Economic Commentaries

Stephan Ernharth, our lead strategist, shares his views in our Economic Commentary series.

A New Reality, and It's Called "Withdrawal"

"The Federal Reserve has since 2008 pushed a cocktail of newly created (and purchasing power debasing) $trillions combined with artificially low interest rates - that addicted stock, bond, housing, and automotive markets, along with the rest of the cheap credit dependent economy (not to mention massively indebted governments, and massively leveraged banks) have readily ingested.

This cocktail of newly created $trillions and artificially low interest rates has allowed the above-mentioned addicts to temporarily (I stress the word 'temporarily') avoid 'withdrawal' (aka dealing with/facing normalized borrowing costs, along with other serious, unpleasant economic and fiscal realities)…
The problem with addicts is that they develop a dependence and a tolerance, and thus they need more of their drug/s (not less). When doses are instead cut back (or stopped) the onset of withdrawal begins…”

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The Federal Reserve is Trapped & Hyper-Leveraged COMEX Gold Reaches New Levels of Absurdity

“Think about it, after keeping its benchmark interest rate at the zero-bound since 2008, the Federal Reserve could not even pull the trigger to raise it .25% (one-quarter of one percent) on September 17, 2015. So this is where we are. The economy and markets are so 'healthy' (or should I perhaps more accurately say - so 'low interest rate addicted, cheap credit dependent, and fragile)' - that the Fed can't even raise the benchmark rate .25 of one percent after having it at the zero-bound for nearly seven years."

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COMEX Registered Gold Available for Delivery Drops to Lowest Levels in History

“Now we learn that COMEX (Commodity Exchange) Registered gold available for delivery has dropped to the lowest levels in history, and that the ratio of gold demandable to gold available for delivery has climbed to an absurd record high of 229-1”

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And the Truth Will Set You Free

“I've said it many, many times before, and I'll say it again: It's my firm, longstanding opinion that the heavily credit-dependent economy, along with the bond and stock markets are utterly dependent on Federal Reserve created artificially low interest rates - and on accompanying perpetual $trillions in new Fed currency creation…”

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Facts Are Stubborn Things

"I believe now more than ever it's time to be as discerning as possible, to question things, and to not simply accept information fed by the mainstream financial media.

A time to seek facts, whether we like what we find out or not. And to use positively the information we discover.”

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