Tag Archive: newsletter

When Is a Capital Gain Capital Consumption? Market Report, 25 May

The price of gold dropped a few bucks this week, but the price of silver jumped about half a buck. The drumbeat for the gold bull market is well underway, and it is beginning now for silver. So let’s do a quick update on the supply and demand fundamentals.

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Coronavirus: drop in revenue could leave Swiss hospitals with 3 billion loss

In Switzerland, the finances of hospitals are similar to those of a business. If revenues fall, as they did during the coronavirus pandemic, profits can turn into losses.

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The Federal Counterfeiter

Suppose you wanted to run an enterprise the right way (we know, we know, this is pretty far-out fiction, but bear with us). And, your enterprise has a $1 million dollar piece of equipment that wears out after 10 years. You must set aside $100,000 a year, so that you have $1 million at the end of 10 years when the equipment needs replacing. There’s a word, now archaic, to describe the account in which you set aside this money.

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Narrative Economics: How Stories Go Viral and Drive Major Economic Events

Abstract: Much of Shiller’s new book is about how economic narratives form, spread, and fade. Drawing on medical evidence about the spread of infectious disease, Shiller argues that “economic fluctuations are substantially driven by contagion of oversimplified and easily transmitted variants of economic narratives.” But Shiller ignores the powerful role of monetary disorder, whether in forming the narrative or determining the contagion rate, or as...

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The Pandemic Gives Us Permission To Get What We Always Wanted

Dear Corporate America: maybe you remember the old Johnny Paycheck tune? Let me refresh your memory: take this job and shove it. Put yourself in the shoes of a single parent waiting tables in a working-class cafe with lousy tips, a worker stuck with high rent and a soul-deadening commute--one of the tens of millions of America's working poor who have seen their wages stagnate and their income becoming increasingly precarious / uncertain while the...

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The Japanese Love of Keynesian Economics Might Finally Be Coming to an End

Even those fortunate enough to have escaped infection by the Wuhan coronavirus will by now have noticed one of the virus’ many secondary effects: the disruption of the supply chain. Sick workers at meat plants, closed restaurants, hoarding, and the sudden spike in demand for things like ventilators, masks, and comestibles with long shelf lives have thrown the global flow of goods and services into disarray.

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Why an Economy Can’t Work without Market Prices

It has been a full century since Mises dropped the economic calculation bomb, but the argument apparently still haunts socialists. It should, since Mises managed to show that a socialist economy is not an economy at all but calculational chaos. Yet it is curious that it does, since most have (incorrectly) concluded that Mises’s argument, after decades of debate, was debunked.

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Most want masks made compulsory on Swiss public transport, suggests survey

More than two thirds are in favour of making masks compulsory on Switzerland’s public suggests a survey run by Tamedia, according to the newspaper Le Matin.

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Dollar Firm as China’s Hong Kong Gambit Triggers Risk-Off Trading

Legislation was introduced that allows Beijing to directly impose a national security law on Hong Kong; US-China tensions are still rising; the dollar is bid as risk-off sentiment takes hold. There are no US data reports or Fed speakers today; Canada reports March retail sales; Mexico reports mid-May CPI.

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Banking and Monetary Policy from the Perspective of Austrian Economics

The editors are to be heartily congratulated for putting together this book, which covers an impressive range of topics in monetary economics from an explicitly Austrian perspective. Most of the twelve essays are of a very high quality and one will learn much about money and related topics by a careful reading of them.

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Swiss Stamp Tax Duty – All you need to know

(Disclosure: Some of the links below may be affiliate links) If you have been investing in Switzerland, you probably have heard about the Swiss Stamp Tax or the Swiss Stamp Duty. This Stamp Tax is a tax that is collected when you do certain transactions on the stock market.Even though this stamp tax is really simple to understand, there is a lot of confusion about it. Therefore, I wanted to cover it in detail to dispel the confusion once and for all.

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Let’s Hope Deflation Is Headed Our Way

The yearly growth rate of the US consumer price index (CPI) fell to 0.4 percent in April from 2 percent in April last year while the annual growth of the producer price index (PPI) plunged to –1.2 percent last month against 2.4 percent in April 2019.

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FX Daily, May 22: US-China Escalation Sinks Hong Kong and Hits Risk Appetites

Overview: The US has ratcheted up pressure on China on several fronts and has sapped risk appetites ahead of the weekend.  Equity markets are lower across the world.  Even in India, where the central bank unexpectedly cut the repo rate 40 bp, shares fell 0.7%.  It was Hong Kong's 5.5% that led the region lower.  Europe's Dow Jones Stoxx 600 is off around 1% in late morning turnover to pare this week's gain to about 2.5%. 

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Swiss central bank could take negative rates lower

The rate on deposits at the Swiss National Bank (SNB) is currently -0.75%. And while taking the rate further into negative territory is not the base case scenario, it cannot be excluded, according to some economists at the bank UBS.

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Swiss maker of clean aviation fuel gets boost from Lufthansa

The Lufthansa Group has entered a partnership with the Swiss solar fuel developer Synhelion. The Swiss start-up is working to produce a fuel that emits 50% less CO2 by 2022 and plans to market a 100% renewable fuel in 2030.

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No Flight To Recognize Shortage

If there’s been one small measure of progress, and a needed one, it has been the mainstream finally pushing commentary into the right category. Back in ’08, during the worst of GFC1 you’d hear it all described as “flight to safety.” That, however, didn’t correctly connote the real nature of what was behind the global economy’s dramatic wreckage. Flight to safety, whether Treasuries or dollars, wasn’t it.

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Dollar Firm as US-China Tensions Flare

The virus news stream is mixed; the dollar has stabilized; US-China tensions continue to ratchet up. We will get some more US economic data for May; weekly jobless claims are expected at 2.4 mln. Eurozone and UK reported firm preliminary May PMI readings; BOE officials continue to take a very dovish tone.

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Open Letter to Crispin Odey

I am writing in response to the comments you made in a letter to investors yesterday, which were widely reported. You have set the gold community afire, with claims that are not new and not true. So I shall attempt to douse the flames. As everyone knows, President Roosevelt outlawed the ownership of gold in 1933. Although gold was legalized in 1975, fears linger today that the governments may repeat this heinous act.

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How Modern Economics Has Lost Its Way: It’s All About the “Unseen”

Economics has lost its way and the study has become both impotent and lacking in relevance. It's easy to see how and why once we recognize that proper economic thinking takes place two steps beyond the apparent. Noneconomists typically take none of these steps, while modern economics has lost the ability to go beyond the first.

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FX Daily, May 21: Markets Pull Back after Flirting with Breakouts

Overview: New two and a half month highs in the S&P 500 yesterday failed to have much sway in the Asia Pacific region and Europe today as US-China tensions escalate and profit-taking set in. Perhaps it is a bit of "buy the rumor sell the fact" type of activity on the back of upticks in the preliminary PMI reading and hesitancy about pushing for what appeared to be breakouts.

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