Pater Tenebrarum's Contributions

Few markets are as widely misunderstood and subject to as many misconceptions as the gold market. Many of these misconceptions stem from gold’s dual characteristics as a commodity and money. Is it actually...

In the aftermath of the 2008 crisis, it has become clear that markets are locked in a battle with policymakers. In an unhampered free market the crisis would have been followed by a sizable deflation of uncovered money substitutes.

From his perch at the NYT, Paul Krugman informs us that he has detected a 'Plot Against France', because credit rating agency S&P has dared to downgrade the government's debt to 'AA' from 'AA+'.

Most stories about central banking and central bankers in the mainstream financial press follow a certain pattern. For instance, the idea that these central planning institutions may not only be superfluous but may be downright harmful is considered utterly beyond the pale of debate.

Readers may recall that we have reported on the toilet paper shortage in Venezuela before. At the time our suggestion to the Venezuelan authorities was to simply replace toilet paper with the country's currency...

Apparently the unresolved back and forth between House and Senate concerning the 'Obamacare' bill in the run-up to the debt ceiling cut-off date on October 17 will lead to what is breathlessly referred to as a 'government shutdown' in the media.

When exactly did Keynes' influence 'fade'? There was a brief moment when it appeared he might be pushed of his pedestal by the monetarists in the 1970s, but to argue that there is little left of his influence in academia is baffling, to say the least.

As our long time readers know, we regard the Financial Times' editorial line in monetary matters as terribly misguided. The paper is strongly in favor of Keynesian recipes and central economic planning.

First of all, the amount of foreign selling is really quite small compared to the size of the market, although it is undoubtedly the case that what used to be a tailwind has become a headwind.

We have come across many articles recently discussing the decline in COMEX inventories and/or the decline in inventories held by physical gold ETFs like GLD. Invariably the writers conclude that these inventory declines must be a bullish sign.

Markit has released its global business confidence survey, and it makes for sobering reading. Due to sharp declines in business confidence in both the US and China, a new post crisis low has been reached in June.

Regarding the risks in Germany's banking system, it should be pointed out that large German Banks are among the most highly leveraged in Europe relative to their net tangible capital.

Given that the inflationary policy the BoJ has embarked on is likely to be maintained or even intensified once Abe wins the upper house elections, it wouldn't be surprising if the breakout in yields were to follow on the heels of the election.

In spite of this year's decline in the gold price, we still trust in gold, one might say. There are a few valid reasons for the recent bearish trend, some of which Ronald dissects; nevertheless, the bet remains that it is very likely undergoing a large degree correction in a secular bull market.

Following the FOMC announcement (although there is probably no direct causal relationship, it is still noteworthy that this temporal coincidence occurred), interbank lending rates (SHIBOR) and repo rates in China went absolutely ballistic overnight.

There is a new reality various governments still dreaming of imposing 'windfall taxes' and other measures of this type on companies involved in the extraction of resources will have to face.

Over the past two weeks, treasury note yields have risen rather vigorously from a higher low. As a side effect of this, mortgage rates are now increasing in spite of Bernanke's truly massive purchases in that sector.

Japan's current economic policy also has strong mercantilist overtones, as the devaluation of the currency is held to help its export sector.

Hollande is – similar to many of his predecessors – apparently very concerned about keeping France's unique cultural heritage alive and kicking, even if that means he has to invent and/or raise a few more taxes here or there.

Carmen Reinhart and Kenneth Rogoff are apparently eager to repair their dented reputation with the economic mainstream. After having to endure and fend off an attack of Keynesian deficit spenders...