Friday, July 19, 2019

U.S. Steel Plants Are Going Idle, But The Fed Continues To Perpetuate The Myth That Everything Is Just Fine

by Michael Snyder, The Economic Collapse Blog:

Even though there is a tremendous amount of evidence to the contrary, the Federal Reserve continues to insist that the U.S. economy is in good shape.  On Wednesday, Federal Reserve Chair Jerome Powell told the nation that “the economy has performed relatively well” in 2019 and he insisted that “the baseline outlook is a good one.”  Of course he didn’t say anything about our collapsing manufacturing numbers, the worst global trade numbers since the last recession or the “bloodbath” in the U.S. trucking industry.  Powell did concede that “the risk of less favorable outcomes has risen”, but other than vague statements like that he really didn’t acknowledge our growing economic problems at all.  Considering the fact that Powell has more power over the U.S. economy than anyone else in the entire country, this should deeply concern all of us.  To me, Powell’s performance on Wednesday was quite reminiscent of the moment in 2008 when Fed Chair Ben Bernanke told us that the Federal Reserve was not “currently forecasting a recession” after a recession had already begun.

American Consumers Prop Up the Economy. Wall Street Clamors for Multiple Rate Cuts. Fed Blows Off Wall Street

by Wolf Richter, Wolf Street:

The economy is in a “very good place,” says Trump’s man at the Fed. And the Fed’s favorite inflation measure ticks up.

The Fed’s message has been that it may consider cutting rates if the economy deteriorates, or if inflation falls further, but the economy is currently in a “very good place,” it says. And consumer spending, 70% of the economy, is growing nicely instead of deteriorating, and the Fed’s favorite measure of inflation has just ticked up. But don’t tell Wall Street.

Nope! Nothing to See Here!

by Peter Schiff, Schiff Gold:

Don’t worry. Nothing to see here!

That was pretty much the message Federal Reserve Chairman Jerome Powell delivered in a speech he gave at the Atlanta Federal Reserve bank conference on May 20.

Powell talked about the high levels of corporate debt. In fact, corporate leverage is at a record level of around 35% of corporate assets. But the Fed chair said it’s not really too big a cause for concern.

Was this the Very Minute of Peak-Insanity in IPO Stocks?

by Wolf Richter, Wolf Street:

Those who bet on the most obvious short in the history of mankind got the heads handed to them.

Every stock-market IPO cycle has this minute. And afterwards is all downhill. And I wish I could be the guy who’d correctly pinpoint the very moment when peak-insanity in IPO stocks occurs, down not only to the day, but the very minute, and then bet on it correctly. So maybe I won’t be that guy, given that I’ve been on record for years as to why I’m not shorting anything anymore in this crazy market. But I have a candidate for this pinpoint minute of peak-insanity: Today at 9:59 a.m. Eastern Time.

Canada May Institute Negative Interest Rates

by Virginia Fidler, Gold Telegraph:

Both Japan and Sweden’s central banks have established negative interest rates. Now, the Central Bank of Canada is making plans to join the desperate move in an effort to bolster its economy.

Most people understand interest rates. It’s the amount of money a borrower pays a lender for the privilege of being able to borrow. When interest rates hit negative territory, it’s an indication of a serious economic problem. It means regular banks will be required to pay the central bank for the privilege of making a deposit.

A Different Kind Of Wage Inflation Heralds This Cycle’s End

by John Rubino, Dollar Collapse:

Towards the end of long expansions (this one is the longest on record) things get tight. Factories operate flat-out and start raising prices. Good workers become harder to find and companies start competing for them with higher wages and other perks.

This story is about the “other perks” which, because they don’t show up in wages aren’t directly inflationary. But they do cost money, which means they shrink corporate profits nearly as much as would a big wage increase. From today’s Wall Street Journal:

The Weekly Perspective with David Morgan – Trade War and Rare Earths

by Kerry Lutz, Financial Survival Network:

David Morgan‘s weekly perspective…

Today’s monetary system is based upon a lie. The lie is that you can get something for nothing, or perhaps more simply stated, wealth can be printed. History has shown throughout 5000 years that whenever a country has tried to maintain this illusion (lie), failure has been the result. You Can Continue To Grow Your Wealth Regardless Of The Changing Winds Of Politics, The Economy And The Financial Markets. Let me show you how

Click HERE to Listen