After watching the schizophrenic market reaction to St. Louis Fed Bullard’s remarks, I am amazed that the world doesn’t think we have gone completely insane. I don’t know how long this sort of Fed induced lunacy can continue, but real signs are pointing to an economy that is still stagnating even with the trillions of dollars of money printing.
In a previous article, I posted the first 4 months of energy consumption in the industrial & transportation sectors for the past three years:
According to the EIA – U.S. Energy Information Agency, industrial & transportation energy consumption in the first four months of 2012 declined compared to 2011 (the motivation for the Fed to do QE3), but picked up a little in 2013. Well, it looks like they made a few revisions and it now seems as if energy consumption in these two sectors actually declined in the first five months of 2013:
The EIA revised April’s figures down a bit and including May’s industrial & transportation energy consumption, 2013 is still declining. Even though these negative changes aren’t substantial, it shows that with all the Trillions of Dollars in QE, money printing, bond & MBS purchases… things are not getting any better in the U.S. economy.
I find it simply astonishing how deluded highly educated adults have become in the face of the most silly, immature and deceitful data & rhetoric coming from the top levels at the Fed, Government & Wall Street. As James Kunstler correctly describes our system today, “A society based on the packaging of Lies.”
The U.S. Economy died back before 2000, however a series of bubbles, the exporting of inflation, and the growth of the derivatives monster has allowed the perception of growth to continue. As you can see from the chart below, transportation energy consumption peaked in 2007 and has been declining ever since.
If the U.S. economy is barely holding its own with the $trillions in monetary stimulus, how will it react if the FED did Taper? Regardless, anything coming out of the Fed today is totally meaningless for those who want to try and protect their wealth in the future.
Another piece of double-talk came from the Fed today from this article on ZeroHedge:
While there is ample proof to prove the Fed’s hypocrisy on that statement in the article, for those who watched the very interesting 4-part History Channel series on “The Men Who Built America”, Alan Greenspan gave a remark in the documentary where is firmly placed his foot in his mouth. Greenspan discussed how no one was able to foresee the 1930′s depression much like the collapse in 2007-2008.
I gather Bullard didn’t watch that series.
Anyone who is paper trading this market and who isn’t apart of the Insider Banking Elite is truly insane. The U.S. economy is on life-support. You take that life-support away and the whole House-of-cards comes crashing down.
I believe one of the best ways to protect an individual’s wealth in the future will be in physical assets such as gold and silver. Precious Metal Market Sentiment is still in the toilet which is a very good sign.
Unfortunately, many gold and silver investors are increasingly frustrated and seem to be losing patience. My response to that is…. the frustration and fear in holding precious metals is exactly the reaction the Fiat Monetary Authorities where shooting for.
If you own the physical and look at your wealth in ounces of gold and silver… it doesn’t really matter what happens along the way.