Tag Archive: Monetary Policy

Toward A New World Order, part III

2016-12-19

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2016-12-19

A new world order is coming of age and the transition is painful to accept for a Western middle class with a deep-seated sense of entitlement. We showed how the West feels threatened globally in Toward a New World Order and followed up explaining how this translate into domestic politics in Toward a New World Order Part II. We will now continue this series by showing how gross economic mismanagement have created the new political class that we...

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Swiss 10 year bond yields still negative, but approaching zero.

2016-12-12

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2016-12-12

Treasury Yields
The global bond rout returned with a bang, sending 10Y US Treasury yields as much as six basis points higher to 2.53%, the highest level in over two years. The selloff happened as oil prices surged by more than 5% following Saturday's agreement by NOPEC nations agreed to slash production, leading to rising inflation pressures. At last check, the 10Y was trading at 2.505%, up from 2.462% at Friday and on track for its highest close since September...

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The War On Cash Is Happening Faster Than We Could Have Imagined

2016-12-03

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2016-12-03

It’s happening faster than we could have ever imagined. Every time we turn around, it seems, there’s another major assault in the War on Cash. India is the most notable recent example– the embarrassing debacle a few weeks ago in which the government, overnight, “demonetized” its two largest denominations of cash, leaving an entire nation in chaos.

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Canadian Bank Starts Charging Negative 0.75percent Rate On Most Foreign Cash Balances

2016-11-22

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2016-11-22

BMO Nesbitt Burns
Despite speculation over the past year that Canada may join Japan and Europe in the NIRP club and launch negative interest rates, so far the BOC has stood its ground. However, starting on December 22, for the broker dealer clients of one of Canada's most reputable financial institutions, BMO Nesbitt Burns, it will be as if the Canadian bank has cut its deposit rate on most currencies, to match the deposit rate of Switzerland.

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Former CEO Of UBS And Credit Suisse: “Central Banks Are Past The Point Of No Return, It Will All End In A Crash”

2016-11-21

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2016-11-21

Remember when bashing central banks and predicting financial collapse as a result of monetary manipulation and intervention was considered "fake news" within the "serious" financial community, disseminated by fringe blogs? In an interview with Swiss Sonntags Blick titled appropriately enough "A Recession Is Sometimes Necessary", the former CEO of UBS and Credit Suisse, Oswald Grübel, lashed out by criticizing the growing strength of central banks...

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BIS: The VIX is Dead, The Dollar is the new “Fear Indicator”

2016-11-20

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2016-11-20

Leverage of US securities broker-dealer sector
Over the past few years, one of the recurring themes on this website has been an ongoing discussion of how the VIX has lost its predictive value as a market risk indicator. This culminated recently with a note by Russel Clark who explained in clear term why the "VIX is now broken." Today, in a fascinating note Hyun Song Shin, head of research at the Bank for International Settlements, the "central banks' central bank" has agreed with the...

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Former Treasury Secretary Summers Calls For End Of Fed Independence

2016-11-06

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2016-11-06

Larry Summers
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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Jim Grant Puzzled by the actions of the SNB

2016-10-27

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2016-10-27

James Grant, Wall Street expert and editor of the investment newsletter «Grant’s Interest Rate Observer», warns of a crash in sovereign debt, is puzzled over the actions of the Swiss National Bank and bets on gold.

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Cashless Society – Is The War On Cash Set To Benefit Gold?

2016-10-26

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2016-10-26

Cash is the new “barbarous relic” according to many central banks, regulators, and some economists and there is a strong, concerted push for the ‘cashless society’. Developments in recent days and weeks have highlighted the risks posed by the war on cash and the cashless society.

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Financial Repression Is Now “In Play”

2016-10-20

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2016-10-20

A FALLING MARKET CANNOT BE ALLOWED – at any cost! The Central Bankers have clearly painted themselves into a corner as a result of their self-inflicted, extended period of “cheap money”. Their policies have fostered malinvestment, excessive leverage and a speculative casino approach to investments. Investors forced to take on excess risk for yield and scalp speculative investment returns, must operate in an unstable financial environment ripe for...

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“Subtle forward guidance”: The marriage between best practice central banking and commodity markets

2016-10-19

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2016-10-19

In the years following the 2008 crash and today, the use of forward guidance from central banking policy makers has become increasingly important. What this nonsense ultimately has translated into is a ridiculous track record in posting upbeat assessments on the economic environment, aimed at trying to fool the marginal investor into believing “there are no need for worry, central bankers have everything under control”.

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The Swiss Begin To Hoard Cash

2016-10-17

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2016-10-17

While subtle, the general public loss of faith in central banking has been obvious to anyone who has simply kept their eyes open: it started in Japan where in February hardware stores were reported that consumers were hoarding cash, as confirmed by t...

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NIRP Has Failed: European Savings Rate Hits 5 Year High

2016-10-17

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2016-10-17

One year ago, when it was still widely accepted conventional wisdom that NIRP would "work" to draw out money from savers who are loathe to collect nothing (or in some cases negative interest) from keeping their deposits at the bank, and would proceed to spend their savings, either boosting the stock market or the economy, we showed research from Bank of America demonstrating that far from promoting dis-saving, those European nations which had...

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USD ready for a second leg higher – then what?

2016-10-17

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2016-10-17

One year ago we showed the following chart to explain the relative strong dollar that was on everyone’s mind at the time. With a second leg higher in the US dollar imminent, this particular chart will be more important than ever. Claims to dollars, such as demand and time deposits, or even more opaque money-like products created by the shadow banking system is just that, a claim or derivative on the final mean of payment, namely base money.

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Why Krugman, Roubini, Rogoff And Buffett Hate Gold

2016-10-10

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2016-10-10

A couple of weeks ago an article appeared on Bitcoin Magazine entitled ‘Some economists really hate bitcoin’. I read it with a sigh of nostalgia. As someone who has been writing about gold for a few years, I am used to reading similar criticisms as those bitcoin receives from mainstream economists, about gold.

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Do our money managers really believe this will end well?

2016-10-09

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2016-10-09

An economic bubble is essentially an economic activity that cannot sustain itself without a continuous influx of new money and credit to bid away real resources from self-funding endeavors. Financial bubbles are obviously closely related as financial...

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Will The ECB Buy Stocks?

2016-10-05

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2016-10-05

Debate about the ECB’s stimulus options have continued to rage, with an equity purchase plan mentioned as a possibility. We think the ECB could legally buy ETFs that fit its requirements… but it would be controversial and we question the benefits. An ETF programme could total EUR 200bn, which would not be large compared to the overall QE programme.

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The Road to Fascism in Just Two Charts

2016-09-19

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2016-09-19

Laws of politics have been turned upside down. The Intellectuals Yet Idiots can make no sense of it. The underdog who ‘tell it how it is’ appeal to people while established reasoning does not.

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Rogoff Warns “Cash Is Not Forever, It’s A Curse”

2016-09-14

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2016-09-14

Kenneth Rogoff, Professor of Public Policy at Harvard University, postulates to get rid of cash. In his opinion, killing big bills would hamper organized crime and make negative interest more effective. Kenneth Rogoff makes a provocative proposal. One of the most influential economists on the planet, he wants to phase out cash.

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Attack The Fed’s War On Savers, Workers And The Unborn (Taxpayers)

2016-09-13

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2016-09-13

The central banks have gone so far off the deep-end with financial price manipulation that it is only a matter of time before some astute politician comes after them with all barrels blasting. As a matter of fact, that appears to be exactly what Donald Trump unloaded on bubble vision this morning:

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