Global Financial Crisis 10 Years On: Gold rises 100% from $650 to $1,300

– Gold price up over 100% in major currencies since financial crisis
– Has outperformed majority of equity and bonds
– Global debt continues to increase despite claims of ‘recovery’
– Gold remains an important safe-haven in long term
It has been ten years since the global financial crisis began to take hold. At the time few would have known that BNP Paribas’ decision to freeze three hedge funds was the signal for the deepest recession in living memory and a near-collapse of the financial system.
As the French bank blamed a ‘complete evaporation of liquidity’ on its decision the ECB flooded its the market with billions of euros of emergency cash as it worked to prevent a seizure in the financial system.

This post was published at Gold Core on August 23, 2017.

Banks Earn Record Profits in Q2, Savers Sacrificed: FDIC

$9 trillion in deposits go a long way.
Savers have been shanghaied into doing an enormous job, in small increments, day after day, for nine years: Recapitalizing the collapsed US banking system and making it immensely profitable again, leading to high core-capital ratios, record bonuses, big-fat dividends, and massive share-buybacks. And the FDIC, in its Quarterly Banking Profile released today, shows how.
The total number of FDIC-insured commercial banks and savings institutions fell by 271 to 5,787 by the end of the second quarter. Of them, 5,338 were community banks. Most of this shrinkage was due to consolidation. But there were a handful of bank failures: in 2016, five banks failed. So far this year, six banks failed. The remaining banks get a bigger slice of the pie.
Here’s the good news: Almost everything in the report is good news! That is, unless you’re a saver whose income stream has been confiscated in order to make this good news possible.

This post was published at Wolf Street by Wolf Richter ‘ Aug 22, 2017.

How Rand Paul Can Free Americans from the Fed

Ever since entering the Senate, Rand Paul has continued his father’s work in advocating for an audit of the Federal Reserve. This week, writing for the Daily Caller, Senator Paul renewed his efforts, illustrating how the recent era of unconventional monetary policy has made an audit all the more important:
In 2009, then-Fed Chairman Ben Bernanke was able to refuse to tell Congress who received over two trillion in Fed loans, and it took congressional action and a Bloomberg lawsuit to force the Fed to reveal the details of what it did in more than 21,000 transactions involving trillions of dollars during the 2008 financial crisis. A one-time audit of the Fed’s emergency lending mandated by Congress revealed even more about the extent to which the Fed put taxpayers on the hook.
When pushed to defend the lack of transparency for the Federal Reserve, officials like Janet Yellen and Treasury Secretary Steve Mnuchin point to the myth of the Fed independence – a position that requires outright ignorance of the history of America’s central bank and the executive branch. Of course it’s quite usual for the Senate to base the merits of legislation entirely off of fallacious arguments, so they have continued to be the legislative body holding up a Fed audit with little indication they are prepared to move.

This post was published at Ludwig von Mises Institute on August 23, 2017.