At the Cato Institute, Norbert Michel explains how central bank digital currencies (CBDCs) are about control. He writes about the dangers of such a creation: As a starting point, I want to distinguish between a wholesale CBDC and retail CBDC. With a wholesale CBDC, banks can electronically transact with each other using a liability of the central bank. Because that is essentially what banks do now, transact and settle (electronically) using reserve accounts held at the Fed, there aren’t very many new and interesting wholesale CBDC policy issues. (Basically, the Fed has had a wholesale CBDC … [Read more...]
Gold, Silver, and Currencies
Young Research & Publishing has been providing research and insights on precious metals and currency markets to institutional investors, corporate financial officers, business owners, and individual investors for over four decades. Richard C. Young started Young Research & Publishing in the 70s to publish the authoritative Young's World Money Forecast, a 50-page monthly investment report on the precious metals and currency markets. Today, our research on gold, silver, and currencies is geared toward investors in or nearing retirement who are looking to preserve and protect wealth.
FRAGMENTATION: World Currency Order Precarious After Biden’s Russia Sanctions
The implementation of crippling sanctions on Russia's central bank may encourage other countries to diversify away from the dollar, lest they fall victim to the same pressure tactics in the future. Gita Gopinath, the IMF's first deputy managing director, suggests there could be "fragmentation," of the world currency market. Johnathan Wheatley and Colby Smith report for the Financial Times: Gita Gopinath, the IMF’s first deputy managing director, said the sweeping measures imposed by western countries following Russia’s invasion, including restrictions on its central bank, could encourage the … [Read more...]
Bank of Japan’s Unlimited Bond Buying Sends Yen Tumbling
When a central bank offers to buy an unlimited number of its government's bonds, is it any surprise when its currency falls hard on the news? The value of the yen has dropped sharply on the news that the Bank of Japan will buy an unlimited number of 10-year Japanese government bonds to support the country's economic stimulus. The Financial Times reports: The yen dropped to a seven-year low on Monday as the Bank of Japan bucked the global trend for tighter monetary policy, stoking speculation that the central bank could intervene to prop up the currency for the first time since 1998. The … [Read more...]
As Turks Flee Lira, Erdogan Opens War Against Cryptocurrencies
For policymakers using currency debasement as a "solution" to their problems, there could be nothing worse than cryptocurrency. Its status as a "hard" currency alternative to fiat money makes cryptocurrency a friend to people living in hyper-inflationary environments. The anonymity of many cryptos also makes them desirable for people in oppressed nations. That combo is hitting Turkey like a double-whammy. Laura Pitel and Eva Szalay report on Turks flocking to cryptocurrency in the Financial Times, writing: Despite having a masters degree and a stable job, a middle-class lifestyle has felt … [Read more...]
DIGITAL DANGERS: Does America Need a Digital Dollar?
In what seems like a relentless drive toward self-actualization, discussion of the digitalization of the dollar has been winding its way through economic and financial news and analysis. But does America need a digital dollar? And are there dangers in such a creation? Alexander William Salter, an associate professor of economics in the Rawls College of Business at Texas Tech University and a senior fellow with the Sound Money Project, discusses some of the dangers of digitizing the world's reserve currency in The Wall Street Journal, writing: The Federal Reserve plans to consider the idea of … [Read more...]
ACHTUNG! Highest German Inflation of Euro-Era
Germany's inflation has climbed to a 29-year high of 4.1%. That's higher than at any point during Germany's participation in the euro currency bloc. This is perhaps most startling because of Germans' traditional aversion to inflation, which is understandable after having undergone one of history's worst hyper-inflations. Martin Anrold reports in The Financial Times: German inflation hit 4.1 per cent in September, its highest level for 29 years, prompting some economists to question whether central bankers are right to assume the surge in prices is only temporary and will disappear next … [Read more...]
Gold’s True Story
Back in 1971, I had just started in the institutional research and trading business on Federal St. in Boston. Our firm traded and researched gold shares. I would in fact shortly be on the way to London to begin research on a lengthy gold study. This presentation by Claudio Grass published on LewRockwell.com is pretty much as I remember events, and is a great summary of the facts and events of that time. He writes (abridged): This year marked the 50th anniversary of President Nixon’s decision to unilaterally close the “gold window”. The impact of this move can hardly be overstated. It … [Read more...]
INFLATION: How Much is a Dollar (Store) Worth?
Dollar stores are among the first to see trouble ahead from inflation in dollar prices. The Financial Times reports: Dollar stores have spread rapidly across the US since the Great Recession, pulling in cash-strapped consumers with their 21st-century twist on the “five and dime” model Woolworth popularised a century earlier. Dollar General now operates almost 17,800 stores and Dollar Tree has more than 15,900, compared with Walmart’s 4,740 larger US outlets. Close to 2,000 new dollar stores are expected to open this year, according to Coresight Research. That represents almost half of … [Read more...]
THE NEXT BIG SHORT: Paulson Predicts Crypto Will Go to Zero
You may remember hedge fund manager John Paulson from the movie The Big Short. He was the one that couldn’t believe what was happening in the real estate market and believed the system would implode. He was right. Now he’s dead against cryptocurrencies, much like Your Survival Guy. In a recent interview with Bloomberg's David Rubenstein, Paulson described cryptocurrencies as "a limited supply of nothing." He also predicted the speculative asset would go to zero. The NY Post reports: Hedge fund manager John Paulson made $20 billion predicting the downfall of the US housing market in 2008. … [Read more...]
Another Crypto Exchange Hit by Hackers: $97 Million Stolen
Japanese cryptocurrency exchange, Liquid, has been robbed by hackers who made away with $97 million worth of assets. Ryan Browne reports for CNBC: Japanese cryptocurrency exchange Liquid said Thursday it has been hit by a cyberattack that saw hackers make off with a reported $97 million worth of digital coins. Liquid said some of its digital currency wallets had been “compromised,” and that hackers were transferring the assets to four different wallets. “We are currently investigating and will provide regular updates,” Liquid tweeted. “In the meantime deposits and withdrawals will be … [Read more...]
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