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How Money Disappears in a Fractional-Reserve Money System
HOW MONEY DISAPPEARS IN A FRACTIONAL-RESERVE MONEY SYSTEM Most experts are of the view that the massive monetary pumping by the US central bank during the 2008 financial crisis saved the US and the world from another Great Depression. On this the Federal Reserve Chairman at the time Ben Bernanke is considered the man that […]
The Fed’s Painted Itself Into The Most Dangerous Corner In History—–Why There Will Soon Be A Riot In The Casino
The Fed’s Painted Itself Into The Most Dangerous Corner In History—–Why There Will Soon Be A Riot In The Casino The chart below crystalizes why the Fed is stranded in a monetary no man’s land. By the time of next week’s meeting the federal funds rate will have been pinned at about 10 bps, or effectively zero, […]
The Poison of Central Planning
The Poison of Central Planning As is well known, central banks around the world have deployed a range of “unconventional policies” in recent years, ranging from imposing zero to negative interest rates, to outright money printing (QE). Photo via americanpatriotdaily.com We have seen a number of people argue that “QE” does not really involve “money […]
JP Morgan And Citigroup Agree That The U.S. Economy Is Steamrolling Toward A Recession
JP Morgan And Citigroup Agree That The U.S. Economy Is Steamrolling Toward A Recession As we approach the end of 2015, researchers at both JP Morgan and Citigroup agree that the probability that the U.S. economy will soon plunge into recession is rising. Just last week, a member of the U.S. House of Representatives asked […]
This Is What Happened The Last Time The Fed Hiked While The U.S. Was In Recession
This Is What Happened The Last Time The Fed Hiked While The U.S. Was In Recession Back on June 17, Bank of America started its 66-day countdown to the moment it was convinced the Fed would hike rates, September 17, 2015. We, correctly, said that “we disagree entirely” with BofA’s conclusion that the Fed would hike rates, and […]
Big Banks Suffer Rare Fail as Congressional Deal Cuts Nearly $1 Billion a Year in Handouts
Big Banks Suffer Rare Fail as Congressional Deal Cuts Nearly $1 Billion a Year in Handouts Big banks will lose a portion of a multi-billion-dollar government handout they’ve enjoyed for over 100 years, thanks to a compromise highway bill released Tuesday. One estimate pegged the loss to the banks at $8 billion to $9 billion over […]
The FED v Bias & Prejudice
The FED v Bias & Prejudice COMMENT: If the Fed is so smart and understands the problem with low/negative interest rates, then why didn’t it hike rates in September? Better yet, why didn’t they raise rates YEARS ago? The Fed has kept rates near zero for seven years but now suddenly realizes that this is a […]
Dollar-Denominated Corporate Time Bomb Set to Blow
Dollar-Denominated Corporate Time Bomb Set to Blow Emerging economies around the world are already feeling the first pangs of withdrawal as fast yield-chasing investors send their funds back to the U.S. in anticipation of higher Treasury yields and a further appreciating dollar. In Mexico, the central bank has just published its balance of payments data […]
Unintended consequences of lift-off in a world of excess reserves
Unintended consequences of lift-off in a world of excess reserves Bar a disastrous NFP print this coming Friday the US Federal Reserve will change the target range for the Federal Reserve (Fed) Bank’s Funds rate from the current level of zero – 25bp to 25 – 50bp on December 16th. The Fed will effectively raise […]
Salting the Economy to Death
Salting the Economy to Death One popular delusion that won’t seem to go away is the notion that policy makers can stimulate robust economic growth by setting interest rates artificially low. The general theory is that cheap credit compels individuals and businesses to borrow more and consume more. Before you know it, the good times […]
Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion Bail-in
Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion Bail-in In uncertain times, “cash is king,” but central bankers are systematically moving to eliminate that option. Is it really about stimulating the economy? Or is there some deeper, darker threat afoot? Remember those old ads showing a senior couple lounging on […]
“One Big Shock Away from a Global Downturn…”
“One Big Shock Away from a Global Downturn…” Zombies vs. Cronies DUBLIN – Most elections these days are contests between cronies and zombies. The left favors the zombies. The right favors the cronies. In yesterday’s presidential elections in Argentina the zombies lost. It’s time for the cronies to take over. New Argentine president Mauricio Macri […]
Weekly Commentary: Monetary Fiasco
Weekly Commentary: Monetary Fiasco All great monetary fiascos are forged upon a foundation of misperceptions and flawed premises. There’s always an underlying disturbance in money and Credit masked by supposed new understandings, technologies, capabilities and superior financial apparatus. During the nineties “New Paradigm” period, exciting new technologies and “globalization” were seen unleashing a productivity and […]
Here Is The Complete Scenario In Which The Fed Hikes Rates, Starts A Recession, And Launches QE4
Here Is The Complete Scenario In Which The Fed Hikes Rates, Starts A Recession, And Launches QE Seven years after the Fed unleashed ZIRP and QE to “fix the economy”, it has finally admitted that ZIRP and QE failed to do that (although they certainly succeeded in blowing the biggest asset bubble ever), and for […]
