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Monetary Policy – The N-Word
In this excerpt from the December 2012 “Letter to Investors” we look at what looms when the Federal Reserve will embrace nominal-GDP targeting, possibly as early as 2013: Monetary Policy – The N-Word
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Sales of American Eagle gold coins surge at the US Mint
We track gold and silver Eagle sales on a daily basis at the US Mint The recent surge in gold Eagle sales in unprecedented (our daily records covering 2012) What is even more puzzling: “uncirculated” gold Eagles are sold out at the Mint (but, of course, available at many coin dealers for around $1,800). Nevertheless,…
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Analyze this: The Fed is not printing enough money!
Before you trash me in the comments, hear me out. It started off with Ray Dalio’s “beautiful deleveraging”, which inspired this post. Since the financial crisis, the Fed has increased its balance sheet from $900 billion to $2.9 trillion (red line in below chart). The difference is $2 trillion (or 13% of GDP). When the…
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David versus Goliath – the SNB against everybody else
A picture says more than a hundred words, so I wanted to present in graphical terms what happened at the Swiss National Bank over the last few quarters. Unfortunately, the SNB does not provide foreign currency positions including derivatives on an absolute basis, but here are the unhedged figures: The SNB increased FX positions…
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Mental contortions of a printing machine operator
“We never pre-commit” is the standard answer the ECB (European Central Bank) has for anyone asking about future interest rates (journalists regularly waste one of their two permitted questions at ECB press conferences). Why should central bankers not indicate future interest rates decisions? Because market participants will price that information accordingly, so the announcement would…
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Sales of gold and silver coins soaring at the US Mint?
An article by Bloomberg “Gold Traders Most Bullish After Bear Market Averted” grabbed my attention; not because of the headline, but what was buried in the text: “The US Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, its website showed.”…
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Save the Swiss Gold
According to an article in Swiss newspaper NZZ (Neue Zuercher Zeitung) the SVP party (Swiss People’s Party) launched a referendum to “protect” the 1,000 tonnes of gold owned by the Swiss National Bank (SNB). Their aim is to: make it unconstitutional to sell gold force the SNB to hold 20% of its assets in gold…
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Why China really needs to step up its gold purchases
Central banks own most of the world’s gold (30,562 tonnes compared to 2,158 tonnes in ETF owned by private investors). Why? Our entire monetary system is based on fiat currencies (the paper is not worth anything – the value stems from the trust someone else will accept this paper for the value printed on it).…
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What a week
Looking at asset class performance during the week August 1-5, 2011: Horrible week for the Dax index, US REITs (Real Estate Investment Trusts) and Emerging Markets. I had wondered why the Dax managed to perform so well despite Euro zone troubles. It is a pretty cyclical index, and usually outperforms the US indices – in…
Category: Gold
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