Free Republic

LONDON (MarketWatch) — No one ever said gold was an asset for the faint-hearted. Or indeed, for anyone who doesn’t enjoy an argument. To some it is the only true form of money, a king over the water just waiting to be re-installed on its rightful throne once the impostors are cleared out of the way. To others, it remains, as the economist John Maynard Keynes described it, a “barbarous relic,” of no more relevance to the 21st century that the canal or the telegraph. Still, even by its usual standards, it was more contested than ever as 2011 closed...

It isn’t easy to earn interest income these days. Interest rates on government T-bills, banks’ savings accounts, and certificates of deposit are microscopic. You can blame our government and central bank. They have “ZIRPed” millions of American savers. Here are the details: According to the U.S. Treasury Department, the average interest rate paid on federal debt, as of July, was just under 2.4 percent, implying an annual interest expense on $14.5 trillion of debt of nearly $350 billion. (Net debt, subtracting intra-governmental debt is lower; actual debt, including off-budget items, is higher.) If the average interest rate rose to 5...

QE2 and the Titanic Nov 10th, 2010 by Michael Pettis China reported an October trade surplus of $27 billion Wednesday. This is a very big number and not one likely to soothe anger directed at China. It will be very hard for China credibly to argue that it is trying to contribute to global growth while pulling in more and more foreign demand. Here is the article in the People’s Daily: China’s exports rose 22.9 percent in October from a year earlier, while imports increased 25.3 percent, the General Administration of Customs said Wednesday. China’s trade surplus expanded to 27.1...

Feldstein: Big Fed Easing Threatens Economic Recovery Wednesday, 03 Nov 2010 09:22 AM By: Forrest Jones The Federal Reserve’s plans to buy possibly up to hundreds of billions in assets from the country’s banks — a move known as quantitative easing — carries much more risk and than potential for reward, says Harvard economics professor Martin Feldstein. As many expect, the Fed will buy long-term government bonds held by banks, perhaps up to $1 trillion, thus pumping the same amount of cash into the economy in the process. Expectations of such a move have lowered long-term interest rates, weakened the...

Nikkei Dips 0.7%, Mood Cautious On Fed Move (Hang Seng Down 2.3%) Thu Feb 18, 2010 9:59pm ESTBy Masayuki Kitano * Nikkei dips after Fed raises discount rate * Dollar's rise to 1-mth high vs yen supports exporters * But mood cautious with S&P futures and commodities down TOKYO, Feb 19 (Reuters) - Japan's Nikkei share average dipped 0.7 percent on Friday, with investors turning cautious after the U.S. Federal Reserve's decision to raise the discount rate jolted U.S. equities futures and commodities. The dollar's rise to a one-month high against the yen helped lend some support to the Nikkei,...

For those consumers who want to know what it’s really like to be gouged by a credit card company, check out First Premier Bank. The subprime credit card issuer is experimenting with a new card that hits customers with a 79.9% interest rate. Yes, 79.9%. The card used to come with a 9.9% rate, but now that the government is forbidding excessive fees on credit cards, First Premier is attempting to recoup its money through a different means. Until now, the company levied $256 in fees in the first year for card holders—who received a credit line of just $250....

By Stocks Finish Mixed (Down) As Fed Stands Pat 12/16/09 - 04:49 PM ESTSung Moss NEW YORK (TheStreet) -- Stocks pulled back Wednesday after the Federal Open Market Committee announced that it will be keeping its key interest rate near zero. In its statement, the Fed reiterated that it will keep its fed funds rate at 0% to 0.25% and that conditions are likely to keep the rate low for "an extended period." But in a slight turn of phrase, the central bankers' statement also noted that deterioration in the labor market is "abating," though the typically cautious statement also...

Best Buy, Krugman and the Carry Trade Submitted by Bruce Krasting on 11/29/2009 22:35 -0500 /snip On ABC’s "This Week" show there were some interesting thoughts from Paul Krugman. He remarked: “The cost of the deficit is only 1.2% real rate of interest at the Federal level.” This is economic speak. What Mr. Krugman was saying is that the Government can borrow long term at 3.2% and inflation is 2% so the real cost of debt is only 1.2%. In response, George Will made the point: "In ten years the interest cost of servicing the debt will go to $700...

As long as the cost of borrowing money is zero, gold will continue to strengthen and the dollar will continue to weaken. Gold is going into strong hands like hedge funds managed by John Paulson, Paul Tudor Jones, David Einhorn, Eric Mindich, David Hayman--the cream of the crop. Public institutions like central banks in India and China are big buyers too. Momentum on gold is building now, as latecomers climb on the bandwagon. We're seeing demand for gold all over the world. Pension funds allocate about 5% as protection against the weakening dollar. Chinese citizens are encouraged by their government...

Home prices are on the rise across Asia Fears about the battered real estate market give way to bubble concerns By Kevin Brown Friday, November 6, 2009 SINGAPORE -- Residential property prices are rising across much of Asia, prompting fears of a real estate bubble. Apartments are selling for staggering prices, and central banks and finance ministries have begun to rein in property-related stimulus measures. It seems like only yesterday that prices were falling. Now fears are rising once again that property investors could be in for a hard landing, destroying personal wealth and delaying the economic recovery. In Hong...

Fiscal Responsibility Has Moved Abroad 1 comment November 05, 2009 John Browne Last week, to the delight of its media cheerleaders, the government announced that economic growth had returned and the recession had ended. But before we start celebrating one quarter of modest growth, we should realize the only force driving this apparent recovery is an enormous increase in government spending. To finance its largesse, the government is now borrowing at a rate that has ordinary citizens and the international community extremely concerned. Leading into the first election season under Obama's reign, this unprecedented government borrowing and spending is creating...

Nov. 4, 2009, 6:53 p.m. EST Fed to markets: Let the bubble blow Commentary: Job losses rule; not commodities, dollar By David Callaway, MarketWatch SAN FRANCISCO (MarketWatch) -- Let the bubble blow. That's the signal the Federal Reserve gave to commodities markets and the stock market Wednesday after keeping interest rates unchanged at historic lows and making no noise about when its policy of easy money will end. That markets fell in the last hour of trading after the Fed decision inspired a brief rally had more to do with concern about Friday's jobless numbers and Washington meddling in the...

Notice of Change in Terms, Right to opt out and information update. Dear Valued customer, We are changing your card agreement. Annual U. S. Percentage Rate plus 21.99% AprR is now 26.42%

Switzerland may have to print money to stave off deflation The Swiss National Bank has cut interest rates to 0.5pc and opened the door for emergency stimulus, becoming the first country in Europe to flirt with zero policy rates. By Ambrose Evans-Pritchard Last Updated: 1:51PM GMT 12 Dec 2008 South Korea cut to 3pc and Taiwan cut to 2pc, the lowest in 30 years. Both countries are facing a collapse in exports to China and traditional markets in the West. Thomas Jordan, a board member of the SNB, said the bank was mulling extreme measures to stabilise the financial system...

Insight: Annihilation on Main Street By Mark Sunshine Published: November 27 2008 15:54 | Last updated: November 27 2008 15:54 Warren Buffett called credit default swaps “financial weapons of mass destruction” and they are about to annihilate Main Street. In a disturbing new trend, international banks are creating syndicated credit facilities that “weaponise” credit default swaps (CDS) by using the trading price of a borrower’s CDS to set the interest rate paid by the borrower. Unfortunately, banks don’t understand that they are arming speculators to ambush and kill unsuspecting and otherwise healthy companies. Regulators are oblivious to this danger as...

<p>WASHINGTON – The Federal Reserve has slashed a key interest rate by half a percentage point as it seeks to revive an economy hit by a long list of maladies stemming from the most severe financial crisis in decades.</p> <p>The central bank on Wednesday reduced its target for the federal funds rate, the interest banks charge on overnight loans, to 1 percent, a low last seen in 2003-2004. The funds rate has not been lower since 1958, when Dwight Eisenhower was president.</p>

ECB President, Jean-Claude Trichet, says inflation could 'explode' Gary Duncan, Economics Editor The President of the European Central Bank (ECB) said yesterday that inflation could explode without action being taken to quell price pressures. Jean-Claude Trichet's comments cemented expectations that the ECB will press ahead today with a controversial increase in eurozone interest rates. In his bluntest signal yet that the ECB will defy political pressure, led by President Sarkozy of France, for it to hold fire, Mr Trichet said: “If we are not resolute, there is a risk that inflation will explode. If we act decisively, then we can...

Equity investors get gloomy message at last Gerard Baker: American view Sell in May and go away, it used to be said. This would not have been a particularly lucrative investing strategy in the past 20 years or so, but you could have done worse than follow its simplistic prescription this year. Depending on exactly when you sold in May and what you had done with the cash, you might now be one of the few investors with a smile on your face as you contemplate the second half of this annus horribilis. For all the talk of global depression,...

Bond debt rates surge The auction-rate bond market has collapsed, with Colorado hit hard. By Aldo Svaldi and Jeffrey Leib The Denver Post Article Last Updated: 03/08/2008 03:54:45 PM MST February was a bad month for Stephanie Doughty, the chief financial officer for Poudre Valley Health System, as interest rates on most of its $215 million in auction-rate bonds climbed steeply, adding as much as $140,000 to weekly interest costs. On Monday, things are expected to get worse when $50 million of that debt goes to auction to face higher rates. "It was just unbelievable, to see such a dramatic...

Hospital bonds are latest credit casualty Interest rates soar amid failed auctions, skittish investors By AVRUM D. LANK and GUY BOULTON alank@journalsentinel.com Posted: March 1, 2008 The spreading contagion in the nation's credit markets has infected health care finance in Wisconsin, sending interest rates on some hospital bonds as high as 18%. Ministry Health Care Inc. in Milwaukee, for example, will have to come up with an extra $700,000 a month to pay interest on bonds used, among other things, to build St. Clare's Hospital in Weston. In all, health care systems in Wisconsin have sold more than $1 billion...