Oct 102014
 

30Y%20Oct%202014_0

Zero Hedge: “If yesterday’s 10 Year auction was very weak, despite the market reaction post the Fed minutes ramping the paper to highs not seen since last May, moments ago the Treasury concluded this week’s auctions by selling another $13 billion in the August 30-Year reopening, in another relatively weak issue, which priced at 3.74%, a small 0.2 bps tail to the 3.72% When Issued.”

Opinion: In simple English, here is why this is important. But first there are three definitions:

  • Short term bonds: 1-5 year in duration
  • Intermediate bonds: 5-15
  • Long term bonds: 15-30

The Federal Reserve only controls short-term interest rates.

When the Treasury offers US government bonds  at auction they are usually bought up immediately. When they are not, which is what happened this week, long term rates may be forced higher to attract buyers, regardless of what the Federal Reserve does.

If the problem persists, the Fed will be forced to start buying the bonds that are not bid for – using newly printed money in another round of QE.

In our book Antichrist: The Search For Amalek, we envisioned such a scenario on page 180-81. But we placed that event after the rapture of the Church. Either we have the timing wrong,  or this panic will right itself, or the rapture is close.

The answer is unknown, but here is the excerpt:

“At 2:00 p.m., rumors of a poorly bid Treasury auction of ten-year bonds started to rattle the bond market. Reports had been circulating for years that China and Japan had been curbing their purchases of US Treasury bonds because of unrestrained spending by the US government.

 The US auctioned off longer-term Treasury bonds with even worse results, indicating that US debt was no longer attractive at current interest-rate levels.

In an attempt to calm financial markets, Federal Reserve chairman Janet Yellen appeared before the Senate Banking Committee to explain why Quantitative Easing (QE) 4, the same money-creation scheme that had seemed to work for her predecessor, was having little or no effect on the recent market sell-off.

The conversation shifted instead to the weak bond auctions of the past two days.

Committee chairman Mike Reed (R, Florida) reminded those present that if other nations such as China, Japan, or Russia were unwilling to finance the country’s two-trillion-dollar deficit and the national debt of almost twenty trillion dollars, interest rates would necessarily rise quickly and destroy the fragile housing market.

Chairman Yellen was a reassuring presence that morning, explaining to Congress that there was nothing to worry about as far as America’s ability to continue to borrow. She said the Fed had its finger on the pulse of the economy and was prepared to buy up all the bonds that had not been bid for in the recent Treasury auctions. Yellen’s comments, however, had little effect in calming the markets.

Traders on global exchanges knew that Yellen’s comments meant that the Fed would simply “create” more money to finance America’s exploding debt. By noon, the Dow Jones Industrial Index was down by almost 1,100 points.”

 

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Oct 092014
 

635482754584155745-AP-CHINA-ECONOMY-38964549USA Today: “Protests over democracy in Hong Kong may be preoccupying the Chinese leadership, but a subject of still greater international importance is being played out this week behind closed doors in Washington. China is bidding to enter the heart of global finance by establishing its currency, the renminbi, as part of an ubiquitous monetary unit used in official transactions around the world.

The issue of whether the Chinese should be part of the International Monetary Fund’s Special Drawing Right, the composite reserve currency used in official financing, is highly technocratic, but the political questions at stake go to the core of world money and power – and will be discussed, in the background, at the annual meetings of the IMF and World Bank in Washington this week.

The decision on a new SDR structure, to be made in the next 15 months, will influence how China and its currency can play a bigger part in driving world trade, investment and capital flows. The renminbi could eventually challenge the dollar and its pivotal position in world money — which is why the U.S. government and Federal Reserve are examining this with intense interest.”

Opinion: Interesting that the IMF announced yesterday that China has overtaken the US as the world’s largest economy.

In our book Antichrist: The Search For Amalek, the last chapter is a fictional account of the beginning of the tribulation period. The war of Psalm 83 has been fought and the rapture of the Church has happened.

Excerpt, page 179: “An economic meeting convened with top administration officials, including former Obama economic advisor Larry Summers, Federal Reserve chairman Janet Yellen, and CIA head John Brennan. This special session was chaired by the current Treasury secretary, Jack Lew.

As the top-secret meeting got under way, John Brennan had disturbing news to share. He informed the group that there was urgent intel from our people on the ground in the Far East. China was about to make a move with support from Japan, Russia, and the European Union to dump the dollar as the world reserve currency. They planned to institute the renminbi, either alone or as part of a basket of currencies called Special Drawing Rights (SDRs), which would include the euro and the yen.

Brennan told the cabinet that China had been buying large amounts of gold for the past five years in an effort to build global confidence in the Chinese currency. Their aim was to make the renminbi the de facto reserve currency and to increase global influence. China had been building support from Australia and Brazil since 2013 by enacting currency swaps to enable the direct con- convertibility of their currencies into Chinese renminbi, without US dollar intermediation.”

 

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Oct 092014
 

walmartInvestors Business Daily Op-Ed: “Wal-Mart says it’s cutting health benefits to part-timers and boosting worker premiums. If a retail empire built on low prices can’t find a way around ObamaCare’s added costs, we are all doomed.

The world’s biggest retailer announced this week that its health costs will be about 48% higher for the current fiscal year than it had expected in February. As a result, it’s cutting 30,000 part-timers from its health benefit plan, raising worker-paid premiums by 19% and trimming its co-payment for health costs above the deductible,

Opinion: Obamacare hit home. Last week our editor called her insurance company and found out she had been cancelled from a plan that she liked; no letter, no phone call …. cancelled.

The old policy cost $412. per month. The ACA (Obamacare) plan with similar doctors will now cost $720 per month with a $3500 deductible.

The lie that is Obamacare is yesterday’s news, until it hits home. I would like to call somebody, but …

 

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Oct 092014
 
Just Took Two Sentences From The Fed To Make Stock Market Go Wild

Business Insider, Federal Reserve: “The event that made stocks take off like a rocket was the Fed minutes that came out at 2 p.m. ET. 1. Economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the U.S. external sector. 2. The appreciation

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Oct 042014
 
Labor Participation Rate Drops To 36 Year Low; Record 92.6 Million Americans Not In Labor Force

Zero Hedge: “While by now everyone should know the answer, for those curious why the US unemployment rate just slid once more to a meager 5.9%, the lowest point since the summer of 2008, the answer is the same one we have shown every month since 2010: the collapse in the labor force participation rate,

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Sep 292014
 
Russia Discovers Massive Arctic Oil Field Which May Be Larger Than Gulf Of Mexico

Zero Hedge: “In a dramatic stroke of luck for the Kremlin, this morning there is hardly a person in the world who is happier than Russian president Vladimir Putin because overnight state-run OAO Rosneft announced it has discovered what may be a treasure trove of black oil, one which could boost Russia’s coffers by hundreds

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Sep 252014
 
In Ukraine, Winter Is Coming

The Daily Beast: “Fur coats may well be in high demand this winter among those glamorous ladies in Ukraine who can afford them. But many others will be happy just to get a hot shower before bundling up in their icy apartments. Once again, the Kremlin is threatening its trouble neighbor with a long-term cutoff

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