Articles related to Monetary Policy
 
John Butler - Goldmoney
Financial crisis dynamics, the ‘shadow’ gold demand, and Mene
The study of financial crises is as old as the economics discipline itself. One of the most prominent theorists of financial crises ever to hold a senior Federal Reserve policy position was John Exter, vice-president of the New York Federal Reserve during the 1950s. Several years ago I co-wrote a series of essays on Exter’s theories together with his sonin- law, Barry Downs. In this paper, building on Exter’s work, including his eponymous ‘pyramid’, I introduce a new ‘hourglass’ framework for un
Friday, November 17, 2017
Alasdair Macleod - Finance and Eco.
Will macro-economists ever learn?
As we lurch through successive credit crises, central bankers and economists believe they learn valuable lessons every time, and that the ultimate prize, the suppression of business cycles through monetary policy, will be achieved.We saw, over Brexit, how wrong the Bank of England’s and the UK Treasury’s models were, and these errors were also evident in the OECD’s model. Brexiteers smelled conspiracy, but in the absence of evidence, perhaps we should give them the benefit of the doubt and assum
Friday, November 17, 2017
Bullion Vault
Gold Price Flat as Half-Billion Da Vinci Sale Sees Stocks and Junk Bonds Rally
GOLD PRICES edged back up to $1280 per ounce on Thursday in London as world stock markets rose for the first session in six. With gold prices trading just $10 per ounce above the 13-week closing low of week-ending Friday 3 November, so-called "junk bond" prices also rallied with equities. US corporate bonds rated below investment grade gained 0.7% from yesterday's new 7-month low as measured by
Friday, November 17, 2017
Jan Skoyles - GoldCore
Protect Your Savings With Gold: ECB Propose End To Deposit Protection
It is the ‘opinion of the European Central Bank’ that the deposit protection scheme is no longer necessary: ‘covered deposits and claims under investor compensation schemes should be replaced by limited discretionary exemptions to be granted by the competent authority in order to retain a degree of flexibility.’ To translate the legalese jargon of the ECB bureaucrats this could mean that the current €100,000 (£85,000) deposit level currently protected in the event of a bail-in may soon be no mor
Wednesday, November 15, 2017
Keith Weiner - Monetary Metals
The Cycle of Falling Interest
Over the past few weeks, we have looked at the effects of falling interest rates: falling discount applied to future cash flows (and hence rising stock and bond prices), and especially falling marginal productivity of debt (MPoD). Falling MPoD means that we get less and less GDP “juice” for each new dollar of borrowing “squeeze”. Last week, we proposed an economic law: if MPoD < 1 then the economy is unsustainable. MPoD has been falling since at least 1950, and is currently well under 0.4 (havin
Tuesday, November 14, 2017
Frank Shostak
There Are Two Types of Credit — One of Them Leads to Booms and Busts
In the slump of a cycle, businesses that were thriving begin to experience difficulties or go under. They do so not because of firm-specific entrepreneurial errors but rather in tandem with whole sectors of the economy. People who were wealthy yesterday have become poor today. Factories that were busy yesterday are shut down today, and workers are out of jobs.Businessmen themselves are confused as to why. They cannot make sense of why certain business practices that were profitable yesterday are
Tuesday, November 14, 2017
Robert P. Murphy -
The Gold Standard Did not Cause the Great Depression
Quarterly Journal of Austrian Economics 19, no. 1 (Spring 2016): 101–111[The Midas Paradox: Financial Markets, Government Policy Shocks, and the Great Depression by Scott Sumner]The Midas Paradox is an impressive piece of scholarship, representing the magnum opus of economist Scott Sumner. What makes the book so unique is Sumner’s use of real-time financial data and press accounts in order to explain not just broad issues—such as, “What caused the Great Depression?”—but to offer commentary on th
Saturday, November 11, 2017
Keith Weiner - Monetary Metals
Heat Death of the Economic Universe
Physicists say that the universe is expanding. However, they hotly debate (OK, pun intended as a foreshadowing device) if the rate of expansion is sufficient to overcome gravity—called escape velocity. It may seem like an arcane topic, but the consequences are dire either way. If the rate of expansion is too low, then it will get slower and slower until expansion stops entirely, then finally, begin collapsing again in a Big Crunch. That’s bad enough. But the other possible fate of the universe i
Wednesday, November 8, 2017
Jan Skoyles - GoldCore
German Investors Now World’s Largest Gold Buyers
– German gold demand surges from 17 ton-a-year to a 100 ton-plus per year – €6.8 Bln spent on German gold investment products in 2016, more per person than India and China – Germans turned to gold during financial crises and ongoing euro debasement – Evidence of latent retail demand on increased economic concerns – “Gold fulfils an important long-term, wealth preservation role in German investors’ portfolios” Editor: Mark O’Byrne India and China often grab the headlines as the world’s largest
Monday, November 6, 2017
Jan Skoyles - GoldCore
Gold Price Reacts as Central Banks Start Major Change
– Bank of England raised interest rates for the first time in ten years – President Trump announces Jerome Powell as his choice to lead the U.S. Federal Reserve – Most investors outside the US Dollar and Euro see gold prices climb after busy week of central bank news – Inflation now at five-year high of 3% – Inflation, low-interest rate, debt crises and bail-ins still threaten savers and pensioners This week has been a significant week for central banks. The Bank of England raised interest rate
Friday, November 3, 2017
Frank Shostak
Can Gradual Interest-Rate Tightening Prevent a Bust?
Fed policy makers are of the view that if there is the need to tighten the interest rate stance the tightening should be gradual as to not destabilize the economy.The gradual approach gives individuals plenty of time to adjust to the tighter monetary stance. This adjustment in turn will neutralize the possible harmful effect that such a tighter stance may have on the economy.But is it possible by means of a gradual monetary policy to undo the damage inflicted to the economy by previous loose mon
Friday, November 3, 2017
Bullion Vault
Interest Rate Expectations 'Driving Gold Prices' as Fed Holds, BoE Hikes Yet Pound Sinks
GOLD PRICES held or rose near multi-week highs for most investors outside the US Dollar and Euro on Thursday, as the Bank of England followed the Federal Reserve's widely expected "no change" decision by raising UK rates off an all-time record low as analysts and traders had forecast. The Pound fell hard on the UK news, erasing all of this week's prior 2 cent gain to trade back at $1.3050 on what pundits called profit-taking.
Thursday, November 2, 2017
Chris Powell - GATA
Fearing eurozone meltdown, German investors rush to gold
Germany has become the world's biggest buyer of gold amid fears of economic meltdown across the eurozone. Figures from the World Gold Council reveal that the country invested a record L6 billion in gold bullion and coins as well as in exchange-traded products. Analysts say improved availability, low prices, and growing demand due to loose monetary policy, economic uncertainty, and volatile geopolitical factors are the three key reasons behind the German investors' gold rush. Their fondness for g
Wednesday, November 1, 2017
Jan Skoyles - GoldCore
  Stumbling UK Economy Shows Importance of Gold
– UK economy outlook bleak amid Brexit, debt woes and rising inflation – Confidence in UK housing market at five-year low – UK high street sales crash at fastest rate since 2009 – Number registering as insolvent in England and Wales hit a five-year high in Q3 – UK public finance hole of almost £20bn in the public finances set to grow to £36bn by 2021-22 – Protect your savings with gold in the face of increased financial woes in UK This week markets will be watching the UK with baited breath as
Wednesday, November 1, 2017
Keith Weiner - Monetary Metals
Falling Discount, Gold and Silver Get Powelled
Warren Buffet famously proposed the analogy of a machine that produces one dollar per year in perpetuity. He asks how much would you pay for this machine? Clearly it is worth something more than $1.00. And it’s equally clear that it’s not worth $1,000. The value is somewhere in between. But where? This leads to the concept of discount (which we mentioned in Falling Productivity of Debt two weeks ago). A dollar to be paid next year is worth less than a dollar in the hand today. One reason is that
Monday, October 30, 2017
Przemyslaw Radomski CFA - SunshineProfits
ECB Meeting in October 2017 and Gold
On Thursday, the European Central Bank released its most recent monetary policy statement. What does it say about the ECB’s stance and what does it imply for the gold market? As expected, the ECB kept its monetary policy unchanged at its last meeting, but altered its quantitative easing program. In line with expectations, the bank cut the volume of monthly purchases, but extended the duration of the program until September 2018: “From January 2018 the net asset purchases are intended to continue
Friday, October 27, 2017
Przemyslaw Radomski CFA - SunshineProfits
U.S. Economic Data, ECB, and Gold
This week, positive data on the U.S. economy was released, but the markets have seemed to focus on today’s ECB meeting. What does it mean for the gold market? Durable goods orders rose 2.2 percent in September, much more than expected (the Bloomberg consensus was 1 percent). Importantly, core capital goods orders (nondefense ex-aircraft) increased 1.3 percent, also above expectations. Moreover, the IHS Markit Flash U.S. Composite PMI Output Index rose from 54.8 in September to 55.7 in October. I
Thursday, October 26, 2017
Alasdair Macleod - Finance and Eco.
America’s stagflation
The accumulation of monetary policy errors by the Fed is increasingly certain to culminate in the credit crisis that always marks the end of the credit cycle. Credit crises are the result of globally coordinated monetary policies nowadays, so the timing of the forthcoming crunch is not only dependant on the Fed’s actions, but is equally likely to be triggered from elsewhere. Candidates for triggering a global credit crisis include economic and financial developments in Europe, Japan and China.Th
Thursday, October 26, 2017
Mary Anne & Pamela Aden - Aden Forecast
Gold's Still Looking Good
Gold has been looking good for the past two years. The main reason why is because it's been carving out a bottom, which will likely result in a major upcoming bull market rise. In fact, gold hit bottom in December 2015 and a big change has been taking place since last year. Low interest rates have been a positive for gold and the metals. Since gold doesn't pay any interest and interest rates are still very low, they don't give gold much competition. Plus, rising inflation expectations h
Wednesday, October 25, 2017
Przemyslaw Radomski CFA - SunshineProfits
Abe’s Victory and Gold
On Sunday, Abe won the snap election in Japan. What does it mean for the gold market? Over the weekend, the general election to Japan’s House of Representatives took place. The Liberal Democratic Party coalition won, gaining 284 seats, while the Komeito got 29 seats. It means that the ruling coalition won 313 seats combined and will keep its two-thirds super majority in the lower house of the parliament. The results are negative for the gold market. Abe’s triumph indicates that we will see a con
Tuesday, October 24, 2017
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