The Mess That Greenspan Made - Part 18

Why Warren Will Run

From this item at The Hill comes a pretty interesting take on the 2016 Presidential election cycle in general and a potential Elizabeth Warren (D-MA) run in particular…

Why Warren will run against Clinton in 2016

By John LeBoutillier, contributor

State of the 2016 Race
A weekly column for The Hill analyzing the current state of the 2016 presidential race.

The Democratic race: Why Sen. Elizabeth Warren (D-Mass.) will run in 2016 against former Secretary of State Hillary Clinton.

1. Warren is the only national politician today from either party who conveys a sense of outrage over our current — deteriorating — national situation. Her passion is her signature calling card in a time when all the other candidates for president seem to have passion only for themselves and their candidacies.

2. At a recent 12-person in-depth focus group in Denver conducted by Peter Hart and reported in The Washington Post by Dan Balz, the only national politician who was viewed favorably was Warren — even by some of the Republican voters in the focus group.

3. Why? Because she is the only politician who is even talking about the powerlessness of the average person — and the seemingly too powerful corporate and Wall Street entities.

4. This issue cuts across all political lines. It is the issue that catapulted President Teddy Roosevelt into the political hall of fame. His trust busting led to today’s anti-trust regulations and the belief that the federal government’s role is to act as a neutral referee to ensure a fair playing field. But no one today believes the feds are neutral — or fair. Instead, big government is seen as corrupt and as “rigged” as big business.

5. Indeed, there isn’t that much that separates Occupy Wall Street from the Tea Party. One blames big business while the other blames big government for our problems. But more and more, people see the two as in bed with each other in a cynical game to line their own pockets and to preserve their power — all at the expense of the average American.

6. This underlying fear is the hidden issue in the 2016 race — and so far, only Warren is even talking about it.

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Wednesday Morning Links

MUST READS
China moves to boost lending, reverse slowdown – AP
Oil falls, cuts short four day rally as U.S. stocks build – Reuters
Careful what you wish for: Oil-price recovery may sting – MarketWatch
CNOOC eyes $5B writedown after announcing major investment cuts – FP
Standard & Poor’s Is Sorry About That Credit Crisis – Bloomberg
Money issues are still really stressing Americans out – CNN/Money
Retired Baby Boomers face emotional adjustments – USA Today
The Surprising Reasons Baby Boomers Retire – Fiscal Times
Avoid 5 Alluring Tax Mistakes That Are Costly, Even Criminal – Forbes
Why Warren will run against Clinton in 2016 – The Hill
Christie’s Measles Madness Explained – Bloomberg View
An Unconventional Truth – Project Syndicate
Where Rich Feels Less Fortunate – Bloomberg

MARKETS/INVESTING
Asia stocks up on energy bounce, Europe drifts lower – AP
Mr. Market is about to take your money on a wild ride – MarketWatch
Billionaire Paul Singer Says It’s ‘Quite Nutty’ to Hold Government Debt – Bloomberg
Bond Market Volatility Surges as Oil Damps Stimulus Euphoria – Bloomberg
Gold rises on lower shares, China’s central bank monetary move – Reuters
Gold In A ‘Sweet Spot’ As Central Banks Pursue Aggressive Easing – Kitco
BofA: Brace for gold ’singularity’ if Fed doesn’t tighten – Mining.com
Investors’ desire for precious metals rise – Mineweb

ECONOMY/WORLD/HOUSING/BANKING
Doubting Economics – Alhambra Partners
The ECB Fears Deflation, But You Should Not – Mises
Is the Declining Unemployment Rate a Big Lie? – PragCap
Survey finds eurozone began 2015 stronger than thought – AP
U.K.’s Half-Hearted Currency Probe – Bloomberg
It’s almost as if central banks are intentionally inflating their housing bubbles – Quartz
Stage Is Set For A Massive Housing Market Correction in Canada’s Oilpatch – Zero Hedge
The illusion of monetary policy independence under flexible exchange rates – voxeu
Fedcoin: On the Desirability of a Government Cryptocurrency – MacroMania
Beware of central bankers bearing surprise ‘gifts’ – MarketWatch
Markets Trump the Fed’s Forecast – Manhattan Institute

 

Inflation Since 1510 (in the U.K.)

Super long-term charts like the one below, painstakingly created at Deutsche Bank and appearing in this item at Business Insider, are fascinating in that they tell a story that few seem interested in hearing, namely, that the world’s financial system and conventional thinking about economics has transformed radically in recent decades as the world switched to a pure paper money system administered by central bankers.

Obviously, you’d see a similar chart for the U.S. where, prior to the 20th century, high rates of inflation used to coincide with wars and was followed by periods of deflation to reverse those price increases almost invariably caused by supply shocks and temporarily abandoning a hard money standard to fund the war effort. Technological advances also fueled prior bouts of deflation, however, even a hint of deflation these days is considered taboo and must be countered by central bank money printing on a grand scale.

In what is part of a growing trend, economists at Deutsche Bank are asking whether deflation is really as bad a thing as most dismal thinkers think it is, as conventional wisdom toward deflation increasingly appears to be another case of The Emperor’s New Clothes.

Monday Morning Links

MUST READS
Europe Should Call Greece’s Bluff – Bloomberg
At heart of new euro crisis: Germany’s obsession with debt – Globe & Mail
Obama proposes $3.99 trillion budget, sets up battle with Republicans – Reuters
Russia’s Eroding Economy Risks Putin’s Economic Union – Fiscal Times
Gazprom gets highest investment grade from China’s biggest ratings agency – RT News
No risk of ‘eating away’ Russia’s currency and gold reserves – Central Bank governor – Tass
When Even the Fed Is Confused About Gold, We Still Have Some Work To Do – Forbes
Settling Case, Standard & Poor’s Backs Off Claims of Government ‘Retaliation’ – NY Times
Market Action Suggests Abrupt Slowing in Global Economic Activity – Hussman Funds
The Forces at Work as Developed World Currencies Diverge – Sober Look
Fiat’s Obvious Failure – Dollar Collapse
The Housing Mania’s Untold Story – RCM
So Long, January – Bespoke

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
Oil prices rally above $55 as investors pile in – Reuters
January’s Market Volatility: Blip or Omen? – Bloomberg
Fed Up: How Will Rising Interest Rates Affect Stocks? – WSJ
Gold edges lower after biggest monthly gain in three years – Reuters
LBMA ‘experts’ go for $1,211 gold price average in 2015, $16.76 silver – Mineweb
Gold Gets Safe Haven Bids But COMEX Has Stopping Power – GoldSilverWorlds
NY Fed Gold Withdrawals Don’t Match Dutch-German Repatriation Claims – BullionStar
India reclaims top spot as No. 1 gold consumer – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Another solid GDP report – Econbrowser
Demographics and GDP: 2% is the new 4% – Calculated Risk
Almost half of US households exhaust their salaries – AP
How Americans Are Spending Their Windfall From Cheap Gas – Bloomberg
China January HSBC factory PMI contracts for second month – Reuters
Alberta’s real estate woes threaten the rest of the country – Globe & Mail
China’s Property Market Is Now On Shaky Foundations – Barron’s
Can monetary policy turn Argentina into Japan? – China Financial Markets
As of Yet, Fed Not Changing Tune – Fed Watch
Less Than Zero – Alhambra Partners

 
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