It’s often very difficult to get a firm handle on what markets are doing—and why. This has become especially true in this unprecedented age of negative interest rates.
The big banks are no strangers to paying huge fines to regulators. This has become especially true since the various forms of market manipulation, price rigging, and other unethical conduct by these financial institutions has come to light over the last several years. Megabank JPMorgan has been at the center of these controversies. Now, one […]
There are a variety of common arguments made against gold’s economic value. Liberal economists believe it is merely a “barbarous relic” from a simpler time. Stockbrokers liken it to a “glorified pet rock” and point out that gold has no yield and often costs money to store. As an example of how far some people […]
Seven years after a messy death, the Zimbabwe dollar is poised to return. The country, which uses the US dollar as legal tender, is facing a severe cash shortage. An estimated $2 billion in US currency left the country last year, causing even greater hardships for its struggling economy. In an effort to reduce the […]
It is fairly commonly known investing insight that gold performs well when the dollar falls. This inverse dynamic is also true with any other fiat currency; it’s just most apparent with the dollar, which makes up such a huge part of the global monetary order. However, it should be noted that gold’s unique monetary properties […]
We have seen attempt after attempt to eliminate large-size banknotes and physical money altogether. This is often referred to as the “War on Cash,” and rightly so. Once all money is digitized, nothing more than little numbers flashing across computer screens, the banks will have virtually unlimited power to control every last cent of money […]
Things aren’t looking particularly good for the Chinese economy. Nonetheless, the country’s economic leaders are assuring the international community that the government will not engage in any further currency devaluation. Anxiety over Beijing perpetuating a so-called “Currency War” against its international counterparts has not effectively been quelled yet.
First it was the confiscation of all gold coins, followed by the retirement (demonetization) of silver coins. Each of these events led to federal governments around the world deeming their legal tender backed by bullion (typically called “gold certificates” and “silver certificates”) no longer valid. Now, governments are trying to do away with cash just […]
In the latest news regarding Iran’s insistence that all international transactions (including oil sales) be conducted in euros, Brazil has become the first Latin American country to buy in to Tehran’s anti-dollar campaign. Iran is interested in Brazilian cars, trucks, jetliners, as well as replacement equipment for its refineries and oil wells. These sales would […]
Do you smell the smokey scent of burning paper? That’s the beginning of the impending War On Cash. A recent editorial that appeared on Bloomberg Business today boldly declares, “Bring On the Cashless Future.” In reference to the growing push for fully digital currencies to replace other forms of money, the editorial staff extols the […]
Within the omnibus spending bill recently passed by Congress is the obscured Division E, Title I, Section 117, which prevents the U.S. Treasury Department from redesigning the one dollar bill. Despite the mostly cosmetic alterations to the $5, $10, $20, and $50 bills—color changes, added watermarks, etc.—the design of the one dollar bill has remained […]
Contrary to expectations, the US dollar rally after the Fed’s first interest rate hike since 2006 has failed to materialize. Conventional wisdom held that an increase in interest rates would strengthen the dollar, especially as the other major central banks continued their stimulus programs. But the dollar is not responding to the rate hike as […]
South Africa is home to the highest-cost gold miners in the world, placing the country’s huge gold and platinum mining industries in peril due to persistently low metal prices. The country has been in turmoil in other ways as well, with a floundering South African rand and lack of government stability a common theme.
There is always a fair amount of buzz in the financial news regarding the imminent demise of the dollar—and rightly so. This is especially true in the long-run. The “reigning heavyweight champion” of fiat currencies is still, by and large, the world’s reserve currency of choice. However, there’s increasingly reason to believe that the USD […]
With all of the upheaval on its stock market and hand-wringing over the consistency of its currency’s value, China has nonetheless pushed forward with a two-pronged plan to shore up its financial system. Through a consistent program of adding gold to its reserves and following the prescriptions of the International Monetary Fund (IMF), it seems […]
The US dollar continued its rally today, crushing all comers. The euro is at a seven-month low of 1.0575 against the dollar this morning. EUR parity with USD becoming a more likely scenario as ECB president “Super Mario” Draghi announces he is going to feed the ECB’s quantitative easing program a yellow mushroom next week. […]
The New York Attorney General’s Criminal Enforcement and Financial Crimes Bureau has opened an investigation into forex manipulation by four interdealer brokers who operate currency trading platforms. Subpoenas were served last week to Tullet Prebon PLC, BGC Partners, Inc, GFI Group, and TFS-ICAP Ltd. TFS-ICAP is a joint venture between ICAP Plc and Cie. Financiere […]
The global commodity markets are showing no signs of breaking out of their prolonged slump with more pressure from the dollar and unfavorable weather patterns around the world. (The weather may be a weak explanation for poor consumer spending—think last winter—but unavoidable as a factor influencing resource extraction.) The precious metals followed the broader commodities […]
While even the most cautious observers think it’s all but certain that the Fed tightens monetary policy at its December gathering, what’s an even greater certainty is that central banks in Japan and Europe are planning to move even further in the opposite direction.
The big news in currency markets this morning is the recommendation by a policy committee of the IMF that China’s currency, the yuan, be included in the Special Drawing Rights basket of currencies. Forex traders put the odds of the yuan’s inclusion in the SDR at the IMF’s November 30 meeting at around 80%. This […]