Faber News Flow

Things are going from bad to worse in Japan: 7 years after BOJ chief Kuroda launched QQE (subsequently with yield curve control) while monetizing tens of billions in ETFs, the central banks has failed to boost either Japan's economy or its inflation, both a dismal byproduct of Japan's record debt load. So now that the BOJ has failed to remedy what was the consequence of massive debt loads, Japan has a cunning plan:   unleash another tsunami of debt. According to the Japan Times, Japan is set to " re-embrace the power of public spending " - because apparently the country with the  world record setting 250% debt/GDP  somehow did not embrace public spending before - with one of its biggest ever stimulus packages. Pointing to slowing global growth, a higher sales tax and a string of natural disasters, policymakers in Tokyo are the latest to join the worldwide shift toward a double-barreled approach of supporting the economy through fiscal measures and ultraloose monetary ...

You really need to  watch the video  of a recent conversation between Ray Dalio and Paul Tudor Jones. Their part is about the first 40 minutes. In the video, Ray highlights some problematic similarities  between our times and the 1930s . Both feature: a large wealth gap the absence of effective monetary policy a change in the world order, in this case  the rise of China  and the potential for trade wars/technology wars/capital wars. Credit Suisse Sees 'Great Reason to Be Pro-Risk' in This Environment He threw in a few quick comments as their time was running out, alluding to the potential for the end of the world reserve system and the collapse of fiat monetary regimes. Maybe it was in his rush to finish as their time is drawing to a close, but it certainly sounded a more challenging tone than I have seen in his writings. Currency Wars It brought to mind an  essay  I read last week from my favorite central banker, former BIS Chief Economist William Whi...

I wanted to write something to   address how little people know and acknowledge about how disastrous central bank policies have been for our societies and economies. Because they don't, and they have no clue, largely and simply because of the way central banks are presented both by themselves and by the financial press that covers them. Make that "covers". Still, going forward, we will have no way to ignore the damage done. All the QE and ZIRP and NIRP will turn out to be so destructive for us all they will rival climate change or actual warfare. That's what I wanted to talk about. Pimco's Fels Predicts 1% Growth, Forcing Fed to Cut Rates You see, free markets are a great idea in theory.  Or you can call it "capitalism", or combine the two and say "free market capitalism". There's very little wrong with it in theory. You have an enormous multitude of participants in an utterly complex web of transitions, too complex for the human mind to co...

You really need to  watch this video  of a recent conversation between Ray Dalio and Paul Tudor Jones. Their part is about the first 40 minutes. In this video, Ray highlights some problematic similarities  between our times and the 1930s . Both feature: a large wealth gap the absence of effective monetary policy a change in the world order, in this case  the rise of China  and the potential for trade wars/technology wars/capital wars. Credit Suisse Sees 'Great Reason to Be Pro-Risk' in This Environment He threw in a few quick comments as their time was running out, alluding to the potential for the end of the world reserve system and the collapse of fiat monetary regimes. Maybe it was in his rush to finish as their time is drawing to a close, but it certainly sounded a more challenging tone than I have seen in his writings. Currency Wars It brought to mind an  essay  I read last week from my favorite central banker, former BIS Chief Economist William W...

The Bureau of Economic Analysis (BEA) has revised its preliminary estimate of GDP. That can only mean one thing: time to look at corporate profits again. Included along with the recalculated headline output estimate is the BEA's first run of profit figures.   If you are Jay Powell, you aren't going to like what you find. First, real GDP in the third quarter was practically unchanged. Revised from around 1.90% (continuously compounded annual rate of change) to a touch above 2.10%, either of those estimates are pretty much equivalent to the unrevised 1.99% growth believed to have taken place in Q2. Barings's Do Sees Value in China, Hong Kong Stocks Still the slowdown from 2017-18. But what everyone wants to know is, what does this downshift really mean? Did the US economy simply revert to its (already too low) mean potential after a minor reflation high last year? Or is it transiting from reflation into a weaker possibly more dangerous state beyond the simply lackluster? The ...