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Forced Liquidation
Forced Liquidation Historians of the future, pan-roasting fresh-caught June bugs over their campfires, may wonder when, exactly, was the moment when the financial world broke with reality. Was it when Nixon slammed the “gold window” shut? When “maestro” Alan Greenspan first bamboozled a Senate finance committee? When Pets.com face-planted 268 days after its IPO? When […]
The Greenspan Moon Cult
The Greenspan Moon Cult Taking another look at what I wrote about repo and the latest developments yesterday, it may be worthwhile to spend some additional time on the “why” as it pertains to so much determined official blindness, an unshakeable devotion to otherwise easily explained lunar events. The short version: monetary authorities as well as the “experts” describe […]
“Inflation Is Inevitably Going To Rise” – Is Alan Greenspan Right?
“Inflation Is Inevitably Going To Rise” – Is Alan Greenspan Right? Via DataTrekResearch.com, “Right now, there’s no real inflation at play. But if we go further than we are currently, inflation is inevitably going to rise.” That’s from Alan Greenspan on CNBC this week. The “further” relates to US Federal deficit spending, the idea being that […]
Really Bad Ideas, Part 8: Yield Curve Control And Mega-Stimulus
Really Bad Ideas, Part 8: Yield Curve Control And Mega-Stimulus It’s been obvious for a while that the next phase of global monetary madness would be both spectacular and very different from the previous phase. The question was whether the difference would be in degree or kind. Now the answer is looking like “both.” Let’s […]
Weekly Commentary: No One Knows How Monetary Policy Works
Weekly Commentary: No One Knows How Monetary Policy Works My interest was piqued by a Friday Bloomberg article (Ben Holland), “The Era of Cheap Money Shows No One Knows How Monetary Policy Works.” “Monetary policy is supposed to work like this: cut interest rates, and you’ll encourage businesses and households to borrow, invest and spend. […]
Where The Next Financial Crisis Begins
Where The Next Financial Crisis Begins We are not sure of how the next financial crisis will exactly unfold but reasonably confident it will have its roots in the following analysis. Maybe it has already begun. The U.S. Treasury market is the center of the financial universe and the 10-year yield is the most important price […]
Paul Volcker Trashes Fed, Washington Plutocrats: World’s In “A Hell Of A Mess In Every Direction”
Paul Volcker Trashes Fed, Washington Plutocrats: World’s In “A Hell Of A Mess In Every Direction” While we have grown used to Alan Greenspan’s flexible world views appearing regularly among US media channels, when former Fed Chair Paul Volcker speaks, it’s low frequency nature tends to make on pay attention, and he is not optimistic […]
Agents of Chaos: Trump, the Federal Reserve and Andrew Jackson
Agents of Chaos: Trump, the Federal Reserve and Andrew Jackson Photo Source Eli Christman | CC BY 2.0 “It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes.” – President Andrew Jackson, Washington, July 10, 1832 They are three players, all problematic in their […]
The Everything Bubble: When Will It Finally Crash?
The Everything Bubble: When Will It Finally Crash? Much like the laws of physics, there are certain laws of economics that remain constant no matter how much manipulation exists in the markets. Expansion inevitably leads to contraction, and that which goes up must eventually come down. Central banks understand this reality very well; they have […]
There’s a New Crash Coming
There’s a New Crash Coming Donald Trump is the epitome of irrational exuberance. You might remember that phrase from the 1990s. Alan Greenspan, the head of the Federal Reserve at the time, was describing how the tech boom was creating a bubble by generating enthusiasm way out of proportion to the actual value of the […]
How the Trade War Helps Hide Central Bank Sabotage Of The Economy
How the Trade War Helps Hide Central Bank Sabotage Of The Economy Almost every aspect of the global economic downturn, which started ostensibly in 2007-08 and is still ongoing to this day, can be traced back to the actions and policies of central banks. The Federal Reserve, for example, used artificially low interest rates and […]
Yellen Wants Fed to Commit to Future Booms to Make Up for Busts
Yellen Wants Fed to Commit to Future Booms to Make Up for Busts Former Fed Chair Yellen promotes “Lower for Longer”, a policy in which the Fed knowingly keeps interest rates too low. Here’s the asinine policy proposal of the day: Fed Should Commit to Future ‘Booms’ to Make Up for Major Busts. The U.S. […]
Weekly Commentary: Unassailable
Weekly Commentary: Unassailable I’ve been here before and, candidly, it’s not much fun. Lodged in my mind this week was the brilliant quote from the 19th century German philosopher Arthur Schopenhauer: “All truth passes through three stages: First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as self-evident.” It’s fascinating how […]
Weekly Commentary: Powell, Greenspan and Whatever it Takes
Weekly Commentary: Powell, Greenspan and Whatever it Takes Fed Chairman Powell is in a tough spot, one made no easier now that he’s on the receiving end of disapproving presidential tweets. The global Bubble has begun to falter, which only exacerbates divergences between various markets and economies. The U.S. is booming, while China struggles and […]
Trump’s Tweets End the Myth of Fed Independence
Trump’s Tweets End the Myth of Fed Independence President Trump’s recent Tweets expressing displeasure with the Federal Reserve’s (minor) interest rate increases led to accusations that President Trump is undermining the Federal Reserve’s independence. But, the critics ignore the fact that Federal Reserve “independence” is one of the great myths of American politics. When it […]
