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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.

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The Best of Jim Cook Archive

 
Commentary Of The Month
December 26, 2016
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SYSTEMIC RISK

By John Williams

The tremendous near-term threat to the U.S. dollar and systemic liquidity continues, tied to the U.S. Federal Reserve’s inability to resolve the 2008 financial collapse. Since then, domestic and global banking systems have not been stabilized in a sustainable manner.

Faced with a financial system panic and pending banking system collapse in 2008, the Bernanke (and later Yellen) Fed and the Bush (and later Obama) administrations moved and have continued to move to save the domestic banking system at any and all costs. Stopgap measures were used successfully to buy some time, irrespective of the cost, yet little was done to address the accompanying U.S. economic collapse, or long-term U.S. sovereign solvency issues (the primary long-term problem).

The time for “pushing the crisis into the future” effectively has run out. The domestic and global banking systems remain afloat, but are not in much better shape than they were in 2008. The U.S. economy collapsed into 2009 but never fully recovered suffering protracted low-level stagnation that is turning down anew.

The ongoing economic downturn promises intensified stress on systemic liquidity. That circumstance ultimately – sooner rather than later – dooms the U.S. central bank to an intensified quantitative easing.

An expanded program of quantitative easing would generate high risk of extreme flight from the U.S. dollar – a massive dollar debasement – threatening an increasingly rapid upturn in energy and dollar-based commodity inflation, driving headline U.S. inflation much higher. Compounding the high risk of a near-term run on the U.S. dollar remains mounting recognition in global markets that the U.S. Federal Reserve and other central banks have no effective idea as to how to boost current economic activity, or how to stabilize global banking system solvency.