Federal Reserve

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acting-man.com

How Many More “Saves” Are Left in the Central Bank Bazookas?

Very few, it seems
Wednesday, February 18, 2015, 10:45 PM

The remarkable success of grandiose pronouncements, money-printing programs and serial expansions of credit raises a key question: how many more “saves” can the central bank bazookas fire that will have the desired effects of maintaining perceptions of central bank omnipotence and pushing global markets ever higher? » Read more

Podcast

alphaspirit/Shuttestock

David Stockman: The Global Economy Has Entered The Crack-Up Phase

And will be characterized by these 4 developments
Sunday, February 15, 2015, 3:42 PM

Few people understand the global economy and its (mis)management better than David Stockman -- former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier.

David is now loudly warning that events have entered the crack-up phase, which he predicts will be defined by the following 4 developments: » Read more

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Esteban De Armas/Shutterstock

We Live In An Era Of Dangerous Imbalances

And history shows they correct painfully
Friday, February 13, 2015, 9:19 PM

The intervention by the world's central banks has resulted in today's bizarro financial markets, where "bad news is good" because it may lead to more (sorry, moar) thin-air stimulus to goose asset prices even higher.

The result is a world addicted to debt and the phony stimulus now essential to sustaining it. In the process, a tremendous wealth gap has been created, one still expanding at an exponential rate. » Read more

Podcast

It's A Wonderful Life/Paramount

Nomi Prins: The Sinister Evolution Of Our Modern Banking System

Because we're all about those banks, 'bout those banks...
Saturday, January 31, 2015, 11:06 PM

Today, the 'revolving door' connecting our political and financial systems is evident to anyone with eyes. But this entwined relationship between Washington DC and Wall Street is nothing new, predating even the formation of the Federal Reserve. 

In this well-detailed interview, Nomi Prins goes into depth of the rationale and process behind the creation of the Federal Reserve, and more important, how its mandate -- and the behavior of the banking system overall -- metastasized into the every-banker-for-himself regime of sanctioned theft we now live with. » Read more

Podcast

Blueximages | Dreamstime.com

Axel Merk: Why Asset Prices Must Return To Lower Levels

It's the price you pay for forcing capital to speculate
Saturday, January 24, 2015, 4:59 PM

Saying it's been a busy week and half on the central bank front is perhaps a sizeable understatement. 

First, the Swiss National Bank stunned the world (and its brethren central banks) by removing its peg to the Euro. This was quickly followed by Mario Draghi finally making good on his longtime threat of firing QE bazooka, announcing that the ECB will pursue a 60 billion Euro per month easing program for the next 16 months. And amidst all the smoke, the Canadian central bank snuck in a surprise rate cut to its interest rate.

To make sense of both the "Why?" behind these extreme moves, as well as the "What?" in terms of their implications, Axel Merk, founder and Chief Investment Officer of Merk Funds joins us this week. » Read more

Blog

A Quick Sanity Check

A cautionary reminder of where we are in this story
Monday, January 19, 2015, 1:06 AM

Sometimes it pays to step way back and look at things from a high level.

In response to the 2008 crisis, the world's major central banks pumped an unprecedented amount of monetary stimulus into the system -- all in the name of kick starting enough economic growth to pull the planet out of its fundamental sinkhole of Too Much Debt.

More than six years and over $4 trillion later, what exactly can we say it did for us?

Not enough, as the following short video summarizes. » Read more

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Daniel Kaesler | Dreamstime.com

Why Our Central Planners Are Breeding Failure

Mistaking illusion for lasting success
Thursday, January 15, 2015, 11:50 AM

As counter-intuitive as it may sound, success rather reliably leads to failure and destabilization.

In the macro-economic arena, I think it highly likely that the monetary and fiscal policies of the past six years that are conventionally viewed as successful will lead to spectacular political and financial failures in 2015 and 2016. » Read more

Insider

Wikimedia (public domain image)

The 6 Reasons The Next Economic Rescue Will Fail

Why the current unstable 'recovery' must topple
Thursday, January 15, 2015, 11:48 AM

Executive Summary

  • The 6 Factors
    • Rising inequality
    • Reversion to the mean
    • Cost overages
    • Diminishing returns
    • Misleading measurement
    • Expertise mismatch
  • Why the 'success' of the Federal Reserve and other world central banks is ultimately dooming them to failure

If you have not yet read Why Our Central Planners Are Breeding Failure available free to all readers, please click here to read it first.

In Part 1, we examined a variety of reasons why the apparent success of Keynesian monetary and fiscal policy may be transitional and brief rather than permanent.

Here in Part 2, we delve into the six other dynamics that make success destabilizing.

Rising Inequality—Perceived and Real

The highly touted “recovery” has been highly uneven in its distribution. The benefits of rising income and wealth have flowed disproportionately to the top 5%, 1% and even 1/10th of 1%.  Those who didn't make it onto the limited-seating Recovery Bus feel the gap between the prospects and wealth of the top tier and their own wealth and prospects widening. Indeed, psychological studies find that we assess our wealth and social position not by our actual material prosperity, but by the narrowing or widening of the perceived wealth gap with our peers.

This is precisely the situation in the U.S. and China. Both economies are supposedly expanding smartly, but the gains are concentrated in a relative few hands; the Rising Prosperity Bus has few seats.  The vast majority perceive themselves as being left behind, and that is highly... » Read more

Insider

Off The Cuff: Today's Low Oil Price Is A Massive Head-Fake

And will ultimately cause the price to rise MUCH higher
Thursday, January 8, 2015, 11:03 PM

In this week's Off the Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Carnage Wreaked By The Oil Price Collapse
    • Setting us up for whopping future price spike
  • The Geo-Political Chessboard
    • The stakes of the game are rising quickly
  • Forecasting the Fed in 2015
    • Will it (can it) continue to bail out everything & everybody?
  • Calling BS on Today's Market Prices
    • They assume a perfection that cannot exist
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Creativa Images/Shutterstock

2014 Year in Review: Part 2

Will 2015 be the year it all comes tumbling down?
Friday, December 19, 2014, 12:27 PM

This year has been all about risk—existential risk. Some of it seemed to dissipate and some lingers.  Market valuations remain risky—regression to the mean could easily provide a 50% haircut and more if we observe regression through the mean. This has not come to pass, but the risk is very real.

Those who seek risk in markets will eventually find it. » Read more