The rise in the gold price above $1,100 per ounce this week is a pretty good indicator that something has changed. For eighteen months, the gold price had been in a trading range topping out around $1,000l it has now broken out decisively from that range. The opportunity for the world’s central banks to change […]

Of the world’s six largest economies, three currently have budget and public debt positions that if allowed to fester will push those nations into bankruptcy (the seventh largest, Italy, also has a budget and debt position that is highly vulnerable, but its problems appear chronic rather than acute.) Given the proclivities of modern politicians for […]

Yes, I know we’ve just had the 80th anniversary of the 1929 Crash. So what? We can learn a lot from past Crashes and economic disasters, but that particular one is looking less and less relevant to the position we are in today.

In the recent unpleasantness, the US made some progress towards solving its biggest economic problem of recent years: the lack of US savings. Regrettably, in the latest figures the beginnings of economic recovery have brought backsliding, with the savings rate dropping back from 6% to 4.3%. Without more savings, as global liquidity declines the US […]

Goldman Sachs’ income from trading and principal investment rose 90% in the third quarter, while allocated remuneration per employee soared 46% to $527,000 in the first nine months of 2009. Good luck to them, but it shows once again that they and to a lesser extent the rest of Wall Street, are currently playing a […]

The Financial Times last Tuesday noted a disturbing new trend – hedge fund and other investors are increasingly seeking to invest in physical commodities themselves, rather than in futures. Given the excess of global liquidity, this is not entirely surprising. It does however raise an ominous possibility of a supply shortage in one or more […]

The Federal Open Market Committee in its latest statement September 23 announced that it was considering ways to reverse the unprecedented torrent of liquidity it has pumped into the US financial system, but that interest rates will remain near zero for a prolonged period. Apart from the question of when the Fed should move, that […]

A new webzine CFOZone has highlighted a study showing that companies which declare “pro-forma” earnings (dolled up by management to reflect the most favorable assumptions) suffer increased attention from short sellers, about $1.3 million worth after the pro-forma earnings declaration. This is good news; it suggests that the market is becoming hostile to attempts to […]

French President Nicholas Sarkozy has leaped with glee on the proposal by a commission headed by Joseph Stiglitz to redefine Gross Domestic Product. After all, if feminine attractiveness, length of vacations and quantity of garlic in the food can be included, France will rank much higher than in more old-fashioned measures. Plus, the existence of […]

Optimism is breaking out all over. The stock market is up 50% since early march, and pundits are discussing how long it will take to get back to the levels of 2007. The economy appears to be recovering nicely, and the Obama administration is attempting to claim credit for causing it to do so through […]