Free Republic

Many central banks reduced policy interest rates to zero during the global financial crisis to boost growth. Ten years later, interest rates remain low in most countries. While the global economy has been recovering, future downturns are inevitable. Severe recessions have historically required 3–6 percentage points cut in policy rates. If another crisis happens, few countries would have that kind of room for monetary policy to respond. To get around this problem, a recent IMF staff study shows how central banks can set up a system that would make deeply negative interest rates a feasible option. In a cashless world,...

In a major diplomatic victory for the Trump administration, the U.S. has convinced the Chinese government to halt all financial transactions with North Korea. Make no mistake: this is a huge step forward in putting pressure on North Korea to halt its rush to develop nuclear weapons and long-range missiles.  It will have near immediate impact on North Korea's ability to pay its bills.  In a carefully choreographed strategy deployed from the shadow of the United Nations headquarters in New York, Treasury Secretary Steven T. Mnuchin called the head of China's central bank very early Thursday to alert him...

https://www.technologyreview.com/s/608088/chinas-central-bank-has-begun-cautiously-testing-a-digital-currency/?set=608153 China’s Central Bank Has Begun Cautiously Testing a Digital Currency -  MIT Technology Review The People’s Bank of China has developed a digital currency that’s designed to scale to the number of transactions made every day across the country.     by Will Knight June 23, 2017 China’s central bank is testing a prototype digital currency with mock transactions between it and some of the country’s commercial banks. Speeches and research papers from officials at the People's Bank of China show that the bank’s strategy is to introduce the digital currency alongside China’s renminbi. But there is currently no timetable...

The U.S.economy only needs to generate about 75,000 jobs — and possibly as few as 50,000 — each month to maintain a healthy labor market, according to a study released Monday by the San Francisco Fed. That’s down sharply from the 192,000 average payroll gains seen over the past three months. Because the economy is close to what the Fed calls “full employment,” the future is less about creating an even stronger labor market than about maintaining a healthy one, said San Francisco Fed President John Williams in a speech last week.

BUENOS AIRES (Reuters) - Former Argentine President Cristina Fernandez was indicted on Friday over accusations that she oversaw irregularities in the central bank's sale of U.S. dollars in the futures market while she was in office. Federal Judge Claudio Bonadio charged Fernandez, her former economy minister Axel Kicillof and former central bank chief Alejandro Vanoli with "unfaithful administration to the detriment of public administration," according to court papers. The ruling, which gives a green light for prosecutors to put Fernandez on trial, may be appealed. There was no arrest warrant. The accusation is that the central bank took billions of...

...snip... While the Bank of Japan’s name is nowhere to be found in regulatory filings on major stock investors, the monetary authority’s exchange-traded fund purchases have made it a top 10 shareholder in about 90 percent of the Nikkei 225 Stock Average, according to estimates compiled by Bloomberg from public data. It’s now a major owner of more Japanese blue-chips than both BlackRock Inc., the world’s largest money manager, and Vanguard Group, which oversees more than $3 trillion. ...snip... Furthermore, recall what we have been saying ever since 2010, namely that central banks are nothing more than glorified risk-free hedge...

Like children clinging to their parents, stock market traders turned to their central banks last week as they sought protection from the frightening economic figures coming out of China. Surely, they asked, the central banks would ward off the approaching bogeymen, as they had so many times since the 2008 crash. The US Federal Reserve came up with the goods. William Dudley, president of the bank’s New York branch, hinted that the interest rate rise many had expected next month was likely to be delayed. A signal that borrowing costs would remain at rock bottom was all it took. After...

https://twitter.com/zerohedge/status/609341858045497344 https://twitter.com/TraderStef/status/609355146842275840 https://twitter.com/JAFF3/status/609343992803774464 https://twitter.com/russian_market/status/609341880623591424 The bank runs (and capital controls) begin. Macedonia Central Bank Governor Bogov states: *GREEK BANKS IN MACEDONIA CAN’T WITHDRAW CASH: BOGOV*MACEDONIAN BANKS PROTECTED IN CASE OF GREXIT: BOGOV How long before the rest of Europe follows suit and a bank holiday is declared Monday to "Cyprus" depositors? He further added: *MACEDONIAN CENTRAL BANK SEES MAJOR RISKS FROM POLITICAL CRISIS http://www.zerohedge.com/news/2015-06-12/macedonia-central-bank-blocks-greek-bank-withdrawals-case-grexit Macedonia Central Bank blocks Greek bank withdrawals FXStreet (Córdoba) - Macedonian Central Bank's Governor Dimitar Bogov has stated that Greek banks are not able to withdraw cash. According to Bogov, this withdrawal halt is protection against...

Here’s an astonishing statistic; more than 30pc of all government debt in the eurozone – around €2 trillion of securities in total – is trading on a negative interest rate. With the advent of European Central Bank quantitative easing, what began four months ago when 10-year Swiss yields turned negative for the first time has snowballed into a veritable avalanche of negative rates across European government bond markets. In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them. On a country by country...

Greek Defence Minister Panos Kammenos said that if Greece failed to get a new debt agreement with the euro zone, it could always look elsewhere for help. "What we want is a deal. But if there is no deal - hopefully (there will be) - and if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source," he told Greek television show that ran in to early Tuesday. "It could the United States at best, it could be Russia,...

It looks like the Federal Reserve is starting to worry about Senator Rand Paul’s plan to audit the central bank. The way the Hill newspaper, which covers Congress, puts it this week is that the Fed is “lashing out” at Mr. Paul’s plan, which, it said, could gain traction now that the Republicans are in control of the Senate as well as the House. It quotes the president of the Dallas Fed, Richard Fisher, as demanding, in an interview, “Who in their right mind would ask the Congress of the United States — who can’t cobble together a fiscal policy...

Russia’s central bank on Wednesday launched another initiative to shore up the ruble, offering hard currency loans to help companies and banks service their debts. Stabilizing the ruble, which is one of the world’s worst-performing currencies this year following the slide in oil prices and the sanctions imposed on Russia for its involvement in Ukraine, is a priority for Russia’s monetary authorities. Russia’s largest lender, Sberbank, admitted again that it faced a run last week when the ruble was in freefall and individuals fretted over the value of their deposits. Its chairman, Alexander Torbakhov, conceded to Russian news agencies that...

Central bankers think they can keep their economy going by artificial stimulus until they hit escape velocity and grow at normal rates again — but they’re wrong. Here at Dent Research we hold a different view to what drives the economy. And central bankers are in for three big surprises ahead. Their economies are NOT going to grow the way they’re hoping, at least not until the early 2020s, thanks to declining demographic cycles and unprecedented debt ratios. But the surprises I’m talking about are going to come out of left field and slam unexpectedly and so fast into these...

George Soros, one of the world’s leading investors, has warned that the European Union is in danger of falling apart if it fails to confront Vladimir Putin’s naked aggression in Ukraine.

ISTANBUL (Reuters) - Turkey's central bank hiked all of its main interest rates in dramatic fashion at an emergency policy meeting, ignoring opposition from Prime Minister Tayyip Erdogan as it battles to defend a crumbling lira. The bank raised its overnight lending rate to 12 percent from 7.75 percent, its one-week repo rate to 10 percent from 4.5, and its overnight borrowing rate to 8 percent from 3.5, much sharper moves than economists had forecast. The lira strengthened to 2.18 against the dollar after the decision from 2.25 late on Tuesday, having hit a record low of 2.3900 early on...

China National Gold Group Corporation General Manager Sun Zhaoxue has come out and told the world media that the US is suppressing the gold price. The reason for America’s manipulation of gold is to ensure US Dollar dominance on the world stage. America has by default ended up with the world’s reserve currency and therefore gets the world to work for them in exchange for an ever increasing supply of printed greenbacks. He also went on with an excellent analysis of America’s war against Europe and the Euro using their investment banks. Another good insight from Sun Zhaoxue is that...

Submitted by Simon Black of Sovereign Man blog,Over the past several decades, people around the world have become so brainwashed that few people really give much thought anymore to the safety of their currency.It’s not something people really understand... there’s apparently some Wizard of Oz type figure at the top of the hill pulling all the levers of the monetary system. And we just trust them to be good guys.This is partially true. Today’s financial system is dominated by central bankers who have been awarded nearly dictatorial control of global money supply.In allowing them to set interest rates, they...

This one's rich: “The combination of a massively expanded central bank balance sheet and an unsustainable public debt trajectory is a mix that has the potential to substantially reduce the flexibility of monetary policy,” the economists write. “This mix could induce a bias toward slower exit or easier policy, and be seen as the first step toward fiscal dominance. It could thereby be the cause of longer-term inflation expectations and raise the risk of inflation overall.” There is no flexibility and it is the direct and proximate consequence of Congress and The Adminstration ignoring the fundamental realities of arithmetic --...

Global Finance magazine is out with its annual report cards for the world's most influential central bankers. The grades, which range from A to F, are based on banker's success in controlling inflation, fostering economic growth, and managing interest rates. Other factors include the banker's ability to stand up to political pressure and influence government in a positive way. In what's been an incredibly difficult economic environment, here are the central bankers who have had a steady hand on the wheel.

June 24, 2012, 11:30 AM ET BIS Official Warns of Central-Bank Overreach Jaime Caruana, general manager of the Bank for International Settlements and former governor of the Bank of Spain, warned Sunday that the recent aggressiveness of the world’s central banks may be creating “unrealistic expectations” about their power to “resolve the fundamental problems that hold back sustainable growth” and argued that more central bank action poses unwelcome risks. “Monetary policy can buy time needed for other policies to correct fundamental balance sheet problems,” he said, according to the prepared text of remarks to be delivered in Basel, Switzerland, at...