RSSCategory: Category: Money & Currency

Coin Shortage Ramps Up War on Cash

Coin Shortage Ramps Up War on Cash

Many retail businesses including grocery stores and fast food restaurants have been wrangling with a national coin shortage. Some are posting notices informing customers that they will need to pay in exact change or use alternative payment methods such as credit cards. What’s driving this scarcity of quarters, dimes, nickels, and pennies? The answer from the U.S. Mint: COVID-19. The virus caused some Mint branches to temporarily slow or suspend production this spring. By May, the total number of circulating coins minted this year came in at around 4 billion, a 1 billion-coin shortfall compared with the same period in 2019. Now as economic activity recovers, there aren’t enough coins […]

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Federal Reserve Notes Are Now “Backed” by Junk Bonds

Federal Reserve Notes Are Now “Backed” by Junk Bonds

Wild price action and unprecedented interventions once again characterized this holiday-shortened trading week. Oil prices whipsawed lower Thursday on concerns about expected oil production cuts from Russia and Saudi Arabia.  But the general trend for most other assets, including metals and equities, was up – way up. Stocks finished out the week with the major averages posting their biggest weekly gains in decades in the space of just four trading days.  Investors went on a buying spree based on hopes that we will soon see a definitive peak in coronavirus cases and begin the process of restarting the economy. The stock market also got another boost from the Federal Reserve.  […]

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Crisis Exposes Devastating Consequences of Fed Policy: Americans Have No Savings

Crisis Exposes Devastating Consequences of Fed Policy: Americans Have No Savings

Two weeks ago, during a March 17 address to the nation in response to the COVID-19 outbreak, President Donald Trump asked that Americans work from home, postpone unnecessary travel, and limit social gatherings to no more than 10 people. And last week, on March 27, Trump signed a stimulus package of over $2 trillion dollars to provide relief to an economy on the precipice of collapse. The aid package includes handouts and loans to individuals, small businesses, and other distressed industries. Despite Trump’s “having created the greatest Economy in the history of our Country,” when the markets tanked, massive and immediate government intervention was the only thing left to forestall […]

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Fed President Declares: “No End in Our Ability to Print Money…and Congress Has Told Us To.”

Fed President Declares: “No End in Our Ability to Print Money…and Congress Has Told Us To.”

The roller coaster ride in markets took a sharp turn higher this week after the Federal Reserve and Congress together pledged over 6 trillion dollars to rescue the financial system. Perhaps this week was an inflection point for the mass fear and panic that has cleared out bullion dealers of coins and grocery stores out of toilet paper.  Although the number of coronavirus cases hasn’t yet peaked, there are some signs that the hysteria surrounding the deadly outbreak has. The stock market finally put together a sustained rally even though the economy remains locked down.  But how can equities jump without the impetus of actual earnings from business operations?  The […]

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Central Banker Pull Out Their Monetary Bazookas to Try to Avert a Coronavirus Crash

Central Banker Pull Out Their Monetary Bazookas to Try to Avert a Coronavirus Crash

The emerging coronavirus pandemic is already crimping global commerce. In response, the S&P 500 has thus far put in two weeks’ worth of declines (the index fell 2.1% last week) since making new highs to start the year. Even though the U.S. stock market hasn’t even entered a true “correction” phase yet, Wall Street is already clamoring for more Fed stimulus. Mainstream stock market mavens figure the central bank will step in to limit downside – and they are probably right. Following the Federal Open Market Committee’s decision on Wednesday to keep rates unchanged, Fed Chairman Jerome Powell said he is “carefully monitoring the situation” with regard to the Chinese […]

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Former Fed Official Says Government Can Borrow a LOT More

Former Fed Official Says Government Can Borrow a LOT More

Narayana Kocherlakota, the former President of the Federal Reserve bank of Minneapolis wants you to know the Federal Government can never borrow too much money. Our government already borrowed $23 trillion and deficits are expected to exceed $1 trillion per year. He knows many Americans feel anxious about the federal government going bankrupt, and he has a simple solution. He just wrote the following in an editorial published by Bloomberg: Policy makers and voters often express concern about the level of the federal deficit, which topped $1 trillion last year, and the national debt, now more than $23 trillion. But, unlike a household that owes money to a bank, the U.S. government […]

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The Signs Swirl All Around Us, so Is the Monetary Reset at Hand?

Article written and contributed by Chris Powell. For most of this decade owning gold and gold-related investments has required the patience of Job, and the sector is so obscure that it is hard to be sure of anything. But for months now the unusual developments have been piling up so much that it may be possible to regain some optimism. There are indications of a shortage of metal not just at the New York Commodities Exchange, where for months now most contracts have been settled through a supposedly “emergency” procedure called “exchange for physicals,” but also in London, the hub of the world gold market, where the usual flow of […]

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The Fed’s “Not QE” Is Morphing into “QE4ever”

The Fed’s “Not QE” Is Morphing into “QE4ever”

Another week, another new and expanded repo market intervention by the Federal Reserve. On Thursday, the Federal Reserve Bank of New York intervened twice with fresh liquidity injections. Fed officials raised their offerings for overnight repos up from $75 billion to a staggering $120 billion. This comes on top of the $60 billion per month in Treasury bill purchases that will extend well into next year and possibly beyond. Over the past month alone, the Fed’s balance sheet has soared by $200 billion. You might think numbers like these should be quite alarming to investors and to anyone who holds U.S. dollars. But the strange thing about these Fed interventions […]

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Federal Reserve’s New QE Transfers Wealth to Its Owner Banks

Federal Reserve’s New QE Transfers Wealth to Its Owner Banks

Metals investors are positioning themselves for rapidly developing political and geopolitical events, as well as a rapidly expanding Federal Reserve balance sheet. What started out as a limited intervention to provide temporary liquidity to overnight lending markets has morphed into a massive $60-billion-per-month Treasury-buying campaign. By some measures, it’s even bigger than the last Quantitative Easing program. The Fed has yet to fully explain why this is all necessary given the lack of an immediate crisis in the real economy. Last week, Fed chair Jerome Powell took great pains to insist that their expanded repo market operations are “not QE” – only to announce a massive new Treasury bill buying […]

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“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools

“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools

Jerome Powell has something in common with Bagdad Bob, Saddam Hussein’s infamous press secretary. They’re both liars, suggests Money Metals podcast guest Craig Hemke of the TF Metals Report. Telling obvious lies with a straight face is part of Powell’s job description. He hopes to maintain order even though anyone who is paying attention knows something extraordinary is going on. When the Fed stepped into the “repo” markets at the end of September with hundreds of billions in short term loans for its owner banks, Powell stood out front telling everyone there is nothing to worry about. The Fed’s repo market lending was initially sold as a very temporary measure to […]

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Monetary Madness Puts U.S. Dollars Holders in Jeopardy

Monetary Madness Puts U.S. Dollars Holders in Jeopardy

We’re in uncharted territory. Never before have U.S. fiscal and monetary policy been leveraged so heavily to boost an economy that wasn’t even in recession. Something will break – and it could be the value of U.S. currency. The Federal Reserve Note now faces devaluation pressures on multiple fronts. With the federal government running a trillion-dollar budget deficit and an election year approaching, fiscal restraint is a dead letter in Washington, D.C. Politicians are fighting over who can promise to borrow and spend the most. Meanwhile, President Donald Trump is trying to talk the dollar down versus the currencies of China and other trading partners. Even as Trump vents frustration […]

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Precious Metals Soar on Falling Yields, Currency Turmoil

Precious Metals Soar on Falling Yields, Currency Turmoil

What a wild week it’s been for investors. The threat of global trade wars and currency wars sparked big swings across all major asset classes.  Bond yields dove toward historic lows.  Stocks plunged earlier in the week before rebounding sharply by Thursday.  And precious metals rode a huge safe-haven wave higher. Gold prices eclipsed the $1,500 level on Wednesday for the first time in over six years. Meanwhile, silver pushed above $17 an ounce to record a one-year high. Both metals are up over 4% for the week. The money metals are becoming increasingly attractive as President Donald Trump ramps up his battles against China abroad and the Federal Reserve […]

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The Sound Money Showdown in U.S. States

The Sound Money Showdown in U.S. States

Policies relating to sound money have been the subject of substantial debate at the state level this year, with bills, hearings, and/or votes taking place in nearly a dozen legislatures. As most state legislatures have now wrapped up their work for the year, let’s review the victories (both offensive and defensive)—and lone defeat—for sound money during the 2019 session. The Sound Money Defense League’s primary goal is to remove every kind of taxation imposed on constitutional money. Given its practical importance, the hottest issue in the states has been taxation—i.e. whether citizens should face a levy when buying or selling gold and silver. House Bill 2684, introduced by West Virginia […]

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After Fed Disappoints, Will Trump Initiate Currency Intervention?

After Fed Disappoints, Will Trump Initiate Currency Intervention?

Following months of cajoling by the White House, the Federal Reserve finally cut its benchmark interest rate. However, the reaction in equity and currency markets was not the one President Donald Trump wanted – or many traders anticipated. The Trump administration wants the Fed to help drive the fiat U.S. dollar lower versus foreign currencies, especially those of major exporting countries. Instead, the U.S. Dollar Index rallied throughout July ahead of the expected rate cut and continued rallying after Fed chairman Jerome Powell made it official on Wednesday. In fact, the Federal Reserve Note broke out to its highest level since early 2017. The Fed also announced it would end […]

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