Category ‘Monetary Policy’

The markets would prefer to see an Operation Shock and Awe than an Operation Twist. After all, this economy is going nowhere and there is Europe, again. Well, in terms of monetary easing, we can’t say that the Fed is sitting on its hands because the money supply is still growing at an annual rate of 23% – so there is plenty of QE going on. It is what’s needed to prevent the system from collapsing.

So what is a central banker to do? Operation Twist? Buying longer term bonds, reducing the yield curve by .oooo5%? Won’t do much in reality. …

Central banking should be the most boring subject on earth but when Glen Beck is doing one of its shows on the Fed, you know it ain’t what it used to be! In effect, the Fed and the powers that be love nothing more than to remain mysterious and mostly under the radar. The last thing they want is publicity. But as much as the ruling elite in charge of the State, democratic or otherwise, would like to mask their obvious intentions – one bad move or a Black Swan event and the little game is sometime revealed in broad …

We are living in a unique time in history as people now perceive currency (paper money) to have value. It was not always like that, far from it. As Voltaire once said, “paper money eventually returns to its intrinsic value – zero”, those days seems long gone.

Inflation Fear Growing…

Now it seems that some are finally catching up to the fact that printing green pieces of paper does not make one prosperous but worst, considerably lowers its purchasing power and eventually its use as a medium of exchange.

In practical investment terms – one would be well advised to look …

The WSJ was reporting that consumer credit in the US was up by $6 billion in December 2010, the first time since August 2008. Wait a minute? The “real” unemployment rate in the US is 17% and recent jobs numbers indicated that Americans are dropping from the labor force like a rock and consumer credit is up?

Well, at some point all this new money injected by the Fed to re capitalize the banks and save a couple of companies (GM, GE…) had to find its way into the market. It’s true, for most of 2010, the banks were sitting …