Investment Rarities Incorporated
History |  Q & A  |  Endorsements  |  Portfolios  | Flatware | Gold Coins  |  Silver Coins  |  Contact |  Home

Products

Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

..Read More »

The Best of Jim Cook Archive

 
Best of Aubie Baltin
October 3, 2011
archive print

The recent stress tests of European banks were “a joke,” according to Jim Chanos, the famous short seller who laughed all the way to the bank when betting against fatally flawed companies like Enron, Conseco and Boston Chicken. “The [stress] tests are a joke,” Chanos recently declared on Bloomberg TV. “The accounting is a joke and the markets are beginning to say, “No More!’” inferring that he would be short these banks right now if European regulators had not outlawed the practice last month.

The stress test “joke” is only one small sliver of the European game of make-believe. Central bankers and politicians throughout Europe are continuing to pretend that various insolvent banks and insolvent governments are in fine shape...as long as they get a little bit of help from the ECB.

But the financial markets are providing ample evidence to the contrary. The share prices of many European banks are plummeting, while the yields of many European government bonds are skyrocketing. The now-infamous Greek two-year government bond yields a whopping 134%! In other words, even if European banks can pass a contrived stress test with flying colors, they are flunking the “normalcy test.” Many European banks, like many European governments, have erected such a fragile and precarious financial structure that bankruptcy seems inevitable, even without any additional stress.

A deepening crisis of some kind is certain, especially because the US economy is still reeling from the credit crisis of 2008. Fearing a repeat of ’08, the US Federal Reserve is springing into action, which pretty much guarantees a repeat. Earlier today, the Fed christened the launch of “Operation Twist” — a scheme to buy up a bunch of the long-term Treasury Bonds to be paid for by selling short term Treasuries. Confused?
Don’t be. Operation Twist is simply Quantitative Easing but by a different name, which is simply the same old game of creating (printing) money out of thin air. In my opinion, the Fed’s balance sheet will be growing exceedingly fatter over the next few months. The Chubby Checker “Twist” is merely the next illogical step in their continued progression toward dollar debasement (raping the people). After the Twist, look for Operation Contort, Operation Zig-Zag, Operation Bait-and-Switch, Operation Capital Controls and ultimately, Operation Devalue.

The longer the Federal Reserve continues its misguided operations, the bleaker the prospects for the US Dollar. But the greenback is not the only paper currency at risk these days. The formerly stodgy, conservative Europeans are beginning to call plays from the American Central Banking Playbook.

The European Central Bank (ECB), in response to the sovereign debt crisis unfolding around the periphery of the Euro Zone, has embarked on a quantitative easing program of its own — buying billions of Euros worth of Greek, Spanish and Italian government bonds in the open market. At the same time, the ECB is also part of a central banking cabal that is providing undisclosed quantities of short-term credit to European banks. And to judge from recent headlines, the ECB is just getting warmed up.

If only the Fed and the government would get out of the way, we’d have a quick Recession or even a mild Depression and let the Free Market get on with life. Instead, here we are nearly 5 years after the bubble popped, with 33 months of zero interest policy and trillions of dollars of wasted government “stimulus” spending and Fed money printing — still suffering from high and rising unemployment with no real economic growth, facing a much bleaker outlook than if the governments had let the courts take care of the failing Banks, General Motors and Chrysler.