Time to Bury the Phillips Curve
The Phillips Curve is an economic concept that posits a stable and inverse relationship between inflation and unemployment. As inflation rises, unemployment falls, and vice versa. Many free market economists had thought that the Phillips Curve had already died in the aftermath of the stagflation of the 1970s when both inflation and unemployment rose together. Certainly, the academic arguments...
Wall Street Banks Warn of Economic Downturn
Analysts at a number of large banks are warning of an economic downturn. Their warnings are based on observations of various technical data, none of which look very rosy. One of Morgan Stanley’s chief strategists has noted a breakdown in the correlation of the prices of various assets. Higher correlations tend to indicate bullish sentiment, as various asset prices move...
Is Saudi Arabia Turning to the Yuan?
In the aftermath of the failure of the post-war Bretton Woods monetary system, the dollar’s position as the world’s reserve currency was strengthened by the development of the petrodollar system. Middle Eastern oil-producing countries agreed to price their oil in dollars, accept only dollars as payment for oil, and invest their dollars in US government debt. In exchange, they...
Germany Finishes Gold Bar Repatriation Ahead of Schedule
The German government finished its planned repatriation of gold holdings by transferring the last bars held at the Banque de France in Paris back to Germany. The German government’s plan was to hold at least 50% of its gold within Germany, a task which has now been completed through transfers from New York and Paris. Those gold holdings are...
The Curious Case of Secretary Mnuchin’s Visit to Fort Knox
Treasury Secretary Steven Mnuchin recently visited the United States Bullion Depository at Fort Knox. According to Bloomberg, Mnuchin stated that “The last time anybody went in to see the gold, other than the Fort Knox people, was in 1974 when there was a congressional visit. And the last time it was counted was actually in 1953.” It’s interesting that...