To Keynesians, easy solutions reside for monetary and economic problems. When the economy is in recession, deficit spend. When inflation heats up (meaning rising prices, which the developed world hasn’t seen for some time), choke back the money supply. Problems solved. Recessions are averted; inflation is held in check. So, if “managing” the economy is
. . . said Mario Draghi, ECB president, in a speech to Wall Street investors in New York Friday. Only the day before, the ECB had announced its QE plans for the Eurozone, which investors immediately deemed insufficient and stocks declined. Rushing to defend his plan for further money creation and asset buying, Draghi made
In the financial news, nothing is getting more attention than Greece’s financial plight. In short, Greece cannot meet its debt payments schedule without further assistance from the European Central Bank and the International Monetary Fund, both of which want a more strident austerity program than the present one that has already brought the people of
Reaching an agreement on Greece’s bailout is beyond the 11th hour. It’s striking midnight. Monday all eurozone presidents and prime ministers have been summoned to meet in Brussels in a final attempt to resolve Greece’s bailout stand-off. This confab is necessary because the finance ministers of the currency union failed to reach an agreement earlier
In a video interview with Barron’s editor Jack Otter, famed Swiss investment advisor, fund manager and publisher of the Gloom Boom & Doom Report Marc Faber gives his economic views for 2015.
As European Central Bank President Mario Draghi has been promising (threatening?) for more than a year, the ECB finally is about to begin a quantitative easing program. The program most likely will run for two years.
“The slump in global oil prices,” reports the Financial Times (1/6/15), bolsters “the case for an ambitious programme of government bond buying by the European Central Bank.” In Germany, the Eurozone’s largest economy, consumer prices in December rose only 0.1 percent versus 0.5 percent the year to November.
The foundation is being laid for massive worldwide inflation. Expansive money creation programs in the world’s major economies have been under way for years, now the Eurozone is about the rejoin the game.
China is the latest to join the money printing binge, this time printing the equivalent of $81 billion. The goal: to fillip an economy that grew in August at “only a 6.9 percent” annualized rate. If the US economy were growing at 6.9 percent, the Dow would be at 25,000. The world’s central bankers are
Fears of financial crises aside, the primary reason for owning gold is as a hedge against inflation, inflation being defined as an increase in the money supply. As more money is printed, the dollar loses value and prices rise. A excellent example of this principle is the menu at an iconic restaurant in Phoenix, Durant’s.