The funding challenges ahead

Goldmoney Insights – October 7, 2021 This article looks at the Fed’s funding challenges in the US’s new fiscal year, which commenced on 1 October. There are three categories of buyer for US Federal debt: the financial and non-financial private sector, foreigners, and the Fed. The banks in the financial […]

Inflation is a monetary curse

Goldmoney Insights Remarkably, in a speech on monetary policy given at the Jackson Hole conference last Friday, Jay Powell never mentioned money, money supply, M1 or M2. With money supply expanding at a record pace to fund both QE and intractable budget deficits the omission is extraordinary. The FOMC (the […]

Eurozone finances have deteriorated

Goldmoney Staff – August 26, 2021 Despite negative interest rates and money printing by the European Central Bank, which conveniently allowed all Eurozone member governments to fund themselves, having gone nowhere Eurozone nominal GDP is even lower than it was before the Lehman crisis. Then there is the question of […]

The extinction of gold derivatives

Goldmoney Insights This month is the fiftieth anniversary of the Nixon shock, when the Bretton Woods agreement was suspended. And the expansion of commercial banking into credit for purely financial activities became central to the promotion of the dollar as the international replacement for gold. With the introduction of Basel […]

Western socialism and Eastern capitalism

Goldmoney Insights – July 30, 2021 There has been a significant shift in geopolitics in recent months, with the US consciously deciding to withdraw from Asian conflicts, notably in Afghanistan. But the diplomatic war against Iran also appears to have been downgraded and the US presence in Iraq is to […]

Alasdair Macleod: 2020—2022 versus 1929—1932

Current levels of equity markets are not only divorced from their underlying economic and business realities but are repeating the madness of crowds that led to the Wall Street crash of 1929—1932. The obvious difference is in the money: gold-backed dollars then compared with unbacked fiat today. We can now […]

Swaps can’t close their bears in gold

Market Update. July 223, 2021 As can be seen in our headline chart, the gold price has gently climbed for a month now. Silver held its level until this week, when it sold off sharply and is yet to recover its poise. This morning, gold was at $1802, down $9 […]

Banking faces seismic changes

Goldmoney Insights  The role of commercial banks in the global economy is changing, with lending to governments and their agencies now more important than lending to goods and services industries. It is a trend which is due to continue. The new Basel 3 regulations seem set to encourage this trend, […]

Market Report: Chinese buying revealed

Market Updates – May 28, 2021 Gold and silver continued to rally this week, with gold challenging the $1900 level and silver $28. From last Friday’s close, gold rose a net $12 to trade at $1892 in European trading this morning, and silver by 16 cents at $27.67. Gold hit […]

Suffering a sea-change

Goldmoney Staff There is an established theoretical relationship between bonds and equities which provides a framework for the future performance of financial assets. It would be a mistake to ignore it, ahead of the forthcoming rise in global interest rates. Price inflation is roaring, and so far, central banks are […]

The end of paper gold and silver markets

Goldmoney Insights – May 20, 2021 This article looks at the likely consequences of the Bank for International Settlements’ introduction of the net stable funding requirement (NSFR) for bank balance sheets, insofar as they apply to their positions in gold, silver and other commodity markets. If they are introduced as […]

The end of the LBMA is nigh

Goldmoney Staff asel 3 is on course to regulate the LBMA out of existence. And with it will go all the associated arbitrage business and position-taking on Comex, because most bullion bank trading desks will cease to exist. The only supply to buy-side speculators of gold and silver contracts will […]

Why interest rate management fails

Goldmoney Staff    April 22, 2021                    By Alasdair Macleod This article explains why attempting to achieve economic outcomes by managing interest rates fails. The basis of monetary interventionist theories ignores the discoveries of earlier free-market thinkers, particularly Say, Turgot and Böhm-Bawerk. It also ignores Gibson’s paradox, which demolishes the theory […]

Say’s law and the destruction of savings

Goldmoney Staff  .  April 1, 2021  By Alasdair Macleod This article explains the fundamental mistake behind Keynes’s General Theory, the vade mecum for all macro and mathematical economists today. It is no exaggeration to say that his casual rejection of Jean-Baptiste Say’s economic theories in his off-hand interpretation of them, […]

Biden’s last throw of geopolitical dice

Goldmoney Staff . March 25, 2021 In a continuing cold war, America is already on the back foot. We have yet to see how long it will be before the Biden administration realises its few victories will be unaffordably Pyrrhic, and by merely not responding to American provocation the Chinese/Russian […]

Inflation watch: Beware the ides of March

Goldmoney Staff . By Alasdair Macleod President Biden has now had his $1.9 trillion stimulus package passed into law, and it will not be the last in the current fiscal year. Covid is not over and is sure to resurge with new variants next winter. But even assuming that is […]

Monetary inflation: the next step

Goldmoney Staff February 25, 2021 Earlier this month the US Treasury released its plan to flood the financial system with cash by reducing its balance on its general account at the Fed by $1.229 trillion by not renewing an equivalent amount of T-Bills. Separately, the Fed will continue with its […]

Keynesians going all in

Goldmoney – January 21, 2021 Mainstream economists are celebrating Joe Biden’s election as US President. For Keynesians, the outlook is for a reaffirmation of economic management by the state, and of reflationary monetary policies to restore economic growth, following the damage caused by covid lockdowns. This article points out the […]

The destructive force and failure of QE

This article concludes that quantitative easing as a means of stimulating economies and financing government deficits will fail. The underlying assumption is that the transmission of additional money to non-banks in order to inflate financial assets, and to banks to cover government finances, will become too great in 2021 for […]

Economic and monetary outlook for 2021

Goldmoney                      December 30,2020          By Alasdair Macleod The most important event in the new year is likely to be the Fed losing control of its iron grip on markets. The dollar’s declining trend is already well established against other currencies and commodities, leading to this outcome. Events in 2021 will be […]