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Federal Reserve Will Continue Cutting Economic Life Support
Federal Reserve Will Continue Cutting Economic Life Support I remember back in mid-2013 when the Federal Reserve fielded the notion of a “taper” of quantitative easing measures. More specifically, I remember the response of mainstream economic analysts as well as the alternative economic community. I argued fervently in multiple articles that the Fed would indeed […]
Lies, Lies & OMG More Lies
LIES, LIES & OMG MORE LIES “There are three types of lies — lies, damn lies, and statistics.” – Benjamin Disraeli Every month the government apparatchiks at the Bureau of Lies and Scams (BLS) dutifully announces inflation is still running below 2%. Janet Yellen then gives a speech where she notes her concern inflation is […]
What Does the QE Experience Say About Rates in a Shrinking Fed Balance Sheet World?
What Does the QE Experience Say About Rates in a Shrinking Fed Balance Sheet World? The Federal Reserve is likely to decide next week to begin letting assets roll of its balance sheet as bonds mature, instead of reinvesting the proceeds. This means that the balance sheet will begin to shrink in size and other […]
Gold Jumps After Mnuchin Says “Less Concerned About Inflation Than Economic Growth”
Gold Jumps After Mnuchin Says “Less Concerned About Inflation Than Economic Growth” In a potentially revealing glimpse of what is to come from the next Fed head, Treasury Secretary Steven Mnuchin, speaking during a Politico forum, told the audience: “Although we respect the Fed’s independence, we are concerned about economic growth. We’re doing everything we […]
“Bad Options” Regarding 2% Inflation Targets (And Other Silly Notions)
“Bad Options” Regarding 2% Inflation Targets (And Other Silly Notions) The Wall Street Journal and Bloomberg both posted ridiculous articles regarding today regarding inflation. The former was on “bad options” the latter on “inflation expectations”. Let’s take a look at both articles because both represent widely believed nonsense. In Bad Options for Addressing Too-Low Inflation, Wall […]
Julian Robertson: “There’s A Bubble” And “It’s The Federal Reserve’s Fault”
Julian Robertson: “There’s A Bubble” And “It’s The Federal Reserve’s Fault” Call it the “bearish billionaire” curse. One month ago, MarketWatch penned “7 billionaires who are worried about a stock-market correction” which listed Carl Icahn, David Tepper, Howard Marks, George Soros, Jeff Gundlach, Warren Buffett and Eliot Singer as some of the world’s wealthiest people […]
Swamp Fever
Swamp Fever Further proof, as if more were needed, that God is rather cross with the world’s number one exceptional nation: Hurricane Irma is tracking for a direct hit on Disney World. In the immortal words of the Talking Heads: This ain’t no party, this ain’t no disco, this ain’t no fooling around. Houston is […]
“10-Year Treasury Yields Headed to Zero Percent” Saxo Bank CIO
“10-Year Treasury Yields Headed to Zero Percent” Saxo Bank CIO In his latest Email article, Steen Jakobsen, Saxo Bank Chief economist and CIO has a bold prediction about interest rates. With nearly everyone, even Janet Yellen at the Fed, predicting wage-induced inflation, Jakobsen makes a bold call in the opposite direction. This is a guest post […]
The world’s most powerful bank issues a major warning
The world’s most powerful bank issues a major warning In 1869, a 48-year old Jewish immigrant from the tiny village of Trappstadt in Germany’s Bavaria region hung a shingle outside of his small office in lower Manhattan to officially launch his new business. His name was Marcus Goldman, and the business he started, what’s now […]
The Insanity of Pushing Inflation Higher When Wages Can’t Rise
The Insanity of Pushing Inflation Higher When Wages Can’t Rise In an economy in which wages for 95% of households are stagnant for structural reasons, pushing inflation higher is destabilizing. The official policy goal of the Federal Reserve and other central banks is to generate 3% inflation annually. Put another way: the central banks want to […]
The Trouble with Asset Bubbles: If You Stop Pumping, They Pop
The Trouble with Asset Bubbles: If You Stop Pumping, They Pop The idea that authorities can massage their pumping to keep asset bubbles inflated at a permanently high plateau is currently being tested. The trouble with inflating asset bubbles is that you have to keep inflating them or they pop. Unfortunately for the bubble-blowing central […]
ECB – Draghi & Tapering
ECB – Draghi & Tapering The European Central Bank (ECB) is expected to begin reducing its bond purchases gradually tampering its stimulation program of Quantitative Easing (QE). Nevertheless, reliable sources tell of the ECB being extremely cautious fearing what will happen if buyers do not appear and rates begin to rise sharply. The difference between […]
How to Make the Financial System Radically Safer
How to Make the Financial System Radically Safer Preventing the Last Crisis Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments. A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders. So, too, a curious skepticism produces […]
Austrian Monetary Theory vs. Federal Reserve Inflation Targeting
AUSTRIAN MONETARY THEORY VS. FEDERAL RESERVE INFLATION TARGETING One of the leading policy guideposts for central banks and many monetary policy proponents nowadays is the idea of “inflation targeting.” Several major central banks around the world, including the Federal Reserve in the United States, have set a goal of two percent price inflation. The problem […]
Fed Study Shows Phillips Curve Is Useless: Admitting the Obvious
Fed Study Shows Phillips Curve Is Useless: Admitting the Obvious The Phillips Curve, an economic model developed by A. W. Phillips purports that inflation and unemployment have a stable and inverse relationship. This has been a fundamental guiding economic theory used by the Fed for decades to set interest rates. A new Fed Study shows the […]
