Paul Krugman: We are already in new great depression
February 03 — Europe is wrong on austerity that may sink the global economy deeper into the 1930s style depression which has already begun, Nobel Prize winner Paul Krugman tells Reuters in an exclusive interview.Read more and watch the video.
Ben Bernanke: Rising Deficits Pose Major Threat to Economy
February 02 — Rising federal budget deficits are posing a significant threat to the U.S. economy and are likely to cause a crisis if not brought under control, Federal Reserve Chairman Ben Bernanke told Congress Thursday.
Calling the situation "unsustainable," the central bank leader pointed out that surging health-care costs, along with the high level of government spending used to pull the economy out of recession, are creating fiscal hazard. Read more.
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Free Money for Banks Does NOT Stimulate the Economy!
January 31 — The Federal Reserve’s interest rate price-setting board, the FOMC, met last week. They will continue to set the federal funds rate at well below 1%, and plan to keep it low until the end of 2014. That’s a year and half longer than they planned when they met just last month. Chairman Bernanke says they are keeping interest rates so low for so long because the economic outlook warrants it. Read more.
Bogle, Volcker: Financial System Remains Broken
January 28 — John Bogle, the founder of mutual fund company Vanguard Group Inc. who popularized index investing, and Paul Volcker, the former Federal Reserve chairman, said confidence in the U.S. financial system is broken as regulators struggle to rein in speculation.
Bogle, who has spent 60 years advocating a low-cost approach to personal investing and railing against conflicts of interest in his industry, said he would grade the U.S. financial system a ‘D’. Volcker, 84, who has urged Congress to ban proprietary trading by commercial banks, said banks are lobbying to undermine financial regulation aimed at making the industry more stable. Read more.
FEDging the figures
January 28 — Both the US Federal Reserve and the European Central Bank are now offering limitless quantities of new money – the ECB to support the banks, and the Fed for reasons (despite explanations) that are not entirely clear. The Fed in its press release announced that it expected interest rates to “warrant exceptionally low levels for the Federal Funds Rate at least through late 2014.” The fact that the central banks governing the two most important currencies in the world are issuing money to all-comers at very little interest cost for up three years has not been lost on gold and silver, whose prices shot up in response to the Fed’s announcement. Read more.
Pimco’s El-Erian: Global Economy Teetering on Knife's Edge
January 31 — The global economy is balancing "on a knife's edge" and facing four tipping points that will push the world into collapse or towards repair and prosperity, say Mohamed El-Erian, CEO of Pimco, the world's largest bond fund.
First, European economic and financial fragmentation could shove the world into a recession if not dealt with. Secondly, Middle East unrest could escalate and roil the politically tense and oil-rich area of the world further. Read more.
Richard Russell: Gold Threatening Dollar’s Reserve Currency Status
January 28 — With the Fed announcement sending gold soaring more than 4% this week and silver almost 7%, Richard Russell is talking about gold replacing the dollar in international transactions, and taking over as the ‘King of Currencies.’ The Godfather of newsletter writers, had this to say in his latest commentary: “In a deal concluded in the 1970s, it was agreed that all transactions of oil would be done in US dollars. Thus the US dollar became the world's reserve currency, used for trading in most materials and commodities.” Read more.
Jim Bianco: The Bull Stock Market Is Almost Over
January 27 — A bull market is raging in U.S. stocks, with the Standard & Poor’s 500 Index up 4.5 percent so far this year.
But Jim Bianco, president of Bianco Research, doesn’t think the good news will last much longer. Stocks may rise another 5 or 6 percent, and then that’s it, he tells Yahoo. Read more.
01/31/12 - About Those US Jobs
US politicians make a great show of concerning themselves with the level of unemployment. And so they bluster about the need for this new program or that new program – in fact, about any new idea except for the one that will actually be effective. Namely, stop the meddling. 01/27/12 - Technical Indicators: A Love-Hate Relationship
Part I: How One Technical Indicator Can Identify Three Trade Setups |
01/31/12 - How Does the Value of the U.S. Dollar Fit Into the Big Picture for the Economy?
Robert Prechter discusses his views on the credit crisis and the U.S. dollar More credit is denominated in U.S. dollars than any other currency. What does this mean for the value of the dollar as the credit crisis continues its strangle-hold on the world economies? Enjoy this video clip of Bob Prechter. Read More. 01/27/12 - Waist Deep in the Big Muddy
With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow.
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