Category Archives: Federal Reserve

Mr. Trump is right on the biggest economic issue we face–the misdirection of our economy by the Federal Reserve

Even a stopped clock is right twice per day, and Mr. Trump is right much more than that (from an economic perspective).  So despite my angst over his posture on immigration and free trade, let’s give Mr. Trump his due.  The Fed’s easy money policy is fraught with significant problems, and the Fed itself is institutionally political.  Mr. Trump excoriated the Fed this week, and was quickly attacked by the standard bearers in the press, as well as Mark Cuban: What… Continue Reading ››

Stock Markets hit record highs, yet earnings are crushed…what’s up with this? And will it make Donald Trump the president?

Stock markets hit record highs this week, and yet most people aren’t excited about it.  Google “the most hated bull market in history” and you’ll find many reasons for pessimism–we just don’t trust this market.  In normal times, this would indicate we are still healthy, as legendary investor Sir John Templeton once said: “Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.” Yet we’re in anything but normal times.  I often tell people… Continue Reading ››

Just one little interest rate hike…and stock market bubble is bursting?

This blog is not investment advice.  Mainly because yours truly has no clue what to tell you to do, although some foolishly ask him, demanding SPECIFICS.  As if without a specific prediction you have nothing worthwhile to say.  It is absolutely true that I might have nothing worthwhile to say–but not because I fail to include specifics!  I should also say I’m not currently shorting the market–although I wish I was.  I personally ended most of my “long” or bullish… Continue Reading ››

It’s a Central Banker’s World now! Buy the dips! Or maybe not…

It always amazes me that most people think that the effect of central bankers on the global economy is small. Its not just our resident critic here @ BATG. I went to a conference last year where a very conservative Christian financial advisor told me that the stock market was basically just about the great earnings. Bubble? I don’t see no stinkin’ bubble! Yet virtually daily other players say the most important thing to follow in markets is the lead… Continue Reading ››

International Monetary Fund warns on the bubble they encouraged! But has the horse already left the barn?

  Yes, another blog post on the Fed’s failed monetary policy.  I hate to keep blogging on this particular issue, but it continues to be the major economic issue facing us.  Now that the effects of the easy credit bubble deflating are becoming apparent to everyone, including famed corporate takeover investor Carl Icahn, the IMF is warning the Fed not to raise interest rates, lest it trigger a wave of emerging market corporate defaults and panic in financial markets as liquidity… Continue Reading ››

In Fed We Trust!

Tomorrow the Fed will announce its decision on whether to increase interest rates for the first time since 2006, and the markets seem to be thinking we’ve got at least another meeting until it happens. Markets are up in the last couple of days and even long-beaten gold is catching a bid, sensing that interest rates won’t rise. In one of my last posts I opined that the Fed wouldn’t increase rates, but I can’t disagree with one of my… Continue Reading ››

Boom Boom! Bust?! What’s next for world markets?

Lots of press the last few days on the markets crashing, with the first stock market correction since 2011.  I’ve been warning that this won’t end well, but that doesn’t mean I have the answer to what happens next–if I did I would be making the trades first thing tomorrow to profit from it myself.  As is often said, he who lives by the crystal ball eats lots of broken glass. Nevertheless, there are some things we know.  Central banks… Continue Reading ››

Some Questions to Ponder: Just Asking

I have a few questions for thought today.  I am not answering them, though the reader may well have some idea where I am on them.  So just read and ponder.  Please feel free to comment too. I have not read the Iran nuclear deal yet, but I understand it will aid Iran in developing “safe” nuclear power.  Question:  Why is the US helping Iran develop nuclear power when the administration has shown no interest at all in developing it… Continue Reading ››

Some economic links from the web worth reading

Over on Cafe Hayek, Don Boudreaux has yet another gem on the minimum wage.  I love his economic work so much that I am almost despondent that I’ll never be as logically articulate as he is.  But I’ll keep trying.  In that article I offer an extended quote for the day: One of the greatest services that economics offers to humankind is the demonstration that prices set on markets are not arbitrary dictates. Instead, prices (1) reflect underlying realities and,… Continue Reading ››

Former Fed Vice Chair encourages patience on rate hikes. Beyond the bad economics, have we thought through the morality of zero interest rates?

Former Vice Chairman of the Federal Reserve board joined the chorus of Wall Street cheerleaders saying the Fed can afford to be patient with raising interest rates earlier this week.  His rationale? Inflation as measured by the consumer price index or the Fed’s favored measure is very low: The so-called hawks, who have been calling for rate hikes since 2009, have constantly warned of high inflation lurking just down the road. It must be a long road. The Fed’s favorite… Continue Reading ››