• Monetary Metals
    02/09/2016 - 02:05
    On Jan 28, the price of silver flash crashed. This irregularity occurred around the silver fix. The spot price was $14.40 but the fix was $13.58.

Quantitative Easing

Tyler Durden's picture

IceCap Asset Management On The Popping Of The 'Super Duper' America Paradigm





The US Federal Reserve read somewhere that if people 'feel' wealthier, they'll borrow and spend more. Simple enough, all they had to do was to make people feel wealthier and when it comes to wealth in America, there’s no better barometer than the stock market. One can see that as the Federal Reserve printed more and more money, the stock market increased more and more as well. This made Ben Bernanke a happy man. Yes, Americans are now wealthier and now all the world has to do is wait for them to start their borrowing and spending engines. Except this hasn’t happened. It’s our view that as economic, political and social lives experience very little progress, governments and central banks will not only continue with their same failing policies, but they will actually implement more of these same failing policies.

 
Tyler Durden's picture

BNP Warns Japanese Bonds Have Lost Their Ability To Price Risk





The JGB market was completely unfazed by the news that the prime minister’s office was reconsidering the planned consumption tax hike. While the tax hike is unlikely to be changed; in BNP's view, the market’s lack of response to tail risk looks like proof that its function has been impaired by the BoJ’s massive buying. Even if the Abe regime is opting for financial repression to reduce the public debt, however, BNP warns that some degree of fiscal reform is needed to control the long-term interest rate. If the unfazed market is deemed to mean that fiscal reforms can be shelved without fear of a bond-yield spike as long as massive BoJ buying continues, serious problems could ensue.

 
Tyler Durden's picture

Guest Post: The Federal Reserve Relies On A Flawed Economic Model





In May 22 testimony to the Joint Economic Committee of Congress, Fed Chairman Ben Bernanke issued another of many similar positive interpretations of central bank policy. Yet again, he continued to argue that quantitative easing has decreased long-term interest rates and produced other benefits. The Fed's polices have not produced the much-promised re-acceleration in economic growth. The standard of living - defined as median household income - has fallen back to the level of 1995. The best approach would be for the Fed to recognize the failure of QE and end the program immediately, thereby allowing price distortions in the markets to correct themselves. By ending the illusion that the Fed can take constructive actions, this might even serve to force federal government leaders to deal with the growing fiscal policy imbalances. Otherwise, debt levels will continue to build and serve to further limit the potential for economic growth.

 
GoldCore's picture

Gold Price Retreats As Dallas Fed Indicates QE Tapering By December





If the Fed drop the ball and move too quickly they could endanger the fragile economic recovery, on the other hand if they move too slowly they could stoke inflation in the near term. 

 
Tyler Durden's picture

Guest Post: The Case For Fed Tapering Sooner Rather Than Later





Better to engineer a mini-crisis while you're still in control than let a crisis you can't control run away from you. One of the most widespread misconceptions about the Federal Reserve is that its policies are based solely on economic data and models. This misconception is not accidental but the result of carefully managed public relations: The Fed fosters a public image of dispassionate experts working econometric magic that mere mortals (i.e. non-PhDs in Economics) cannot possibly understand. The reality is the Fed is as much a political and PR machine as it is a financial institution.

 
Pivotfarm's picture

Fed Head: Sitting in the Hot Seat





Just a few days ago on July 27th President Barack Obama said that the next Fed head had to consider average Americans when setting monetary policy. If only that were true.

 
Tyler Durden's picture

Guest Post: Still Waiting





We do not inhabit a “normal” economy. We live in a financialised world in which our banks cannot be trusted, our politicians cannot be trusted, our money cannot be trusted, and – not least thanks to ongoing spasms of QE and expectations of much more of the same – our markets cannot be trusted. At some point (though the timing is impossible to predict), asset markets that cannot be pumped artificially any higher will start moving, under the forces of inevitable gravitation, lower.

 
Tyler Durden's picture

Dallas Fed's Fisher: "We Own A Significant Slice Of Critical Markets. This Is Something Of A Gordian Knot"





"This is a delicate moment. The Fed has created a monetary Gordian Knot.  Whereas before, our portfolio consisted primarily of instantly tradable short-term Treasury paper, now we hold almost none; our portfolio consists primarily of longer-term Treasuries and MBS. Without delving into the various details and adjustments that could be made (such as considerations of assets readily available for purchase by the Fed), we now hold roughly 20 percent of the stock and continue to buy more than 25 percent of the gross issuance of Treasury notes and bonds. Further, we hold more than 25 percent of MBS outstanding and continue to take down more than 30 percent of gross new MBS issuance. Also, our current rate of MBS purchases far outpaces the net monthly supply of MBS. The point is: We own a significant slice of these critical markets. This is, indeed, something of a Gordian Knot."

 

 
Tyler Durden's picture

Kyle Bass Warns "There Is No Real Way Out"





Quantitative easing is nothing but "competitive devaluation," Kyle Bass begins this brief but wide-ranging interview; and while no central bank can explicitly expose the 'beggar thy neighbor' policy, they are well aware (and 'banking on') the fact that secondary or tertiary effects will lead to devaluing their currency. The bottom line, Bass warns, is "when the globe is at 360% credit market debt-to-GDP, there is no real way out." Furthermore, the winds of austerity have already blown (simply put no nation engaged in austerity prospectively - for the nation's betterment - they were forced by the bond markets) and with central bankers now dominant - the Krugman-esque mentality of "let's just keep going," is very much in the driver's seat since politicians now see "no consequence for fiscal profligacy." The average investor, Bass adds, "is at the mercy of the central bank puppeteers," as the Fed's policies are forcing mom-and-pop to "put their money in the wrong place at the wrong time." There will be consequences for that... there is only one way this will end... "and investors should be really careful doing what the central bankers want them to do."

 
Tyler Durden's picture

Why Washington’s Happy Talk Will Not Save The U.S. Economy





Wall Street bankers, Washington politicians, economists and the media trumpet a substantial rebound in the U.S. economy, in the second half of 2013 and beyond, as a result of the Federal Reserve’s continued and open ended use of $85 billion dollars a month in quantitative easing. Learn why this is wishful thinking.  Rather than do want is necessary to solve the ongoing 2008 credit crisis, those in power stoop to public relations tricks and propaganda.

 
Tyler Durden's picture

Moderate To Modest - The Fed "Word Change" Heard Around The World





It started moments after the release of the Federal Reserve’s latest decision on interest rates. Even though officially they announced maintaining the same policies of low rates and Quantitative Easing, it was a single word change in the official text of their press release from the prior month that sent shockwaves around the world and changed everything forever...

 
Marc To Market's picture

Dollar Poised to Slip to Lower End of Ranges





Discussion of recent and prospective price action in the foreign exchange market.

 
Tyler Durden's picture

Guest Post: Why Another Great Real Estate Crash Is Coming





There are very few segments of the U.S. economy that are more heavily affected by interest rates than the real estate market is.  When mortgage rates reached all-time low levels late last year, it fueled a little "mini-bubble" in housing which was greatly celebrated by the mainstream media.  Unfortunately, the tide is now turning. 

 
Tyler Durden's picture

The Most Important Number In The Entire U.S. Economy





There is one vitally important number that everyone needs to be watching right now, and it doesn't have anything to do with unemployment, inflation or housing.  If this number gets too high, it will collapse the entire U.S. financial system.

 
Tyler Durden's picture

The Financial System Doesn't Just Enable Theft, It Is Theft





It is painfully self-evident that our financial system doesn't just enable theft, it is theft by nature and design. If you doubt this, please follow along...

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists."

Ernest Hemingway, The Next War
 
Syndicate content
Do NOT follow this link or you will be banned from the site!