Posts Categorized: Current Events

Valuing Gold – USD FMQ Update

There is only one way to value gold, and that is to quantify the expansion of the fiat currency in which it is priced. That is the sole purpose of the Fiat Money Quantity (FMQ), which since I last wrote about it five months ago has increased by $375bn to $13.7 trillion. This is despite the end of quantitative… Read more »

There is only one way to value gold, and that is to quantify the expansion of the fiat currency in which it is priced. That is the sole purpose of the Fiat Money Quantity (FMQ), which since I last wrote about it five months ago has increased by $375bn to $13.7 trillion. This is despite the end of quantitative… Read more »

The New Order Emerges

China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan. These banks do business at the behest of the old Bretton Woods* order. The AIIB will dance to China and… Read more »

China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan. These banks do business at the behest of the old Bretton Woods* order. The AIIB will dance to China and… Read more »

An Austrian Take on Inflation

We know that today’s macroeconomists are very confused about inflation, if only because despite all experience they think they can print money and increase bank credit with a view to generating price inflation at a controlled 2% rate. Admittedly, most of them will acknowledge there is more hope than reality about the controlled bit. Economic… Read more »

We know that today’s macroeconomists are very confused about inflation, if only because despite all experience they think they can print money and increase bank credit with a view to generating price inflation at a controlled 2% rate. Admittedly, most of them will acknowledge there is more hope than reality about the controlled bit. Economic… Read more »

Economic Insights – A Greek Epic

The mainstream media have interpreted the agreement between the Greek government and its creditors last Friday as finally removing the Grexit risk.  To be sure, the threat that Greece might leave the euro zone in the very near term has subsided, even if it has not been entirely removed.  The Greek government still has to present a package of… Read more »

The mainstream media have interpreted the agreement between the Greek government and its creditors last Friday as finally removing the Grexit risk.  To be sure, the threat that Greece might leave the euro zone in the very near term has subsided, even if it has not been entirely removed.  The Greek government still has to present a package of… Read more »

Economic Insights – SNB Throws in Towel

The Swiss National Bank (SNB) today abandoned its foreign exchange intervention which had kept the Swiss franc no stronger than 1.20 against the euro.   It also reduced its target-range for the three-month LIBOR to between -1.25% and -0.25% from the previous range between -0.75% and +0.25%.  Overall these measures represent a major policy move.  The… Read more »

The Swiss National Bank (SNB) today abandoned its foreign exchange intervention which had kept the Swiss franc no stronger than 1.20 against the euro.   It also reduced its target-range for the three-month LIBOR to between -1.25% and -0.25% from the previous range between -0.75% and +0.25%.  Overall these measures represent a major policy move.  The… Read more »

Economic Insights – Euro Strains Re-Emerge

Today’s meeting of the ECB’s Governing Council is taking place in Naples. ECB policymakers will be able to see at first hand, if they care to look, what effects euro zone policies are having on Mediterranean member-states. The jobless rate in Naples, at the last count, was running at 25%, and at 6% for the 15-24 age-group.  This is… Read more »

Today’s meeting of the ECB’s Governing Council is taking place in Naples. ECB policymakers will be able to see at first hand, if they care to look, what effects euro zone policies are having on Mediterranean member-states. The jobless rate in Naples, at the last count, was running at 25%, and at 6% for the 15-24 age-group.  This is… Read more »

Economic Insights – Central Bank Activism

The ECB Governing Council is next due to meet on 6 November to assess the state of the euro zone economy and to decide what, if any, adjustments to make to monetary policy.  According to surveys of market opinion, the ECB is not expected to take fresh action this month.  December, when revised staff economic… Read more »

The ECB Governing Council is next due to meet on 6 November to assess the state of the euro zone economy and to decide what, if any, adjustments to make to monetary policy.  According to surveys of market opinion, the ECB is not expected to take fresh action this month.  December, when revised staff economic… Read more »

A Market Reset is Due

Recent evidence points increasingly towards global economic contraction. Parts of the Eurozone are in great difficulty, and only last weekend S&P the rating agency warned that Greece will default on its debts “at some point in the next fifteen months”. Japan is collapsing under the wealth-destruction of Abenomics. China is juggling with a debt bubble that threatens to implode. The… Read more »

Recent evidence points increasingly towards global economic contraction. Parts of the Eurozone are in great difficulty, and only last weekend S&P the rating agency warned that Greece will default on its debts “at some point in the next fifteen months”. Japan is collapsing under the wealth-destruction of Abenomics. China is juggling with a debt bubble that threatens to implode. The… Read more »

Economic Insights – Euro Under Threat

It is difficult to see how the EU Commission can do anything but censure the French government over its 2015 budget plans.  While EU policymakers are eager to stress that their fiscal pact’s budget rules are flexible, these rules could hardly be stretched to accommodate what Mr Sapin, the French finance minister, is proposing.  He is projecting a minuscule… Read more »

It is difficult to see how the EU Commission can do anything but censure the French government over its 2015 budget plans.  While EU policymakers are eager to stress that their fiscal pact’s budget rules are flexible, these rules could hardly be stretched to accommodate what Mr Sapin, the French finance minister, is proposing.  He is projecting a minuscule… Read more »

A Difficult Question

In a radio interview recently* I was asked a question to which I could not easily give a satisfactory reply: if the gold market is rigged, why does it matter? I have no problem delivering a comprehensive answer based on a sound aprioristic analysis of how rigging markets distorts the basis of economic calculation and why a properly… Read more »

In a radio interview recently* I was asked a question to which I could not easily give a satisfactory reply: if the gold market is rigged, why does it matter? I have no problem delivering a comprehensive answer based on a sound aprioristic analysis of how rigging markets distorts the basis of economic calculation and why a properly… Read more »