A few thoughts by Biderman.
Here comes another boring video about why all the short term moves by the central banks will ultimately destroy us in the future. Why do I call this boring? Because most people would rather not hear the truth, living as if tomorrow doesn’t matter, hoping for a miracle. Certainly our central bankers political leaders are only focused on the present; always looking to kick the can further down the road.
Day traders, momentum traders and many regular investors also are only focused on the short term. Inherent in their misguided investment philosophy is that they will be able to get out and take their profits before “reality” hits the fan. That’s despite the fact that history has taught us repeatedly that pigs eventually get slaughtered.
Full video below.
Stiglitz says the financial industry is to be blamed for the huge inequalities developed in the US, and proclaims the land of opportunities a myth. Must read interview via Spiegel online.
SPIEGEL: Professor Stiglitz, how do you expect the next President of the United States to tackle the problem of unequal distribution of wealth?
Stiglitz: First, he has to recognize that there is a problem at all. Watching inequality grow is like watching the grass grow. You don’t see it happening day by day, but over a period of time it becomes visible.
SPIEGEL: What is the scale this inequality?
Stiglitz: In the last decades, income and wealth disparity have grown dramatically in this country. Let me give you an example: In 2011, the six heirs to the Walmart empire commanded wealth of almost $70 billion, which is equivalent to the wealth of the entire bottom 30 percent of US society.
Our analysis of the physical gold market shows that central banks have most likely been a massive unreported supplier of physical gold, and strongly implies that their gold reserves are negligible today. If Frank Veneroso’s conclusions were even close to accurate back in 1998 (and we believe they were), when coupled with the 2,300 tonne net change in annual demand we can easily identify above, it can only lead to the conclusion that a large portion of the Western central banks’ stated 23,000 tonnes of gold reserves are merely a paper entry on their balance sheets – completely un-backed by anything tangible other than an IOU from whatever counterparty leased it from them in years past. At this stage of the game, we don’t believe these central banks will be able to get their gold back without extreme difficulty, especially if it turns out the gold has left their countries entirely. We can also only wonder how much gold within the central bank system has been ‘rehypothecated’ in the process, since the central banks in question seem so reluctant to divulge any meaningful details on their reserves in a way that would shed light on the various “swaps” and “loans” they imply to be participating in. We might also suggest that if a proper audit of Western central bank gold reserves was ever launched, as per Ron Paul’s recent proposal to audit the US Federal Reserve, the proverbial cat would be let out of the bag – with explosive implications for the gold price.
Full article click here.