The European Farce: Part 1 — ECB to the Rescue
First published at Minyanville.com http://www.minyanville.com/sectors/global-markets/articles/The-European-Farce-Part-1-ECB/6/11/2014/id/55265?refresh=1 It is only a matter of time before the ECB will be forced into QE-like money-printing schemes. In the immediate aftermath of the financial crisis, like the Fed, the European Central Bank (ECB) stepped up and made cash available to the notoriously overleveraged banking system. That, in fact, is the […]
Bonds Got It Way Wrong, Economy Is Accelerating
First published at Seekingalpha.com http://seekingalpha.com/instablog/27843163-robertbarone/2967823-bonds-got-it-way-wrong-economy-is-accelerating In the financial marketplace, the bond market usually signals first and reflects the magnitude of a changing economic environment. The equity market, on the other hand, is often late, or at least later than the bond market in recognizing oncoming changes in economic conditions. So, the worries now rampant on […]
Awash in Liquidity, Part I: Why Interest Rates Are Falling
First published at Minyanville.com http://www.minyanville.com/business-news/the-economy/articles/Awash-in-Liquidity-Part-I-Why/5/27/2014/id/55107 And why, in the short-term, increased market volatility will result. Despite a generally stronger economic outlook for the US economy, interest rates in May moved significantly lower, as if expectations were for an oncoming recession. This has confounded many macroeconomists. In this first installment of a two-part series, I will […]
What’s the Safest Way to Hedge Against Inflation With Gold?
Until inflation becomes recognized, the investor holding gold as a hedge must have both patience and the ability to hold for an extended period. Historically, the price of gold protected the purchasing power of the currency invested in it, as the price rose in some reasonable correlation with existing or expected inflation of that […]
Why Gold Prices Dropped in 2013
Most seasoned investors have some allocation to precious metals in their portfolios, most often gold. They believe that such an allocation protects them, as it is a hedge, or an insurance policy, against the proliferation of paper (fiat) money by the world’s largest central banks. Fiat money is not backed by real physical assets. In […]
Part II: The Long-Term Outlook – Even a Strong Economy Doesn’t Change the Ultimate Outcome
If you’ve read Part I of this year end outlook, you know that it is our view that the underlying private sector is healthy and, except for the fact that the real rate of inflation is much faster than the ‘official’ rate, we could well have a short period of prosperity. Unfortunately, our long-term outlook […]