The dollar is likely to hit parity with the euro during 2017 driven by diverging paths for interest rates, according to Goldman Sachs’ chief economist.
The Federal Reserve is likely to hike interest rates three times in 2017, pushing it even further from the rate positioning stance of Europe during the course of the year, Jan Hatzius told CNBC at the Goldman Sachs Strategy Conference in London on Monday. Continue reading →
One month ago, when we last looked at the Fed’s update of Treasuries held in custody, we noted something troubling: the number had continued to drop sharply, declining by another $14 billion in one week, and pushing the total amount of custodial paper to $2.788 trillion, the lowest since 2012. One month later, we refresh this chart and find that in last week’s update, there is finally some good news: foreign central banks finally bought some US paper held in the Fed’s custody account, which following months of liquidation, rose over the past two weeks by $23 billion, the biggest two-week advance since November of 2016, pushing the total amount of custodial paper to $2.816 trillion, the highest since early October.
That was the good news, and we use the term loosely in as much as the custody account can be used as a proxy of foreign buying, which according to most rates watchers, it can. Continue reading →
Today we welcome a cohort of new readers visiting PeakProsperity.com for the first time. This article is to give them our best grounding in the massive wealth transfer underway.
Our hope is that our longtime readers will likely benefit from a revisitation of the fundamentals, as well.
One serious predicament we face is that the current leaders in the halls of monetary and political power do not appear to understand the dimensions of our situation. The mind-boggling part about it is that the situation is easy to understand.
As has been said here oft: It doesn’t matter who wins the election. Dozens, if not hundreds, of poison pills will be left behind in a very paralyzed four years for Trump should he win. In a Hillary win, you could expect an accelerated decline. Economics, as discussed here is but one facet of the multiple fronts about to face impact.
Regardless of who wins the election, one thing is certain: the vote that takes place in December within the confines of the Eccles Building cast by a dozen un-elected, Ivy Leagued, academic bankers whose combined real world business experience is near nonexistent (less for that read in some wood-paneled library) will decide monetary policy that will have more implications for not only the U.S., but the world as a whole. Effecting not only the global financial markets, but quite possibly, the entire international political stratum as well. And the new President (as well as every other world leader) will have to adjust to that outcome.
November 8th is only the first-act of this very real, “landmine” infested global drama playing out on the world stage. On December 14th the world will truly witness just how much power has really been transferred to this unelected cohort.Continue reading →
Nomi Prins, who meets with people from the Federal Reserve, IMF, World Bank, foreign central banks and high-raking government officials across the globe, just warned when the system crashes time time, it will crash harder.
Nomi Prins: “The financial system is fragile. It (the crackup) has been contained for 8 going on what will be 9 years of cheap money, bond subsidization, banking subsidization, and of a codependency that is very fragile. I don’t know when that gives. I’ve tried to guess this throughout the years, but the point is that it only increases in its tension and its (ultimate) downfall with every day that it’s been subsidized artificially… Continue reading →
Banks are in over their heads in trouble. Central banks are over their heads in trouble as well. The only thing left to bail them all out would be the IMF — which is within the realm of possibility as we enter a harsh downturn.
Sentiment at IMF annual meeting sours on Fed, BOJ, ECB
The global financial elite has soured on global central bank policy, believing that it’s now counterproductive, doing more harm than good.
That was the message on the sidelines of the International Monetary Fund’s annual meeting in Washington, where in informal survey of more than 100 bankers found more than 70% saying monetary policy is now part of the problem instead of a solution. Continue reading →
Former Japanese Economy Minister Heizo Takenaka said on Wednesday the Bank of Japan will lower its minus 0.1 percent interest rate further to achieve its 2 percent inflation target.
(TRUNEWS Vero Beach, FL) – Takenaka stressed that “core-core inflation”, which excludes food and energy prices, rose around 1 percent last year, reversing the 1 percent decline seen before BOJ Governor Haruhiko Kuroda took the post early 2013.
“I think BOJ Governor Kuroda has been doing well, although there is strong criticism.”Continue reading →
The Federal Open Market Committee, in its latest meeting Wednesday, reiterated the same message to spellbound investors that’s been in place the last eight years: The Fed is committed to maintaining a massive balance sheet through bond buying, but someday that balance sheet and near-zero interest rates will revert to normal levels. Continue reading →
A PERFECT market storm is brewing and it’s going to leave economic carnage in its wake, a finance expert has warned.
Investors should prepare for world stock markets to sink by a massive 12 per cent amid a repeat of the turmoil that tore through stock markets at the beginning of the year, according to David Rosenberg chief economist and strategist at wealth management firm Gluskin Sheff.
He believes markets are not ready for a US interest rate rise and when the US Federal Reserve does make changes to its policy – which could happen as early as next week – there’s going to be a nasty shock. Continue reading →
For decades, a growing pool of college graduates poured into the U.S. labor market, boosting productivity and shaping America’s status as the world’s dominant economic power.
That driver of growth is diminishing. Enrollment has declined every year since peaking in 2011, according to the Census Bureau and the National Student Clearinghouse Research Center. The reasons include an aging population, rising tuition costs and a healthy rate of hiring that lessens the demand for learning. Continue reading →
It looks like Deutsche Bank is heading toward failure. Why might we be concerned?
The problem is that Deutsche is too big to fail — more precisely, that the new Basel III bank resolution procedures now in place are unlikely to be adequate if it defaults.
Let’s review recent developments. In June 2013 FDIC Vice Chairman Thomas M. Hoenig lambasted Deutsche in a Reuters interview. “Its horrible, I mean they’re horribly undercapitalized,” he said. They have no margin of error.” A little over a year later, it was revealed that the New York Fed had issued a stiff letter to Deutsche’s U.S. arm warning that the bank was suffering from a litany of problems that amounted to a “systemic breakdown” in its risk controls and reporting. Deutsche’s operational problems led it to fail the next CCAR — the Comprehensive Capital Analysis and Review aka the Fed’s stress tests – in March 2015. Continue reading →
We are headed for disaster, and the only question is how long the economy can dodge a bullet.
The illusory bubble on Wall Street claims to be at record highs, but the reality, the underbelly, is dark indeed.
Economic expert Peter Schiff speaks on not only the safe haven of gold, and what is at stake in the election, but just how dire the financial consequences will be when the great storm hits and batters everyone.Continue reading →