Tag Archive: Monetary Policy

Defining Labor Economics

Economics is a pretty simple framework of understanding, at least in the small “e” sense. The big problem with Economics, capital “E”, is that the study is dedicated to other things beyond the economy. In the 21st century, it has become almost exclusive to those extraneous errands. It has morphed into a discipline dedicated to statistical regression of what relates to what, and the mathematical equations assigned to give those relationships some...

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Sweden’s Gold Reserves: 10,000 gold bars (pet rocks) shrouded in Official Secrecy

In February 2017 while preparing for a presentation in Gothenburg about central bank gold, I emailed Sweden’s central bank, the Riksbank, enquiring whether the Riksbank physically audits Sweden’s gold and whether it would provide me with a gold bar weight list of Sweden’s gold reserves (gold bar holdings). The Swedish official gold reserves are significant and amount to 125.7 tonnes, making the Swedish nation the world’s 28th largest official gold...

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To The Asian ‘Dollar’, And Then What?

The Bretton Woods system was intentionally set up to funnel monetary convertibility through official channels. The primary characteristic of any true gold standard is that any person who wishes can change paper claims into hard money. It was as much true in any one country as between those bound by the same legal framework (property).

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Optimal Lunacy

In June 2012, Janet Yellen, then the Vice Chairman of the Federal Reserve, addressed an audience in Boston with what for the time seemed like a radical departure. It was the latest in a string of them, for conditions throughout the “recovery” period never did quite seem to hit the recovery stride. Because of that, there was constant stream of trial balloons suggesting how the Federal Reserve might try to overcome this economic inertia. At that...

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US Jobs: Who Carries The Burden of Proof?

The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed “raised rates” for a third time in March. Such “hawkishness” by convention should not go so unnoticed, and yet yields and curves are once more paying little attention to Janet Yellen.

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Ultra-Loose Terminology, Not Policy

As world “leaders” gathered in Davos in January 2016, they did so among financial turmoil that was creating more economic havoc than at any time since the Great “Recession.” Having seen especially US QE as the equivalent of money printing, their focus was drawn elsewhere to at least attempt an explanation for the contradiction.

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We Need To Define The ‘Shadows’, And All Parts of Them; or, ‘Rising Dollar’ Kills Another Recovery Narrative

JP Morgan’s CEO Jamie Dimon caused a stir yesterday with his 45-page annual letter to shareholders. The phrase that gained him so much widespread attention was, “there is something wrong with the US.” Dimon mentioned secular stagnation and correctly surmised it was the right idea if for the wrong reasons. He then gave his own which included a litany of globalist agenda items, including not enough access to mortgages.

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Systemic Depression Is A Clear Choice

Looking back on late 2015, it is perfectly clear that policymakers had no idea what was going on. It’s always easy, of course, to reflect on such things with the benefit of hindsight, but even contemporarily it was somewhat shocking how complacent they had become as a global group.

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Blocher and the People That Ruined the EU

Last weekend, European leaders gathered in Rome for the 60th anniversary of the Treaty of Rome. They discussed, not for the first time, how to get the EU back on track. And they told each other they are still committed to the Union and believe in its future. (We’ve heard that one before, too.)

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All In The Curves

If the mainstream is confused about exactly what rate hikes mean, then they are not alone. We know very well what they are supposed to, but the theoretical standards and assumptions of orthodox understanding haven’t worked out too well and for a very long time now. The benchmark 10-year US Treasury is today yielding less than it did when the FOMC announced their second rate hike in December.

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Durable Goods After Leap Year

New orders for durable goods (not including transportation orders) were up 1% year-over-year in February. That is less than the (revised) 4.4% growth in January, but as with all comparisons of February 2017 to February 2016 there will be some uncertainty surrounding the comparison to the leap year version.

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Pressure, Sure, But From Where?

It may just be that in life you have to get used to disappointment. Though not for lack of trying, I have spent a great deal of time over the years intending to piece together exactly what happened on days like October 15, 2014. The official explanation is an obvious whitewash, one so haphazard that I doubt it will ever be referred to again outside of ridicule.

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Digital Gold – For Now Caveat Emptor

Bitcoin surpasses gold price - a psychological and arbitrary headline. Royal Mint blockchain gold asks you to trust in the UK government. Royal Canadian Mint and GoldMoney blockchain product asks you to trust in government and the technology, servers, websites etc of the providers. Invest in a gold mine using cryptocurrency - but wait until 2022 for your gold and trust the miners that it is there. Blockchain and gold will likely make a "good...

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Was There Ever A ‘Skills Mismatch’? Notable Differences In Job Openings Suggest No

Perhaps the most encouraging data produced by the BLS has been within its JOLTS figures, those of Job Openings. It is one data series that policymakers watch closely and one which they purportedly value more than most. While the unemployment and participation rates can be caught up in structural labor issues (heroin and retirees), Job Openings are related to the demand for labor rather than the complications on the labor supply side.

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Further Unanchoring Is Not Strictly About Inflation

According to Alan Greenspan in a speech delivered at Stanford University in September 1997, monetary policy in the United States had been shed of M1 by late 1982. The Fed has never been explicit about exactly when, or even why, monetary policy changed dramatically in the 1980’s to a regime of pure interest rate targeting of the federal funds rate.

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SNB Monetary Policy Assessment March 2017: EUR/CHF lower again

The EUR/CHF collapsed after the monetary assessment meeting of the Swiss National Bank. The SNB did not fulfill the wishes of currency traders with a more dovish policy, i.e. with lower rates or the thread of stronger interventions.

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Mugged By Reality; Many Still Yet To Be

In August 2014, Federal Reserve Vice Chairman Stanley Fischer admitted to an audience in Sweden the possibility in some unusually candid terms that maybe they (economists, not Sweden) didn’t know what they were doing. His speech was lost in the times, those being the middle of that year where the Fed having already started to taper QE3 and 4 were becoming supremely confident that they would soon end them.

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Economic Dissonance, Too

Germany is notoriously fickle when it comes to money, speaking as much of discipline in economy or industry as central banking. If ever there is disagreement about monetary arrangements, surely the Germans are behind it. Since ECB policy only ever attains the one direction, so-called accommodation, there never seems to be harmony.

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Video: The Swiss National Bank Is Acting Like A Hedge Fund

We discuss the fact that Central Banks have basically morphed into Hedge Funds with similar risky investing strategies, except they buy without any regard to the underlying fundamentals of the assets they are buying. When did the Swiss Citizens say it was the proper role for the Swiss National Bank to be buying US Stocks? How is this stimulating the Swiss Economy?

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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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