Category: Central BanksThe analysis published under this category are as follows.
Sunday, April 12, 2015
Lucas M. Engelhardt writes: “Sound money and free banking are not impossible — they are merely illegal. Freedom of money and freedom of banking are the principles that must guide our steps.” — Hans Sennholz
When I was asked to give the Hans Sennholz Memorial Lecture, I was uncertain what I should speak about. Should I give an inspirational, autobiographical talk about life as a young academic? Should I present cutting edge research? Should I advocate for better policy in some “hot” political topic? In the end, I looked at the title of the lecture — this was the Hans Sennholz Memorial Lecture. So, I decided that I should present something Sennholzian — especially since I am a Grove City College alumnus, though I was never a student of Sennholz — who had retired before I was a student here.Read full article... Read full article...
Wednesday, April 08, 2015
It wouldn’t be a first, but it would certainly be a – bigger – shock. That is to say, the Bank of England hijacked the head of Canada’s central bank some time ago, but, while unexpected enough, that would pale in comparison to the US hiring the present Governor of the Russian central bank, Elvira Sakhipzadovna Nabiullina. It would still seem to be a mighty fine idea, though.
Not that I think it will happen, not to worry if you think Yellen is just what it takes at the Fed. But Nabiullina is both razor sharp and fiercely independent. Yellen is obviously neither; she’s a cog in a machine that huffs and puffs and pumps and dumps to make sure her overlords in the blissful world of US finance make ever more profit no matter how bad things get in American society.Read full article... Read full article...
Monday, March 30, 2015
But low and behold, it looks like the political-monetary landscape is being groomed in preparation for the next leg of this ongoing train wreck. Now the Bank for International Settlement (BIS), the central bank bank of central banks, is throwing the Fed under the bus.
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Friday, March 27, 2015
Though the Fed would deny it, it is clear from the minutes of the last Federal Open Market Committee (FOMC) meeting that a rise in interest rates has been put off indefinitely. The subsequent rally in the price of gold and the sudden fall in the dollar tend to confirm this conclusion.
The Fed Funds Rate, which is the interest rate the Fed targets to set all other rates, has now been less than 0.25% for six and a quarter years, gradually declining from roughly 0.15% to about 0.10% today. It was set at a target range of between zero and 0.25% in December 2008.Read full article... Read full article...
Tuesday, March 17, 2015
Shah Gilani writes: Central bankers aren't stalwart free-market shepherds, although that's how they cloak themselves.
The truth is they're more like wolves… communist wolves in sheep's clothing. Today I'm going to show you what their game really is.
Then I'm going to show you how we'll fight back…Read full article... Read full article...
Tuesday, February 03, 2015
Is Monetary Policy Too Complicated for Mainstream to Understand?
It is amazing how far Central Banks have been allowed to go with regard to policy tools and influence, and how extreme their policy measures have become since the financial crisis. No other form of governmental authority has been granted these types of unrestrained powers in any branch of government, not Congress, the Supreme Court, the President, or the Military for comparison`s sake in the United States.Read full article... Read full article...
Thursday, January 29, 2015
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 the welfare/warfare state, it has become the manipulator of the premier world reserve currency.
As Fed Chairman Ben Bernanke explained to me, the once profoundly successful world currency – gold – was no longer money. This meant that he believed, and the world has accepted, the fiat dollar as the most important currency of the world, and the US has the privilege and responsibility for managing it. He might even believe, along with his Fed colleagues, both past and present, that the fiat dollar will replace gold for millennia to come. I remain unconvinced.Read full article... Read full article...
Wednesday, January 21, 2015
In today’s Outside the Box, good friend Ben Hunt informs us that we have entered the cult phase of the Golden Age of the Central Banker:
We pray for extraordinary monetary policy accommodation as a sign of our Central Bankers’ love, not because we think the policy will do much of anything to solve our real-world economic problems, but because their favor gives us confidence to stay in the market. I mean, does anyone really think that the problem with the Italian economy is that interest rates aren’t low enough? Gosh, if only ECB intervention could get the Italian 10-yr bond down to 1.75% from the current 1.85%, why then we’d be off to the races! Really? But God forbid that Mario Draghi doesn’t (finally) put his money where his mouth is and announce a trillion euro sovereign debt purchase plan. That would be a disaster, says Mr. Market. Why? Not because the absence of a debt purchase plan would be terrible for the real economy. That’s not a big deal one way or another. It would be a disaster because it would mean that the Central Bank gods are no longer responding to our prayers.Read full article... Read full article...
Tuesday, January 20, 2015
Originally, paper money was not regarded as money but merely as a representation of a commodity (namely, gold). Various paper certificates represented claims on gold stored with the banks. Holders of paper certificates could convert them into gold whenever they deemed necessary. Because people found it more convenient to use paper certificates to exchange for goods and services, these certificates came to be regarded as money.Read full article... Read full article...
Saturday, January 17, 2015
More and more it appears as if we are going to get some form of QE next week out of the ECB. The big question is the size and scope of the program that most expect to be announced.
There has been some discussion as to whether the ECB would buy various government bonds across the board or whether the actual Central Banks of the respective Euro zone nations would buy their own government bonds as the composition of the actual bond buying program.Read full article... Read full article...
Saturday, January 17, 2015
The Swiss have unleashed a pretty wild storm in financial markets. All sorts of companies and people today are licking their wounds, and quite a few will simply have to fold. It’s no exception to be so leveraged in foreign exchange wagers that a move of a few percent can wipe you out, let alone one of 30%. Leverage makes sure that right off the bat a whole bunch of foreign exchange brokers, including FXCM, the biggest, are literally dead in the water – FXCM stock fell 90% -.Read full article... Read full article...
Tuesday, December 23, 2014
With the utterance of one word, “patience” in reference to the Fed’s anticipated lift off date from its zero bound interest rate target, Janet Yellen sent the Dow Jones soaring over 700 points in two days. It is clearly evident that our central bank is finding endless excuses not to raise interest rates in an effort to keep the equity and bond bubble rolling along. But this entrenched addiction to free money has now set the economy up for a catastrophe. The Fed’s $3.7 trillion dollars in QE and six years of ZIRP have created massive economic imbalances. When interest rate normalization eventually occurs, it will lead to wide spread insolvency.Read full article... Read full article...
Tuesday, December 09, 2014
Shah Gilani writes: Remember when banks used to make it worth your while to deposit cash with them?
Heck, if you’re old enough you probably even remember such inducements as free toasters.
But in a reprehensible turn of events, now you – the depositor – are about to get toasted.Read full article... Read full article...
Wednesday, December 03, 2014
"Central banks have the power to create economic, political and social change. This is how they do it."
While I cringed at some of the early parts of the film and the mid-century American attitudes towards the Japanese, even if it was in the aftermath of a long and viciously fought war, I think this documentary provides some valuable insights into the evolution of the modern economy that is Japan. I direct your attention to the things that we are often saying about different peoples today.Read full article... Read full article...
Monday, December 01, 2014
Look for awhile at the China Cat Sunflower
Proud-walking jingle in the midnight sun
Copper-dome Bodhi drip a silver kimono
Like a crazy-quilt stargown
Through a dream night wind
Krazy Kat peeking through a lace bandana
Like a one-eyed Cheshire
Like a diamond-eye Jack
A leaf of all colors plays
A golden string fiddle
To a double-e waterfall over my back
Comic book colors on a violin river
Crying Leonardo words
From out a silk trombone
I rang a silent bell
Beneath a shower of pearls
In the eagle wing palace
Of the Queen Chinee
- Robert HunterRead full article... Read full article...