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Posts Tagged ‘Fiscal Policy’

Trump & the Monumental Magnitude of the US Debt Trap

What lies directly ahead, therefore, is another bumbling attempt by the White House and Congressional Republicans to hammer out an FY 2018 budget resolution and what amounts to a 10-year fiscal plan. So there flat-out must be big-time deficit offsets or there will not be close to 218 votes for what would otherwise be upwards of $15 trillion in added public debt over the coming decade.

What Role May Trumps' Policies Play in Creating Inflation

Among the main drivers of higher inflation expectations, one is the idea that a larger fiscal deficit will inevitably lead to higher inflation. The Trump program calls for higher defense expenditures and increased infrastructure spending. The perception in the financial markets is that fiscal spending and tax cuts add up to higher deficits, which would almost certainly imply higher inflation.

A Gold Standard would've Prevented U.S. from this Extreme Indebtedness

Even Greenspan admits this is the case with debt: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.” Certainly, debt loads have taken off since Nixon closed the gold window in 1971, breaking the last link with gold.

Push Gold Prices Higher to Unleash Inflation - The Elite’s Master Plan

Yesterday, I explained how the monetary elites are looking to engineer higher gold prices to generate inflation since nothing else has worked. That’s the first answer. Today, I show you the second part of their plan, which may already be underway. The plan now is to have much larger budget deficits. When the government spends & deficit finances it, it will eventually produce inflation.

Volatility Frustrates Traders: No Rational Explanations On What’s Going On

Traders are frustrated in a market where nothing makes sense. A casualty of this current volatility is that at any given time there are no rational explanations for what’s going on. Back & forth swings of meaningful proportion are characterized, by necessity, with a random reason generator. Better to just put it down to simple things like China’s economy or European banking system is collapsing.

Eurozone Wants to Force Common Fiscal Control, Eurobonds - Jim Rickards

Greece now has to run its government according to German dictates. Greece has already outsourced its monetary policy to the ECB & now it’s sort of outsourced its fiscal policy to the German finance ministry. So you’re on a path to unified fiscal policy & ultimately the Eurobonds – bonds backed by full strength & credit of not just any one country but the entire Eurozone.

An Endless Fiscal Crisis Looms

Since 1985, fiscal policy went on automatic pilot — where it has more or less languished ever since. – U.S. nominal GDP will be lucky to reach $24 trillion by 2024 or so. The math computes out to a public debt equal to 140% of GDP. For all practical purposes, it means an endless fiscal crisis lurks in the nation’s future.

The Legacy of Ben Bernanke : A Weak and Mediocre Economy

If there was no pre-crisis credit boom, there would have been no large financial crisis and thus no need for Bernanke to have done better during and after. Bernanke’s policy is also rightly criticized as the great cost of these post-crisis policies is the intrusion of the Fed into politics and fiscal policy.

The Elusive Economic Recovery. The “Tide of Cheap Money”

What is remarkable is that this setback to recovery has occurred even in the midst of a period when the “tide of cheap money,” to use an expression of the Financial Times in the context of “quantitative easing,” “is lifting all boats.”

The 3 Myth's About Rising Interest Rates

The markets assume that when the Federal Reserve “Tapers,” or eventually ceases, its current bond buying program that interest rates will begin to rise – However, there are three primary issues which should be considered that fail to support this widely held belief.

Why The Fed Likely Won't Taper...Anytime Soon

Its unlikely the Fed will taper its purchases in Dec as government once again begins to debate over raising the debt ceiling. A March taper is also unlikely as the Fed will be dealing with two primary issues then – Evaluating impact of Debt ceiling deal & transition of control at the Fed.

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