Category Archive : US Dollar

European Central Bank, Federal Reserve Prepare Public for Quantitative Easing

More Quantitative Easing (QE) could be coming to the US and Eurozone as soon as the end of the year. The European Central Bank is preparing to cut interest rates and start a new round of bond purchases come Autumn to stymy economic uncertainty amid a global economic slowdown. The Federal Reserve has indicated that it too is considering aggressive asset purchases.

ECB Bank president Mario Draghi has made it clear that all options are on the table for the ECB, which oversees an export-driven European economy that is currently enduring a considerable slowdown due to the German economy’s poor economic indicators, tensions between Brussels and Italy over the latter’s budgetary policy, as well as the threat of a No Deal Brexit. Read More

The IMF Says Donald Trump is Good for the American Economy

As Trump is planned stimulus to pump money to upgrade bridges, roads and other parts of the nation’s infrastructure, and cutting corporate and personal taxes, the IMF is saying the President Trump could  be good for U.S. economy.

Christine Lagarde, head of the International Monetary Fund said Sunday that President Donald Trump will probably be good for the American economy in the short term. She did say rising interest rates and a strengthening dollar will be tough for global trade.

Also Read: Donald Trump Said He’d Consider a Gold Standard

Ms. Lagarde cited Trump’s plans for investment in U.S. infrastructure and his likely tax reforms could do well for America’s economic fortunes. Donald Trump’s policies might be felt in the rest of the world.


“That’s a tightening that is going to be difficult on the global economy and for which economies have to prepare,” Lagarde said during an event at the World Government Summit in Dubai as reported by USA Today.

Lagarde discussed a creeping and “insidious” anti-globalization movement which has led to a rise in protectionist views. “We have been saying globalization is great, international trade is great — and it is,” she said. “But we have not looked at those who were badly, negatively impacted.” Instead of citing derivatives and bad loans, she cited robots and shrinking incomes of the global middle class.

Regarding Trump in the White House, Lagarde tread lightly, saying “this is really a work in progress — there’s been of announcements, a lot of tweets, a lot of things being said.” She pointed towards the importance of data and facts in decision making.

“I know it’s not fashionable at the moment, but I think that facts, figures (and) actual assessment of the reality matter and that we have to be honest about it,” she said.

Her comments mirror IMF statements in January, when the said that a stimulus in spending under Trump should bode well for the U.S. economy.

The IMF’s recent optimism towards the U.S economy comes as the world awaits how the Trump administration will approach global governance.

The IMF’s most recent growth forecast for 2017 is 2.3%, an incremental increase from its 2.2% made in October. Next

Trump has claimed his economic policies would mean a 4% pace.

The IMF called its forecast for the U.S. the most probable of a “wide range of possible scenarios,” citing uncertainty over Trump and a Republican controlled congress will spell.

If Donald Trump pursues stimulus measures above the IMF forecast, U.S growth could prove even stronger. Donald Trump protectionism could stifle the growth.

The IMF’s tune was different during the Presidential election, when they sugested that Trump’s protectionism wold be bad for world economy.

“For two decades before the 2000s, global trade regularly grew by 7%, or twice the rate of the world economy. Today, however, trade growth is below that of the global economy – at about 2%,” Lagarde said.

“There is a growing risk of politicians seeking office by promising to ‘get tough’ with foreign trade partners through punitive tariffs or other restrictions on trade. I am deeply concerned about this – not only because I was a minister of trade, but because trade has been at the heart of the IMF’s mandate for more than 70 years.”

India, Venezuela & Zimbabwe All Have Tragic Cash Problems

The word “cash” means different things in some parts of the world than in the US, Europe Australia and many other of the more stable economies worldwide. The Venezuela crisis has been ongoing, but trials and tribulations in India have meant a population short on cash. Meanwhile, things are “bizarre” in Zimbabwe where dollars go for dollars..with a premium. Read More

The US Mint Won’t Even Buy Back Its Own Coins

Importers of scrap coins have waited for years as the US government tested coins, failing to return them without due process. Many coins appear to have been released by the government to go back to the proper owners. Yes, the U.S. Mint’s suspended buyback program remains suspended, meaning the US government won’t buy back its own currency. Coin recyclers are searching for other means to redeem their coin inventory.

The U.S. Bureau of Customs and Border Protection (CBP) is due to release over $700,000 in coin shipments to three importers, and pay over  $300,000 in melted coins detained and withheld without due process since 2014 and 2015, sources say.

Portland, Ore.-based Portland Mint LLC learned of the release of a shipment detained by the CBP for 507 days, according AMM.

The Mint’s program means recyclers will have to get creative. They can’t melt the coins down themselves, as it’s illegal to destroy U.S. currency. Coin recyclers are waiting to hear from the U.S. government what they can do with the piles of coins they’re collecting at global facilities.  Recyclers bemoan that the US government won’t even buy back its own currency.

“The suspension of shipments to the Mint has caused a severe business hardship, as we have been held up from shipping to the Mint for nearly 18 months. This includes almost six months prior to the formal suspension of the program in which we were unable to get an appointment to deliver coins,” according to an anonymous heavy media plant operator.

“While we understand and can deal with the market risks associated with scrap metals, we could never have imagined the current scenario under which U.S. currency has essentially become worthless with no ability to monetize it. … We are currently looking at various methods to clean and recirculate these coins, as we need to be able to recoup some of the costs already expended. On a much broader level, if the program stays on hold what impact will the continued suspension have on the monetary value of the coins and U.S. currency?” the source rhetorically asked.

Luke Palen, president of Rosemount, Minn.-based Spectro Alloys Corp.

concurred: “We’re frustrated that the program is still offline due to the fact that we want to be able to capture the value of all these coins.”

More frustration by other industry insiders: “This is currency and its value is being lost,” said Steve Bossotti, senior vice president of Morristown, N.J.-based Covanta Holding Corp.’s metals management division. Covanta might sort through its inventory for unmutilated coins – roughly one-third of the company’s coins.

Bossotti noted: “We are evaluating cleaning and sorting the coins and returning them into the U.S. banking system. We’d spend more time to process (them) and get less value but if the status quo continues, we have to look at doing something different because it’s value being lost.”

Industry CEO’s are willing to work with the government. “…But the Mint and Treasury haven’t even replied or taken us up on our offer,” Johnson said.

He added: “I don’t know how they can make a valid choice to stop the program, but we also understand that they need to figure it out. … This is U.S. currency and recyclers have a legal duty to redeem it. We need the Mint to lift the suspension as soon as possible.” The Treasury isn’t set to make a change to the program until November 2.

“The coins aren’t going anywhere until the program is resumed. It’s encouraging to see that the U.S. government is releasing our coins, but until the program comes out of a suspension there will continue to be far-reaching impacts through the industry,” said John J. Coughlin, a Moorestown, N.J.-based attorney representing three importers who are now suing the government for failing to return inventory without due process.

Representative Sherman’s Fall In The Fall & Rise In The Spring Interest Rate Speech

Check out Representative Brad Sherman (Democrat, California) make some religious-based assertions about when the Federal Reserve and Janet Yellen should raise interest rates. In a way, Representative Sherman makes some good points. Everything he says is true. Insert “nature” everywhere he says “God” – if you’re secular – and see the point he is making perhaps a bit more clearly. Now, learn about “interest rate” “Federal Reserve” and “Sherman” and things become a bit more mysterious.

Puerto Rico Is The United States’ Greece

The United States is facing its own Greece moment as Puerto Rico faces similar debt questions. One key difference is that it seems unlikely that Puerto Rico will leave the United States, potentially leaving American citizens on the hook to foot the bill for the US territory of Puerto Rico.

On June 28, Puerto Rico’s governor Alejandro García Padilla called the island’s debts “not payable” and that in order to avoid a “death spiral” the country would need to refuse payment. Lenders lent the poor government money very cheaply, and the government did not use the money to invest.  Puerto Rico and US will likely not sever political and economic union, like many say Greece could. Thus, Puerto Rico becomes a US liability. (What’s likely, to be sure, is that Greece will not leave the European Union)

Puerto Rico is a self-governing US territory, which has enjoyed a US law that creates a tax subsidy for Puerto Rican debt. Middle class and well-to-do US people thus lent money to Puerto Rico, and Puerto Rico accepted the terms, then spent money on a considerable welfare state.

In 2006, economic strife came to Puerto Rico and Puerto Rico could not depreciate its currency due to the US ties. A brain-drain brought Puerto Ricans to the US. The last 10-years in Puerto Rico have been marred by tax hikes, spending cuts, emigration and increasing interest rates, and things have only become worse for Puerto Rico as the 50 states fall into economic strife as well.

Puerto Rico has official liabilities of $72 billion. Both California and New York have more debt than Puerto Rico, though Puerto Rico is smaller, home to the population of San Diego county. Puerto Rico’s population continues to shrink, as the Economist reported  in 2013: “…in America’s 50 states the average ratio of state debt to personal income is 3.4%.”  The ratings agency Moody puts Puerto Rico’s at 89%. The most indebted state according to this measure is Hawaii, which has a 10 percent ratio, according to the Economist.

Brain Drain

Puerto Rico’s population is declining at the fastest rate in 60 years, according to PEW research. The trend started in 2006.  From 2011 to 2013,  Puerto Rico’s net population fell by 50,000 people per year, with job-related reasons being cited by 42% as a reason for leaving. Young people are leaving as well.

“Structural problems, economic shocks and weak public finances have yielded a decade of stagnation, outmigration and debt,” the report said. “Even if there is no intensification in economic problems, which is a big if, the [Puerto Rico] Planning Board projects that the population will continue to fall through 2020.” Official unemployment is 12.4% which is twice the national jobless rate.

Texas Bill to Establish Bullion Depository, Make Gold and Silver Money Once More

Texans could soon be allowed to pay with gold and silver coins minted by the federal government for taxes and other government services – namely, the American Silver Eagle and the American Gold Eagle – thanks to a bill proposed by Sen. Konni Burton, R-Colleyville.

Burton argues the option to pay in gold and silver for government services has caught on as the dollar’s purchasing power declines. Read More

A Wild Day & Night For Stocks, Gold, Currencies & The Economy

This weekend might have left you wishing you were in semi-numismatic coins as the prices were wildly volatile. First ZeroHedge reported an uptick in the gold price of $190.

Then, when markets opened, metals tanked.

Read More

Does The Dictionary Foretell Our Monetary Future?

Google is known as a massive technology company. Best known for its Search, Adwords, Adsense, Analytics, Google Books, Google News, YouTube, Google Voice, Google Maps and other products and services, something Google is not known for is financial advice, but that might be changing.

Check out this definition:

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Everyone’s Buying Dollars

Gold and silver’s lower prices are not a sign the bull market is over. Instead, it is a sign that the US dollar is experiencing relative strength because other things are falling. For instance, the New Zealand central bank just finished off its biggest sale of the Kiwi in 7-years, but that is nothing compared to some other events, like protests for Democracy in Hong Kong, which is causing a selloff in the Hong Kong dollar and renminbi for US dollars. With more bullish news for the US dollar hitting the wires, it is uncertain when gold and silver will stop their slide.

Myriad speculators agree: silver is oversold. Traders and analysts point to a completely out of whack gold-and-silver ratio to explain this fact.

Overnight September 28 the gold-silver ratio was approximately 69.72. That means, for every ounce of gold, you could purchase 69.72 ounces of silver. At the end of August the ratio was 66. The ratio is above its 10-year average of 57.

This is a change from the usual.

Historically, the ratio has been much closer. Read More

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