Rising Stock Market False Positive-Yra Harris

Yra Harris: Rising Interest Rates, Capital Controls and MoreBy Greg Hunter’s USAWatchdog.com 

Renowned commodity trader Yra Harris says forget about talk of the Federal Reserve “tapering” money printing.  The real problem is the $3 trillion of junk the Fed has already bought.  Harris says, “So you are going to allow $3 trillion in cash the Fed created to sit out there in the economy?  That would be phenomenally inflationary.”  Harris thinks the Fed might make the banks hold much of that money to “slow the velocity.”  Harris thinks the Fed has just “bought time” and goes on to say, “Has Congress really gotten their act together? . . . They sit back and say the stock market is going up.  I don’t have a problem.  That’s a false positive if I’ve ever seen one.”  Harris contends, “This doesn’t end pretty.  They have to recreate the bubble that got you here in the first place.  At some point, the market is going to exact its price.”  That “price,” according to Harris, is going to come in the form of “capital controls and rising interest rates.”  Join Greg Hunter as he goes One-on-One with legendary trader Yra Harris.

Comments
  1. Liquid Motion

    Greg,

    Great Interview. Insightful and timely. Nothing beats reality.

    You pressed hard on a number of points….which Yra attempted to resolve. You did get some absolutes out of him, which you are to be commended on.

    IMO…There will be no tapering ..unless they (FED) want instant bankruptcy/insolvency of the USA Govt. Money printing = Bonds = Interest rates. It must keep the cycle going at least until they are forced to make some changes. Its not about the long end of the curve …it simply is that formula.

    Let them mature (Bonds/Treasuries)…as the FED solution to the 3TLN being carried on the B/Sheet. Sure they can keep playing the rollover game and devalue the currency to ZERO in the process. What better way to repay debt with worthless paper. OR They could repudiate the debt. A debt jubilee not only in the USA, but globally that is.
    Communist Russia and Poland have done it to avoid repressing its citizens. Even America has had a tradition of Debt repudiation (1840’s / 1870’s). There may come a time when this needs to be re-visited. Not for further dialogue…but for solid action. Perhaps what might draw us all to this inevitability, is anarchy and the throwing out of the Elitist controllers in government and fraudsters in Crony Capitalist Businesses that through their actions and continued malfeasance, caused the financial world to be in state of such imbalance and uncertainty that it cannot function properly nor gain positive momentum. Time is indeed being wasted. Time will not cure these wrongs nor make them right. The central planners and the system that they control, are the prerequisites for change, to allow a cleansing process. As we advance towards this black hole we will find that the desperate Governments of the World will perform even more desperate acts. That is when there will come an uprising.

    On the “Buying time vs making worse” point. “Buying time” has been the phrase that even I have used to clarify the actions of the central planners in the faint hope that with time there comes resolution. Yra rightly suggests that there is some degree of stabilisation we are witnessing. But this has not fixed the problem. As for making it worse, there is an assumption that we should let them all fail/or some of them. Sure let them fail – so that they take their medicine /losses. This may have more merit than with the casualness of the comment is made. Losses will come BUT “Bail-Ins” are part of that future. At this juncture we must keep the Lehman event in perspective. Just one bank. Consider the pain and destruction it caused. There are other alternatives to this destructive process. No-one wants to go through a Lehman x 100 event. Life is too precious to be wasted in some concentration centre which you happen to be sharing with 1MLN others all in the same boat. Losses will come and the pain will be shared across the spectrum of investor/account holders.

    You cannot hide in stocks nor bonds nor cash.
    They are all distorted with fiat currency (printing).
    A well known Financial advisor says that the financial world is demonstrating that Hyperinflation is creeping up subtly. None more evident than the inflated stock markets.

    Its not about Congress getting their act together to resolve the financial/debt problems…The System is set up to hinder/mask/disguise the actions of government/politically powerful bodies/agencies, make them opaque and protect the powerful wrong-doers, whilst crucifying the hardworking middle class. The inequality is palpable.

    Yra has his opinion on EUR (failure).I don’t agree.
    On a lot of metrics it remains a stronger proposition than the USA today.
    Japan’s economy will crash (it in fact will fail first). There is no concern over the manufacturing loss Germany will suffer (ECB haven’t even started the OMT yet). Japan is outdoing the US whilst China is a rank outside forth place behind the UK(in devaluation…destruction).

    Everyone needs to adjust their speed dials, things will start to accelerate from here. If history is any guide, we can expect that the decision makers will not be timely in their process.

    • Greg

      Liquid Motion,
      Thank you for your analysis!!
      Greg

  2. Anne Elliott

    Good interview, Greg! People always say how well the stock market is doing, and they forget, like Yra said, that there will always be pension funds buying while the interest rates are so low. Just think what will happen to all those funds if the stock market does crash (sorry, has a “correction”, as they say). Those pensioners (including many in my family) will be hurting even more than they are now. My great Uncle Mahlon was a very wealthy man who had all of his stocks disappear overnight during the Great Depression. He ended up having nothing and lived with his sister and her family… Eventually he left them and became a vagrant because he didn’t want to take food from his little nieces’ and nephew’s mouths. America has been so spoiled with good times for so long now, that no one can imagine anything different, just like Uncle Mahlon. Get ready, people. Everything goes in cycles, and the down turn is overdue; as Greg and Yra have said, nobody in government has done anything to fix the problem with the time that’s been bought, so we need to be prepared for the worst.

    • Dwain

      But this time is different. During the depression we still had manufacturing. We did not have the enormous debt. There were not as many people and those people were real Americans. The economy was not dependent on disease, drugs, crime, government, consumption, etc. and debt to pay for it. Like Peter Schiff said, 08 was not corrected but just put off and made much worse. The coming collapse will make 08 look like a picnic.

      The only difference between the carnival ship and US state ship is the fed boat will be unable to rescue when economic engines blow again. Like 9/11 the economy got hit, is now burning with paper fuel and when economic beams give, momentum will bring all sectors down.

  3. tim

    There are only three websites which I may watch daily, USAWatchdog is one of them. Thanks for the great work.

    Please.
    Let your guest speak, don’t interrupt them, and again, please, don’t put so much of your own speak into the conversation. Keep your questions short and to the point, let them talk, that is why you got them on your program in the first place. I hope you take this well.

    I, we enjoy your program. Your program fills in the blanks of what is going on in the U.S. and the world at a time when its difficult to get good information. Keep it up.

    Sincerely,
    Tim Perales

  4. Al

    From listening to Mr. Harris for a few moments, I get the feeling he hopes things will get better somehow. Maybe his mind won’t let him see how much trouble the system is in and maybe the fed can fix it. Maybe if Mr. Harris were to read the report William Kaye just wrote for King World News yesterday of how the federal reserve has been helping these criminal banks rape the gold market as the financial system implodes. It’s a criminal syndicate running our globe and nobody wants to see the truth, or stop it. Greg Hunter tried to pry the stark reality out of Mr. Harris to little or no avail. Old men have clay feet———

  5. Jerry

    Greg this was a good interview. Unfortunately I disagree with Mr. Harris assessment of the economy. We did not avoid a depression in 2008 by the bailouts “we delayed it”. I would really like someone to explain to me how we get out of this 17 trillion dollar debt bubble we’re in without someone getting hurt? Its good to be positive, but come on the economy hasn’t gotten any better. GDP 2.8 when it should be in the 7.5 range. The un-employment figures do not take into consideration those that have given up and resorted to living off the welfare state. When simply don’t have the tax dollars to pay off the debt we’ve created to sustain the economy. From my perspective, if The Affordable Care Act stands, you will see massive unemployment next year as employers trim their payroll status to get below 50 employee’s to avoid the IRS penalties. It doesn’t set to well with me to know that we are going to turn our Health Care System over to the IRS (hiring 58,000 auditors) with the tactics they were using on the Tea Party members the last two years.
    Like Betty Davis used to say, “buckle up folks its going to be a bumpy ride”! Again Greg thanks for your interview.

  6. Hoppe

    Yra seems to have the best grip ( now) on the Fed and their actions of anyone I have heard.I enjoyed listening to him, in spite of your numerous efforts to put words in his mouth about some impending disaster ( which you have been talking about since 2010). Greg you should go back and watch your own interview again. Don’t be so desperate for the big one. Guys like Yra have done great in the last several years for his clients, due to the Fed policies and his understanding that there is a gradual unwinding of the economy and only those people willing to take risk and borrow cheap money to bet with will prosper. The rest, hiding in their bomb shelters for the doom of next week will be the big losers- due to inflation.

    You mention the Bible. Yes, it propheses doom and says no one will know when it comes, like a thief in the night. I don’t think you have an inside track there.

    I’m all in since the “fiscal cliff” turned out to be another “millenium scare”. Look what companies that borrow cheap from the Fed banks have done for their ivestors like me; MITT, AGNC, GGT.

    I’m not sure what you point is anymore. BTW, my name is Hoppe. ( family name) And am a grey haired old man. You figure it out.

    • Greg

      Hoppe,
      Well, I guess everything is under control. So, we can stop the phony accounting (FASB 2009) and knock off the $85 a month and shut down the dollar swaps with Europe. I hope you continue make lots of money off the continuing bailouts and enormous unprosecuted criminal activity of Wall Street bankers. (HSBC money laundering, foreclosure fraud, perjury, forgery, securities fraud of MBS, rate rigging of LIBOR, market manipulation of gold, silver, energy, stocks and interest rates.) Are you getting my point now? Thank you for your comment.
      Greg

    • droidX-G

      Good luck being all in. I am happy not to be.become

  7. Farley

    Excellent exchange Greg.
    I enjoyed listening to Yra’s viewpoints.

  8. AndyB

    Connecting all the dots, the end game will be far worse than Yra expects. There will be bank bail-ins (i.e. theft), pension reconfigurations (but only to the benefit of banks and their puppet governments), bank closures, riots, martial law, and then the ultimate totalitarian state. We let it happen since 1913, a very pivotal year.

  9. Scott R

    Good interview, however, when asked the question about what the end will look like on more than one occasion, Yra never would answer the question other than it will end badly. Nor would he go down the path of whether or not someone ultimately must take a loss. You’ve been interviewing some very interesting guests, keep them coming.

  10. Jerry

    Greg I hated to post again, but after reading some of the comments I had to. I have just two questions for some people who keep trying to cast you as chicken little.
    1. How do we get out of this 17 trillion dollar debt bubble we’re in without a financial collapse?
    2. If things are really that great don’t you think the Feds would quit printing $85 Billion dollars a month.

    I’m as positive as the next guy. But I can’t seem to come up with answer for either of these questions. 50 million people are living off the government and another 50 million people are working for it, so I simply can’t see where the government is going to come up with the tax money to help pay it off when they are busy spinning policies and regulations to kill business. I’m I wrong here Greg?

  11. josh

    mr. harris is a very smart guy who has done his homework for sure. i think if you parse what he is saying, he’s not without sympathy to the fed’s position. his point is that the central bankers are trying to buy time for the policy makers to fix things but nobody is fixing anything so it’s bound to end badly. i believe he’s saying that monetization is terrible but the alternative may be worse.

  12. steve

    Greg,
    I’ve read and listened to a lot of commentary concerning our current situation. There has been much speculation as to the direction in which we are heading. Sometimes the best way to understand the future is to look to the past. There are two great books that can explain where we have been, where we are, and where we are going. They are “When Money Dies” by Adam Fergusson, and “Fiat Money Inflation In France” by Andrew Dickson White. A quote from the latter, “Before the end of the year 1795 the paper money was almost exclusively in the hands of the working classes, employees and men of small means, whose property was not large enough to invest in stores of goods or national lands. [69] Financiers and men of large means were shrewd enough to put as much of their property as possible into objects of permanent value. The working classes had no such foresight or skill or means. On them finally came the great crushing weight of the loss. After the first collapse came up the cries of the starving. Roads and bridges were neglected; many manufactures were given up in utter helplessness.” Sounds familiar. After each round of money printing, QE, or monitization, there followed a short period of prosperity and hope–a hope only to be dashed by the next deeper downturn. Throughout history knowledge and technology has changed, but not human nature,–that’s why we will repeat it. If you have not already, please familiarize yourselves with these writings. The story has already been written even though the ending is not what we had hoped.

  13. LPearce

    Greg, thanks for another insightful interview and all that you do. When Kevin Walsh (who conspired with Hank P and Tim G to sell the TBTF lie) says the central bankers role is to buy time for “policy to work” it is the unstated policy of wealth transfer/theft from the public to the insolvent banks.

    • Greg

      LPearce,
      Very good point sir!!! Thank you for making it here.
      Greg

  14. Shawn in San Jose

    I liked the interview but agree with Jerry. We avoided a Global Depression for now. But by kicking the can down the road and not taking losses all we have done is make the inevitable Depression that is coming worse. Lets not forget it took 10 years after the stock market crash in 1929 for the world to finally be plunged into Global War. I’m not saying thats what will happen but I think we shouldn’t be surprised if the worst possible outcomes of the 2008 crisis take a 10-15 years to unfold.

  15. Liquid Motion

    Greg,

    I want to add another observation.

    The world in which we live in, is now a fully blown Global Ponzi Scheme.
    Money printed out of thin air to be lent at no cost to insiders who leverage the “thin air” with even more thin air and extend the debt cycle (indefinitely). In the process of extending lines of credit, the beneficiaries(banks) are able to collateralise the debt by taking hard assets as security. Here’s the rub: When the debt is eventually called in, we have a transfer of wealth (hard assets) to the banks.
    Money created from nothing in fact has been acquiring real assets. This is the biggest BANK heist the world will ever experience. Except,the BANKS are the ones doing the stealing. They are systematically destroying our economies to the point of forcing everyone to suffer. Ultimately, the debt becomes unserviceable and assets are foresaken at a fraction of their intrinsic values.
    We all know about booms and busts and cycles. The ones ahead of the curve are the ones who “make a killing” aka Smart Money. The ones who trust their financial advisors and banks…aka “Dumb Money” will always be the losers. What we have is now a series of mini booms (since 2008). Each one ends with a correction. But we dont achieve any desirable progression in debt resolution, we just become more complex and introverted.
    A good example of creating a fabrication for financial reward can be found in the Gold/Silver manipulation. When a non-Govt body (FED) can allow a member bank to deal with a fabricated quantity of a precious metal in order to create distrust and price suppression, with the ultimate aim to create a lower price to facilitate “A Transfer of Wealth”, then we are all a witness to the crony system which has no morals or ethics.
    Nothing is any different with interest rates, stock prices and even bonds. Forget about real estate and the Dollar.

    The system is created by the same thieves who benefit from it (that includes corporates). It does not get any better for them..but it does get a lot worse for us because we are the ones that are trapped in the system. Our lives revolve around and are fully exposed to the inefficiencies and inequalities of the financial system. We really are at their mercy. In a quest for sense and sensibility one may be fully tested on their psychological strength. If you arent playing the game with the controllers, you will lose.

  16. Nathan

    I just have really quick point that’s a little off the subject . For sometime now I’ve noticed that Wall St. (Who is usually jittery over spilled milk in Iowa ) is acting as if absolutely nothing is going on in the Middle east . Keep ALL eyes on Iran after the elections (which I believe are 7 weeks away ) If they put another hardliner in office I think it’s game on for Israel because they are running out of time .

    Good job as usual .

    • Greg

      Nathan,
      It is very dicey over there and out eye is off the ball and looking in the bleachers!!
      Greg

  17. jc davis

    Greg I fail to understand how anyone could invest in a rigged / fraudulent system proven to be set up for legalized thieves. As my deceased dad would say never bet against a machine that backs up in a corner and challenges the whole world. One should ask how can gold be in such great demand, and gold miners cant sell it high enough to stay open ? In every thing demand should set the price..So many question with so little truth in our system. thanks.

  18. Robert Burke

    The most likely next big trend, in my view, is deflation, or falling price levels. I believe deleveraging, or the elimination of debt either through repayment or bankruptcy, will lead to deflation.

    History shows that a debt bubble followed by a credit crisis leads to a deflationary recession or depression, and a major secular bear market.

    In my view, it is the overwhelming force of the debt deleveraging that has overcome government efforts to inflate.

    Gold and commodities are clearly indicating this trend.

    • Greg

      Robert,
      Really? You are using history when what is happening now has never happened before. Please account for the $12 trillion in liquid U.S. dollar assets held outside the country. What does history say about that? How about the $700 trillion in derivative contracts with no guarantee, no standards and public market. (Many say the real size is twice that much.) No history there either, is there? You are applying historical metrics to something that has never before. I have asked you this before and I really want to know your background. You have given me nothing. You see, I just want to make sure you are not a Wall Street wonk or someone working for the government spreading disinformation. You are a smart guy and we just want to know who you are. You should be able to give me that. Thank you.
      Greg

      • Robert Burke

        I am not an American, I have no affiliation to any Government funded organization in the U.S.A. I have no financial affiliation to any Bank or Financial institution in the the U.S.A.

        My opinions are my own. Just because my options differ from most on this site does not make me immediately subject to unfounded suspicions, but I understand your point of view.

        Thanks for letting me post.
        Robert

        • Greg

          Thank you Robert. Post away.
          Greg

  19. Mark

    I’m afraid Mr. Harris is a part of the Wall Street guard who made their money not fighting the Fed. That conditioning runs deep and has always been very profitable for them. I was not surprised to hear anything contrary from him concerning the omnipotent power of the Fed to cure all and avoid anymore calamity. Unfortunately, today is not the postwar, nor 15th century times when the solution he mentioned (financial repression of interest rates, as he termed it) to buy time seemed to work (with emphasis on seemed).

    Clearly, postwar the US was in an enormously strategic position. With it’s economy intact (and the world’s destroyed), a huge hoard of gold, little private debt, and enormous pent-up demand both at home and eventually abroad, the enormous public debt caused by the war was not an issue. In the 15th century, other than war mongering sovereigns, there wasn’t much debt (as we know it today) to speak of – after all usury was a crime. Clipping coins main purpose was to enrich the sovereign’s coffers at the expense of the peons.

    However, today we see that the world has reached the limit on debt service and creation. ZIRP is required to prevent outright collapse of the global banking system and hence, governments. Money creation is to provide funds for the banking system to game the market – commodity, credit and equity any way they see fit. To the central banker, this strategy has helped cure damaged balance sheets in the past, even though their main business, lending, was in the dumps.

    The problem is though, buying time isn’t working this time because there hasn’t been, and most likely won’t be, a sustained economic recovery. A global downturn seems to be in the cards. QE is not helping main street – but how can it, when a significant segment of the population is burning through capital just to survive because of stolen income via ZIRP. Investment equals savings, if I recall. All recoveries can only be sustained with real, productive business investment. Also, I would suggest that real unemployment (taking into account underemployment) is probably closer to the 25 % mentioned by Mr. Harris. The official number is an artificial number, I think, when compared against the employment participation rate.

    So how can you sustain increasing debt load with no income growth? Even with Zirp, eventually the debt load gets so big it overwhelms the economy. Look at Japan. A small increase in interest rates will cause interest to rise to a level that will consume the entirety of the government’s budget.

    Therefore, it is hard to imagine that this can go on much longer before they opt for the nuclear option, both in Europe and at home, here – NIRP (negative interest rate policy). Then they’ll get their inflation and nominal growth. They’ll destroy the bond market and dollar too, but they will get what they want.

  20. Troy

    Not sure if I’m listening to cognitive dissonance, or self centered spin, micro gain at a macro net loss. A giant sucking sound. Which side of the mouth is talking here? “That’s why we are going global” Germany, Germany, Germany…Forget Europe..what? Thick as a B.R.I.C.S. They did this after WWII hello!… the US was the world manufacturing giant and leader in real commodity holdings. Paper commodity trader?

    BEST QUOTE “At least they kept unemployment under 25%” It’s now at 23% So have a parade and 46 million take their food stamps to buy more koolaid?

    The loss of the too big to fails, admittedly will be sifted to the tax payers. 211T No Problem there.

    Greg, I guess I’m just not edumacated enough to fully embrace that which your far more intellectual super charged guess is selling.

    Back to the bomb shelter. Re assuming fetal position ;)

  21. Robert Burke

    The sum up the state of the world economy as a whole, the latest Brookings Institution- Financial Times tracking index of global recovery found it remained “stuck in a rut, unable to sustain a decent recovery and susceptible to a sudden stall.”

    The fall in the gold price is the first indication of a deepening slump. It will also set in motion a new round of financial crises when major investors get caught on the wrong side of its gyrations. And the sudden rush for the exits out of gold, producing the very sharp falls of the last few days, may well be pointing to a similar exit from equity and other markets this year.

    • Greg

      Robert,
      There is a big distinction with your term “sudden rush for the exits out of gold.” Please note that rush is out of paper contracts. China, last month alone imported more than 200 tons of gold. All the BRICS are doing the same thing.
      Greg

      • Robert Burke

        World Gold Council report showing that total demand for gold fell 13% in the first quarter, to a three-year low of 963 tons in the period. The decline was driven by investors yanking money out of gold-backed exchange-traded funds, and those redemptions have accelerated since March, according to ETF Securities, an ETF sponsor and data provider.

        The redemptions have resulted in a decline in total gold ETF holdings of 380 metric tons, to the lowest level since July 2011, according to ETF Securities. That decline is more than the combined annual gold production of the U.S. and Canada. To compare, 279 tons of gold flowed into ETFs in 2012, according to the World Gold Council.

        The selling by ETFs outweighed a rise in demand for jewelry, bars and coins, the council said in its report.

        • Greg

          Robert,
          They are selling paper gold. Even Terrence Duffy, head man at CME recently said, “They Don’t Want Certificates, They Want the Real Product!.” Selling paper ETF’s and naked short selling at the COMEX and LBMA is not selling real gold. The gold that is sold out of the ETF’s is ending up in China and other BRIC nations. Please stop with this nonsense and spin.
          Greg

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