Welcome to Capital Account. We talk to Chris Martenson about his outlook for 2013, about the prospects of reducing the US’s debt, and the plausibility of minting the trillion dollar platinum coin.
Plus, gold tumbled after the release of yesterday’s Fed minutes. Gold has been on the move down since last October, but the mention of a potential end to QE brought gold prices lower. Dennis Gartman, publisher of The Gartman Letter, wrote that gold bugs, operating on the thesis the Fed has lost control of the money supply, are in tatters. Is there more to the swings in the gold price than meet the eye? We ask Keith Weiner, president of the Gold Standard Institute and CEO of Monetary Metals, if the claims of gold market manipulation are founded. [Read more...]
As we begin 2013, we reflect on some economic predictions that never came true. After the Fed’s unprecedented actions in 2008, some predicted massive double digit inflation by now. Yet headline consumer price inflation, as of November 2012, was below 2 percent. And as for inaccurate predictions, the Federal Reserve’s expectations of growth over the past 10 years have greatly overstated actual growth. These inaccurate predictions are now the basis for Fed policy, as the FOMC announced in December “The Committee…currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as…inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal.” We talk to Pragmatic Capitalist Cullen Roche about why so many wrongly predicted inflation and what the Fed’s overly optimistic past predictions mean for its future interest rate guidance. He breaks down monetary mechanics and his view on why this understanding is missing from mainstream economics. 
Welcome to Capital Account. With reports of 
UBS is expected to pay as much as 1.6 billion dollars to settle charges of Libor rigging with US, UK, and Swiss authorities, according to Bloomberg. The settlement is over alleged rigging of the yen Libor interest rate starting in 2007. However, unlike a majority of recent bank settlements where the banks neither admit to nor deny the allegations, the Japanese subsidiary of UBS will reportedly plead guilty to a criminal charge. In addition, about three dozen bankers and senior managers will reportedly be implicated in the alleged rigging.
There is no question that yields have been eviscerated by Fed policy, but is it the result of Fed policy past or present? Is it the current presence of the Fed in the bond market that is keeping rates low, or was it the Fed’s accommodative monetary policy during the boom years and the subsequent urge by the private sector to relieve itself of overpriced assets in the bust that has kept yields from rising? In either case, we find fault with the Federal Reserve. It seems the Fed can now claim this: “Honey I Shrunk the Yield Curve!” Only in this scenario, policy wonks in control of the “shrink ray” seem hardly concerned about our new microscopic interest rates. If anything, the lower they go, the more the Fed may print, forcing a new class of indentured investor out to scavenge for more yield on the front lawn. We talk to Jim Grant, founder and editor of “Grant’s Interest Rate Observer” and author of “Mr. Speaker!”, about the recent announcements from the Federal Reserve. 
Welcome to Capital Account. It’s Federal Reserve Interest Rate Decision day! As expected,
Welcome to Capital Account. In the summer of 2011, during the US debt ceiling debate and credit downgrade, gold topped 1900 dollars an ounce. However, since then the price has dropped, despite the types of news events that usually drive investors to gold. Plus, according to the World Gold Council, central banks will buy more than 500 tons of gold this year, up from 465 tons in 2011, a new high. Why has the yellow metal been trading sideways for the past year and a half as the S&P 500 has gained a very respectable 25 percent? We talk to commodities legend Eric Sprott about gold and silver, and where he sees prices headed over the next decade.
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