Tuesday , October 15 2019
Home / Tag Archives: Central Banks

Tag Archives: Central Banks

Central Bank Gold-Buying Ramps Up Again

The central bank gold-buying spree shows no signs of letting up. In fact, it ramped up again in August after ebbing slightly in July, according to the latest data released by the World Gold Council.After a relatively modest net increase of 13.9 tons in July, central banks globally took in a net 57.3 tons of gold in August. Gold purchases of a ton or greater amounted to 62.1 tons. Gross sales came in at 4.8 tons.The World Gold Council bases its data on information submitted to the...

Read More »

Low & Negative Interest Rates Get Broadsided by the BIS

They undermine banks. To dodge the fallout, banks chase yield, buying stuff like CLOs, instead of lending. When loans go bad, banks may “evergreen” them.  By Nick Corbishley, for WOLF STREET: Prolonged low interest rates are having significant negative effects on banks’ core business and role in the economy, the Bank of International Settlements (BIS) warned in a new paper, just weeks after the ECB reduced its policy rate deeper into the negative after a tumultuous meeting where ECB...

Read More »

US Dollar Status as Global Reserve Currency Slides

Chinese Renminbi struggles forward in slow micro-steps. If the US dollar loses its hegemony as a global reserve currency, it would be a sea change globally, and specifically for the US economy. Today, we got the next installment in that saga, via the IMF’s quarterly COFER data on foreign exchange reserves. Total global foreign exchange reserves in all currencies ticked up 1.1% from the first quarter, to $11.7 trillion. US-dollar-denominated exchange reserves rose only 0.7% to $6.79...

Read More »

Palace Revolt at the ECB, Legitimacy of Policy out the Window

Draghi’s desperate shenanigans thicken. ECB President Mario Draghi, who is on his way out, will, as we’re learning more and more, do anything to push his agenda and make it stick at the ECB long after he leaves, but whatever his agenda may be, it’s clearly unrelated to the European economy which has been buckling under the consequences of his agenda: the destructive weight of negative interest rates and QE. And in the process, he is destroying the legitimacy of the ECB’s policy. The...

Read More »

Central Banks Keep on Buying Gold

Central banks continue to gobble up gold.  Globally, the world’s central banks added another net 13.9 tons of gold to their reserves in July.While this was the lowest net increase in global central bank reserves since August 2017, the number was skewed downward by a significant gold sell-off by Uzbekistan. Gross purchases by the world’s central banks came in at 36.4 tons, according to the latest data released by the World Gold Council.The World Gold Council bases its data on information...

Read More »

Here’s What I’m Worried About. And It’s Not a Recession

A rout in the hyper-inflated bond market can blow up everything at this point. This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT: The locker room at my swim club has become the litmus test. When a complex topic, after years of being absent or ignored, suddenly crops up in conversation, and not just sporadically but all the time, it means that there is some kind of peaking going on. This suddenly hot topic now is a “coming recession.” Just about everyone is...

Read More »

Negative Yields Not Required: Even “Low” Interest Rates Screw Up the Economy

How to make a mess in the era of low demand. This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT: Now the plot thickens: I’ve got a former Secretary of the Treasury backing me up. We’ve already seen, including in my last podcast, how negative interest rates screw up the economy. Negative interest rates are so absurd that just thinking about them gives me a headache. In the era of negative interest rates, owning financial assets such as government bonds, or...

Read More »

The Fantasy of Central Bank “Growth” Is Finally Imploding

Having destroyed discipline, central banks have no way out of the corner they’ve painted us into. It was such a wonderful fantasy: just give a handful of bankers, financiers and corporations trillions of dollars at near-zero rates of interest, and this flood of credit and cash into the apex of the wealth-power pyramid would magically generate a new round of investments in productivity-improving infrastructure and equipment, which would trickle down to the masses in the form of higher...

Read More »

The Fantasy of Central Bank “Growth” Is Finally Imploding

It was such a wonderful fantasy: just give a handful of bankers, financiers and corporations trillions of dollars at near-zero rates of interest, and this flood of credit and cash into the apex of the wealth-power pyramid would magically generate a new round of investments in productivity-improving infrastructure and equipment, which would trickle down to the masses in the form of higher wages, enabling the masses to borrow and spend more on consumption, powering the...

Read More »

David Stockman: We’re in the Mother of All Bond Bubbles

A couple of weeks ago, the yield on the 10-year Treasury fell below the yield on the 2-year for the first time in 12 years. This inversion of the yield sparked recession fears in the mainstream. But in an interview with Tom Woods on Contra Krugman, former Reagan administration Office of Budget Management Director  David Stockman said this is really a sign of a different problem. He said we’re actually in the mother of all bond bubbles.Stockman said the mainstream is looking the yield curve...

Read More »