What is Deflation and Why is it Bad?

I'm quite sure that all of my readers know what inflation is and if asked, could probably write a paragraph explaining it....but what about deflation?  Can we write a paragraph on what that is?

If rising prices are seen as 'bad', then falling prices must be seen as 'good'...right?

Nope.  Deflation is something that the "magic money men" fear even more than inflation.

U.S. NOT IMMUNE FROM DEFLATION RISK
• All of the good economic news aside, the U.S. is still not safely clear of deflation risk as slow
recovery from a debt-driven recession continues
• A risk-averse Fed has little reason to raise short-term rates any time soon. We reiterate our
long-standing view of “lower for longer”
• In fixed income, we prefer the more credit-sensitive segments of the market, including high-yield,
where active management can add value
• As markets become increasingly volatile, a focus on global diversification may help protect
investor portfolios

Dominant economic trends in early 2015 — weak GDP growth in developed and emerging markets, plunging oil prices and a muscular dollar — all fit into the nervous global conversation about deflation risk and what it might mean for U.S. investors. 

Deflation risk remains very real in Europe. Consumer prices shrank in December for the first time in more than five years, and more contraction followed in early 2015. Lower energy costs are in part to blame, but not counting oil and food, inflation in the eurozone was still at a record low in January. 

Deflation is opposite of inflation, so how can it be bad? 
Most of us understand the harm that income-eroding inflation can cause, but the potential damage from deflation is less intuitive. After all, if inflation is bad, and deflation is the opposite of inflation, deflation by definition should be good, right? Why wouldn’t we want products and services to be cheaper? 

When prices are falling, consumption should increase because everyone now has more purchasing power. In a deflationary environment, however, consumption actually decreases. That’s because consumers look at today’s price tags, and notice they are lower than yesterday’s. The question then becomes, “Why should I spend today if I can get an even better deal tomorrow?"

Across an entire economy, suppressed spending can lead to a destructive downward spiral that is hard to reverse. Lower consumption leads to lower production, lower hiring rates, lower wages, lower profitability and lower capital expenditures. Governments take in less tax revenue, which can cut public spending and possibly jobs as well. Declining sales and earnings can drive down dividends and stock prices, which further curtails consumption. Real estate values are vulnerable as well. For bond investors, deflation tends to drive up prices in the near time, but coupons fall over time due to stimulative monetary policy. 

It’s not certain that the massive quantitative easing program by the European Central Bank will be enough to reverse deflationary momentum in the eurozone economy. And even if QE provides a short-term reprieve, Europe still has profound structural problems to address, including persistent fiscal deficits, inflexible labor markets and excessive government regulation. 

Here;  http://pages.advisorusaa.com/rs/usaa/images/Deflation-Risk-FNL-218086%20-%200415-Removed-Tag.pdf?mkt_tok=3RkMMJWWfF9wsRonvqjJZKXonjHpfsX54uQrWLHr08Yy0EZ5VunJEUWy2YECSNQ%2FcOedCQkZHblFnVsJSq2xUbcNoqEI

So the short answer of why deflation is bad for consumer driven, debt prone societies is because people will put off spending money today if they believe that the TV, boat, or gas grill they want today will be cheaper in 30 days!  They will just wait a while.  If you take that decision times MILLIONS....the whole economy can start to fold up and the 'magic money men' at the Federal Reserve have very few tools in their tool belt to combat it.  What are they going to do to entice people to buy it today?  Lower interest rates below 0% and force Best Buy to actually PAY YOU interest if you buy it today??

Wow!  Europe might really be in a pickle!  Just imagine if their economy starts to implode and the Euro Zone and Euro currency start to tumble....then folks will look to America as the last big safe-haven to hold their wealth!  So they pour their money into U.S. holdings....only to find out that America is $18 trillion in debt, our economy has created millions of part time, low paying jobs, we have $50 trillion of unfunded liabilities on the horizon and we are rejecting Christ at an astonishing level.

Sounds like a perfect recipe for the Prince of the Earth to destroy the current global economic system so it can be replaced with ONE NEW SYSTEM!  A system that implements all the great technologies we currently have....like bar codes, online banks and 100% completely cashless!

It's Not 1929....But....

Strange, strange, strange stuff going on in the financial markets.

Today on the front page of the WSJ, Janet Yellen has said she believes that stocks may have gotten too bloated and bond holders may be taking more risk than they realize.

Really?  What do you expect is going to happen, Mrs. Federal Reserve, when your institution drives interest rates down to 0% and hold them there for 6 years?  Do you think it MIGHT force people to look for higher returns and thereby drive them into the stock and bond markets which in turn drives stock prices higher?  Is it a coincidence that the stock market indexes have broken new highs this year?

Of course the bear market dudes continue to growl....warning us all that this MONETARY EASING experiment that has NEVER BEEN DONE before may end with a thunderous BUMP!

"Oh Dennis, I NEVER listen to those gloom and doomers!  They always say bad stuff is coming and yeah, some minor shaking may happen for a little while but things always go right back up!  This is America!  That's how it's always going to be!  I just wish they would quit warning us of something that is NEVER going to happen!"

Our old mega-bear friend, Robert Shiller, is warning us again that we may have already entered the Twilight Zone....where things aren't necessarily as they appear.

Achieving escape velocity from 2% or 2.5% GDP growth seems increasingly unlikely to both Nobel laureate Robert Shiller and DoubleLine CEO Jeffrey Gundlach. Both financial market experts were interviewed yesterday in New York by DoubleLine portfolio manager Jeffrey Sherman, who co-manages the DoubleLine Shiller Enhanced CAPE smart beta fund with Gundlach.

The United States has looked like one of the strongest countries in the developed world, “but I’m distrustful,” Shiller said. While Shiller acknowledged pockets of “animal spirits” can be found in areas like fracking and technology, the current economic expansion has seen fewer hot new innovations than past economic cycles.

Like many of the previous five years, 2015 was supposed to be the year U.S. GDP growth would reach 3.0%, but Gundlach said he had arrived at the viewpoint of Missouri, the so-called “Show Me” state. The Fed is “starting to believe in Missouri” as well, he noted.

Blame the harsh winter weather if you want, but since the economic recovery began in the second quarter of 2009, first quarter growth has averaged 0.6% while all other quarters have averaged 2.8%. Other culprits besides the weather have included Greece, the euro and Japanese earthquakes, but there is always an excuse. It “makes you start to wonder about seasonal adjustments,” Gundlach said.

Neither man disagreed with Fed Chair Janet Yellen’s remarks that equity valuations are high. Using his CAPE ratio, Shiller says it indicates equities should return 2% annually for the next decade, and that is better than he expects bonds to do. “My gut feeling is this doesn’t look right,” Shiller said, but “I haven’t met anyone who sold everything. People are worried, but no one knows what to make of [the markets] because interest rates are so low.”

Still, Shiller noted that it wasn’t 1929, when his CAPE ratio was 37, not the current 27, which is still very high compared to historical levels. Furthermore, interest rates were much higher than they are today.

Record low interest create distortions that both these perceptive observers find very odd. though in the last ten days bond prices have suddenly tumbled around the world, triggering some odd results. "We've lost 100 years of income on 10-year German bunds in the last week," Gundlach said.

In addition to such anomalies, Gundlach said some warning signs aren’t hard to spot. In the corporate bond market, new issuance of covenant-lite bonds reached a record of 70% of all new issues last year. Worse yet is some people’s interpretation of this phenomenon.

“Some people say it’s a good thing because it shows how confident people are,” Gundlach said. “That’s a horrible way” to extrapolate the willingness of bond market investors rolling over for issuers. The upshot is that the investment-grade corporate bond market entered 2015 at its “most overvalued level” in history.

Another interpretation that left Gundlach startled was when he heard recently that the stock market had set a record because consumer confidence reached levels not seen since June 2007. That hardly makes him eager to buy stocks and uncork champagne bottles.

Here;  http://www.fa-mag.com/news/shiller--gundlach-on-2--gdp-growth--why-2--equity-returns-may-still-beat-bonds-21688.html?section=43

Wait...what??  Investment grade corporate bonds entered 2015 at it's most overvalued level in history??  Isn't that just another way of saying bonds are the most overpriced they have EVER been?

And how about those crazy Swiss and German bond yields they are selling today?  Who can explain them?  If you give the Swiss or German government $10,000 today they will promise to pay you back $9800 in 5 years!!  And people are buying them up like hotcakes!!  Why?  What is happening?  Why would you pay a government to hold your money?  Because the bank is going to charge you more to hold your money?

As the authors above tell us, these strange negative interest rates are causing never-before-seen anomalies in the financial markets.

One day the Bible tells us that all the wealth of the world is simply going to evaporate.  What man THOUGHT he had set aside in savings will be revealed as worthless paper.  It's happened before, it WILL happen again...BUT...when you lay all of this on top of earthquakes, volcanoes, tornadoes, droughts, floods, Arabs fighting Arabs and Israel sitting in the middle of it all......it makes one ponder even more what Jesus said, "When these things begin to take place, stand up and lift up your heads, because your redemption is drawing near.”

Why does he tell us to look up?  What are we believers in Jesus Christ supposed to be looking for in the sky?

Acts 1
9 After he said this, he [Jesus] was taken up before their very eyes, and a cloud hid him from their sight.

10 They were looking intently up into the sky as he was going, when suddenly two men dressed in white stood beside them. 11 “Men of Galilee,” they said, “why do you stand here looking into the sky? This same Jesus, who has been taken from you into heaven, will come back in the same way you have seen him go into heaven.”

So wait!!  Jesus is going to come back to earth in the same way the disciples saw him disappear into the clouds...meaning he will reappear in the clouds?

1 Thessalonians 4
16 For the Lord himself will come down from heaven, with a loud command, with the voice of the archangel and with the trumpet call of God, and the dead in Christ will rise first. 17 After that, we who are still alive and are left will be caught up together with them in the clouds to meet the Lord in the air

"Yeah, but Dennis, I don't believe in any of those fantastical verses in the Bible!  Stories of Arks, whales spitting, cities destroyed, dead rising, demons cast, thousands fed with 5 fish....those are all just old wive's tales that helped people make sense of things before we got science...and now have explanations for everything like evolution, epilepsy, rising sea levels, etc...  You must be crazy if you think a man named Jesus who has been dead for over 2000 years is going to appear in the sky, blow a trumpet and transform millions of people into new, glorified bodies and whisk you all away into the sky to a wedding banquet!!  That has to be about the craziest thing I have heard yet!!  Are you actually allowed to have a job and educate our kids?"

How to Take Christ Out of Christianity

The Bible is clear that there will be a GREAT falling away in the very last days.  Falling away from what?  Falling away from the True Gospel of Jesus Christ. Of course the folks who have never had anything to do with the Church can't fall away....because they were never there.  So this can only refer to people who are hanging around the Church and maybe even call themselves "Christians" when asked by someone conducting a survey.

The Bible also says that in the Last Days men will have a form of godliness but it won't be real and will have no power.  Power for what?  Power to save.

Now let's think of all the people sitting in churches on Sunday morning across America.  How many are simply "ChrEasters?"  (go to church only at Christmas and Easter)  How many are sitting in Catholic churches believing that God takes attendance and if you have enough checks by your name then St Peter allows you to pass by the pearly gates?  How many believe that putting $10 in the offering plate a few times per year buys them admission to heaven when it's combined with their believe that "I'm a pretty good person."  How many of these churches preach homilies and never open their Bibles?  How many of these churches tell their congregants that all paths lead to God?

You get the idea....

Today we find this article in the Washington Post by an atheist who still wants to be part of a church...for 'community' reasons.

When I tell my socially progressive, atheist friends that I’m “culturally Christian,” they’re momentarily concerned that I have a latent preoccupation with guns and the Pledge of Allegiance. Using the term with devout believers gets me instructions that I just need to read more sophisticated theology to come around. I’ve tried hard to accept my fully secular identity, and at other times I’ve tried to read myself into theistic belief, going all the way through divinity school as part of the effort. Still, I remain unable to will myself into any belief in God or gods — but also unable to abandon my relationship to the Episcopalian faith into which I was born and to the ancient stories from which it came.

And though I am without a god, I am not alone.

The group of nonbelievers dubbed “Nones” in the media — because they don’t mark a religious affiliation on demographic surveys — grew from 15 percent of the U.S. population to 20 percent between 2007 and 2012; almost a third of them are under 30. These are the people who identify with ambivalent, ambiguous statements like “I’m spiritual, but not religious”; “I’m kind of agnostic”; “Now I’m an atheist, but I grew up Catholic”; or “I believe in something, but I don’t know if it’s God.” There are those of us, too, who still feel a profound connection to the Christianity we grew up with but who can no longer — or never could — connect those feelings to theistic belief. Some miss the ritual of singing in unison or wishing peace to their neighbors in a pew. Others miss feeling grounded in a community where they can celebrate life’s milestones and heartbreaks. Some find secular life lacking in sufficient ethical frameworks and systems of accountability to reinforce them. For many, it is a combination of all three.

All those severed connections, though, mean a new opportunity to create spaces for the “culturally Christian” nonbeliever and to examine how churches lost them in the first place.

Christianity is the dominant religion in the United States, but the cultural experience of Christianity here varies at least as widely as its practice does across denominations, families and individuals. Despite the persistence of Catholic guilt, only a third of people who identified as Catholic in a General Social Survey in 2014 were actually practicing the faith. Polls conducted by the evangelical research firm Barna Group found that young people leave because of factors such as the church’s views on sexuality and science, and its failure to acknowledge “the problems of the real world.”

Their liberal counterparts don’t fare much better: “Liberal Protestant churches, which have famously lax requirements about praxis, belief, and personal investment, therefore often end up having a lot of half-committed believers in their pews,” writes Connor Wood, a PhD candidate in religious studies at Boston University. “The parishioners sitting next to them can sense that the social fabric of their church isn’t particularly robust, which deters them from investing further in the collective.”

But not belonging to a religious institution doesn't mean you don’t have a cultural attachment to your religious history. Just look at the more familiar concept of cultural Judaism. Among younger American Jews, cultural ties are increasingly the basis of their connection to their faith; 32 percent of Jewish American millennials told a Pew survey in 2013 that their Jewish identity is based on ancestral, ethnic and cultural connections rather than religious ones. Rabbi Miriam Jerris of the Society of Humanistic Judaism says cultural Jews and cultural Christians who celebrate their religious traditions have a lot in common (though they’re not completely analogous, because Judaism has a long history as both a religion and an ethnicity): “These people are looking for communities and for memories from their background, but they want to do it in an intellectually consistent way.”

Here;  http://www.washingtonpost.com/opinions/how-to-take-christ-out-of-christianity/2015/05/01/a4e28430-eebc-11e4-8666-a1d756d0218e_story.html

Friends, it's hard to look at the state of the Church in America and not realize that we are fulfilling a lot what the Bible said would happen in the Last Days.  Thousands of churches are already boarded up across the country or have been sold and "re purposed" into apartment buildings, office space or Muslim mosques.

1 Timothy 4
The Spirit clearly says that in later times some will abandon the faith and follow deceiving spirits and things taught by demons. 

Revelation 3
15 I know your deeds, that you are neither cold nor hot. I wish you were either one or the other! 16 So, because you are lukewarm—neither hot nor cold—I am about to spit you out of my mouth. 17 You say, ‘I am rich; I have acquired wealth and do not need a thing.’ But you do not realize that you are wretched, pitiful, poor, blind and naked. 18 I counsel you to buy from me gold refined in the fire, so you can become rich; and white clothes to wear, so you can cover your shameful nakedness; and salve to put on your eyes, so you can see.

Killing Newborn Babies is Ethical

The liberals are currently in the process of having their minds 'given over' to futile thinking.  Their thoughts are becoming foolish...because they have denied that they have a Creator.  Romans 1 clearly says this is what happens to people who insist on believing that all complex life forms EVOLVED from rocks and pond scum.

Today we find news that a Princeton ethicist believes our society should be able to kill babies if they are mentally disabled.

Princeton professor and animal rights activist Peter Singer argued in a radio interview that it is “reasonable” for healthcare providers, insurance companies, and government programs such as Medicare or Medicaid to kill mentally disabled babies.

Singer appeared on the Aaron Klein Investigative Radio show to discuss his latest book, The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically.

Klein asked Singer—who served as a task force coordinator on President Obama’s 2008 Presidential Campaign—if he believes that Obamacare will lead to healthcare rationing in the United States, specifically in relation to “disabled” babies.

Singer’s answer? It already has.

For example, Singer said, doctors routinely end the life of babies born with brain hemorrhages.

“If an infant is born with a massive hemorrhage in the brain that means it will be so severely disabled that if the infant lives it will never even be able to recognize its mother… doctors will turn off the respirator that is keeping that infant alive.”

Doctors who kill disabled babies, Singer explains, are likely “just influenced by the fact that this will be a terrible burden for the parents to look after.”

This is not a new position for Professor Singer; on his faculty page on Princeton’s website, Singer argues that “killing a newborn baby is never equivalent to killing a person.”

“A normal newborn baby has no sense of the future,” Singer writes, “and therefore is not a person.”

Here;  http://www.campusreform.org/?ID=6479

So according to this professor a human needs to have a sense of the future to qualify as being worthy to live and to be called a person.

Hmmm....that means he should also be a proponent of killing all the Alzheimer and dementia patients.  Next we should kill all the people with Downs Syndrome and maybe lots of Autistic folks as well!  In fact, why stop there?  Maybe the government should consider killing everyone who costs the Federal Government MORE than they contribute to it?  That would mean MOST of the people who were 80 years old and older....unless they could prove they were still worthy to be kept around....or could prove that they were paying their own way.

This sounds an awful lot like what Hitler recommended and did.

Market Liquidity Drought Could Spark "Bloodbath"

The headlines with blaring warnings are everywhere.  If chaos, collapse and major unrest actually DO break out in America and spread to the rest of the civilized world, it will be very disingenuous to stand with our mouths open and say, "I had absolutely no idea!  It just came out of nowhere!"

Ummmm.....no, it certainly DID NOT come our of nowhere.  The warnings that America and the Western world are teetering on the edge of an abyss are daily news if you open your eyes.

"But Dennis, I don't watch, read or listen to the news...because it's all only bad news and it makes me depressed."

OK, I get that...but there has to be some sort of happy medium there....because Jesus told us to "Watch!" and that means understanding that ISIS is killing Christians, Iran is threatening Israel with annihilation, Muslims are killing everyone while believing they are offering a service to Allah and nature seems about ready to cut loose in droughts, volcanoes and floods.

On the financial front we find more verbal warnings from some of the smartest people on earth.  The warnings they are sounding are saying that the current global financial market is on the edge of the abyss...and that levers have pulled to "fix" it that they have no idea what happens when they get pulled.

Investors face a “painful” adjustment in a world of evaporating liquidity and higher US interest rates that will trigger huge market swings with potentially catastrophic consequences, the Institute of International Finance has warned.

Timothy Adams, the chief executive of the IIF, which represents the world’s biggest banks, described liquidity as the “top issue” at high level meetings of central bankers, chief executives and other financial institutions.

He warned that the raft of regulation introduced in the wake of the 2008 crisis could potentially cause market gyrations larger than last October’s “flash crash” in US Treasuries.

While Mr Adams supports tougher rules that have made the banks more resilient, he said a complex web of regulatory reform may have left banks less able to respond to the next crisis.

“There’s just less capacity for making markets,” he said. “Officials will say: we expect some volatility and this was part of this broader scheme of regulatory reform. But for the private sector there is this issue of: is the total effect of all of these various regulatory changes likely to produce outcomes larger than each individual regulatory reform and its consequences?

"The cumulative unintended could end up being much larger than the one-off intended - we just don’t know.”

The "flash crash" in US Treasuries, captured by the International Monetary Fund. Jamie Dimon, the chief executive of JP Morgan, said the move of 37 basis points on October 15 was “an event that is supposed to happen only once in every 3 billion years or so” (Source: IMF)

"There are some concerns that a couple of events that we have seen is function of these regulatory changes, that may or may not be the case, but watching over the next year or two, and will we have similar events [to the flash crash] – if not larger - that may then warrant further investigation and looking at the cumulative effect of these regulatory changes.

Dame Clara Furse, an external member of the Bank of England's Financial Policy Committee (FPC), which is in charge of financial stability, said in February that liquidity in some markets had "become more fragile", which could result in "unforeseen consequences" for markets.

The Bank, led by Governor Mark Carney, will work with market participants and industry bodies such as the IIF to assess whether asset managers could cope with a rapid change in market conditions.
Mr Adams said policymakers were now facing the challenge of navigating the new financial order.

"I grew up in the 1970s and 80s when it was all about trying to get inflation down, you had a steep yield curve and it just feels like we’re in a very different and foreign place," he said. "At the same time we’re re-engineering the financial architecture, so we just don’t know what the linkages are.

"As you turn the dials of policy, you don’t know how much to turn it in order to get a certain amount of impact, so you’re making it up as you go along, and that’s a bit frightening if you’re in a position of accountability.

In terms of volatility, officials will say they want a two-way market. They argue that there's been too much complacency. But it’s like saying, I want to get on a rollercoaster because I want to have fun. Well you'd better make sure you’re ready and you’re strapped in and this is a rollercoaster that you understand."

Here;  http://www.telegraph.co.uk/finance/markets/11581820/Liquidity-drought-could-spark-market-bloodbath-warns-IIF.html

Significant warnings are there for us to NOT BE SURPRISED if one day we wake up in America  to discover that some events happened overnight that the stock market won't like.  The first day it may be down 500...the next day it drops by 700...and then some profit takers decide they better lock in some of their gains and sell before the market gives back 2 years of returns in a few days, and this causes it to go down 450 more.

Next the pundits start talking on the morning news shows and wondering aloud to their audiences of millions if we are heading for a bear market.  Next those same pundits will start looking real close at RETAIL SALES and EMPLOYMENT and they will come to the conclusion that retail numbers are "off" from the past 4 years and job creation was "less than expected".

Next ISIS blows up a theater in Texas and kills 65 people...and the stock market really starts to tumble.

Average Joe is now concerned about the $100,000 he has in his 401k because he believes "it's all in that stock market thing!"...so he picks up the phone to Vanguard and moves his money out of stocks and into cash thereby driving the stock market down more.

And before you know it, the markets have tanked by 50% or more and everyone is standing around looking gloomy and saying, "I never had any idea the stock and bond markets could go down so much!  Now how am I going to retire to Phoenix?...and WHO is gonna pay for my nursing home care now?"

Sadly, as a nation we spend WAY more time thinking about what the DOW and S & P 500 Indexes have done in the past day instead of focusing on eternal things that we should be DOING in service for Jesus Christ while there is still light to work.

Preparing for the Ultimate Crisis

It certainly seems that the closer the world gets to a potential financial meltdown...the more the Western world seems to fall asleep.

Long time readers of this blog know I have written many times about how our paper money is now based solely on FAITH.  The only reason that anyone takes a $20 bill from you is because they have FAITH that they will be able to use it tomorrow to exchange it for goods or services that they require.

They have FAITH that they can bring it to a bank and the bank will accept it for deposit to be put toward their car loan, home loan or credit car payment.

The world has FAITH in the U.S. dollar because it is backed by the FULL FAITH AND CONFIDENCE in the U.S. Government and as of now the world still has confidence and faith the U.S. Government is going to protect its currency and pay its obligations.

But what happens when people lose faith in a government's paper currency?  We don't have to guess...we can actually look around the world and see exactly what happens in Argentina, Greece, Russia, etc...  When the confidence wanes, people on the street demand to be paid with something tangible (gold, eggs, labor) or they will demand to be paid with other paper money that they still DO have confidence in.

Today I received this email from a financial service firm...no doubt they are selling newsletters and no doubt they WANT to disturb their readers so you feel that you need to buy their newsletter...but what I found interesting was their discussion on FAITH.

Preparing For the Ultimate Crisis 

The final and ultimate round of the Crisis that begin in 2008 will occur when faith is lost in the Central Banks. 

The entire rally in stocks post-2009 has been due to Central Bank intervention of one kind or another. Whether it be by cutting interest rates, printing money, buying bonds, or promising to do more/ verbal intervention, the Fed and others have done everything they can to push stocks higher. 

As a result, today, more than 90% of market price action is based on investors’ perceptions of what the Central Banks will do… NOT fundamentals. For instance, if bad economic data hits the tape, the market tends to rally because investors believe this will result in the Fed having to print more money. 

Again, the primary driver of stocks is no longer fundamentals, but Central Bank intervention. 

There are many problems with this, not the least of which is the fact that we now know that Central Bankers will openly LIE about what they’re doing. Consider the recent revelations concerning ECB President Mario Draghi’s claim that he will do “whatever it takes” to hold the EU together. 


Geithner: [T]hings deteriorated again dramatically in the summer which ultimately led to him saying in August, these things I would never write, but he off-the-cuff – he was in London at a meeting with a bunch of hedge funds and bankers. He was troubled by how direct they were in Europe, because at that point all the hedge fund community thought that Europe was coming to an end. I remember him telling me [about] this afterwards, he was just, he was alarmed by that and decided to add to his remarks, and off-the-cuff basically made a bunch of statements like ‘we’ll do whatever it takes’. Ridiculous. 
  
Interviewer: This was just impromptu? 

Geithner: Totally impromptu…. I went to see Draghi and Draghi at that point, he had no plan. He had made this sort of naked statement of this stuff. But they stumbled into it. 

Here is former Secretary of the Treasury, Timothy Geithner, stating openly that Mario Draghi had “no plan” and was simply bluffing when he claimed, “we’ll do whatever it takes.” 

Draghi  was not only being deceptive (he didn’t have a plan); he was actually lying in the sense that the ECB couldn’t “do whatever it takes.” The OMT policy he talked about creating is in fact illegal based on EU law. He couldn’t do anything then and he can’t now. 

And yet, EU stocks have rallied hard, EU sovereign bond yields have fallen, and the world has proclaimed that the EU Crisis is “over”… all based on this lie. 

If you think Draghi is somehow unique in this regard amongst Central Bankers, thinking again. Recently Bank of Japan Governor Haruhiko Kuroda increased the Bank of Japan’s QE program, not because it would benefit Japan’s economy, but because doing so would make his colleagues’ forecasts better match his own. 

Put simply, the folks who are supposed to be holding the financial system together have been caught openly lying and spending money just to suit their own egos. The consequences of this have not yet been felt. But the seeds of the next crisis have already been sown in these revelations. 

The next time stuff hits the fan, will the world be as trusting in Central Banker proclamations? Will we continue to believe these folks are omnipotent? Or will their phony promises accomplish nothing? 

Friends, please read this twice!  The newsletter has NOTHING to do with Christianity....it is a Wall Street Newsletter but this last paragraph is so prophetic that it bears repeating....

The next time stuff hits the fan, will the world be as trusting in Central Banker proclamations? Will we continue to believe these folks are omnipotent? Or will their phony promises accomplish nothing? 

No!  The central bankers of the world are NOT omnipotent!!  Only God is!

Yes!  Their phony promises (which are really lies) will not accomplish anything!!  Liars are really children of the devil...and the devil is the prince of this earth and is in control of everything during this dispensation of grace that we are living in.

1 John 5
19 We know that we are children of God, and that the whole world is under the control of the evil one. 20 We know also that the Son of God has come and has given us understanding, so that we may know him who is true. And we are in him who is true by being in his Son Jesus Christ. He is the true God and eternal life.

Friends!  The finish line is in sight!  Keep running towards it and finish the race strong! Let's all keep our minds on eternal things because the earth and all it's systems are passing away....and when it happens it could happen VERY quickly....after all, FAITH can vanish in an instant.

Remember, the Bible tells us twice that a day is coming when massive amounts of wealth will vanish in ONE HOUR and never be recovered again!  ONE HOUR!!!

Revelation 18
7-In one hour your doom has come!’

10-In one hour such great wealth has been brought to ruin!’

"But Dennis, that could never happen to America....because this is America!"

I wish you would quit saying that!!  Could you please come up with another comment?!