In The stock market is managing the Fed, I said that the Fed will put off raising interest rate until after September because of stock market action. Now, the IMF is using the same reasoning in arguing that the Fed should wait until 2016 before raising interest rates.
On March 25, I presented evidence that perhaps stocks were topping and that it would be prudent to move from overvalued stocks to undervalued gold and silver. Now, Matthew Kerkhoff, a regular contributor to Richard Russell’s’ Dow Theory Letters, suggests the same.
In a statement that could not have been more blunt, last week the IMF told Japan that it needs to print more money to ensure that its economy will not slip into recession. Specifically, the IMF wants the Bank of Japan to push inflation to 2 percent. Japan’s inflation rate is near zero.
One of the reasons gold and silver prices are stuck in a narrow trade range is that stocks are stuck in a narrow trading range. Still, widely-followed indexes recently made new highs, specifically the S&P 500, the NASDAQ and the Dow Industrials. However, the much ignored (except by professionals) Dow Transportation index is some 850
Five megabanks–Barclays, JPMorgan Chase, Citigroup, the Royal Bank of Scotland and UBS–are expected to plead guilty to rigging currencies markets; collectively, they will pay fines in the billions of dollars. And, we’re supposed to continue believing that the bullion banks never manipulated the gold and silver markets.
Despite our constant attention to news, we listen and view with disdain, knowing full well that what we hear and see is often distorted to get us to react and think in specific ways. In short, the news is slanted. Sometimes, slanted news coverage is exposed, but rarely is it exposed as was the case
In a move that is supposed to fillip economic activity, China’s central bank cut interest rates again. While interest rates in China are not at near zero levels as in the US, the move further signifies that the Bank of China has fully embraced Keynesian economics, which have not stimulated economic activity in the US
After not being significantly large enough to make headlines for years, the US trade deficit is back in the news after ballooning 40% to $51 billion in March. $37.8 billion of the deficit was with China. The CBO projects a record high $486 billion trade deficit for fiscal 2015.
While speculation is spreading that the Bank of Japan may increase its bond-buying program, with the dual goals of increasing economic activity and filliping the rate of inflation to 2 percent, influential members of the money establishment are asking “Is 2 percent inflation high enough?”