The Mess That Greenspan Made - Part 20

Tuesday Morning Links

MUST READS
Russia warns of investor flight – BBC
U.S., other powers kick Russia out of G8 – CNN
Punishing Putin Fuels Energy-Export Drive in Congress – Businessweek
Dancing with the Bear: Merkel Seeks a Hardline on Putin – Spiegel
Fed’s Plosser: Yellen’s ’six months’ comment was no mistake – Reuters
Has Janet Yellen Given Up On Her 2% Inflation Target? – Econospeak
John Williams Acknowledges the Fed’s Forecast Change – Fed Watch
Money is just an IOU, and the banks are rolling in it – alternet
Madoff Aides Convicted After Decades Working for Firm – Bloomberg
IceCap: “Which Bubble Is Created Next?” – Zero Hedge
The Fourteen Year Recession – The Burning Platform
American Patrimony – Krugman, NY Times

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MARKETS/INVESTING
Stock futures up ahead of data – MarketWatch
Who’s the Sucker? – Alhambra Investment Partners
Wall Street wary of potential escalation in Ukraine – CNBC
Fears of rising rates killing bull overblown? – USA Today
Should retail investors continue plowing into stocks or follow the smart money? – FP
Treasury Notes Cheapest Versus Peers Since 2010 Before Auctions – Bloomberg
Gold holds above 1-month low, but U.S. rate hike fears weigh – Reuters
How hard top gold miners fell since the metal’s turn – Mineweb
Gold forecaster with 100% accuracy says gold to remain weak – Gold Chat
Peak Gold: How The Romans Lost Their Empire – SRSrocco Report
How Yellen’s gamble screwed up gold – MarketWatch

ECONOMY/WORLD/HOUSING/BANKING
Graduate student loans are ballooning – CNN/Money
When long-term unemployment becomes self-perpetuating – Washington Post
Welcome to the Currency War, Part 13: China’s Turn – Dollar Collaps
German business optimism slips amid Ukraine crisis – AP
UK inflation hits 4-year low, house prices up sharply – Economic Times
A depressingly familiar reality lies behind the UK’s economic miracle – Telegraph
National Bitcoin Alternative Auroracoin Launches To Save Iceland’s Economy – Forbes
Wealthy Chinese home buyers boost suburban L.A. housing markets – LA Times
Housing Recovery Hits a Soft Patch, Prices Still To Rise By 5% In 2014 – IBT
Message to the Fed: Here Are a Few Things That You Can’t Do – Cyniconomics
Stein: Fed Should Weigh Risks in Stoking Job Gains – Bloomberg
The Fed’s Big Mistake – Short Takes

 

Confidence Across the Country

More intriguing data about the outlook of the American public is available in this survey from Gallup where it is clear that the bigger the boom, the better the mood.

The Washington D.C. area has been booming for some time as money continues to gush out of the Federal Reserve and Treasury Department and, of course, there are all sorts of bubbles of varying sizes in the Bay Area that, with each passing day, looks more like 1999.

Rising confidence in Seattle may have something to do with their recent Super Bowl win…

As for the the bottom five, there should be no surprise about the rust-belt states (just don’t tell Ohio Governor John Kasich who made the talk show rounds yesterday morning), but it’s not at all clear why Jacksonville Florida should be the gloomiest area of them all.

According to this report, it is the poor economy in general and an ongoing housing crisis that is dragging them down, down south.

Gold and silver prices gave back a good portion of their year-to-date gains after Crimea’s secession vote came and went without any further geopolitical turmoil, and then the Federal Reserve surprised investors by indicating interest rate hikes could come sooner than expected. Both of these developments were decidedly negative for precious metals and cut short their recent rallies as the metals saw their heaviest selling since November.

Gold and SilverLast week’s sell-off clearly changed what was a very positive technical picture into something much less so, and now, rather than watching resistance levels above, traders are eyeing support levels below.

A surging U.S. dollar has added new headwinds for the metals, however, much of last week’s dollar strength was due to comments about interest rate hikes by new Fed Chief Janet Yellen that many think were simply in error. U.S. ETF flows continue to be an encouraging sign for gold market bulls as investors actually added to their holdings after a series of losing sessions.

After the gold price briefly reached a six-month high over $1,390 an ounce on Monday, precious metals tumbled to three-week lows in trading on Thursday in the aftermath of Janet Yellen’s first policy meeting and press conference as Federal Reserve Chairman.

Fading safe haven demand as a result of easing tensions in Ukraine had already sent metal prices lower earlier in the week, but the surprisingly hawkish outlook on interest rates…

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Via Sovereign Man comes this series of clips of former Rep. Ron Paul (R-TX) and billionaire investor Jim Rogers on subjects such as Federal Reserve policy, money, and inflation.

I don’t recall ever seeing these two together on the same stage before, so, for that reason alone this is kind of neat as they both rail against the status quo regarding economics and monetary policy, taking Ben Bernanke to task for his misdeeds.

This is from a conference late last year, so, some of the data is a bit old.

Nonetheless, I think Paul has it right when he says “There’s going to be a lot more chaos yet to come”, due primarily to the many gross distortions around the world in financial markets, economic data, currencies, etc. caused by monetary and fiscal policy of recent years.

Rogers again questions whether Ben Bernanke is a liar or a fool and concludes it’s the latter.

Toward the end they talk about U.S. government confiscation of private assets (mostly retirement accounts) when the SHTF – that doesn’t sound good.

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