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Throwing Water on a GREECE Fire – An Explosive Action
- February 22, 2012
- Posted by: Ted Bullen
- Category: Banking, Economy, Government, Monetary Policy, News, Public Sector
No CommentsIt is common knowledge that if grease gets hot enough (above 600 degrees Fahrenheit,) it will catch fire. It is also common knowledge that such a fire is best extinguished by taking measures to smother the flames, and NEVER to throw water on such a fire. If such a mistake is made, the result is
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BRICS Thrown at the U.S. House of Cards May Cause Things to Come Tumbling Down
- April 18, 2011
- Posted by: Ted Bullen
- Category: Commodities, Economy, Government, Inflation, Monetary Policy, News
Brazil, Russia, India, China, and South Africa, each representing large and populous developing countries with growing economies, have formed a consortium known by the acronym BRICS. They met four days ago to call for an end of the U.S. dollar as the world’s reserve currency. These emerging economies are seen as the engine for global
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Freddie and Fannie: Na Na Na Na, Na Na Na Na, Hey Hey-ey, Goodbye
- February 11, 2011
- Posted by: Ted Bullen
- Category: Financial Services, Government, Mortagages, News
The White House has issued a proposal recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac were brought under government conservatorship in 2008 in a costly taxpayer bailout. We wrote about this in June of 2010, supporting the gradual winding down of these companies with solutions
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Debt Addiction Intervention Needed
- November 26, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
Earlier this week, Forbes published an article by Shaun Rein, Managing Director of China Market Research Group. As we have done previously, he decries the Federal Reserve’s quantitative easing measures, saying (http://www.forbes.com/2010/11/22/ben-bernanke-wrong-quantitative-easing-leadership-managing-rein.html): 1) “Low interest rates and an increased money supply are worthless tools if companies don’t think there are ways to make money. More
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The Fed Says Potato, the Market Says Potahto – Let’s call the Whole Thing Off!
- November 16, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
The Wall Street Journal reported, today, that investors are selling off U.S. government debt, challenging the Federal Reserve’s efforts to push interest rates lower, and, instead, driving rates, in many cases, to their highest levels in more than three months (See previous blog post: Inflation Nation). The rise in borrowing costs is a most unwelcome
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QEII – No Luxury Liner for the Average Citizen
- November 6, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
As the country was watching the election results of November 2, 2010, the Federal Reserve was quietly implementing the second monetization of debt, called QEII. This Keynsian-style move of issuing debt and buying it back has some unintended consequences: First, the dollar is devalued. It is estimated that the dollar will be worth 20% less
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Insanity – Fed Considering Options That Are Sure to Fail
- October 15, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
Albert Einstein is quoted as saying: “Insanity: doing the same thing over and over again and expecting different results.” The Federal Reserve is expected to initiate a new round of Treasury purchases, thus monetizing more debt to add to the $1.7 trillion in longer-term assets it has already bought. Typically, “if a budget deficit persists
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GM IPO is Equivalent to a Government Bake Sale
- September 7, 2010
- Posted by: Ted Bullen
- Category: Automotive, Government, News
You may have experienced, as a child, when your school or Boy Scout troop wanted to raise money, it held a “Bake Sale.” A “Bake Sale” basically meant that your Mom baked a cake or cup cakes, donated them to the bake sale, and then bought them back. The school or troop received the proceeds
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Hindenburg Omen – Strike Two and One to Go
- August 27, 2010
- Posted by: Ted Bullen
- Category: Econometrics, Economy, Government, News, Stock Market
The Hindenburg Omen is an econometrics-based model that has been successful in predicting stock market crashes. The Omen has been behind every market crash since 1987, but significant stock-market declines have followed only 25% of the time. The Hindenburg, of course, was the German passenger airship LZ 129 Hindenburg which caught fire, and was destroyed,
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Can GDP Growth Outpace Spending in Order to Reduce the Deficit?
- June 28, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, News
No. That means that increased taxes and austerity measures are on the horizon, though such action is beyond the policy and historical practices of our government. Yesterday, the G20 published a communiqué endorsing a goal of cutting government deficits in half by 2013 and reducing the ratio of public debt to gross domestic product by
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