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The Next Bust: The “Risk Trade”
A lot of focus was given to the central banks’ meetings this week.
That’s because a lot of people would really like to see target rates start moving up from their low levels.
Some argue for higher rates because they think the world is returning to normal and the emergency policy responses need to be removed sooner rather than later to avoid a date with inflation.
Others are concerned that all of the ultra-easy money will result in asset price inflation, another bubble and ultimately another bust.
But clearly, the central banks have different concerns. This week …
- The Federal Reserve kept…
Gold Investments Market Update – Many Government Mints, Wholesalers and Refiners Internationally Continue to Ration Gold and Silver Bullion
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Gold is marginally lower today despite sharply weaker oil prices (Light Sweet Crude Oil Future – Combined – FEB09 : -5.14%) and a slightly higher dollar (US DOLLAR INDEX: 83.01 +0.6%).
There was significant volatility last week and such volatility often portends a big move up or down. Given the strong fundamentals, gold’s next move is likely to be up, especially as investment demand for gold coins, bars, certificates and exchange traded funds remains very robust.
Concerns regarding the dollar’s long term health (and other major currencies) given the likelihood of trillion dollar deficits in the next few years are likely contributing…
14Jan2009 | The Gold Blog | 0 comments | ContinuedBank of England’s Deflation Defense: More Cut Rates
Bank of England governor Mervyn King said today (Wednesday) that dangerous deflation is opening a door for further interest cut rates.
“In the space of a few months, we have gone from the highest rate of manufacturing input price inflation in nearly 30 years to the lowest monthly rate on record. And measures of short-run inflation expectations have fallen back sharply,” King read from a statement before a press conference.
When asked about cutting rates, King said the Bank of England is “prepared to cut bank rates to whatever level is necessary” to keep inflation at its 2% target, Bloomberg…
13Nov2008 | Money Morning | Comments Off | ContinuedECB and BOE Inject Billions, Bank of China Cuts Rates as Central Banks Cope with Lehman Fallout
Central banks around the world, including the European Central Bank (ECB), the Bank of England (BOE) and the People’s Bank of China, scrambled yesterday (Monday) to shore up liquidity and protect domestic markets against the fallout from the collapse of Lehman Bros Holdings Inc. (LEH).
The Bank of England and the European Central Bank injected billions of dollars into global money markets and the Bank of China cut interest rates for the first time in six years and lowered capital reserve requirements for its smaller banks.
The ECB allotted roughly $43 billion (30 billion euros) in a one-day money-market auction that…
16Sep2008 | Money Morning | Comments Off | ContinuedBank of England Announces $100 Billion Banking Rescue
In an effort to restore liquidity to the U.K. financial markets, the Bank of England (BOE) yesterday (Monday) announced a $100 billion (50 billion pounds) rescue plan.
The plan, similar to the U.S. Federal Reserve’s lending initiative, will allow U.K. banks to swap illiquid mortgage-backed assets for government bonds. The BOE hopes the plan will encourage banks to begin interbank lending again, which in turn should loosen up commercial lending as well.
The plan will “unfreeze the situation we’ve got at the moment,” Chancellor of the Exchequer Alistair Darling said in an interview with the BBC, Bloomberg News reported. “What the Bank of…
22Apr2008 | Money Morning | Comments Off | Continued
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