Commodity Trade Mantra

Posts Tagged ‘Bernanke’

Central Banks are Not Innocent Bystanders

Central banks don’t raise or lower interest rates randomly, like fluctuations in temperature. Their expectations of overheating cause higher rates, and their expectations of recessions cause lower rates. But central banks can’t tame the storms they raise. So is it that interest rates are relatively innocent bystanders in the business cycle?

The End Of QE3, Trouble Ahead For The Bulls?

The Federal Reserve’s latest asset purchase program, QE3, is coming to an end. What was once an $85 billion a month program, one in which at its peak had been goosing the financial markets and economy at an annual rate of $1.0 trillion – and over its 27 month life will have pumped $1.7 trillion of money into the economy – is going to zero.

We’re in an Era of Central Bank Worship

On the subject of bond markets, “does it not seem incongruous to chase low-yielding fixed-income securities denominated in a currency that the central bank is vowing to inflate?” Why do you think that investors go into bonds despite the Fed’s intention to devalue them over time?

Why Are Gold and Silver Prices Manipulated?

Gold is a thermometer or canary in the coal mine which serves as an early warning siren to bad, lax or faulty fiscal & monetary policies. Gold is a lie detector which politicians & central bankers wish would just shut up and go away. They cannot make it just go away so they do the next best thing …they manipulate & falsify its price.

How Important is Housing to the American Economy?

Nothing moves the economic needle like housing. No wonder every Fed chairman has lowered rates to try to crank up housing activity. All claims to the contrary, the disappointing first-quarter housing numbers expose the Federal Reserve as impotent at influencing GDP’s most important component.

Freddie And Fannie Reform – The Mortgage Monster Has Arrived

As promised, the Johnson/Crapo bill has finally arrived. The Bill is going to increase mortgage compliance costs. It will confuse, rather than clarify, the mortgage application and approval process. It is a disaster. Fortunately, I opine the Bill has no chance of passing in its present form.

Emerging Markets Banking Crises Are Next

The concern for emerging markets is that carry trades and subsequent inflows of capital have created substantial credit and real estate bubbles in many of these markets. The unwinding of these bubbles is likely to lead to banking crises in several countries, including China.

Goldman's 5 Key Questions For Janet Yellen

Fed Chair Janet Yellen is likely to stick to the script in her inaugural monetary policy testimony but Goldman looks for additional color on: 1) Recent patch of softer data 2) Fed’s thinking on EM weakness 3) Hurdle for stopping taper 4) Amount of slack in labor market 5) Future of forward guidance

Federal Reserve Overstepped Bounds With Monetary Policy

The Federal Reserve has caused more damage by creating a short-term bubble that is unsustainable on its own, and has set the stage for future ad-hoc interventionist asset purchases in markets on equally subjectivist timeframes and justification!

The Long and the Short of Gold Investing

There are two types of gold investors: those trying to make money on short-term market timing and those looking for long-term asset preservation – Finishing 2013 down 28% seems to have sealed its fate in the eyes of the short-term speculators.

10 Outrageous Predictions for 2014 by Saxo Bank

Saxo Bank, the online multi-asset trading specialist and investment advisor has released its ‘Outrageous Predictions’ for 2014. They admit the probability of any of them coming to fruition is rather low. But, that hasn’t stopped them making them – Hype or outlandishly canny laughable material?

Gold Drops Below Cash Cost, Approaches Marginal Production Costs

Not even Bernanke, Yellen, or all the paper Gold ETFs in the world will be able to do much to suppress gold prices from reaching their fair value when gold production hits a standstill, and when demands, especially by China, is still in the hundreds of tons each year.

Deflation - Phobia Set to Bring on More Monetary Inflation

Why would Inflation below 2% pose risks to the economy? Who doesn’t want to pay less for things? It is only considered a problem because there is such a huge mountain of unsound debt in the system, much of it incurred by governments, which they naturally want to ease.

Gold, S&P or the Dollar - Mr. Bernanke?

Sacrifices, such as higher gold prices, must be made to maintain the “full steam ahead” status of our national train wreck in progress – deficit spending, ever-increasing debt, QE-forever, more wars and currency debasement.

U.S. Consumer Confidence Plunges The Most In 2 Years

From 80.2 in Sept, Consumer confidence collapsed to 71.2 (the largest MoM drop in 2 years) to its lowest in six months, far below expectations – It appears the Fed has lost its wealth effect inspiration and once again we remind that all about confidence and hope appears to be fading.

A Collective Pining for More Inflation

Some economists say more inflation is just what US economy needs to escape from a half-decade of sluggish growth and high unemployment – Widely reviled as a kind of tax on modern life, a sustained burst of moderate inflation is not something to worry about.

US Federal Reserve And The Ghosts Of LTCM

The LTCM crisis in 1998 was averted through a Federal Reserve intervention and a new policy instrument had been perfected for the Fed’s toolkit : The ‘Greenspan Put’ – It’s as if the ghosts of LTCM bailout have returned 15 years later.

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