We Have Seen Gold Prices Act Like This Before
Gold has not behaved like money in decades, rather gold is, for the most of the world, an investment class. We may not like such a development (it is one of the most insidious actions intentionally undertaken by central banks, including Basel rules) but gold is a liability on a bank’s balance sheet complete with .. read more
How Far Did Draghi Go To ‘Save’ The Euro?
Getting into the arcane accounting of central banks is a chore, but, in an uncertain world with every central bank “doing something” at exactly the same time, it is a vital task that requires patience. A lot of patience. Central banks all have familiar financial disclosures and statements. The Fed, ECB, SNB, Bank of England, .. read more
Is Cyprus A Tipping Point?
Could tiny Cyprus with a population of less than 1 million be the undoing of the Euro experiment? It seems surreal to think that such a tiny country, representing less than a quarter percent of Euro GDP could be the trigger for the unraveling of an entire continent’s currency but it is often small countries .. read more
Europe’s Debtor Prison, Part 2
“According to ABI the value of total loans issued, 1.467 billion euros, represented a 2.5% drop on the December value and was largely the result of the continuing recession in Italy. “Meanwhile, for the current year ABI researchers said their forecasts of a 0.6% contraction in the economy would likely be revised for the worse .. read more
Europe’s Debtor Prison
Last November, the Spanish government withdrew €4 billion from the state’s Social Security reserve fund to pay pension obligations. That followed a €3 billion withdrawal just two months before, in September 2012, to cover “unspecified” needs at the Spanish treasury. It was also disclosed that the Social Security fund had allocated over 90%, about €65 .. read more
As The Euro Turns (Again)
Financial markets in Europe have been a sea of tranquility since last summer. The ECB and Mario Draghi’s promise for unlimited interventions began another quieting period that suppressed bond spreads that has led to the premature “euro crisis is over” sentiment. During that time, the Greek settlement (or third default) on December 10 seemed to .. read more
Brother, Can You Spare A Euro?
By Brian Cronin: I am old enough to remember the horrendous conflict in the Congo in the 1960s. The players: Patrice Lumumba, Joseph Kasavubu, Dag Hammarskjold and Moise Tschombe of the breakaway province of Katanga are all still clear memories. What is also clear, unfortunately, is the question asked by a particularly insensitive British TV .. read more
Black Wednesday
By Brian Cronin This week sees the 20th anniversary of a traumatic event for the British government. Wednesday, September 16th 1992 was the day that Britain exited the Exchange Rate Mechanism in rather ignominious fashion. It would forever after be known as Black Wednesday. It is also a good lesson for today’s investors in that .. read more
