Forex

March 01 2013 3:29 PM

During his testimony before Congress this week, Federal Reserve Chairman Bernanke made it a priority to dampen the growing concern that the unprecedented growth of the Fed's balance sheet presents great risks to the economy. There has been a heightened sense even among normally complacent members of Congress that the Fed could spark a precipitous decline in the economy and the financial markets if and when it seeks to "withdraw liquidity" by selling even a minor portion of its bond portfolio (which is projected to swell to $4 trillion by year end). This is a valid concern that I have been discussing for years.

March 01 2013 8:48 AM

The euro held above $1.30 on Friday morning after uncertainty in Italy overshadowed positive data from the Spanish economy. Italy's election results this week gave investors reason to believe the country would hinder the EU's progress toward ending the three year financial crisis. Italians, who are sick of the current course of raising taxes and cutting spending, voted erratically for politicians who promised to do away with many of the austerity measures already in place.

February 28 2013 10:34 AM

The euro ticked up on Thursday and traded at 1.3146 at 6:48 GMT after a successful debt auction in Italy which calmed fears that recent political turmoil wouldn't affect the country's debt restructuring. The modest gains came following Italy's sale of 5 and 10 year bonds, for which there was a healthy demand.

February 27 2013 2:57 PM

As China enters the "Year of the Snake," Singapore stands as a beacon of sound currency in a world gone mad. China's renminbi remains pegged to the US dollar, while even steadfast Switzerland has followed the US, UK, EU, and Japan into an impoverishing strategy of currency debasement. Singapore, alone, has been able to sustain genuine economic growth in the context of a strong national currency.

February 27 2013 9:21 AM

The euro rebounded only slightly on Wednesday and traded at 1.3076 at 9:53 GMT on Monday morning. The increase can be attributed to Federal Reserve Chairman Ben Bernanke's reassurance that the US central bank was on track with its stimulus plan which eased market worries on Tuesday. Italy remains the main focus in the eurozone after an inconclusive election left investors feeling uncertain about the fate of the entire region. The vote, in which Italians opted for anti-austerity promises, sent a message that Italians are fed up with the German-led crisis management and ignited worries that this rejection of the current path to recovery could spread to other struggling nations.

February 26 2013 9:52 AM

I've said since the beginning of 2009 that any future "recovery" experienced by the markets and the economy would be derived through massive government spending and Federal Reserve debt monetization. Therefore, the logical conclusion must be that when or if fiscal and monetary austerity is eventually adopted, the economy and markets would crash.

February 25 2013 9:36 AM

Economic data flagged a growing risk of recession in the euro zone's second biggest economy, France, on Thursday, but investors nonetheless snapped up the country's bonds, banking on them as a safe bet. Hot on the heels of Paris's admission that it would overshoot its deficit target this year and that growth would be a minimal 0.3 percent at best, a survey showed that business activity this month contracted at the fastest pace in nearly four years.

February 21 2013 12:11 PM

In a classic example of stepping over dollars to pick up pennies, chatter is getting louder that the United States could follow Canada’s lead and reduce its production of certain coins. Earlier this month, the Royal Canadian Mint officially ended its distribution of pennies to banks and retailers, in an effort to save money since production costs now exceed their face value. The government estimates that it cost about $11 million a year to supply pennies to the Canadian economy. Now, the big spenders in Washington D.C. may look under the couch cushion for similar savings.

February 20 2013 12:11 PM

The interest rate on the Ten-year Note has risen from 1.58% on December 6th of last year, to as high as 2.03% by mid-February. Most equity market cheerleaders are crediting a rebounding economy for the recent move up in rates. According to my count, this is the 15th time since the Great Recession began that the economy was supposedly on the threshold of a robust recovery.