Economy

It’s Hard to Summon Sympathy for Big Banks

"It may not be easy to be sympathetic to the big banks, but it is easy to understand their surprise and frustration. They have gone from being viewed as national champions — proof of a country’s standing in the world — to being seen as a potential source of national disaster. Iceland and Ireland went broke because they had to, or chose to, bail out their irresponsible banks. Eric H. Holder Jr., the attorney general, did not help when he said last spring that the Justice Department had to keep in mind that filing criminal charges against a large bank could 'have a negative impact on the national economy, perhaps even the world economy.' He quickly backtracked, but the perception was reinforced." Continue reading →

Continue ReadingIt’s Hard to Summon Sympathy for Big Banks

How the Paper Money Experiment Will End

"We are now in a situation that looks like a dead end for the paper money system. After the last cycle, governments have bailed out malinvestments in the private sector and boosted their public welfare spending. Deficits and debts skyrocketed. Central banks printed money to buy public debts (or accept them as collateral in loans to the banking system) in unprecedented amounts. Will money printing be a constant with interest rates close to zero until people lose their confidence in the paper currencies? Can the paper money system be maintained or will we necessarily get a hyperinflation sooner or later? There are at least seven possibilities." Continue reading →

Continue ReadingHow the Paper Money Experiment Will End

New Barbados currency ‘more secure’ [May 2013]

"Producers of fake Barbados money should not be smiling all the way to the bank anytime soon. On the heels of what it said was 'an increase in counterfeit activity in 2012', the Central Bank of Barbados has unveiled the island’s first new banknotes in 40 years. Central Bank of Barbados officials and representatives from British-based currency printer De La Rue officially introduced the new notes this morning at the Grande Salle, Tom Adams Financial Centre, saying they carried advanced security features within a modern design that was in the making for the last three years." Continue reading →

Continue ReadingNew Barbados currency ‘more secure’ [May 2013]

Barbados PM: Central bank ‘indulgence’ a threat to economic stability

"Former Barbados prime minister Owen Arthur said that the Central Bank had printed BDS$370 million to purchase Government Treasury Bills, which had caused the country’s foreign exchange reserves to plunge. 'The printing of money on this scale to accommodate government’s fiscal deficit is the chief factor that has triggered the dramatic plunge downward in the country’s foreign exchange reserves. If this plunge downward is not immediately checked, the economic affairs of Barbados will enter a new and very dangerous territory,' he warned, reminding of the economic and social problems of Guyana and Jamaica as a result of excessive increases in money supply and inflation." Continue reading →

Continue ReadingBarbados PM: Central bank ‘indulgence’ a threat to economic stability

Barbados Debt Higher Than Cyprus Prompts Firing of 3,000

"Barbados will fire 3,000 public sector workers by March and freeze wages as the eastern Caribbean island’s debt burden soars and the International Monetary Fund says 'urgent adjustments' are needed. Barbados’s ratio of debt to gross domestic product reached 94 percent in September, the IMF said today, more than the 93 percent that forced Cyprus to seek a European Union-brokered bailout in March. Finance Minister Chris Sinckler told lawmakers yesterday that the government risks 'further hemorrhaging' of its reserves and the local currency’s peg to the dollar if nothing is done. Barbados’s financial struggles are mirrored across much of the Caribbean, which has seen eight debt defaults since 2003." Continue reading →

Continue ReadingBarbados Debt Higher Than Cyprus Prompts Firing of 3,000

Cyprus central bank: Bitcoin use dangerous

"The Central Bank (CBC) has said use of virtual currency bitcoin is extremely dangerous, the Cyprus News Agency (CNA) said on Tuesday. 'Using any virtual money is extremely dangerous because they are not monitored by any authority, thus operating without control,' CNA said, quoting the CBC. In a written response later on Tuesday, Danny Brewster the CEO of Neo & Bee, the largest business in the world that is building infrastructure around the Bitcoin technology, said he had been trying for the past two weeks to reach and arrange a meeting with the CBC so that it could operate under the appropriate regulatory framework." Continue reading →

Continue ReadingCyprus central bank: Bitcoin use dangerous

Visa, MasterCard $5.7 Billion Swipe Fee Accord Approved

"Visa Inc. (V) and MasterCard Inc. (MA) won approval for a $5.7 billion settlement that ended years of litigation with U.S. merchants over allegations that credit-card swipe fees are improperly fixed. U.S. District Judge John Gleeson said that he was satisfied with the settlement, which was estimated to be the largest-ever U.S. antitrust accord. 'For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees and use that information to influence their customers’ choices of payment methods,' Gleeson wrote in his ruling today in federal court in Brooklyn, New York." Continue reading →

Continue ReadingVisa, MasterCard $5.7 Billion Swipe Fee Accord Approved

Fed to Explode QE Next Downturn – Can’t Control Velocity

"'What's going to happen the next time there's an economic downturn? They're going to double, triple, quadruple (QE). Instead of making 85 billion per month, they're going to be making 850 billion per month. It'll go up TEN times.'" Continue reading →

Continue ReadingFed to Explode QE Next Downturn – Can’t Control Velocity

Bill Bonner: Is This the World’s Cheapest Commodity Play?

"Brazil has made its share of bad decisions… and suffered its share of bad policies. Generals, dictators, repression, depression and hyperinflation – Brazil has seen it all. In the 1980s, Brazil’s consumer price increases went wild. In constant currency, a taxi ride that might have cost 4 cruzeiros in 1980 would have cost 5 trillion cruzeiros in 1994. The government tried to head off inflation by introducing a new currency, the cruzado. Then came the new cruzado. Then came the cruzeiro back. And finally, the government introduced the real. With prices rising so rapidly, it was impossible for investors and business people to make reasonable projections." Continue reading →

Continue ReadingBill Bonner: Is This the World’s Cheapest Commodity Play?

Investors, Run for Cover From the Incoming ‘Taper Bomb’

"The bond market sell-off is leaving fixed-income investors (at least, those who didn’t heed my advice to get out of the way) with the worst annual losses on bonds since 1999. It also proves beyond the shadow of a doubt that the bond market is more powerful than the Fed. Now, against that backdrop, the Fed is about to hold its last policy meeting of 2013. On Dec. 17 and 18, policymakers will gather around a conference table in Washington and decide whether to continue their $85 billion-per-month QE program. My prediction? They drop a taper bomb and start dialing down those purchases, probably by at least $10 billion." Continue reading →

Continue ReadingInvestors, Run for Cover From the Incoming ‘Taper Bomb’