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The FED’s Recovery: Tepid, at Best

Posted on February 28, 2015

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By David Stockman The most important number in today’s Q4 GDP update was 2.3%. That’s the year/year change in real final sales from Q4 2013. As an analytical matter it means that the Great Slog continues with no sign of acceleration whatsoever. Indeed, the statistical truth of the matter is that this year’s result amounted to a slight deceleration—since […]

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Yellen Says No Rate Hikes, As I Knew She Would

Written by Gary North on February 25, 2015

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The Federal Reserve System cannot raise rates. It only pretends that it can. It cannot raise short-term T-bill rates. It has no power over T-bill rates. It can raise the Federal Funds rate: the rate at which commercial banks lend overnight money to other commercial banks. Problem: banks no longer lend overnight money to other […]

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How Will the FED Raise Interest Rates?

Written by Gary North on February 16, 2015

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Everyone is talking about the FED’s promise to hike interest rates.  But nobody is talking about how the FED will do this, except for me. Next time you read a story like this one, ask yourself: “How will the FED pull this off?” When Group of 20 finance ministers this week urged the Federal Reserve […]

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“Audit the FED” Bill — Rand Paul

Posted on January 29, 2015

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Republican Senator Rand Paul, a potential 2016 presidential candidate, on Wednesday re-introduced a bill that would expose the Federal Reserve’s monetary policy discussions and decisions to a congressional audit. The Kentucky senator’s move to re-introduce the bill, along with 30 co-sponsors, comes as Republican lawmakers and some Democrats increase their efforts to rein in the […]

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The Futility of ZIRP: Zero Interest Rate Policy

Posted on January 29, 2015

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By David Stockman The ZIRP market is completely dishonest and therefore deeply subsidized. And every Econ 101 student knows that when you deeply subsidize something, you get more and more of it. In essence, by clinging obstinately and mindlessly to ZIRP the Fed is just systematically juicing the gamblers, and thereby inflating ever greater mispricing […]

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A Rising Dollar Terrifies Keynesians

Written by Gary North on January 28, 2015

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The headline in the Financial Times blares this message: Strong dollar weighs on US results. Keynesians love soft dollars. They love price inflation. They love a boom caused by central bank inflation. The Federal Reserve stopped QE3 last year. It is no longer buying U.S. government debt, Fannie Mae debt, Freddy Mac debt, or anything […]

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Video: Obama, Yellen, and Ray Stevens

Written by Gary North on January 26, 2015

Ray Stevens had it right until QE3 stopped. But now Dr. Yellen faces a problem. Who will fund the federal deficit, now that she and the FOMC have stopped buying debt with counterfeit money? At what price (interest rates)? For how long?

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Mary’s Bar and Janet’s Bank

Posted on January 21, 2015

By Anonymous Mary is the proprietor of a bar in Boston. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. […]

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