Australia

Helicopter Money - The Biggest Fed Power Grab Yet

The Cleveland Fed’s Loretta Mester is a clueless apparatchik and Fed lifer, who joined the system in 1985 fresh out of Barnard and Princeton and has imbibed in its Keynesian groupthink and institutional arrogance ever since. So it’s not surprising that she was out flogging - albeit downunder in Australia - the next step in the Fed’s rolling coup d’ etat...“So it’s my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative." It’s the ultimate in 'something for nothing' economics.

US Futures, Global Markets Storm Higher As More Details Emerge About Japan's "Helicopter Money"

The global meltup continues with the S&P set to open at new all time highs, some 20 points higher from yesterday's close, however the driver for the latest rally is not so much the imminent BOE announcement which is expected to cut rates by 25 bps from 0.50%, but a dramatic surge in the USDJPY just after 1am Eastern when Bloomberg revealed more details about Ben Bernanke's masterplan for Japan's helicopter money.

"Soon" And "Really, Really Crazy": Starting Up The Helicopters

The idea (now being pushed by a surprising number of people who ought to know better) that governments should take advantage of historically low interest rates to “invest” with borrowed money has an obvious fatal flaw. That is, accumulating even more negative or zero-rate debt will make it functionally impossible to raise rates to “normal” levels, which is to say levels where markets can once again function as mechanisms for moving savings into productive investments. It’s not a stretch to call this the end of capitalism and the beginning of a new Dark Age.

Fed's Mester Says Helicopter Money "The Next Step" In US Monetary Policy

"We're always assessing tools that we could use," Mester told the ABC's AM program. "In the US we've done quantitative easing and I think that's proven to be useful. "So it's my view that [helicopter money] would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative.

Beautiful Brexit & The Five Stages Of Grief

The post-Brexit ‘conversation’ in Britain is taking on grotesque proportions. Nobody seems to know how to react, at least not in a rational manner. They all look to be stuck in phase one of Kübler Ross’s Five Stages of Grief, i.e. Denial. Phase two is supposed to be Anger, and while there’s plenty of that, the shape it takes makes one think Angry Denial, instead of a progression between phases. That is to say, I don’t think I’ve seen one voice expressing anger at themselves. It’s all somebody else’s fault. And it just keeps going.

"We've Never Had A Shock To The System Like This" - Global Selloff Accelerates On Brexit, Italy, "Unknown" Fears

The flight to safety following last week's quarter-end window dressing is accelerating, with constant news and flashing red headlines of record low yields across DM government bonds once the norm, and as of moments ago Denmark's 10Y bonds joined the exclusive club of sub-zero yields; gold has soared to fresh multi-year highs above $1,370, the risk-off currency, the Yen, soaring and sending the USDJPY just above 100, while sterling crashed overnight once again below 1.27, levels not seen since 1985.

Brexit Blowback - The Panic Will Start With Property

The problem lies mostly with the human tendency to avoid short-term pain...Unless it is accepted that demand must be tied to income growth, and not extra debt, we’re never getting out of this one. The current disconnect between high asset prices, stagnant incomes and increasing, overall debt levels, is both economically and politically unsustainable. And what is the ultimate result? Brexit politically and economically there is no housing market for our young workers.

Precious Metals Surge Continues, As Does Italian Bank Pain, In Holiday-Shortened Session

In today's US holiday-impacted session, the biggest overnight story was the dramatic surge in precious metals, which saw silver briefly soar above $21 following a Chinese short squeeze sending the metal as much as 7% higher overnight, its biggest one day gain since December 1, 2014. As we reported overnight, silver touched a two-year high and gold rallied for a fourth day after the Brexit vote spurred demand for havens. The catalyst is familiar: speculation central banks in some of the world’s leading economies will step up monetary stimulus in the wake of Britain’s decision to leave the European Union.