the commonplace, then get ready for change.

What you can expect from this blog is something out of the ordinary, not the conventional wisdom from Govcordia, but radical thinking from emerging experts in fields of personal finance, politics, ecology and management.

The days of big government, big corporations and big media are coming to an end. Welcome to the world of self-government, home business and alternative media. It all starts here.