Fred Hickey, whose stock market and gold predictions I’ve written about before, sees the stock market on precarious ground. He reminds investors that the Fed kicked off this bull market in stocks and bonds eight years ago with a forecast that massive money creation would “lift asset prices and generate a wealth effect,” which then
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
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.
A little over a year ago, the IMF announced that the renminbi, China’s currency, would be added the IMF’s “basket of currencies” that makes up SDRs (Special Drawing Rights). A loud outcry ensued from many pro-gold analysts that the inclusion would mean the end of the dollar as the world’s reserve currency and would result
From Dow Theory Letters, September 21, 2016: “Good news today from both the Fed and the Bank of Japan (BOJ). The Fed announced no rate increases for now, though hinted (or teased, to be honest) that one would come later in the year. In Japan, the BOJ said it would continue an easy monetary policy
Fed Chair Janet Yellen’s July proclamation that “the case for an increase in the federal funds rate has strengthened,” was nullified by a weaker than expected August jobs report. Only 151,000 jobs were added, short of the 180,000 forecast by economists and far short of the 275,000 added in July.
Fed Chair Janet Yellen said, in her prepared remarks at the Jackson Hole symposium, that “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.” The markets did
Despite gold’s stellar performance so far this year, The Financial Times (August 24, 2016) chose to headline a front page article “Gold loses shine as Fed decision looms.” In the Commodities Section, a second piece was titled “Gold heads for monthly drop after investors turn anxious over rate rise and weaker demand.” Regardless gold’s performance,
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