Monetary Policy

Tyler Durden's picture

Leading German Keynesian Economist Calls For Cash Ban





"Coins and bills are obsolete and only reduce the influence of central banks," German economist and sole Keynesian member of the German Council Of Economic Experts Peter Bofinger tells Spiegel, becoming the latest central planning proponent to suggest that a cashless society would solve the world's economic problems by allowing the government to control who spends what and when in a futile effort to control the business cycle.

 
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The Economist "Buries" Gold





The Economist is a quintessential establishment publication. Keynesian shibboleths about “market failure” and the need to prevent it, as well as the alleged need for governments to provide “public goods” and to steer the economy in directions desired by the ruling elite with a variety of taxation and spending schemes as well as monetary interventionism, are dripping from its pages in generous dollops.  The magazine has one of the very best records as a contrary indicator whenever it comments on markets. While gold hasn’t yet made it to the front page, but the Economist has sacrificed some ink in order to declare it “dead” (or rather, “buried”).

 
Tyler Durden's picture

Stephen King Warns "The Second Great Depression Only Postponed, Not Avoided"





Reading like his name-sake's horror novels, HSBC's Chief Economist Stephen King unleashes a torrent of truthiness about the Titanic-like economic ocean liner that is headed for an iceberg except this fragile ship doesn’t have lifeboats.

 
Marc To Market's picture

Dollar Blues





Dollar downmove still seems corrective in nature.  Fed hike in September still seems most likely scenario.  Taalk of US recession is over the top when unemployment, broadly measured is falling and weekly initial jobless claims are at new cyclical lows.  

 
Tyler Durden's picture

5 Things To Ponder: Reading While Waiting List





"To critics who warn that pumping trillions of dollars into the economy in a short period is bound to drive up inflation, today's central bankers point to stagnant consumer prices and say, 'Look, Ma, no inflation.' But this ignores the fact that when money is nominally free, strange things happen, and today record-low rates are fueling an unprecedented bout of inflation across asset prices."

 
Tyler Durden's picture

So You Want To Fight The Central Banks? Then Short Treasurys





Not a day passes without one clueless pundit after another appearing on TV and reading from the teleprompter like a stoned zombie that one must not fight the Fed (and central banks) and buy stocks while shorting bonds. And yet what are central banks buying? Not stocks (at least not officially in the case of the Fed; only the BOJ and the SNB admit to openly monetizing equities).

The answer: bonds.

 
Tyler Durden's picture

The Trouble with Cash





Monetary policy has now become like a pressure cooker with a defective safety-valve. Central bankers realise it and investors are slowly beginning to as well. Add into this mix a faltering global economy, a fact that is becoming impossible to ignore, and a dash-for-cash becomes a serious potential risk to both monetary policy and the banking system. There is an obvious alternative to cash, and that is to buy physical gold.

 
Tyler Durden's picture

Bundesbank Blasts Draghi For Breaking Bailout Taboo





"The head of Germany's Bundesbank ripped into the European Central Bank on Thursday, saying emergency funding for Greek banks broke the taboo of financing governments and it was not up to central banks to decide who was or wasn't in the euro zone," Reuters reports.

 
Tyler Durden's picture

Gold Breaks Key Technical To 3-Month High, Silver Surging





The last 3 days have seen precious metals surging. Silver is up over 7% - its biggest such rise since Aug 2013, and Gold up 3% - its largest in 4 months. Volume is heavy also. A specific catalyst is unclear but USD weakness is being cited, weak macro data suggesting further easing, China demand ahead of SDR-backing, and finally the realization that the Chinese shift to unconventional monetary policy (LTROs) is a slippery slope to full-blown QE from which few (if any) have ever escaped.

 
Tyler Durden's picture

It's Official: The BoJ Has Broken The Japanese Stock Market





Monetizing the entirety of gross government bond issuance and amassing an equity portfolio worth just shy of $100 billion on the way to cornering the entire ETF market may come across as insanely irresponsible even in a world that is now defined by insanely irresponsible central banks, but Haruhiko Kuroda does not care because when it comes to QE and the financing of governments via central bank-assisted ponzi schemes, no one does it like the BoJ.

 
Tyler Durden's picture

China Goes "Unconventional" In Effort To Tackle Trillions In Debt, Rescue Economy





China has officially entered the realm of "unconventional" monetary policy, joining the Fed, the ECB, the BoJ, and a whole host of other global central banks in an attempt to bring the supposedly all-mighty printing press and the unlimited balance sheet that goes with it to bear on subpar economic growth. We suspect the results will be characteristically underwhelming (at least in terms of lowering real interest rates, although in terms of boosting risk assets, the results may be outstanding) meaning it's likely only a matter of time before LTRO becomes QE in China just as it did in Europe.

 
Tyler Durden's picture

"QE Doesn't Work... But We Can't Wait For More"





It is perhaps an emblematic description for our current bubble age; QE doesn’t work but “we” can’t wait for more. Maybe that is just the logical evolution of monetary magic, since QE was brought on with almost mythical properties that were going to cure a lot of financial and economic ills (Bernanke the former). Now resignation (Bernanke the latter) has left it with only the hope that it can just save us from the worst downside, even without any real expectation of a true upside in the economy. In other words, markets hope for the QE zombie, where the economy is kept from death by it, with full recognition now that it will never regain full life either.

 
Tyler Durden's picture

Return Of Bond Market Stability Pushes Equity Futures Higher





Following yesterday's turbulent bond trading session, where the volatility after the worst Bid to Cover in a Japanese bond auction since 2009 spread to Europe and sent Bund yields soaring again, in the process "turmoiling" equities, today's session has been a peaceful slumber barely interrupted by "better than expected" Italian and a German Bund auction, both of which concluded without a hitch, and without the now traditional "technical" failure when selling German paper. Perhaps that was to be expected considering the surge in the closing yield from 0.13% to 0.65%. Not hurting the bid for 10Y US Treasury was yesterday's report that Japan had bought a whopping $23 billion in US Treasurys in March, the most in 4 years so to all those shorting Tsys - you are now once again fighting the Bank of Japan.

 
Tyler Durden's picture

"More Probable Than Not"





To use the ponderous, legally parsed language of the NFL’s Wells Report on “deflate-gate”, language which we think wonderfully encapsulates the pinched spirit of our age, here are four things that we believe are “more probable than not”: 1) Alex Rodriguez has routinely used steroids and PED’s of various stripes since he was a sophomore in high school; 2) Tom Brady has routinely bribed equipment managers with autographed jerseys and new shoes in order to receive footballs deflated well below what he knew was the legal limit; 3) Janet Yellen has routinely leaked market-moving information to favored private sector conduits, and has also sought to quash internal investigations of same; and 4) Ben Bernanke is for sale to the highest bidder.  But here’s the thing, we're not that worked up about 'any' of these issues. What we are worked up about, though, is the mendacity - the utter lack of character and authenticity - on full display in all of these cases. All of these cases and so many, many more.
 
Tyler Durden's picture

Riddle Me This: The Difference Between Headlines And Reality





What is extremely clear is that there is something amiss with the statistical headline employment and economic data. While there are indeed pockets of improvement, which should be expected following a recessionary contraction, there is a lack of widespread recovery. That sentiment is clearly reflected in every major poll of American's over the last year. What is important is that there is a clear disconnect between the financial markets, statistical economic headlines, and the reality of the vast majority of American consumers. So, riddle me this - what happens when that disconnect is eventually resolved?

 
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