On the heels of the International Monetary Fund’s approval for the yuan, Russia said it’s preparing to raise $1 billion in yuan-denominated sovereign bonds in Moscow, the Financial Times reported Monday.
Last week, the IMF made the yuan, also known as the renminbi, a world reserve currency by including it in its Special Drawing Rights basket. By integrating the yuan to the SDR, the IMF boosted the credibility of the currency and acknowledged it would be an accepted part of the global economic system. Continue reading
As you know, I’ve been calling for a bond market crisis for months now. That crisis has officially begun in Greece, a situation that we addressed at length other articles.This crisis will be spreading in the coming months. Currently it’s focused in countries that cannot print their own currencies (the PIIGS in Europe, particularly Greece).
However, China and Japan are also showing signs of trouble and ultimately the bond crisis will be coming to the US’s shores. Continue reading
The European economy is “on the brink of deflating” and urgently needs more stimulus, particularly from the continent’s largest economy Germany, former U.S Treasury secretary Larry Summers said on Tuesday.
Summers also said central bank bond buying, known as quantitative easing, would be welcome and certainly better than no action at all.
Swiss decision probably means Mario Draghi and the ECB have at last convinced Germany that QE is needed to save the eurozone
Another day, another bout of extreme market turbulence. The last cue for mayhem has been the decision by the Swiss National Bank to abandon its attempts to prevent the franc from appreciating against the euro. Given that just a month ago, the SNB said it would hold the line with the “utmost determination”, the announcement took traders by surprise. The franc soared, the euro collapsed, shares lost their gains. It was uproar. Continue reading
The 2008 crash was a warm up.
Many investors think that we could never have a crash again. The 2008 melt-down was a one in 100 years episode, they think.
They are wrong. Continue reading
Playing monetary games has done nothing to eliminate moral hazard.
If we step back and look at the past six years since the global financial meltdown of 2008, we see that in terms of financial and political power, nothing has changed–and that’s the problem. If nothing has changed structurally, then none of the problems that caused the meltdown have truly been addressed.
All that’s changed is the vast expansion of monetary games has masked the dysfunctional reality that the same old vested interests that had a death-grip on wealth and power in 2008 have tightened their death-grip in the past six years. Continue reading
Europe’s debt crisis seems to have entered a calm phase, but that’s only an illusion, German Finance Minister Wolfgang Schäuble said on Tuesday. The worst is probably still to come, he warned.
The financial markets have been notably calm of late. Stock indexes have ticked upwards and interest rates on sovereign bonds have drifted downwards. The euro has also remained relatively stable against the dollar. And investor panic seems to have dissipated. Continue reading