Tag: federal reserve

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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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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Race to the Bottom: What to Expect as the Fed Eases

Race to the Bottom: What to Expect as the Fed Eases

How low will they go? With the Federal Reserve all but certain to cut interest rates multiple times in the months ahead, central bankers are engaged in a race to the bottom. As negative interest rates expand in Japan and across Europe, as long-term bond yields in the U.S. plummet, and as President Donald Trump continues to talk tough on trade, the Fed has little choice but to cut. President Trump has effectively declared a currency war – and enlisted a reluctant Fed to help him fight it. He is convinced that lower interest rates will boost the economy and that a lower dollar will boost U.S. producers in international […]

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The Hidden Reason Why Fed Chairman Powell and “Systemically Important” Banks Oppose a Gold Standard

The Hidden Reason Why Fed Chairman Powell and “Systemically Important” Banks Oppose a Gold Standard

By Mike Gleason, First Published on Sound Money Defense League Chairman Powell’s testimony this week was closely scrutinized not just for its economic implications but also for its political overtones. Powell cited “trade tensions” as cause for concern about the strength of the global economy. He clearly seemed to be blaming President Trump’s tariffs. But if the tariffs are what ultimately move the Fed to cut rates, Trump will have finally gotten what he wants out of Powell. In recent weeks, Trump has stepped up his attacks on the central bank, calling it the biggest problem facing the economy, floating the idea of firing Powell, and suggesting his administration would […]

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Trump’s Backdoor Power Play to Rein In the Fed

| September 19, 2018 | Category: Economy
Trump’s Backdoor Power Play to Rein In the Fed

“Just run the presses – print money.” That’s what President Donald Trump supposedly instructed his former chief economic adviser Gary Cohn to do in response to the budget deficit. The quote appears in Bob Woodward’s controversial book Fear: Trump in the White House. Trump disputes many of the anecdotes Woodward assembled. But regardless of whether the President used those exact words, they do reflect an “easy money” philosophy that he has expressed many times before. Trump Likes Low Rates, Loose Money President Trump has described himself as a “low interest rate person.” This past summer, Trump launched a very public attack on the Federal Reserve’s rate hiking campaign. He wants it […]

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Michael Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts

Michael Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts

Your browser does not support the podcast player element. DOWNLOAD MP3 Mike Gleason: It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. Michael is a well-known money manager and a fantastic market commentator, and over the past few years, has been a wonderful guest and one of our favorites here on the Money Metals Podcast. We always love getting his highly-studied Austrian economist viewpoint. Michael, welcome back, and thanks for joining us again. Michael Pento: Thanks for having me back on, Mike. […]

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Inflation and its Effects on Cash Holdings and Investments

Inflation is a sustained rise in overall prices. A moderate rise in inflation means economic growth while high inflation results in an overheated economy. There are certain factors that affect inflation and a couple of theories that are tied to it. So before we proceed it’s very important to know some of the standing factors that influence inflation and how it affects cash holdings and investment. Inflation can be caused by a number of factors, rising commodities, high-interest rates… etc. Here are some principles and theories you need to know before we continue.  Fraction- Reserve Banking The world currently uses this type of banking system. When someone deposits $1000 in […]

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House Monetary Policy Committee Member Questions Treasury and Fed about Their Gold Activities

Washington, DC (April 25th, 2018) – A Member of Congress posed some pointed questions to the Federal Reserve and the U.S. Treasury this week about their activities involving America’s gold reserves, including, apparently, efforts to “drive gold out of the world financial system in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.” In a letter dated April 24, Representative Alex Mooney (R-WV) wrote to Jerome Powell, Chairman of the Federal Reserve, and Steven Mnuchin, Secretary of the U.S. Treasury, raising concerns about their formal policy to devalue the Federal Reserve Note (e.g. “inflation targeting”) and requesting information about the United States’ use […]

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Central Banks Are Starting To Worry Investors

Central Banks Are Starting To Worry Investors

The original article was posted on TimeMoney.com In previous articles (here and here), we’ve discussed how central banks are going to halt adding liquidity into the financial system which could cause a correction in the stock market. Many people scoff at that idea because they look at the current market and say, “what could possibly go wrong?” This is recency bias at work as many investors have never experienced a sizeable market correction. Stimulus reached the highest level of this cycle. Quantitative easing has been among the most important drivers of the rally in asset prices for the past 8 years, once discontinued, the opposite will happen – namely a decline in asset prices. If you are an […]

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Is the Yellen Fed Planning to Sabotage Trump’s Presidency?

Is the Yellen Fed Planning to Sabotage Trump’s Presidency?

The Federal Reserve can make or break a president. Monetary policy influences all financial markets as well as the cycles in the economy. No president wants to have to run for re-election when the stock market and economy are turning down. Recall that President George H.W. Bush was sitting on sky-high job approval numbers in 1991 and was expected to coast to victory in his 1992 re-election bid. But then the economy swooned toward recession, giving Bill Clinton the opening he needed. Bush later blamed Federal Reserve chairman Alan Greenspan for his defeat. Greenspan had held interest rates too high for too long, Bush complained. On the campaign trail in […]

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Gold Prices Fall To The Thrill Of Investors

Gold Prices Fall To The Thrill Of Investors

The price of gold fell to a new low during the first week of July according to several reports that claim the decrease in value is due to a strong job market and the expectations of higher interest rates in the United States. August gold fell by $13.60, which is the equivalent of a 1.1 percent decrease in value. Such rate is the lowest since March when prices dropped by 2.6 percent. Silver also experienced its share of decline with initial values falling by as much as 10 percent on Friday (July 7). There was eventually a reversal in the numbers that increased September silver’s value from its original price […]

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Fed Officials Say More Hikes Are on The Way, Markets Disagree

Fed Officials Say More Hikes Are on The Way, Markets Disagree

Federal Reserve Chairwoman Janet Yellen says she is planning more hikes in the Fed funds rate, but you wouldn’t know it by watching the markets. So far, the response in foreign exchange, bonds, and equities isn’t what people expected. Markets have always been notorious for behaving unpredictably. But in an age when central bankers micromanage virtually all markets, the behavior could be the result of careful planning. Maybe the recent market action was only unpredictable for those of us outside of the FOMC conference room. Officials hiked rates in December, March, and June. Despite that the U.S. dollar has fallen to its lowest levels in more than a year. The […]

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