OUZILLY, France – “How does this all end?” It’s a regular subject for guesswork here at the Diary. It is also the subject of a new book, The Breaking Point, by our old friend and editor of investment advisory Strategic Investment, James Dale Davison.
The cover of J.D. Davidson’s new book The Breaking Point. One isn’t supposed to judge a book by its cover, but it’s probably safe to say that this book isn’t exactly brimming with everything is awesome messages.
The Rationale for Interventionism
It has been almost eight years since former U.S. President George W. Bush warned the world that “without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.”
September 2008: a solemn-faced “rescue party” of bureaucrats and politicians (from left to right: Ben Bernanke, GW Bush, Hank Paulson and Donald Cox) announces that the village needs to be destroyed in order to save it (“normally, we’re all for free market capitalism, just not this time”).
Photo credit: Credit Larry Downing / Reuters
Both Political Candidates Demonstrate Economic Ignorance While Pandering For Votes
As we enter the final lap of the presidential race in the United States, as always, the two candidates will say just about anything to secure your vote. And of course the economy is a major topic of conversation. Loud calls for both higher wages and more jobs dominate the rhetoric.
This year’s election may feature very polarizing and idiosyncratic candidates, but much of their rhetoric is not that much different from that heard on occasion of previous elections.
Better the Devil You Know?
We are providing around-the-clock nursing care to our invalid wife, who is back at home, with cracked ribs, unable to move. We are upstairs in the bedroom – the shutters closed against the heat (we have no air-conditioning) – taking a few minutes to update our Diary… but with nothing important to say.
Every day, we look at the headlines, think about what is going on in the big wide world and try to connect a dot or two. It is probably the same in your life. You go about your business. You have work to do. Projects, goals, deadlines. Your priorities. Your investments. Your schedule. Your plan.
Cartoon by Ramirez
OUZILLY, France – Poor Donald Trump. He has had to apologize for hurt feelings. He has had to reshuffle his campaign team. He has been kicked so often by the press that he is starting to hide behind chairs, like a university president. Here at the Diary, we favor lost causes, diehards, and underdogs. “The Donald” may soon qualify on all three counts.
Underdog spotted! But is he really such a “lost cause?” He may not be, actually… in spite of his uncanny ability to occasionally put his foot in his mouth.
Distortions and Crazy Ideas
We have come across a few articles recently that discuss some of the strategies investors are using or contemplating to use as a result of the market distortions caused by current central bank policies. Readers have no doubt noticed that numerous inter-market correlations seem to have been suspended lately, and that many things are happening that superficially seem to make little sense (e.g. falling junk bond yields while defaults are surging; the yen rising since the BoJ adopted negative rates; stocks rising amid a persistent decline in earnings growth; bonds, gold and stocks moving in unison, etc., etc.).
Unknown veteran trader experiences another WTF moment.
Photo credit: Everett Collection
No CPI Change
Several ill-defined economic data points were unveiled this week. Namely, the Labor Department’s July consumer price index report. According to the government data, on whole, consumer prices for the month didn’t change one iota.
AEP Speaks for Himself
“We are all Keynesians now, so let’s get fiscal.” This is one view according to Ambrose Evans-Pritchard from The Telegraph who believes the time is right for the UK government to loosen its fiscal stance.
Ambrose Evans-Pritchard is channeling JM Keynes these days (depicted above). Alternative media long regarded AEP as a rare exception in the mainstream press, willing to take on economic orthodoxy. We are happy to report that we had his number early on. First he outed himself as a monetarist and advocated money printing, and now he has apparently moved over to Keynesianism. Readers may want to review some earlier articles in this context: Parade of the Inflationists, Tapering Paranoia, and Anglo-Saxon Central Banking Socialism = Free Lunch.
Photo credit: Keystone/DPA
When Will the Helicopter Take Off?
The quarterly meeting of the Incrementum Fund’s advisory board was held on July 19. A pdf transcript of the discussion can be downloaded via the link below. We were once again joined by special guest Brent Johnson, the CEO of Santiago Capital.
The new obsession of liquidity junkies around the globe: helicopter money! This should cement the “TINA” rationalizations for buying hopelessly overvalued stocks and bonds, right?
Cartoon by Bob Rich
Most read in the last 20 days:
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- Insanity, Oddities and Dark Clouds in Credit-Land
Insanity Rules Bond markets are certainly displaying a lot of enthusiasm at the moment – and it doesn't matter which bonds one looks at, as the famous “hunt for yield” continues to obliterate interest returns across the board like a steamroller. Corporate and government debt have been soaring for years, but investor appetite for such debt has evidently grown even more. The perfect investment for modern times: interest-free risk! Illuustration by Howard...
- Trump's Tax Plan, Clinton Corruption and Mainstream Media Propaganda
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- The Great Stock Market Swindle
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- News from TINA Land
Distortions and Crazy Ideas We have come across a few articles recently that discuss some of the strategies investors are using or contemplating to use as a result of the market distortions caused by current central bank policies. Readers have no doubt noticed that numerous inter-market correlations seem to have been suspended lately, and that many things are happening that superficially seem to make little sense (e.g. falling junk bond yields while defaults are surging; the yen rising...
- An Old Friend Returns
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- The Fabian Society and the Gradual Rise of Statist Socialism
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- Silver is in a Different World
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- Retail Snails
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- The Fed’s “Waterloo” Moment
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- Good Money and Bad Money
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- Real vs. Nominal Interest Rates
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