Search Results
Results 51–100
of 149 found.
Markets Focused on the Wrong Target
by John Browne of Euro Pacific Capital,
In recent months economic commentators and financial markets have focused almost excessively on the Federal Reserves quantitative easing ("QE") policy as the markets main driver. However, last month two senior economists at the Federal Reserve published a report entitled How Stimulating Are Large-Scale Asset Purchases which calls this devotion into question.
Greece Highlights Germany's EU Dilemma
by John Browne of Euro Pacific Capital,
On August 11th, German media got hold of and published an internal Bundesbank report which maintained that Greece would likely need further relaxation of the terms of its rescue bailouts. The report contained revelations that could be deeply embarrassing to the government of Angela Merkel that has maintained forcefully that German taxpayers would face no further commitments. The revelations could potentially be a potent weapon for her political opposition in the upcoming election. More broadly, the revelations reveal a wide gap between economic reality and the sunny face of EU optimism.
Crushing the Middle Class
by John Browne of Euro Pacific Capital,
Like a carefully memorized religious incantation, politicians and central bankers continually stress how their stimulus policies are designed to promote the interests and prosperity of the middle class. Cynical observers may note that this brave political stance may have something to do with gaining the support of the vast majority of voters who identify themselves as "middle class." However, the cumulative effect of their economic programs has achieved the opposite.
Understanding Gold Market Dynamics
by John Browne of Euro Pacific Capital,
To an extent that reveals a thorough misunderstanding of the market forces, the financial media has failed to consider the different motivations and beliefs that drive the different types of investors who are active in the gold market. By treating the gold market as if it were comprised of just one type of investor, analysts have drawn false conclusions about the recent volatility.
Germany Under Pressure To Create Money
by John Browne of Euro Pacific Capital,
Currently, central banks around the world are walking in lock step down a dangerous path of money creation. Led by the Federal Reserve and the Bank of Japan, economic policy is driven by the idea that printed money can be the true basis of growth. The result is an unprecedented global orgy of currency creation. The only holdout to this open ended commitment has been the hard money bias of the German-dominated European Central Bank. However, growing political pressure from around the world, and growing dissatisfaction among domestic voters have shaken, and perhaps cracked, the German resolve.
Gold Recovers Amidst Uncertainty
by John Browne of Euro Pacific Capital,
The selloff in gold that captured the worlds attention in mid-April has revealed some truths about how the market trades and the sentiments of many of the investors who have piled into the trade over the past few years. While the correction does highlight a higher degree of uncertainty than many of the most ardent gold advocates had anticipated, it does not represent the historic "end of an era" reversal that the many in the media have so gleefully suggested. In many ways, the market has shown a resiliency that its detractors do not understand.
Cypriot Chaos Assists EU Centralization
by John Browne of Euro Pacific Capital,
Remarks by members of the European Unions elite suggesting that banking deposit seizures may become standard practice appear to have heightened the risk of a European bank run and perhaps even a catastrophic collapse of the euro. Any threat to the euro is a threat to the European publics conception of the Unions manifest destiny. As such, I believe members of the EU elite may be purposefully leveraging the crisis to push for a centralized European banking system to cement the political framework of an EU superstate.
Spending Patterns Paint Half Truth
by John Browne of Euro Pacific Capital,
On March 13th, the Commerce Department announced a 1.1 percent increase in food and services retail sales, doubling a prior Dow Jones survey of economists that forecast an increase of just 0.6 percent. This new data has led to a fresh wave of enthusiastic commentaries that the US economy is set for a strong recovery. Less examined were the underlying factors that supported the increase.
Gentlemen, Start Your Presses
by John Browne of Euro Pacific Capital,
In his Congressional testimony last week in Washington, Fed Chairman Ben Bernanke took time to downplay the significance of the few dissenting voices on the Fed's Open Market Committee (FOMC). Those statements, combined with an even more dovish statement by Fed Vice Chairman Janet Yellen earlier this week, clearly reaffirm the Fed's indefinite commitment to $85 billion of monthly quantitative easing.
Singapore A Wise Owl Among Currency Snakes
by John Browne of Euro Pacific Capital,
As China enters the "Year of the Snake," Singapore stands as a beacon of sound currency in a world gone mad. China's renminbi remains pegged to the US dollar, while even steadfast Switzerland has followed the US, UK, EU, and Japan into an impoverishing strategy of currency debasement. Singapore, alone, has been able to sustain genuine economic growth in the context of a strong national currency.
Investing In a World of Make Believe
by John Browne of Euro Pacific Capital,
In recent years, a high degree of economic, financial, and political uncertainty has resulted in acute volatility in stocks, real estate, commodities and precious metals. I believe that another aggravating factor has been the increasing skepticism through which the investing public views government statistics and statements.
Investing In a World of Make Believe
by John Browne of Euro Pacific Capital,
In recent years, a high degree of economic, financial, and political uncertainty has resulted in acute volatility in stocks, real estate, commodities and precious metals. I believe that another aggravating factor has been the increasing skepticism through which the investing public views government statistics and statements.
EU Financial Tax Portends Loss of Market Leadership
by John Browne of Euro Pacific Capital,
Although it was barely noticed by the American press, on January 22nd, EU finance ministers approved a new "Financial Transactions Tax" (FTT) that has implications for market competitiveness around the world.
German Gold Claw Back Causes Concern
by John Browne of Euro Pacific Capital,
Last week the Bundesbank (the German central bank) surprised markets around the world by announcing that it will repatriate a sizable portion of its gold bullion reserves held in France and the United States. To many, the news from the world's second largest holder of gold signaled a growing, if clandestine, mistrust among central banks, possibly fueled by diverging policy goals. The Germans have attempted to tamp down the alarm by highlighting the myriad of logistical, practical and historical reasons that qualified the announcement as unremarkable.
Washington Squanders its Gift of Time
by John Browne of Euro Pacific Capital,
As the clock winds down on 2012, the Fiscal Cliff is all anyone seems capable of discussing. Right now it appears that some sort of narrow deal has just emerged that will include raising tax rates on family income over $450,000 a year, increasing the estate tax rate, extending unemployment benefits for one year, and delaying spending cuts. But the prospect of higher taxes and the great uncertainty that has surrounded this fiscal fiasco has been acting like sand in the gears of the complex but sputtering U.S. economy.
Republican Sellout Invites Stagflation
by John Browne of Euro Pacific Capital,
While it may not be a surprise that the Republicans are preparing to yield on their vow to oppose tax hikes, it should raise investor concerns the world over that an upcoming budget agreement will likely involve a Congressional surrender of its authority to set the federal debt ceiling. In exchange for this, it appears that the Republicans have simply done nothing to halt, or even curb, the dangerous federal spending trajectories or the current drift towards greater state control of the economy.
Budget Farce Suggests Term Limits Needed
by John Browne of Euro Pacific Capital,
Put simply, the fiscal cliff debate is an illustration of staggering political cowardice. Politicians of both parties are unwilling to ask voters to pay for all of the big government promises that they made on the campaign trail. They would rather risk the country's long term future than risk losing the next election. As a former elected legislator, I can assure them that their offices are not worth the price they are asking us, the voters, to pay.
Euro Crisis: Major Implications For Investors
by John Browne of Euro Pacific Capital,
The euro crisis has begun to feel like an everlasting steeplechase with high hedges and water obstacles blocking the path to economic resurgence on the Continent. Each time a hurdle has been cleared another problem emerges to potentially block the track. The latest developments involve ugly anti-austerity riots across the southern tier and open rifts emerging among the creditors, most notably between the International Monetary Fund and northern nations.
Report Raises Questions About Central Bank Gold Holdings
by John Browne of Euro Pacific Capital,
For years I have cautioned that changes in the ownership of gold held in the vaults of key central banks around the globe may not have been accurately reported. A report issued last month in Germany has once again brought these issues to the fore. In today's environment of rampant money creation and questioning of central bank activities, such uncertainty is bound to spark the curiosity of an increasing number of investors.
Banks Punished For Central Bank and Political Errors
by John Browne of Euro Pacific Capital,
In recent decades politicians have increasingly followed the Keynesian prescription of economic growth through continued government borrowing and the creation of undreamt of amounts of fiat money by central banks. To facilitate this process, the larger commercial banks have acted as the central banks' de facto distribution system, and as a result have grown ever larger while accepting progressively greater risks.
Gold Glitters
by John Browne of Euro Pacific Capital,
Just a few weeks ago, Mario Draghi, President of the European Central Bank, announced that he would do anything required to bailout the weakest members of the Eurozone and in so doing prevent the euro currency from dissolution. Two weeks ago, as signs of recession increased, Fed Chairman Bernanke announced he would do anything required to stimulate the U.S. economy, real estate, and the financial markets. But the biggest winners thus far that may have resulted from these newly communicated intentions are not the euro or the broad stock markets but rather gold and gold-related investments.
September 12th Looms Large for Germany
by John Browne of Euro Pacific Capital,
The German economy is undoubtedly the powerhouse of Europe. As a result, an understanding of the developments within Germany can offer a strong indication of the path that the rest of Europe is likely to take. Until recently, Germany stood as a bastion of sound money against those Keynesian led regimes in the developed nations that favor continual currency debasement as an economic panacea.
Mistrust Fuels Continued Gold Demand
by John Browne of Euro Pacific Capital,
In the face of growing fears of a renewed global plunge into economic depression and a climate of low apparent price inflation, investors might expect commodities and precious metals to be falling in price. Instead, gold continues to hover around a relatively high $1,640 an ounce and silver at $29. At the same time, central banks - including those of the ever more important China, Russia and India - continue aggressively to buy gold.
Disconnected Markets Confound Investors
by John Browne of Euro Pacific Capital,
The current environment for investors is perhaps one of the most confusing that many have ever encountered. Unpredictable markets now appear to take no clue whatsoever from underlying economic data, and maxims long cherished by traditional money managers are being abandoned in favor of seemingly illogical choices. While such an environment is enough to encourage many to cash out completely, we believe that investors should remain focused on the fundamentals.
Promises, Promises
by John Browne of Euro Pacific Capital,
In the last week of July, ECB President Mario Draghi attracted investor interest worldwide by saying that he would do "whatever it takes" to solve the Eurozone crisis and, in the process, save the euro. Given the record of Central bankers for encouraging hopes that invariably have proved fruitless, it was surprising how international financial markets appeared to be taken for yet another ride.
Dependence Day
by John Browne of Euro Pacific Capital,
The Fourth of July week brought unwelcome birthday gifts to the United States in the form of poor domestic jobs data and similarly gloomy information from other major economies. Amidst the heat and festivities, it has become difficult to deny that the economy is deteriorating. Politicians appear helpless, thrashing about for a solution and blaming everything and everyone but themselves.
Germany Loses to Italy, Again
by John Browne of Euro Pacific Capital,
June was not a particularly good month for Germany. First, she suffered a loss to Italy in the semi-finals of the European Cup soccer tournament. Then, she suffered a more significant blow when Italy's Prime Minister, Mario Monti, extracted important concessions from German Chancellor Angela Merkel at the European Summit. A loss on the soccer pitch can put a dent in the national ego. But a loss on the field of finance can be far more serious.
European Leaders Play With Fire
by John Browne of Euro Pacific Capital,
The world economy today stands at the doorstep of great change. A gathering crisis looms in Europe, splitting the Continent into two competing blocs. While leaders there face off against one another in a high stakes game of chicken, the rest of the world powerlessly watches the train wreck slowly unfold.
Germany Faces Political Isolation
by John Browne of Euro Pacific Capital,
One month ago it appeared that Germany held the whip hand in its titanic struggle against those seeking to cure all economic ills with the snake oil of currency debasement. Now, it appears that the ground beneath its feet is being swept away in a flood of popular unrest and political exploitation. The recent elections in Europe, which highlight both the strong grass roots revolt against Germanic demands in Greece and France show that the cause of sound money and fiscal prudence to be a lonely and difficult endeavor.
BRICS Plan for the Future
by John Browne of Euro Pacific Capital,
Last week, the leaders of Brazil, Russia, India, China, and South Africa met in New Delhi for their fourth annual "BRICS" summit. The meeting brought together five countries that together represent 43% of the world's population and 18% of the world's GDP. When the gathering concluded on March 29, the coalition subtly issued its latest challenge to the increasingly desperate bankers and politicians of the West. They announced more definitive plans to establish a BRICS-focused development bank, to be solely funded by the BRICS countries themselves.
Bernanke Spooks Gold
by John Browne of Euro Pacific Capital,
Regardless of who wins the reserve currency race, a key issue will be the gold conversion price. To accommodate the world economy without being recessive, many have concluded that the price of gold would need to be far higher than it is today. In any case, if China continues to pursue a path towards a fully convertible Yuan, investors might be wise to pursue a buy and hold strategy. This of course discounts the possibility that their holdings are not confiscated by debtor governments with plummeting fiat currencies.
Inflation Held in Check by Fear
by John Browne of Euro Pacific Capital,
Out of control money supply creates inflation. In light of the trillions of synthetic dollars that have been injected into the economy by the Fed over the past five years, most observers had expected prices to spiral upward. But in making these determinations, many of us forgot to factor in the supply side of the supply/demand equation. Inflation remains low now because of game changing events that have reduced the demand for money. So beware of the recovery. Any wakening of animal spirits in the U.S. will likely stir the threat of inflation, which may very well short-circuit the recovery.
Wary Investors Give US Stocks Another Go
by John Browne of Euro Pacific Capital,
Recently, the stock market has been roaring, with the S&P500 up a stunning 22% from October 3, 2011, which was the low of last year. In fact, the first month of 2012 has been one of the best Januaries on record for US stocks. On top of that, last Fridays jobs report seems to provide further evidence that we're turning a corner. However, there are many reasons to question the bestowal of bona-fide bull status on this market. It's hard to miss the artificial props in place to push up prices. Both the supply and demand sides of the equation are standing on shaky foundations.
Straightening Out the Straits
by John Browne of Euro Pacific Capital,
Recently some of the fears that investors had focused on in the 11thhour debt negotiations in Greece have drifted southeastward towards the Straits of Hormuz. An increasingly bellicose Iran threatens to throw the world economy into confusion with the potential closure of one of the worlds most important sources of energy. Catastrophic failure in Athens or the Gulf could plunge the world into severe recession if not depression. Having discussed the Eurozone at length, we focus this week on the threats posed by Iran.
Fed Plays PR Games
by John Browne of Euro Pacific Capital,
The world was taken by surprise recently by the Fed's announcement that it would publish some of its economic forecasting that forms the basis for its strategy. The Fed claims that the move will vastly increase so-called transparency, which has become a buzz word for honesty and virtue. However, the new policies do nothing to remove the cloak of secrecy that conceals still many of its most significant activities. This myth will do little to lure investors back into the markets but as an unintended consequence will reveal just how profoundly the markets are currently guided from the top.
2012 Offers Few Reasons for Optimism
by John Browne of Euro Pacific Capital,
In 2011, politicians of the U.S. and EU set their economies on a rendezvous with economic and financial disaster. If one assumes as I do that no leader on either side of the Atlantic has the courage to face the music, then there can be little reason for optimism in 2012.
Risky Moves Spark Quick Rally
by John Browne of Euro Pacific Capital,
In order to win for itself as many economic cards as possible, we can expect Germany to continue playing economic brinksmanship. The high stakes game will continue creating extreme market volatility. Various bodies such as the Fed, ECB, EU, IMF and G-20 likely will continue to issue calming statements to cover a building crisis of confidence in paper currencies and sovereign debt. Meanwhile, greatly increased liquidity threatens high future inflation. In such an environment, precious metals remain a hedge against inflation and a form of insurance against possible catastrophe.
Manipulated U.S. Rates See Saw Gold Prices
by John Browne of Euro Pacific Capital,
The Super Committee has followed the path of least resistance and maximum irresponsibility. Given the likely after-effects, the outcome should be judged as criminal dereliction of duty. It should now be crystal clear to even the most casual observer that a solution to the U.S. debt crisis will not come from within, but will be imposed, perhaps brutally, from without.
The Beginning of the End of Fiat Money
by John Browne of Euro Pacific Capital,
Last week, the G-20 meetings did not produce an expanded bailout fund for the eurozone. While this may bode well for the long-term solvency of the member-states (moral hazard and all), it has also triggered a market reaction that I expect to help destabilize the common currency. Yesterday's market moves suggested that this development is good for the dollar and bad for gold. Allow me to step back from the stampeding herd to evaluate whether they are, in fact, moving in the right direction.
Greek Democracy Could Be Costly
by John Browne of Euro Pacific Capital,
Financial planners and politicians could be faced with a possible depression accompanied by a breakdown of confidence in fiat currencies if either the euro or the EU collapses. As the worlds second currency, the euros collapse would create a massive currency crisis in the European Union, the worlds largest economy, possibly triggering a massive depression. With both the dollar and the number two global currency (the euro) facing an uncertain future, investors would likely be wise to maintain some exposure to stores of value, such as precious metals.
Greeks May Look North
by John Browne of Euro Pacific Capital,
If the citizens of Greece follow the Icelandic lead, a larger sovereign debt crisis will likely follow. In such a scenario all fiat currencies will likely suffer. However, those considerations will merit little concern from those throwing Molotov cocktails on the streets of Athens. In the end, Greek politicians will cater to their constituencies rather than their creditors. We should all prepare for that.
A Hair Trigger Rally
by John Browne of Euro Pacific Capital,
While a meeting between two Euro leaders (Sarkozy and Merkel) may have galvanized Eurozone politicians into more dramatic group action, the new Facility fails to address the intractable political problem that solvent countries are tiring of funding profligate neighbors. It also fails to reverse the fundamental structural problems that plague the euro. Just a few weeks ago, when the EFSF bailout fund was announced, it was widely trumpeted as a cure-all. However, even $2 trillion would be a paltry sum with which to confront any debt problems erupting from larger countries such as Italy.
Fiddling While the Euro Burns
by John Browne of Euro Pacific Capital,
Last week, eurozone finance ministers postponed, the most difficult decisions on the Greek debt crisis. The assembled powers could have forced an orderly Greek default or they could have taken steps to push Greece out of the union. Instead, they simply bought time until the next major rollover of Greek debt-which comes due in November. Much of the prevarication can be attributed to political disagreement in Germany, where some see the current crisis not only as a means to further European unification, but also as an opportunity to extend German influence throughout the continent.
Don't Panic on Metal Tumble
by John Browne of Euro Pacific Capital,
Given the swift rise of gold and silver during the first half of 2011, precious metals were due for a correction especially following the parabolic increases that we saw in August. Markets never go up in a straight line, and often the biggest downward movements occur in bull markets. These sharp movements are common in gold, especially during short periods of financial panic. For instance, gold fell more than 25% in the second half of 2008, and almost 15% from February to April 2009. Yet after the dust settled in those earlier corrections, gold resumed its upward march with even more gusto.
Germanys Inner Struggle Stifles EU Action
by John Browne of Euro Pacific Capital,
The leaders of Europe have been criticized for their inability to deal expeditiously with the Eurozone debt crisis. Many view the paralysis through the prism of self interest: taxpayers of the EUs creditor nations are simply unwilling to finance spending of the blocs debtors. But the hesitancy can also be ascribed to the growing voter dissatisfaction with the entire structure of the Eurozone, and in particular a chasm between German voters and German leaders.
German Court Opens Door to ber-Empire and ber-Collapse
by John Browne of Euro Pacific Capital,
In the early days of September, financial markets worldwide were nervous. Investors and governments were waiting for a crucial ruling of the Federal Constitutional Court of Germany, a ruling that could have triggered the imminent collapse of the worlds second currency, the euro. This past Wednesday, the court ruled that the German bailout of Greece did not violate the German Basic Law (i.e. constitution), and investors breathed a collective sigh of relief.
German Court Wields Huge Economic Power
by John Browne of Euro Pacific Capital,
With investors now emerging from a state of panic after the harrowing losses of late July and August, stock markets are now rising and gold is finally falling after a record run that pushed its price north of $1,900 per ounce. The buoyant mood is largely undergirded by the hope that on this Friday, August 26th, Fed Chairman Ben Bernanke will announce another round of stimulus to stop the U.S. economy from slipping back into another recession.
Paper Currencies Finally Redeemed for Gold
by John Browne of Euro Pacific Capital,
The basic unwillingness of politicians to face economic and financial realities has caused the United States and European Union to face currency collapse. The politicians are content literally to paper over the problem with massive amounts of newly printed currency. This means that savvy investors, facing major real losses, are turning increasingly to gold. In essence, even though currencies are no longer on a gold standard, they are increasingly being redeemed for gold in the marketplace.
Gold is Antidote for Treasury Trap
by John Browne of Euro Pacific Capital,
Last week Fed Chairman Bernanke raised eyebrows and denied history when he asserted in front of Congress that gold doesn't qualify as money. Yesterday he took the unprecedented step of announcing that the Fed would keep interest rates near zero for at least the next two years. In very short order thereafter it required much more of the money that he believes in (U.S. dollars) to buy the money that he doesn't believe in (gold). It was beyond unusual for the Fed to make such an explicit time commitment on monetary policy.
Results 51–100
of 149 found.
