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India Central Bank Cuts Interest Rate “Pre-Emptively” For Second Time In 2 Months
India Central Bank Cuts Interest Rate “Pre-Emptively” For Second Time In 2 Months In a surprise move, the RBI just cut its main interest rates for the second time in two months, taking it from 6.75% to 6.50%, in what the central bank calls a “pre-emptive” policy move, but what is in reality merely a […]
Housing Crash in China Steeper than in Pre-Lehman America
Housing Crash in China Steeper than in Pre-Lehman America China has long frustrated the hard-landing watchers – or any-landing watchers, for that matter – who’ve diligently put two and two together and rationally expected to be right. They see the supply glut in housing, after years of malinvestment. They see that unoccupied homes are considered […]
Ex-Plunge Protection Team Whistleblower: “Governments Control Markets; There Is No Price Discovery Anymore”
Ex-Plunge Protection Team Whistleblower: “Governments Control Markets; There Is No Price Discovery Anymore” One year after the great stock market crash in 1987, US President Ronald Reagan launched the “Working Group on Financial Markets.” Conspiracy theorists believe, however, that the real task of this committee is to protect against a renewed slump in the stock […]
The “Liquidity Glut” Springs Eternal: Global Central Bank Easing Quadruples In 2015
The “Liquidity Glut” Springs Eternal: Global Central Bank Easing Quadruples In 2015 Thanks to global disinflationary pressures driven by the savings glut, an oil glut, and universally high (peak) debt levels (crushing the transmission mechanisms of textbook economists), central planners have gone full ease-tard in 2015. From a ‘balanced’ 10 easing, 9 tightening bias (~1:1) in […]
Fears over deflation thwarted Bank of England vote to raise interest rate
Fears over deflation thwarted Bank of England vote to raise interest rate Falling oil prices driving inflation down to 0.5% in January, forced Martin Weale and Ian McCafferty to back down Fears that Britain could sink into a damaging “deflationary spiral” have stayed the hands of Bank of England policymakers who had pushed for an early interest […]
Debt As Wealth; The Caution of Unfit Past Experience
Debt As Wealth; The Caution of Unfit Past Experience With the G-20 recoiling itself back into the same kinds of mistakes made in the 1960’s, leading directly to the Great Inflation, we will have to take into account the other end of that, namely other forms of “stimulus.” With the global economy sinking, and worries about […]
A New Red Flag for Our Rosy Economic Scenario
A New Red Flag for Our Rosy Economic Scenario Wholesale inventories balloon to Lehman-Moment levels. A lot of economists, particularly those quoted in the media, claim that rising inventories are a sign of confidence, that merchants believe that the future is rosy, that sales will be good. There is some truth to that. Merchants stock […]
“We Just Need To Print More Money” Bank Of Japan’s New Board Member Clarifies Endgame
“We Just Need To Print More Money” Bank Of Japan’s New Board Member Clarifies Endgame The Abe administration nominated a major proponent of reflationary (inflationary) monetary policy to the central bank’s board, buttressing Governor Haruhiko Kuroda’s efforts to save the nation from the dread of deflation. As Bloomberg reports, economist Yutaka Harada, who will replace Ryuzo Miyao, […]
The Beauty of Deflation
The Beauty of Deflation Deflation Paranoia The euro zone’s consumer price inflation rate declined below 1% in early 2014, getting closer to zero during 2014, nowhere near the ambitious 2% benchmark set by central banks. A further small downward adjustment in the inflation rate has put it into negative territory, so harmonized euro area consumer […]
Oil-led deflation can be good, bad or ugly
Oil-led deflation can be good, bad or ugly Not all deflation is the same. In this case, cheaper oil wears the white hat — for now When you fill up your car with cheap gas, there’s a group of economists who just hate it. That’s because in many parts of the world the biggest worry for economic […]
ECB Euro QE Won’t Succeed
ECB Euro QE Won’t Succeed The European Central Bank (ECB) leaked the information beforehand to test the waters and this time followed through on their promise: Money printing galore in the form of 60 billion euros per month ($69 billion). ECB president Mario Draghi has been talking about it since 2012 and now finally got […]
Oil and Real Estate Bubbles in Canada: What Goes up Won’t so Smoothly Come Down
Oil and Real Estate Bubbles in Canada: What Goes up Won’t so Smoothly Come Down Five years ago, I noted how unsustainable Canadian economic growth is fuelled by debt, which is leveraged to increase the prices–and ‘profitability’–of assets like oil holdings and real estate. It might as well be called “phantom growth,” because it’s bound to disappear […]
‘Two Percent Inflation’ and The Fed’s Current Mandate
‘Two Percent Inflation’ and The Fed’s Current Mandate Over the last 100 years the Fed has had many mandates and policy changes in its pursuit of becoming the chief central economic planner for the United States. Not only has it pursued this utopian dream of planning the US economy and financing every boondoggle conceivable in […]
Fear And Dread Of Deflation—-The Keynesian Big Lie At Work
Fear And Dread Of Deflation—-The Keynesian Big Lie At Work The fear of deflation has become the cornerstone of Keynesian economic thought. A lack of inflation has been used to explain periods of economic weakness from the Great Depression of the 1930’s, to the Great Recession 2008-2009. And now, that philosophy has been adopted as […]
All eyes on Fed, Greece after ECB fires bazooka
All eyes on Fed, Greece after ECB fires bazooka PARIS (Reuters) – After the surprises from central banks which rocked markets at the start of the year, the U.S. Federal Reserve will be watched as closely as ever this week to see that it doesn’t stray from its own policy path. The atmosphere will already be […]
