Janet Yellen, Chairperson of the Federal Reserve, indicated in the press interview following the recent Federal Reserve Committee meeting, it is “natural to have a wide range of views”. Her comments were made while discussing whether her fellow FED committee members shared her views of the current FED monetary policy. I suspect the FED committee members will indeed develop a wide range of views in the future when the FED attempts to unwind its unparalleled intrusion into the marketplace. The wide range of views could result in public arguments among the FED committee members at a crucial time in the future – very dangerous.

Oil prices have declined 12% since the beginning of summer driving gasoline prices lower. Lower gasoline prices put more money into the pockets of consumers – just at the right time. The all-important Holiday shopping season is around the corner. I expect this Holiday season will be stronger than previously predicted. We have raised the grade on Consumer Spending (see “Heat Map” below) to reflect this expectation.

Scottish Independence would shake up the Global system. Polls released today showed for the first time that a majority — an extremely small majority, but a majority nonetheless — of Scots favor independence. A poll is not the election which will be held Sept. 18. The political union between Scotland and England might be abolished after 300 years. The implications of this are enormous and generally ignored.

One of the principles of post-World War II was the inviolability of Europe’s borders. Border disputes were the origin of centuries of war, and so Europe’s borders were frozen after World War II to avoid discussion.

Scotland separating from England can’t be minimized. If that centuries-old union can be revised, then anything can be revised. Scottish separatists’ reason for splitting is that they are a separate nation, that each nation has the right to its own state and the right to determine its own destiny, and that they no longer choose to be in union. But if they have the right to determine this, why shouldn’t others in Europe enjoy the same right?

For example, modern Spain is an amalgam of regions. One, the Catalan region — which contains Barcelona — has a strong separatist movement. If Scotland can leave the United Kingdom, then why shouldn’t Catalonia be allowed to leave Spain? Meanwhile, if French-speaking Belgians and Dutch-speaking Belgians wish to part ways and return their two regions to their respective countries of origin, why should they not be allowed to? And why shouldn’t the eastern part of Ukraine be allowed to secede and join Russia?

Raising the stakes, this is an issue that goes far beyond Europe. There are seemingly innumerable separatist movements in India, China, Africa and so forth. If Scotland has the right to leave the nation-state it is part of and form a new one based on ethnic identity, why can’t anyone follow suit? And if anyone can do it, but they are blocked by the state they wish to leave, is resorting to violence in pursuit of independence legitimate?

Having Scottish Independence happen in the heart of Western Europe would set a clear precedent that would expand geographically and conceptually. It would legitimize similar movements globally and force a reconsideration of what a nation is. Ultimately, a nation would be whatever the majority says it is (Source: Stratfor Global Intelligence).

BEWARE! Scam artists are now posing as IRS officials and calling on the telephone. The scam artist is claiming to be from the IRS Legal Investigation Division and calling about a potential tax fraud. They sound legitimate because they use a case number (fictitious), they mention the phone call is being recorded, and when questioned will transfer you to their “supervisor”. But, it is a scam. They are attempting to obtain sensitive information about you to use against you.

The IRS does not call taxpayers on matters such as this. If you ever receive a telephone call from someone representing to be from the IRS, we recommend telling the person to send something in writing to you AND HANG UP.

In search of a “bubble”: In the year 2000, Cisco Systems (CSCO) sold for 100 times earnings and paid no dividends. At the same time, the yield on the 10 year maturity U.S. Treasury Bond equaled 6.5%. When the internet bubble burst, Cisco’s price was decimated.

Today, the 10 year maturity U.S. Treasury Bond yields a low 2.4%. Meanwhile, Cisco sells for 16 times earnings and yields 3%. Many advisors believe it is clear a bubble in U.S. Treasury Bonds has formed, and it is only a matter of time before it bursts.

Note: the statistics on Cisco are for example purposes only. This is not intended to be a recommendation to buy Cisco.

Meteorologists (and insurers) speak of the 1 in a 100 year flood. But what is happening in western economies (and Japan) is not even close to a 1 in a 100 year event. It has not happened in centuries; and, I would argue human civilization hasn’t experienced the sort of monetary conditions we now bear witness to. How and when it all ends, no honest person knows. But I strongly suspect that when it ends, it will end badly.

Here is what’s happening: Holland Interest rates are lower than any time in 500 years. That’s right -in 500 years, Dutch interest rates have never been lower. That history covers the Tudors, the Dutch 80 year War of Independence, 30 Year War (a war which claimed the lives of 25 to 40 per cent of all Germans and Bohemians), Tulip mania (and bust), three Anglo Dutch wars, the simultaneous South Sea & Mississippi bubbles, 7 Year War, empire building in the Dutch East Indies, American & French revolutions, Napoleon (when Dutch interest rates hit an all-time high), 19th century peace & prosperity, 20th century wars and Depression. Yet in our very own time, in 2014, Dutch interest rates have never been lower.

The “Heat Map” is indicating the U.S. stock market is in good shape ASSUMING no international crisis. We have identified one potential international crisis hot spot:

Iraq and the “powder keg” in the Middle East including Gaza. On a scale of 1 to 10 with 10 being the highest level of crisis, I rate this Middle East powder keg situation as a 3 at this time. This is unchanged from last week even in light of the inability to find a diplomatic solution to the Israeli/Gaza conflict. Risks continue to lurk, and they deserve our ongoing attention.

The “Heat Map” is indicating the U.S. stock market is in good shape ASSUMING no international crisis. We have identified one potential international crisis hot spot:

Iraq and the “powder keg” in the Middle East. On a scale of 1 to 10 with 10 being the highest level of crisis, I rate this Iraq situation as a 3 at this time. This is unchanged from last week even in light of the downing of the Malaysian Airlines jet and the Israeli/Gaza conflict. Risks continue to lurk, and they deserve our ongoing attention.

The “Heat Map” is indicating the U.S. stock market is in good shape ASSUMING no international crisis. We have identified one potential international crisis hot spot:

Iraq and the “powder keg” in the Middle East. On a scale of 1 to 10 with 10 being the highest level of crisis, I rate this Iraq situation as a 3 at this time. This is a decrease of 1 from last week. Risks continue to lurk, and they deserve our ongoing attention.

The “Heat Map” is indicating the U.S. stock market is in good shape ASSUMING no international crisis. One potential international crisis hot spot is Iraq. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate the Iraq situation as a 4 at this time. This is unchanged from last week. Risks continue to lurk, and they deserve our ongoing attention.