SNB & CHF

This is the difference, though in the end it only amounts to a matter of timing. When pressed (very modestly) on the slow pace of the ECB’s “inflation” “fighting” (theater) campaign, its President, Christine Lagarde, once again demonstrated her willingness to be patient if not cautious. Why? For one thing, she noted how Europe produces a lot of stuff that, at the margins of its economy, make the whole system go. Or don’t go, as each periodic case may be: Europe in...

Last week, I received an email from a conservative-oriented libertarian who suggested to me that it is disloyal to “side with Russia” because Ukraine was “just sitting there” when it was invaded by Russia. Are you kidding me? “Just sitting there”? As in just innocently minding its own business? I don’t think so.  Sure, most everyone would concede that Russia had no legal authority to invade Ukraine, but that doesn’t necessarily mean that Ukraine was “just sitting...

A monetary system that allows the creation of money out of thin air is vulnerable to the fits of credit expansion and credit contraction. Periods of credit expansion typically occur over many years and even decades while the phases of credit contraction happen like sudden implosions. The monetary policy makers tend to promote the prolongation of credit expansion because they fear deflation. By doing this, however, the central banks prevent monetary moderate deflation...

Die letzten Tage wirkte es, als hätte der Bitcoin einen stabilen Support in der Nähe von 40.000 US-Dollar gefunden. Doch gegen Ende der Arbeitswoche ging deutlich runter – der Kurs verlor in der Spitze fast 15 Prozent. Der gesamte Markt folgte dem BTC-Trend. Bitcoin News: Bitcoin verliert erneut an BodenHeute sind es immerhin noch ungefähr 7 Prozent Kursminus im Wochenvergleich, so dass der Bitcoin aktuell nur noch 36.000 US-Dollar wert ist. Der gesamte Markt verlor...

The Fed's 50 bp rate hike is behind us.  Another 50 bp hike is expected next month. The April employment report will do little to calm the anxiety about the "too tight" labor market.  The decline in the participation rate was disappointing and this coupled with decline in Q1 productivity raies questions about the economy's non-inflationary speed limit.    One of the fascinating things about the markets is that sometimes the cause take place after the effect.  This...

What if all the new consensus memes are as wrong as the ones they replaced? I have the Contrarian Curse, and I have it bad. The Contrarian Curse is: as soon as the herd adopts your previously contrarian view, you start questioning the new consensus, just as you questioned the previous consensus. Example #1: fiat currencies are doomed. After all, if creating “money” out of thin air solves all our problems, why not just let everyone print as much as they want at home?...

It’s never just one thing or another. Take, for example, collateral scarcity. By itself, it’s already a problem but it may not be enough to bring the whole system to reverse. A good illustration would be 2017. Throughout that whole year, T-bill rates (4-week, in particular) kept indicating this very shortfall, especially the repeated instances when equivalent bill yields would go below the RRP “floor” and often stay there for prolonged periods. There was, as I wrote...

Washington regards the entire world as its “sphere of influence.” But now Beijing is looking to follow the US playbook on hegemony and expand Beijing’s network of military bases abroad. Original Article: “Expect Washington to Throw a Fit over China’s New Deal with the Solomon Islands” Over the past twenty years, the United States has increasingly tried to claim that Washington does not believe in spheres of influence and that only supposedly imperialist states...

The electricity prices reflect the supply and demand conditions in Europe and interfering with the price formation mechanism would have dangerous consequences. Since the end of 2021, we have witnessed unprecedented price levels in the European electricity markets, with an increase in electricity prices by 200% within less than a year. This tense market situation was further perpetuated by geopolitical events, namely the Russian invasion of Ukraine, impacting gas...

The Swiss National Bank is not prepared to release any further reserves. Keystone / Martin Ruetschi The Swiss National Bank (SNB) continues to beat off demands to fight inflation by raising interest rates and to distribute more reserves to cantons and other causes. SNB president Barbara Janom Steiner showed signs of frustration in a speech on Friday that defended the policies of the central bank. “There are ever more varied proposals – and indeed, increasingly,...