Is the Fed Resolute in This Game of Chicken?

Doug Noland and Michael Oliver return as guests on this week’s program.

The Federal Reserve has led America and the post-1971 world to the brink of global bankruptcy. It has led the world to this brink of disaster by papering over one credit cycle after another.  It has never really allowed the deflationary process to completely wash excesses of debt and mal investment of the past so that new healthy balance sheets could reemerge and an age of egalitarian capitalist prosperity could take hold again in America and beyond. Instead, it has reduced short term pain by bailing out failed companies, keeping them on life support, denying productive capital to be employed in creating “economic green shoots.” Crony capitalism has enriched a ruling elite who now uses the powers of government to deny competing ideas out of the public square and honest capital from competing against their monopolies. Given an absence of productive capital, natural laws of economics require a higher rate of interest to reach equilibrium which the Fed has so far reluctantly allowed to take place. But with a return to honest market-driven interest rates, the Zombie companies and the millions of Americans that rely on them for life support are starting to squeal in pan as they plan to charge the Fed with torches and pitchforks.

Will the Fed have the resolve to allow natural market forces to prevail or will it chicken out as the elite who created it in the first place applies pressure? Or, owing to the fragility of the existing over-indebted economic system, will an earthquake in the financial markets and economy force the Fed’s hand in either entering an even greater QE or go along with the World Economic Forum in engineering a new global currency that replaces the dollar? No one is more focused on the day-to-day global market dynamics than Doug, so we asked him for his views on those questions and more. Michael provides his usual astute momentum and structural analysis of key markets starting with the precious metals.

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Doug Noland is currently Portfolio Manager for the Tactical Short Strategy at McAlvany Wealth Management.  Previously, Doug served as Senior Vice President and Portfolio Manager of Federated Equity Management Company, overseeing the Prudent Bear Fund and Prudent Global Income Fund.  Doug served as Portfolio Manager and Strategist of David W. Tice & Associates, Inc. He served at David Tice & Associates, Inc., from 1999 to 2008. Mr. Noland was a Trader, Portfolio Manager and Analyst for short-biased hedge funds, including G.W. Ringoen & Associates, from 1990 to 1998.  He has received an M.B.A. from Indiana University and a B.S. in Accounting and Finance from the University of Oregon.

Michael Oliver entered the financial services industry in 1975 on the Futures side, joining E.F. Hutton’s International Commodity Division, NYC. He studied under David Johnson, head of Hutton’s Commodity Division and Chairman of the COMEX.

In the 1980’s Oliver began to develop his own momentum-based method of technical analysis. In 1987 Oliver, along with his futures client accounts (Oliver had trading POA) technically anticipated and captured the Crash. Oliver began to realize that his emergent momentum-structural-based tools should be further developed into a full analytic methodology.

In 1992 he was asked by the Financial VP and head of Wachovia Bank’s Trust Department to provide soft dollar research to Wachovia. Within a year Oliver shifted from brokerage to full-time technical research. MSA has provided its proprietary technical research services to financial and asset management clients continually since 1992. Oliver is the author of The New Libertarianism: Anarcho-Capitalism. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.