Posts filed under “Currency”

2010 Reminder: QE = Currency Debasement and Inflation

One of my biggest complaints about the media is the lack of accountability. People say things on TV in print an on radio, and then . . .  Poof!  No consequences. They influence public perception of issues, affect policy debates, drive legislation.

This is a perfect example of a stern warning of currency debasement and inflation due to QE. Let me point out this was made 3 years ago today — hence, it has been terribly wrong.

I won’t give you advice — but I keep track of who is consistently wrong, whose histrionic forecasts are both silly and wrong. Their future comments are valued accordingly.

 

e21 Team | 11/15/2010

To: Chairman Ben Bernanke
Federal Reserve
Washington, DC

Dear Mr. Chairman:

We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.

We subscribe to your statement in The Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.

Respectfully,

Cliff Asness
AQR Capital

Michael J. Boskin
Hoover Institution, Stanford University
Former Chairman, President’s Council of Economic Advisors

Richard X. Bove
Rochdale Securities

Charles W. Calomiris
Columbia University Graduate School of Business

Jim Chanos
Kynikos Associates

John F. Cogan
Hoover Institution, Stanford University
Former Associate Director, U.S. Office of Management and Budget

Niall Ferguson
Harvard University
Author,
The Ascent of Money: A Financial History of the World

Nicole Gelinas
Manhattan Institute & e21
Author,
After the Fall: Saving Capitalism from Wall Street—and Washington

James Grant
Grant’s Interest Rate Observer

Kevin A. Hassett
American Enterprise Institute
Former Senior Economist, Board of Governors of the Federal Reserve

Roger Hertog
Hertog Foundation

Gregory Hess
Claremont McKenna College

Douglas Holtz-Eakin
Former Director, Congressional Budget Office

Seth Klarman
Baupost Group

William Kristol
Editor, The Weekly Standard

David Malpass
GrowPac, Encima Global
Former Deputy Assistant Treasury Secretary

Ronald I. McKinnon
Stanford University

Joshua Rosner
Graham Fisher & Co., Inc.

Dan Senor
Council on Foreign Relations
Co-Author,
Start-Up Nation: The Story of Israel’s Economic Miracle

Amity Shlaes
Council on Foreign Relations
Author,
The Forgotten Man: A New History of the Great Depression

Paul E. Singer
Elliott Management Corporation

John B. Taylor
Hoover Institution, Stanford University
Former Undersecretary of Treasury for International Affairs

Peter J. Wallison
American Enterprise Institute
Former Treasury and White House Counsel

Geoffrey Wood
Cass Business School at City University London

(Institutional Affiliations are for Information Only)

See the letter as printed in the Wall Street Journal (PDF)

Category: Currency, Inflation, Really, really bad calls

The Optimal Currency Area in a Liquidity Trap

Category: Currency, Think Tank

Past, Present, and Future Money (Topologies, Powers, Trends)

click for complete infographic
topology of money
Source: Climateer Investing

 

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Category: Currency, Digital Media

China Invented Every Form of Money

9 Mind-Blowing Facts About Money China: Invented every single major form of currency: metal coins, paper money, and fiat currency not backed by precious metals Seized gold six centuries before Franklin Roosevelt, in order to prop up its fiat currency and prevent runaway inflation Debt Forgiveness Is The Basis for Modern Civilization Religions were founded…Read More

Category: Currency, Think Tank

Currency Markets Are Rigged

U.S. Justice Department Opens Criminal Probe Into Currency Market Manipulation Currency markets are massively rigged. Bloomberg reports today: The U.S. Justice Department has opened a criminal investigation of possible manipulation of the $5.3 trillion-a-day foreign exchange market, a person familiar with the matter said. The Federal Bureau of Investigation, which is also looking into alleged…Read More

Category: Currency, Legal, Think Tank

Crisis Chronicles: The “Not So Great” Re-Coinage of 1696

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Category: Currency, Think Tank

How to Bypass the Debt Limit

click for video
Bypass the Debt Limit
Source: Yahoo Finance

Category: Currency, Politics, Video

Capital Flight inside the Euro Area: Cooling Off a Fire Sale

Capital Flight inside the Euro Area: Cooling Off a Fire Sale Matthew Higgins and Thomas Klitgaard Liberty Street Economics, October 02, 2013     Countries in the euro area periphery such as Greece, Italy, Portugal, and Spain saw large-scale capital flight in 2011 and the first half of 2012. While events unfolded much like a…Read More

Category: Currency, Federal Reserve, Think Tank

Category: Currency, Think Tank

Is Gold Overdue for a Bounce?

Back in my days as a trader, I would peruse the lists of 52 week lows looking for reversal candidates. The key was finding an intelligent entry that had a very tight stop, so it presented a good risk reward. I am happy to risk one dollar to make three. Slowly build the position over…Read More

Category: Currency, Gold & Precious Metals, Technical Analysis, Trading