Federal Reserve

Blog

Bloomberg

Has The Fed Already Lost?

Growth is dying & the Fed has few options left
Friday, April 17, 2015, 3:36 PM

Increasingly we live in a world of Now. Instantaneous access to digital real time data and news has simply become a given in our lives of the moment.

You may be surprised to know that the Federal Reserve has taken notice. » Read more

Insider

Dreamstime

The Future Of Interest Rates

The Fed faces an increasingly bad set of options
Friday, April 17, 2015, 3:36 PM

Executive Summary

  • Why the Fed may no be able to raise rates from here
  • Will the Fed go to negative interest rates instead?
  • Why the next recession will limit the Fed's options greatly
  • Why it may well be too late for the Fed at this point to act

If you have not yet read Part 1: Has The Fed Already Lost? available free to all readers, please click here to read it first.

What If The Fed Isn't Actually Able To Raise Rates From Here?

Let’s start with a look at the history of the Federal Funds rate (the shortest maturity interest rate the Fed directly controls).  Alongside the historical rhythm of the Funds rate are official US recession periods in the shaded blue bars.   

Chart Source:  St. Louis Federal Reserve

Of course there is one striking and completely consistent historical commonality in the behavior of the Funds rate over time.  The Fed has lowered the Federal Funds rate in every recession since 1954 at least.  There are no exceptions.  You can see the punchline coming, can’t you?  Just how does one lower interest rates from zero to stimulate a potential slowdown in the economy?

Of course in the banking system... » Read more

Insider

Kevin Grant/Shutterstock

The Fed Is Destroying the World One Saver At A Time

Bernanke's new blog offers bloviating proof of that
Tuesday, April 7, 2015, 12:25 AM

I must confess to a deep-seated anger at just how insultingly stupid the world has become. As a sufferer of crisis fatigue I can be caught exclaiming You have got to be kidding me!!? several times per day, or perhaps shouting How dumb do they think we are?

Three choice outbursts came last week as I read Bernanke’s new blog and came across statements like this one:

 

 

Podcast

Brian A Jackson/Shutterstock

Steve Keen: The Deliberate Blindness Of Our Central Planners

Choosing to ignore the largest risks
Sunday, March 29, 2015, 12:20 PM

The models we use for decision making determine the outcomes we experience. So, if our models are faulty or flawed, we make bad decisions and suffer bad outcomes.

Professor, author and deflationist Steve Keen joins us this week to discuss the broken models our central planners are using to chart the future of the world economy. » Read more

Podcast

Everett Collection/Shutterstock

Grant Williams: Why The Smart Money Is So Nervous Now

And selling out to "dumber" hands
Saturday, February 28, 2015, 12:50 PM

More and more, those who have made long, successful careers in money management are realizing that the system has morphed into a strange beast they no longer recognize, nor trust.

Fear of epic, perhaps historic, dislocations in price when the current market reverses is causing more and more of the "smart money" to sell out now and seek safe harbor. » Read more

Blog

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

Blog

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