Tag Archives: central banks

Global Economy and the Financial System on the Cliff’s Edge?

11 Mar

The illusion of economic stability convinced most people that the great economic crisis of 2008 was exceeded. The truth is that it’s just beginning, and the next wave of crisis is very close. Europe is experiencing economic depression and is only a matter of time before the U.S. will follow.

Unemployment rate at high alert

20120731_EUYouthUnemployment_0Published last Friday, this index shows a new historic high in the euro area unemployment rate: 11.9%. In Italy it rose to peak last 21 years, while in Greece reached 27%. More worrying is the unemployment rate among young people under 25 years: in Greece and Spain is close to 60% and in Italy and Portugal is 40%.

Jobs crisis is a direct consequence of the global crisis of 2008 and may generate a political crisis. In general for each unemployed person three people have to suffer. For the euro area the real test is not the debt crisis, but how to avoid the consequences of high unemployment.
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Monetary Stimulus Could Lift The Gold Price?

7 Feb
Gold Price
·         Sept. 21, 2011: Federal Reserve launches “Operation Twist.” The central bank swaps $400 billion of short-term bonds for the same dollar amount in longer-dated securities. Deadline for program is slated for June 2012.
 
·         Oct. 2011: Bank of England initiates new round of quantitative easing, creating an additional 85 billion pounds in stimulus.
 
·         Nov. 2011: The Federal Reserve pledges to “leave the door open for further action” and to keep interest rates at record lows “at least through mid-2013.”
 
·         Jan. 2012: Federal Reserve pledges to “keep interest rates near zero until at least late 2014.”
 
·         Feb. 2012: Bank of England adds an additional 50 billion pounds to stimulus program
 
·         June 2012: Federal Reserve extends “Operation Twist” to the end of the year, swapping an additional $267 billion of shorter-term securities for 6-to-30-year Treasury’s.
 
·         July 2012: Bank of England adds an additional 50 billion pounds to stimulus program, bringing the total to 375 billion pounds.
 
·         September 2012: Federal Reserve pulls the trigger on a third round of quantitative easing, QE 3. The new, $40 billion per month bond purchasing program of mortgage-backed securities is open-ended, with no time limit.
Source: elliottwave.com

Are We In A Currency War?

4 Jan

In Japan, the new prime minister, Shinzo Abe, was put into office on a platform that was primarily based upon forcing the Bank of Japan to ramp up its stimulus efforts, indeed to run what amounts to unlimited easing until inflation hits a certain point (2%, in this case).What will happen when Japan kicks in with its own nuclear plans to drive down the yen, and Asia follows suit. Continue reading

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