Real Interest Rates

Peak Debt Complacency: Carmen "Different This Time" Reinhart Urges Debt Restructuring

[The establishment] needs no reminder of the historical record, but it bears noting that more than a dozen advanced economies received debt relief in one form or another during the depression of the 1930s. The approach to unwinding current debts is likely to vary considerably across countries, but it is time to place greater emphasis on debt restructuring (which comes with a menu of options) than on accumulating more debt.

Gold Money's picture

Using our proprietary real rate, energy proof of value- model as a guide, we find that the USD gold price has less downside risk from current levels than commonly perceived, with skewed upside risk. For gold to fall back below $1,100/toz again, the market would need a somewhat paradoxical environment of collapsing energy prices yet rising inflation, with the FED hiking interest rates

Russia Cuts Interest Rates Whilst Maintaining Tough Monetary Policy

At a time when Russia has suffered a recession any other G20 Central Bank or government finding itself in such a position would surely focus on ending the recession, not on further reducing inflation from what is by Russian standards an already historically low level. Russia however is different.

"The Financial Crisis Has Morphed Into A Growth Crisis" - Rogoff Warns "Cash Is Not Forever, It's A Curse"

"Big bills are a curse... understand this: Cash is not forever... in fifty years there will be no cash... it’s one very important step towards enabling central banks to have much more effective tools in fighting a financial crisis and in particular to use negative interest rates in an effective way... people who are older need to think about having a larger share of stocks than the traditional wisdom..."

"It Ain't Working" - Axel Merk Lashes Out At The Fed's Failed Inflationary Focus

It ain't working. Eight years after the outbreak of the financial crisis, central bank chiefs suggest they have saved the world, but have they? We argue central banks have become part of the problem, not the solution. At its core, their indoctrinated focus on inflation may well do more harm than good, with potentially perilous implications for investors.

Negative Rates & The War On Cash, Part 1: "There Is Nowhere To Go But Down"

As momentum builds in the developing deflationary spiral, we are seeing increasingly desperate measures to keep the global credit ponzi scheme from its inevitable conclusion. Credit bubbles are dynamic - they must grow continually or implode - hence they require ever more money to be lent into existence. As the peak of a credit bubble is reached, all these necessary factors first become problematic and then cease to be available at all. Past a certain point, there are hard limits to financial expansions, and the global economy is set to hit one imminently.

One Striking Chart Shows Why, According to MS, The Next Global Recession Begins In China

here is the chart revealing what may be the most unsustainable trend in China, one that is even more dramatic than China relentless debt growth: accounted for 26% of global annual capex in 2015, compared with 9% in 2006 and 5% in 2000. Hence, as China continues to invest with low return expectations, that this will continue to weigh on the global returns on capital employed.

Dispelling The Norwegian Housing Myth

Recently,an economist from DnB (Norway’s largest bank) stated that Norway is not in a housing bubble although conditions resemble one and prices can still fall. The article states that a socialist country with lots of benefits can handle higher debt levels than a capitalist one. It fails to acknowledge the impact of the eroding oil foundation on the long term economy.

Toward Stagflation - The Real End Game For Central Banks

Norway is heading straight into stagflation and at some point Norges Bank will be forced to tighten monetary policy into a weakening economy. The world should take note, because the real end game for central banks will come when they are constrained by rising inflation in a weakening economy. We all know what happened after the 1970s stagflation; and hiking rates to 20 per cent in an overleveraged world is a lot harder than it was back then.

Why MainStreet Isn't Buying Obama's Economic Story

Last night, President Obama took a victory lap for his economic achievements while in office. With the 2016 Presidential Election fast approaching, this was one of the final chances the President will have to try and divert attention away from Hillary’s “trustworthiness” problem following continued revelations surrounding Benghazi, email scandals and the Clinton Foundation which is now under investigation by the IRS. The question is whether the majority of the voting public will agree with the President’s message? Let’s take a look at some charts...