Are Banks Finally Ready To Start Lending?

In normal times, today’s combination of record low interest rates and massive infusions of capital into the banking system would ignite the mother of all expansions. That it hasn’t has confused the economists whose textbooks clearly state that it should. And it has convinced the Fed to just keep upping the ante with QE after QE.

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The Big Picture: From banking crisis to sovereign debt crisis to currency crisis (diagram)

Last week’s article ‘The Big Picture: From banking crisis to sovereign debt crisis to currency crisis’, provides a brief outline of each of the macro forces and trends that are currently impacting the global economy and financial markets. Today’s article attempts to show these forces in visual form so that investors can begin to understand the interplay between them.

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The Big Picture: From banking crisis to sovereign debt crisis to currency crisis

This article attempts to outline all the macro forces and trends that are currently impacting the global economy and financial markets. It is only by understanding all of these forces (and the interplay between them) that investors can begin to see the inevitable path from banking crisis to sovereign debt crisis to currency crisis.

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Examining the global crack-up boom: Part II

Since the 2008 financial crisis central banks around the world have created in excess of $12 trillion. Not only has their policy of ultra-lose money created another unsustainable boom in asset prices, it is looking increasingly likely that it will end in what Austrian economist Ludwig von Mises called a “crack-up boom”, i.e. a complete breakdown of the monetary system.

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Weekly Market Wrap: 12 April 2013 – Gold tumbles as predicted, but is this the “puke point”?

This regular column reviews the condition of several different markets including: stocks, commodities, currencies and precious metals. This week focuses on gold, the S&P 500 index, WTI, natural gas and the Japanese yen.

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IMF head praises BoJ’s monetary revolution

Last week, Haruhiko Kuroda, the Bank of Japan’s new Governor, promised to double the yen in circulation in two years with a goal of generating 2% inflation for the Land of the Rising Sun. Only days after Kuroda’s announcement, IMF managing director Christine Lagarde praised it, saying it will help boost global growth.

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Chart of the week: Money velocity plunges to lowest level in more than 50 years

Since the financial crisis hit the US Federal Reserve has created more than $2.2 trillion. However, all this new money has not found its way into the economy. Instead, it is just sitting idle in the banking system, and as a result money velocity has plunged to the lowest level in more than 50 years.

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Gold, a Hedge Against Financial Repression?

Had those with money tied up in the Cypriot banking system owned gold instead, they might have been able to watch the unfolding crisis relaxing on the beach. So why isn’t gold going through the roof? Is Cyprus too small to matter? Can it happen in the U.S.? Should investors hold gold?

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