Swiss National Bank

Swiss Franc Plunges On FinMin "Minimum Exchange Rate" Comment

Just what are the Swiss up to...

*SWISS FINANCE MINISTER WANTS NEW MINIMUM EXCHANGE RATE: HZ

A confidential paper signed by Swiss Finance Minister Eveline Widmer-Schlumpf, discussed in government last week, said that new minimum exchange rate should be "considered," Handelszeitung reports in a prerelease of an article to be published Thursday.

Poland Cuts Rates More Than Expected, 21st Central Bank "Policy Ease" Of The Year

Just hours after India's 'surprise' rate cut (which saw the SENSEX surge and then dump to close red), Poland has surprised the market with a bigger-than-expected rate cut. Despite two-thirds of econmomists expecting a mere 25bps cut, the Polish Central Bank slashed its benchmarket 7-day rate to just 1.5% - the lowest on record. Today's cut "makes up for inaction in previous months" after Poland held rate flat in January and February (but echoes Poland's Oct 'surprise' greater-than-expected ease of 50bps. Polish stocks dropped on the news (but recovered), banks are weaker, and the Zloty is selling off on this news (pushing back towards record lows)...

 

India Central Bank Cuts Interest Rate "Pre-Emptively" For Second Time In 2 Months

In a surprise move, the RBI just cut its main interest rates for the second time in two months, taking it from 6.75% to 6.50%, in what the central bank calls a “pre-emptive” policy move, but what is in reality merely a confirmation that so far in 2015 at least 20 central banks have lowered their interest rate.

David Stockman Warns "It's One Of The Scariest Moments In History"

"The Fed is out of control," exclaims David Stockman - perhaps best known for architecting Reagan's economic turnaround known as 'Morning in America' - adding that "people don't want to hear the reality and the truth that we're facing." Policymakers are "taking our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that's been built up and created by the American people over decades and decades." The Fed, Stockman concludes, "is a rogue institution," and their actions have led us to "one of the scariest moments in our history... it's a festering time-bomb and we're not sure when it will explode."

China Cuts Interest Rates, Takes Number Of Central Banks Easing In 2015 To 21

And then there were 21. Hours ago on Saturday, the country whose currency is largely pegged to the dollar which itself is now anticipating a rate hike in the coming months, surprised the world by confirming its economic slowdown yet again following a recent rate cut just this past November when it lowered its benchmark rate by 40 bps, after it again cut benchmark lending and deposit rates by 25 bps starting on March 1. Specifically, the PBOC will lower the one-year lending rate to 5.35% from 5.6% and its one-year deposit rate to 2.5% from 2.75%. It also said it would raise the maximum interest rate on bank deposits to 130% of the benchmark rate from 120%.

Regret? Why Take A Chance

Behavioral economics suggests that a little QE can change human behavior at the margins, but no amount of QE is enough to change human nature at its core. The High Priests of the IMF, the Fed, and the ECB are blind to this because all of modern economic theory – ALL of it – is based on a single bedrock assumption: humans are economic maximizers. Yes, we are maximizers of reward. But we are also minimizers of regret. We seem destined to learn the hard way... once again...  that you can’t change human nature by government fiat. But individual investors and allocators can listen and learn from these old good ideas, and that’s how you survive the Golden Age of the Central Banker.

20 Central Banks Have Cut Rates In 2015 After "Surprise" Rate Cut By Israel To Record Low 0.1%

Last week it was 19 central banks (including the ECB which accounts for 19 nations) which had cut rates in 2015, mostly in "surprise", unexpected easing decisions. Moments ago the number became 20 when the Israel central bank just cut its interest rate by 0.15% to 0.1%, the lowest on record, a move which once again caught the market by surprise as only 3 of 23 analysts had predicted it.

Central Banks Have Lost Control Of The World

With the world's oldest central bank - Sweden's Riksbank - taking the plunge into negative rates, there have been 19 'eases' by central banks this year, Morgan Stanley warns of "ghosts of the 1930s." With competitive 'easing' stoking fears of international currency wars, The Telegraph notes however that looser monetary policy is not the order of the day everywhere in the world, and herein lies potential danger for the world economy.

Fed Links To Paper Extremely Critical Of Monetary Intervention... Then Pulls Link

The Federal Reserve Bank of Cleveland earlier this week tweeted out a notice of a working paper titled: U.S. Intervention during the Bretton Woods Era:1962-1973... a detailed report on the massive interventions in currency markets that the Treasury and the Federal Reserve conducted and is exceptionally critical of the market manipulations that took place during that period. It is probably no surprise then that the paper is no longer featured at the Cleveland Fed, and the tweet was quickly deleted.

Gold In A Negative Interest Rate World

Gold and government bonds now cost about the same to own, but governments actively trying to lower the value of their bonds and bank accounts while gold is rising wherever trouble erupts. The logical conclusion is that if gold and cash both cost the same to own, then maybe gold — which has held its value over millennia while every previous fiat currency has evaporated — is the better bet.

Goldman Asks If Negative Rates Are Coming To The US

Now that Europe has demonstrated that one can go NIRP and not crash the system, will the Fed - once its silly obsession with hiking rates in the summer only to launch even more easing and/or QE as the ECB did in 2008 and 2011 - follow suit and join a rising tide of "developed" world central banks in punishing savers for hoarding cash? In a note released last night titled "Revisiting Negative Interest Rates in the US", Goldman shares its thought on the matter. It goes without saying that Goldman is important, because whatever Goldman's econ team shares with Goldman's Bill Dudley over at the NY Fed, usually tends to become official policy with a 3-6 month lag.

The Keys To The Gold Vaults At The New York Fed ‘Coin Bars’, ‘Melts’ And The Bundesbank

 

‘Coin bars’ is a bullion industry term referring to bars that were made by melting gold coins in a process that did not refine the gold nor remove the other metals or metal alloys that were in the coins. The molten metal was just recast directly into bar form. Because it’s a concept critical to the FRBNY stored gold, the concept of US Assay Office / Mint gold bar ‘Melts’ is also highlighted below. Melts are batches of gold bars, usually between 18 and 22 bars, that when produced, were stamped with a melt number and a fineness, but were weight-listed as one unit. The US Assay Office produced both 0.995 fine gold bars and coin bars as Melts. The gold bars in a Melt are usually stored together unless that melt has been ‘broken’.