Category Archives: Economy
Commodities “flash crash” just what the Fed ordered
A post in March suggested that commodity markets would cool as emerging-world growth slowed in response to monetary tightening. Industrial commodity prices remain closely correlated with E7 industrial output – see first chart. The timing of the correction, however, seems … Read More
Yesterday’s events and market volatility imply that a new round of US Quantitative Easing is not only possible but probable
Yesterdays movements in financial markets were certainly volatile and in some cases quite severe. For example the price of a barrel of Brent crude oil fell by more than US $10 or 8%. Indeed after an attempted rally in Far … Read More
UK economic gloom wildly overdone
The consensus narrative is that a rise in UK interest rates has been pushed back by “disappointing” economic news. The consensus rate view may be right as the MPC diverges further from its remit but the interpretation of recent economic … Read More
Central Banks as a group sold gold at the bottom and are now buying it at a price five times higher!
After we saw more and more details released on the bailout package for Portugal yesterday today the emphasis moves to two of the world’s central banks as they have interest-rate setting meetings. We will hear the result of the Bank … Read More
Why the bailout package as announced by Portugal’s Prime Minister will fail
Yesterday evening the Portuguese Prime Minister Jose Socrates gave a speech on Portuguese television to announce that he had achieved a bail out deal with the European Union/European Central Bank/International Monetary Fund troika. Mr. Socrates further said that this was a … Read More
The price of silver tells us much about these times and Governor King informs us it will be quite some time before he votes to raise interest-rates
After discussing the development of economic events for the United States at the end of last week we got an event over the weekend that fell into many categories. The mainstream media quickly settled on the idea that the death … Read More
Are the British more rational? Deficits in Britain and America.
Both countries face “broadly similar deficit challenges,” as The New York Times put it in a recent story. “Britain aims to close a fiscal gap of about 10 percent of gross domestic product. The comparable figure in the United States … Read More
Economic figures imply a rise in the “misery index” of inflation and unemployment for the United States
Living and working as I do in Central London it has been quite plain for the last few days that something large is happening here! However I do not intend to spend much time on the Royal Wedding other than … Read More
Federal Reserve Chairman Ben Bernanke speaks and the US dollar falls and gold rises yet again
Wednesday the 27th of April 2011 saw something of an innovation in US monetary policy. For the first time after a policy meeting had ended the Chairman of the Federal Open Market Committee gave a Press Conference. As this had … Read More
UK GDP detail shows economic recovery remains on track
The 0.5% rise in GDP in the first quarter is stronger than it looks because of a large drag from the construction sector that should reverse in the current quarter. Outside construction, the economy has continued to recover over the … Read More
