Tag Archive: newsletter

How to Think About the Fed Now

2020-04-19

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2020-04-19

[This text is excerpted from the introduction to The Anatomy of the Crash, a Mises Institute ebook to be released in April 2020.] The Great Crash of 2020 was not caused by a virus. It was precipitated by the virus, and made worse by the crazed decisions of governments around the world to shut down business and travel. But it was caused by economic fragility.

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Between a Rock and a Hard Place: Pandemic and Growth

2020-04-18

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2020-04-18

There is no way authorities can limit the coronavirus and restore global growth and debt expansion to December 2019 levels. Authorities around the world are between a rock and a hard place: they need policies that both limit the spread of the coronavirus and allow their economies to "open for business." The two demands are inherently incompatible, and so neither one can be fulfilled.

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Interest groups present demands for coronavirus exit plans

2020-04-18

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2020-04-18

Political parties, trade unions and other interest groups have published their proposals for the government to relax restrictions introduced to stem the Covid-19 pandemic. The calls come a day ahead of the government’s decision on a nationwide coronavirus exit strategy, notably a staggered resumption of business activities and the reopening of schools.

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Builders in Denial

2020-04-18

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2020-04-18

The year 2006 seems like a lifetime ago. The housing boom seemed to be going full throttle, but danger lurked. I wrote on LewRockwell.com in March of that year, concerning a Las Vegas real estate seminar, that “nary a discouraging word was spoken.”

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More high-profile brands desert the Baselworld fair

2020-04-17

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2020-04-17

Rolex, Patek Philippe and Chanel will not exhibit at the Baselworld watch and jewellery trade show in 2021. The announcement marks another blow to the event, which has already seen high-profile exits, including by the Swatch Group.

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Pandemic takes a heavy toll on consumer confidence 

2020-04-17

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2020-04-17

Switzerland’s consumer confidence index plummeted to a “historically low” level in April, according to a Wednesday statement from the Secretariat for Economic Affairs (SECO). The index fell to -40 points, compared to -9 points in January, when the previous survey was conducted. That marks the lowest results since the early 1990s.

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Gold Stocks – A Show of Strength

2020-04-17

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2020-04-17

Gold Sector Outperforms Broad Market. The gold sector is in an uptrend since September 2018. The initially rather labored move accelerated after a secondary low was established in May 2019 and the 50-day and 200-day moving averages were breached for the second time. Last week the two moving averages were once again overcome in the course of the post-crash rebound.

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Why This Bubble Economy Keeps Going and Going

2020-04-17

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2020-04-17

The Fed's "bail out" package eases stress in the US credit Market, 2007-2020
Quite a few people may wonder why the global fiat money system has not yet collapsed. The fiat money system did not crash in the financial and economic crisis of 2008/2009, when a great many people feared the debt pyramid would come crashing down.

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FX Daily, April 16: Markets Brace for another Jump in US Weekly Jobless Claims

2020-04-16

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2020-04-16

Overview:  Equity losses in the US appeared to drag most Asia Pacific markets lower today, with China and India the notable exceptions.  European bourses are higher, and the only energy sector is a drag on the Dow Jones Stoxx 600,  which is around 1% higher in late morning turnover, while US shares are also trading firmer.  Asia Pacific 10-year benchmark yields eased. 

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Swiss Producer and Import Price Index in March 2020: -2.7 percent YoY, -0.3 percent MoM

2020-04-16

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2020-04-16

Switzerland Producer Price Index (PPI) YoY, March 2020
16.04.2020 - The Producer and Import Price Index fell in March 2020 by 0.3% compared with the previous month, reaching 99.4 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products. Compared with March 2019, the price level of the whole range of domestic and imported products fell by 2.7%.

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Covid-19 therapy could come by end of year, vaccine in 2021

2020-04-16

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2020-04-16

Swiss pharma and business insiders predict that an effective drug therapy against Covid-19 will be available by the end of this year, but a vaccine might take a year longer than that. “In the best-case scenario, a drug could be available before the end of 2020,” said on Monday Francesco De Rubertis, director and co-founder of Medicxi, a Geneva-based venture capital company that invests in biotechnology.

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The Global Engine Is Still Leaking

2020-04-16

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2020-04-16

Federal Reserve: Liabilities & Capital, 1984-2019
An internal combustion engine that is leaking oil presents a difficult dilemma. In most cases, the leak itself is obscured if not completely hidden. You can only tell that there’s a problem because of secondary signs and observations.If you find dark stains underneath your car, for example, or if your engine smells of thick, bitter unpleasantness, you’d be wise to consider the possibility.

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In an Age of Pandemics We Need More Freedom to Trade, Not Less

2020-04-16

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2020-04-16

There are many who use the coronavirus crisis to blame freedom to trade for the current epidemic. And, of course, there are those who are already arguing for autarky, closing our borders, and producing everything locally.

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Thanks to Lockdowns, State and Local Tax Revenues Are Plummeting

2020-04-16

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2020-04-16

Unlike the federal government, state and local governments in America can't just create money out of thin air. So when tax revenues go down, that money is simply not available to the state legislatures and city councils anymore. These governments either have to borrow the money or raise taxes and hope the tax hike itself doesn't cause total revenue to fall.

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FX Daily, April 15: Dollar Rises as Equities Slump

2020-04-15

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2020-04-15

Overview:  The recovery in equities stalled, and the risk-off mood has helped lift the US dollar, which had been trending lower. Taiwan and Malaysia were notable exceptions in the Asia Pacific regions to the heavier equity tone. The Nikkei gave back almost 0.5% after surging more than 3% on Tuesday. Europe's Dow Jones Stoxx 600 is ending a five-day rally. 

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Ranking finds Swiss cities less expensive

2020-04-15

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2020-04-15

Zurich and Geneva are still among the world’s ten most expensive cities, but both have slid down the rankings since last year. The full effect of the coronavirus crisis remains to be seen. In the Economist Intelligence Unit’s annual report comparing the cost of living in cities around the world, Zurich is tied for 5th place with Paris; in 2019 it ranked 4th.

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Dollar Firm in Thin Holiday Trading

2020-04-15

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2020-04-15

The virus news stream is mostly positive today; yet risk assets are starting the week under some modest pressure. The dollar took a hit last week but we think it will recover; some US data releases from Good Friday are worth repeating. With most of Europe closed today, the news stream from the region is very light; oil prices could not extend their gains today after OPEC+ finalized output cuts over the weekend.

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Gold Surges To New Record Highs in Euros at €1,581/oz and $1,726/oz in Dollars

2020-04-15

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2020-04-15

Gold in Euros – 3 Days
Gold prices surged to new all time record highs in euros and other digital fiat currencies today due to concerns about the outlook for risk assets and currencies in an era of unprecedented economic and monetary risk.

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Danish State Plans to Pay the Salaries of Private Sector Workers

2020-04-15

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2020-04-15

The ongoing coronavirus pandemic has halted economies across the globe. With various countries on lockdown and companies unable to continue production, an economic downturn is inevitable. In light of this, the government of Denmark has come up with a strategy to avoid recession—paying 75 percent of private employees’ salaries.

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Dollar Under Modest Pressure as Europe Returns from Holiday

2020-04-15

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2020-04-15

Coronavirus Daily Change, 2020
The tug of war between extending vs. softening lockdowns continues. The dollar remains under modest pressure but we think it will eventually recover; Bernie Sanders has endorsed Joe Biden. Europe reopens from holiday today but the news stream remains light; South Africa surprised with an emergency 100 bp rate cut.

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