Central Banks are under the mistaken belief that negative interest rates will be the magic kiss which turns their toad economies into prince charmings. Why exactly do they think this? What makes Draghi, Kuroda, and others think imposing negative interest rates will stimulate credit and lending in their respective economies? It is important to understand […]
Gold is Not Just Another Commodity
Mainstream media pundits, economists, and journalists love to lump gold in with other commodities. They put it in the same category as oil, copper, wheat, natural gas, and other things that come out of the ground. But while gold is in fact a metal you must dig up, it’s a mistake to call it “just […]
The Federal Reserve: Damned if it does, damned if it doesn’t
To hike or not to hike? That is the question. That has been the question for the Federal Reserve for what seems like an eternity. But the question of whether or not the Federal Reserve is going to raise interest rates this December misses the point. The hard truth is that the Federal Reserve is […]
How Big is the Gold Market and Why Does it Matter?
The gold market is criticized for being a volatile, reactionary market. Despite our unorthodox view that gold is in fact the standard by which we should measure market prices and value, not surprisingly in our dollar dominated world, this criticism persists. Gold’s incorrectly perceived volatility leads many financial commentators to question its relevance in today’s modern financial arena. […]
Why the Federal Reserve Can’t Raise Rates (Too Much)
After Federal Reserve Chairwoman Janet Yellen’s congressional testimony, the markets are still convinced the Fed could begin to raise rates sometime this summer. This is just plain wishful thinking. The Fed can no more raise rates (to any significant degree) than it can borrow money into oblivion. There are several reasons for this. The Federal […]