Tag Archive: Central Bank

Here are three things you can learn from the Fed

Anyone who has decided to buy gold, or follows the gold price will be aware of how powerful the US Federal Reserve is. This year the Federal Reserve will turn 110 years old, only in recent years is dollar hegemony appearing to falter. Below we look at the central bank’s origins and three lessons we can learn from the history of the world’s most powerful bank, in order to help our investment decisions in 2023.

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Ben Bernanke Wins Nobel Prize for Kicking Can Down the Road!

So Ben Bernanke has won a Nobel Prize for kicking a can down the road!Many will have heard the saying ‘those who do not learn from history, are doomed to repeat it’. It is often attributed to Churchill, but he was in fact quoting George Santanya. We prefer the Stephen Hawking quote, ‘“We spend a great deal of time studying history, which, let’s face it, is mostly the history of stupidity.” as this feels more apt in this day and age. 

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Ed Steer Gold And Silver – We Ain’t Seen Nothing Yet!

Our guest this week is Ed Steer, expert gold and market analyst and author of the Gold & Silver Digest. We invited Ed onto GoldCore TV to get his take on what is concerning him most in financial markets, movements in SLV and sanctions against Russia. He also draws our attention to central bank purchases of gold.

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We Didn’t Print Money… Honest We Didn’t And More Baseless ClapTrap from Central Banks

One of the reasons people choose to invest in gold bullion or to buy silver coins is because they are simple and they are finite; basically the opposite of fiat currency. The complexity of fiat-driven markets and infinite possibilities to create money works to the advantage of central banks.

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When markets forget that Central Banks cannot fix the world with interest rates

It would be easy for those who have decided to buy gold and silver bullion to lose heart over the precious metals, had they seen how prices reacted to Chairman Powell’s comments, last week.

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A muddled message from The Fed

If you have decided to buy gold bullion or to buy silver coins in the last few months then you may have been delighted with how last night’s Fed press conference went.

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Episode 2 of The M3 report with Marc Faber

Inflation! Trading Places! Marc Faber! Chart Watch! That’s right, it’s episode two of The M3 Report. 

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Central Banks…Why Bother?

Central banks…why bother? Inflation is here and it cannot be contained. US inflation is touching a 40-year high, the UK has hit the 40-year high, and the EU’s has already hit an all-time high.

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Gold Price News: Gold Down 1% in Wake of More Hawkish Federal Reserve Meeting Minutes

Gold price fell to $1,808 an ounce in the wake of the release of the minutes of the December Federal Reserve meeting, having hit an intra-day high of $1,829. Silver price fell to $22.72 an ounce from an intra-day high of $23.26.

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“Monetäre Staatsfinanzierung mit Folgen (Monetary Financing of Government),” Die Volkswirtschaft, 2020

Die Volkswirtschaft, 24 July 2020. PDF. Clarifying the connections between outright monetary financing, QE, the distribution of seignorage profits, the relationship between fiscal and monetary policy, and central bank independence.

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“Wenn die Notenbank den Staat finanziert (When the Central Bank Finances the State),” FAS, 2020

Monetary deficit financing is the norm—after all, central banks distribute their profits. Monetary financing occurs in the context of regular open market operations and QE and, hyper charged, with helicopter drops. The question is not whether monetary policy should finance the government, but why it does so, and to what extent. Fiscal and monetary policy are inherently connected; what constitutes monetary policy is defined by objectives.

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A Wealth Tax Consumes Capital, Report 6 Oct

It seems one cannot make a name for one’s self on the Left, unless one has a proposal to tax wealth. Academics like Tomas Piketty have proposed it. And now the Democratic candidates for president in the US propose it too, while Jeremy Corbyn proposes it in the UK. Venezuela finally added a wealth tax in July.

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GDP Begets More GDP (Positive Feedback), Report 30 June

Last week, we discussed the fundamental flaw in GDP. GDP is a perfect tool for central planning tools. But for measuring the economy, not so much. This is because it looks only at cash revenues. It does not look at the balance sheet. It does not take into account capital consumption or debt accumulation. Any Keynesian fool can add to GDP by borrowing to spend. But that is not economic growth.

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Is Capital Creation Beating Capital Consumption? Report 3 Mar

We have written numerous articles about capital consumption. Our monetary system has a falling interest rate, which causes both capital churn and conversion of one party’s wealth into another’s income. It also has too-low interest, which encourages borrowing to consume (which, as everyone knows, adds to Gross Domestic Product—GDP).

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Central Planning Is More than Just Friction, Report 17 February

It is easy to think of government interference into the economy like a kind of friction. If producers and traders were fully free, then they could improve our quality of life—with new technologies, better products, and lower prices—at a rate of X. But the more that the government does, the more it burdens them. So instead of X rate of progress, we get the same end result but 10% slower or 20% slower.

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Are Stocks Overvalued, Report 24 Dec 2018

We could also have entitled this essay How to Measure Your Own Capital Destruction. But this headline would not have set expectations correctly. As always, when looking at the phenomenon of a credit-fueled boom, the destruction does not occur when prices crash. It occurs while they’re rising.

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“Vollgeld – Was spricht dagegen? (Sovereign Money—What are the Problems?),” RABE, 2018

Die Vollgeld-Initiative will die Schweizer Geldpolitik komplett umkrempeln. Künftig soll nur noch die Nationalbank Geld herstellen dürfen, sowohl Banknoten und Münzen als auch das elektronische Geld. Die Schweizer Geschäftsbanken wie die UBS oder die CS, die heute 90% des elektronischen Geldes herstellen, soll das künftig verboten sein.

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“Was Vollgeld bringt – und was nicht (Sovereign Money—Pluses and Minuses),” SRF, 2018

Wer soll Franken herstellen dürfen? Nur die Schweizerische Nationalbank, oder auch die Geschäftsbanken wie UBS, CS oder die Kantonalbanken? Ginge es nach der Vollgeld-Initiative, über die wir am 10. Juni abstimmen, wäre künftig klar: Geld als gesetzliches Zahlungsmittel gäbe es nur von der SNB.

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In Unprecedented Intervention, Swiss Central Bank Bails Out Firm That Prints Swiss Banknotes

  In the most ironic story of the day, the company that makes the paper that Swiss banknotes are printed on was just bailed out by the money-printing, stock-purchasing, plunge-protecting, savior-of-global equities…Swiss National Bank. While The SNB has a long and checkered history of buying shares in companies… as we have detailed numerous times.

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SNB: It’s A Bonfire Of The Absurdities

This week’s letter will take a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week.

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