Money and Finance
- Richard Duncan: Wealth Preservation Through Diversification
The excerpt below is from the final chapter of The New Depression by Richard Duncan on inflation and deflation. Wealth Preservation through Diversification The hard truth is that it is not easy to preserve wealth. If it were, the families who were wealthy...
- John Mauldin: First Deflation, Then Inflation. But The Timing…?
One of the more frequent questions I am asked in meetings or after a speech is whether I think we will have inflation or deflation. My ready answer is, “Yes.” Then I stop, which I must admit is rather fun, as the person who asked tries to digest the...
- Ft: ‘helicopter Ben’ Risks Destroying Credit Creation - By Bill Gross
“Helicopter Ben” Bernanke is a second-generation pilot. As he himself acknowledged in his now well-known 2002 speech, the term was an original of economist Milton Friedman. Whether father or child, the concept of showering money over national economies...
- John Mauldin: Some Thoughts On Deflation
The debate over whether we are in for inflation or deflation was alive and well at the Agora Symposium in Vancouver this week. It seems that not everyone is ready to join the deflation-first, then-inflation camp I am currently resident in. So in this...
- Wcam: How Inflation Became The Good Guy
Inflation has been an all-purpose bogeyman since the 1970s, but a small amount of inflation comes with a healthy, growing economy. The Federal Reserve focuses on managing inflation, not preventing it. We have written often that we feel the government...
Money and Finance
Annaly February Commentary
In this environment, we are reminded of a speech given by Ben Bernanke in November 2002 when he was still a Fed Governor. The speech, entitled “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” laid out the rationale for lowering Fed Funds to an emergency rate in order to stave off deflation and its corrosive effects on the economy. The prescription, he said, could include bringing the target rates as low as possible, even zero. But beyond that, there are a variety of alternate tools it could use, including expanding the scale and menu of asset purchases, including Agency debt and MBS, making low interest-rate loans to banks or directly to the private sector (through the discount window, for example), working with fiscal policymakers, committing to holding short term rates at zero for a specified period (a la Japan), or establishing interest-rate ceilings on long-term Treasuries. As he concludes, even though these ideas are relatively unfamiliar, using them to prevent deflation is far preferable than having to cure it. “I hope to have persuaded you that the Federal Reserve and other economic policymakers would be far from helpless in the face of deflation, even should the federal funds rate hit its zero bound.” To us, even though he was talking about general price deflation, he could have been referring to the possible toolbox for fixing the asset deflation/deleveraging that is currently plaguing the financial markets. Today, the title of that speech would be “Deleveraging-induced economic depression: Making sure ‘it’ doesn’t happen here.”
- Richard Duncan: Wealth Preservation Through Diversification
The excerpt below is from the final chapter of The New Depression by Richard Duncan on inflation and deflation. Wealth Preservation through Diversification The hard truth is that it is not easy to preserve wealth. If it were, the families who were wealthy...
- John Mauldin: First Deflation, Then Inflation. But The Timing…?
One of the more frequent questions I am asked in meetings or after a speech is whether I think we will have inflation or deflation. My ready answer is, “Yes.” Then I stop, which I must admit is rather fun, as the person who asked tries to digest the...
- Ft: ‘helicopter Ben’ Risks Destroying Credit Creation - By Bill Gross
“Helicopter Ben” Bernanke is a second-generation pilot. As he himself acknowledged in his now well-known 2002 speech, the term was an original of economist Milton Friedman. Whether father or child, the concept of showering money over national economies...
- John Mauldin: Some Thoughts On Deflation
The debate over whether we are in for inflation or deflation was alive and well at the Agora Symposium in Vancouver this week. It seems that not everyone is ready to join the deflation-first, then-inflation camp I am currently resident in. So in this...
- Wcam: How Inflation Became The Good Guy
Inflation has been an all-purpose bogeyman since the 1970s, but a small amount of inflation comes with a healthy, growing economy. The Federal Reserve focuses on managing inflation, not preventing it. We have written often that we feel the government...