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Central Banks Continue to Buy Gold
Zero Hedge: The latest development in the gold bubble saga, and one which will likely cause the precious metal’s price to spike even higher, comes from the tiny island of Mauritius which according to Dow Jones has purchased 2 metric tons of Gold from the IMF for $71.7 million. The price works out to approximately $1,115 per ounce. More as we get it.
My comment: More and more countries, investors, and individuals are protecting themselves from the runaway inflationary policies of the US government. You have to at this point begin questioning the sanity of Congress with their ridiculous trillion dollar healthcare…
20Nov2009 | The Real Deal | 0 comments | ContinuedThe Hidden Costs of Too Much Government Debt
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This week was a fascinating one on the geopolitical front. President Barack Obama travelled to China in what was billed as a major diplomatic trip.
The idea? Try to reach common ground on several fronts, including global nuclear proliferation, environmental issues, and especially China’s currency …
The U.S., Europe, and even some of China’s Asian neighbors believe that China is artificially suppressing the value of its currency, the renminbi or yuan. That, in turn, is giving China an artificial advantage in global trade by making its exports more competitive vis-à-vis those of other nations.
But you know what Obama came home with?…
20Nov2009 | Money and Markets | 0 comments | ContinuedStrong Dollar Policy: What??
“I believe deeply that it’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar,” U.S. Treasury Secretary Geithner recently told reporters. Indeed, it seems to be a pre-requisite to apply for the position of U.S. Treasury Secretary to be able to utter these words. In the meantime, the greenback seems to be falling further and further; the ‘strong dollar commitment’ appears to have become a farce. Just what, then, would be a strong dollar policy?
Bloomberg Radio asked me last week what I would like to hear from Federal Reserve…
17Nov2009 | Merk Investments | 0 comments | ContinuedThe Latest on Rates, the Fed, Asset Inflation, and More
When it comes to Lay’s potato chips, the saying goes, you can’t eat just one.
And when it comes to the interest rate and financial markets, I just can’t focus on one thing this week. There’s just too much going on.
So if you’ll forgive me, I’m going to cover a lot of ground in the little time I have. Fasten your seatbelt!
Fed Still … STILL … Doesn’t Get It
When It Comes to Asset Bubbles
More than a year and a half ago, right here in Money and Markets, I took the Federal Reserve to task for one of its idiotic practices —…
14Nov2009 | Money and Markets | 0 comments | ContinuedBen and Barack Have Your Back
Signals from the Fed, the White House, the Treasury, and just about every other central bank and government around the world are pointing toward the same conclusion, which can be summarized in two words: “Easy Money.” Monetary policy will stay loose. Public money will flow freely. “Systemically important” financial institutions will be protected from failure at all costs. The light is green, and everyone should just step on the gas.
In hindsight, last week’s Fed statement may have revealed too much. By defining specific criteria by which it intends to make decisions – namely capacity utilization, i.e. unemployment – the Federal…
12Nov2009 | Invest With An Edge | 0 comments | ContinuedThe Sorry State of Modern Economics
Since last year’s collapse of the banking system, hundreds of billions of dollars have been spent to bail out some of the major players. Additionally, governments all over the world, and their central banks, have implemented huge stimulus programs to combat the consequences of the burst real estate bubble.
Economic history is being written right before our eyes. Hence, I refer to this episode as the largest economic experiment since the implementation of communism. And here’s what really frightens me: None of the experimenters saw this crisis coming, but all of them claim to know the remedy!
At the same time politicians…
12Nov2009 | Money and Markets | 0 comments | ContinuedImportance of the October Jobs Report Dissected
We can ignore the debates over this lagging indicator…
The Labor Department reported on Friday that 190,000 more jobs were lost in October, only slightly worse than the consensus forecast of 175,000 lost jobs, and job losses for August and September were revised to fewer losses than previously reported. Good news. The negative surprise was that the unemployment rate shot up from 9.8% in September to 10.2% in October, considerably worse than expectations that unemployment would rise to 9.9%.
But should the report influence thinking in either direction regarding the prospects for economic recovery?
I don’t think so.
As I have noted in this column…
Fed Signals “All Systems Go” for More Inflation
I have been adamant recently in saying that the Federal Reserve would not … would NOT … signal an end to the easy money environment at this week’s policy meeting. These guys simply lack the political willpower and the inclination to do what’s right. They want to keep the booze flowing to inflate assets, the long-term consequences be darned.
Sure enough, the Fed reiterated Wednesday that it’s not worried at all about the surge in asset or commodity prices. It said,
9Nov2009 | Money and Markets | 0 comments | Continued“Substantial resource slack [is] likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects…
Zero Is No Longer Exceptional
Today was another Fed Day. To no great surprise, the Federal Open Market Committee kept interest rates unchanged. The only speculation was how and if the policy statement would change since the last meeting. Traders specifically wondered whether the FOMC would maintain its forecast of “exceptionally low” rates for an “extended period.” For today the answer was “yes,” but at some point they will have to change this language. The near-zero Federal Funds rate becomes less and less “exceptional” as the period gets more and more “extended.”
The statement sounded slightly positive on the economy. The committee noted that activity in…
6Nov2009 | Invest With An Edge | 0 comments | ContinuedBen Bernanke a Bit Confused on Economics
Forbes.com: "The great economist Henry Hazlitt once observed that ‘Economics is haunted by more fallacies than any other study known to man.’ Were Hazlitt alive today, he surely would have a field day addressing the numerous economic fallacies offered up by our very own Federal Reserve Chairman, Ben Bernanke.
From his frequent assertions that economic growth is the cause of inflation, to his support of spending ’stimulus’ as though wealth redistribution actually drives economic activity, to his belief that simple money creation enhances the economy, it’s fair to say that the world’s most powerful central banker buys into a quite…
4Nov2009 | The Real Deal | 0 comments | Continued
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