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by WashingtonsBlog
Fed Policy Raising – Rather than Reducing – Unemployment The Federal Reserve announced today that it will keep on buying $85 billion dollars worth of assets until unemployment improves. That is like a medieval doctor bleeding a patient with leeches until his iron deficiency goes away. Ken Griffin – head of Citadel Capital – noted this week: As we’ve all learned over the years, if you reduce the cost of capital you increase your use of [...] Gold slump has wiped $560 billion from the value of central bank reserves after its price dropped 13% in the last two days. Global investors are switching to equities in a bid to generate income. Central banks own 19% of all gold mined (some 31,694.8 metric tons) and are among the major losers from the asset price slump, according the World Gold Council in London. Global investors have sold gold to [...] by Charles Hugh-Smith of OfTwoMinds blog, If we shed our fixation with the Fed and look at global supply and demand, we get a clearer understanding of the tailwinds driving the U.S. dollar higher. I know this is as welcome in many circles as a flashbang tossed on the table in a swank dinner party, but the U.S. dollar is going a lot higher over the next few years. For a variety of reasons, [...] Swiss right-wing forces referendum on banning SNB gold sales The right-wing Swiss People’s Party (SVP) has gathered enough signatures to force a referendum on a proposal to ban the country’s central bank from selling any of its gold reserves. The Central Bank of the Russian Federation Gold Reserves Central Bank of the Russian updated its Internet site with February’s data. That data showed that they purchased another 200,000 ounces of gold for their [...] Obama Began Currency Wars in 2010 – Jm Rickards
Rickards say’s The the U.K. Pound Sterling will be as of now the Biggest Loser as they have no Gold to fight with….
BOC Chief Says China Should Be on ‘High Alert’ on Inflation China should be on “high alert” over inflation after February’s figures exceeded forecasts, central bank Governor Zhou Xiaochuan said, signaling a heightened focus on controlling prices. Monetary policy is “no longer relaxed” and [...] http://www.usdebtclock.org/ U.S. dollar’s share of central bank reserves falls to 54% in 2012: World Gold Council The U.S. dollar’s share of total reserves fell from 62% in 2000 to 54% in 2012, according [...] Thanks to fears over government regulations, there’s a massive $1.46 trillion treasure chest sitting idly at the Fed, excess reserves from skittish US banks. And it’s forecast to reach a startling $2.6 trillion in the next year.
This cash doesn’t do anything for the American economy, say leading analysts… < snip >
The banks see it as an asset to be accessed to meet government regulations such as recapitalization programs, toxic asset purchases and [...] by George Washington
Many speculate that the Fed will launch QE3 next week. But independent economics and financial experts say this would hurt – rather than help – the economy. Dallas Federal Reserve Bank president Richard Fisher said: I firmly believe that the Federal Reserve has already pressed the limits of monetary policy. So-called QE2, to my way of thinking, was of doubtful efficacy, which is why I did not support it to begin with. But even [...] The Extraordinary Becomes Normal The lunatics are running the asylum. This is the only conclusion one can come to when considering the nonchalance with which what was once considered an extraordinary policy with a firm ‘exit’ in mind is now propagated as a perfectly normal ‘tool’ to be employed at the drop of a hat. We refer of course to so-called ‘quantitative easing’ (QE), which really is a euphemism for money printing [...] From Bloomberg: Federal Reserve Chairman Ben S. Bernanke may be taking another look at cutting the interest rate the Fed pays on bank reserves to bring down short-term borrowing costs and spur the slowing U.S. expansion. by GoldCore Today’s AM fix was USD 1,579.50, EUR 1,288.65, and GBP 1,012.57 per ounce. Silver is trading at $27.09/oz, €22.23/oz and £17.43/oz. Platinum is trading at $1,415.75/oz, palladium at $574.18/oz and rhodium at $1,190/oz. Gold fell $7.80 or 0.49% in New York yesterday and closed at $1,581.70/oz. Gold dropped off in later trading in Asia and then recovered losses for [...] From Zero Hedge: When it comes to the future, suddenly torn by economic uncertainty driven by a plunging stock market and a tanking economy, the talking heads and the sellside brigade have opined: more QE, preferably in the form of asset purchases. After all it was none other than Goldman earlier today who said that “our confidence that the FOMC will ease policy once more at the June 19-20 meeting has also [...] by Tyler Durden When it comes to the future, suddenly torn by economic uncertainty driven by a plunging stock market and a tanking economy, the talking heads and the sellside brigade have opined: more QE, preferably in the form of asset purchases. After all it was none other than Goldman earlier today who said that “our confidence that the FOMC will ease policy once more at the June 19-20 meeting has [...] Argentine official denied on Friday that the government plans to devalue the peso amid rumors that drastic official actions are looming. “We are not going to take any explosive measures,” Deputy Economy Minister Axel Kicillof said at a news conference. Argentina’s economy is under pressure from rising inflation and slowing trade, and people have been increasingly trading their pesos for U.S. dollars to shelter their earnings. Currency controls aimed at reducing rampant tax [...] To readers of THE CONTRARIAN TAKE, it will come as no surprise that we are fond of the Austrian School’s take on monetary matters, specifically the unintended consequences of monetary largesse – economic busts. To Austrians, ALL economic “booms” founded on monetary largesse ALWAYS end in economic busts, roughly equal in size and intensity to the preceding booms. By distorting interest rate and price signals and, as a consequence, creating malinvestments that [...] Frobes To readers of THE CONTRARIAN TAKE, it will come as no surprise that we are fond of the Austrian School’s take on monetary matters, specifically the unintended consequences of monetary largesse – economic busts. To Austrians, ALL economic “booms” founded on monetary largesse ALWAYS end in economic busts, roughly equal in size and intensity to the preceding booms. By distorting interest rate and price signals and, as a consequence, creating malinvestments that [...] By: Jim Willie CB, GoldenJackass.Com < by Michael Pollaro The next Great Recession is in the making. The money supply trends say so. And it is looking more and more like this next Greater Recession is going to be one for the ages… The money supply, as measured by THE CONTRAIAN TAKE‘s broad (and preferred) TMS2 metric (TMS for True “Austrian” Money Supply), posted a 14.6% year-over-year increase in February, making this the 39th consecutive month of double digit year-over-year rates of [...] By Greg Robb, MarketWatch WASHINGTON (MarketWatch) — Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday. Analysts said the new approach would allow the Fed to move despite high oil prices. Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie [...] by Jim Sinclair Dear CIGAs, This would be a hat trick because it assumes the Fed would borrow back funds they have created by good ole debt monetization. It assumes there is no purpose to QE in the first place. It is monetary double talk beyond MOPE or maybe MOPE at a spiritual level. It is an attempt to intellectually cloud the process and to give plausible believability to PR lies. Once you buy [...] WTF Did All That Printed Money Go? Courtesy of Lee Adler of the Wall Street Examiner Normally when we think of printing money, we are talking about the Fed buying Treasuries, or some other securities from the Primary Dealers. The PDs then take the cash and buy Treasuries from the government. The Fed’s asset base is thereby increased, and an offsetting liability, bank reserves on the Fed’s balance sheet, also increases. As long [...] When gold was undergoing its latest (and certainly not greatest) near-parabolic move last year, there were those pundits consistently calling for comparisons to 1980, and the subsequent gold crash. Yet even a simplistic analysis indicates that while in the 1980s gold was a hedge to runaway inflation, in the current deflationary regime, it is a hedge to central planner stupidity that will result as a response to runaway deflation. In [...] One of the major factors in the Central Banks of the world having stepped up the pace of flushing the world with increasing amounts of freshly digitized cash is writ large in the contraction in credit availability to the real economy (even to shipbuilders). Anecdotal examples of this constrained credit are everywhere but much more clearly and unequivocally in tightening lending standards in all of the major economies. As Bank [...] by Margaret Bogenrief, ACM Partners “Should Old Acquaintance be forgot, and never thought upon…” Happy holidays! It’s that time of the year, when resolutions are declared, regrets forgotten, and financial predictions made. Here, then, without further ado, is Part 1 of ACM Partners’ 3-Part-Post-Series “Where The World’s Headed in 2012.” Part 1: EuroZone, China, and all things BRIC First in this series, the view from overseas: As 2011 comes to a close, the financial world waits and watches the EuroCrisis, hoping [...] Germany’s Bundesbank has raised serious objections to EU summit plans to shore up Italy and Spain by channelling up to €200bn (£170bn) from central bank reserves through the International Monetary Fund (IMF). Unexpectedly, the Bank of England has just announced 75 billion pounds of more QE. The pound is getting crushed, not surprisingly, while other “risk” assets are rising. The full announcement is here. UPDATE: The European Central Bank did not follow suit, keeping rates unchanged. ————————- The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to increase [...] by ZH In the past two weeks, one of the curious development in monetary aggregates, in addition to a spike in the Adjusted Monetary Base (discussed previously here), was the $88.7 billion surge in the M2 for the week ended July 4, the third largest jump in the broadest tracked monetary aggregate in history. Some have speculated that this number may be indicative that the money multiplier [...] By Paul B. Farrell, MarketWatch SAN LUIS OBISPO, Calif. (MarketWatch) — A slow-growth decade is already raging. You feel it everywhere. And it’s going to get worse, much worse. A recession is virtually certain for 2012, in an angry, volatile presidential election year. May morph into a 1930’s-style depression. That’s the clear message we get from Gary Shilling, one of the world’s foremost economic forecasters, long-time Forbes columnist and author of [...] By Steve Goldstein, MarketWatch WASHINGTON (MarketWatch) — Bank reserves swelling, and commodity prices surging — that’s the situation that the U.S. economy is now confronting. But it also was the case back in 1937. And that’s what worries Ethan Harris, North American economist at Bank of America Merrill Lynch. He fears, now like then, that tightening of monetary and fiscal policy could cause a recession, so much so that [...] Jim Sinclair is out with a quote on King World News predicting a possible value for gold of $12,500 per ounce, though without a time frame. I try to demonstrate herein that today’s gold price of $1500+ is low via two different lines of thought. First, I compare it to all other financial assets. Second, I compare it to returns achieved since 1976 from the stock market and to the growth in US Federal liabilities. 1. [...] “The central bank, by purchasing and selling government securities, can deliberately change aggregate bank reserves in order to affect deposits. There are two other ways in which the System can affect bank reserves and potential deposit volume directly; first, through loans to depository institutions, and second, through changes in reserve requirement percentages. A change in the required reserve ratio, of [...] |
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