Central Banks

The Monetary Policy "Berlin Wall" Is Coming Down

The real question for investors is to ask yourself: Is this merely the latest "extend and pretend" maneuver, which is about to happen again with Draghi coming full online in March and the BOJ doing another desperate action and the Fed backing down. Or is it the end of the debt cycle? That is the trillion-dollar question right now.

The World Is Hoarding Gold: "This Was Just A Taste Of What's To Come"

"Before any big move in gold we have always seen extreme volatility or volatility pick up. This was just a taste of what’s to come in the next few years... We’ll look back at this and be reflecting on how minimal this move was compared to what’s going to happen as we go forward... They’re just positioning themselves for what’s to come."

The Follies & Fallacies Of Keynesian Economics

Eighty years go, on February 4, 1936, one of the most influential books of the last one hundred years was published, British economist, John Maynard Keynes’s The General Theory of Employment, Interest and Money. With it was born what has become known as Keynesian Economics. In the process Keynes helped undermine what had been three of the essential institutional ingredients of a free-market economy: the gold standard, balanced government budgets, and open competitive markets. In their place Keynes’s legacy has given us paper-money inflation, government deficit spending, and more political intervention throughout the market.

"Everything Changes At Zero" - Investors "Obligated" To Fight The Fed

The financial world is growing increasingly crazy-looking. What is alarming is that central banks are brandishing these new tools without any viable evidence or theory that they will even work. This itself presupposes that central banks have any idea of what “work” might even mean in this brave new context. It used to be said, ‘Don’t fight the Fed’. Now as investors, if we want to protect our capital, we are all obligated to fight the Fed, and its international cousins, with whatever we have.

The Next Big Leg Lower In The Baltic Dry Is On Deck: 360 New Vessels Are About To Be Delivered

According to DB, with the vast majority of orders placed w/Chinese ship yards, the current market provides incentive (and maybe even increased scope) for owners to more aggressively pursue cancellations ahead of keel laying. The problem is that the latest order book data shows a whopping 360 dry bulk vessels over 60k tons on order at Chinese ship yards (net of typical non-deliveries). This equates to 37M tons of new capacity or 5% of the fleet!

Are Asian Central Bankers Even Crazier Than Our Own?

That the world’s central bankers get a lot of things wrong, deliberately or not, and have done so for years now, is nothing new. But that they do things that result in the exact opposite of what they ostensibly aim for, and predictably so, perhaps is. And it’s something that seems to be catching on, especially in Asia.

Are Central Banks Setting Each Other Up?

There are times you try to connect the dots. There are others where those connections warrant adorning your trusted tin-foiled cap of choice; for you just can’t get there unless you do. This I believe is one of those times. And if correct? What at first might appear apocryphal, may in fact, be down right apocalyptic. And besides, what good is a tin-foil capped conspiracy theory anyhow if it doesn’t have the potential for doom, correct?  The implications for everything we now take for granted such as: money, enterprise, global commerce, and a whole lot more may be far closer to a “Minsky moment” than any of us dared to imagine.

Citi Asks "When Does A Recession Become A Depression?"

“When it rains, it pours.” That is most assuredly one of the most heavily used cliches in the history of the English language but a failure to understand it apparently causes Citi’s economics team to get it wrong when it comes to forecasting the depth and trajectory of EM recessions.

Markets Surge On Chinese Debt Flood; Worst European PMI In Over A Year; Crashing Pound

Propped up by the Chinese central bank and by a generous Chinese finance ministry, with further hopes a backsliding European economy will mean even more easing by Draghi, the risk on mood is back: "People are willing to take risk again,” Karl Goody, a private wealth manager at Shaw and Partners Ltd. in Sydney told Bloomberg. “People are looking at the selloff this year and saying: enough is enough, there’s been enough pain now."