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The Fed Has All the Markets in Lockdown

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This is one interview that you must not miss from Dr. Paul Craig Roberts.

If you only have time to spend on one article in today’s newsletter, then listen to this interview below by Dr. Paul Craig Roberts.  It will clarify everything we have said to you for the past two years and explain just what Obamacare means to YOU and to the economy.

Two topics stood out for me in the interview.  First, the Fed has ALL the markets in lockdown.  They will continue as long as the media keeps the wool pulled over the public’s eyes.  Second, by the time the public figures out what is happening and decide to get out of the dollar for the safety of gold and silver, it will be too late.  There won’t be any left to buy.  It will already be in Asia.  The West is foolish – sending its gold and silver to China and India.  All in the name of temporarily supporting the U.S. dollar, this is a losing proposition.

You’ve heard this over and over from Bill Holter.  Here is another voice, one with credibility, backing up Bill’s views.  The former Treasury Secretary, Roberts says – don’t worry about the price – the price may fall further – but it’s not important.  The real issue is whether you have it or not because when you need it you won’t be able to buy it.  The Chinese will never sell it.  It’s gone forever.  Point well taken Dr. Roberts!  You are preaching to the Miles Franklin choir.

Dr. Paul Craig Roberts-U.S. Markets Rigged by its Own Authorities–It Blows the Mind

By Greg Hunter on January 8, 2014

Economist Dr. Paul Craig Roberts says, “We have a situation where all the markets are rigged. All the markets are manipulated.” As an example, Dr. Roberts points to the stock market. Dr. Roberts contends, “We have a stock market at all-time highs, and where is the economy? There’s not one. There’s no recovery.” Dr. Roberts goes on to say, “53% of Americans earn less than $30,000 per year. Well, the poverty rate for a family of four is something like $24,000. . . . If there is no income to drive the economy and there is no credit expansion to drive the economy, then how does it go anywhere? You can’t possibly have a recovery.”

When asked how long can this go on, Dr. Roberts replied, “How long can they fool people?” When asked about the recent Fed “taper” of $10 billion a month in bond purchases with printed money, Roberts said, “Foreigners are getting nervous because they see the Fed creating all this new money.” Roberts thinks the appearance of cutting back the money printing “is a way to protect the dollar.” Obama Care is another headwind for the economy as monthly premiums for many double. Dr. Roberts says, “The whole thing is constructed to produce massive income for the insurance companies, and that drains the economy.”

So, what does Dr. Roberts see for 2014? “I would expect, this year, the economy will drop again, and they won’t be able to hide it. So, the deficit will widen . . . and the widening deficit will again cause dollar worries. Who’s going to finance it? It means the Fed will have to print more dollars.” Roberts goes on to say, “The Fed won’t be able to cut back $10 billion a year. It will have to increase it $30 billion a year, $40 billion a year, whatever.” On gold and silver, Roberts says, “The West is draining itself of physical bullion. . . If there is a currency collapses and you try to flee into gold, there won’t be any there. The Chinese will have it.” So, is this the year gold and silver stage a big turnaround? Roberts says, “It’s gone on longer than I thought it could go on. I didn’t realize all the deceptive and crooked methods they would use to rig the markets. The notion that a democratic capitalist country having its markets rigged by its own authorities–it blows the mind. This is not normal. What will they do next? I don’t know.” Join Greg Hunter as he goes One-on-One with former Assistant Treasury Secretary Dr. Paul Craig Roberts.

Dr. Paul Craig Roberts: If the Currency Collapses & You Try to Flee Into Gold,There Won’t Be Any

And now, as promised in yesterday’s daily, here is a brief recap of John Williams from Shadowstats.com latest report on hyperinflation.  His last report on this topic was in 2012.  It is a must read and I strongly urge all of our readers to subscribe to Shadowstats and take the time to read the report in its entirety.

Again, at this onset to the New Year, the hyperinflation timing remains in place for 2014. By its nature, a currency panic—the likely proximal trigger of the hyperinflation event—is difficult to time. With all the underlying fundamentals for the collapse of the U.S. dollar having been in place for some time, the potential for an imminent break in the system also has been and remains in place. In the wake of the Panic of 2008, the hyperinflation timing reflects the period in which many of the economic- and systemic-related crises of 2008 likely will intensify or resurface, in a confluence of market-roiling circumstances. Extraordinary financial intervention by the federal government and Federal Reserve in 2008 saved the U.S. banking system from collapse, but those actions did little more than to push mortal problems for the economy and financial system a couple of years down the road. Those actions also had inflationary consequences, and they limited the flexibility of federal-government and Federal Reserve options in addressing future crises, accelerating the approach of a day of reckoning for the U.S. dollar into the near future. The U.S. currency has been set up for its ultimate demise, in debilitating inflation.

The government manipulates the data through the BLS.  They use “core” inflation, which is nonsense in terms of measuring consumer inflation as it relates to the common experience.  Food and energy account for 24.6% of the CPI-U and 27.6% of the CPI-W.

Little has changed in the basic outlook for the 2014 onset of the Great Collapse, a hyperinflationary great depression. Extraordinary fiscal imbalances by 2004 had set the United States on course for a hyperinflation before the end of this decade. The Panic of 2008, and related extreme actions taken by the Federal Reserve and the U.S. government to prevent the collapse of the financial system, brought in the hyperinflation timing to 2014, which now is at hand.

A looming crisis in the U.S. dollar—a panicked sell-off in the U.S. currency in the months ahead— remains the likely proximal trigger for the early stages of the hyperinflation. A sharp decline in the exchange-rate value of the dollar (all dollar references are for the U.S. dollar, unless otherwise noted) would spike dollar-denominated commodity prices, such as oil, and related inflation.

Inflation will return.  It will be of the cost-push variety, like Jim Sinclair says, and not the ordinary demand-pull that the media focuses on.  Inflation will not be the result of a strong economy.  It will be caused by a weak dollar, which will boost the price of oil.  Changes in the value of the U.S. dollar accounts for 80% of the movement of oil prices.  Oil prices are the dominant component of cost-push inflation in the U.S.

If initial weakness in the U.S. dollar is not part of a currency-selling panic, it likely will cascade into one, with domestic and global holders of the U.S. currency dumping it and related dollar-denominated paper assets as quickly as possible. Cash and liquid, dollar-denominated paper assets are an effective overhang to the domestic U.S. money supply of more than $16 trillion. In contrast, broad money (ShadowStats-Ongoing M3) stood at about $15.5 trillion in December 2013. In response, the Federal Reserve would be forced to attempt to stabilize the domestic financial markets, including massive monetization of unwanted U.S. Treasury debt. The resulting surge in the money supply, combined with the cost-push pressures from the sinking dollar, would trigger the early phase of a hyperinflation. Coincident with and likely exacerbating that crisis would be the loss of the dollar’s reserve status.

In turn, as the early stages of runaway inflation hit an economic system unprepared and unstructured for such activity, the hyperinflation would tend to disrupt the normal flow of commerce, pushing an already-depressed and faltering economy into great-depression territory, hence the forecast of a hyperinflationary great depression.

The unfolding circumstance will encompass a complete loss U.S. dollar purchasing power; extreme disruption in the normal stream of U.S. commercial and economic activity; a collapse in the U.S. financial system; and a likely realignment of the U.S. political environment.

To read full article, please subscribe to Shadowstats.com.

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