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Chris Martenson

Image | Why are the stock markets up?
Why are the stock markets up?
 PREVIEW

The headlines are screaming at the top of every financial media outlet tonight: The Dow Closes Above 12,000 For The First Time In Two Years!

What’s going on here? Is the recovery well and truly underway? And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” in the future, as Kansas City Fed President Thomas Hoenig said today? 

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here. Why are they already dropping trial balloons?  What are they seeing that we are not seeing, and why won’t they just tell us? What, exactly, is it that justifies more than $100 billion in thin air money each month?

Here’s how member dbworld put it earlier today:

Why are the stock markets up?
 PREVIEW

The headlines are screaming at the top of every financial media outlet tonight: The Dow Closes Above 12,000 For The First Time In Two Years!

What’s going on here? Is the recovery well and truly underway? And, if it is, why is the Fed dropping hints again that “QE3 may get discussed” in the future, as Kansas City Fed President Thomas Hoenig said today? 

Given the raft of good economic news lately, one might be forgiven for wondering what the Fed has in mind here. Why are they already dropping trial balloons?  What are they seeing that we are not seeing, and why won’t they just tell us? What, exactly, is it that justifies more than $100 billion in thin air money each month?

Here’s how member dbworld put it earlier today:

Image | Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat
Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Catherine Austin Fitts: investment advisor and entrepreneur. She is the founder of Solari Investment Advisory Services, where she offers subscribers guidance for navigating the risks of the global financial system and the political economy. (FYI: Chris will be the guest on her weekly podcast, The Solari Report, on Feb 3). Her perspective on Wall Street and Capitol Hill are shaped by her past roles as Assistant Secretary of Housing under George H. W. Bush, and before that, as Managing Director and board member for the investment bank Dillon, Read & Co. 

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1. Despite (or perhaps because of) your time as Assistant Secretary of Housing under Bush Sr., you are extremely critical of the government’s financial stewardship. What, if anything, changes with administrations and how much is institutionally baked into the cake?

The federal financial model is institutional, and its ultimate governance is outside of the government.

 

Straight Talk with Catherine Austin Fitts: We Are Victims of A Financial Coup D’Etat

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Catherine Austin Fitts: investment advisor and entrepreneur. She is the founder of Solari Investment Advisory Services, where she offers subscribers guidance for navigating the risks of the global financial system and the political economy. (FYI: Chris will be the guest on her weekly podcast, The Solari Report, on Feb 3). Her perspective on Wall Street and Capitol Hill are shaped by her past roles as Assistant Secretary of Housing under George H. W. Bush, and before that, as Managing Director and board member for the investment bank Dillon, Read & Co. 

p.p1 {margin: 0.0px 0.0px 6.0px 0.0px; font: 13.0px Verdana}

1. Despite (or perhaps because of) your time as Assistant Secretary of Housing under Bush Sr., you are extremely critical of the government’s financial stewardship. What, if anything, changes with administrations and how much is institutionally baked into the cake?

The federal financial model is institutional, and its ultimate governance is outside of the government.

 

Image | “Let Them Eat Cake”
“Let Them Eat Cake”
 PREVIEW

There are great moments in history, critical turning points that seemingly hang upon a single phrase. In response to news that the peasants had no bread, Marie Antoinette allegedly said “Qu’ils mangent de la brioche.” (A brioche is a luxury bread enriched with eggs and butter).

At the time of the French Revolution in the late 1700’s, the staple food of the peasants was bread, which absorbed 50% of their income, in contrast to fuel, which consumed only 5%. The obliviousness and selfishness of the ruling class sparked the violence that led to its downfall.

Fast forward to today, where food and fuel consume up to 50% of the income of people in developing nations, such as Tunisia and Egypt, as well as China and India. In an increasing number of these places, violence is breaking out, as the modern-day peasants grow increasingly restive at the burden of merely trying to stay fed.

“Let Them Eat Cake”
 PREVIEW

There are great moments in history, critical turning points that seemingly hang upon a single phrase. In response to news that the peasants had no bread, Marie Antoinette allegedly said “Qu’ils mangent de la brioche.” (A brioche is a luxury bread enriched with eggs and butter).

At the time of the French Revolution in the late 1700’s, the staple food of the peasants was bread, which absorbed 50% of their income, in contrast to fuel, which consumed only 5%. The obliviousness and selfishness of the ruling class sparked the violence that led to its downfall.

Fast forward to today, where food and fuel consume up to 50% of the income of people in developing nations, such as Tunisia and Egypt, as well as China and India. In an increasing number of these places, violence is breaking out, as the modern-day peasants grow increasingly restive at the burden of merely trying to stay fed.

Image | Interview with Jim Rogers: Why Inflation is Raging Worldwide and He Shorted US Treasury Bonds*
Interview with Jim Rogers: Why Inflation is Raging Worldwide and He Shorted US Treasury Bonds*

"I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest."

So said investing legend Jim Rogers when he spoke recently with PeakProsperity.com about the inflationary pressures rising dramatically around the globe, despite some governments' best efforts to downplay them. Jim shares his "outside in" perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, "It's going to be a real mess before it's over."

 
Interview with Jim Rogers: Why Inflation is Raging Worldwide and He Shorted US Treasury Bonds*

"I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest."

So said investing legend Jim Rogers when he spoke recently with PeakProsperity.com about the inflationary pressures rising dramatically around the globe, despite some governments' best efforts to downplay them. Jim shares his "outside in" perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, "It's going to be a real mess before it's over."

 
Image | Inflation Is So Much Worse Than We’re Told (Full Report)
Inflation Is So Much Worse Than We’re Told (Full Report)
 PREVIEW

Inflation Is So Much Worse Than We’re Told

Tuesday, January 25, 2011

Executive Summary

  • Why inflation is several percent higher than claimed
  • The criticality of correctly weighting the CPI & how the current methodology is flawed
    • Case study using healthcare, one of the largest victims of underweighting in today’s CPI
  • Why the Fed (erroneously) sees deflation and is making dangerously-flawed policy decisions as a result
  • The 8-steps that will signal our progression into an inflation-induced financial crisis in the US
  • Recommendations for preserving the purchasing power of your assets 
Full Report (for enrolled members only)

Provides a much deeper dive into the CPI, its flawed methodology, the likely implications of understating inflation, and strategies for individual investors than available in the public-only article. If you are a looking to protect the purchasing power of your current wealth, it’s important to understand the stealth tax your assets currently exposed to from the erroneously-low reported inflation rate.

Inflation Is So Much Worse Than We’re Told (Full Report)
 PREVIEW

Inflation Is So Much Worse Than We’re Told

Tuesday, January 25, 2011

Executive Summary

  • Why inflation is several percent higher than claimed
  • The criticality of correctly weighting the CPI & how the current methodology is flawed
    • Case study using healthcare, one of the largest victims of underweighting in today’s CPI
  • Why the Fed (erroneously) sees deflation and is making dangerously-flawed policy decisions as a result
  • The 8-steps that will signal our progression into an inflation-induced financial crisis in the US
  • Recommendations for preserving the purchasing power of your assets 
Full Report (for enrolled members only)

Provides a much deeper dive into the CPI, its flawed methodology, the likely implications of understating inflation, and strategies for individual investors than available in the public-only article. If you are a looking to protect the purchasing power of your current wealth, it’s important to understand the stealth tax your assets currently exposed to from the erroneously-low reported inflation rate.

Image | Inflation Is So Much Worse Than We’re Told
Inflation Is So Much Worse Than We’re Told

Inflation is actually much higher than what the BLS claims it is; something that purchasers of college tuition, pharmaceuticals, or health insurance know all too well.

To give the BLS some credit, they must try and estimate a single rate of inflation that applies to everyone equally.  But that is a completely impossible task. An octogenarian living in Seattle on a meager pension and taking lots of prescription medications will have a totally different inflation experience than an 18 year old living in their parent’s basement eating Ramen noodles. 

But even after spotting the BLS some slack, there are some enormous and glaring errors in their methods that render the official inflation measure hopelessly – and dangerously – inaccurate. 

In this article, I am going to reveal how US inflation numbers are badly understated, how this practice short-changes institutions and fixed-income individuals alike, and why this means fiscal and inflationary train-wrecks are the most probable outcome for the US — and, by extension, the globe.

Inflation Is So Much Worse Than We’re Told

Inflation is actually much higher than what the BLS claims it is; something that purchasers of college tuition, pharmaceuticals, or health insurance know all too well.

To give the BLS some credit, they must try and estimate a single rate of inflation that applies to everyone equally.  But that is a completely impossible task. An octogenarian living in Seattle on a meager pension and taking lots of prescription medications will have a totally different inflation experience than an 18 year old living in their parent’s basement eating Ramen noodles. 

But even after spotting the BLS some slack, there are some enormous and glaring errors in their methods that render the official inflation measure hopelessly – and dangerously – inaccurate. 

In this article, I am going to reveal how US inflation numbers are badly understated, how this practice short-changes institutions and fixed-income individuals alike, and why this means fiscal and inflationary train-wrecks are the most probable outcome for the US — and, by extension, the globe.

Image | The Week Ahead: More Inflation on the Way
The Week Ahead: More Inflation on the Way
 PREVIEW

I am putting the final touches on a new report today which reveals just how badly inflation is undercounted in the US. The bottom line is that with the rest of the world already reeling from and reacting to accelerating inflation, the game is much closer to an inflationary dénouement for the US than one might suspect by following the Fuzzy Number generator otherwise known as the Bureau of Labor Statistics (BLS).

The week ahead in the markets is simple enough to divine: more asset inflation, dead ahead.

That’s the plan, and here’s the thin-air money printing for the week that will provide the fuel for that plan:

The Week Ahead: More Inflation on the Way
 PREVIEW

I am putting the final touches on a new report today which reveals just how badly inflation is undercounted in the US. The bottom line is that with the rest of the world already reeling from and reacting to accelerating inflation, the game is much closer to an inflationary dénouement for the US than one might suspect by following the Fuzzy Number generator otherwise known as the Bureau of Labor Statistics (BLS).

The week ahead in the markets is simple enough to divine: more asset inflation, dead ahead.

That’s the plan, and here’s the thin-air money printing for the week that will provide the fuel for that plan:

Image | Interview with Jim Rogers: Why Inflation is Raging Worldwide And He’s Shorting US Treasury Bonds
Interview with Jim Rogers: Why Inflation is Raging Worldwide And He’s Shorting US Treasury Bonds
 PREVIEW

“I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest.”

So said investing legend Jim Rogers when he spoke recently with PeakProsperity.com about the inflationary pressures rising dramatically around the globe, despite some governments’ best efforts to downplay them. Jim shares his “outside in” perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, “It’s going to be a real mess before it’s over.”

We’re making this important interview available first to our enrolled members.

Interview with Jim Rogers: Why Inflation is Raging Worldwide And He’s Shorting US Treasury Bonds
 PREVIEW

“I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest.”

So said investing legend Jim Rogers when he spoke recently with PeakProsperity.com about the inflationary pressures rising dramatically around the globe, despite some governments’ best efforts to downplay them. Jim shares his “outside in” perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, “It’s going to be a real mess before it’s over.”

We’re making this important interview available first to our enrolled members.

Image | Straight Talk with Paul Kedrosky: Don’t Count on Technology To Save Us
Straight Talk with Paul Kedrosky: Don’t Count on Technology To Save Us

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Paul Kedrosky. Paul is an investor, writer, entrepreneur and editor of the widely-followed econoblog Infectious Greed. He is a prolific engine of commentary on the economy, the markets, and society – often looking through the lens of how technology serves (and dis-serves) all three. Paul is also a Senior Fellow at the Kaufman Foundation, an advisor to Ten Asset Management, The Berkeley Center for Innovative Financial Technology, and other companies and venture capital firms. He tweets tirelessly via @pkedrosky.

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1. You spend your time focusing on the intersection of entrepreneurship, innovation and the future of risk capital. From your vantage point, what are the most important trends you see right now to be driving – or threatening – the advancement of our society?

The list is endless. High on that list, however, is financialization: the absurd, uneconomic and disastrous distortions introduced into the U.S. economy by its overreliance on the financial sector.

Straight Talk with Paul Kedrosky: Don’t Count on Technology To Save Us

"Straight Talk" features thinking from notable minds that the PeakProsperity.com audience has indicated it wants to learn more about. Readers submit the questions they want addressed and our guests take their best crack at answering. The comments and opinions expressed by our guests are their own.

This week's Straight Talk contributor is Paul Kedrosky. Paul is an investor, writer, entrepreneur and editor of the widely-followed econoblog Infectious Greed. He is a prolific engine of commentary on the economy, the markets, and society – often looking through the lens of how technology serves (and dis-serves) all three. Paul is also a Senior Fellow at the Kaufman Foundation, an advisor to Ten Asset Management, The Berkeley Center for Innovative Financial Technology, and other companies and venture capital firms. He tweets tirelessly via @pkedrosky.

p.p1 {margin: 0.0px 0.0px 6.0px 0.0px; font: 13.0px Verdana}

 

1. You spend your time focusing on the intersection of entrepreneurship, innovation and the future of risk capital. From your vantage point, what are the most important trends you see right now to be driving – or threatening – the advancement of our society?

The list is endless. High on that list, however, is financialization: the absurd, uneconomic and disastrous distortions introduced into the U.S. economy by its overreliance on the financial sector.

Image | Missing the Big Picture – Economists Risk Everything
Missing the Big Picture – Economists Risk Everything
 PREVIEW

In a different time we could happily go about our lives, ignoring economists as largely irrelevant to our daily lives. That is no longer the case.

In helping to shape central bank policies, economists are performing one of the largest social and monetary experiments in all of history, and its outcome, good or bad, will shape all of our lives enormously over the coming years. In fact, this experiment is already well underway and yielding results. Perhaps not the desired results, but results nonetheless.

The biggest problem with most, but not all, economists is that their theories are founded on incorrect assumptions.

This biggest of them all is assuming that the economy has some sort of an ‘equilibrium point,’ a magic place where just the right number of monetary actions and policies will create high jobs, price stability, and economic growth.

Unfortunately, this is just completely the wrong way to look at things.

Niall Ferguson recently pointed this out and made a critically important point:

Missing the Big Picture – Economists Risk Everything
 PREVIEW

In a different time we could happily go about our lives, ignoring economists as largely irrelevant to our daily lives. That is no longer the case.

In helping to shape central bank policies, economists are performing one of the largest social and monetary experiments in all of history, and its outcome, good or bad, will shape all of our lives enormously over the coming years. In fact, this experiment is already well underway and yielding results. Perhaps not the desired results, but results nonetheless.

The biggest problem with most, but not all, economists is that their theories are founded on incorrect assumptions.

This biggest of them all is assuming that the economy has some sort of an ‘equilibrium point,’ a magic place where just the right number of monetary actions and policies will create high jobs, price stability, and economic growth.

Unfortunately, this is just completely the wrong way to look at things.

Niall Ferguson recently pointed this out and made a critically important point:

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