Tag Archive: central-banks

As the Controlled Inflation Scheme Rolls On

2018-01-21

American consumers are not only feeling good. They are feeling great. They are borrowing money – and spending it – like tomorrow will never come. On Monday the Federal Reserve released its latest report of consumer credit outstanding. According to the Fed’s bean counters, U.S. consumers racked up $28 billion in new credit card debt and in new student, auto, and other non-mortgage loans in November.

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Why Monetary Policy Will Cancel Out Fiscal Policy

2018-01-02

by MN Gordon

2018-01-02

Good cheer has arrived at precisely the perfect moment. You can really see it. Record stock prices, stout economic growth, and a GOP tax reform bill to boot. Has there ever been a more flawless week leading up to Christmas?

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How Uncle Sam Inflates Away Your Life

2017-11-23

by MN Gordon

2017-11-23

“Inflation is always and everywhere a monetary phenomenon,” economist and Nobel Prize recipient Milton Friedman once remarked. He likely meant that inflation is the more rapid increase in the supply of money relative to the output of goods and services which money is traded for.

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Business Cycles and Inflation, Part II

2017-11-22

by Pater Tenebrarum

2017-11-22

We recently received the following charts via email with a query whether they should worry stock market investors. They show two short term interest rates, namely the 2-year t-note yield and 3 month t-bill discount rate. Evidently the moves in short term rates over the past ~18 – 24 months were quite large, even if their absolute levels remain historically low.

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Business Cycles and Inflation – Part I

2017-11-18

by Pater Tenebrarum

2017-11-18

Incrementum Advisory Board Meeting Q4 2017 – Special Guest Ben Hunt, Author and Editor of Epsilon Theory. The quarterly meeting of the Incrementum Fund’s Advisory Board took place on October 10 and we had the great pleasure to be joined by special guest Ben Hunt this time, who is probably known to many of our readers as the main author and editor of Epsilon Theory.

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Heat Death of the Economic Universe

2017-11-12

by Keith Weiner

2017-11-12

Physicists say that the universe is expanding. However, they hotly debate (OK, pun intended as a foreshadowing device) if the rate of expansion is sufficient to overcome gravity—called escape velocity. It may seem like an arcane topic, but the consequences are dire either way.

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Federal Reserve President Kashkari’s Masterful Distractions

2017-10-09

by MN Gordon

2017-10-09

The True Believer.How is it that seemingly intelligent people, of apparent sound mind and rational thought, can stray so far off the beam? How come there are certain professions that reward their practitioners for their failures? The central banking and monetary policy vocation rings the bell on both accounts. Today we offer a brief case study in this regard.

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Hard Assets In An Age Of Negative Interest Rates

2017-10-04

by Marcia Christoff-Kurapovna

2017-10-04

Time is the soul of money, the long-view - its immortality. Hard assets are forever, even when destroyed by the cataclysms of history. It is the outlook that perpetuated the most competent and powerful aristocracies in continental Europe, well up through World War I and, in certain prominent cases, beyond; it is the mindset that has sustained the most fiscally serious democratic republic in the Western world, that of Switzerland.

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Fed Quack Treatments are Causing the Stagnation

2017-10-03

by MN Gordon

2017-10-03

Bleeding the Patient to Health. There’s something alluring about cure-alls and quick fixes. Who doesn’t want a magic panacea to make every illness or discomfort disappear? Such a yearning once compelled the best and the brightest minds to believe the impossible for over two thousand years.

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21st Century Shoe-Shine Boys

2017-09-16

by Pater Tenebrarum

2017-09-16

Anecdotal Flags are Waved. “If a shoeshine boy can predict where this market is going to go, then it’s no place for a man with a lot of money to lose.” – Joseph Kennedy It is actually a true story as far as we know – Joseph Kennedy, by all accounts an extremely shrewd businessman and investor (despite the fact that he had graduated in economics*), really did get his shoes shined on Wall Street one fine morning, and the shoe-shine boy, one Pat...

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The Government Debt Paradox: Pick Your Poison

2017-09-12

by MN Gordon

2017-09-12

“Rule one: Never allow a crisis to go to waste,” said President Obama’s Chief of Staff Rahm Emanuel in November of 2008. “They are opportunities to do big things.” At the time of his remark, Emanuel was eager to exploit the 2008 financial crisis to raid the public treasury. With the passage of the American Recovery and Reinvestment Act in February 2009, Emanuel’s wish was granted.

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How to Make the Financial System Radically Safer

2017-09-07

by MN Gordon

2017-09-07

Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments. A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders. So, too, a curious skepticism produces etched forehead lines and nighttime bruxism.

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FX Weekly Preview: Three Central Banks Dominate the Week Ahead

2017-09-04

by Marc Chandler

2017-09-04

Following strong Q2 GDP figures, risk is that Bank of Canada's rate hike anticipated for October is brought forward. ECB's guidance to that it will have to extend its purchases into next year will continue to evolve. Among Fed officials speaking ahead of the blackout period, Brainard and Dudley's comments are the most important.

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Yanking the Bank of Japan’s Chain

2017-08-13

by MN Gordon

2017-08-13

Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation. The social safety nets of industrialized economies, including the United States, have frayed at the edges. Soon the safety net’s fabric will snap. This recognition is not an opinion. Rather, it’s a matter of basic arithmetic. The economy cannot sustain the government obligations that have been piled up upon it over the last 70 years.

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Adventures in Quantitative Tightening

2017-07-18

by MN Gordon

2017-07-18

All remaining doubts concerning the place the U.S. economy and its tangled web of international credits and debts is headed were clarified this week. On Monday, Mark Yusko, CIO of Morgan Creek Capital Management, told CNBC that:

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How Dumb Is the Fed?

2017-07-15

by Bill Bonner

2017-07-15

Bent and Distorted. POITOU, FRANCE – This morning, we are wondering: How dumb is the Fed? The question was prompted by this comment by former Fed insider Chris Whalen at The Institutional Risk Analyst blog.

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No “Trump Bump” for the Economy

2017-07-14

by Bill Bonner

2017-07-14

POITOU, FRANCE – “Nothing really changes.” Sitting next to us at breakfast, a companion was reading an article written by the No. 2 man in France, Édouard Philippe, in Le Monde. The headline promised to tell us how the country was going to “deblock” itself.

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Tales from the FOMC Underground

2017-07-11

by MN Gordon

2017-07-11

Many of today’s economic troubles are due to a fantastic guess. That the wealth effect of inflated asset prices would stimulate demand in the economy. The premise, as we understand it, was that as stock portfolios bubbled up investors would feel better about their lot in life.

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Dudley in a Good Place

2017-06-27

by MN Gordon

2017-06-27

Unemployment Versus Participation Rate, 1970 - 2017

Dear Mr. Dudley, Your recent remarks in the wake of last week’s FOMC statement were notably unhelpful. In particular, your explanation that further rate hikes are needed to prevent crashing unemployment and rising inflation stunk of rotten eggs.

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Great Graphic: Fed, ECB, and BOJ Balance Sheets

2017-06-23

by Marc Chandler

2017-06-23

This Great Graphic composed on Bloomberg shows the balance sheets of the Federal Reserve, the European Central Bank, and the Bank of Japan as a proportion of GDP.

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