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Tag Archives: interest rates
Chinese Media Stunner: China Will Be The Next Country To Cut Rates To Zero
Chinese Media Stunner: China Will Be The Next Country To Cut Rates To Zero One week ago, we showed in one chart why the global economic recovery that so many expect is just a few months away, won’t happen: as the chart below shows, China’s credit intensity since 1994 has exploded. This means that before the Global Financial […]
The Next Wave of Debt Monetization Will Also Be A Disaster
The Next Wave of Debt Monetization Will Also Be A Disaster According to the IMF (International Monetary Fund) and the IIF (Institute of International finance) global debt has soared to a new record high. The level of government debt around the world has ballooned since the financial crisis, reaching levels never seen before during peacetime. This has happened in […]
The Fed Is Losing Control Over Rates Again, This Time In The Other Direction
The Fed Is Losing Control Over Rates Again, This Time In The Other Direction Starting in late March, something unexpected happened: as the Effective Fed Funds rate drifted higher, it broke above the implicit upper bound on the interest rate corridor defined by the Interest on Excess Reserves. It was not meant to do this. This loss of […]
The Austrian School Warned, the ECB Didn’t Listen
The Austrian School Warned, the ECB Didn’t Listen Looking at the current situation, one can easily perceive that our economic environment is not in the best condition. The whole of Europe is suffering from an economic stagnation, if not in some countries even a slowdown, that could very well turn into an economic recession sooner […]
Fed Has Shovel, Digs Bigger Hole
Fed Has Shovel, Digs Bigger Hole Let’s get to the bottom line on all this “rate cut” nonsense. The Fed made a fatal mistake in first promoting “fiscal” actions (during the 08 crash) and then continuing to support them well after the bottom in 2009. This allowed Barack Obama to run trillion dollar deficits for years and, once he did […]
Warning! Interest Rates, Inflation, And Debt Do Matter
Warning! Interest Rates, Inflation, And Debt Do Matter With our national debt blowing past 23 trillion dollars nothing is as sobering as looking at future budgets. We should be worried. Central banks across the world claim the lack of inflation is the key force driving their QE policy and permitting it to continue, however, the […]
The Fed is Lying to Us
The Fed is Lying to Us “When it becomes serious, you have to lie” The recent statements from the Federal Reserve and the other major world central banks (the ECB, BoJ, BoE and PBoC) are alarming because their actions are completely out of alignment with what they’re telling us. Their words seek to soothe us […]
We Finally Understand How Destructive Negative Interest Rates Actually Are
We Finally Understand How Destructive Negative Interest Rates Actually Are We are in the midst of a strange economic experiment. Vast quantities of negative-yielding debt are currently sloshing around the global economy. While the amount of negative-yielding bonds has dropped recently from a mind-boggling number in excess of $17 trillion, reinvigorated central bank easing across […]
Will the Bank of England join the loose money bandwagon?
Will the Bank of England join the loose money bandwagon? As the year of the 325th anniversary of the Bank of England’s foundation, and as the month of one of the Bank’s more important rate-setting decisions since 2008, September provides a congruous occasion on which to reflect on the history of the BoE and consider […]
Peter Schiff: Negative Interest Rates Are Boneheaded
Peter Schiff: Negative Interest Rates Are Boneheaded Donald Trump has been badgering Federal Reserve Chairman Jerome Powell for months, begging for lower interest rates. Yesterday, he took things to another level, saying that the “boneheads” at the Fed need to push rates into negative territory. In his podcast, Peter Schiff said negative interest rates are […]
How Is Negative Interest Possible?
HOW IS NEGATIVE INTEREST POSSIBLE? Germany has recently joined Switzerland in the dubious All Negative Club. The interest rate on every government bond, from short to 30 years, is now negative. Many would say “congratulations”, in the belief that this proves their credit risk is … well … umm … negative(?) And anyways, it will […]
Trump Says Fed Should Cut Rates “To ZERO Or Less”, So US Can Refinance Debt And Lenghten Maturities
Trump Says Fed Should Cut Rates “To ZERO Or Less”, So US Can Refinance Debt And Lenghten Maturities Volfefe begins early today. One day before the ECB is expected to cut rates further into negative territory and restart sovereign debt QE, moments ago president Trump resumed his feud with the Fed piling more pressure on Powell […]
Why the ECB should raise, not cut rates
Why the ECB should raise, not cut rates Negative rates are likely one of the reasons behind the lacklustre European growth. Negative rates have worked as a tool to transfer wealth from savers to the indebted governments that have abandoned all structural reforms, while these extremely low rates have also perpetuated overcapacity, incentivised the refinancing of […]
Is The Fed Trying To Sabotage Trump’s Re-Election?
Is The Fed Trying To Sabotage Trump’s Re-Election? William Dudley is encouraging the Fed to prevent Trump’s re-election. Imagine an organization that can grow an economy as fast it can destroy it. This institution can make presidents kings and then transform them into court jesters. The smartest men in a room situated on 2051 Constitution Ave can […]
The Mechanics of Absurdity
The Mechanics of Absurdity Over the past few decades, the central banks, including the Federal Reserve (Fed), have relied increasingly on interest rates to help modify economic growth. Interest rate management is their tool of choice because it can be effective and because central banks regulate the supply of money, which directly effects the cost to borrow […]
