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Browsing Category
Monetary System
Belgium will nationalise Dexia this weekend
Franco-Belgian bank Dexia is being officially nationalised according to two Belgian newspapers.
Why is a bank that failed the stress tests in Spain getting bought at a 31% premium?
I don’t follow the Spanish banking sector well enough to know what hidden value Banco Pastor has but I find it curious that it is the subject of a takeover bid at a 31% premium by Spain’s fifth largest bank, Banco Popular.
Europe’s Bank Problem
Another informative chart from the IMF showing the fundamental problem in Europe’s banking system - excessive leverage and dependence on wholesale funding. Add to that overexposure to highly indebted sovereigns with deteriorating credit…
The End of the Fake Recovery
This is going to be a relatively long post. But I think it’s important. I have been meaning to update my thinking about the “Fake Recovery” which I heralded in early 2009 as the economy in the US began to turn. My view is that without…
Currency Sovereignty
This week we will begin to examine our next topic: government spending, taxing, interest rate setting, and bond issue. We will examine fiscal and monetary policy formation by a government that issues its own currency. We will bear in mind…
Currency Revulsion
All US government obligations are substantially identical promises to repay a specific amount of the currency unit of account backed by nothing but taxing authority. So, Treasury bonds don’t ‘fund’ anything. If the Treasury were allowed to…
Here’s why inverted yield curves are a leading indicator of recession
Just following up on my last post about the expectations theory of interest rates, I wanted to explain why yield curve inversion signals recession – and why it hasn't this go round in the US.
Long-term interest rates are a series of future short-term rates
On how the expectations theory of interest rates explains why debt-induced depressions are fundamentally deflationary in nature.
How the Federal Reserve came into being
The question after the frightful period in 1907 was what to do to prevent another panic from causing a severe depression. Benjamin Strong, a senior executive at Bankers Trust and later the first President of the Federal Reserve Bank of New…
Why Nobody Went to Jail During the Credit Crisis
The following is a transcript of an interview with Financial Sense Newshour, a free financial/market broadcast hosted by money manager Jim Puplava on the week's market action, interviews with financial experts, and Jim's personal…