There are many dangers–not to mention moral issues–of money created out of “thin air.” One of the dangers is that it distorts the markets and results in bad investments during “booms,” which inevitably turn to “busts.” During the busts, the bad investments wash out. Another is that it is easy to use. The economy slows,
Gold and silver prices were hammered this morning, gold down $20 at its low, silver down $.60. Both recovered only slightly. It is no coincidence that the metals dropped in what is one of the slowest commodities trading days of the year, tomorrow being the 4th of July with most bullion house traders in the
In Thursday’s post, I noted that central banks are adding approximately $2 trillion a year to the world’s money supply. Most of that freshly-created money goes into government bonds. However, some of it goes into equities. That’s right, stocks, like those traded on the NYSE and the NASDAQ. The Swiss National Bank and the Bank
According to David Stockman, who served as Budget Director under Ronald Reagan, the world’s central banks are adding some $2 trillion annually to the world’s money supply. This is on top of the trillions that were added with multiple quantitative easing programs by the Fed, the European Central Bank and the Bank of Japan since
One of the reasons that gold and silver are safe investments is that today central bank printing of paper money is widely accepted. Additionally, there are no limits on how much money central banks can create. The graph shows the balance sheets of the European Central Bank, the Fed and the Bank of Japan. Note
This is the slowest precious metals market in decades. The good news is that slow markets often are signs that bottoms are being put in. But, let’s consider the causes of this lackadaisical market. The primary cause is that the many stock indexes are making new highs, with the most watched, the Dow Industrials, only
Central banks to the rescue Just as the world’s central banks moved to rescue the banking system during the 2008 World Financial Crisis, they are now moving to rescue gold and silver investors, albeit the central banks are not rescuing gold/silver investors wittingly. Nonetheless, they are doing it just the same.
I’m not fond of recommending videos, especially long videos. However, this video interview of David Stockman, Budget Director during the Reagan Administration, is well worth the time. Stockman reminds us of problems and developments that are being ignored. For example, Obama and Congress made a deal years ago to suspend the debt limit until March
At the height of the 2008 World Financial Crisis, Greece was in the headlines daily because of its inability to make its debt payments. Now, Greece is seeking a third bailout of €30 to €50 billion, and it’s barely in the news.
Friday’s issues of the New York Times and the Financial Times painted glowing pictures for the US jobs market, based on October’s 161,000 jobs added. A quick investigation calls their conclusions into question.
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