SNB & CHF

The UBS Swiss Real Estate Bubble Index nudged down in 2Q 2016 to 1.32 points and thus remains in the risk zone. This second drop in a row was due to house prices falling in real terms and the declining momentum of mortgage growth. Investments in real estate remain popular due to low interest rates. Zurich, 10 August 2016 – The UBS Swiss Real Estate Bubble Index was in the risk zone in 2Q 2016 at 1.32 index points....

  Calculation Problem What is the real interest rate? It is the nominal rate minus the inflation rate. This is a problematic idea. Let’s drill deeper into what they mean by inflation. You can’t add apples and oranges, or so the old expression claims. However, economists insist that you can average the prices of apples, oranges, oil, rent, and a ski trip at St. Moritz. This is despite problems that prevent them from...

  The “Third Way” “Stealth, intrigue, subversion, and the deception of never calling socialism by its right name” – George Bernard Shaw The Brexit referendum has revealed the existence of a deep polarization in British politics. Apart from the public faces of the opposing campaigns, there were however also undisclosed parties with a vested interest which few people have heard about. And yet, they have been...

What is the real interest rate? It is the nominal rate minus the inflation rate. I previously wrote about one problem with this notion (the nominal rate exists in the market, but the real rate is imaginary). Now let’s turn to another problem. To visualize this problem, let’s make an analogy to someone who inherits a family farm. There are two approaches to making a living from a farm. In the first—we’ll call this...

Mainstream media often speaks of the great shale gas/oil revolution and how it makes the United States more productive and a net exporter of oil. We wanted to go into more details,we compare oil production costs for U.S. shale and global oil producers. It has to be recognized that long-cycle break-Even costs of shale oil have fallen from 77$ to 62$. As reason for the currently cheap oil we see the combination of two...

Swiss Franc The upwards tendency of the euro against CHF continues.The 100 day EMA of 1.0901 has passed. Click to enlarge. FX Rates In an otherwise uneventful foreign exchange market, sterling’s slide for its fifth consecutive session is the highlight. It was pushed below $1.30 for the first time since July 12. Initial resistance for the North American session is seen near $1.3020, while the $1.2960 area...

Mark Carney, Wrecking Ball For reasons we cannot even begin to fathom, Mark Carney is considered a “superstar” among central bankers. Presumably this was one of the reasons why the British government helped him to execute a well-timed exit from the Bank of Canada by hiring him to head the Bank of England (well-timed because he disappeared from Canada with its bubble economy seemingly still intact, leaving his...

Summary: Bernanke reviews the changes in the long-term dot plots. There as been a clear trend toward lower long-term growth, unemployment and Fed funds equilibrium. The full adjustment may not be over. Former Fed Chair Bernanke keeps a blog at Brookings.   His latest post offers insight into how to think about Federal Reserve, and in particular, Fed officials’ understanding of the US economy. Bernanke’s...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. Bubble Conditions The price of gold was down about fifteen Federal Reserve Notes this week. The price of silver was down sixty-two copper-plated zinc pennies. Is the Federal Reserve Note a suitable instrument with which to measure gold? Can one really use debased pennies – which aren’t even made of the base metal copper...

Submitted by Peter Diekmeyer via SprottMoney.com, An era of slowing growth, falling corporate profits, record debt levels, and currency debauchment has many investors buying gold as a bet against global central banks. Holding that gold outside the banking system, and for some, outside one’s own country, are increasingly popular options. Canada, Switzerland, and four other countries have particularly attractive...