Financial crisis: the printing press has reached its limits
Central bankers may have averted outright disaster, but they are powerless to do more.
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Monetary Policy
The Fed & the Cliff
Evel Knievel was an American daredevil, who attempted over 75 ramp-to-ramp motorcycle jumps between 1965 and 1980. In 1974, he failed in his attempt to jump across Snake River Canyon in a rocket. He survived, and died in 2007 of pulmonary disease. Fed Chairman Ben Bernanke may be about to try to outdo Knievel with an even greater stunt: attempting to leap over the fiscal cliff at the beginning of next year.
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Another sign QE2 is undermining the economic recovery
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[[wysiwyg_imageupload:2228:]]By Clif Droke
A rather eye-opening headline appearing in the financial press is worth discussing here because it’s symptomatic of a bigger problem plaguing the economy. This problem will only increase in the coming months and there’s ample reason for believing it will eventually undermine the cyclical bull market in stocks. The headline reads, “Kimberly-Clark to hike prices after profit falls.”
Monetary Policy in 3-D
One of the most important factors likely to influence the financial markets over the coming year is the extreme stance of U.S. monetary policy and the instability that could result from either normalizing that stance, or failing to normalize it. It is not evident that quantitative easing, even at its present extremes, has altered real GDP by more than a fraction of 1% (keep in mind that commonly reported GDP growth rates are quarterly changes multiplied by 4 to annualize them).
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Putin: U.S. Monetary Policy Is ‘Hooliganism’
Russian Prime Minister Vladimir Putin slammed expansionary U.S. monetary policy, calling it “hooliganism”, in remarks that followed more veiled criticism from China after Standard & Poor’s Corp. cut the outlook on its U.S. debt rating this week.
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Is Gold the New Black? States Look to Bring Gold Standard Back
Starting in May, Utah residents will be able to shop in a currency other than the dollar -- gold, something that hasn't happened since 1933.
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The Fed Is on 'Different Monetary Planet': Economist
The Federal Reserve is on a different monetary planet from the rest of the world, according to Credit Suisse UK Economist Robert Barrie.
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Having Fun With Bubbles - WSJ-Style
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[[wysiwyg_imageupload:1732:]]By Bill Fleckenstein
After the close yesterday, FedEx preannounced that this quarter's results were going to be negatively impacted by the weather and fuel costs. However, the stock was not badly affected after hours, nor were the futures. And, lo and behold today, FDX was higher on that news. It's not like FDX was necessarily a sale on that announcement, but I don't see why folks would be racing into it, either. Then again, we are in a crazy environment.
Later Is Now: Profiting from Rising Interest Rates
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By Terry Coxon
In the fall of 2008, the Federal Reserve responded to the Lehman bankruptcy by igniting a rapid expansion in the U.S. money supply. It did so because, by its lights, the immediate and obvious menace to the economy was a deflationary collapse, with one giant bankruptcy breeding another. And it went about the task without compromise; the monetary base more than doubled in less than a year, and the public's M1 money supply (checkable deposits plus hand-to-hand currency) jumped by 20%.
Egypt's Revolution and Inflation
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By Steve Saville
Unless you've been unconscious for the past few days you are probably aware that the situation in Egypt is becoming increasingly precarious. Increasingly precarious, that is, for Egypt's government (the dictatorship of Hosni Mubarak). Inspired by the fall of Tunisia's dictatorship two weeks ago, Egyptians have taken to the streets en masse in an effort to bring Mubarak's thirty-year rule to an end. Predictably, the Egyptian government's response to the protests has been draconian. For example, police have assaulted protestors with tear gas, water cannons and rubber bullets, the military has been deployed to assist the police and to help enforce a curfew, and the internet has effectively been shut down.
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