Tag Archive: Federal Reserve

FX Weekly Preview: Yellen Pushes Divergence Front and Center

2016-08-28

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2016-08-28

The summer dynamics of the capital markets has changed by the enhanced prospects of a Fed hike. Equity markets and other risk assets look particularly vulnerable. Sterling may do better against the euro than the dollar.

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Weekend Reading Negative Rates: The Coin Flip Market

2016-08-26

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2016-08-26

As summer begins to fade, and kids return to school, the focus once again turns to the annual event of Central Bankers in Jackson Hole, Wyoming. However, if you only looked at the market as a gauge as to the excitement of the event, well it must have been one pretty boring after-party.

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End of Bretton Woods: A Date Which Will Live in Infamy

2016-08-24

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2016-08-24

Franklin Delano Roosevelt called the Japanese “surprise” attack on the U.S. occupied territory of Hawaii and its naval base Pearl Harbor, “A Date Which Will Live in Infamy.” Similar words should be used for President Nixon’s draconian decision 45 years ago this month that removed America from the last vestiges of the gold standard.

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Great Graphic: GDP Per Capita Selected Comparison

2016-08-24

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2016-08-24

US population growth has been greater than other major centers that helps explain why GDP has risen faster. GDP per capita has also growth faster than other high income regions. The US recovery is weak relative to post-War recoveries but it has been faster than anticipated after a financial crisis and shows little evidence of secular stagnation.

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Effective Fed Funds and Money Markets

2016-07-21

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2016-07-21

Fed funds have been trading firmly. There are several reasons and one of them is the shift that is taking place in the US money markets. Still the risk of a Fed hike has increased, just as speculation increases of easing in other major centers.

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The Curious Case of Vanishing Lady Liberty; Only Gold and Silver Remember Her

The very first word anyone ever saw on a circulating United States coin was the word “LIBERTY.” From half-cents to silver dollars, each featured the likeness of an unnamed woman. The images varied, thanks to different engravers, but together they became recognized as Lady Liberty. Many, maybe most, of young America's citizens were illiterate. "Liberty" may have been the first word they ever learned to read.

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“It’s Prohibited By Law” – A Problem Emerges For Japan’s “Helicopter Money” Plans

2016-07-14

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2016-07-14

Over the past four days, risk assets have been on a tear, led by the collapsing Yen and soaring Nikkei, as the market has digested daily news that - as we predicted last week - Bernanke has been urging Japan to become the first developed country to unleash the monetary helicopter, in which the central banks directly funds government fiscal spending, most recently with an overnight report that Bernanke has pushed Abe and Kuroda to sell perpetual...

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Stockman Rages: Ben Bernanke Is “The Most Dangerous Man Walking This Planet”

2016-07-12

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2016-07-12

Ben Bernanke is one of the most dangerous men walking the planet. In this age of central bank domination of economic life he is surely the pied piper of monetary ruin. At least since 2002 he has been talking about “helicopter money” as if a notion which is pure economic quackery actually had some legitimate basis.

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The Gold Standard: Friend of the Middle Class

2016-07-07

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2016-07-07

A Morally and Economically Superior Monetary System. It has been theoretically demonstrated and seen in general practice that a monetary system of 100% metallic money devoid of central banking checks monetary inflation, prevents a general rise in the price level, and eliminates the dreaded business cycle while making all sorts of monetary mischief nearly impossible.

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ETF Securities Reports Biggest One-Day Gold Inflow Since Financial Crisis

2016-07-04

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2016-07-04

It never ceases to amaze how vastly different the investment styles of gold paper vs physical traders are: while we have documented previously how the latter tend to buy progressively more the lower the price (as traditional "buy low, buy more lower" investing would suggest), "investors" in gold paper-derivatives such as ETFs and ETPs are quite the opposite: in fact, they rarely buy until someone else is buying and generating momentum.

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The British Referendum And The Long Arm Of The Lawless

2016-06-23

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2016-06-23

Kings have long arms, many ears, and many eyes.” So read an English proverb dated back to the year of our Lord 1539. And thus was born an idiom that today translates to the very familiar Long Arm of the Law. It stands to reason that such a warning was born of feudal times when omnipotent and seemingly omnipresent monarchs personified the law.

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Bullard’s New Paradigm and the Federal Reserve

2016-06-20

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2016-06-20

There is much to like in Bullard's new paradigm. The problem is that it does not reflect the Federal Reserve's view or approach. Policy emanates from the Fed's leadership, but be confused by the noise.

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US Negative Interest Rate Bets Surge To Record Highs

2016-06-17

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2016-06-17

As the "deflationary supernova" sweeps across the world, dragging bond yields to zero-and-beyond, even the almighty omniscent Federal Reserve has been forced to capitulate as the 'cheapness' of Treasury bonds lures the world's yield-hunters dragging ...

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Macro Thinking: FOMC, USD, and EU

2016-06-16

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2016-06-16

The Federal Reserve modified its stance yesterday without changing rates.  It is not just about how fast the Fed sees itself normalizing monetary policy but also where the level of the equilibrium rate. The FOMC statement, but especially the officials’ forecasts (dot plots) effective unwound the impact of the earlier Fed talk of the likely …

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FX Daily, June 15: Key Data and FOMC

2016-06-15

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2016-06-15

The Swiss Franc was today on the back-foot against the euro, while the FOMC helped him to rise against the dollar. Yesterday Swiss producer prices were published. Negative changes in producer prices in 2015 reduce the Swiss franc overvaluation in terms of the Real Effective Exchange strongly. Now, however, changes producer prices are approaching zero again.

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Fed Softens Stance Slightly

2016-06-15

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2016-06-15

The immediate reaction was driven by the Fed's dot plots.  Although the median continues to expect two hikes this year, six officials now see only one hike.  Only one official anticipated one hike this year in the last forecasts made in March.  The m...

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Central Banks & Governments and their gold coin holdings

2016-06-13

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2016-06-13

While this is true in some cases, it is not the fully story because many central banks and governments, such as the US, France, Italy, Switzerland, the UK and Venezuela, all hold an element of gold bullion coins as part of their official monetary gold reserves.

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FX Weekly Preview: Four Central Bank Meetings and More

2016-06-12

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2016-06-12

A couple of weeks ago, the four central banks that meet in the coming days were thought to be a big deal.  Numerous Federal Reserve officials were preparing the market for a summer hike. Risks of a new downturn in Japan spurred spe...

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Brexit: Switzerland Prospers outside the EU, why Can’t the UK?

2016-06-10

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2016-06-10

As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly...

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Presidential Elections and Fed Policy: How Close is Close?

2016-06-09

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2016-06-09

The most important element in next week’s FOMC meeting may come from the dot plot and whether Fed officials back away from the two hikes thought appropriate in March. When looking the schedule of FOMC meetings, and understanding that when the Fed says “gradual” to describe the normalization process, it does not mean hiking at …

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