Gold outlook improves

There is a conflation of three related events that materially alter the prospects in favour of a higher gold price.

The change in the outlook for US interest rates has probably put an end to the dollar’s four-year bull run, it is clear that there is a growing likelihood of negative interest rates in the future, and the global banking system is no fit state to manage the potential challenges of 2016. This article walks the reader through the likely economic effects relevant to the future purchasing power of the dollar, and therefore prospects for the gold price. Continue reading Gold outlook improves

Surprises in store

The month of January has been a wake-up call for complacent equity investors.

From the peaks of last year stock indices in the major markets have fallen 10-20%, give or take. On their own, these falls could be read as healthy corrections in an ongoing bull market, and doubtless there are investors hanging on to their investments in the hope that this is true. Continue reading Surprises in store

Out of the mouths of babes….

Parents will tell you the most difficult questions to answer sometimes come from their children. Here are some apparently innocent questions to ask of economists, journalists, financial commentators and central bankers, which are designed to expose the contradictions in their economic beliefs. They are at their most effective using a combination of empirical evidence and simple, unarguable logic. References to economic theory are minimal, but in all cases, the respondent is invited to present a valid theoretical justification for what invariably are little more than baseless assumptions. Continue reading Out of the mouths of babes….

Austrians get some mainstream credibility

Well, well: who would have believed it. First the Bank for International Settlements comes out with a paper that links credit booms to the boom-bust business cycle[1], then Britain’s Adam Smith Institute publishes a paper by Anthony Evans that recommends the Bank of England should ditch its powers over monetary policy and move towards free banking[2]. Admittedly, the BIS paper hides its argument behind a mixture of statistical and mathematical analysis, and seems unaware of Austrian Business Cycle Theory, there being no mention of it, or even of Hayek. Is this ignorance, or a reluctance to be associated with loony free-marketeers? Not being a conspiracy theorist, I suspect ignorance. Continue reading Austrians get some mainstream credibility