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Posts Tagged ‘NIRP’

Helicopter Money Tested And Failed Spectacularly, Surprising Only Economists

Imagine waking one morning to find extra cash in your account, a gift from your country’s central bank. That might sound outlandish. But the concept of so-called helicopter money is being seriously debated by economists. Helicopter money handed directly to consumers, the theory goes, would send us scurrying to the shops to spend our windfalls, boosting confidence in the economy.

Giant Financial Bubbles created by Central Banks are Fracturing

Nearly everywhere on the planet the giant financial bubbles created by the central banks during the last two decades are fracturing. The latest examples are the crashing bank stocks in Italy & elsewhere in Europe & the sudden trading suspensions by three UK commercial property funds. It’s beginning to feel like August 2007 all over again. Of course, central banks have nothing to do with it at all!

Negative Rates Confirm The Failure Of Globalization: Deutsche Bank

Negative interest rates may or may not be a thing of the past, but the confusion about their significance remains. Here is Deutsche Bank’s Dominic Konstam explaining how, among many other things including why Europe will need to “tax” cash before this final Keynesian experiment is finally over, negative rates are merely the logical failure of globalization.

What Savers Do Under Negative Rates - The "Perversely Negative" Impact Of Going Negative

The initial market reaction on negative rates has been to see it as an act of desperation by central banks to keep up the momentum of economic growth. The risk is that this negative sentiment will infect the real economy, serving to depress spending. If so, the danger is that NIRP will have an impact on economic growth that is not merely non-linear, but perversely negative.

The Escalating War on Cash and What It Means For Precious Metals

While bureaucrats can theoretically win the War on Cash because they have complete control over the issuance of paper money, they cannot win a war on bullion. Physical gold and silver is private and off-the-grid – a nightmare for regulators. The push to eliminate cash will inevitably push people into cash alternatives including physical precious metals.

Where Is Negative Interest Rate Policy Leading Us To?

Negative interest rate policy by the world’s central banks is getting out of control. The Riksbank has joined the European Central Bank, the Swiss National Bank and the Bank of Japan in this negative interest rate madness. They want inflation, but negative rates feed deflationary expectations. This causes consumers to hold onto cash in the expectation that goods will get even cheaper.

What Does NIRP Say About Central Banks & The Economy?

NIRP says, central banks have run out of options & are now in their own end zone, heaving the final desperate Hail Mary pass that has no hope of saving them from total defeat. An economy that needs NIRP is sick unto death & doomed to an implosion of impaired debt, over-leveraged risk-on bets, asset bubbles generated by stock buybacks & central bank purchases of risky assets.

The Negative Rates "Doom Loop" That Can Wipeout Banks & Global Economy

In a way, the move below zero was a gamble. The theory went like this: Banks would take a hit, but negative rates would get the economy moving. A stronger economy would, in turn, help the banks recover. It appears that wager isn’t working. The consequences are deeply worrying. Weak banks may now drag the economy down further.

The Outlook for Gold Prices is Brightening Rapidly

US dollar’s serious breakdown, which results from the NIRP move in Japan & the realization that this makes further rate rises in US much less likely, coupled with growing pressure for global QE to beat back the mounting forces of deflation mean that massive and widespread inflation is not far. While this is obviously not good news for the average housewife, what could be better for gold?

Negative Rates In The U.S. Are Next: Here's Why In One Chart

The Fed will follow the footsteps of negative rates in Sweden, Denmark, Europe, Switzerland & now Japan. Will this crush money markets as we know them & unleash even more volatility & havoc around the world? Absolutely. But at this point, when every other central bank has lost credibility “what differnce will it make” if the Fed joins the party on the central bank Titanic?

The Mindless Stupidity Of Negative Interest Rates

Can anyone show a clear example connecting the dots to show where negative interest rates have stimulated an economy? Can anyone clearly explain how charging an institution or business to hold deposits is in any way stimulative… not net stimulative, but stimulative AT ALL? It defies common sense.

Goldman Calls It: No Rate Hike Until Mid-2016

There you have it: no rate hike until mid-2016, which as we said previously, means no rate hike at all since the “apolitical” Fed will never hike just before a presidential election, and more importantly, by then the epic inventory liquidation-driven recession will have already started, making the only question that matters in the summer of 2016: NIRP or QE4.

Will Yellen Shock All: Goldman Says "Fed Should Think About Easing"

The punchline comes from Goldman’s Financial Conditions Index which is now screaming for QE4 or NIRP. After predicting of a roaring economy,Goldman admits the Fed can’t hike even 25 bps. Pay attention to what Goldman says the Fed will do, for “risk management” purposes – because as shown many times in the past, Goldman runs the Fed.

ECB Will Cut Rates To Minus 3%: JP Morgan

ECB is now close to running out of ammunition. Contrary to its initial design, the OMT programme could no longer be seen as unlimited. Draghi is already playing down Q€’s potential, noting that QE alone will not be sufficient to reignite eurozone growth. It seems the only option for the ECB would be to plunge further into NIRP-dom.

Are Central Banks Creating Deflation?

The unintended consequences of continuing to delve deeper into the new paranormal are making the game ever more dangerous as we now have central banks accidentally creating deflation while simultaneously embedding enormous amounts of risk in fixed income markets by sapping every last vestige of liquidity.

NIRP Officially Arrives In The US As JPM Starts Charging Fees On Deposits

NIRP is now officially in the US, which means that one after another US commercial banks will join what has already become a NIRP free-for-all across most of continental Europe where NIRP now reigns supreme & where trillions in government bonds yield negative rates. JPM is preparing to charge large institutional customers for deposits.

Negative Interest Rate Policy Arrives In Europe

Negative interest rates would support banks but destroy the business model for money- market funds, which would face the prospect of paying to invest. But the ECB doesn’t set policy to keep alive certain parts of the financial sector. Policy makers want to show that they haven’t exhausted their options yet.

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