Quantitative Easing

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Low Eurozone Inflation Proves How Helpless Central Banks Are

eurozone

The European Central Bank (ECB) is loath to admit it, but it has no control over the Eurozone inflation rate.

According to official data released this morning (Monday), Eurozone inflation in August was unchanged at 0.2%.

That's far below the 2% inflation rate target sought by the ECB. And it shows just how ineffective the central bank's unprecedented monetary stimulus program has been.

Here's what the ECB will do next...

Will the Fed Meeting Today Ignore This Reality?

why is the stock market closed on Good Friday

The U.S. Federal Reserve will adjourn its two-day Fed meeting today (Wednesday) as the Fed mulls over rate hikes.

What's spooked markets over a potential rate hike is the possibility that with so much global stimulus, the United States will sink into deflation should it raise rates.

Though this is a flawed assessment of how U.S. monetary policy is working and has worked over the last seven years...

4 Charts That Show Japan Stock Market Rally Is Overdone

Japan Working Age

In Japan, stock market euphoria has taken hold.

The reality of the Japanese economy is much bleaker than the roaring Japanese stock market would have you believe.

Here are four charts that explain Japan's current crisis not reflected in this rally...

How the QE Delusion Is Inflating the Japanese Stock Market

Japanese stock market

The Japanese stock market is up big and the yen is getting crushed as the Bank of Japan lays on the stimulus.

This is all unfolding as the BOJ planned when it first announced an acceleration of its quantitative easing measures in October 2014.

But there's something wrong with these market movements that can only point toward BOJ stock market manipulation...

The "Unnatural Disaster" Ravaging Global Markets

global-map

The tide is turning for crude oil prices. Following some nice recent gains and despite a dip on Tuesday, the market currently remains at just below $60 a barrel for West Texas Intermediate (WTI) crude oil futures in New York. The recent rise in prices would seem to be just what the smaller operators in the U.S. need to avoid a sector meltdown. A few months back, when prices were pushing lows of $40 a barrel, there was widespread talk of a wave of bankruptcies coming in the oil patch. The picture is now better, given a recovery in crude prices.

The tide is turning for crude oil prices.

Following some nice recent gains and despite a dip on Tuesday, the market currently remains at just below $60 a barrel for West Texas Intermediate (WTI) crude oil futures in New York.

The recent rise in prices would seem to be just what the smaller operators in the U.S. need to avoid a sector meltdown.

A few months back, when prices were pushing lows of $40 a barrel, there was widespread talk of a wave of bankruptcies coming in the oil patch. The picture is now better, given a recovery in crude prices.

But there is another shoe about to fall in the ongoing fight by smaller companies to survive. Here's my take on the disaster that's brewing - and the opportunities it may bring...

Proof of Federal Reserve Stock Market Manipulation

Federal Reserve stock market manipulation

The fact that the U.S. banking system is awash with $2.6 trillion in excess reserves points to nothing more than U.S. Federal Reserve stock market manipulation.

For years, the amount of reserves in the banking system was flat, at least relative to the relentless surge Bernanke's tenure brought with it. Excess reserves were at $1.5 billion in February 2006 when Ben Bernanke stepped in as chairman. Under Bernanke, it grew $2.5 trillion.

Here's why that can be nothing more than Fed stock market manipulation...

Bond-Buying Chaos Is Spinning Out of Control

20140616_Bonds-Q-BW

A few weeks ago, the man formerly known as the Bond King, Bill Gross, tweeted that shorting German bunds would be the trade of the century.

I was gratified to see that he was reading my mind, as readers of my Credit Strategist newsletter already know.

As a result of a massive bond-buying program by the European Central Bank (ECB), the yields not only on German bunds but on all European debt had plunged to ridiculously low levels.

Here's what you need to know...

How to Play the Japanese Stock Market Euphoria

Japanese stock market

U.S. market indexes plunged yesterday (Wednesday) and took the Japanese stock market with them.

The Nikkei 225, a Japanese stock market index tracking 225 Japanese blue-chips, fell 1.4% today. This was the day after a broad sell-off in the U.S. stock market. This was a blip in what will be a larger rally.

Japan is presenting an opportunity, but this recent sell-off shows that investors need to be discriminant in buying Japanese stock...

The Truth Behind Central Banks' Machinations

central bank

Central bankers disguise themselves as friendly shepherds. But really it's more of a "wolf guarding the henhouse" situation...

You see, we've been experiencing deflation, not inflation...on a global scale. Why aren't prices rising? Why aren't wages rising? Why is global demand so lackluster?

Well, the answer has to do with central bankers' and how they treat your money...

It's Not Time to Sell Everything… Yet

The Fed One of my favorite lines is "I'm not the kind of guy to say I told you so – but if I was, I'd sure be saying it now." As far as saying "I told you so," back in the summer of 2008, in my "Friday Night Illumination" emails to my banker and trader friends, […]

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Why the European Central Bank's Massive Economic Experiment Will Fail

Eurozone conflict

Last week, the European Central Bank's turn finally came to announce large scale quantitative easing.

As the continent witnesses a battle between deflation and attempts at inflation, will it finally be enough?

Europe is following in the footsteps of the United States, hoping for similar "successful" results.

Instead, it's likely to fall somewhere between the U.S. and Japan.

From the Land of the Rising Sun there is precedent, but it's a forewarning.

Here's the story...

FOMC Meeting Today: A Tale of Two QEs

FOMC Meeting Today

The Federal Open Market Committee (FOMC) Meeting today marks 2015's inaugural meeting of the U.S. Federal Reserve's monetary policy makers.

It's only been a month since the last meeting convened. But a lot has changed. It's following big stories in the way of global central, particularly from the European Central Bank.

Here's how this QE story will play out, and why today's FOMC meeting will just be noise in a much more troubling outlook for central banking...

ECB QE Points to These Profit Plays

ECB QE

ECB QE and EU LTRO for Dummies: As soon as you read this explanation, comprehensible to even the dumbest of the dumb, you'll be set to trade initials.

We made 382% gains trading these initials. And there's more: Once we closed out, we re-entered.. and now we're up 180%.

Here's how to make real, easy money from the world's biggest economic experiment...

Protect Your Money From the QE Delusion

quantitative easing

While this week's announcement of a massive new QE program by the European Central Bank (ECB) was the worst kept secret in the world, it may not produce the results that everyone expects.

For one thing, while the immediate reaction was to push European interest rates lower, recent experience in the US shows that QE results in higher rates.

And while everyone is talking about deflation - and Europe is definitely experiencing deflation - the US is still experiencing inflation that could lead the Fed to start raising rates by summertime.

So before getting too carried away with celebrating another major central bank opening up the printing presses, investors should take a serious look at the facts and then decide how to play the markets.

Why QE Doesn't Work

why QE doen't work

Quantitative easing doesn't work.

And that can be a tough pill to swallow. Especially for the world's central bankers who are only more aggressively employing QE strategies to bring an end to their economic woes.

Here's why they're doing it anyway, and why it won't bear fruit...