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Tag Archives: negative interest rates
ECB Negative Rate Experiment May Lead to the Worst Financial Crisis in Modern History
ECB Negative Rate Experiment May Lead to the Worst Financial Crisis in Modern History QUESTION: Mr. Armstrong; Your proposition that the quantity of money theory is dead seems to be a true earth shattering proposition. It certainly disproves the Austrian School and the events post 2008 support your statement. The European Central Bank is supposed […]
Why Governments Expand the Gap Between Rich and Poor
Why Governments Expand the Gap Between Rich and Poor QUESTION: Mr. Armstrong; You said at your Frankfurt the ECB policy of negative interest rates is actually creating a wider gap between the poor and the rich. Could you elaborate on that comment? Thank you. Hop you come back to Frankfurt. You do realize that you get […]
Draghi: Trillions In QE Have Made Economies “More Resilient”
Draghi: Trillions In QE Have Made Economies “More Resilient” When last night we previewed this week’s annual Jackson Hole symposium at which Mario Draghi is scheduled to speak just before the market close on Friday, we said that the ECB head is warming up for the trip by speaking at the Lindau economics symposium in […]
Could the elimination of cash prevent an economic crisis?
COULD THE ELIMINATION OF CASH PREVENT AN ECONOMIC CRISIS? Given the still subdued economic growth many experts are of the view that the presence of cash has constrained central banks from setting negative rates to stimulate a subdued economic activity. In a future economic or financial crisis, current low rates would restrict the effectiveness of […]
Traveling Circus
Traveling Circus After Wednesday’s policy statements by the Fed and Bank of Japan, a harsh light is being shined on the incredible nature of their communications. It would be wise in the current environment to structure investment portfolios with a pro-volatility bias. Central banks in G7 economies have been carrying a heavy load for a […]
Negative Interest Rates and the War on Cash (1)
Negative Interest Rates and the War on Cash (1) Irving Underhill City Bank-Farmers Trust Building, William & Beaver streets, NYC 1931 It’s been a while, but Nicole Foss is back at the Automatic Earth -which makes me very happy-, and for good measure, she starts out with a very long article. So long in fact that […]
There is no such thing as a negative interest rate
There is no such thing as a negative interest rate We Austrian economists are used to having terms corrupted, misused and redefined by statists and others who love and advocate strong central control of money and power. The term “inflation” is a prime example. We Austrians refer to “inflation” as creating new fiat money–as in […]
Global Debt with Negative Rates Reaches $12 Trillion
Global Debt with Negative Rates Reaches $12 Trillion QUESTION: Dear Mr. Armstrong, I am really confused regarding long-term interest rates – I had thought they were controlled by the markets – but it seems at time that the central banks control them by buying the governments debt. Can you shed some light on this? Can […]
Negative interest rates are coming to America
Negative interest rates are coming to America Well, that didn’t take long! Negative Interest Rate Policy appears to be a gift that keeps on giving. Just a little while ago I wrote that, in essence, if the Federal Reserve wants to keep the financial party going a little bit longer, it will have to continue […]
Jeff Gundlach: “Things Are Going To Get Pretty Scary”
Jeff Gundlach: “Things Are Going To Get Pretty Scary” One day before the Fed’s June statement, Jeff Gundlach once again accurately predicted the somber mood that would ensue as a result of Yellen’s Wednesday decision and press conference when he correctly said that “Central Banks Are Losing Control.” Today, in the aftermath of James Bullard stunning […]
Negative-Interest-Rate absurdity is another “rabbit out of the hat.”
Negative-Interest-Rate absurdity is another “rabbit out of the hat.” For the second time this year, Spain’s caretaker government just managed to sell 50-year bonds in a €3 billion ($3.4 billion) deal. Despite maturing in the year 2066, when many of us won’t even be alive and the duty to pay back the debt (assuming it […]
Gold and Negative Interest Rates
Gold and Negative Interest Rates The Inflation Illusion We hear more and more talk about the possibility of imposing negative interest rates in the US. In a recent article former Fed chairman Ben Bernanke asks what tools the Fed has left to support the economy and inter alia discusses the use of negative rates. We first have to […]
Asset Recycling – Robbing Pensions to Cover Govt. Costs
Asset Recycling – Robbing Pensions to Cover Govt. Costs We are facing a pension crisis, thanks to negative interest rates that have destroyed pension funds. Pension funds are a tempting pot of money that government cannot keep its hands out of. The federal government of Canada, for example, is looking to reduce the cost of […]
Draghi at War with Reason & Other Central Banks
Draghi at War with Reason & Other Central Banks Tensions are starting to rise between Germany and the ECB because Draghi will not admit his negative interest rates are causing an economic meltdown. “We continue to expect them (interest rates) to remain at present or lower levels for an extended period of time, and well past […]
“A Total Illusion from QE and Financial Engineering”
“A Total Illusion from QE and Financial Engineering” The 10-Year Treasury Is Less Than You Think When the Fed was created in 1914, it was set to task of controlling short-term interest rates in an attempt to iron out financial cycles. It succeeded for many years. But by avoiding the natural rebalancing (and occasional pain) from […]
