Commodity Trade Mantra

Posts Tagged ‘Interest Rate’

Silver Price Dives while Gold Price is Motionless - What Gives?

Silver is in a different world. It has a long way farther to fall, before it catches down to the fundamentals. As speculators reduce their positions, the silver price falls a bit. The gold to silver ratio rose significantly this week. The gold market may not be screaming “buy” yet—today is not that day—but it’s no longer screaming “danger”.

Central Bank Monetary Policy Can't Fix an Economy's Structural Problems

What with all the praise being heaped on central banks for saving the world from economic doomsday in 2008, it’s natural to ask which structural problems their unprecedented policies solved in the past 6 years. The truth is central bank policies of zero-interest rates & free money for financiers have made many structural problems worse.

What the "Price of Gold" Says About Central Bankers

Today, it seems hard to imagine a time when central bankers were more involved meddling in the markets. It seems hard to imagine a time when investors would be more likely to question their faith in these central bankers & that there has been a time in recent memory that investors would be more inclined to consider owning gold.

How Economies Collapse: Systemic Friction and Debt Are Self-Liquidating

Paying for unproductive friction with borrowed money has generated the illusion that piling up debt is risk-free as long as interest rates are low and the government backstops all the debt. The final illusion is that there is no mechanism to brake the expansion of debt: that the “solution” to rising interest costs is to borrow more money.

What are Negative Interest Rates and how do they work?

The ECB has cut its headline interest rate to a new record low of 0.15%, and also imposed negative interest rates of -0.1% on Eurozone banks with the hope that this will encourage the banks to stop hoarding money, and instead lend more to each other, to consumers, and to businesses, in turn boosting the broader economy.

What Happens When The Giants Unwind Economic Stimulus

The world has depended on Chinese and American stimulus for years, and one implication of their tightening is a slowing global economy in 2014 – Unwinding stimulus, especially one so large and prolonged, is fraught with unintended consequences. Bubbles tend to pop, not deflate slowly.

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