Tag Archive: Interest Rate

Dollar Supply Creates Dollar Demand, Report 2 June

We have been discussing the impossibility of China nuking the Treasury bond market. We covered a list of challenges China would face. Then last week we showed that there cannot be such a thing as a bond vigilante in an irredeemable currency. Now we want to explore a different path to the same conclusion that China cannot nuke the Treasury bond market.

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Monetary U-Turn: When Will the Fed Start Easing Again? Incrementum Advisory Board Meeting Q1 2019

On occasion of its Q1 meeting in late January, the Incrementum Advisory Board was joined by special guest Trey Reik, the lead portfolio manager of the Sprott Institutional Gold & Precious Metal Strategy at Sprott USA since 2015

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What They Don’t Want You to Know about Prices, Report 10 Feb

Last week, in part I of this essay, we discussed why a central planner cannot know the right interest rate. Central planner’s macroeconomic aggregate measures like GDP are blind to the problem of capital consumption, including especially capital consumption caused by the central plan itself.

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Jim Grant: “Markets Trust Too Much In The Presence Of Central Banks”

James Grant, Wall Street expert and editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank. Nearly ten years after the financial crisis, extraordinary monetary policy has become the norm.

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Dollar Surge Continues Ahead Of Jobs Report; Europe Dips As Catalan Fears Return

World stocks eased back from record highs and fell for the first time in eight days, as jitters about Catalonia’s independence push returned while bets on higher U.S. interest rates sent the dollar to its highest since mid August; S&P 500 futures were modestly in the red - as they have been every day this week before levitating to record highs - ahead of hurricane-distorted nonfarm payrolls data (full preview here). U.S. jobs report will also be...

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The Internet Helped Kill Inflation In America, Says Credit Suisse

Whether or not San Francisco Fed President John Williams is right about US inflation and employment being about as close to the central bank’s targets as investors have seen - as he told CNBC two days ago - is irrelevant: The central bank is going to raise interest rates two more times this year no matter what happens to consumer prices, says Credit Suisse Chief Investment Officer for Switzerland Burkhard Varnholt.

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Simple Math of Bank Horse-Puckey

We stepped out on our front stoop Wednesday morning and paused to take it all in. The sky was at its darkest hour just before dawn. The air was crisp. There was a soft coastal fog. The faint light of several stars that likely burned out millennia ago danced just above the glow of the street lights.

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Video: Interest Rate Differentials Increasing Financial Market Leverage To Unsustainable Levels

We discuss the rate differentials between Switzerland, Britain, Europe, Japan and the United States and how this Developed Financial Markets carry trade is incentivizing excessive risk taking with tremendous leverage and destabilizing the entire financial system in the process in this video.

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Former Treasury Secretary Summers Calls For End Of Fed Independence

At an event in Davos, Switzerland earlier today, Former U.S. Treasury Secretary, Larry Summers, argued that Central Bank independence from national governments should be scrapped in favor of a coordinated effort between politicians, central bankers and treasury to engineer inflation. Seems reasonable, right?...what could possibly go wrong?

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Yield Purchasing Power: Think Different About Purchasing Power

The dollar is always losing value. To measure the decline, people turn to the Consumer Price Index (CPI), or various alternative measures such as Shadow Stats or Billion Prices Project. They measure a basket of goods, and we can see how it changes every year. However, companies are constantly cutting costs. If we see nominal—i.e. dollar—prices rising, it’s despite this relentless increase in efficiency. At the same time, the interest rate is...

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(1) What Determines FX Rates?

The effects of so-called “currency wars” and other central bank actions are small compared to the long-term impact made by these five catalysts, which include credit cycles, trade balance, differences in economic growth, and more.

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(1.2) Explaining price movements in FX rates

We indicate the main factors that influence FX rates in the longer term. We explain the movements of currencies based on these factors.

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(6) FX Theory: Carry Trade and Reverse Carry Trade

This page discusses two closely related concepts: the carry trade and the reverse carry trade.

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SNB Monetary Assessment March 2013

In its monetary assessment the SNB maintains the EUR/CHF floor and warned against further risks in the euro zone. The SNB has downgraded the inflation path to -0.2% (previously-0.1%) in 2013 and +0.2% (+0.4%) in 2014.We do not completely agree.

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Mainstream Economics , The Medium Run



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Quantitative Easing, Gold and the Swiss Franc

The main drivers of demand for Swiss francs are the euro crisis, but even more, the behavior of American investors, who go out of the dollar in the fear of further bad US economic data and of Quantitative Easing. This will push down the dollar, and safe-havens like the CHF, gold or the Japanese Yen up. … Continue reading »

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