SNB & CHF

The Federal Reserve, like other central banks around the world, it does lend out the securities it owns and holds. Sophisticated modern wholesale money markets are highly collateralized, so much so that collateral itself takes on the properties of currency. Elasticity of collateral is as much – if not more – important as elasticity of other forms of wholesale money (therefore excluding bank reserves). Dealers, however, they don’t much like using the Fed’s Securities...

In March, I flew for the first time since the start of Covid health theater. I was invited to speak at the Austrian Economics Research Conference in Auburn, AL. My talk covered Jimi Hendrix, and an infamous bridge collapse. In other words, I discussed my theory of interest and prices. At the end of November, I flew to London for two weeks of business meetings. This was my first international trip since the Covid lockdown. I offer three comments. One, the UK...

In the incessant media discussion about whether inflation is transitory there is a big elephant in the room about which all are silent. Perhaps strangely some do not see it. Others for whatever reason pretend it is not there. The elephant is the fantastic surge in US corporate profits that monetary inflation has fueled during the second year of the pandemic. This elephant’s unremarked appearance is likely transitory, unlike the simultaneous jump in US consumer...

Overview:  US stocks built on the recovery started on Monday and Powell’s suggestion of letting the balance sheet shrink later this year eased some speculation of a fourth hike this year, which seemed to allow the Treasury market to stabilize.  What amounts to a greater appetite for risk is carrying over into Asia Pacific activity today. Many of the large bourses advanced more than 1%, with the Hang Seng up almost 2.8% and the Nikkei up  nearly as much.   Bond...

The New York Times published an article yesterday that denied that U.S. officials promised Russia at the end of the Cold War that NATO would not expand membership to Warsaw Pact countries.  Unfortunately, the article misses the point. The point is that NATO should have been abolished when the Cold War ended, which would, needless to say, have meant that it would not have absorbed those former Warsaw Pact countries and would not have moved U.S. bases, missiles, and...

© Christin Millhill | Dreamstime.com From 1 January 2022, the cost of posting a standard letter for next day delivery (A-class) is 10% higher and a B-class letter 6% higher. These price hikes are the first of their kind in 18 years, reported RTS. The cost of posting a standard A-class letter is now CHF 1.10, up from CHF 1.00, the cost until 31 December 2021. Theprice of posting a standard B-class letter is now CHF 0.90, up from CHF 0.85. The price rise, announced in...

“If you can’t hold it in your hand, you don’t own it.” That’s one of the most common refrains we hear from gold and silver investors. And while there is a kernel of truth in this saying, investing by these words alone could prove a costly mistake. This popular phrase conflates and entangles two different concepts. Gold owned for emergency use or as a financial insurance policy Gold owned for investment purposes In this article, we’ll untangle those ideas and offer a...

Most experts tend to assess the strength of an economy in terms of real gross domestic product (GDP). The GDP framework looks at the value of final goods and services produced during a particular time interval, usually a quarter or a year. The GDP is formed as the summation of consumer outlays on goods and services; outlays by businesses on plants, machinery, and inventories; outlays by government; and exports less imports. An increase in consumer outlays, businesses...

The dollar was high and going higher. Emerging markets had been seriously complaining. In one, the top central banker for India outright warned, “dollar funding has evaporated.” The TIC data supported his view, with full-blown negative months, net selling from afar that’s historically akin to what was coming out of India and the rest of the world. China was cutting its RRR multiple times. This was all following May 29, 2018, too, a day in the global “bond market”...

Nikki Böhler is a young Swiss internet campaigner who is part of a growing community seeking to shape the digital transformation of society. The 29-year-old wants people to become more aware of the importance of their personal online data and of the traces they leave behind on the internet. But she also wants to improve data transparency so that existing, anonymised data can be used for the common good. Her video portrait is the first in the “Digital offensive” series by...