Quantitative Easing

Misplaced Confidence In The ECB - Lessons From John Law's Mississippi Bubble

 

Everyone in the Eurozone believes that the ECB is all-powerful, because to believe otherwise is unthinkable. This was also true of Banque Royale, until it faltered. It was not a loss of confidence in the bank that was responsible for the collapse, it happened as a result of the difficulties encountered in sustaining the bubble. The lesson is that it need not take a loss of confidence in the ECB to start its destruction.

 

It's Moved Beyond Vancouver: "Downtown Seattle Has Entered The Phase Of Ponzi Financing"

In the past, the value of a commercial property was "the capitalized value of the stream of rents from that property." In this order of things, occupancy rates (content) mattered. Now, commercial properties are not selling content and value but merely value. Meaning, they are selling a "projected increase in price." Meaning, downtown Seattle has entered the phase of Ponzi financing. "My speculation is that this has been caused by people looking to move their money into the US,"

What’s The Frequency Janet?

To now dismiss Fed policy causation as “correlation theory” is laughable. The markets are now so intertwined and Fed dependent the observation of whether correlation is causality has been rendered moot. Without the Fed – there is no market. That’s now a proven fact. Period.

The Two Worlds Of Precious Metals: East And West

Decades of relentless brainwashing in the West have convinced the vast majority of our populations that there is no longer a place or role in our modern economy for Perfect Money. What is continually forgotten beneath the veneer of our cultural arrogance is that the rest of the world, and the vast majority of humanity’s population, have a fundamentally opposite perspective regarding the world’s only Perfect Money. In the East, China and Russia are relentlessly accumulating gold, observing a “rule” which is now forgotten by the arrogant oligarchs of the Corrupt West: the Golden Rule. He who has the gold makes the rules.

Central Bankers' Embarrassment Of Stitches

Had central bankers simply taken to heart that well known idiom that cautions "a stitch in time saves nine" early on, they would not now be so frantically stitching such a gaping gash in the world economy. One thing is for certain. All of this quantitative pleasing has done little to lift the spirits of the world’s worker bees.

What Happens To The Market Next: JPMorgan's Head Quant Explains

"In the next week, we could see some downward pressure as the impact of option hedging is reversed. Historically, we have found that the market develops positive momentum during the 3rd week of the month (when there is a call imbalance), and this often reverses during the 4th week of the month."

Steve H. Hanke's picture

Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Since 1983, when Hong Kong adopted its currency board system, speculative bets against the Hong Kong dollar (HKD) have ended in the graveyard. Just ask Bill Ackerman. He bet the house in a 2011 attach on the HKD, and he lost big. Now, it’s reported that the likes of George Soros and Kyle Bass are rolling the dice against the HKD. They will lose, too.

Oil Prices Should Fall, Possibly Hard

"I hope that oil prices increase but cannot find any substantive reason why they should do anything but fall." As market balance reality re-emerges in investor consciousness and the false euphoria of a production freeze recedes, prices should correct to around $30. A little bad economic or political news could send prices much lower.

Norway’s Interest Rate Conundrum

We are experiencing 1970’s style stagflation, coming from the supply side, not demand. Prices are going up because Norges Bank continues to destroy the Norwegian Krone, turning it into the Nordic Peso. This is where they are “hiding” the damage to save rest of the economy. For example, housing prices will rise in NOK but fall in USD or gold (universal commodity) terms. It’s a shell game, leading to long term decline or even worse, an unexpected period of elevated inflation, requiring a rapid rise in interest rates. 

Forget 'Free Lunches' - The Populace Gets Nothing For Something

When an economy’s demographics are young, and growth is strong, the price of lunches looks minimal. The miracle of getting something for nothing seems possible. But as the economy ages, and growth peters out, debt levels become unsustainable. Eventually, the bill comes due. The lunches must be paid for. Instead of something for nothing, the populace now gets nothing for something.