Central bank actions and expectations of central bank actions are driving investment markets: the bond markets, the equity markets and the metals markets. Economic news does not move the markets, except that markets move on how investors think that central banks will react to economic news.
Metals prices surged Wednesday–as they should have–after the Fed announced no rate hike. Gold jumped 1.6%, silver a whopping 3.7%. The Fed decision was a reaffirmation of a continued loose monetary policy. Gold and silver investors need to keep in mind that the world’s monetary and fiscal policy makers have fully embraced loose money and
April 15 is behind us, and that gives a feeling of relief to those Americans who labored and toiled in 2015 to provide for themselves and their families while seeing billions of dollars confiscated from their earnings. (And, now they must keep records for years just in case they are later audited by the IRS.)
As noted in G-20 talks up more deficit spending; Deutsche Bank recommends gold, there were loud cries at the Shanghai G-20 Summit for “a worldwide coordinated effort” to head off global recession. Here are a few more details about the G-20 discussions.
Martin Wolf, chief economics commentator at the Financial Times, is calling for the world’s central banks to start electronically depositing money “to every adult citizen.” Wolf’s not calling on only the Fed to implement this policy but all the world’s central banks, which would mean massive inflation around the world that would send investors scurrying
Mario Draghi, ECB chief, again reaffirmed his pledge to print more euros next month in a Keynesian effort to fillip economic activity in the eurozone. In December, the ECB’s measures fell short of market expectations, and stock markets declined. This time Draghi does not plan to disappoint.
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
Quantitative easing opened a Pandora’s box that will not be closed until massive inflation spreads worldwide. Only when people quit accepting the digital money that central banks spew will it end. However, the end may be far, far away. Traditionally, central banks created money “out of thin air” to finance wars by buying new government
“First they ignore you, then they laugh at you, then they fight you, then you win.” — Mahatma Gandhi Mahatma Gandhi successfully sought the overthrow of tyrannical British rule in India via non-violent civil protests. In doing so, the above quote became synonymous with his name. Basically, Gandhi’s quote outlines how new ideas are received
Wednesday the Federal Open Market Committee (FOMC) gave no date for an interest rate hike, leaving analysts and economists speculating as to when the long anticipated .25 percent increase in the federal funds rate, which now officially stands at “zero to .25 percent,” will come. Following the Fed’s official statements issued after FOMC meetings has
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