Earlier this year, the International Monetary Fund (IMF) worried publicly about a storm brewing for the global economy if government policymakers don’t match the coordinated easing of monetary policy with complementary fiscal policy—in other words, more spending. In its second biannual report of the year, the IMF is now warning about dwindling bank profits as […]
European Central Bank President Mario Draghi traveled to Berlin today to face some of his harshest foes: the German lawmakers of the German Bundestag. This was his first trip through the doors of the Reichstag Building since October 2012, when he appealed to lawmakers to support his plan of unlimited purchases of government debt. His […]
Japanese Prime Minister Shinzo Abe, who with the Bank of Japan (BOJ) Governor Haruhiko Kuroda has embarked on an unprecedented amount of quantitative easing known as “Abenomics,” won over enough voters to recently earn reelection for his government. This is widely seen as a mandate for him to continue his aggressive, accommodative economic policies. Yet […]
For those analysts who have a sense of perspective about cycles in the markets, we appear to be living in very strange economic times, indeed. There will always be pundits on each side of the argument, the pessimistic bears and the optimistic bulls. (It’s worth stating that if someone’s hedge fund is long or short, […]
For all of its miscalculations, mistakes, and policy difficulties, the best thing that the Federal Reserve could give to the markets is clarity. This, however, is not part of the central bank’s modus operandi. Nor is it likely to happen in the near future.
Some call it the “War on Cash.” Others, citing studies, suggest we are approaching “Peak Cash,” referencing the similar transformation that will accompany environmental constraints such as “Peak Oil.” No matter what you choose to call it, the world’s advanced economies are all hurtling toward a system of fully digitized money—perhaps coming as soon as […]
Wells Fargo may have let its latest scandal break too close to Congressional elections. An angry American public are asking questions of their Congressmen. Questions such as “Why have no banking executives been punished for destroying the world financial system in 2008? Why are banks allowed to get away with endless instances of fraud, market […]
In this unprecedented era of central bank intervention in the global economy, we’ve seen an increasing use of bellicose and militaristic metaphors for monetary policy tools—”Bazookas! Sinks! Aggressive Doves!” a recent Wall Street Journal headline declares sardonically of the figurative language that central bankers have resorted to. Heck, even the title of this article relies […]
Among many other more important factors, one of the precursors to the financial crisis was the lifting of a long-standing legislative prohibition on investment banks simultaneously operating as commercial banks, and vice versa. Since the passage of the Glass-Steagall Act (1933) during the time of FDR and the New Deal, these two functions were kept […]
We live in unprecedented times when it comes to central banks resorting to untested and counterintuitive monetary policy. As many experts have noted over the past two years, the Federal Reserve and other central banks around the world are in dire need of a credible exit strategy from their extreme policy measures. Increasingly, it looks […]
By now, you’re probably a bit fatigued by the nonstop coverage of this year’s presidential election. While the campaigns have devolved into a constant sideshow on the cable news networks, the financial markets have been subdued during the slow trading of the “summer doldrums.” Volatility has been particularly low. However, markets may starting to pay […]
Cultures from all around the world have a long history of using military metaphors for a vast array of unrelated topics. Think of Sun Tzu dishing out philosophy in The Art of War during antiquity, and how this text has remained widely relevant today. For a modern example, look no further than football, where both […]
A mix of weak economic data in the U.S. and a focus on Fed Chair Janet Yellen’s remarks at the central bank symposium in Jackson Hole, Wyoming are having the heaviest influence on gold prices this morning. After the spot gold price closed at about $1,322/oz on Thursday, the yellow metal is now trading 1% […]
One important dynamic that investors would do well to pay attention to is the ratio of the money supply to gold. Although it doesn’t seem incredibly important on its face, this can be one of the most important measures for evaluating the health of the economy.
Federal Reserve Chair Janet Yellen will be speaking at the annual Economic Policy Symposium hosted by the Kansas City Federal Reserve in Jackson Hole, Wyoming next Friday.
Today marks 45 years since US President Richard Nixon ended the redemption of dollars for gold. Called “closing the gold window,” this action signaled the end of the world’s last gold standard — the Bretton Woods system. Designed to avoid the pitfalls of the Classic Gold Standard, its fatal flaw was using a single nation’s […]
The most powerful private banks in the world have been fined billions of dollars for their misdeeds over the past eight years or so. In an unprecedented move, these banks were held fiscally (but not criminally) responsible for the manipulation of markets and dishonest practices that bilked investors and account-holders of their hard-earned money.
The question on the mind of market participants is whether or not the Fed will decide to pull the trigger on interest rates at some point this year.
Are the officials at the Federal Reserve finally showing uncharacteristic signs of humility? Not really, unfortunately.
One of the blockbuster hits of 2015 was the film The Big Short, an equal parts dark and comical tale by director Adam McKay that chronicles three small groups of investors who foresaw the collapse of the real estate market in 2007-2008.