In early 2002, gold was around $300. The primary goal was to preserve wealth. The Nasdaq had already crashed by 67%, but, before bottoming out, it lost an additional 50%. The total loss was 80%, with many companies going bankrupt. In 2006 the Great Financial Crisis began In 2008, the financial system found itself minutes …
Tag: inflation
FED – ECB: Inflationary landmine with interest rate cuts – Trump victory in the US is the key scenario
The Bureau of Labor Statistics (BLS) argued that a pick-up in rent inflation—the index rose unexpectedly sharply in January’s CPI—was due to a shift in the data series that could either mean that the change was a structural shift in values or indeed an error which could be fixed at a later stage. Conclusion; No …
How do central banks embellish the image of the economy for the benefit of politicians?
Reports on both sides of the Atlantic of ending the current cycle of monetary easing as a central policy option were probably a smoke screen to cover up the poor state of the financial system. The analyzes that are circulating refer to the prospect that the Fed and the ECB return from the spring of …
The Painful lessons of a three-decade Stock Market Disaster
Japan’s Nikkei 225 is on the verge of surpassing its all-time highs of 1989, ending a 34-year drought for investors in the Land of the Rising Sun. That in itself is cause for celebration on the one hand but also a deeply flawed way of understanding how markets work – both in Japan and everywhere …
The cost of resurgent inflation is high
Societies around the world as well as the economic staffs of governments must be prepared for the possibility of revivals on the inflation front. Inflation, after reaching its highest level in decades in mid-2022, in the United States and the euro zone, fell sharply in the second half of last year. But in December, the …
Interest rate cuts will send Corporate debt into “junk” bonds
The announced interest rate cuts by the Federal Reserve will lead to lower yields on junk bonds. In other words, for a company with a very low credit rating, it will lead its debt to the category of “junk” bonds. The question is whether investors will be willing to take on the greater risk of …
Why will Money remain Expensive for Decades?
What is the most important price in the world economy? That of an oil barrel? A microchip? Or maybe a Big Mac? More important than any other is the price of money. For more than three decades, it was falling. Now it’s going up. Forces that were driving the price of money lower have reversed …
Light Painkiller the interest rate cut, loop the over-indebtedness
While the Federal Reserve and European Central Bank’s message on rate cuts appears clear as they reiterate their commitment to reducing inflation, the market expects between five and six rate cuts, between 125 and 150 basis points , the next twelve months. This shows us the tendency of investors to overlook bubbles. We live in …
The Challenges that the US Economy will face in 2024
US economic data show fiscal derailment as debt servicing costs rise, which will cast doubt on US geopolitical commitments to Ukraine and Israel, but also set the stage for tax hikes and deflation pressure on stock prices. This highlights that in 2024 the focus will not be on the question of rising interest rates – …
How are Bubbles created in the Economy? – why were the Economies over-indebted? What is the correct solution?
How and why are bubbles created in the financial system? Is it a random error in the path or a structural element of the circumvention of the rules of the functioning of the market? The capitalist economic system has an inherent tendency to develop instability that results in a severe economic crisis. The main mechanism …