Posts Categorized: Uncategorized

Inaccurate Statistics and the Threat to Bonds

Statistics have become very misleading: in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher. There are two… Read more »

Statistics have become very misleading: in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher. There are two… Read more »

Doubts on monetary policy

The leading central banks in the advanced economies insist their policies are guided by targets, usually expressed in terms of the annual increase in a relevant consumer price index (CPI).  For the ECB, the target is annual CPI inflation below, but close to, 2%.  For the Bank of England (BoE) it is an annual rise in CPI of 2%,… Read more »

The leading central banks in the advanced economies insist their policies are guided by targets, usually expressed in terms of the annual increase in a relevant consumer price index (CPI).  For the ECB, the target is annual CPI inflation below, but close to, 2%.  For the Bank of England (BoE) it is an annual rise in CPI of 2%,… Read more »

Euro-sclerosis

There appears to be little or nothing in the monetarists’ handbook to enable them to assess the risk of a loss of confidence in the purchasing power of a paper currency. Furthermore, since today’s macroeconomists have chosen to deny Say’s Law, otherwise known as the laws of the markets, they have little hope of grasping the more subtle aspects… Read more »

There appears to be little or nothing in the monetarists’ handbook to enable them to assess the risk of a loss of confidence in the purchasing power of a paper currency. Furthermore, since today’s macroeconomists have chosen to deny Say’s Law, otherwise known as the laws of the markets, they have little hope of grasping the more subtle aspects… Read more »

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 »

Capital Markets & Banks

For those central bankers who have been worrying about a lack of volatility in capital markets and investors’ apparent insensitivity to risk, the past few days’ trading will have come as welcome relief.  In the past week, euro zone peripheral bond yield spreads over German Bunds have widened, by more than 60 bps in the… Read more »

For those central bankers who have been worrying about a lack of volatility in capital markets and investors’ apparent insensitivity to risk, the past few days’ trading will have come as welcome relief.  In the past week, euro zone peripheral bond yield spreads over German Bunds have widened, by more than 60 bps in 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 »

The end of Tapering and Government Funding

Last year markets behaved nervously on rumours that QE3 would be tapered; this year we have lived with the fact. It turned out that there has been little or no damage to markets, with bond yields at historic lows and equity markets hitting new highs. This contrasts with the ending of QE1 and QE2, which… Read more »

Last year markets behaved nervously on rumours that QE3 would be tapered; this year we have lived with the fact. It turned out that there has been little or no damage to markets, with bond yields at historic lows and equity markets hitting new highs. This contrasts with the ending of QE1 and QE2, which… Read more »

Economic Insights – An unfinished agenda

In his Stockholm speech, Mr Stanley Fischer, Vice Chairman of the US Federal Reserve, expressed his views on topics other than the slow rate of recovery from the 2007-09 financial crisis, on which we commented in yesterday’s briefing.  He devoted a substantial section of his presentation to reviewing the progress made so far in strengthening… Read more »

In his Stockholm speech, Mr Stanley Fischer, Vice Chairman of the US Federal Reserve, expressed his views on topics other than the slow rate of recovery from the 2007-09 financial crisis, on which we commented in yesterday’s briefing.  He devoted a substantial section of his presentation to reviewing the progress made so far in strengthening… Read more »

The New ‘Great Game’

By nightfall on June 18 1815 the control of Europe had been decided with the defeat of Napoleon and the Congress of Vienna then decided how the Continent should be divided. In an amazingly conciliatory gesture the integrity of France was mostly upheld, the genesis of Prussian expansion had been established, Britain took over some… Read more »

By nightfall on June 18 1815 the control of Europe had been decided with the defeat of Napoleon and the Congress of Vienna then decided how the Continent should be divided. In an amazingly conciliatory gesture the integrity of France was mostly upheld, the genesis of Prussian expansion had been established, Britain took over some… Read more »