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Tag Archives: Monetary Policy

Fed Mechanizations: SchiffGold Friday Gold Wrap Sept. 20, 2019

It was Fed week. As widely expected, the central bank cut interest rates another 25 basis points on Wednesday. But the real Fed action happened on Tuesday morning and most people didn’t even notice.In this episode of the Friday Gold Wrap, host Mike Maharrey talks about all of the Fed mechanizations – not just the rate cut – and what it all could mean. The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You...

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Peter Schiff: Why the Fed Won’t Be Able to Rescue the Economy the Next Time Around

Peter Schiff has been saying that the Federal Reserve is going to take interest rates back to zero and launch another round of quantitative easing in order to reinflate the bubble economy after the next crash. The central bank successfully pulled this off after the 2008 crisis. By dropping rates to zero and holding them there for nearly a decade, and running three rounds of QE, the Fed has reinflated the real estate bubble, blown up a bond bubble and pumped up the stock market. But Peter...

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The Problem of France

The explanation may look too simple, but it is very likely the correct one. The problem of France is not wine, literature, or the sensuality of the whole country. The problem was illustrated by a French government minister a couple of days ago. Alexis de Tocqueville and other observers already pinpointed the problem as it sailed unchanged from the Ancient Regime through the democratic governments that followed the devastating revolution of 1789. The problem is the...

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I Owe, I Owe… SchiffGold Friday Gold Wrap Sept. 13, 2019

The price of gold whipsawed this week, driven up and down by various headlines. In this episode of the Friday Gold Wrap, host Mike Maharrey covers some of the big news that moved the markets. But he said that we need to keep our eyes on the big picture. All of this is happening in front of a backdrop of surging debt driven by central bank policy. How much do we owe and what does it mean for the future? Mike talks about it. The SchiffGold Friday Gold Wrap podcast combines a succinct summary...

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Peter Schiff: The Only Winners Will Be the People Who Bought Gold and Silver

Gold has been on a three-day skid, but as Fox Business anchor Liz Claman put it, “So what? It’s been a breakout summer for bullion.”Over the last three months, gold is up about 12% and has hit six-and-a-half year highs in recent weeks.Peter Schiff joined Claman, along with, Frank Holmes and Imaru Cassanova on to talk about the yellow metal.Holmes started out the segment saying that recession fears are driving central bank easy monetary policy and that’s good for...

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Is Fed policy “premised importantly” on market monetarism being true?

Market monetarists favor a policy regime where the instrument setting creates a policy stance that the financial markets believe will achieve the Fed’s policy goal. Thus, if the Fed’s goal is 2% inflation, then the monetary base (or the fed funds target) should be set at a level that the market believes will result in 2% inflation. Here’s Yahoo.com: Is the Federal Reserve beholden to short-term volatility in the financial markets? A handful of Fed-watchers argue that...

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Peter Schiff: The Fed Makes Life Easier for Politicians

The Federal Reserve makes life easier for politicians by pursuing monetary policies that shield them from the consequences of bad economic decision-making. By keeping interest rates low and printing money, the Fed hides the nefarious impact of government spending, trade wars and other bad policies.Peter Schiff talked about this in a recent podcast.In an op-ed by former Fed member Bill Dudley said that the Fed should not be enabling Trump’s bad trade policy by cutting rates. Dudley said the...

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Using monetary policy as a political weapon

Former New York Fed President William Dudley has received a great deal of well-deserved criticism for these remarks: “I understand and support Fed officials’ desire to remain apolitical. But Trump’s ongoing attacks on Powell and on the institution have made that untenable,” Dudley wrote, referring to Fed Chair Jerome Powell. “Central bank officials face a choice: enable the Trump administration to continue down a disastrous path of trade war escalation, or send a...

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There’s no reason to go heterodox

Commenter Michael Sandifer had this to say: Seeing so many developed economies at negative nominal rates, with others trending there, as the global economy slows down, with those economies never having enjoyed even the nominal growth rates of the past, it is tempting to think there’s something very wrong with standard economic theory. And, perhaps there is. By standard economic theory, I mean Mishkin’s pre-Great Recession treatment of the subject. I bought an old copy...

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How has Keynes’s liquidity trap theory held up over time?

It’s worth revisiting this issue in a world with $17 trillion in negative yield bonds. Keynes was a complex thinker, who looked at issues from many different perspectives.  Unfortunately, that means his views were not always internally consistent. Thus it’s foolish to try to pin him down, as if sticking a pin in a butterfly. You’ll always find other passages that contradict your interpretation. Consider the following, from the General Theory: There is the...

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