Saturday, 18 November 2017

Euro

Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies

July 16, 2017
in Blog

The Federal Reserve’s (Fed) and European Central Bank’s (ECB) policy responses to the recent financial disasters offer two tales of unintended consequences. Our previous post outlined the undesired effects of the Fed’s policies. In this post, we suggest that the ECB’s stabilization policies did not only fail to achieve its goals. Monetary policy has also […]

Read More

Hot Money, Cold Credit

Posted by Gonzalo Schwarz
May 23, 2013
in Blog

By  Steve H. Hanke This article appeared in the June 2013 issue of Globe Asia.   Money matters — it’s a maxim of Prof. Milton Friedman that I repeat often in my columns. Since the Northern Rock bank run of 2007 — the “opening shot” of the financial crisis — the money supply, broadly measured, in […]

Read More

2012 Currency Rankings In Terms of Gold

Posted by Devin Roundtree
January 2, 2013
in Blog

by Devin Roundtree Now that 2012 has come and gone, here are the 15 most traded currencies ranked by their performance against the yellow metal. Among the top performers, the New Zealand dollar and Swedish Krona should not come as a big surprise; the central banks of both countries have gained a reputation for relatively […]

Read More

Bad Advice for the Greeks

Posted by Gonzalo Schwarz
October 15, 2012
in Blog

 by Patrick Barron This summer Roger Bootle won Lord Wolfson’s £250,000 prize for the best advice for a country leaving the European Monetary Union (one may assume that this advice is aimed at Greece). A more statist, anti-liberal policy than his could hardly be envisioned, which is a sad commentary on the mindset of the judges […]

Read More

What Will Benefit From Global Recession? The US Dollar

Posted by Gonzalo Schwarz
October 9, 2012
in Blog

A very interesting article by Charles Hugh Smith of the Of Two Minds blog, and in line with the view that, even as all of the ships sink, the last one to go down will look very good for a while. For this reason the US dollar will be the beneficiary of the Euro’s distress, […]

Read More

Two Legends in Economics Wrestle Over the Euro’s Future

Posted by Gonzalo Schwarz
September 28, 2012
in Blog

By Shawn Tully FORTUNE — Robert Mundell and Allan Meltzer rank among the most influential economists of the past half-century. Mundell, a professor at Columbia University, garnered a Nobel Prize in 1999, in part for his work in defining what he calls “optimum currency areas.” No academic has ever enjoyed such success seeing his theories into […]

Read More

Farage Blasts Communist Europe And Leaders “Living In Noddy-Land”

Posted by Gonzalo Schwarz
August 15, 2012
in Blog

From ZeroHedge.com: Nigel Farage, looking tanned and refreshed, is back and as he tells FOX Business in this brief clip“nothing has changed” from his views of Europe as the Titanic and its unelected officials dragging it down to the depths of the ocean. Citing Mario Monti specifically with his concerns over allowing politicians to ‘decide’ anything […]

Read More

The Euro’s Fetters?

Posted by Gonzalo Schwarz
July 9, 2012
in Blog

Is the Euro harder to escape than the Gold Standard? by Gonzalo Schwarz Spanish economist Jesús Huerta de Soto just published a new article entitled “An Austrian Defense of the Euro.” In this paper Huerta de Soto develops an argument based on the lectures given by Nobel laureate Friedrich Hayek in the 1930’s at the […]

Read More

Tinker Bell Economics in Europe

Posted by Gonzalo Schwarz
June 20, 2012
in Blog

by Gary North If you have seen the stage version of Peter Pan, you know the scene in which the audience is asked to clap if they want Tinker Bell to live. It’s time. Janet Daley wrote a provocative essay in London’s The Telegraph on the day before the Greek election (June 16). She did her best to explain why […]

Read More

“The whole thing’s a giant Ponzi scheme!”

Posted by Gonzalo Schwarz
June 20, 2012
in Blog

More from the hilarious and blunt Nigel Farage, leader of the UK Independence Party. He proposes to toast being described as a Libertarian and calls out European leaders for being enamored of Chairman Mao and for leading Europe back to the days of the Soviet Union. As always, enjoy the fireworks! image: flickr.com/EuroRealistNewsletter

Read More

The Welfare Kings of Europe

Posted by Gonzalo Schwarz
June 18, 2012
in Blog

From Azizonomics.com: In spite of the fact that 85% of Greeks want to stay in the Eurozone, I was reasonably confident that Greeks would support Syriza to a first-place finish, and elect a new government willing to play chicken with the Germans. However Greeks — predominantly the elderly — rejected change (and possible imminent Drachmatization) in favour […]

Read More

The Euro Titanic Has Hit the Iceberg

Posted by Gonzalo Schwarz
June 13, 2012
in Blog

Mutually Assured Financial Destruction “Under the deal, the Italians have to lend to the Spanish banks at 3%, but to get that money they have to borrow on the markets at 7%! It’s genius!” It’s Nigel Farage, back again. Enjoy! image: flickr.com/ericconstantineau

Read More

Europeans Ambivalent About the Euro

Posted by Gonzalo Schwarz
May 30, 2012
in Blog

From the Associated Press: LONDON — The debt crisis that has ravaged Europe for the best part of three years has exposed a dislike of the single currency but little desire to abandon it, a wide-ranging survey of public opinion found Tuesday. Pew Research Center’s survey across eight European Union countries, including five members of the 17-country eurozone, indicated […]

Read More

Alasdair Macleod: All Roads In Europe Lead To Gold

Posted by Gonzalo Schwarz
May 24, 2012
in Blog

Submitted by Chris Martenson This week we bring back Alasdair Macleod, publisher of Finance and economics.org, because, as he puts it “every horror that we discussed last time we spoke is coming about”. Especially scary since our previous conversation with him was less than three weeks ago… Today’s interview continues building on his excellent synopsis from last month that detailed the […]

Read More

National Lampoon’s European Currency

Posted by Gonzalo Schwarz
May 22, 2012
in Blog

Once again, for your viewing pleasure, we present Nigel Farage. Here is he speaking of Greece, human dignity, and the breakup of the Euro. h/t zerohedge.com image: flickr.com/constantine-graphics

Read More

Are We Waking Up?

Posted by Gonzalo Schwarz
May 17, 2012
in Blog

In some of the most encouraging news to come out of the endless War on Financial Sanity being waged by Western governments, it seems that people are beginning to wake up to the fiat money scam. Greeks are pulling their money out of banks (though still woefully unaware that pulling out fiat money from banks […]

Read More

The European Union Is Destroying European Unity

Posted by Gonzalo Schwarz
May 8, 2012
in Blog

by azizonomics So we know that the pro-bailout parties in Greece have failed to form a coalition, and that this will either mean an anti-bailout anti-austerity government, or new elections, and that this will probably mean that the Greek default is about to become extremely messy (because let’s face it the chances of the Greek […]

Read More

Is There No Escape from the Euro?

Posted by Gonzalo Schwarz
April 27, 2012
in Blog

by Philipp Bagus As I discussed recently, the costs and risks of maintaining the eurozone system are already immense and rising. So is an exit possible? Intuitively, the exit from the euro should be as easy as the entrance. Joining and leaving the club should be equally simple. Leaving is just undoing what was done before. Indeed, many popular […]

Read More

The Euro (Double) Standard

Posted by Tyler Watts
February 20, 2012
in Blog

The received wisdom in economic history places much of the blame for the Great Depression squarely on the shoulders of the gold standard. For instance, Berkley economist Barry Eichengreen states, “Far from being synonymous with stability, the gold standard itself was the principal threat to financial stability and economic prosperity between the wars” (Golden Fetters […]

Read More

How to Use the Dollar Index (DXY)

Posted by Gonzalo Schwarz
January 20, 2012
in Blog

Remember, you still need to pull the parachute ripcord even if your altimeter is broken. “The simple truth is the U.S. dollar is under increased assault from negative real interest rates, increased counterfeiting from the Fed and a national debt the government is attempting to inflate away–that truth isn’t made less painful just because a […]

Read More

So Much for a Stable Currency…

Posted by Gonzalo Schwarz
January 12, 2012
in Blog

Market Implies Greek Devaluation To 1530 Drachma Versus Euro Submitted by Tyler Durden on 01/12/2012 13:09 -0500 On the day when Greek 1Y yields broke above 400% for the first time, a consideration of just what Greece would look like post-exit is perhaps fruitful. Looking at hypothetical forward rates (generated from covered interest rate parity between EURUSD FX […]

Read More

What Really Caused the Eurozone Crisis?

Posted by admin
December 29, 2011
in Blog

World leaders probably spent more time worrying about the eurozone crisis than anything else in 2011. And that was in the year that featured the Arab Spring, the Japanese tsunami and the death of Osama Bin Laden. What’s more, 2012 looks set to be not much different. But as eurozone governments hammer out new rules […]

Read More

Ron Paul Predicts Dollar Holders Will Be Forced To Bailout the Euro Holders

Posted by Gonzalo Schwarz
December 28, 2011
in Blog

The economic establishment in this country has come to the conclusion that it is not a matter of “if” the United States must intervene in the bailout of the euro, but simply a question of “when” and “how”. Newspaper articles and editorials are full of assertions that the breakup of the euro would result in […]

Read More

Oh, Nigel! “The Euro is a Failure”

Posted by Gonzalo Schwarz
December 28, 2011
in Blog

Bombastic European Speaker Nigel Farage MEP, UKIP, Co-President of the EFD Group in the European Parliament (Europe of Freedom and Democracy) shows American representatives how it should be done.  He attacks the failed currency union, unelected bureaucrats, and buying debt with debt.  People would actually tune in to C-Span if we had this kind of entertainment […]

Read More

Rules versus Solidarity

December 22, 2011
in Blog

A recent news item in The  Washington Times describes the political situation among European countries. In the article two opposite suggestions of how to deal with the crisis can be clearly seen among European policy makers. Take, for instance, the following paragraph: When it was launched in 1999, the euro came with a set of […]

Read More

What the Price of Gold Means

Posted by Tyler Watts
December 19, 2011
in Blog

It’s amazing how so many people don’t get gold. It’s only been 40 years since the dollar was completely severed from it’s once proud golden heritage, yet most finance and econ people are wont to consider gold just another commodity—and a not very “useful” one at that. Thus they speak of “investing” in gold as […]

Read More

The Gutenberg Solution

Posted by Tyler Watts
December 5, 2011
in Blog

The European Monetary Union is evolving like a slow-motion train-wreck these days. Just a few weeks ago, the pundits and bloggers began to ponder the possibility of the Euro failing, and now many are claiming that this is all but inevitable (the Economist provides a sobering assessment; an even more sobering assessment in the Financial […]

Read More

Financial Crisis in Europe and Regime Uncertainty

November 28, 2011
in Blog

In recent days, Europe has seen two governments fall: the Prime Ministers from Greece and Italy. New governments where formed. Besides these important changes, the financial markets did not calm down; volatility and uncertainty did not go away as former governments did. This points to the fact that the problems in Europe are not political, […]

Read More

Europe and the Euro: Attacking the Problem or Dealing with the Symptoms?

November 20, 2011
in Blog

The recent political events in Europe, especially the situation in Greece and in Italy, brought new concerns about the situation in Europe and the future of the Euro. If countries do not honor their debts, how hard will their economy be hit? What happens if any country decides to leave the Euro; will it be […]

Read More

It is that easy to cook up new money?

November 16, 2011
in Blog

The financial, and fiscal, crisis in Europe has brought doubt to the future of the Euro. Can it persist, or are we witnessing the end of the Euro? But, if the Euro is to be abandoned, how will the transition play out? In this respect, a latest post in the The Economist’s blog Free Exchange […]

Read More

Notes on the Euro Crisis; or, Crisis of the Euro Notes

Posted by Gonzalo Schwarz
October 13, 2011
in Blog

The Euro is Dead. Long Live the Euro To ensure the European sovereign debt crisis doesn’t go to waste, the markets have kept policy makers and bankers on their toes. The naysayers of a European turnaround have become so overwhelming that it is stunning Europe hasn’t submerged into the Atlantic Ocean yet. It appears that […]

Read More

Germany and the Financial Crisis

July 20, 2011
in Blog

Lately, a lot has been said about Greece, Spain and Italy in the financial crisis affecting Europe. The fear is that these economies can affect the performance of bigger economies, like Germany, one of the largest economies in the world and the second worldwide exporter. Germany, as well, is in a precarious situation given the […]

Read More

Budget Reform in Italy

July 14, 2011
in Blog

Italy’s senate approved today a plan to cut government spending for the period 2011-2014. Italy’s public debt is more than 100% of GDP and the fiscal deficit was between 3% to 5.9% of GDP for last year. Similar situation is shared by other European countries like Greece, Spain, Germany, Portugal, Ireland and France. Europe, in […]

Read More

Sovereign Debt Pressure

July 6, 2011
in Blog

The European countries seem to be facing a road with no easy exit. One on side they are facing fiscal deficits. On other side they are already dealing with an important debt amount that can hardly be sustained, as the case of Greece is showing these days. On even another front, governments are facing strong […]

Read More

Lagarde’s Golden Opportunity

Posted by Intern
July 6, 2011
in Blog

Article and photo originally found at The Wall Street Journal: Opinion Europe Author: Dr. Judy Shelton It can be hard to remember these days, but the International Monetary fund started out as an undeniable force for good. Even as World War II was raging in July 1944, delegates from dozens of nations convened at the […]

Read More

Greece and the Lost Opportunity of the Euro

June 23, 2011
in Blog

With the financial crisis affecting the United States and Europe, here and there are comments and concerns on what could happen with the dollar, the euro and even the international monetary order. With politicians and economists warning that the financial crisis can become the worst economic situation since the Great Depression, this concerns comes with […]

Read More

“Global Price Fears Mount” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Mr. Trichet argues that budget discipline would help growth in Europe more than renewed stimulus, and called on the euro zone’s 17 member countries to strengthen “surveillance” of each other’s fiscal policies. In Europe, budget discipline benefits growth and job creation by “improving confidence of households, enterprises, investors and savers,” said the 68-year-old Frenchman. In […]

Read More

“ECB Intervenes As Debt Crisis Deepens” – Financial Times

Posted by Tom Duncan
January 11, 2011
in Blog

“The European Central Bank intervened to prop up the eurozone bond markets on Monday as political leaders and bankers warned the debt crisis was deepening amid fears Portugal was edging closer to an international bail-out. Although European Union officials denied they were talking about a bail-out for Portugal, the ECB had to buy the country’s […]

Read More

“ECB Gives Portugal Temporary Lifeline, Traders Say”

Posted by Tom Duncan
January 11, 2011
in Blog

“The European Central Bank threw Portugal a temporary lifeline on Monday by buying up its bonds, traders said, as market and peer pressure mounted for Lisbon to seek an international bailout soon. A senior euro zone source said on Sunday that Germany, France and other euro zone countries were pushing Portugal to seek an EU-IMF […]

Read More

“U.K. Think Tank Sees 20% Chance of Euro’s Survival” – WSJ

Posted by Tom Duncan
January 11, 2011
in Blog

“Europe’s common currency, battered for more than a year by a sovereign debt crisis, is unlikely to survive the next decade in its current form, the Center for Economics and Business Research warned Friday. In a list of top 10 predictions for 2011, the CEBR, a U.K.-based think-tank, gave the euro a slim one-in-five chance […]

Read More

“Eurozone inflation soars to new high”

Posted by Tom Duncan
January 4, 2011
in Blog

“Eurozone inflation rose in June to its highest since the bloc’s 1999 formation, data showed on Monday as political opposition mounted to an expected European Central Bank move to raise its main interest rate this week. Prices were 4 per cent higher in June than a year earlier, twice as high as the ECB’s inflation […]

Read More

“Dollar Weakens Versus Euro as Treasury Yields Decline Before Fed Meeting”

Posted by Tom Duncan
December 10, 2010
in Blog

“The dollar fell against the euro, paring a weekly gain, on speculation Federal Reserve policy makers on Dec. 14 will discuss a plan to extend Treasury purchases to support growth. The dollar dropped as benchmark Treasury yields declined for a second day, damping the allure of U.S. assets. Fed officials announced last month a $600 […]

Read More

“The Dance of the Dollar” – Steve Hanke

Posted by Tom Duncan
November 30, 2010
in Blog

“The dance of the dollar counts — and it counts a lot. With few exceptions, when the dollar weakens against the euro, commodity prices soar, and when the dollar soars against the euro, commodity prices plunge. Every commodity trader knows the importance of the dance of the dollar. Indeed, commodity traders know that, when the […]

Read More

“Sovereign Debt Concerns Weigh on Euro”

Posted by Tom Duncan
November 9, 2010
in Blog

“The euro came under pressure as worries over the finances of countries on the edges of the eurozone continued to undermine the single currency. While the cost of insuring against a default in Portuguese, Greek and Spanish government debt has risen sharply, Ireland has become the main focus of investors’ concerns. The cost of protecting […]

Read More

Currency Chaos: Where Do We Go From Here? – Judy Shelton

Posted by Judy Shelton
October 16, 2010
in Blog

‘The most important initiative you could take to improve the world economy would be to stabilize the dollar-euro rate.’Global monetary relations are in disarray. Exchange rates fluctuate wildly among the world’s major trade partners, spawning talk of protectionism and a currency war. Gold is soaring as the dollar slides, and economists debate whether the biggest […]

Read More

“Dollar Reaches 15-Year Low Versus Yen”

Posted by Tom Duncan
October 7, 2010
in Blog

“The dollar dropped to a 15-year low against the yen and the weakest in more than eight months against the euro amid growing expectations the Federal Reserve will expand credit easing to sustain the U.S. recovery.” Read more.  “Dollar Reaches 15-Year Low Versus Yen on Fed; Euro Strengthens”  Keith Jenkins and Yasuhiko Seki  Businessweek, October […]

Read More

Euro Will Unravel, and Soon — AEI

September 17, 2010
in Blog

By Desmond Lachman AEI Online Tuesday, September 14, 2010 “The outbreak of a sovereign-debt crisis in the eurozone’s peripheral economies has been among the more important developments in the global economy in 2010. Sadly, this crisis will likely intensify in the months ahead as markets increasingly focus on the intractable solvency and competitiveness issues confronting […]

Read More

“An Old Battlefront Returns in War on Euro”

Posted by Tom Duncan
July 8, 2010
in Blog

“In 1998, four renegade German professors tried to stop the introduction of the euro with a legal challenge in Germany’s highest court. Now, 12 years later, they are fighting against a German bailout for Greece — and this time around, people are listening to them. Wilhelm Hankel is sitting on the stage at a meeting […]

Read More

Greek Government Junk Bonds

June 18, 2010
in Blog

The Greek crisis rolls on.  This week yields on Greek government bonds rose by almost 3/4 of a percentage point to 9.06 percent as Moody’s–a rating agency–downgraded its debt to junk bond status citing “substantial” risks in connection with the three-year Greek  program for economic reform. Furthermore, being downgraded to junk bond status also means […]

Read More

A Spanish Banking Crisis in the Making

June 17, 2010
in Blog

Spain was hit hard by the financial crisis. Like the U.S. and the UK, Spain experienced high capital inflows and rapidly rising housing prices in the years leading up to the crisis. And like the U.S. and the UK it is now stuck with a struggling banking sector and bloated public finances. Spanish banks have […]

Read More