Monetary Policy

Silicon Valley Snake Oil

If you wanted a more clear example of why people have not only left this "market" along with many of the business/financial media outlets, this interview just about says it all. You can replace every-time he said "Theranos" with "current monetary policy" and "Ms. Holmes" with "Chair Yellen" and the narrative and storytelling would be about the same.

Price Discovery - R.I.P.!

But the destruction of price discovery in the sovereign debt market is not simply an academic curiosity to be jawed about by the few remaining fiscal scolds in the world. To the contrary, it is already having massive toxic consequences in the arenas of fiscal governance and capital markets alike.

Bob Janjuah Explains All That Is Wrong With The Financial System (And Remains Bearish)

"By dumping the responsibility for the heavy lifting for growth on central banks, we have ended up with asset bubbles, rampant speculation, lack of investment in productivity and in the real economy, significant levels of financial engineering to artificially boost earnings, and merely the (now failed) hope that “trickle down” still works. The outcome has been almost unprecedented levels of rising inequality in the global economy.  I suspect that it is this inequality that was behind a fair chunk of last week’s Brexit outcome and which has driven the rise of extremism across other important nations/blocs."

Silver Breaches Key Resistance, Soars To 21-Month Highs Against Gold

Silver is up over 11% in the last 6 days (the most since Aug 2013) since Britons decided to leave the sinking ship, pushing the white metal above the key $19.50 level - back to its highest since September 2014. Gold has been in great demand also, heading for its 5th straight weekly gain after its best start to a year since 1980 as one analyst noted "gold will remain one of the major beneficiaries in the current backdrop, as heightened volatility and lingering uncertainty will keep investors' risk appetite in check." Silver's recent surge has seen it play catch up to gold, now back at its 'richest' to gold since September 2014.

Futures Stumble As Global Bond Yields Drop To All Time Lows, Precious Metals Spike

Whether it is due to the conclusion of quarter-end window dressing, or due to a more poor manufacturing data out of China overnight, but the new quarter is starting off poorly for risk with Europe flat and US equities lower, while the scramble for safety means that bond yields across the developed world just hit new all time lows as precious metals are surging once again on ongoing speculation central banks will do anything to keep markets propped up and buy up even more assets.

If The UK Economy Tanks, Don't Blame Brexit

Last Thursday, the people of Britain voted in a referendum to leave the European Union (EU). Most commentators view Britain’s exit (“Brexit”) from the European Union as bad news for economic growth in the UK and the eurozone. As a result, it is argued, the growth rate in the rest of the world will be also badly affected. It is more likely that, whether the pace of real economic growth over time will weaken or strengthen is going to be set by the pace of expansion in the pool of real wealth.

The Curse Of "Wealth Effects" Central Banking

The robo-machines and perma-bulls are at it again, delivering another volumeless dead-cat bounce in a market that has churned sideways for 600 days now. Nevertheless, there is a reason for the churn and there is a culprit behind the abortive rallies.

Global PPT Swings From "Easing Actions Are Backfiring" To Double Central Bank Bazookas In 3 Days

Sunday evening, as the world watched the fallout from what "Remin"-ers said was the end of the world, The BIS warned that central bank 'easing' actions "have started to backfire" and explained what little could be achieved with further stimulus. Three days later, first The Bank of England and then the European Central Bank both unleashed fresh bazookas as The PPT to save the world swung into action to rescue stocks and the all-important global wealth effect. Yet again - no consequences for anything will be allowed...

Day 3 Of Global Post-Brexit Rally: European Stocks, US Futures At Session Highs

Day three of the post-Brexit rally continues, and after some initial weakness due to concerns about Chinese currency devaluation, both European stock and US equity futures were trading at session highs, facilitated by yesterday's stress test results which saw dozens of US banks unleash a tsunami of stock buyback announcement which in turn pushed S&P futures to new post-Brexit highs.

Revenge Of The Rubes - Why The Days Of The Financial Elite's Rule Are Numbered

The truth is, it is the “European Project” which represents the darker impulses -  it is a tyranny based on a muddled brew of globalism, statism, financialization and the cult of central banking. It’s days are numbered because even the rubes can see that it doesn’t work, and that its massive internal contradictions are heading for a spectacular implosion. The British voters have decided to get out of harms’ way. Hopefully, there will soon be many other cases of the rubes in revolt.

August 15th - The Date Which Will Live In Monetary Infamy

August 15, 2016 will mark the 45th anniversary of President Nixon’s decision to close the gold window. U.S. citizens and the government are now beholden to the consequences of years of accumulated debt and weak productivity growth that have occurred since that day. Now, seven years after the end of the financial crisis and recession, these consequences are in plain sight. The Fed finds themselves crippled under an imprudent zero interest rate policy and unable to raise interest rates due to fear of stoking another crisis.

Brexit, A Step In The Right Direction: The Optimistic View

In the conventional narrative, Brexit is about immigration, escaping the EU's bureaucrats of Brussels, class war or political theater. It may be about all of these, but beneath these surface issues lies a deeper dynamic: a recognition that the entire system is broken and a new arrangement of power, responsibility and risk is required. In this view, Brexit is a positive step in the right direction, away from centralization and central planning and towards decentralized arrangements that enable more dynamic, localized solutions.