You may have seen them already but some of them were so, so bad (and some pretty good) that we just had to say something about them. Yep, we’re talking about the Fed Valentine’s.
Originally from The Market Oracle
Thomas Jefferson and Andrew Jackson understood "The Monster". But to most Americans today, "Federal Reserve" is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.
Originally from The Market Oracle
By forcing interest rates to record low levels, the Federal Reserve has effectively vaporized most interest income along with most of the ability to benefit from compound interest, with devastating results for many retirees, retirement investors and pension funds. However, in the process of creating artificially low interest rates for an entire economy, the Fed has also opened up unusually profitable opportunities for individual investors with certain types of investments. Record-low interest rate levels are the most powerful of six different factors that are currently working together to increase owner cash flows from the purchase (or refinancing) of investment real estate in the United States.
Originally from The Market Oracle
Martin Hutchinson writes: Federal Reserve Chairman Ben Bernanke may think he has everything under control, but the truth is the monetary ground is literally shifting beneath our feet. That's why his loose monetary policy has some U.S. states looking to get into the gold coin business.
Originally from The Market Oracle
Advocates of government stimulus are running victory laps on recent developments that appear to vindicate their strategy. In particular, Paul Krugman compares the sluggish growth in Europe to the somewhat-less-sluggish growth in the US to prove that stimulus was more effective than austerity. Other economists are using government inflation measures to defend Fed Chairman Bernanke's easy-money policy. The only problem is, they're calling the race before the finish line is even in sight.
Originally from The Market Oracle
Peter Krauth writes: If you really care about your financial future, here's something you need to know. It's about a story that received almost zero coverage from the mainstream press. I can't say that I am surprised. It involves gold.
Originally from The Market Oracle
This gigantic flood of extremely inexpensive high-powered money does have a major impact, not in the real economy, but in the liquid investment markets. Free money sets a very low hurdle for a short-term investment and as long as the transaction has decent liquidity, why not do the trade. As a result, almost every equity, commodity, and credit market is moving higher. High beta currencies are moving higher as well, as risk is clearly on the front foot. This positive mood began at the start of October, a bit more than a week after Bernanke announced the start of ‘Operation Twist,’ a subtle way to improve the profits of the banks and increase the risk of the Fed without expanding its balance sheet.
Originally from The Market Oracle
2012 is going to be a difficult year, but not as dreadful as anticipated. The neutralization process, as usual, we covered over by the availability of money and credit. We have already seen that via Fed $1 trillion loans to the ECB and the admission by the Fed that QE 3 is on the way. In Europe banks have borrowed $3.2 trillion and they find they will need $1 trillion more. These borrowings are more than troubling and indicate that there are 523 banks in Europe in serious trouble.
Originally from The Market Oracle
After the first weekend of the Holiday shopping season, there were jubilant members of the mainstream press virtually jumping out of their skins at the news that holiday spending was looking strong. The initial counts showed an uptick in spending and that was all the MSM needed. Interestingly at the same time, the ‘bad cops’, namely the Fed and other central banks, were quietly talking about more easing, the rotten labor market, and the debt crisis in Europe, still bubbling beneath the surface. So what gives here? Is the economy back off to the races or are we merely continuing to kick the can down the road in spite of the obviously sour fundamentals?
Originally from The Market Oracle
The civilian unemployment rate declined to 8.3% in January from 8.5% in the prior month and is noticeably lower than the year ago reading of 9.1% (see Chart 1). The jobless rate in the Great Recession peaked at 10.0% in October 2009. The elevated unemployment after ten quarters of economic growth remains one of the top concerns of the Fed. Frequently, measures of unemployment different from the headline number are cited to drive home the message that the underlying fundamentals of the labor market are softer than what is inferred from the official rate. The aim of today’s comment is to sort out the different measures of unemployment and draw a meaningful conclusion of the status of the labor market.
Originally from The Market Oracle
Articles and Discussions on The Federal Reserve
