What Can Happen with Gold If the Dollar Collapses?
|
|
- Alexia Lawrence
- 5 years ago
- Views:
Transcription
1 What Can Happen with Gold If the Dollar Collapses? December 4, 2012, 11:43 AM Today s essay is the first one in our two-part commentary on U.S. debt and the dollar collapse. On numerous occasions we have gone back in our commentaries to the year 1971 and U.S. President Richard Nixon s decision to cut off the ties between the greenback and gold. Today, we revisit the topic once more and check what kind of implications it has for the price of the yellow metal. Prior to 1971 the most prominent world currencies had been regulated by the Bretton Woods system. Under this agreement, the U.S. agreed to link the dollar to gold. This meant that any amount of dollars handed over by a foreign government or central bank would be exchanged for gold at $35 per ounce. Such an arrangement had a particularly important consequence for money creation. Namely, the U.S. government shouldn't issue more paper money than it had physical gold to back this money up. In practice, it was rather improbable that all the dollars would have to be exchanged for gold at once, so the U.S. government in fact issued more money than it could have paid for with gold, but the main restriction was in place: debt numbers couldn't be inflated to unsustainable levels. In 1944 when the Bretton Woods system was introduced, the relation of U.S. debt to the official Treasury gold reserves stood at $ per ounce of gold. This meant that there was $ of borrowed money for every ounce of gold the U.S. had. With the price of gold at $35, a quick calculation shows that the U.S. gold reserves could have paid for about 10.9% of its debt. At first, it might seem that there was a lot of debt compared to gold assets. On the other hand, however, such a ratio was similar to reserves required from commercial banks by the regulator. In a way, the U.S. operated like a bank (with a lot of differences, of course). By 1970, partly due to the Vietnam War, the U.S. began running consistent deficits. The government printed more dollars to meet its obligations and the amount of debt per ounce of gold surged to $1, The coverage of debt in gold went down to 3.1%. The ability of the U.S. to keep up to the promise to exchange dollars for gold was put into question. Nixon, fearing a situation in which foreign central banks would make a collective bank run on Fort Knox, decided to cease to exchange the dollar for gold and directly break the Bretton Woods agreement. From that moment on, the dollar has been a fiat currency, that is a currency not backed by a physical asset, just by a promise of the government to accept payments (taxes) in it. But, as we've just seen, promises can be broken and right now the ability of the U.S. to pay its debts off in the future is also being put into question. To see why, take a look at the chart below. 1/5
2 Since 1970 U.S. debt has gone up from $370.9 bln to $16,159.5 bln, which is a more than 41-fold increase (!). Since 2000 gold has appreciated along with the ever sharper increase in debt. A similar chart was discussed in our commentary on gold as insurance. Our next chart shows the rates of change (ROC) of both the U.S. debt and the average annual price of gold between 1920 and its.com/research/articles/what-can-happen-gold-if -dollar-collapses/ 2/5
3 The annual ROC of U.S. debt was in a general downtrend in the period which was accompanied by poor performance of gold. Since 2000, the ROC of U.S. debt has been increasing again, which means that debt has been growing increasingly rapidly. This coincided with gold s extraordinary performance during the last 10 years. The U.S. Federal Reserve, led by Ben Bernanke, initiated three substantial rounds of what it calls quantitative easing (QE). In short, QE is a process in which the Fed buys government bonds and other assets from secondary markets with newly created dollars. Its (official) purpose is not to finance government deficits but rather to bring the U.S. economy back on the growth trajectory. Nonetheless, the effects of QE can be compared to those of printing enormous amounts of money. Just to give you an idea of how much debt the consecutive rounds of QE have so far created (approximate amounts): QE1 (Nov 2008 Mar 2010): $1.65 trillion QE2 (Nov 2010 Jun 2011): $600 billion QE3 (Sep 2012?): $40 billion per month. As a matter of fact, Fed s quest to provide the economy with more incentives has not stopped. The direct effect of QE on debt is reflected on the chart below. In the period between January 2012 and November 2012 U.S. debt grew by 7.2%. There s more to it: QE3 is an open-ended operation. This means that there is no limit on the amount of money the Fed can create and inflate the debt with within QE3. The purchases in the amount of $40 billion per month will continue as long as the Fed deems necessary. The points mentioned above add up to a picture which is not at all rosy for the U.S. But it s not apocalyptic either. Particularly for precious metals investors. Let us explain why. its.com/research/articles/what-can-happen-gold-if -dollar-collapses/ 3/5
4 It belongs to common sense that you can t borrow money forever. Economics has a lot of intricacies and can be quite complicated at times but the basic rules are very simple. You borrow, you have to pay back. So if the government borrows too much and can t pay it back, it will have to go bankrupt. The more debt it has, the worse its reputation is. People are less willing to put their money into treasury bills of a government with excessive debt. If the economy is shaky and the government is printing money, it damages its reputation but also makes the currency worth less and less. Hyperinflation is not a default nor bankruptcy in technical terms, but it is in practical terms. For the USD bond holders it will make little difference if they are not paid or paid something that is worthless. In such an environment investors, motivated psychologically, turn to gold and silver. As Warren Buffet correctly pointed out: [Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head. But there s one side of precious metals that is not covered by that quote. Gold and silver may be just lumps of metal but what makes them extremely interesting is the psychological association people have with them. Gold and silver have been used as currencies throughout the centuries. And people, for whatever reason, perceive them as valuable, particularly in times of economic turbulence. This alone stipulates that gold and silver prices may rise along with the worsening of the economic situation. And in case of the unlikely collapse of paper currencies, gold and silver could quite naturally come in as the base of a new monetary system. The possibility we would like to highlight now is the default of the U.S. on its obligations and the demise of the dollar. In this scenario, a new currency system based on the gold standard is introduced. The financial collapse is usually perceived as Armageddon but doesn't necessarily have to be one. Just imagine, even in case of the U.S. government defaulting on its obligations, the assets that the country has would remain in place. The buildings, cars and infrastructure would still be there, they wouldn't melt down in the possible financial crisis. A lot of property would change hands and there definitely would be turmoil, but it wouldn't need to amount to a civil war. Take a look at Latvia, a country where the GDP between 2007 and 2009 shrank by 24%, where unemployment shot up to 30% in Where the government laid off 30% of the civil servants and cut payrolls by 40%. Latvia didn't disintegrate. So what implications for gold would a collapse of the U.S. dollar have? The next chart will aid us to analyze such an occurrence. 4/5
5 This chart presents the already mentioned relation of U.S. debt to Treasury gold reserves the amount of debt per one ounce of gold up to The red line represents U.S. Treasury gold reserves in metric tonnes, while the yellow line denotes the amount of U.S. debt in dollars per ounce of gold. The debt per ounce has visibly increased since 1971, accelerating around 2000 and even more around In 2012, there were $61, of debt per one ounce of gold owned by the U.S. government. Now, if a new gold standard is introduced and the agreement works like the Bretton Woods system, the dollar (or whatever other currency) would be tied to gold. As noted earlier in this essay, at the introduction of the Bretton Woods agreement in 1944 the debt coverage for the U.S. stood at 10.9% (or $ of debt per one troy ounce of gold). If the new system were based on similar assumptions with debt coverage at 10%, this would imply a fixed price of $6, per ounce of gold ($6, per ounce of gold divided by $61, of debt per one ounce of gold gives us coverage of 10%). But is the dollar collapse all that likely? Or let us restate the question: if the dollar doesn't collapse, does it still make sense to be invested in gold and silver? Bear with us until next week when we publish the second part of this commentary. Until then you can gain some more insight into why holding on to precious metals might keep you on the safe side by reading our essays on gold and silver as insurance and on gold and silver portfolio structure. Thank you for reading. Przemyslaw Radomski, CFA 5/5
All that glitters. Gold. August 2018
All that glitters August 2018 By Richard J. Wylie, CFA Vice-President, Investment Strategy, Assante Wealth Management Investors, even well-seasoned market veterans, can be forgiven for the unease that
More informationThere are two major reasons we re seeing a resurgence of the greenback, and it may bode well for stocks and the economy.
2014 Third Quarter Updates: King Dollar Reclaims the Throne & The Market - It s The Wall of Worry; Another Spooky October The optimist proclaims that we live in the best of all possible worlds: and the
More informationThe Great Bull Market in Bonds Is Over What Comes Next? Introduction
The Great Bull Market in Bonds Is Over What Comes Next? Introduction November 2010 BY: JOHN L. SICA President, Meridian Capital Partners, Inc. In 2008, for the first time in 50 years, the 3.4% yield on
More informationThe yellow highlighted areas are bear markets with NO recession.
Part 3, Final Report: Major Market Reversal Model This is the third and final report on my major market reversal model. This portion of the model focuses on the domestic and international economy. I ve
More informationMULTIGAMES ICO. Online Gaming Casino BlockChain Based. WHITE PAPER
MULTIGAMES ICO Online Gaming Casino BlockChain Based www.multigames.mobi WHITE PAPER Legal Investment Disclaimer This material does not constitute any representation as to the suitability or appropriateness
More informationINTERNATIONAL: Emerging-market currencies set to gain
1 of 5 11/6/2012 8:07 PM Back to previous page document 1 of 1 INTERNATIONAL: Emerging-market currencies set to gain INTERNATIONAL: Emerging-market currencies set to gain2012,, Oxford Analytica Ltd, Oxford,
More informationWhy Bullion is Outperforming Mining Stocks
BMG ARTICLES Why Bullion is Outperforming Mining Stocks 1 I f the investment choice is between mining stocks and physical bullion, it is essential to remember that these are different asset classes with
More informationFinancial Markets Perspective
Financial Markets Perspective 4101 Main Street, Suite C Hilton Head Island, SC 29926 843.342.3044 www.victoriacapitalus.com FUNDAMENTALS MATTER January 2014 A BRIEF SUMMARY OF THE CURRENT ECONOMY Last
More informationLBMA Precious Metals Conference Montreal, September Silver Investment. Philip Newman Research Director, Thomson Reuters GFMS
Silver Investment Philip Newman Research Director, Thomson Reuters GFMS As Mike has mentioned, I am going to talk about silver investment, asking the question, Is silver investment the new rich man s strategy?
More informationECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY Annenberg Foundation & Educational Film Center
ECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY ECONOMICS U$A: 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY (MUSIC PLAYS) ANNOUNCER: FUNDING FOR THIS PROGRAM WAS PROVIDED BY ANNENBERG
More informationMonetary Policy Tools in an Environment of Low Interest Rates James Bullard
Monetary Policy Tools in an Environment of Low Interest Rates James Bullard President and CEO CFA Society of St. Louis February 5, 2009 The Economy Today A sharp recession. Declining output during 2008
More informationCOMMENTARY NUMBER 372 April Trade Deficit, Bernanke Shift. June 9, Earthquake-Diminished Imports of Auto Parts Narrowed April Deficit
COMMENTARY NUMBER 372 April Trade Deficit, Bernanke Shift June 9, 2011 Earthquake-Diminished Imports of Auto Parts Narrowed April Deficit Trade Revisions Showed Somewhat Deeper Historical Shortfalls Mr.
More informationMonthly Market Risk Update: March 2019
Monthly Market Risk Update: March 2019 March 14, 2019 by Brad McMillan of Commonwealth Financial Network Market risks come in three flavors: recession risk, economic shock risk, and risks within the market
More informationThe Dollar And Prospective Treasury Returns
The Dollar And Prospective Treasury Returns The philosopher George Santayana once said something profound, but who can remember it anymore with all the blogging, texting and tweeting? The author wrote
More informationPOLI 12D: International Relations Sections 1, 6
POLI 12D: International Relations Sections 1, 6 Spring 2017 TA: Clara Suong Chapter 9 International Monetary Relations 9 INTERNATIONAL MONETARY RELATIONS Core of the Analysis National Monetary Order Fixed
More informationMarket Perspectives. Bretton Woods is a resort in the mountains of New Hampshire that was made famous by a
Market Perspectives BY SCOTT MINERD CHIEF INVESTMENT OFFICER October 2012 Return to Bretton Woods Bretton Woods is a resort in the mountains of New Hampshire that was made famous by a series of meetings
More informationInvestment Fundamentals Forum 21 January 2013
Investment Fundamentals Forum 21 January 2013 Economic Variables Still Matter to Markets? Suan Teck Kin, CFA 21 Jan 2013 Investment Fundamentals Forum Copyright CFA Singapore and SGX. All rights reserved.
More informationThe Economy: Growth Has Been Weak But Long-Lasting
The Economy: Growth Has Been Weak But Long-Lasting October 19, 2016 by Gary Halbert of Halbert Wealth Management 1. Why This Economic Recovery Has Been So Disappointing 2. The Fourth Longest Economic Expansion
More informationUnderstanding the Key Support Levels for Gold
Understanding the Key Support Levels for Gold Gold bulls and inquiring minds are perplexed by last week's mayhem in the precious metals markets. In addition to gold and silver, copper prices also went
More informationFEDERAL RESERVE POLICY AND BRETTON WOODS
FEDERAL RESERVE POLICY AND BRETTON WOODS Michael D. Bordo Owen F. Humpage Federal Reserve Bank of Dallas 18 September 214 Introduction The Bretton Woods system was designed to correct the perceived problems
More informationChapter 10 The Money Supply and the Federal Reserve System
Chapter 10 The Money Supply and the Federal Reserve System 10.1 An Overview of Money 1) Money is A) the same as income. B) anything that is generally accepted as a medium of exchange. C) the value of all
More informationCOMMENTARY NUMBER 405 October Trade Balance. December 9, October Trade Deficit Suggests Positive Contribution to Fourth-Quarter GDP
COMMENTARY NUMBER 405 October Trade Balance December 9, 2011 October Trade Deficit Suggests Positive Contribution to Fourth-Quarter GDP Nonmonetary Gold Trade Patterns Are Not Easily Tied to Gold Price
More informationThe Fighting Irish of the Investment World
The Fighting Irish of the Investment World Gold s On A Tear Gold has enjoyed its best start to a year in three decades, climbing more than 20 percent, and its dramatic climb higher is even more evident
More informationADVANCE SPECIAL COMMENTARY No. 858 Economic and Financial Review and Preview December 30, 2016
ADVANCE SPECIAL COMMENTARY No. 858 Economic and Financial Review and Preview December 30, 2016 Consumer Expectations Soar Along with Anticipated Changes from the Incoming Administration Yet, the Near-Term
More informationERSTE GROUP. ERSTE Group, International Equities Research. 2nd Precious Metals Conference, Zagreb
ERSTE GROUP Ronald-Peter Stöferle, CMT ERSTE Group, International Equities Research 2nd Precious Metals Conference, Zagreb May 9 2012 Disclaimer Cautionary note regarding forward-looking statements THE
More informationOperation Twist: 1961 vs. 2011
Amol Agrawal amol@stcipd.com +91-22-66202234 Operation Twist: 1961 vs. 2011 Ever since the crisis, Federal Reserve (and other central banks following Fed) has introduced new innovative measures to stimulate
More informationTrump to Reset The Dollar to Gold at $10,000/oz. Really?
Trump to Reset The Dollar to Gold at $10,000/oz. Really? Paul Farrugia Posted Dec 17, 2017 Does anybody have any idea really as to what gold will do? There have been recent predictions that President Trump
More informationTo go directly to the Mishkin Report: Crunch Time For Financial Markets click here:
The Mishkin Report: To go directly to the Mishkin Report: Crunch Time For Financial Markets click here: http://research.chicagobooth.edu/igm/usmpf/download2.aspx The report uses lots of math and economic
More informationA Corrective Decline Approaching within. Gold s Long Term Rising Trend
A Corrective Decline Approaching within Gold s Long Term Rising Trend By Robert McHugh, Ph.D. February 22nd, 2019 On September 4 th, 2018, we published an article forecasting that Gold was about to start
More informationConsumer Price Index
The Return of Inflation? Yet another Fed meeting has now come and gone without a rate hike. As much as market participants continue to obsess over when the Fed will normalize interest rates, the Fed Funds
More informationAs Good as Gold. April 24, Be fearful when others are greedy and greedy when others are fearful. Warren Buffett
As Good as Gold April 24, 2013 Be fearful when others are greedy and greedy when others are fearful. Warren Buffett Whenever one of our investments experiences a significant price correction, we regard
More informationCOMMENTARY NUMBER 462 June Trade Balance, Consumer Credit. August 9, Bernanke Bemoans GDP Not Reflecting Common Experience
COMMENTARY NUMBER 462 June Trade Balance, Consumer Credit August 9, 2012 Bernanke Bemoans GDP Not Reflecting Common Experience Trade Data Place Upside Pressure on Second-Quarter GDP Revision Consumer Credit
More informationBy JW Warr
By JW Warr 1 WWW@AmericanNoteWarehouse.com JW@JWarr.com 512-308-3869 Have you ever found out something you already knew? For instance; what color is a YIELD sign? Most people will answer yellow. Well,
More informationBanking Chapter 3 Study Guide
Name: Class: Date: Banking Chapter 3 Study Guide True/False Indicate whether the sentence or statement is true or false. 1. The flow of money has a direct effect on how the economy performs. 2. Liquidity
More informationThe next 15 years Is there a New Normal ahead? Delaware Investments Presentation. Richard C Marston Wharton School, University of Pennsylvania
The next 15 years Is there a New Normal ahead? Delaware Investments Presentation Richard C Marston Wharton School, University of Pennsylvania Outline 1. Is there a New Normal ahead for stocks? 2. Is the
More informationThe coming battles over monetary policy
Jeff Frieden January 2013 The coming battles over monetary policy As the world recovers from the Great Recession, get ready for some new fireworks, of a sort we haven t seen for a while over monetary policy.
More informationWHAT IS BANK CREDIT? FRACTIONAL BANKING
The Story of Money: Reflect with me for a moment upon the nature of money, wealth and prosperity. And the more time you take reflecting upon it, the more varied and abstract your thoughts concerning money,
More informationGlobal Real Assets Strategy Report: Focus on Gold
Global Investment Strategy Global Real Assets Strategy Report: Focus on Gold February 27, 17 John LaForge Head of Real Asset Strategy Analysis and outlook for the real assets market» Gold s rich history
More informationChapter 1-3. Topics in Financial Decisions. Financial System and the Economy. Financial system affects the economic performance It consists of
Chapter 1-3 Topics in Financial Decisions Financial system affects the economic performance It consists of Financial markets Financial institutions Money How does each of the above affect the economy?
More informationThe cabal is setting its own trap! A reset this weekend?
The cabal is setting its own trap! A reset this weekend? On April 11 gold rose to $1365 and silver to $16.85 as the possibility of a war in the Middle East took center stage. Libor rose for the 45th consecutive
More informationSlides for International Finance Macroeconomic Policy (KOM Chapter 19)
Macroeconomic Policy (KOM Chapter 19) American University 2010-09-17 Preview Macroeconomic Policy Goals of macroeconomic policies Monetary standards Gold standard International monetary system during 1918-1939
More informationPrecious Metals Monthly China in focus
Precious Metals Monthly China in focus Group Economics Macro Research Georgette Boele tel, +31 2 6297789 3 March 214 Gold investment demand outlook to remain negative and to overshadow an increase in jewellery
More informationCOMMENTARY NUMBER 400 Budget Deficit Reality, October CPI, Industrial Production. November 16, 2011
COMMENTARY NUMBER 400 Budget Deficit Reality, October CPI, Industrial Production November 16, 2011 GAAP-Based 2011 Federal Deficit Likely Within Five- to Seven-Trillion Dollar Range Effects of High Oil
More informationDolefin Investment Management and Technical Research for Institutional and Professional Investors. Economics 101
Economics 101 Helicopter Speech 10 years later Foreword: This autumn we commemorate the 10 th anniversary of the famous helicopter speech given by Ben Bernanke. We take this occasion to review this controversial
More informationTo gold cling all? Stefan Scheurer, Senior Analyst, Capital Market Analysis, Allianz Global Investors
This material is for reference only. The content is not allowed to be extracted or further distributed. Market Insights To gold cling all? Navigation Series 09/2011 Stefan Scheurer, Senior Analyst, Capital
More informationObjectives for Class 26: Fiscal Policy
1 Objectives for Class 26: Fiscal Policy At the end of Class 26, you will be able to answer the following: 1. How is the government purchases multiplier calculated? (Review) How is the taxation multiplier
More informationGundlach: Treasuries will Rally When QE2 Ends
Gundlach: Treasuries will Rally When QE2 Ends April 19, 2011 by Robert Huebscher The bonds that PIMCO s Bill Gross sold to take a 3% short position in the Treasury market may have found a buyer in Doubleline
More informationMacro Money and Banking Essentials WCC
Macro Money and Banking Essentials WCC Barter - a system of exchange in which people directly exchange one good for another without any intermediate step Barter relies on the double coincidence of wants
More informationThe Economy: A View from the Fed Economic Outlook Montgomery, AL January 16, 2013
The Economy: A View from the Fed 2013 Economic Outlook Montgomery, AL January 16, 2013 Sources: Federal Open Market Committee The View from the Fed: The December Summary of Economic Projections (GDP) 1.8
More informationSTRATEGY 13: COMMODITY CORRELATION (PART 2)
STRATEGY 13: COMMODITY CORRELATION (PART 2) The correlation coefficient is a number that describes the extent to which two instruments are correlated to each other. The number oscillates between 1 and
More informationFigure I Trends in current account balances of major emerging economies after the collapse of Lehman Brothers (Current account balance; $ 1 bill
Section 2 Effects of the tapering of the quantitative easing program in the United States The monetary easing policy implemented by the U.S. Federal Reserve Board (FRB) since 28 to respond the global economic
More informationCapital Expenditure Clouds Profitability
Contents Introduction Gold Wave Analysis XAU Analysis API Analysis Australian Theoretical Gold Price Update Closing Comments Disclaimer Associated Products Volume 2, Issue 29, 26 August 2009 Capital Expenditure
More informationAren t You Precious. Weekly Gold
Aren t You Precious Phrases like world s oldest immediately alert the reader to interesting material ahead. Such as the oldest word in continuous use in English is gold. No other commodity has exercised
More informationA News and Notes Exclusive
A News and Notes Exclusive An Excerpt on Monetary and Fiscal Policy from Chapter 7 of Economics for Dummies By Sean Masaki Flynn Fighting Recessions With Monetary and Fiscal Policy In This Chapter * Using
More informationVolatility/Vix Trading. Your Step-by- Step Guide to Stock Trading
Volatility/Vix Trading Your Step-by- Step Guide to Stock Trading and Options Trading with Volatility Table Of Contents Introduction Chapter 1 What Is Volatility? Chapter 2 The Volatility Index Chapter
More informationCOMMODITIES ESSENTIAL The resource for what matters
COMMODITIES ESSENTIAL The resource for what matters Futures Forecast, p2 Moving near-term Neutral on crude oil as the Commitment of Traders spec positioning suggests a turning point may be near. My intermediate-term
More information2012 US HIGH YIELD MARKET OUTLOOK
Q1: What are the impacts of the prolonged interest rate environment, fiscal budget tightening and possible QE3 to the US High Yield Market? So, it's really impossible to look at each of those variables
More informationMarkets Discount High Inflation
Markets Discount High Inflation What About Government Finances? July 2018 Kurt Winkelmann, Raghu Suryanayaranan, Ferenc Szalai Navega Strategies LLC. www.navegastrategies.com Navega Strategies LLC is not
More information1 What is a gold standard?
1 What is a gold standard? A monetary system where the government links its supply of paper money to a stock of gold reserves (visual) Under a GS, the government defines a dollar to be a specific weight
More information2013 SECOND QUARTER ACCOUNT MANAGEMENT REVIEW July 13, 2013
2013 SECOND QUARTER ACCOUNT MANAGEMENT REVIEW July 13, 2013 HIGHLIGHTS Markets fall worldwide on nervousness about higher US interest rates Housing continues to recover, but may be slowing due to higher
More informationAll That Glitters: A Primer on the Gold Standard. Key points in this Outlook:
All That Glitters: A Primer on the Gold Standard By John H. Makin The periodic debate around whether the United States should adopt a gold standard a monetary system tied to the value of gold has heated
More informationStrong 1 Strategy. Remember - for examples of current trades using this strategy see Jim s Chart Book as well as our Premium Alert Service Videos.
Strong 1 Strategy GOAL To find the closest-to-the-money option we can afford on the first day that a particular market s Trend Seeker Trend on US Charts Online s Trend Seeker feature changes to either
More informationFinancial Markets. 1. In what ways can financial markets and instruments be grouped?
Financial Markets L E A R N I N G O B J E C T I V E 1. In what ways can financial markets and instruments be grouped? Financial markets come in a variety of flavors to accommodate the wide array of financial
More informationThe following is an extract from the April 07 Issue of The Global Speculator sent to subscribers on the 4 th of May 2007.
TECHNICALLY SOUND The following is an extract from the April 07 Issue of The Global Speculator sent to subscribers on the 4 th of May 2007. The month of April 07 has seen further falls in the US dollar
More informationDoes the Riksbank have to make a profit?
SPEECH DATE: 23 January 2015 SPEAKER: First Deputy Governor Kerstin af Jochnick LOCATION: Swedish House of Finance (SHoF), Stockholm SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8
More informationInvestment Newsletter September 2012
Licensed by the California Department of Corporations as an Investment Advisor Government policies have always had a significant impact on investors and investments, but the level of intervention in the
More informationMSCI EAFE (Developed Markets) 5.40% 18.23% US Dollar (DXY) -2.66% -9.20% MSCI Emerging Markets 7.89% 25.42% Euro (FXE) 3.28% 11.
ROSELINE CAPITOL ADVISERS THIRD QUARTER 2017 MARKET PERSPECTIVE Asset Class/Index Q3 2017 YTD 2017 Asset Class/Index Q3 2017 YTD 2017 US Equities Fixed Income S&P 500 Index 4.48% 14.24% US T reasury Bonds
More information8/16/2018. Part 1. Introduction. Chapter 1. Why Study Financial Markets and Institutions?
Part 1 Introduction Chapter 1 Why Study Financial Markets and Institutions? 1 Chapter Preview The evening news features a segment about the bond market and interest rates. What does this mean for your
More informationInternational Money and Banking: 8. How Central Banks Set Interest Rates
International Money and Banking: 8. How Central Banks Set Interest Rates Karl Whelan School of Economics, UCD Spring 2018 Karl Whelan (UCD) Central Banks and Interest Rates Spring 2018 1 / 32 Monetary
More informationCOMMODITY WEEKLY REPORT
COMMODITY REPORT 2017 Monday-Friday Trade House 426 Alok Nagar, Kanadia Main Road Near Bangali Square Indore-452001 (M.P.) India Mobile :+91-9039261444 E-mail: info@tradenivesh.in Telephone :+91-731-698.3000
More informationWeekly Outlook. 2 nd June 2014 by Richard Perry, Market Analyst. Macro Outlook. Must watch out for: European Central Bank monetary policy
Forex and CFDs are high risk leveraged products that can result in losses greater than your initial deposit and you should therefore only speculate with money you can afford to lose. FX and CFD trading
More informationPost-Election Special Analysis November 27, 2016 by The GaveKal USA Team of GaveKal Capital
Post-Election Special Analysis November 27, 2016 by The GaveKal USA Team of GaveKal Capital Page 1, 2018 Advisor Perspectives, Inc. All rights reserved. Source: Center for Responsible Federal Budget Page
More informationThe Importance of Precious Metals During Economic Crisis Free Report
The Importance of Precious Metals During Economic Crisis Free Report This short report is intended to raise awareness to the increasing importance of precious metals during economic turmoil. We ll take
More informationWould a Gold Standard Brighten Economic Outcomes? January An informative and accessible economic essay with a classroom application.
the back story on front page economics Would a Gold Standard Brighten Economic Outcomes? January 2015 An informative and accessible economic essay with a classroom application. Includes the full version
More informationA Tactical Opportunity: Sell High, Buy Low
Outlook 2016 1 Real Gold vs. A Promise of Gold A Tactical Opportunity: Sell High, Buy Low By Nick Barisheff January 2016 T he market outlook for 2016 presents Many Canadians have profited by investing
More informationTHE NEW ECONOMY RECESSION: ECONOMIC SCORECARD 2001
THE NEW ECONOMY RECESSION: ECONOMIC SCORECARD 2001 By Dean Baker December 20, 2001 Now that it is officially acknowledged that a recession has begun, most economists are predicting that it will soon be
More informationECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #24 FEDERAL DEFICITS Annenberg Foundation & Educational Film Center
ECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #24 FEDERAL DEFICITS ECONOMICS U$A: 21 ST CENTURY EDITION PROGRAM #24 FEDERAL DEFICITS (MUSIC PLAYS) ANNOUNCER: FUNDING FOR THIS PROGRAM WAS PROVIDED BY ANNENBERG
More informationGold the other currency- The importance of gold in investment portfolio. C.A. Shubha Ganesh
Gold the other currency- The importance of gold in investment portfolio C.A. Shubha Ganesh "We have gold because we cannot trust governments." said President Herbert Hoover's statement to Franklin D. Roosevelt
More informationJapan s Economic Outlook No. 190 Update (Summary)
Japan's Economy 9 September 2016 (No. of pages: 20) Japanese report: 08 Sep 2016 Japan s Economic Outlook No. 190 Update (Summary) What will happen if there is a Recurrence of Financial Instability in
More informationOther similar crisis: Euro, Emerging Markets
Session 15. Understanding Macroeconomic Crises. Mexican Crisis 1994-95 Other similar crisis: Euro, Emerging Markets Global Scenarios 2017-2021 The Mexican Peso Crisis in 1994: Background An economy that
More informationForeign Exchange Currency Pair Analysis: USD/JPY
Figure 1.1: A Case Study of the Crash in USD/JPY in the First Half of October 2014 Figure 1.2: Monthly Chart of USD/JPY Figure 1.3: Weekly Chart of USD/JPY Figure 1.4: Daily Chart of USD/JPY Case Study
More informationGoldman: The Fed Needs To Print $4 Trillion
Page 1 of 5 Published on zero hedge (http://www.zerohedge.com) Home > Goldman: The Fed Needs To Print $4 Trillion In New Money By Tyler Durden Created 10/24/2010-11:58 With just over a week left to the
More informationPreparing Your Projections
Preparing Your Projections HELP GUIDE 2315 Whitney Ave. Suite 2B, Hamden, CT 06518 tel. (203)-776-6172 fax (203)-776-6837 www.ciclending.com CIC - 1006 PREPARING YOUR PROJECTIONS FOR A START-UP BUSINESS
More informationFederal Spending to Top a Record $4 Trillion in FY2017
Federal Spending to Top a Record $4 Trillion in FY2017 July 11, 2017 by Gary Halbert of Halbert Wealth Management 1. June Unemployment Report Was Better Than Expected 2. Federal Spending to Blow Through
More informationCOMMENTARY NUMBER 395 September CPI, PPI, Real Retail Sales, Housing Starts, Industrial Production. October 19, 2011
COMMENTARY NUMBER 395 September CPI, PPI, Real Retail Sales, Housing Starts, Industrial Production October 19, 2011 Consumer and Wholesale Inflation Jumped in September September s Annual Inflation: 3.9%
More informationHow has money changed over the centuries? What are the functions of money? Where does our money come from?
How has money changed over the centuries? What are the functions of money? Where does our money come from? Section Preview In this section, you will learn that money functions as a medium of exchange,
More informationPolicy Note 04/07. CFEPS Center for Full Employment and Price Stability AN INTERVIEW WITH THE CHAIRMAN
CFEPS Center for Full Employment and Price Stability Policy Note 04/07 AN INTERVIEW WITH THE CHAIRMAN TAXES, SPENDING, DEFICITS, INFLATION: THE WORKINGS OF FEDERAL FINANCE BY WARREN MOSLER APRIL 26, 2007
More informationcepr Briefing Paper Paying the Bills in Brazil: Does the IMF s Math Add Up? CENTER FOR ECONOMIC AND POLICY RESEARCH By Mark Weisbrot and Dean Baker 1
cepr CENTER FOR ECONOMIC AND POLICY RESEARCH Briefing Paper Paying the Bills in Brazil: Does the IMF s Math Add Up? By Mark Weisbrot and Dean Baker 1 September 25, 2002 CENTER FOR ECONOMIC AND POLICY RESEARCH
More informationTechnical analysis of selected chart patterns and the impact of macroeconomic indicators in the decision-making process on the foreign exchange market
Summary of the doctoral dissertation written under the guidance of prof. dr. hab. Włodzimierza Szkutnika Technical analysis of selected chart patterns and the impact of macroeconomic indicators in the
More informationMarch Trade Ideas: «Fairly Soon» Means May or June
March Trade Ideas: «Fairly Soon» Means May or June Author: Nick Korzhenevsky, senior analyst with AMarkets Company Summary: The Fed continues with its hawkish rhetoric but cautious actions. Three rate
More informationThe Hottest M&A Market Ever:
The Hottest M&A Market Ever: What You Should Do About It Keynote at the World Angel Investment Summit September 27, 2018 Toronto, Canada Basil Peters Early Exits 10 Years On Ten years ago when I wrote
More informationPolicy Note 2000/6 Drowning In Debt
Policy Note 2000/6 Drowning In Debt Wynne Godley The U.S. expansion has been driven to an unusual extent by falling personal saving and rising borrowing by the private sector. If this process goes into
More information3/9/2010. Topics PP542. Macroeconomic Goals (cont.) Macroeconomic Goals. Gold Standard. Macroeconomic Goals (cont.) International Monetary History
Topics PP542 International Monetary History Goals of macroeconomic policies Gold standard International monetary system during 98-939 Bretton Woods system: 944-973 Collapse of the Bretton Woods system
More informationThe business of making money. Rate of return of a simple asset /1. The role of financial assets /2
1 The business of making money In a modern monetary economy, goods are typically not exchanged for goods but for fiat money. Therefore, even though people are ultimately interested in getting goods, the
More informationWill 2019 be the Year when Foreign & Swiss Businesses do better than their Chinese Competitors?
The China Integrated Analysis 3 February 2019 Will 2019 be the Year when Foreign & Swiss Businesses do better than their Chinese Competitors? China grew 6.6% in 2018, a less than impressive figure when
More informationQuarterly Chartbook. June 30, What happened, where are we now, and what do we expect?
Quarterly Chartbook June 30, 2009 What happened, where are we now, and what do we expect? What happened? At the end of the day, the market events of the past twenty-four months can be attributed to poor
More informationCOMMENTARY NUMBER 386 GDP Revision, July Durable Goods Orders and New Home Sales. August 26, 2011
COMMENTARY NUMBER 386 GDP Revision, July Durable Goods Orders and New Home Sales August 26, 2011 Revised Second-Quarter GDP Change Remained Statistically Insignificant Could Have Been a Contraction as
More informationMarket Report for Republic of Korea
Market Report for Republic of Korea November 2014 Korea Financial Investment Association 1 I. Economic and Financial Background 1. General Economic Development Although economic recovery has continued
More information