The Fed is flooding world markets with excessive liquidity, but the turnover of money (velocity) has collapsed, indicating a frightening level of concern. Velocity today sits at 1.59, well below the average of 1.79 since 1959. Velocity is calculated by dividing nominal GDP by money supply as measured by M2. With slow GDP growth, and rapid expansion of M2 spurred on by the Federal Reserve’s loose monetary policies, the velocity formula (GDP/M2) has resulted in smaller values. Slow money turnover is a sign of an anemic economy. Today’s levels are the lowest ever recorded. … [Read more...]
VIDEO: Fed Preparing for Collapse Worse than Great Recession
VIDEO: Jim Grant on QE3
VIDEO: Coming Sovereign Debt Crisis-Marc Faber
Durable Goods Give Back
Today the Census Bureau announced that durable goods orders in January fell by -4%, the most in three years. Timothy R. Homan writes in Businessweek, “The expiration at the end of 2011 of a tax incentive allowing full depreciation on equipment purchases may have prompted a slowdown in investment at the start of this year.” Drops in orders were most apparent in the types of goods businesses would buy and depreciate under normal circumstances. Homan continues “Today’s report showed bookings for non-defense capital goods excluding aircraft, a proxy for business investment in items such as … [Read more...]
What We’re Reading 2-24-12
Pension gap spells trouble for muni bonds, Gillian Tett, Financial Times SEC May Ticket Speeding Traders, Scott Patterson and Andrew Ackerman, The Wall Street Journal Quitting while they’re behind, The Economist Why Obama’s corporate tax plan is a total bust, James Pethokoukis, The American Christie: Buffett Should ‘Write a Check and Shut Up’, Stacie Servetah, Bloomberg Why We Can't Believe the Fed, Benn Steil, The Wall Street Journal Apple's Size Clouds Market, Jonathan Cheng and Brendan Intindola, The Wall Street Journal Plan B for China's Wealthy: Moving to the U.S., … [Read more...]
VIDEO: Greece Austerity Plan, Investment Strategy
Feb. 13 (Bloomberg) -- David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., talks about Greek auseterity measures approved by lawmakers and the global economy. Rosenberg, talking with Betty Liu on Bloomberg Television's "In the Loop," also discusses investment strategy. (Source: Bloomberg) … [Read more...]
Gold King as Currencies Debased
Yesterday the Bank of England announced another round of quantitative easing, this time spending $79.1 billion on government bonds. On the chart below you can see the effects previous rounds of quantitative easing have had on the price of gold in U.S. dollars and pounds sterling. As monetary authorities in the United States and the United Kingdom have poured money on their economies, the price of gold in their currencies has skyrocketed. The continued debasement of fiat currencies has been a boon for gold investors, but a terrible strain on savers, diluting the value of their nest eggs. … [Read more...]
Sam Zell on Mark to Market Taxes
Billionaire T. Boone Pickens on Oil Prices, Natural Gas
Feb. 2 (Bloomberg) -- T. Boone Pickens, chairman of BP Capital LLC, talks about the outlook for oil prices. Pickens also discusses the Obama administration's energy policy, prospects for natural gas and TransCanada Corp.'s Keystone XL pipeline project. He speaks with Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg) … [Read more...]
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