When Trumponomics Meets Abenomics
by MN Gordon
Thirty Year Retread
What will President Trump and Japanese Prime Minister Shinzo Abe talk about when they meet later today? Will they gab about what fishing holes the big belly bass are biting at? Will they share insider secrets on what watering holes are serving up the stiffest drinks?
Indeed, these topics are unlikely. Rather, what they’ll be discussing is cooperative trade, growth, and employment policies between their respective national economies. They’ll also talk about currency debasement opportunities.
Soon enough, perhaps by the time you read this, (Read More....)
. . . → Read More: When Trumponomics Meets Abenomics
by MN Gordon
Lucky to Be Alive
Just when we thought we’d seen it all the impossible happened. Earlier this week the 10-year Japanese government bond slipped into negative. Obviously, it took decades of heavy handed intervention into credit markets to pull off such a feat.
On Tuesday, when the Nikkei dropped over 5 percent, the yield on Japan’s 10-year government bond dropped to minus 0.005 percent. This marked the first time in the history of government debt that the yield on a G7 country’s 10-year bond has been less than zero. We are lucky to be alive to bear witness to the absurdity.
Just a few years ago these depressed (Read More....)
. . . → Read More: Less than Zero
by MN Gordon
Something befuddling’s going on. It is quite the brain twister. As night follows day and day follows night, should not price inflation follow the massive $4 trillion Fed balance sheet expansion that’s happened over the last 6-years?
Simply connecting the dots quickly leads one to a ‘yes’ conclusion. More money chasing a static number of goods and services should result in price inflation. For prices must rise to balance out all the new money.
This, of course, makes good practical sense. In fact, it might even lead someone to sell dollars and buy gold. Certainly they’d have a bullet proof rationale guiding their decision.
Yet the world isn’t always a practical place. Often time things happen that don’t make sense. Sometimes the exact opposite of what should logically occur ends up happening.
Gold’s price peaked around $1,900 an ounce in 2011. Gold’s currently at about $1,180. That’s over 37 percent off its high. What is going on?
The U.S. (Read More....)
. . . → Read More: Hold On To Your Gold
By MN Gordon
One of the pleasures of living in a postmodern world is witnessing the incoherent monetary policy efforts of central bankers. It’s like watching a child chase seagulls at the beach. There’s a lot of movement with no purpose or accomplishment.
Nonetheless, observing the central bankers of the world go about their business makes one unsettling thing clear. They are making it up as they go. They have no intelligible principle…except to recklessly inflate the money supply to fight off the economic boogeymen of unemployment, deflation, and falling asset prices.
Just think of all the fun you’d be missing out on if you were born at practically any other period of human history? Zero interest rate policy. Operation (Read More....)
. . . → Read More: Experience the Magic of Unconventional Instruments