Good day… And a Happy Friday to one and all! Apparently, an email friend named Craig sent a letter to the Bank of Canada pointing out the perils of the bank’s low-interest bias, and guess what? He received a reply from the governor of the Bank of Canada, Mark Carney! WOW! So I guess Craig actually has friends in high places!
[Read more...]How Austerity Hinders an Economic Recovery
February 23, 2012 By Leave a Comment
This will be our last Daily Reckoning until April 17th.
So, what well-chosen words can we leave you with?
How about “if,” “but” and “maybe?”
Yes, dear reader, if everything continues to clunk along as it is today…maybe the world financial system will hold together until we get back.
[Read more...]Debt Beats the Economy in a Growth Race
February 9, 2012 By Leave a Comment
Get out your chopsticks! Brush up on your sushi! Learn to read backwards and upside down!
Yes…we’re going to Japan!
The gist of the Japanese situation is this:
The bubble burst in 1990. But rather than let their big businesses go belly up, the Japanese used every trick in the book. Counter-cyclical deficits up the Shinanho. ZIRP (zero interest rate policy). And QE too.
[Read more...]Who’s Still OK With Deficit Spending Now?
February 2, 2012 By Leave a Comment
I had to laugh yesterday when the New York traders came in and didn’t sell the currencies right away… I said to myself, “Self, maybe the ‘big boys’ read the Pfennig and now know that I’ve uncovered their ‘game,’ so they have to lay low for a while!” HA! Whatever the case, the currencies held their gains most of the day, and even added on in some cases.
[Read more...]More Upside for Gold as Government Spending Continues Unabated
December 16, 2011 By Leave a Comment
Have yourself a merry little depression.
Dow up 45 points. Gold down $9.
We’re still waiting for a major correction in the gold market. Each time one begins, it seems to run out of steam before doing any real damage. At yesterday’s closing price, $1,577, gold is still solidly ahead for the year.
[Read more...]Changing Views on Growth and Economic Recovery
December 12, 2011 By Leave a Comment
What’s new?
When we signed off last week, the Germans and the French were trying to hold Europe together. This morning, they are still trying.
“Don’t you live in Europe?” asked a friend at a party over the weekend.
“Yes…much of the time.”
“Well, maybe you can tell me what is going on with this European debt crisis?”
[Read more...]China Still Finding Ways to Gain Wider Renminbi Distribution
December 6, 2011 By Leave a Comment
Yesterday, I told you the currencies were range trading, with the euro (EUR) better bid, after Friday’s Jobs Jamboree crock… Well, about mid-morning, we received word that German Chancellor, Angela Merkel, and French President Sarkozy, had reached an agreement on how to handle rogue Eurozone members going forward. They ironed out a new Eurozone Treaty, which will be presented to the Head of the Eurozone on Wednesday, and then on for a vote on Friday… This news was well received by the markets, and they happily marked up the euro, with the other currencies following along.
[Read more...]Zombified Government Spending
December 5, 2011 By Leave a Comment
The huge rally on Wednesday of last week fizzled by the end of the week.
What a week. Full of sound and fury…signifying nothing.
Wednesday’s rally was the “seventh best day for the DJIA in 110 years,” reports our Bonner Family Office analyst, Chris Hunter. “And sure, this sounds pretty impressive. But it’s useful to bear in mind that the best day in history for the DJIA was on October 13, 2008 (when the index shot up 936 points). In the next few days the DJIA was down 11%. Then it shot up again by 15%. Then it nosedived by 25%. The next best day after that for the index was October 28, 2008. And the sixth best day came six days after the top of the Nasdaq bubble, on March 16, 2000.”
[Read more...]
Fed Meeting Spillover Aids US Dollar Strength
Good day and welcome to another Thursday. We saw another summer-like day here in the Midwest that lends itself to throwing the winter coat toward the back of the closet and forgetting about it until next winter. While it’s still way too early to take such drastic action, investors have seemingly thrown the debt problems and other fundamental concerns about the U.S. economy to the back of the closet, hidden under that shirt you got as a birthday gift years ago that was never returned.
[Read more...]