Developed countries are scrambling to put in place more rounds of stimulus to prop up their faltering economies.

The U.S. Federal Reserve has already pledged or spent an unbelievable $12.2 trillion to bail out a handful of bankers. The Fed slashed interest rates to zero and it is now purchasing more treasuries with proceeds from existing purchases. Finally, at its recent meeting the Fed stated that it stands ready to inject more stimulus in the economy.

Continue reading $12.2 Trillion Was Not Enough Stimulus

$12.2 Trillion Was Not Enough Stimulus originally appeared on BloggingStocks on Thu, 23 Sep 2010 10:50:00 EST. Please see our terms for use of feeds.

In a footnote in a 216-page report released last week, the Bank for International Settlements (BIS) disclosed that since December, it has taken in 349 metric tons of gold from central banks, which swapped it for $14 billion in cash.

Why is this important? First off, the BIS is the central bankers' bank. We can gather from this that central banks needed cash to pay their bills. So they pawned their gold.

Continue reading Central Banks Swap Tons of Gold for Cash

Central Banks Swap Tons of Gold for Cash originally appeared on BloggingStocks on Sun, 11 Jul 2010 14:10:00 EST. Please see our terms for use of feeds.

Continue reading Central Bankers Love the Aussie Dollar and Canadian Loonie

Central Bankers Love the Aussie Dollar and Canadian Loonie originally appeared on BloggingStocks on Tue, 22 Jun 2010 16:40:00 EST. Please see our terms for use of feeds.

A weak US dollar is the main stimulus for central bankers' gold purchases. India just bought 200 metric tons from the International Monetary Fund. Central bankers in Mexico, Russia, the Philippines, all have increased their gold purchases.

Continue reading Why is gold marching higher? Ask the central bankers

Why is gold marching higher? Ask the central bankers originally appeared on BloggingStocks on Fri, 20 Nov 2009 18:00:00 EST. Please see our terms for use of feeds.

For the fourth month in a row, Bank of England interest rates will remain at the record low of 0.5%. In an announcement today, the UK's central bank said it would not expand its quantitative easing of financial markets, much to the surprise of the market. The bank has been buying up assets aggressively, printing cash to finance what is likely to be £125 billion in purchases by the end of this month.

Financial markets expected a much different play, involving an increase in this asset purchase target by another £25 billion (to £150 billion). This move would have let the Bank of England shove even more money into the economy through next month, which is when the bank publishes its latest quarterly economic forecast.

Continue reading Bank of England surprises: No expansion of quantitative easing

Bank of England surprises: No expansion of quantitative easing originally appeared on BloggingStocks on Thu, 09 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

Every January, central bankers from the U.S. and Europe meet to discuss the financial industry's issues and problems.

This year's meeting in Basel is especially unique in that it takes place in a post-crisis setting. To emphasize its importance, chief executive bankers from JPMorgan Chase (NYSE: JPM), Citigroup (NYSE: C), Credit Suisse (NYSE: CS), UBS (NYSE: UBS) and Deutsche Bank (NYSE: DB) have been invited. The presence of this wide array of key executives underscores the importance and need to hammer out guidelines for central bankers in the U.S. and Europe.

The Basel Committee on Banking Supervision, which sets world banking regulations, has signalled plans to encourage banks to hold greater capital assets in the future and to make provisions for future bad debts throughout the economic cycle. They are also working on guidelines to ensure that banks hold greater liquidity reserves than they do now.

What is your opinion on these guidelines? Is it too little, too late?

U.S. and European central bankers meet to discuss woes originally appeared on BloggingStocks on Sun, 11 Jan 2009 18:10:00 EST. Please see our terms for use of feeds.

I wrote here recently that China was experiencing a nasty bout of inflation along with meteoric growth. China admits as much and is taking active steps to combat it. With a recently published inflation rate of 6.5% and certain food prices spiking (pork is up 55%), China is pledging to rein in export growth.

With all the focus on China, I was interested to see Dr. Enzio von Pfeil on CNBC discussing Chinese inflation. While I don't have access to the video, you can read about the interview on Enzio's own blog, Enzio's Clock.

Dr. von Pfeil's thesis is that food inflation, while spiking in China, is something beyond the purview of the Chinese Central Bank. Through monetary policy, central banks can affect only non-food inflation. Inflation in food prices comes from policy issues, weather, and rising global commodity prices -- not excess supply of money and excess demand for good.

Dr. von Pfeil doesn't think China is overheating, though he does caution waiting to step into the Chinese market until after the subprime mess has run its course in the U.S. and abroad. Good, sagacious advice.

As is frequently the case in quickly growing economies, it's hard to stay on the sidelines until after all overhangs have cleared. By then, a big chunk of the investment opportunity has passed the investor by. There are always significant risks in investing and returns provided have to be greater to compensate investors for assuming such risks. I like Dr. von Pfeil's analysis, and he's a much smarter investor than I am -- I'm just not sure how actionable this really is.

Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Disclosure: I personally own shares in Chinese ETF, FXI.

Is China overheating or just getting started? originally appeared on BloggingStocks on Sun, 25 Nov 2007 11:10:00 EST. Please see our terms for use of feeds.

Continue reading Wall Street 'relieved' by Barclays' $2.7 billion subprime loss

Wall Street 'relieved' by Barclays' $2.7 billion subprime loss originally appeared on BloggingStocks on Thu, 15 Nov 2007 12:18:00 EST. Please see our terms for use of feeds.