Money For Nothing

British pound strikes seven-month lows amid calls for further weakness

"Sterling's slide came as Martin Weale, a senior Bank of England policymaker, said on Saturday that the pound may need to weaken further, which would help to make exports cheaper and spur growth. 'It may be that high levels of uncertainty and a reluctance to take on new risks have stood in the way of exporters seeking new markets and domestic producers doing what is needed to displace imports,' Mr Weale said in a speech. 'Provided the calmer atmosphere we have seen since the summer is sustained, we may see further benefits of the depreciation.'" Continue reading →

Continue ReadingBritish pound strikes seven-month lows amid calls for further weakness

Detlev Schlichter: Of interest and the dangerous habit of suppressing it

"Interest is an essential component of human action and the charging of interest rates an integral component of human cooperation on markets. Abolishing interest rates or depressing them through policy intervention will never make markets work better, will never make financial markets more stable, and will never make society more prosperous." Continue reading →

Continue ReadingDetlev Schlichter: Of interest and the dangerous habit of suppressing it

Fed Vice Chair Says Higher Rates Not Assured After Thresholds Hit

"Federal Reserve Vice Chairman Janet Yellen said the central bank may hold the benchmark lending rate near zero even if unemployment and inflation hit its near-term policy targets. U.S. central bankers are focusing the full force of monetary policy on reviving growth and reducing 7.9 percent unemployment, using near-zero interest rates and a program of unprecedented bond buying. Yellen’s comments reflect the view of some policy makers that there is a risk of damaging the expansion by raising rates too early." Continue reading →

Continue ReadingFed Vice Chair Says Higher Rates Not Assured After Thresholds Hit

Countries are using devaluation to gain an advantage – and Britain is one of the worst offenders

"At Wednesday’s Inflation Report press conference, Sir Mervyn King, Governor of the Bank of England, aired some apparently shocking numbers. Since the financial crisis began, not only had interest rates been reduced to close to zero, but the Bank of England’s balance sheet had been expanded by a factor of five. Expressed as a share of GDP, the increase has been greater than that of the US, greater than that of the European Central Bank, and greater than that of Japan. This is way beyond being an unprecedented degree of stimulus. These are completely uncharted waters we are in, and even Sir Mervyn seems to be getting worried by them." Continue reading →

Continue ReadingCountries are using devaluation to gain an advantage – and Britain is one of the worst offenders

The Ascent of Whatever-It-Takes Banking Is a Good Thing?

"We didn't realize the reaction to criticism that central bankers were rash and their strategic destabilizing would result in a worldwide movement of even MORE activist bankers. You've read it for yourselves now. A 'new breed' of banker is emerging that will grasp the true power of the printing press and pump harder. Yet it simply must be admitted that central bankers don't ever know how much money is too much. There are no tools that exist that can divine the future. If new and bolder central bankers are going to print even MORE money, the booms and busts shall be correspondingly larger. This would seem to be an illogical solution, but in truth, not so." Continue reading →

Continue ReadingThe Ascent of Whatever-It-Takes Banking Is a Good Thing?

From Watery Bourbon To Horse-Meat Chili: Hidden Inflation Is Everywhere

"We’ve had an endless series of products whose ingredients have been cheapened in order to maintain the price. Consumers won’t be able to taste the difference, the theory goes. So, as the horse-meat lasagna scandal in Europe is spiraling beautifully out of control, we’re now getting hit where it hurts: Maker’s Mark is watering down its bourbon." Continue reading →

Continue ReadingFrom Watery Bourbon To Horse-Meat Chili: Hidden Inflation Is Everywhere

G20 will ignore G7 demands on currency wars

"The currency market was thrown into turmoil this week after the G7 - the United States, Japan, Germany, Britain, France, Canada and Italy - issued a joint statement stating that domestic economic policies must not be used to target currencies. The G20 draft merely sticks to previous G20 language on the need to avoid excessive foreign exchange volatility, the delegate said. Others have noted that the United States has created new money in a very similar way to the Bank of Japan, although Federal Reserve Chairman Ben Bernanke insisted the U.S. central bank was acting in line with the G7 statement, 'using domestic policy tools to advance domestic objectives'." Continue reading →

Continue ReadingG20 will ignore G7 demands on currency wars

G20 will ignore G7 demands on currency wars

"The currency market was thrown into turmoil this week after the G7 - the United States, Japan, Germany, Britain, France, Canada and Italy - issued a joint statement stating that domestic economic policies must not be used to target currencies. The G20 draft merely sticks to previous G20 language on the need to avoid excessive foreign exchange volatility, the delegate said. Others have noted that the United States has created new money in a very similar way to the Bank of Japan, although Federal Reserve Chairman Ben Bernanke insisted the U.S. central bank was acting in line with the G7 statement, 'using domestic policy tools to advance domestic objectives'." Continue reading →

Continue ReadingG20 will ignore G7 demands on currency wars

Japan’s economic minister wants Nikkei to surge 17% to 13,000 by March

"Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March. 'We want to continue taking (new) steps to help stock prices rise' further, Amari stressed, referring to the core policies of the Liberal Democratic Party administration — the promotion of bold monetary easing, fiscal spending and greater private sector investment." Continue reading →

Continue ReadingJapan’s economic minister wants Nikkei to surge 17% to 13,000 by March

The Fed’s Bailout Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In Past Month

"In the past 4 weeks, the Fed has injected a record $237 billion of cash into foreign banks with access to the Fed's excess reserves: a number greater than both the cash influx surge seen after the Lehman collapse, and faster and more acute than the massive build up of cash during the spring and summer of 2011 when all the Fed's brand new QE2 cash was once again, solely used to overfund European bank cash." Continue reading →

Continue ReadingThe Fed’s Bailout Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In Past Month