ben bernanke

Gold: Big Difference Which Kind of Hedge It Truly Is

By |2019-08-30T16:16:19-04:00August 30th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It isn’t inflation which is driving gold higher, at least not the current levels of inflation. According to the latest update from the Bureau of Economic Analysis, the Federal Reserve’s preferred inflation calculation, the PCE Deflator, continues to significantly undershoot. Monetary policy explicitly calls for that rate to be consistent around 2%, an outcome policymakers [...]

Does A Second Floor Make An Effective Ceiling?

By |2019-07-22T17:06:42-04:00July 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For central bankers like Bill Dudley and Ben Bernanke, the Global Financial Crisis was a godsend. So much had been a disaster it was hard to pin down specific failures. Where does one begin? Practically everything went wrong, so take your pick. The Financial Crisis Inquiry Commission (FCIC) did its part pointing the finger at [...]

The Fallacious Doctrine of ‘Abundant Reserves’

By |2019-07-22T16:44:42-04:00July 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t the first time it had happened, but to that point it did suggest something had changed. Things were going wrong and afterward the very idea of wrong took on an even more disastrous nature. On Monday, September 29, 2008, the Dow Jones Industrial Average plummeted nearly 778 points. It was the largest single [...]

The RHINO Conundrum of UFO Non-believers

By |2019-06-26T17:14:42-04:00June 26th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 2005, Ben Bernanke kicked up quite a bit of controversy, or what qualifies as drama in the dry space of top-level Economics. It was Alan Greenspan who really started the conversation, practically begging for someone to offer an answer. Long-term interest rates were not behaving the way they were supposed to; the maestro’s true [...]

Anesthesia Right On Schedule

By |2019-06-20T16:54:35-04:00June 20th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

In early January, much of the world was dazed and confused. What the hell just happened? Two weeks before, in the middle of December 2018, Jay Powell stood in front of the microphones confidently declaring his rate hikes justified by an extremely strong economy. Yet, even the stock market had turned against him. When the [...]

When Verizons Multiply, Macro In Inflation

By |2019-06-12T16:06:28-04:00June 12th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Inflation always brings out an emotional response. Far be it for me to defend Economists, but their concept is at least valid – if not always executed convincingly insofar as being measurable. An inflation index can be as meaningful as averaging the telephone numbers in a phone book (for anyone who remembers what those things [...]

Central Bankers Follow Bonds, Then Insist They Aren’t And That Bonds Agree With Them

By |2019-05-24T13:04:09-04:00May 24th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When central bankers use the word “financial” in an economic context, they mean exclusively stocks. Maybe that’s somewhat appropriate given how bonds are so often treated as monetary equivalents. Then again, if that is the case in the official view, how does anyone reconcile bonds with anything? Economy or money? The hard answer is that [...]

The Transitory Story, I Repeat, The Transitory Story

By |2019-05-22T15:44:29-04:00May 22nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Understand what the word “transitory” truly means in this context. It is no different than Ben Bernanke saying, essentially, subprime is contained. To the Fed Chairman in early 2007, this one little corner of the mortgage market in an otherwise booming economy was a transitory blip that booming economy would easily withstand. Just eight days [...]

Proposed Negative Rates Really Expose The Bond Market’s Appreciation For What Is Nothing More Than Magic Number Theory

By |2019-05-21T16:10:42-04:00May 21st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By far, the biggest problem in Economics is that it has no sense of itself. There are no self-correction mechanisms embedded within the discipline to make it disciplined. Without having any objective goals from which to measure, the goal is itself. Nobel Prize winning economist Ronald Coase talked about this deficiency in his Nobel Lecture: [...]