Paul Volcker

Paul Volcker Explains Why The Fed Can't Raise Rates

"Our current debt may be manageable at a time of unprecedentedly low interest rates. But if we let our debt grow, and interest rates normalize, the interest burden alone would choke our budget and squeeze out other essential spending. There would be no room for the infrastructure programs and the defense rebuilding that today have wide support."

The Fed Has Made Another Massive Policy Error

The Great Recession was a result of a massive monetary policy error. The Fed kept rates too low for too long, which - when coupled with lax or no regulation in the mortgage markets - resulted in a housing bubble and a crash. This then bled over to global markets. We are again suffering the effects of a massive monetary policy error. The error has already been committed, but we have just begun to endure the consequences.

Frontrunning: October 19

  • China third quarter GDP grows 6.7 percent as expected as construction booms, debt rises (Reuters)
  • China Growing at 6.7% Opens Window to Deliver Debt-Curb Vow (BBG)
  • U.S. expects Islamic State to wield chemical weapons in Mosul fight (Reuters)
  • Iraq urges U.S.-led coalition to prevent Islamic State escape to Syria (Reuters)
  • Fox national poll shows Clinton leading by six points (Hill)

"Pounded" - How Not To Manage A Fiat Currency

The Bank of England’s inept monetary policies under Mark Carney’s governorship seem certain to expose the fragility of fiat sterling to wider public attention and skepticism. If the consequences weren’t so serious, we might thank him for unwittingly toppling the status quo. But the inevitable crisis, many times worse than that faced in 1975, cannot be embraced even by the most extreme financial masochist. This is why people in Britain and America will increasingly find solace in gold.

The Flawed Logic Of Inflation

"The hubris of central bankers who somehow believe they will know the precise time to alter easy money policies in order to prevent a monetary disaster is only exceeded by the foolishness of Congressional oversight in granting that authority."

"It's Never Different This Time" PIMCO Warns "The Tides Of Risk Will Flow Eventually"

The old Wall Street expression is “They don’t ring a bell at the top.” This snarky adage is usually employed by those saddened financial managers who ride a successful investment to a peak and then watch in horror as it reverses course to a level below their cost basis. A pity this notion is misguided, since the market frequently “rings the bell.” It is just that most market participants are not listening. Perhaps they should be listening now.

August Payrolls Loom: Futures Flat, Dollar Rises, Treasuries Slip

The much anticipated payrolls day, expected to provide at least some more clarity on future Fed policy, has arrived and heading into today's report both price action and newsflow has been muted. U.S. equity index futures were fractionally higher, as European stocks rise 0.6% while Asia was flat. Gold fell as the dollar rose, while comments by Vladimir Putin which endorsed an OPEC oil production freeze while granting Iran an exemption, have pushed oil higher.

Martin Armstrong Questions "Are Central Bankers Coming To A Bitter End?"

Central bankers these days are seriously trapped. They cannot now reverse their policies for that means they have to admit that they have failed. That is far more serious than you might imagine. To even entertain backing down from negative interest rates means they have to admit that Keynesian/Marxist economics has failed and therein socialism, which is based upon the very principle that government can and is capable of managing the economy.

Dear Janet... A Memo From Millennials To The Fed

The Federal Reserve’s long-term influence hinges in part on its ability to convince millennials that its current policies can help push inflation closer to the central bank’s 2% goal. That’s not as easy as it sounds, because this cohort has both a different history and current relationship with this economic variable. Why?