A Currency War Will Only Weaken Growth And Strengthen Gold

Global Economy, On the cover

A few months ago many of us read about the conspiracy theory of “the nuclear option”, according to which China could generate a huge debt crisis in the United States and destroy the US economy if it sold its treasury holdings.

I already commented on it in this website (read).
China is an can become a greater economic leader, but the Chinese yuan cannot be a global reserve currency while maintaining capital controls and exchange rate fixing.

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A Day Of Reckoning For The Global Economy. Interview at Hedgeye

Global Economy, Interviews, Media, On the cover

European and Asian economic data is deteriorating, says economist and author Daniel Lacalle.

“I’d call right now the day of reckoning,” Lacalle says, in this video excerpt of our soon-to-be released podcast In The Arena. “The entire message from mainstream consensus is ‘Yes there was a global slowdown,’ but using the trade war as an excuse.”

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The Fed’s Unnecessary Rate Cut

Global Economy, On the cover
The Fed's Unnecessary Rate CutIf there is something that is evident is that the United States does not need a rate cut.

With the economy growing at 2.1%, unemployment at 3.6%, creating 170,000 jobs per month, and estimated underlying core inflation of 2%, no objective data justifies cutting rates that are already artificially low. Wages are rising by 3% and credit growth for companies and families is solid.

There is also no public sector financing problem. The 10-year US bond trades at a 2.05% yield, consistent with the country’s growth and inflation. In real terms, the United States borrows at almost no cost and without Federal Reserve support, as all bond demand comes from the secondary market. Continue reading The Fed’s Unnecessary Rate Cut →