Mar 15 2014

The big economies cannot avoid a soft default as they face their debt reckoning: U.S. and other central banks battle it out for artificially low interest rates on unsupportable levels of debt.

Would you lend money to someone that you knew would never pay you back?  The answer is, probably not unless you are okay with burning through hard earned cash.  The global central banks unfortunately have entered into terminal velocity when it comes to debt support.  The U.S. carries a stunning $17.51 trillion in total public […]

Feb 11 2014

The global debt reckoning – Total global debt at $230 trillion. Total world debt over 300 percent annual GDP. There is no escape from a reckoning with debt markets.

Total global debt crossed a troubling event horizon by going past the $200 trillion mark last year.  Given the latest figures we are likely well above a total global debt of $230 trillion based on a comprehensive study done by ING last year.  The banking sector rummages for every possible way of accessing debt.  Global […]

Dec 16 2013

Quantitative Easing has become heroin to the financial markets: Federal Reserve balance sheet hits $4 trillion this week.

Addiction is never an easy battle to overcome.  This also applies to easy money addiction that is now part of the Quantitative Easing economy.  The Fed’s extraordinary measures are now appearing to be more permanent measures.  Every time the whispers of tapering are made the markets respond accordingly signifying that the stock market is fully […]

Jun 20 2013

The Fed has built a financial pyramid based on unsustainable low rates. How the Fed is running out of economic curtains to hide behind when it comes to monetary policy.

The markets are pulling back dramatically because the Fed sneezed.  The Fed essentially said they would begin tapering off their experiments in quantitative easing by pulling back their bond purchases from $85 billion a month to $65 billion.  That is it.  Not a shocking revelation.  So why then are the markets plunging on this news?  […]

Jun 3 2013

Rationalizing and pushing the debt limit: The academic battle to open the gates on unlimited digital debt monetization.

One of the recent cases for the never ending expansion of debt purchases via central banks is the case of the Bank of Japan.  The BoJ has essentially gone into hyper-drive with their version of quantitative easing by going straight into the Nikkei.  The case seemed simple: the European Union mired in austerity measures has […]

Jan 8 2013

Inflation by any other name – Central banks around the world increase balance sheets from $2 trillion in 2008 to $6 trillion in 2013. The slow erosion of purchasing power in the US.

The Federal Reserve has been trying with all its power to stoke inflation.  This is not the stated mission and you will not hear this proclaimed over loud speakers but if actions speak louder than words, this is the policy they are following.  Yet the Fed is picking winners and losers with their inflation targeting.  […]

Jul 5 2012

The dynamic central banking duo – ECB balance sheet up over €3.1 trillion mimicking Fed balance that is close to $3 trillion. Shuffling toxic assets into darkness.

You might have the vague memory that the European Central Bank reacted somewhat negatively to the Federal Reserve’s massive balance sheet expansion a few years ago.  The ECB was not following in the same path as that of the Fed.  Well fast forward to the current Euro crisis and the ECB now has a balance […]

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