Tag Archive: Bank of England

Negative and the War On Cash, Part 2: “Closing The Escape Routes”

History teaches us that central authorities dislike escape routes, at least for the majority, and are therefore prone to closing them, so that control of a limited money supply can remain in the hands of the very few. In the 1930s, gold was the escape route, so gold was confiscated. As Alan Greenspan wrote in 1966:

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Negative Rates and The War On Cash, Part 1: “There Is Nowhere To Go But Down”

As momentum builds in the developing deflationary spiral, we are seeing increasingly desperate measures to keep the global credit ponzi scheme from its inevitable conclusion. Credit bubbles are dynamic — they must grow continually or implode — hence they require ever more money to be lent into existence.

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Gold Withdrawals From The NY Fed Accelerate, Hit 388 Tons Since 2014

First it was Germany who redeemed 120 tons of physical gold from the NY Fed in 2014; then it was the Netherlands who "secretly" redomiciled 122 tons of gold; then last May, we learned that Austria would be the third "core" European nation to repatriate most of its offshore gold, held primarily in the Bank of England, redepositing it in Vienna and Switzerland.

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Does the UK Need Even More Stimulus?

“We are all Keynesians now, so let’s get fiscal.” This is one view according to Ambrose Evans-Pritchard from The Telegraph who believes the time is right for the UK government to loosen its fiscal stance. He suggests that the “Bank of England has done everything possible under the constraints of monetary orthodoxy to cushion the Brexit shock. It is now up to the British government to save the economy, and the sooner the better,” — argues the...

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FX Daily, August 19: Dollar Recovers into the Weekend

The US dollar is trading firmly ahead of the weekend as part of this week's losses are recouped. The euro is trading within yesterday's range, holding to a little more than a half-cent above $1.13. However, as we have noted, the Asia and European participants appear more dollar-friendly than Americans

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Two More Banks Start Charging Select Clients For Holding Cash

Bank of Ireland, which is 14% owned by the State, has informed its large corporate and institutional customers that it plans to charge them a negative rate of -0.1% for deposits of €10 million or more starting in October.

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Spectacular Chinese Gold Demand Fully Denied By GFMS And Mainstream Media

In the Gold Survey 2016 report by GFMS that covers the global gold market for calendar year 2015 Chinese gold consumption was assessed at 867 tonnes. As Chinese wholesale demand, measured by withdrawals from Shanghai Gold Exchange designated vaults, accounted for 2,596 tonnes in 2015 the difference reached an extraordinary peak for the year.

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FX Daily, August 16: Dollar Slumps, but Driver may Not be so Obvious

The US dollar is being sold across the board today. The US Dollar Index is off 0.65% late in the European morning, which, if sustained, would make it the largest drop in two weeks. The proximate cause being cited by participants and the media is weak US data that is prompting a Fed re-think.

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UK Imported Net 152 Tonnes of Gold in June, 68 from Switzerland

On a firmly rising gold price the UK is one of the largest net importers of gold in 2016. The gold price went up 25 % from $1,061.5 dollars per troy ounce on January 1 to $1,325.8 on June 31. Over this period the UK net imported 583 tonnes and GLD inventory mushroomed by 308 tonnes.

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Will Ireland Be First Country In World To See Bail-in Regime?

Deposit bail-in risks are slowly being realised in Ireland, after it emerged overnight that FBD, one of Ireland's largest insurance companies, have been moving cash out of Irish bank deposits and into bonds.

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FX Weekly Preview: Thoughts on the Significance of Ten Developments

The GDP deflator may be just as important as overall growth for BOJ considerations and the possibility of fresh action next month. Falling UK rates and a weaker pound are desirable from a policy point of view. Dudley's press conference may be more important than FOMC minutes. Two German state elections that will be held next month comes as Merkel's popularity has waned.

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FX Daily, August 10: FX Consolidation Resolved in Favor of Weaker US Dollar

European bourses are mixed, and this is leaving the Dow Jones Stoxx 600 practically unchanged in late-European morning turnover. Financials are the strongest sector (+0.4%), and within it, the insurance sector is leading with a 0.8% advance and banks are up 0.4%. The FTSE's Italian bank index is up 1.4% to extend its recovery into a fifth session.

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Great Graphic: Bullish Emerging Market Equity Index

Liquidity rather than intrinsic value seems to be driving EM assets. MSCI EM equity index looks constructive technically. The chart pattern suggests scope for around 13% gains from here.

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Bank of England QE and the Imaginary “Brexit Shock”

Mark Carney, Wrecking Ball. For reasons we cannot even begin to fathom, Mark Carney is considered a “superstar” among central bankers. Presumably this was one of the reasons why the British government helped him to execute a well-timed exit from the Bank of Canada by hiring him to head the Bank of England (well-timed because he disappeared from Canada with its bubble economy seemingly still intact, leaving his successor to take the blame).

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666: The Number Of Rate Cuts Since Lehman

BofA's Michael Hartnett points out something amusing, not to mention diabolical: following the rate cuts by the BoE & RBA this week, "global central banks have now cut rates 666 times since Lehman."

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FX Daily, August 04: The BOE Owns Today, but Tomorrow is a Different Story

The Swiss Franc appreciated today against the euro. Given that the Bank of England started monetary easing, this slight appreciation is unexpectedly weak - reason was probably intervention. The SNB intervention level should be around 1 billion francs. Numbers revealed in next week's sight deposits.

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Carney Gets Ahead of Market Expectations; Sterling Slumps, Gilts Soar

BOE cuts rates and expands QE. Door is open to more easing. Sterling stabilizes after selling off 2 cents.

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FX Daily, August 03: Consolidation Featured

The US dollar is consolidating yesterday's losses. The greenback's upticks have thus far been shallow and unimpressive, except perhaps against the New Zealand dollar, which is off 0.8% ahead of next week's RBNZ meeting. Softer than expected labor cost increase reinforces the conviction that a 25 bp rate cut will be delivered next week.

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No Big Thoughts, but Several Smaller Observations

Notable that as the CRB Index moves lower, MSCI emerging market equities have done well. European banks are retreating after the stress test results. Tokyo elected its first women governor as this seem to be in part a sign of protest against Abe.

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FX Weekly Preview: After this Week, Does August Matter?

RBA meeting is a close call. BOE meeting consensus on rate cut, maybe new QE and lending-for-funding. More details of Japan's fiscal policy. U.S. jobs data. After this week, and outside of RBNZ rate cut, August may be uneventful.

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