Pretense Of Knowledge

Bill Bonner: How Do You Destroy a Business?

"Mr. Mnuchin was on the board of Sears for the past 11 years, throughout its devastating decline. He is resigning now, letting the ship go down without him. Besides, he has already stolen the silver. How do you destroy a business? It’s not that hard. Rather than invest in new people and new methods, you take the money for yourself. It is even more attractive if you can borrow a lot of fake money at ultra-low rates against the company’s credit… pay it out to yourself and other financiers… and then jump ship, leaving the company, its employees, and its creditors to drown in your debt." Continue reading →

Continue ReadingBill Bonner: How Do You Destroy a Business?

Bernanke Advises “Perpetual Bonds” To Japanese Government

"In April the former Federal Reserve chief warned there was a risk Japan at any time could return to deflation. He noted that helicopter money -- in which the government issues non-marketable perpetual bonds with no maturity date and the Bank of Japan directly buys them -- could work as the strongest tool to overcome deflation, according to Honda. Bernanke noted it was an option, he said. Bernanke joined central bank chief Haruhiko Kuroda over lunch this Monday and on Tuesday he attended a gathering with Abe and key officials, including Koichi Hamada, another influential economic adviser. The central bank didn’t reveal what Kuroda and Bernanke discussed." Continue reading →

Continue ReadingBernanke Advises “Perpetual Bonds” To Japanese Government

Ban $100 bills to tackle crime: Ex-bank chief

"He argued that high-denomination notes in high-value currencies were little used other than for crime, with people in most parts of the world favoring cash for small payments and electronic alternatives like credit cards or Paypal for bigger ones. As such, Sands called for the elimination of the 500 euro note, £50 bill and 1,000 Swiss franc bill and the $100 note. Depending on the country, tax evasion robs the public sector of anywhere between 6 percent and 70 percent of what authorities reckon they should collect, Sands added. He said that global financial crime flows amounted to $2 trillion per year, with corruption accounting for another $1 trillion." Continue reading →

Continue ReadingBan $100 bills to tackle crime: Ex-bank chief

No Negative Rates Without Banning Cash, Says Former Fed Official

"I think it’s going to be hard to push the Fed Funds rate below negative 1. That’s going to be difficult. People can basically take out cash and put it in a vault and they get a zero return on it. This is supporting the ban on cash rhetoric. This is a huge social debate that we should start having. One way of doing it is to ban cash. Banning cash is a social and political debate, which is going to happen increasingly. As long as we have cash, we can’t have rates of much below negative 1 percent." Continue reading →

Continue ReadingNo Negative Rates Without Banning Cash, Says Former Fed Official

Audit the Fed Legislation Sinks: Plan Accordingly

"Rand Paul and Ron Paul, the dynamic duo of anti-Fed forces, invested a lot of time and money trying to get that legislation passed. But even if it reached Barack Obama's desk, it would have been vetoed. Of course, the Fed pushed back against the legislation. Fed Chairman Janet Yellen penned a letter to senators before the vote claiming that the legislation would deprive the Fed of necessary independence. She also noted that passing the legislation might generate an inflation scare and cause interest rates to rise. One wonders if this was a subdued threat." Continue reading →

Continue ReadingAudit the Fed Legislation Sinks: Plan Accordingly

After QE failure, BOJ’s Kuroda says no plan to ease policy now

"Bank of Japan Governor Haruhiko Kuroda said on Friday he had no plan to expand monetary stimulus now, blaming sharp declines in oil costs for keeping consumer inflation distant from the bank's ambitious 2 percent target. While he maintained his optimistic view of the economy, Kuroda stressed his resolve to ease monetary policy further if risks threaten achievement of the BOJ's price target. The remarks, made in response to a question by an opposition lawmaker, pushed down Japanese stocks on disappointment that no immediate monetary stimulus was forthcoming." Continue reading →

Continue ReadingAfter QE failure, BOJ’s Kuroda says no plan to ease policy now

Societé General Strategist: Yellen’s Dithering Fed Is Destined for Infamy

"The Federal Reserve’s failure to recognize its role in driving the third dangerous asset bubble in 15 years will destroy the central bank’s reputation for good, said Albert Edwards, global strategist at Societe Generale. Edwards said it’s too late to avoid another massive collapse in asset prices. 'This time the Fed’s largesse has fueled another corporate debt explosion,' he said. 'The real rate of corporate borrowing is even greater than was seen during the late 1990s tech bubble. This is 100 percent attributable to the Fed’s excessively loose monetary policy.'" Continue reading →

Continue ReadingSocieté General Strategist: Yellen’s Dithering Fed Is Destined for Infamy

Bill Gross: Central bank ‘casinos’ to run out of luck

"Investors should cut risk heading into 2016 as central banks trying to pump up their respective economies make losing bets, bond guru Bill Gross says. Institutions like the Federal Reserve and the European Central Bank are like 'casinos' that create money instead of chips 'they'll never have to redeem,' said Gross, founder of bond giant Pimco who now runs the $1.4 billion Janus Global Unconstrained Fund. Furthering the gambling analogy, he said central bankers are using a familiar ploy — doubling down on losing bets until they break even. 'How long can this keep going on? Well, theoretically as long as there are financial assets (including stocks) to buy,' Gross said." Continue reading →

Continue ReadingBill Gross: Central bank ‘casinos’ to run out of luck

Ben Bernanke Was Incredibly, Uncannily Wrong [2009]

"We now have the diametrical opposite of the famous 'Peter Schiff Was Right' video (a compilation of 2006 and 2007 clips in which Schiff, a financial expert who subscribes to Austrian economics, predicted the deep recession that would follow the bursting of the housing bubble). The new, opposite video is a compilation of the 2005–2007 prognostications of Federal Reserve Chairman Ben Bernanke. In it, Bernanke is shown to have been just as embarrassingly wrong as Schiff was uncannily right. Could their differences in economic understanding have anything to do with this remarkable dichotomy?" Continue reading →

Continue ReadingBen Bernanke Was Incredibly, Uncannily Wrong [2009]

Want to play the market? Count the Fed leak weeks

"U.S. central bankers not only regularly leak secret information about monetary policy, but the leaks are so predictably timed that a savvy investor without access to the leaked information could make money just by buying stocks in certain weeks. The weeks that have excess stock-market returns are generally the same in which there are closed Fed Board meetings, and increased volatility in short-term interest-rate futures contracts suggests that it is information on monetary policy from those meetings that is driving the pattern." Continue reading →

Continue ReadingWant to play the market? Count the Fed leak weeks