Money For Nothing

Japan lashes out over depreciating dollar and euro

"Japan's new finance minister upped the ante in the country's war of words against the strong yen, lashing out at the U.S. and Europe for letting their currencies weaken dramatically and calling on the U.S. to strengthen the dollar. The dollar has recently staged a sharp recovery, as Mr. Abe's pledge to strong-arm the Bank of Japan into easing monetary policy to weaken the yen has driven investors to sell off the yen. While that has cheered Japan's struggling exporters, Mr. Abe's drive toward a weaker currency has also raised concerns abroad that it could risk triggering a devastating global race to undercut currencies to protect export competitiveness." Continue reading →

Continue ReadingJapan lashes out over depreciating dollar and euro

Ben Bernanke – Revisiting The Helicopter Speech

"He referred to economist Milton Friedman’s famous 'helicopter drop' of money as a solution for deflation. In essence, the suggestion was that, if there is deflation, it may be cured simply by dumping new currency from helicopters. For this suggestion to come from a member of the Board of Governors of the Fed caused many economists and investors to worry that the US economy may not be in the most competent hands. The comment was so unnerving that much of the rest of the speech failed to generate much discussion; yet, in it, Mr. Bernanke revealed other points from his philosophy on dealing with deflation that most certainly deserve review." Continue reading →

Continue ReadingBen Bernanke – Revisiting The Helicopter Speech

Could 2 platinum coins solve debt crisis?

"If President Obama wants to avoid an economic calamity next year, he could always show up at a news conference bearing two shiny platinum coins, each worth ... $1 trillion. That sounds wacky, but some economists and legal scholars have suggested that the 'platinum coin option' is one way to defuse a debt ceiling crisis. Under this scenario, the U.S. Mint would make a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed moves this money into Treasury's accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years." Continue reading →

Continue ReadingCould 2 platinum coins solve debt crisis?

Georgia supervisor, coworkers and four others cashed 1,300 U.S. Treasury checks before authorities caught them

"The former supervisor at an Atlanta mail distribution facility, a coworker and four others pled guilty this month to stealing $3 million in U.S. Treasury checks, including veterans benefits, tax refunds and Social Security checks. By the time authorities figured out the scheme, the small theft ring had stolen or cashed 1,300 federal checks, officials said. And the Georgia workers aren't alone. Between April and September of this year, 171 Postal Service employees were arrested for theft, willful delay or destruction of mail, according to a new report by the USPS inspector general. The Service has about 546,000 employees." Continue reading →

Continue ReadingGeorgia supervisor, coworkers and four others cashed 1,300 U.S. Treasury checks before authorities caught them

JP Morgan Admits That “QE Will Offset Almost All Of Next Year’s Government Deficit”

"Since the Lehman crisis, the Fed has been purchasing Treasuries and Agencies at a $500bn per year pace. This flow, which is equivalent to around 3.5% of US GDP, has offset more than a third of the government deficit since the end of 2008. In other words, QE purchases meant that the QE-adjusted government deficit has averaged 5.8% of GDP since the end of 2008 instead of 9.3% for the actual government deficit. This week’s Fed announcement means that this QE flow will double from a $500bn pace currently to $1tr. Coupled with a projection of a lower government deficit next year, to around 6% of GDP, this means that QE will offset almost all of next year’s government deficit." Continue reading →

Continue ReadingJP Morgan Admits That “QE Will Offset Almost All Of Next Year’s Government Deficit”

Japan’s Shinzo Abe prepares to print money for the whole world

"Mr Abe’s Liberal Democratic Party (LDP) won a landslide victory on Sunday, securing a two-thirds 'super-majority' in the Diet with allies that can override senate vetoes. Mr Abe said he would 'set a policy accord' with the Bank of Japan for a mandatory inflation target of 2pc, backed by 'unlimited' monetary stimulus. 'It's very rare for monetary policy to be the focus of an election. We campaigned on the need to beat deflation, and our argument has won strong support. I hope the Bank of Japan accepts the results and takes an appropriate decision,' he said. He has already threatened to change the Bank of Japan’s governing law if it refuses to comply." Continue reading →

Continue ReadingJapan’s Shinzo Abe prepares to print money for the whole world

Bank of Japan likely to ease again next week via asset buying

"The Bank of Japan will likely ease monetary policy next week, sources say, as looming risks such as the potential fallout from the U.S. fiscal cliff and weak Chinese growth continue to cloud the outlook for an economy already seen as in recession. The most likely option is for the central bank to expand its asset-buying and lending programme, currently at 91 trillion yen ($1.1 trillion), by another 5-10 trillion yen, at the meeting on Dec. 19-20. The central bank has been under intense pressure to become bolder in its efforts to beat deflation ahead of a lower house election on Dec. 16, which polls suggest the main opposition Liberal Democratic Party (LDP) will win." Continue reading →

Continue ReadingBank of Japan likely to ease again next week via asset buying

Bank of England & Carney: This Doesn’t Sound Good

"'The [UK] Treasury opened the door to a more aggressive monetary policy on Wednesday, as aides to the chancellor welcomed the next Bank of England governor’s radical views on stimulus measure for flagging economies. In a speech on Monday, Mark Carney suggested setting targets for the overall size of the economy, or nominal gross domestic product, rather than inflation.' [...] Does it worry anyone besides me just a teensy bit that this guy hasn’t even figured out where the BoE coffee pot is, and his people are already lying for him? Far be it from me to distrust an ex-Goldman Sachs banker, but still…" Continue reading →

Continue ReadingBank of England & Carney: This Doesn’t Sound Good

Kyle Bass On The End Of The Debt Super-Cycle

"'When you let the politicians run monetary policy, well, that is how it [ends]... All of the ingredients are there [for Japan now] for this vicious cocktail to fall apart' is how Kyle Bass concludes this broad and succinct recent interview. With total credit market debt-to-GDP globally around 350% (or ~$200 trillion), his thesis remains that many countries will reach their profligate endpoint soon (if not already in Greece's case - where investors have already lost 90c on the dollar); but that managing around this current evolution is the single-hardest period for investing of the last few decades." Continue reading →

Continue ReadingKyle Bass On The End Of The Debt Super-Cycle