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Californication is a brilliant 1999 song by the Red Hot Chili Peppers.
Many of the lyrics reference the often insane, unrealistic, impossible dream
images Hollywood sells to the world.
"Space may be the final frontier but it's made in a Hollywood
basement."
Quantifornication is the term I coined for what the Federal Reserve is
selling to the world - the unrealistic, insane fiat dream that the monetary
policy employed by the Fed can fix the predicament we are in.
In the movie the Matrix, Neo is given a choice by Morpheus, if he takes
the blue pill he will return to sleep unaware of the truth, if he takes
the red pill he will wake from the dream and become aware of the illusion,
created by the AI entity, and fed to the humans in their pod dream world.
The Blue Pill
The Red Pill
 
The civilian labor force
participation rate is the number of employed and unemployed but looking for a
job as a percentage of the population aged 16 years and over.
Real gross domestic product -- the
value of the goods and services produced by the nation's economy less the value
of the goods and services used up in production, adjusted for price changes
The middle class has shrunk to just
under half the US population for the first time in decades, with more of the
population shifting to the extremes both above and below the middle.
Allianz’s Global Wealth Report 2015 dubs the U.S. the ‘Unequal States of
America’ because the U.S.’s wealth inequality is even more gaping its income
inequality.
Allianz calculated each country’s wealth Gini coefficient — a measure of
inequality in which 0 is perfect equality and 100 would mean perfect
inequality, or one person owning all the wealth. It found that the U.S. had
the most wealth inequality, with a score of 80.56, showing the most
concentration of overall wealth in the hands of the proportionately fewest
people.
When the Organization for Economic Cooperation and Development (OECD)
examined income inequality, it found that the U.S. has the fourth highest income
Gini coefficient — 0.40 — after Turkey, Mexico, and Chile.
Supplemental Nutrition Assistance
Program (SNAP). Food stamp use remains near record highs, up by 78 percent
over the past ten years.
The U.S. Federal Reserve ended their quantifornication
program in 2014.
The S&P has more than doubled
since 2009, while the Dow Jones has actually tripled.
Stock buyback programs, fueled by CEOs borrowing hugely from the bond
market, have supported the market since the Federal Reserve stopped pumping
money into the system.
Here’s a must read on the current, and future state, of stock buybacks
from Wolf Richter over on Wolf Street:
“Share buybacks have been a key part of the well-oiled Wall-Street
machinery of financial engineering. They hide the dilutive effects of stock
compensation programs and stock-based mergers and acquisitions. And they
inflate earnings per share by lowering the number of shares outstanding…buyback
announcements are suddenly plunging…But that plunge in buyback
announcements hasn’t made its way to reality yet, and the waves of prior
buyback announcements are still being implemented and are still propping up
the S&P 500 at this point. But gradually, that plunge in announced
buybacks is going to translate into plunging actual buybacks.” Share-Buyback
Announcements Plunge, Stocks Risk Getting Clocked
The Great Gold Rush
Think Central Banks, gold bullion buyers and precious metal ETF purchasers
are onto something?
“Data from the World
Gold Council showed that central banks scooped up a net 45 tonnes of gold
during the first quarter. According to Capital Economics' commodities
economist, Simona Gambarini, central-bank demand in the first quarter
climbed 28% versus a year ago.
Of the buyers, Russia (+46 tonnes), China (+35 tonnes), and Kazakhstan
(+7 tonnes) were the most active in the market, Capital Economics says. As
for why the central banks are buying, here's the research firm:
The primary driver of central banks' gold buying continues to be
diversification away from the US dollar with some also looking for a hedge
against currency volatility more generally. Indeed, historically gold is
negatively correlated with the US dollar, the main asset held by central
banks across the world, making it an effective hedge against future dollar
weakness. What's more, gold tends to have little or no correlation to other traditional
or alternative reserve assets, like government bonds.”
Jonathan Garber, China Destroys the Dollar, Business Insider
Conclusion
 Are you a blue pill person or a red pill type
of person?
The rocky shores of awake reality are far different than our political
masters, and the mainstream media, would have you believe.
What’s playing in your pod?
The ending of Fed quantifornication, the coming end to share buybacks, and
perhaps owning some gold, should be on all our radar screens, are they on
yours?
If not, they should be.
***
Richard lives with his family on a 160 acre ranch in northern British
Columbia and is the owner of Aheadoftheherd.com.
Richard’s articles have been published on over 400 websites, including:
WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette,
VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews,
Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire,
Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks,
SeekingAlpha, BusinessInsider, Investing.com, MSN.com and the Association of
Mining Analysts.
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***
Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources
he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts
no responsibility or liability as to its accuracy or completeness.
Expressions of opinion are those of Richard Mills only and are subject to
change without notice. Richard Mills assumes no warranty, liability or
guarantee for the current relevance, correctness or completeness of any
information provided within this Report and will not be held liable for the
consequence of reliance upon any opinion or statement contained herein or any
omission.
Furthermore, I, Richard Mills, assume no liability for any direct or
indirect loss or damage or, in particular, for lost profit, which you may
incur as a result of the use and existence of the information provided within
this Report.
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