The Bank of Japan got tired of the yen (JPY) setting record highs, and enlisted the help of the G7 to intervene in the currency markets and push the yen lower. This is the first time the Group of Seven nations have jointly intervened in the markets in more than a decade. The result of this concerted effort was a drop of over 3% for the yen, which had touched a record high early yesterday at 76.36 yen/dollar. And the G7 finance ministers stand ready for more intervention if needed. A statement by the G7 said “in response to recent movements in the exchange rate of the yen associated with the tragic events in Japan, and at the request of the Japanese authorities” it will intervene in the currency market today. The statement went on to say, “We will monitor exchange markets closely and will cooperate as appropriate.”
[Read more...]US Inflation Worse than Zimbabwe?
If you live in the United States, your cost of living – even by official stats – is rising twice as fast as in Zimbabwe.
Rounding Up the Culprits of Rising Prices
From Bloomberg.com we get the bad news that “Bank of England Governor Mervyn King said inflation is likely to exceed the UK government's upper 3% limit in coming months as higher sales taxes drive gains in consumer prices,? which “rose 3.1% in July from a year earlier after climbing 3.2% in June.?
[Read more...]Combating Annuities With Gold, Silver and Oil
People are always writing me and asking questions, which can usually be divided into one of two categories. The first category is the one that I call “Is there something wrong with you that you sound/look/appear so stupid/ugly/weird?? (Answer: “Probably?), and the other, smaller category is the one I call “Other.?
[Read more...]A Return to Debit Crisis Trading
The rain was coming down hard on the dollar yesterday… But, this morning, when I turn on the screens, it looks like the dollar selling that went on all day yesterday, has had the brakes applied. I would say slammed on, but it all happened while I was sleeping, so I don't really know for sure!
[Read more...]Inflation Still a Problem, Despite Evidence to the Contrary
I was as surprised, as many were, to see that the Consumer Price Index (CPI) actually declined in April, dropping to 2.2% inflation from Marchs 2.3% inflation.
My family seemed to be endlessly delighted that inflation seems to be going is down, which is because I have been yammering about how inflation in prices going up will always be the result of a money supply that goes up, and I have been saying it for so long that they are sick, sick, sick of hearing that inflation is prices will follow inflation in the money supply, they are sick, sick, sick of hearing my voice telling them that ruinous inflation in prices will always follow ruinous inflations in the money supply, and they are happy, happy, happy that I am wrong!
[Read more...]On the Cyclical Nature of Financial Markets
Most investors believe that markets behave cyclically, like an ocean tide that ebbs and flows. Bull markets give way to bear markets; booms turn into busts; low interest rates yield to high interest rates. And its true, markets are cyclical…but not like ocean tides.
Financial markets are cyclical…like an Ouroboros the mythological snake that devours its own tail. Economic trends are forever in the process of devouring parts of the financial markets. Recessions consume stocks; recoveries consume bonds.
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Beware the Demon of Inflation
The 5-Minute Forecast came to me in an email with the subject line reading “5-Minute Forecast – Everybody Panic.”
Naturally, as a guy who is always on the verge of panic because of the fact that all the monstrously excessive amounts of money that the Federal Reserve is creating will cause inflation in prices, this affected me greatly.
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