Don’t Do The Crime If You Can’t Pay The Fine…

With Christmas right around the corner, we should see our ponzi numbers soaring upward creating a stronger than should be USD.  Since 70% of Americans are consumers, with our numbers looking better than estimated Americans are feeling the full force of commercialism and the pressure to spend. This is always good for the USD; the low cost in oil and gas are fueling the cognitive dissonance between spending and saving.  Even though personally, I cannot see the greenback sailing on the way it has for another long stretch. I do see why traders are eagerly selling off the GBP with what has been taking place in the UK.

The people in the UK are appalled at the reality that the banks have been paying hundreds of millions to avoid jail time, for manipulating the market, literally robbing them blind.  The Financial Conduct Authority (FCA) regulation in the UK has fined five banks so far reaching the billions for “rigging” the foreign exchange rate and more. Leading the FCA enforcement is Tracey McDermott who has now been active on campaigning the need to do something more than just fine the bankers who seem to have jail immunity.  McDermott read back bank statements from 2002 all the way to 2014, so far, bankers just don’t seem to care for instance, the multinational bank Barclay's was fined for “rigging” lending rates, and the next day traders manipulated the gold market.  This is not really a surprise they had been accused of money laundering in 2004, and again 2009 they settled with the government for a cool $298 million, not to mention tax evasion, rate fixing, the list went on even energy manipulation, this has been going on for years and into hundreds of billions in charges, yet no jail time.  The only common factor is the hundreds of millions in fines paid per charge.

Is the FCA truly relying on the banks to have a moral outlook towards the criminal acts taking place? Or will real action take place? Investors and traders get weary when money handling is exposed the way it has been in the UK, with elections taking place in May of next year we should see many other scandals and hidden truths fueling the candidates arguments trying to sway votes.

Should we be following Iran is this fight sentencing our guilty bankers to death? Instead they let the GBP die along with faith in the financial system. When you cant trust the system you invest elsewhere and where better than the USD. Don’t get me wrong I defiantly don’t think our bankers are doing anything less of the described above, but I can bet they will hide it a little better.

The big “barrel” out

How can our own private oil companies compete with the Saudi state run oil companies?  The Saudis have predicted this decline for months now, so who is running this decline in the price per barrel. Who owns the most oil owns the world, and the Saudi empire cannot and will not be affected by the digital generated commodities prices, they will make revenue regardless.  Could it be such a large manipulation in oil price?  America’s grand schemes to keep Putin up at night, or keep Iran on its toes, disable Venezuela?  I do not think this was Americas plan, yes I see the pros in low oil; we can fund our overwhelming service economy.  Americans are huge consumers, when those numbers drop right before Christmas people are not spending, instead they are saving. This can take a toll on the US more than low oil prices will. The FED has stated that a lower income would provoke more spending.  The benefits of the low oil price is primarily for the EU, China and most of East Asia, not the US or Putin.  I wonder if the FED and The Powers That Be thought this one through.

In 2005 we saw a need for oil at about 7 million barrels a day, it is estimated that that number will be above 9 million by 2015.  With oil need higher than ever, many companies took out massive loans in this expectation and hope oil will again be over $100 a barrel as previously.  The US production was in full force before the ultra steep decline in price per barrel.  The lower prices have made it impossible to expand production, and have put the bids on the energy index far into the red; in fact, the energy market has been one of the worst sectors on the index.  In October when people were saying how $88 a barrel was at an all time low, and the seasonal need for oil would boost cost and not to worry.  The analysts at OPEC were extremely wrong this time, since as of today it stands at $63.56 and heading lower.  It seems that oil is falling at an astronomical rate as low as it has been since 2010 after the last crash. It seems people forgot it was as low as $35 in 2008-2009 and we are still in the $60 range, is this decline a indicator of what’s yet to come.

  Not to mention that energy sector on the index makes up the second largest high yield bond market for investors and with oil rates dropping and the energy sector performing badly it has many of those investors pulling out leaving the banks to cover the high liquidity its causing.  The selling of the banks high-yield debt exchange traded funds “junk bonds” overall banks may not be able to sell off the bonds to break even.  The sizable share decline could push the high yield market down lower leaving investors looking for a new investment.

We are living in a massively over-leveraged economy, how can we achieve sustainable economic growth with this extreme debt the monetary system has created.  The fiat and crypto currency and any digital form of decimal points have created a need to hold on, and seek out a safe hold for our investments.  What was once seen as a smart move for a working citizens to invest in a bank or IRA even SSI is now a total nightmare. Deceiving people and lies seem to make more money that honor and truth, and if we are talking about the big bucks, we are taking heavy manipulation .It seems nothing is sacred anymore and it all comes with a price tag attached, we have police and government that we all once trusted breaking us down and pushing us further into a hole we cant climb out of.  46,000,000 individuals have been on food stamps for 37 straight months.  They say unemployment is at an all time low but they only count people that are filing for the first time.  For many investors, looking at the numbers and graphs it would seem that the US is growing steadily and things are A-OK. Things couldn’t be further from the truth and its about time to make some real money. Don’t just follow the trend, the information can be overwhelming and takes more time than many people can invest into a profitable strategy. I continue to gain in trading metals as well as fourteen different currency trades weekly.  

Fairy Tails

          Composed of a board of governors, the reserve bank presidents and the seven members of the Federal Open Market Committee (FOMC) meet eight times a year to discuss and set interest rates, these decisions will control the money supply and the exchange value of the U.S. dollar.  The FED who buys and sells government securities that can tighten or loosen the monetary supply this in return will raise or decrease interest rates.

Today they publicly announced the end of QE3 they perhaps may just call it something else, weigh-able aid, perceptible appease, or computable assist.  They can call it what they want, but the one thing they will not really do is stop it.  They announced their extraordinary positive outlook on our economy.  I do not really know where or how they got their information; they said that they see solid job gains, lower unemployment due to under utilization of labor resources.  That low energy costs will hold down inflation (back to my USD and oil theory) or that the inflation is somewhat diminished.  I do not know what billionaire world they live in. While in the real world we are seeing that the FED is buying up the assets we supposedly own.  We will never pay off our homes or land, we are taxed so much that until we are dead they own us.

If they raise the rates it will cause a huge disruption in the world of politics, and with elections so close it is hard to fathom that Obama would let them.  How long till QE4?  The real economy cannot and will not just be fixed by debt

GDP weather you believe it or not

Can we really blame the gross domestic product reports on the weather?

The U.S. did just that when it blamed the 100 billion lost on snow early this year. China is now following suit of the bazaar claim that cool weather is the reason for the outcome and higher levels of activity growth in the recent outcome of the GDP data. Seems odd to me considering that the pollution in China is so intense you cannot even see the sun at times.  Since when does economic data rely on weather? To better understand this let us look at how we see and get the GDP overall. We have to understand the factors of the data research.

The System of National Accounting (SNA) and the Material Product System (MPA) that was used in the early soviet union, still used by some countries as an alternative to the United Nations System of National Accounts (UNSNA) or (SNA) that focuses on "free market" prices. This is supposed to provide data of economic activity on an international level. Countries cannot provide the same data, it is impossible, the country that invests billions into research, is not going to be the same as a country that cannot be assessed because of geographical factors, or socio-political instability. Some governments will not allow surveys of all kinds to take place. Many factors prevent the “same” data from being entered. The input-output levels can be highly manipulated due to the standard. The UN cannot enforce the same standard. Since it differs from country to country so there are often discrepancies, quarterly and yearly revisions, but as long as they provide sufficient data on national accounts the UN will fit it into its standard, all the other accounts can be reworked up to UN standard. If you look UN Yearbook, under detailed tables the data over decades instead of yearly you will see a trend change significantly. Studies in economics have shown that even the “free market prices” are truly regulated and administered prices in Western countries.

Many people do not even know that the MPA exists. The MPA that uses administered prices, measures the output of “material goods” tangible products, in comparison to “services”, usually in national accounts, the data collected is only to measure the “value” of outputs produced. Comparing the MPS and SNA is how China determines the GDP.