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Chris Martenson

Image | Decoding the Fed
Decoding the Fed
 PREVIEW

The Federal Reserve policy statement yesterday was a masterful blend of contradictory words and ideas.


Nonetheless, the markets reacted with great volatility to these words, as though there was some useful information within them.   You can read the entire statement for yourself here at this link. 


To save you the trouble, what I’ve done is chopped the whole statement up into smaller sections and translated them (with tongue in cheek, but only slightly):

Decoding the Fed
 PREVIEW

The Federal Reserve policy statement yesterday was a masterful blend of contradictory words and ideas.


Nonetheless, the markets reacted with great volatility to these words, as though there was some useful information within them.   You can read the entire statement for yourself here at this link. 


To save you the trouble, what I’ve done is chopped the whole statement up into smaller sections and translated them (with tongue in cheek, but only slightly):

Image | The Liquidity Flood
The Liquidity Flood
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I don’t know what else to say at this point, other than that everyone had better be ready for massive inflation..

For the record, I do not ascribe to the simplistic views of “either/or” when it comes to the great inflation vs. deflation debate.  When I am asked about which outcome I favor, I say “yes.”

What I mean by this somewhat flippant comment is that I can easily envision some assets declining in price (worthless CDOs anyone?  McMansions?) even as I see other things rising dramatically in price.

I’ve alluded to this before, and now the evidence for a liquidity flood is presented below:
The Liquidity Flood
 PREVIEW

I don’t know what else to say at this point, other than that everyone had better be ready for massive inflation..

For the record, I do not ascribe to the simplistic views of “either/or” when it comes to the great inflation vs. deflation debate.  When I am asked about which outcome I favor, I say “yes.”

What I mean by this somewhat flippant comment is that I can easily envision some assets declining in price (worthless CDOs anyone?  McMansions?) even as I see other things rising dramatically in price.

I’ve alluded to this before, and now the evidence for a liquidity flood is presented below:
Image | Housing and Wealth
Housing and Wealth

A new Martenson Report is ready for enrolled members.

Link:  Housing and Wealth

There are several economic issues and data sets that we are tracking closely here on a daily and weekly basis because they have the best opportunity to help us illuminate the path for a few more feet.

One has been the flow of money into and out of the US.  There we’ll continue to track and explain the mechanisms while keeping a firm eye on the dollar and interest rate (via Treasuries) pair.

Another has been the various government and Federal Reserve programs to inject money into the economy and financial institutions, respectively, as these maneuvers have distortive effects on the rest of the data. 

But the main driver from a consumer standpoint has been housing.  Every so often we dive into that area pretty deeply and this week we head into housing and where we currently stand with respect to prices, inventory, liquidity, and demand.  

This is part one of a two part report.

(Comments turned off here, leave them in the posting further down the main page…)

Housing and Wealth

A new Martenson Report is ready for enrolled members.

Link:  Housing and Wealth

There are several economic issues and data sets that we are tracking closely here on a daily and weekly basis because they have the best opportunity to help us illuminate the path for a few more feet.

One has been the flow of money into and out of the US.  There we’ll continue to track and explain the mechanisms while keeping a firm eye on the dollar and interest rate (via Treasuries) pair.

Another has been the various government and Federal Reserve programs to inject money into the economy and financial institutions, respectively, as these maneuvers have distortive effects on the rest of the data. 

But the main driver from a consumer standpoint has been housing.  Every so often we dive into that area pretty deeply and this week we head into housing and where we currently stand with respect to prices, inventory, liquidity, and demand.  

This is part one of a two part report.

(Comments turned off here, leave them in the posting further down the main page…)

Image | Housing and Wealth – Part I (Supply and Prices)
Housing and Wealth – Part I (Supply and Prices)
 PREVIEW
Tuesday, September 22, 2009

Executive Summary

Tracking the housing market helps us see where the economy is headed.  Two categories of data that are useful to focus on are house prices and housing supply.

House Prices

Measuring the value of housing is critical, because the amount of foreclosures and the economic fallout from them are both tightly linked to the difference between the current value of a house and the mortgage held on it.

Housing Supply

To appreciate housing supply, there are three things we need to track:

  • Total number of existing homes for sale (expressed in either a raw number or in “month’s supply,” which takes the raw number and divides it by the current sales pace)
  • Total number of new homes for sale (expressed the same as above)
  • Amount of “shadow inventory,” which are homes that are on the books of the banks but have not been released into the market for sale

This is Part I of a two-part report.

 
Housing and Wealth – Part I (Supply and Prices)
 PREVIEW
Tuesday, September 22, 2009

Executive Summary

Tracking the housing market helps us see where the economy is headed.  Two categories of data that are useful to focus on are house prices and housing supply.

House Prices

Measuring the value of housing is critical, because the amount of foreclosures and the economic fallout from them are both tightly linked to the difference between the current value of a house and the mortgage held on it.

Housing Supply

To appreciate housing supply, there are three things we need to track:

  • Total number of existing homes for sale (expressed in either a raw number or in “month’s supply,” which takes the raw number and divides it by the current sales pace)
  • Total number of new homes for sale (expressed the same as above)
  • Amount of “shadow inventory,” which are homes that are on the books of the banks but have not been released into the market for sale

This is Part I of a two-part report.

 
Image | Treasury Purchases: Foreigners Can’t Get Enough
Treasury Purchases: Foreigners Can’t Get Enough
 PREVIEW

Aside from a critically important family meeting I attended this weekend, I spent the rest of the time this weekend, and through today, working on the latest Martenson Report, which should be out by tomorrow morning at the latest.  The report will be on housing and where we stand with respect to prices, inventory, liquidity, and demand. In terms of where we are headed economically, housing ranks as one of the most vital issues of the day.
Treasury Purchases: Foreigners Can’t Get Enough
 PREVIEW

Aside from a critically important family meeting I attended this weekend, I spent the rest of the time this weekend, and through today, working on the latest Martenson Report, which should be out by tomorrow morning at the latest.  The report will be on housing and where we stand with respect to prices, inventory, liquidity, and demand. In terms of where we are headed economically, housing ranks as one of the most vital issues of the day.
Image | Flow of Funds Analysis – Big Declines in Credit Market Debt (Except for Government)
Flow of Funds Analysis – Big Declines in Credit Market Debt (Except for Government)
 PREVIEW

The Flow of Funds report, covering the second quarter of 2009 (through June), was released today by the Federal Reserve.  It revealed yet another retreat in total credit, despite the heroic levels of state and federal government borrowing.

One of the better windows available into the macro credit and borrowing universe is a quarterly report put out by the Federal Reserve called the “Flow of Funds” report.   While it is a bit dated already (the report covers through the end of June), it is a great snapshot of the big trends and can tell us much about the general direction in which we are headed.  This report was released today (9/17/2009) at 12:00 p.m.

Here are a few of the fascinating findings…

Flow of Funds Analysis – Big Declines in Credit Market Debt (Except for Government)
 PREVIEW

The Flow of Funds report, covering the second quarter of 2009 (through June), was released today by the Federal Reserve.  It revealed yet another retreat in total credit, despite the heroic levels of state and federal government borrowing.

One of the better windows available into the macro credit and borrowing universe is a quarterly report put out by the Federal Reserve called the “Flow of Funds” report.   While it is a bit dated already (the report covers through the end of June), it is a great snapshot of the big trends and can tell us much about the general direction in which we are headed.  This report was released today (9/17/2009) at 12:00 p.m.

Here are a few of the fascinating findings…

Image | The Recovery Cost Too Much
The Recovery Cost Too Much

Now that Bernanke is taking victory laps for electro-shocking the economy back into an upright position, inquiring minds want to know what this statistical recovery has cost us.

The concern here is that a few hundreds of billions in temporary growth have been achieved at the cost of several trillions of dollars of stimulus and thin-air bailout money.

The calculations and the implications are explored below.  Here are the quotes around which this piece was written:

The Recovery Cost Too Much

Now that Bernanke is taking victory laps for electro-shocking the economy back into an upright position, inquiring minds want to know what this statistical recovery has cost us.

The concern here is that a few hundreds of billions in temporary growth have been achieved at the cost of several trillions of dollars of stimulus and thin-air bailout money.

The calculations and the implications are explored below.  Here are the quotes around which this piece was written:

Image | Another Huge Miss – Money Floods Out of the US in July
Another Huge Miss – Money Floods Out of the US in July
 PREVIEW

The Treasury International Capital data for July came out this morning, and it once again revealed a far larger outflow of money than anyone expected.

In fact, for a country borrowing as much as the US, anything less than a few hundred billion to the positive every month is a really big problem.  If you’ve been wondering why the dollar has been going down, here’s part of your answer….money is flooding out of the US.
Another Huge Miss – Money Floods Out of the US in July
 PREVIEW

The Treasury International Capital data for July came out this morning, and it once again revealed a far larger outflow of money than anyone expected.

In fact, for a country borrowing as much as the US, anything less than a few hundred billion to the positive every month is a really big problem.  If you’ve been wondering why the dollar has been going down, here’s part of your answer….money is flooding out of the US.
Image | Breakout! – A Closer Look at Gold
Breakout! – A Closer Look at Gold
 PREVIEW
Monday, September 14, 2009

Executive Summary

  • Gold had the highest weekly close ever
  • UN calls dollar trading a “confidence game”
  • US fiscal deficit breaks all records, keeps accelerating
  • Brazil, Russia, India, & China (BRICs) have dollar concerns
  • China promotes owning gold to its citizens
  • Examining US dollar reserve currency status (again)

Normally I like to switch up my analyses each week, but last week’s look at gold already needs some updating, due to a few important occurrences.  There was a blistering array of developments and cross currents this past week that make me suspect we may be entering a new inning of this game.

The first of these is that gold just had its highest weekly close ever:
Breakout! – A Closer Look at Gold
 PREVIEW
Monday, September 14, 2009

Executive Summary

  • Gold had the highest weekly close ever
  • UN calls dollar trading a “confidence game”
  • US fiscal deficit breaks all records, keeps accelerating
  • Brazil, Russia, India, & China (BRICs) have dollar concerns
  • China promotes owning gold to its citizens
  • Examining US dollar reserve currency status (again)

Normally I like to switch up my analyses each week, but last week’s look at gold already needs some updating, due to a few important occurrences.  There was a blistering array of developments and cross currents this past week that make me suspect we may be entering a new inning of this game.

The first of these is that gold just had its highest weekly close ever:
Image | Throwing Caution to the Wind
Throwing Caution to the Wind

The number of articles out there in the mainstream press that are designed to create the impression that all is well practically constitute a deluge at this point.

One thing I like to do, especially when an article comes out in a reputable paper like the NYT, is to check their facts to see if they square up with the tenor and tone of their “it’s safe to get back in the pool” articles.

Here’s a perfectly fine example from today:

Throwing Caution to the Wind

The number of articles out there in the mainstream press that are designed to create the impression that all is well practically constitute a deluge at this point.

One thing I like to do, especially when an article comes out in a reputable paper like the NYT, is to check their facts to see if they square up with the tenor and tone of their “it’s safe to get back in the pool” articles.

Here’s a perfectly fine example from today:

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